In its first earnings statement as a public company, issued on Feb. 25, DoorDash (NYSE: DASH) did not impress investors, despite setting quarterly records for total orders, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), and market share. A doubling of the quarterly loss over Q4 2019 soured analysts.
In its second try as a public company Thursday, DoorDash again set quarterly records for total orders and marketplace gross order value (GOV), achieved an all-time high on average order frequency, and grew orders from nonrestaurant categories 40% quarter-over-quarter.
If analysts were looking for improvement, they got it in Q1 2021. DoorDash reported that revenue grew 198% year-over-year to $1.1 billion and up from $970 million in Q4 2020, and total orders jumped 219% year-over-year to $329 million. Marketplace GOV also increased significantly, rising 222% year-over-year to $9.9 billion, up from Q4’s $8.2 billion.
GAAP gross profit increased 233% year-over-year to $493 million, which was up from $477 million in Q4, and adjusted EBITDA was $43 million, compared to an adjusted EBITDA loss of $70 million in Q1 2020.
Earnings per share (EPS) was a loss of 34 cents, wider than expected. Analysts expected EPS of negative 26 cents on revenues of $993.3 million. Expected adjusted EBITDA was $34.5 million on orders of 303.7 million, according to Seeking Alpha.
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DoorDash stock was down to $115.94 a share near market close Thursday, off from about $183 a share on Feb. 25. In aftermarket trading immediately after the earnings release, the stock was up more than 8%.
DoorDash said drivers were harder to find, but consumer demand was improved. It has raised its full-year guidance for GOV to a range of $35 billion to $38 billion, up from $30 billion to $33 billion.
In a letter to shareholders, DoorDash executives said new customers were joining with higher average order rates than before COVID-19 hit, and customer acquisition remained on pace with previous quarters. DashPass subscribers more than doubled year-over-year.
“Throughout Q1, as markets continued reopening and in-store dining increased across the U.S., the impact to our order volume was smaller than we expected, which contributed to strong performance in the quarter. We believe stimulus checks were partially responsible for this, as their issuance increased consumer demand on our platform at the same time as in-store dining rates accelerated in many markets,” the company said, while also acknowledging that as more sectors of the economy have reopened, DoorDash has seen a negative impact on new consumer growth and order rates.
“Despite the modest impact on order volume to date, we anticipate consumer behavior will shift further as markets continue to reopen, the impact of stimulus fully wears off, and we enter the seasonally slower summer months. While our historical growth rates and the impact of the COVID-19 pandemic have masked seasonality in previous years, we typically see softness in order rates and new consumer acquisition in the summer months compared to the colder winter months,” the company said.
DoorDash has been a target of new restrictions across the county as cities and towns put in caps on delivery and service fees. At the end of April, the company announced a new Partnerships Plans program, offering restaurants three price points, ranging from a base 15% commission plan to a 30% plan with the largest possible delivery area, the lowest customer fees and DashPass benefits. The top plan also offered a “growth guarantee,” which refunds full commissions for any month in which the restaurant accepts fewer than 20 total orders across its Pickup, Delivery and Caviar offerings.
In the shareholder letter, DoorDash said these fee caps negatively impacted revenue by $31 million in Q1.
“Unfortunately, these fees reduce order volume, which reduces revenue to merchants and earnings for Dashers. While we expect price controls to continue negatively impacting our revenue, we expect a slightly smaller net negative impact to revenue in Q2 than we experienced in Q1,” the company said.
Earlier this week, DoorDash signed on as a delivery partner of Rite Aid (NYSE: RAD). The company will offer same-day delivery of over 24,000 items from Rite Aid stores across the country, including nonprescription health, convenience and wellness products. All the products can be ordered through the DoorDash app, and DashPass members will pay no delivery charges.
