Despite generally lower COVID friction in its market during Q2 2021, DoorDash managed to set records for orders and the value of those orders. In the three-month period concluding June 30, 2021, the on-demand food delivery company turned $10.46 billion in order value (marketplace GOV) into $1.24 billion in total revenue. The marketplace GOV number was 70% greater than the Q2 2020 result, while DoorDash’s revenues expanded by 83%.
Investors had expected the company to post $1.08 billion in total revenues, so DoorDash handily bested expectations.
How profitable was DoorDash during the quarter? DoorDash was unprofitable overall, with a net loss of $102 million. In adjusted EBITDA terms, DoorDash saw $113 million in profit during Q2 2021. That’s not too bad, given that Uber cannot manage the same feat with its own food delivery business. DoorDash’s net income was worse than what it managed in Q2 2020, while its adjusted EBITDA improved.
Shares of DoorDash are off around 3.5% in after-hours trading.
Why? It’s not entirely clear. DoorDash said that it expects “Q3 Marketplace GOV to be in a range of $9.3 billion to $9.8 billion, with Q3 Adjusted EBITDA in a range of $0 million to $100 million.” Sure, that’s down a smidgen from its Q2 GOV number, but investors were anticipating DoorDash to post less revenue in Q3 than Q2, so you would think that GOV expectations were also more modest.
Is COVID the answer? Mentions of COVID-19 in the company’s earnings document tend to deal with trailing results and historical efforts to provide relief to restaurants that use DoorDash for orders or delivery. So, there’s not a lot of juice to squeeze there. However, the company did say the following toward the end of its report:
We believe the broad secular shift toward omni-channel local commerce remains nascent. However, the scale and fragmentation of local commerce suggests the problems to be solved will get more difficult, coordination between internal and external stakeholders will become more complex, and vectors for competitive threats will increase. At the same time, we expect the pace of consumer behavioral shifts to slow compared to the extraordinary pace of change in recent quarters.
Simplifying that for us: DoorDash expects slower growth in the future, a more complex business climate and rising competition as it enters new markets. That’s not a mix that would make any investor more excited, we don’t think.