Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DoorDash Inc (DASH, Financial) is experiencing strong growth in international markets, mirroring the progress seen in the US, with improvements in both top-line and bottom-line metrics.
- The company has successfully leveraged fixed costs across multiple markets, benefiting from shared technology and talent.
- DoorDash Inc (DASH) continues to gain market share in grocery delivery, with new customer acquisition and increased order frequency.
- The company has achieved record numbers of DashPass subscribers, indicating strong consumer engagement and retention.
- DoorDash Inc (DASH) has seen significant growth in its advertising business, driven by a successful marketplace and high return on ad spend for advertisers.
Negative Points
- The grocery delivery market remains highly competitive, with challenges in achieving price parity and maintaining competitive pricing.
- DoorDash Inc (DASH) faces operational complexities in international markets due to the hyper-local nature of delivery services.
- The company is still in the early stages of investing in product and market expansion, which may impact short-term profitability.
- There are ongoing challenges in ensuring inventory reliability and solving logistical issues in grocery delivery.
- DoorDash Inc (DASH) must continue to invest in technology and operations to address the unique challenges of autonomous delivery, which differs significantly from ride-hailing.
Q & A Highlights
Q: Have you seen similar improvements in contribution margins in international markets as in the US, and how does fixed cost leverage play out in these markets?
A: Tony Xu, CEO: Yes, we are seeing similar progress in international markets as in the US, with strong top and bottom-line growth. We gain market share in every market we operate in. Regarding fixed cost leverage, we do see benefits as we expand into new markets, using the same team and tech stack, despite the hyper-local nature of the business. Ravi Inukonda, CFO: Our international business is growing faster than peers, gaining market share, and remains gross profit positive. We continue to invest in retention and order frequency.
Q: Are we closer to seeing major grocers join DoorDash, and what trends are you seeing with grocers on the platform?
A: Tony Xu, CEO: We are excited about our progress in grocery, having launched it four years ago. We started with a top-up experience and have expanded to include major grocers like Wegmans. Customers tend to order more items over time, increasing frequency and spend. We are leading in new customer acquisition and retention in grocery delivery.
Q: Can you discuss the partnership strategy, particularly with the recent Lyft announcement?
A: Tony Xu, CEO: Our main focus is building and enabling local commerce. Partnerships, like with Lyft, complement our core product offerings. Lyft provides access to a large user base, and we offer them the largest local commerce platform. Our main growth driver remains our own product improvements, with partnerships enhancing our reach.
Q: What are the key contributors to take rate improvements, and what is your goal for grocery price parity?
A: Ravi Inukonda, CFO: Revenue growth outpaces GOV growth due to ads and cost efficiencies. We expect this trend to continue, though not linearly. Tony Xu, CEO: For grocery, we aim to offer competitive prices and ensure customers get exactly what they order. Some partners already match in-store prices, and we strive to improve convenience and speed.
Q: How do you view the potential for autonomous vehicles in delivery, and what trends are you seeing in restaurant-sponsored listings?
A: Tony Xu, CEO: Autonomous delivery is different from ride-hailing, with unique challenges in loading and unloading. We are taking a first-principles approach and are excited about future developments. On ads, our marketplace growth supports a successful ads business, with high ROA for advertisers and improving consumer conversion rates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
