DoorDash, Inc. (DASH) on Q1 2021 Results - Earnings Call Transcript

Operator: Good day and thank you for standing by. Welcome to the DoorDash Q1 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Andy Hargreaves. Please go ahead. Andy Hargreaves: Thanks, Mei. Hello, everyone. And thanks for joining us for our first quarter 2021 earnings call. I am pleased to be joined today by Co-founder, Chair and CEO, Tony Xu; and CFO, Prabir Adarkar. Operator: Our first question is from the line of Lloyd Walmsley from Deutsche Bank. Your line is now open. Lloyd Walmsley: Thanks for taking the question. Two if I can. Just first in the shareholder letter, you called out increased frequency from existing customers who order convenience and I’m curious if you can just put a finer point on that. Is that increases in frequency even on the food delivery side just more habituation to the app or is it more just a comment that convenience is additive and not cannibalistic? And I guess maybe in areas where the product is more full in terms of other things that you offer on the platform on top of food, convenience and other stuff? Are there similar dynamics where just the more categories people use it across, the more they use within individual categories? And then the second question would just be as far as the new commission packages, how are you seeing kind of merchants react to the new packages? Are they opting into the higher value bundles and what should we kind of expect in terms of take rate impact from that? Anything you can share that would be great. Thanks. Prabir Adarkar: Hi, Lloyd. It’s Prabir. Why don’t I take the first question on the frequency comment and then Tony will take the second. It’s the latter thing you mentioned, which is what we actually find is that these categories are symbiotic with one another. So customers who order from new categories subsequently increase their frequency with restaurants by a greater amount than those who do not order from new categories. To said definitely, once you begin to use multiple categories, that actually increases your engagement with the core restaurant category. And then the other thing we found is that customers will actually engage with us across different categories beyond food, also creating stronger retention and engagement versus restaurants are pleased. Obviously consumers are pleased that all of our restaurant selling it. So we’re actually seeing strength, because the addition of categories basically makes a user stickier without platform. Tony Xu: Yeah. Hey, Lloyd. On the -- this is Tony. On the second question. The business impact is reflected in our guidance and it’s something that we feel pretty comfortable. And as we tested this program, as we do with all of our new initiatives with merchants for about six months. So it’s meeting our expectations in terms of our rollout so far. But I thought I’d take a second to give you a bit of the guiding principles or the design principles behind why we shipped what we announced a couple of weeks ago. If you take a step back, we took quite a lot of actions during the pandemic to make sure that the businesses would be successful, that’s the entirety of why DoorDash was founded to make sure that these local businesses would succeed. And so during the pandemic, I’m very proud that the actions we took, as well as hundreds of millions of dollars in investments we made allow these businesses to have 8 times the odds of surviving the pandemic versus the average restaurant in the industry. Now, as we get out of the pandemic and as we start heading into reopening, which I’m very excited about, given where the country is in terms of vaccination rates increasing and such, is that, we wanted to give these business owners and speaking with him for about six months, seven months about this, the best chance of getting out of the gate as fast as possible. And what we heard over and again was, they really wanted choice, choice on the spectrum of investing in growth and in which case, they can pick some of the higher price plans that allows them participation in programs like DashPass, where DoorDash is covering the cost of delivery or choice in the form of greater profitability, depending on how they’re seeing staffing and things like that, as they get into recovery. Prabir Adarkar: Yeah. Just to add one point is that, if you actually look at these programs, there is an offset between the lower commission rate that comes with a higher consumer fee, it’s not a perfect offset, but just keep that in mind as you think about the ramifications going. Lloyd Walmsley: Okay. Thanks, guys. Nice quarter. Operator: Next in line is Douglas Anmuth from J.P. Morgan. Your line is open. Douglas Anmuth: Thanks for taking the questions. As to first just hoping to talk more about your thoughts on impact of reopening, and perhaps, just better thoughts have changed relative to six months ago, if it has? And then second question, just DoorDash supply, I guess, just how do you get comfortable with how that can play out here in the coming months given some of the supply issues, of course, better to deal with ridesharing in some other areas? Thanks. Prabir Adarkar: Hey, Doug. Thanks for the question. So the first thing I’ll say is, we were encouraged by the trends that we saw in the first quarter, particularly as markets reopened and in-store dining grew, the negative impact to consumer behavior was smaller than we initially anticipated and that enabled us to actually beat our Q1 guidance by 9%. What’s driving that is the commentary we made even at the -- at our earlier earnings call we talked about consumer behavior being sticky. So as consumers begin to use the product, new habits develop and those habits tend to persist and par of that’s been bolstered by the fact that the product has gotten routinely better over the course of time. Just over the course of this past year, the selection on the platforms improve in terms of the number of restaurants, as well as new categories, which is convenience stores and grocery stores, quality is improved, our affordability has gotten better. And all these things continue to adapt and support the continued stickiness as far as consumers go. And so as we look to the future, we’re optimistic about the balance of the year, which led to an increase of guidance by about 15% to $35 billion to $38 billion of GOV. Douglas Anmuth: Thank you, Prabir. Operator: Next is Youssef Squali from Truist Securities. Your line is now open. Youssef Squali: Great. Thank you very much and congrats on the impressive quarter. Just two if I may. First, can you just speak to the recent trends that you’ve seen so far, in May I think your guide speaks to it. But anything to highlight in terms of just the competitive intensity and how you guys feel about the -- particularly the growth in the non-food delivery business in the quarter and contribution to it? And second, as you look at the diversification that you’re embarking on into non-food, convenience, grocery, et cetera. I was wondering if you can just speak to the broader, well, first, how big you think that business could become over time? Is this a situation where you could see a scenario where half of your business is coming from these new initiatives, say, over the next I don’t know three years to five years, but probably, also just how do you see that impacting the take rates over time? Thank you. Tony Xu: Sure. Hey. It’s Tony. I’ll start. So far the quarter is off to a great start. And what I’ll say is that, the impact of reopening really has been more muted than we expected. Certainly, when we were looking at this last fall and even as we’re starting to prepare for this towards even last summer. With respect to some of the new categories, we’re very excited about our progress. I mean, growing 40% quarter-on-quarter, our non-restaurant orders now totaling over 7% of our total orders. And again, this happened in a pretty short period of time. We really in earnest launched our second category outside of restaurants in convenience, which we’re now the market leader in just under a year. So things are certainly ahead of plan and exceeding our expectations there. Prabir Adarkar: And Youssef, if I could just add to that, I mean, some of the markets you mentioned, whether it’s convenience or grocery, these are extremely large markets, convenience is $200 billion and $250 billion, grocery is an $800 billion -- trillion market. But the thing that’s unique is both of these have very low penetration rates and you think about our platform and the success that we’re enjoying in convenience up to this point, despite thank you launching that business 12 months ago, it’s because of the extensibility of our platform. Because we can take a hybrid approach that pairs together, not just third-party partners in our marketplace like CVS, like Walgreens, like 7-Eleven, in fact, Rite Aid that we recently announced. But also we’re bringing our own first-party selection to consumers and that’s in order to provide consumers a choice and serve them in underserved neighborhoods. And so penetration extremely low today and there’s a lot of runway for growth. Operator: Next question is from the line of Ross Sandler from Barclays. Your line is now open. Ross Sandler: Hey, guys. Just a quick follow-up on our last one and then one other one. So the 7% of orders for non-restaurant, can you talk about the unit economics of that business and your got-to-market like Instacart I think is mostly getting its profit pool from ads. Gopuff is a one key business. So how do we think about the blended offering that you guys have an EBITDA per order, I think you mentioned is a little bit lower for convenience, any color there would be helpful on the EBITDA per order. And then it sounds like based on the letter that you guys are expecting a little bit of a drop off into the summer, which I think everybody can totally understand as things reopen, the question is more like, as you look at the data and are you seeing new customers that came in in 2020 and those ones that are going to drop off or is it that the higher frequency Dash past folks who order like 5 times a month. I’m just going order last, when we get to the summer. Any color on that would be helpful? Thanks guys. Prabir Adarkar: So on the first question in terms of the unit economics, we’re not actually breaking out even economics with these orders. What I will say is where we’re fortunate in that our core U.S. business is cash generative and we’re taking that cash and we’re investing it to grow some of the new verticals with its community to or expand into new merchant services like storefront as well as expanding. So we’re fortunate to have a profitable core business that allows us to invest in variance. On the question regarding the summer seasonality in the trajectory reticles baked into the guidance is the fact that starting about April and going all the way through to later day usually as the weather improves, we see consumers go dining and that behavior is generally consistent across both new customers that we recently acquired as well as existing customers that have been in the black for a while. It could be just behavior that we tend to see as weather improves and people want to go out a little bit more. So you don’t see it in our historical numbers partly because of the rapid pace of customer acquisition. But if you look at it on a cohort level it’s there both for you and existing cohorts. Operator: Next is Ralph Schackart from William Blair. Your line is now open. Ralph Schackart: Good afternoon and thanks for taking the question. I’m just curious if you could provide maybe a little more color on Dash pay and incentive trends that you’ve seen both in the quarter, maybe kind of quarter-to-date, and on the low talked about 40% pay increase 30% I think decrease for cost of consumers over two year period. It sounds like you’re in better supply situation now which is great. Just curious if you could give some more color on kind of recent trends and then signups are some of that’s getting passed on the consumer and then eventually as government incentive programs subside. Do you think the driver incentives will normalize over time? Thank you. Prabir Adarkar: Yes, maybe I’ll take that question. The summary is we’re expecting take rates to improve sequentially from Q1 to Q2 and in part that’s driven by the fact that Dash should be -- will normalize because the supply state is actually better to be the problem has been resolved and will drive market back to health. Taking a step back just in terms of overall Dash should be -- we’ve said before, in the context of overall strategy, our North Staris to reduce customer prices, consumer prices, reduce the fees and commissions and just merchants and increased earnings per Dash and so in the 40% year over to will increase in Dash earnings per active hour, is consistent with our general philosophy. So as we continue to squeeze out more efficiency out of the logistics network, as we continue to improve by be fact and that results in unit economic improvements we invest a lot of that back into the ecosystem by taking down fees and by increasing Dash owners. Ralph Schackart: Great. And if I could squeeze one more. And just under pickup opportunity, you talked about on the call and the later it seems a pretty good opportunity for you post-COVID environment. Maybe just talk about sort of how that’s been received by consumers can of what we’ve learned and as you had sort of technology to that long-term some innovation. What are your views on this opportunity? Thank you. Tony Xu: Sure, I’ll take that, it’s Tony. I think the greatest privilege we probably have in this business is that people eats 22 to 25 times a week, maybe more, maybe less during this pandemic, but what I will say is that when someone is doing that kind of frequency of consumption, it’s never going to happen in one method, it’s never going to be all in cooking, it’s never going to be all in eating out or eating in or getting deliveries. I think especially as we get out of the pandemic, we’re going to go back to doing some of the things that I think are now priced commodities by grabbing a coffee on the way to work or doing a walk along the block with your colleagues and grabbing a snack or what have you and so we’re seeing quite a lot of excitement to the pick a products, I think not just because people are tired of being stuck at home. But I think there is just a mere fact because we consume so often that this is one of the natural use cases that governs our behavior and so we’re very excited to continue investing there. Ralph Schackart: Great, Tony and thanks Prabir. Operator: Next is Deepak Mathivanan from Wolfe Research. Your line is now open. Deepak Mathivanan: Great, thanks for taking the question guys. One for Tony and one follow-up for Prabir. Can you talk about your partnership strategy for the new categories? I mean you’ve entered into partnership is a lot of retailers directly, but as you kind of think about expanding it further over the next few years. How should we think about your desire to work with platforms that have offline business integrations like the online presence systems, point of sale software companies, shop with and even companies like Facebook to scale the merchant’s side rapidly on both marketplace and drive? Tony Xu: Yes, I’ll start. Hi, Deepak, it’s Tony. So the way that we look at all things is how do we build the best products and before our marketplace with that really means is how do we offer the best selection, quality price and customer service and for our platform business where we’re building tools for merchants to allow them to grow their own digital businesses. It’s really about how do we allow them to be very successful across all the activities that they have to perform in order to build a digital business. And so with that, I suppose as the guiding principle, we would consider any partnerships that achieve those means and they can look different depending on whether or not they fit into our marketplace or whether or not they fit into our platform, and so at DoorDash, we really are thinking about building the system that has both components. One, the system is our app which is trying to grow all of local commerce and bring everything inside your neighborhoods and minutes not hours or days. And then on the other side, we are trying to empower you the merchants to replicate and grow on top of your four-wall business and the two job that we do which is grow in power local commerce for all years. Deepak Mathivanan: Got it. Now that’s very helpful Tony, and then Prabir, can you talk about the second half guidance on GOV. Should we expect that GOV to bottom out in 3Q and it start improving sequentially in 4Q into 2022. How are you thinking about like the slope in the second half? Thank you so much. Prabir Adarkar: Yes, the second half GOV has impacted by two factors. The first we’re baking in some uncertainty with respect to consumer behavior as markets continue to reopen it is increase vaccination rates, but second to your point, there is some seasonality, even in that region continues to Labor Day until you’ve got notes of Q2 and Q3 . And then as the winter season start setting in and we start to see growth from there right now. So it’s this what you pointed out. The one thing I will say Deepak is just stepping back the GOV guidance for the year is materially higher than what we thought at the beginning of the year. So I’d point to the shape of the curve you see at the novel right but may anything that you cited a big picture, which is we were feeling more optimistic today than you were earlier on. Deepak Mathivanan: Got it. That’s very helpful. Thanks guys. Operator: Next is Michael McGovern from Bank of America. Your line is now open. Michael McGovern: Great, thanks for taking my question and congrats on the great quarter. I just wanted to ask maybe about -- maybe just like a regulatory overview. It seems like there’s been a lot of news items on the regulatory side recently. So, maybe first if you could comment about the federal side and the comments from the Department of Labor Secretary recently and just any views on what could happen in long-term on the federal side? And then I think some of your peers in the gig economy rideshare space have talked about potentially working out deals with states that might look similar to Prop 22. So can you share with us if you’re participating in those kinds of discussions are just what you think about the potential for regulatory developments on the state side as well? Thank you. Tony Xu: Yes, hey, Mike, it’s Tony. I’ll take that. So we’re very excited about what we heard Secretary Walsh and the buying administration say which two or years was that they’re very excited and figuring out with us with the private sector companies how to actually construct a model that takes us into the 21st century instead of I guess moving backwards the 20th century. I mean if you think about it. What DoorDash stands for is optimizing for the worker. So in this case the Dasher, the millions two drivers on our platform. And the number one thing we hear over and again from Dashers is that they want this flexibility that has never existed in any labor environment before, and the question is how do we marry that’s in the face of traditional labor definitions with benefits and protections that we believe they deserve and what we heard from really anyone we stick to is our willingness to engage in that conversation and construct forward a third way in which we can compare this independence and flexibility with benefits and that’s true at the federal level, that true at the state level, and any elected official that we speak with. Prabir Adarkar: And Mike, this to be clear, the deal we clear that we aren’t taking immediate action and said we want to give comes from we’re in dialog, which with the government in state level. Michael McGovern: Got it. Maybe just one quick follow-up to that. I thought the prior comments about the difference between Dashers and rideshare drivers were really important, especially on the regulatory side. So could you talk about just like the possibility that rideshare drivers and food delivery couriers are regulated separately with different rules or do you think that gig economy workers could just all be kind of lumped together long-term in terms of like that regulatory response in development? Prabir Adarkar: Yes, I’m not sure that we’ve got a full confusion on this matter. I mean, as Tony indicated in the Secretary Walsh’s comment actually suggest an openness to engage with the private sector to figure this stuff out, so it’s a little early to signal whether rideshare drivers we could together with the broader gig economy or good support, we’ll come back if there’s any update on this topic as our conversations progressed. Michael McGovern: Got it. Thanks so much. Operator: Next is Jason Helfstein from Oppenheimer & Co. Your line is open. Unidentified Analyst: Thanks. This is Shawn on the call for Jason. So just one on how are you guys thinking about the risk around local pricing cash and how does this take into account with the new merchant pricing model? And then second, can you talk about the competitive environment around non-food sales relative to the environment through deliveries is more competitive, good at the same, less competitive. What are you guys doing there? Thank you. Tony Xu: Yes. Hi, Shawn, it’s Tony. I’ll start. So on the first question around commission caps what we expect is that these commission caps will be rolling off pretty soon in fact we’ve already seen some of this and some very large cities like in Chicago, Kansas City, Cincinnati, I saw some even roll off earlier this week and so we’re very encouraged I think by what we’re seeing which is elected officials allowing capitalism to do its job and allow everyone to really make things work for all audiences and we’re the first to be excited at DoorDash to have, lots of folk go back inside restaurants, and I think people will and I think that’s -- as that continues to happen as the reopenings occur more and more folks will see delivery as an augmented way to help grow these physical businesses and to be one part of the portfolio of how they do business moving forward. I think with respect to the second question which is around I think you asked about the competitive environment and some of these newer categories. I mean, look, I would say that certainly things exceeded our expectations. If you look at the fact that we started just a year ago in our first non-restaurant category convenience and in about a year’s time, we’ve become the market leader in that category. I think really just show the strengths of both actually across all audiences. The receptivity to our platform how Dashers willing to do deliveries across different hours of the day, different categories how consumers are willing to see help solve different jobs at different times of the week and how different types of merchants will like to have access to the largest on demand food audience and that comes to us at the highest frequencies every month. And so far we are seeing quite a lot of progress in these areas. But to Prabir earlier points to an earlier question, we had the beginning of a massive transformation that’s just unfolding. I mean just to remind all of us even in the core restaurant business even if you added all of the sales up for the largest platforms in the U.S. or about 10% or less of the entire restaurant industry. If you did the same math for some of these other categories that we’re entering via convenience grocery and others that number is very, very, very small single-digits. And so there is a massive runway ahead. Operator: Next question is from the line of Ron Josey from JMP Securities. Your line is open. Ron Josey: Great, thanks for taking the question and really great quarter. I wanted to ask two please more on -- one on DashPass, and you talked about subscribers more than doubled year-over-year average order frequency is an all-time high and I think you mentioned that new users joining in 1Q was somewhat of a record, but can you talk about the strategic nature of DashPass here just specifically as you think about increasing the penetration of new categories and you are increasing the MAUs for new categories, just how you see both DashPass in new categories are working together. And then, Tony maybe as a follow-up to your prior answer, and this is weird question maybe, but could it be that with the reopening the amount of change in consumer behavior to the reopening might actually help longer term about how we as consumers this order things restaurant food et cetera online and how you’re thinking about how the reopening might actually be a tailwind? Thank you. Prabir Adarkar: Ron, Prabir will take the first one, and Tony will take the second. DashPass at the end of the day in the core pillar of our strategy to think about what we’re going to do for consumers, its ability to deliver the wider selection. The best quality and superior affordability and DashPass right to the heart of both selection as well as this price because DashPass as you know consumers digital delivery fees introduced services on their orders until refining is consumers particularly the start increasing the engagement we derive value out of the fact that the $10 subscription fee differs the cost of multiple industries and multiple deliveries and multiple orders and so we are seeing the value proposition of a DashPass translating to into sign ups that have been allowed us to grow the DashPass number should be could be 2x was a year ago and another aspect of the strategy is to continue adding verticals into DashPass. So much the same way Amazon Prime allows you to consume products across multiple categories. That’s our vision for DashPass with Starwood Food and over time, we’ve added convenience stores and then the time as we continue that categories see get slotted into to DashPass to improve the consumer value proposition. Tony Xu: Yes, and with respect to the second question around the reopening as a possible tailwind. I guess, no one has the crystal ball in terms of how this shape recovery occurs, I think in the earlier discussion how the slope of change happens, but what I would say is that the long-term trend is that when it comes to convenience things always move towards the direction of greater to convenience, which means that over the long-term and I suppose, if you look at it from that perspective the tailwind thesis would be that the all that’s happening is that we’ve kind of shifted some of the growth that was otherwise going to happen by who knows some period of time and I think what it was. It has allowed is just that it’s allowed more and more people to be more and more comfortable with this type of business, which allows possibly faster entry into other categories as we power all of local commerce for example. And so I think that’s kind of where we’re seeing it, but I do just want to remind people that convenience only moves in the direction of better convenience. I mean if someone was wanted to go and eat inside of a restaurant for example, they’re probably not thinking about delivery. Conversely, if they’re thinking about takeout or delivery they probably we’re never going to go inside the restaurant in the first instance. And so I think it’s again. I always like to step back in moments where we’re trying to figure out what seems like a very difficult question to take a slightly longer time horizon and think was the greatest privilege we have here is that people eat 22 to 25 times a week and do we see some share of that growing into more convenience. We believe the answer is yes. Ron Josey: That’s helpful. Thank you guys. Operator: We have our next question from Spencer Tan from Evercore ISI. Your line is open. Unidentified Analyst: Hi, thanks for taking my question. Just, I think one question around guidance. So it looks like if you were to take the midpoint of your GOV and EBITDA guidance that you’re guiding to EBITDA accretion versus prior quarters. Just wondering if that’s a direct from the commission structure change that you announced this quarter and how we should think about that. Maybe just providing a little bit more color around that specifically. And then secondarily, I guess, looking into the recovery. Are you seeing any restaurants consolidate the platforms that they utilize and do you think that DoorDash has a competitive advantage from that standpoint by offering other types of software as a service and storefront versus maybe some of the smaller competitors out there i.e., having the ability to maybe gain a little bit more share from some of your comps? Thank you. Prabir Adarkar: So if I answer the question correctly that to do with the EBITDA margins of the GOV picking up slightly, is there… Unidentified Analyst: Yes, got you. Prabir Adarkar: What I’d say is would be provided a range of EBITDA, but if you just reiterate the way we manage our business, it’s to try to maximize scale and so to the extent that the opportunity available to invest in order to beat top line we will do that all day long. The reason for expanding the guidance compared to the prior quarter. We don’t want to feel compelled to have to spend the money in the quarter. If we don’t find the right term cash flows. And so what this allows us to do is to drive that profitability to the bottom line in the event that the right investment opportunities and the slight margin accretion that you see is because of the sequential increase in the peak rate that we’re expecting in Q2 because supply side is normal. Tony Xu: Got it. Okay. Yes, thanks. And at this time, with respect to the second question, yes, we do believe that by having a wider portfolio of products, we can certainly serve more use cases both from a consumer perspective, as I was mentioning earlier people 22 to 25 times a week and so by having more use cases, whether it’d be in delivery pick up the office business where we’re serving a bigger addressable market and of course, you are stemming from that regard. And then with respect to the merchants on the platform piece where we’re not only their largest source of incremental demand through our app. But the fact that we also power their own channels powered their deliveries that gives us greater ordered entity, which drives lower fulfillment costs, but it also allows us to take up greater kitchen capacity as we’re powering the majority of the space that is being used up to produce the food in the first instance and so. I think those are some ways in which our suite of products are generating competitive advantage both for the consumer in terms of just giving a lot more value beyond delivery as well as some of the things that said earlier where we’re adding more categories at no extra charge into a program like DashPass. And then on the merchant side, the wide portfolio of products choose either to grow through the largest source of incremental demand or app or the fact that we’re powering we all of their channels allows us to certainly work with merchants more, but also take more of their production capacity. Unidentified Analyst: Got it. Thank you so much and congrats on the quarter. Operator: Next question is from the line of Clara Linton from BTIG. Your line is now open. Unidentified Analyst: Hi, good evening. Tony or Prabir and why does some speculation on M&A that’s come up somewhat recently, I wanted to see if we could revisit, how you guys are thinking about both new market entry and also specifically weighing up sort of build versus buy options for doing that? Thank you. Tony Xu: Yes, look, I mean we’ve said previously that one of our aspiration is to build a global company in Italy. We operate in the U.S., Canada and Australia. And over time over a long horizon, we will go to expand outside of these regions, now as far as M&A goes what I’d say is we look at all of the opportunities around us. And we’re fortunate in that we’ve got the core business in the U.S. that generates cash and we can invest organically to build out doesn’t to the nation. To the extent, M&A makes sense it might be something we consider. But the bar is extremely high, just given that M&A frankly, it is a complicated matter and getting it right is difficult. So unless we’ve got absolute conviction that M&A is right tool, we will usually rely on inorganic mechanisms. Operator: No further questions at this time. I turn the call back over to Mr. Andy Hargreaves. Andy Hargreaves: Perfect, thank you for the questions and thank you everybody for joining us today. Have a great afternoon or evening and we’ll talk to you again in a few months. Bye. Operator: This concludes today’s conference call. You may now disconnect
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DoorDash Stock Gains 2% on Upgrade

DoorDash (NYSE:DASH) shares rose more than 2% intra-day today following an upgrade by Mizuho Securities analysts. The analysts upgraded the stock from Neutral to Buy and raised the price target to $105 from $90.

The upgrade is based on a deep analysis of key metrics, suggesting that Gross-Order-Value (GOV) growth is likely to surpass guidance and Street expectations in the second half of 2023. The analysts cited factors such as continued market share gains in the US, rational competition in Europe, moderated food inflation, and resilient consumer spending as drivers supporting this outlook.

DoorDash Stock Gains on Q2 Beat & Better Than Expected Outlook

DoorDash (NYSE:DASH) shares rose more than 3% intra-day today following the company's release of a full-year forecast that surpassed expectations.

The company reported a loss per share of $0.44 on revenue of $2.13 billion for Q2. The expected loss per share was $0.41, and revenue was projected to be $2.06 billion. The number of orders rose by 25% year-over-year, reaching 532 million. Moreover, the marketplace gross order value witnessed a significant 26% increase, reaching $16.47 billion.

For the current quarter, DoorDash anticipates a marketplace gross order value of $16 billion, surpassing the Street estimate of $15.4 billion. Additionally, the full-year forecast for the marketplace gross order value is now projected to be $64.7 billion, up from the previous forecast of $63.75 billion, and exceeding the Street estimate of $62.66 billion.

DoorDash Reports Q2 Revenue Beat, While EPS Miss Estimates

DoorDash, Inc. (NYSE:DASH) reported its Q2 results, with EPS of ($0.72) coming in worse than the Street estimate of ($0.21). Revenue increased 30% year-over-year to $1.61 billion, beating the Street estimate of $1.52 billion.

The company anticipates Q3 Marketplace GOV of $13.0-$13.5 billion and adjusted EBITDA of $25-$75 million. For the full 2022 year, the company anticipates Marketplace GOV of $51.0-$53.0 billion and adjusted EBITDA of $200-$500 million.

According to the analysts at RBC Capital, the company’s quarterly results were somewhat mixed, with a modest downside to GOV but upside to EBITDA, and GOV guidance relatively in line with expectations.

Positively, the company isn’t letting the public market’s newfound appetite for profitability alter its strategy to fund growth initiatives with its core, which highlights high confidence that the machine is working well.

DoorDash Reports Q1 EPS Miss, Better Than Expected Revenues

DoorDash, Inc. (NYSE:DASH) reported its Q1 results, with revenue of $1.46 billion coming in better than the consensus estimate of $1.37 billion, while EPS of ($0.48) missing the consensus estimate of ($0.41).

US restaurant marketplace orders grew over 250% from Q1/20 to Q1/22. The number of orders during the quarter was 404 million, up 23% year-over-year.

Economies of scale are showing through lower Dasher costs quarter-over-quarter and year-over-year. The company anticipates more efficient capital redeployment at Wolt post-acquisition (expected to close in Q2/22), keeping the EBITDA outlook unchanged.

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