DoorDash, Inc. Q3 FY2024 earnings call

Key managerial messages include: International markets showing similar top-line and bottom-line progress as the U.S., with gross profit positive and gaining share in most markets. Grocery business has seen strong growth, with consumers ordering more items each subsequent visit and cohorts showing increased frequency and spend. Partnership strategy focuses on building products as the main priority, with partnerships like Lyft, Chase, and MAX adding benefits to DashPass. DashPass has reached an all-time high in subscribers. Work on autonomous delivery is ongoing with a focus on first principles approach. CPG advertisers are excited about DoorDash's scale and product portfolio. DoorDash sees itself as having defensible characteristics in grocery competition through product execution, retention, and frequency.

Q: In international markets, have you seen a similar arc of contribution margin improvement as in the U.S.?

A: Yes, seeing similar progress both top line and bottom line in international markets, similar to the U.S. with efficient growth driven by retention and order frequency.

Q: On fixed cost leverage in international markets?

A: Yes, as we add markets, we see operating leverage in tech stack, products, and know-how, though still early in international markets with investment in product.

Q: On grocery, are we getting closer to seeing larger grocers on the platform?

A: Yes, made progress in grocery, adding selection including large grocers, with customers coming to DoorDash first for grocery delivery.

Q: On cohorts in grocery, who are the new cohorts?

A: New cohorts include consumers from suburban markets, those starting with grocery as the first order, and existing cohorts showing continued strong retention and wallet share increase.

Q: Broader partnership strategy?

A: 80% on building products, 20% on partnerships. Examples include Chase, MAX, and Lyft partnerships to add engagement to DashPass and new members.

Q: Rank order of impact on take rates: ad growth, platform contribution, cost line efficiencies?

A: Revenue outpacing GOV growth driven by ads, platform benefits, and cost efficiencies, with revenue expected to continue outpacing GOV growth flexibly.

Q: Grocery price parity goal?

A: Aim to get customers exactly what they ordered, competitive prices, and faster than self-service, combining these for price parity.

Q: Breakdown of 19% GOV growth between core restaurant and other categories?

A: Restaurant business stable, grocery and international growing faster and gaining share.

Q: AOV increase due to product mix or price inflation?

A: Some increase in grocery business, driven by more consumers ordering from more categories.

Q: Gross profit margin outperformance details?

A: Driven by advertising, reducing regulatory costs, and logistics efficiency, with focus on maximizing long-term profit dollars.

Q: M&A in international, attractiveness of targets?

A: Standards high, looking for candidates that help launch new geographies, accelerate growth, achieve cash flows, and have capable management teams, like Wolt and TAZ in Europe.

Q: DashMart update?

A: DashMart has progressed, with focus on national service and partnering with retailers to provide inventory infrastructure.

Q: Feedback on DoorDash Commerce platform?

A: Excitement from merchants as DoorDash is a leading local commerce marketplace connecting consumers to merchants.

Q: DashPass member concentration?

A: DashPass members are everywhere, with strength across urban and suburban markets.

Q: Autonomy in delivery?

A: Working on autonomous delivery since 2017, different from ride hailing, taking first principles approach with technology and operations.

Q: CPG advertising trends?

A: CPG advertisers excited about DoorDash's scale and product portfolio, with team maturing the product portfolio.

Q: Grocery competition defensible characteristics?

A: Starts with building best product, high retention and order frequency, being the first place consumers go for grocery delivery, and getting most shots on goal.

Q: Sales and marketing leverage on EBITDA, driver incentives?

A: Leverage from product improvements making Dasher and consumer acquisition more efficient, expecting continued improvement but slower pace ahead.

Q: Grocery large basket orders?

A: Larger baskets are a bonus, as business is sustainable with smaller baskets, but seeing growth in larger baskets with subsequent orders and cohorts