Release Date: February 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• DoorDash Inc (NASDAQ:DASH) reported strong growth in Q4 2024, with both US and international markets showing substantial gains.
• The company continues to expand its penetration in new verticals such as grocery and retail, with these areas growing faster than the restaurant business.
• DoorDash Inc (NASDAQ:DASH) has a large addressable market with significant room for growth in both penetration and frequency of use.
• The international business is gross profit positive, and the company is gaining market share in virtually every country it operates in.
• DashPass and Wolt Plus subscription services are experiencing strong growth, with DashPass growing faster than in previous years.

Negative Points

• DoorDash Inc (NASDAQ:DASH) faces challenges in improving product quality and affordability, particularly in the grocery delivery sector.
• The company is not yet operating at a specific margin percentage, focusing instead on increasing EBITDA and profit dollars, which may concern some investors.
• There are uncertainties in the broader economic environment that could impact future performance.
• The cost structure of autonomous vehicles currently does not make delivery a primary use case, posing a potential long-term challenge.
• The take rate was sequentially flat, impacted by seasonal factors such as Dasher pay, which could affect profitability.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Sign with DASH.

Q: What's the bigger opportunity for DoorDash: increasing order frequency or market penetration? A: Tony Xu, CEO, emphasized that both penetration and frequency are key opportunities. He noted that DoorDash is still a small player in the US restaurant industry and even smaller globally. The focus is on expanding into more geographies, improving product quality, and enhancing customer support to drive both penetration and frequency.

Q: Can you discuss contribution profit margins, especially in international markets, and your goals for 2025 and 2026? A: Ravi Inukonda, CFO, stated that DoorDash focuses on increasing EBITDA dollars rather than specific margin percentages. The international business is growing faster than peers and is gross profit positive. Tony Xu added that investment decisions are based on signs of product-market fit and potential for strong cash generation.

Q: How is DoorDash preparing for the potential impact of autonomous vehicles on delivery? A: Tony Xu expressed excitement about autonomy as a mega trend. He noted that autonomous delivery differs from robotaxis and emphasized the importance of integrating technology with operations to achieve cost efficiency. DoorDash is exploring this area but has no announcements yet.

Q: What are the key learnings from the grocery side of the business, and what are the strategic priorities for 2025? A: Tony Xu highlighted the need for product improvements in grocery delivery, such as increasing SKU availability and delivery accuracy. He noted that customers are transitioning from small to larger basket orders, and partnerships with grocers are proving incremental. The focus remains on enhancing the product.

Q: What is the roadmap for DoorDash's advertising business over the next 12-24 months? A: Tony Xu explained that the advertising business focuses on balancing advertiser needs with consumer experience. The goal is to ensure ads are relevant and integrate well with existing platforms. The emphasis is on maintaining a healthy marketplace to support the advertising business.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.