Loyal DoorDash users helped the company to another record quarter in Q1, despite widespread vaccination and the easing of restaurant restrictions—and executives’ warnings that a slowdown was coming.
“The impact of reopening really has been more muted than we expected, certainly, when we were looking at this last fall and even as we were starting to prepare for this toward even last summer,” said CEO Tony Xu on the company’s first quarter earnings call Thursday.
Total orders were up 219% year over year to 329 million, and gross order value grew 222%, to $9.9 billion—both all-time highs. Revenues were up 198%, to $1.08 billion, though the company still lost $110 million in the quarter.
But signs of headwinds are starting to appear. DoorDash reported declines in new customer growth, order rates and average order value in the quarter.
“While the impact has been smaller than expected to date, we expect it to grow through the summer as markets continue re-opening,” executives wrote in a letter to shareholders.
Those trends aren’t affecting all customers equally, though. Dropoffs were more prevalent among newer customers and less so for high-frequency users and members of the company’s DashPass subscription program.
DashPass order frequency in the quarter hit a record high, the company said, and the number of members has more than doubled year over year. As of September, the program had more than 5 million subscribers; they pay $9.99 a month for no delivery fee on orders over $12 from participating restaurants.
Those “sticky” customers helped the company outperform its Q1 forecast, executives said.
“As consumers begin to use the product, new habits develop, and those habits tend to persist. And part of that is being bolstered by the fact that the product has gotten routinely better over the course of time,” said CFO Prabir Adarkar on the earnings call.
Improvements include better selection, quality and affordability, as well as new categories like convenience and grocery, he said. And those new verticals are apparently helping drive frequency across categories, including restaurants.
“Once you begin to use multiple categories, that actually increases your engagement with the core restaurant category,” Adarkar said, adding that those customers also show stronger retention and engagement compared to restaurant-only customers.
Those nonrestaurant transactions—alcohol, convenience, grocery, flowers and gifts—grew 40% in Q1 vs. the prior quarter, accounting for 7% of all orders, the company said. And it has already started integrating these categories into DashPass.
“So, much the same way Amazon Prime allows you to consume products across multiple categories, that's our vision for DashPass,” Adarkar said.
As the importance of that program becomes increasingly clear, DoorDash has stepped up its efforts to court subscribers. Earlier this week, it announced that users of most Chase co-branded cards would get one year of free access to DashPass—a perk previously limited to users of Chase’s premium cards.
Stimulus checks helped DoorDash in the quarter, too, and their effects could soon wear off. And even DashPass users are unlikely to be immune to the pull of summer weather, executives noted.
“Usually as the weather improves, you see consumers go dine in. And that behavior is generally consistent across both new customers that were recently acquired as well as existing customers that have been on the platform for a while,” Adarkar said.
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