Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Strong consumer demand with no significant challenges observed, contrary to industry trends.
- Digital channels are growing robustly, contributing to overall growth.
- High retention and order frequency, even better than pandemic cohorts.
- DashPass achieved an all-time high in subscriber base.
- Expansion into non-restaurant categories is driving new customer acquisition and increased use cases.
Negative Points
- Regulatory costs in markets like New York and Seattle have impacted EBITDA.
- Inflation has led to fewer items per order, although overall AOV remains flat.
- Competitive landscape remains highly active, requiring continuous investment in product and efficiency.
- International markets are still underpenetrated compared to the US, indicating a long runway for growth.
- Balancing consumer experience with ad revenue growth remains a challenge.
Q & A Highlights
Highlights from DoorDash Inc (DASH, Financial) Q2 2024 Earnings Call
Q: What are you seeing from an overall demand perspective, especially regarding restaurant demand and new customer acquisition?
A: Tony Xu, CEO: We are seeing strong consumer demand and not experiencing the challenges reported elsewhere. Digital channels are growing robustly, and we are still in the early stages of digital adoption. Our product continues to improve, with high retention and order frequency. We are also expanding use cases beyond restaurants, acquiring more new customers than any other platform.
Q: Can you explain the increase in the revenue take rate and the factors driving it?
A: Ravi Inukonda, CFO: The increase is driven by the fast growth of our ads and platform businesses, as well as improvements in efficiency. We aim to continue growing our ad and platform businesses while finding opportunities to reinvest in growth.
Q: What are the key takeaways from running the international business for two years, and how do you plan to grow in new countries?
A: Tony Xu, CEO: Success in international markets comes from offering the best service for customers, carriers, and merchants. We have strong retention and frequency in these markets, and we continue to improve our offerings. We see significant growth potential in expanding our product offerings globally.
Q: Can you provide more details on the impact of regulatory changes in New York City and Seattle on your business?
A: Ravi Inukonda, CFO: The impact on EBITDA from regulatory costs in Q1 was significant but has decreased in Q2 due to product improvements and efficiency gains. We expect these costs to continue to reduce throughout the year.
Q: How are you addressing price parity and ensuring affordability for consumers?
A: Tony Xu, CEO: We are constantly working to align business models and incentives to offer the most affordable service. This involves improving logistics efficiency and ensuring inventory availability. Our goal is to make our products and services more accessible and affordable.
Q: What are your plans for expanding the advertising business, especially with CPG advertisers?
A: Tony Xu, CEO: Our focus is on building a great marketplace first, which will naturally attract CPG advertisers. We are growing our ad business responsibly, ensuring it does not degrade the consumer experience. The growth of our new verticals will also attract more CPG ad spend.
Q: How are you managing competitive dynamics in the US and international markets?
A: Tony Xu, CEO: We have not seen significant changes in the competitive landscape. Our focus remains on offering the best combination of selection, quality, price, and support. We continue to lead in retention and frequency, which are key indicators of consumer preference.
Q: Can you quantify the impact of adding new merchants to the platform?
A: Tony Xu, CEO: We are adding selection across all categories, not just restaurants. The goal is to represent every city digitally, which means continuously onboarding new merchants. This effort is ongoing as new restaurants and retail categories emerge.
Q: How do you plan to drive leverage in operating expenses (OpEx) going forward?
A: Ravi Inukonda, CFO: Our goal is to scale the business while driving efficiency in OpEx. We are investing in product and engineering to improve retention and order frequency. We expect OpEx as a percentage of GOV to remain stable for the rest of the year and aim to drive leverage in the future.
Q: What are the key factors driving the strong performance of your international markets?
A: Tony Xu, CEO: The strong performance is due to offering the best combination of selection, quality, affordability, and support. We started with a robust foundation and have continued to improve our offerings. We see significant growth potential in expanding our product offerings globally.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
