For the fourth consecutive quarter, DoorDash has underwhelmed on the bottom line and delivered major losses, despite record numbers of people ordering take-out food.
For the three months ending June 30, the company announced on Thursday (Aug. 12) that losses for Q2 totaled $102 million. The company experienced a brief period of profitability at the start of the pandemic and reported a $23 million profit a year ago, but returned to operating at a loss the following quarter. It has been in the red since then due to major investments that the company is making in its long-term future.
“We’re super early — not just in food, but also when you add in these other categories that we’re recently entering into, such as convenience, grocery, pet food, alcohol and others,” DoorDash CFO Prabir Adarkar told analysts on a call. “We’re a tiny, tiny fraction of the potential in these categories, and that’s why we’re investing. So if you take a look at where we’re investing, it’s largely driven by new categories, and to build our international business.”
In fact, regarding the company’s moves into the grocery and convenience space, a letter to shareholders noted that “strong early demand signals” in the categories the company is entering beyond restaurant meal delivery “have increased [their] confidence” in the value of these investments. Additionally, the company noted that it expects to invest even further in these categories throughout the remainder of the year.
The company gained on its competitors in the quarter, earning three additional percentage points of its category share in the United States and breaking its record for total orders in a quarter, with 345 million orders.
Additionally, in analyzing third-party data, the company stated that its delivery service has gained share in Canada and Australia. DoorDash also expanded to Japan in June. Adarkar stated that the company is “encouraged by” early results in Sendai, the one Japanese market in which the company currently operates.
Regarding plans for further international expansion, Adarkar said, “As these other markets get bigger and start generating profit pools, and we can afford to do so, we will expand — obviously in an economically efficient manner — in other geographies.”
In recent weeks, DoorDash has launched a new feature, DoubleDash, that allows customers to add items from a selection of merchants to their restaurant order for no additional cost. It has also geared up to invest in multinational ultra-fast grocery delivery app Gorillas, has opened its second ghost kitchen and has grown its grocery presence with an Albertsons partnership that added almost 2,000 new grocery stores to the platform.