Growth in New Verticals: DoorDash reported significant growth in the grocery and new verticals segments, with grocery showing north of triple-digits growth year-over-year.
Positive Unit Economics in New Verticals: Despite smaller baskets and without a substantial contribution from CPG ad dollars, new verticals displayed positive unit economics.
Advertising Revenue Growth: Without specific figures disclosed, the company indicated that its advertising business is substantially larger and growing well, especially in serving the restaurants category and beginning to address CPG advertisers’ demand.
Future Guidance
Incremental Investments: The company highlighted continued investment in international markets and new vertical segments, suggesting ongoing growth and unit economic improvements in these areas.
Advertising Business Expansion: DoorDash plans to expand its advertising product offerings, improving self-serve capabilities and reporting for advertisers, indicating an expectation of continued revenue growth from this segment.
Management of Regulatory Impacts: Mentioned absorbing costs from regulatory changes in markets like Seattle and New York, with a roadmap to sustainability and improving unit economics over time.
Trends, Market Conditions, Sentiment
Expansion Beyond Groceries: DoorDash is expanding its selection not just in groceries but also across various other retail segments, indicating a strategy to become a one-stop-shop for local commerce beyond food delivery.
Regulatory Challenges: The earnings call addressed regulatory challenges in some markets, notably Seattle and New York, impacting cost and operations but with strategies in place to mitigate these effects.
Strategic International Growth: The acquisition of Wolt and the resultant international expansion were highlighted as positively contributing to the company’s growth trajectory, emphasizing efficient scale, retention, and order frequency as key metrics.
Investment Focus Shift: There’s a nuanced approach to allocating investment dollars, focusing on areas of significant growth (such as new verticals and international expansion), as well as platform and product innovation to drive long-term sustainability.
Notable Quotes
”if you can build the largest network in the highest frequency category… then you would have a cost advantage.” – Tony Xu, exploring DoorDash’s advantage in logistics and delivery.
”We’re seeing increasing pull from consumers and from retailers.” – Tony Xu, indicating strong demand growth in new verticals like grocery and retail segments beyond food.
”The ads business is substantially larger than what you were quoting… it’s going really well.” – Tony Xu, highlighting the success and growth potential of the advertising revenue stream.
”We are continuing to invest behind that strategy.” – Ravi Inukonda, emphasizing continued investment in growth areas, particularly in new verticals and international markets, despite the incremental costs associated.
”We’ve seen a material progress on all 3 metrics…” – Ravi Inukonda, referring to retention, order frequency, and unit economics as key performance indicators for international expansion.
