In its first earnings statement as a public company, issued on Feb. 25, DoorDash disappointed despite setting quarterly records for total orders, adjusted earnings before interest, taxes, depreciation and amortization, and market share. Investors instead fixated on the company’s doubling of its quarterly loss over Q4 2019.
Since then, DoorDash (NYSE: DASH) has ridden pandemic tailwinds to a pair of productive quarters in 2021, turning in strong earnings across the board in Q1 and a sequential increase in revenue in Q2. Still, investors had fears that a Dasher shortage and a series of renewed dine-in options for restaurants that had turned to all-pickup and delivery during the pandemic might put a dent in the company’s Q3 numbers.
DoorDash may have confirmed some of those fears when it released its Q3 earnings report on Tuesday after the bell. The food delivery app beat estimates for revenue, grew total orders by nearly 50% year-over-year and boosted its marketplace gross order value (GOV) by 44% over Q3 2020, but it missed on analyst estimates for earnings per share (EPS) and more than doubled its quarterly GAAP net loss year-over-year.
Still, total monthly active users as well as membership for DashPass, DoorDash’s monthly free delivery subscription, both hit all-time highs. DashPass orders as a percentage of total orders also hit a record peak for the company, as it continues to grow a loyal customer base.
“We are proud of our progress growing DashPass members and excited by the opportunity ahead of us,” the company said in its letter to investors. “There is a much larger group of people who are not members and order much less frequently on average, as well as an even larger group who do not use DoorDash. We believe the vast majority of consumers still view our service as a point solution for restaurant delivery or a luxury service.
“To attract these consumers and win their consistency, we intend to continue investing to expand the number of merchants we connect people with, broaden the range of services we offer, improve our quality and ease-of-use, and extend our affordability.”
The company’s stock was trading at around $192 at market close, jumping almost 10% in post-market trading on the simultaneous news that DoorDash had completed the $8.1 billion acquisition of international food delivery platform Wolt.
DoorDash (NYSE: DASH) reported that revenue grew 45% year-over-year to $1.3 billion and up from $879 million in Q3 2020, while total orders jumped 47% year-over-year to 347 million from 236 million in Q3 2020. Marketplace GOV also increased, rising 44% year-over-year to $10.4 billion, up from Q3 2020’s $7.3 billion. It predicts GOV for Q4 2021 to fall between $10.3 billion and $10.7 billion.
The revenue figure was also impacted negatively by price controls, such as caps on the commission DoorDash can charge partnering restaurants, the company said.
“We exited Q3 operating under price controls in 65 jurisdictions, down from a peak of 108. Price controls expired in 33 jurisdictions in Q3 and no jurisdictions implemented new price controls in the quarter. In Q3, we estimate price controls had a net negative impact on our revenue of $23 million. We expect the impact to decline slightly in Q4.”
Interestingly, the company said that international orders “grew substantially faster” than domestic orders, supporting investors’ thesis that closures of in-person dining in the U.S. negatively impacted order growth. It also emphasized that orders in international markets have lower net revenue margins than those domestically.
GAAP gross profit increased 42% year-over-year to $665 million, up from $469 million in Q3 2020, and adjusted EBITDA was $86 million, perfectly in line with DoorDash’s adjusted EBITDA of $86 million in Q3 2020. DoorDash had expected adjusted EBITDA to be in the range of $0 to $100 million, and it maintains that same adjusted EBITDA range in its Q4 guidance.
Meanwhile, though, DoorDash widened its $43 million GAAP net income loss in Q3 2020 to $102 million this quarter.
GAAP EPS was a loss of 30 cents, much worse than expected. Analysts expected EPS of 11 cents on revenues of $1.18 billion.
The number of dashers –– DoorDash’s term for its drivers –– and their earnings remained consistent with trends from the first half of 2021, with a little over 3 million dashers earning around $2.8 billion in Q3. Dasher earnings per active hour grew 9% year-over-year and 30% over Q3 2019.
“We believe dashing provides additive features to the labor market that, if removed or impaired, would risk damaging the millions of people who simply want an opportunity to earn more money in a manner that works for their lives,” DoorDash said in a message to investors. “We firmly believe we can make dashing even better, and we remain committed to improving the accessibility, flexibility and earnings potential we offer to ensure Dashers have the opportunity to choose what is best for them.”
DoorDash certainly remains focused on restaurants, having released its ghost kitchen service DoorDash Kitchens in July. But the company has also ventured into other areas. In September, it began offering delivery of alcohol to 100 million customers worldwide, and just last week, it penned a partnership with Ulta to deliver beauty products. DoorDash had more nonrestaurant partners on its marketplace in Q3 than ever before, with over 40,000 stores.
“We believe we have done a good job so far at expanding the opportunity for our restaurant partners, both through our Marketplace and our Platform Services,” the letter to investors reads. “However, even in our most developed vertical, there is significantly more work yet to be done. Among other areas, we remain heavily focused on driving new forms of demand, increasing efficiency in restaurant operations, improving marketing and customer service, and helping optimize kitchen infrastructure.”
DoorDash has added at least one new source of demand, debuting nationwide shipping earlier this week to compete with GoldBelly. It also doubled down on its growing international presence, announcing the $8 billion acquisition of Wolt alongside the earnings release.