DoorDash Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nikhil Devnani - Sanford C. Bernstein & Co., LLC. - Analyst : Hi, thanks for taking the question. I wanted to ask a two part question on international. So in the past, you've kind of illustrated this dynamic in the US business where as cohorts experienced go forward and mature a little bit you see improvements in the contribution margins by years three and four. Now that you've been operating in some of these international markets for a few years now, -- have you seen a similar arc and magnitude of improvement on the contribution margin front for these cohorts as well? Or is it a little bit different for market structure reasons or for other reasons? And then my second question is around the degree of fixed cost leverage that you can get operating in so many different countries at once. I'm sure you get to share some technology and talent, but given delivery is hyper local, how do those two things shake out? Is your fixed cost burden in your newer markets lower and easier to overcome or not really? Thank you.

Question: Nikhil Devnani - Sanford C. Bernstein & Co., LLC. - Analyst : Thank you both.

Question: Michael Morton - MoffettNathanson LLC - Analyst : Hey, everyone. Thanks for the question. I wanted to start first maybe one for Tony and then a cohort question for Ravi. It's great to see the Wegmans grocery announcement. Just curious if we're getting closer to seeing an unlock of some of the largest grocers in the country who are not currently on DoorDash platform coming on to DoorDash? And then on the grocery topic and thinking longer term and your ability to make strides into the market. Could you talk about the trends that you see for the grocers who have been on the platform for the like longer extended period of times that you see with larger baskets and maybe larger basket market share trends for the grocers have been on the platform for two years. And then for Ravi your comments on cohorts the last couple of quarters is really encouraging. The new cohorts coming in being as strong as ever. The question that we get from investors is, who are these people . What are the demographics isn't everybody already ordering (technical difficulty) clearly not. So we would love if you could maybe shine a little light on what they look like. Is this skewing younger college age students, more digitally inclined, who are moving out of their home every fall going to college. Anything there would be great. Thanks again.

Question: Michael Morton - MoffettNathanson LLC - Analyst : Thank you so much.

Question: Bernie McTernan - Needham & Company, LLC - Analyst : Great. Thanks for taking the question. Just wanted to ask about the partnership strategy, especially in light of the list announcement from tonight. So maybe just talk about the broader partnership strategy. I know you also partner with streaming companies, for example, but is there anything different here with the list that there is the driver component as well?

Question: Bernie McTernan - Needham & Company, LLC - Analyst : Makes sense. Thanks, Tony.

Question: Shweta Khajuria - Wolfe Research, LLC - Analyst : Thank you so much for taking my questions. Let me try two, please. Ravi, the day rate contributors in the past, you've mentioned its ad growth and platform contribution as well as cost line efficiencies. Could you maybe please rank order them in terms of the impact on take rates as you think about maybe near to mid-term? And then on price parity, either Tony or Ravi, where do you think you want to be when it comes to grocery price parity in the mid to long term. Is there a future where it's going to be the same as in-store prices? Is that the goal? Or is it that you want to be the most competitively priced online grocery delivery platform?

Question: Shweta Khajuria - Wolfe Research, LLC - Analyst : Thanks Tony. Thank you, Ravi.

Question: Andrew Boone - JMP Securities LLC - Analyst : Thanks so much for taking my questions. Ravi, I wanted to ask about the gross profit margin outperformance in the quarter. I understood the call out on the insurance benefit, but is there anything else that you guys want to highlight in terms of the outperformance there? And then Wolf acquired TAS in Europe. Tony, can you just step back and talk about what may be attractive in terms of M&A targets going forward and why that specific country and acquisition? Thanks so much.

Question: Andrew Boone - JMP Securities LLC - Analyst : Thank you.

Question: James Lee - Mizuho Securities USA LLC - Analyst : Great. Thanks for taking my questions. Great. Tony, I was wondering if you can comment about comment about [DashMart]. And maybe can you give us an update like which business models are working and which business model is still working progress? And maybe talk about some of the growth constraints that we should be thinking about? So -- and lastly, it seems like some of the European peers are able to make quick commerce profitable. Maybe help us understand any differences you're seeing between North America and Europe? Thanks.

Question: James Lee - Mizuho Securities USA LLC - Analyst : Great. Thank you.

Question: Michael McGovern - BofA Securities, Inc. - Analyst : Hey guys, thanks for taking my question. I have two -- there's been a lot of attention on the topic of AVs recently, obviously, for rideshare, but do you have a view on the potential future of the delivery use case for autonomous vehicles? Is that something that you may be looking into for your partnership strategy? And then secondly, on restaurant sponsored listings, what are the latest trends that you're seeing in terms of merchant roads and some consumer conversion? And how is that playing out in terms of demand for the ads? Thank you.

Question: Michael McGovern - BofA Securities, Inc. - Analyst : Thank you.

Question: Lee Horowitz - Deutsche Bank AG - Analyst : Thanks, Maybe sticking with ads and moving over to CPG advertising. You guys have obviously been stacking multiple quarters of really strong grocery volume growth and getting that marketplace to scale. I guess this is probably presumably grabbing the attention of your CPG advertising partners. Have you gotten any indication from those partners in your conversations as they think about budgets for next year, that they be leaning a bit more aggressively into your platform, just given how much you have grown over the last year or so?

Question: Lee Horowitz - Deutsche Bank AG - Analyst : Great. And maybe one follow-up just on grocery competition holistically. Obviously, it's very fierce. You have first-party delivery partners who can perhaps lean in on price, given vertical integration. You have other marketplaces that have other verticals that they can monetize on besides grocery and then obviously some focused grocery marketplaces. I guess within that hypercompetitive environment, where do you see as the most defensible sort of characteristics for DoorDash that should allow you guys to come out as one of the key winners in this vertical over a longer period of time.

Question: Lee Horowitz - Deutsche Bank AG - Analyst : Thank you.

Question: John Collante - Jefferies LLC - Analyst : Great. Thanks for squeezing me in here. So I want to start with sales and marketing leverage continues to be a really nice tailwind for EBITDA. Can you peel back the onion and talk a little bit about contribution from driver incentives. And sort of when you think about beyond the near term and look at supply and demand dynamics and your investments in driver experience, how are you thinking about the magnitude of the ongoing contribution to margin expansion from leverage on incentives? And second question, just turning to grocery. How important is capturing more of that big basket weekly shop to your long-term profit aspirations in grocery? And what are the capabilities and investments you still need to make to start driving more of those large basket orders? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 9:00PM, DASH.OQ - Q3 2024 DoorDash Inc Earnings Call

Question: John Collante - Jefferies LLC - Analyst : Thanks so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 9:00PM, DASH.OQ - Q3 2024 DoorDash Inc Earnings Call