Investors celebrated as DoorDash released its first quarter 2021 financial results showing the leader in the U.S. delivery scene nearly tripled its quarterly revenue to $1.08 billion, increased its gross order volume to $9.9 billion and saw average order rates that were well above pre-COVID averages as the company narrowed its quarterly net loss to $110 million.
Year over year, total orders grew 219 percent to 329 million, which was driven by improved retention, increased average order frequency and new consumer growth. Looking ahead to the next quarter, the company cautioned investors that the outlook for the rest of 2021 “remains highly uncertain as consumer behavior could deviate” from its expectations with so many variables related to vaccination, reopenings and sudden shifts in consumer behavior.
DoorDash reported strong growth in the number of consumers placing their first order on DoorDash in new categories, as the company has continued expanding beyond the restaurant meals category. Orders from non-restaurant categories increased by more than 40 percent over the previous quarter, now totaling more than 7 percent of all DoorDash orders.
Those new consumers attracted by non-restaurant categories are demonstrating higher average three-month order rates than those who place their first order with a restaurant, reinforcing DoorDash’s view that “offering greater selection across multiple categories improves our consumer value proposition.”
“We expect the combination of summer seasonality, market reopenings, and the waning impact of stimulus to result in some impact to our business in the near term,” the company said in a press release announcing its financial results. “Nonetheless, we are encouraged by the consumer behavior we have observed thus far and are more optimistic with regard to our full-year prospects than we were at the beginning of the year.”
The company’s balance sheet also showed significant increases in expenses tied to sales and marketing, research and development, as well as general and administrative costs, with total costs and expenses increasing from $485 million to $1.2 billion compared to the previous quarter.
“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,” the company said. “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.”
DoorDash expounded, pointing to three notable trends around reopenings and the impact to its business: a negative impact on new consumer growth, order rates and average order value, which has been smaller than expected to date; the pace of reopening has had a larger impact on consumer behavior than the absolute level of openness; and reopening has had a larger impact on behavior among newer consumers who order less often on DoorDash than it does on DashPass subscribers and inhabited consumers with higher order frequencies.
Investors like what they heard during the DoorDash earnings presentation, with DASH shares increasing from approximately $113 to approximately $145 after the announcement.
As categories beyond restaurants continue to pad DoorDash’s bottom line, it’s a safe bet those comparably new verticals will grab an increasingly large share of the spotlight in the quarters to come.
Keep up with Food On Demand!
Subscribe to our newsletter to receive the latest industry news and updates.