Q1 2021 DoorDash Inc Earnings Call
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Good day, and thank you for standing by and welcome to the door Dash Q1, 2021 earnings call of this.
Time, all participants are in a listen only mode.
After the Speakers' presentation of there will be a question and answer session.
Ask the question during the session you will meet the press star one on your telephone if you require any further assistance. Please press star zero. Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Mr. Andy Heartbeats. Please go ahead.
Thanks, Dan.
And thanks for joining us for our first quarter 2021 earnings call I'm pleased to be joined today by co founder of chair and CEO, Tony Schuh and CFO per Bureau, Darko I would like to remind everyone that we'll be making forward looking statements. During this call, including statements regarding our expectations of our business future financial results and guidance on strategy.
Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements and some of it.
Such risks are described in our risk factors, including the SEC filings, including form 10-K.
You should not rely on our forward looking statements of predictions of future events.
Claim any obligation to update any forward looking statements, except as required by law.
This call will the will discuss certain non-GAAP financial measures information regarding our non-GAAP financial results, including a reconciliation of such non-GAAP results to the most directly comparable GAAP financial measures may be found in our industrial water, which is available on our Investor Relations website.
These non-GAAP measures should be considered in addition to our GAAP net results and are not intended to be a substitute for our GAAP results. Finally this call in its entirety is being audio webcast on our Investor Relations website, an audio replay of the call will be available on our website. Shortly after the call ends.
We're gonna go straight into the questions today, So Maine.
Please take the first question.
Our first question is from the lineup of light Ramsey from Deutsche Bank. Your line is now open.
Thanks for taking the question two if I can just first in the shareholder letter you called out increased frequency from existing customers from quarter convenience and I'm curious if you can just put a finer point on that is that increases in frequency even on the food delivery side, just more of habituation of.
The app or is it more just the comment that convenience is additive of not not cannibalistic.
And I guess, maybe in areas, where the product is more of a full in terms of.
Other things that you offer on the platform.
On top of good convenience on the other stuff or Theyre similar dynamics, where there is the more categories people use it across the more of that use.
Within the individual categories.
And then the second question would just be.
On the New Commission packages, how are you seeing kind of merchant.
To the to the.
The new packages on the operating into the higher value bundles and.
What should we kind of expect in terms of.
The take rate impact from that.
Anything you can share there would be great. Thanks.
A lot of distributor why don't I take the first question on the frequencies are gone on COVID-19.
We take the second.
It's the lack of the thing you mentioned because of what we actually find is that the categories of symbiotic with one another.
Customers, who order from new categories subsequently increased the frequency with the restaurants.
Yeah.
A greater amount than those who do not order from the new categories of said differently. Once you begin to use multiple categories of actually increasing the engagement of the Gore restaurant category and then the other thing we found is that customers, who actually engage with us across different categories. Beyond food also appeared to ease the stronger retention and engagement of boost.
In.
The restaurant supply of.
Both of these consumers of piece of that all the versions of that shrunk zone. So we're actually seeing.
Strength because of the addition of categories being skewed.
The user.
Vicki on without platform.
Yeah, Hey, Lloyd and Tony on the second question.
The business impact is reflected in our guidance and it's something that we feel pretty comfortable and as we tested this program as we do with all of our new initiatives with merchants for about six months. So it's meeting our expectations in terms of our rollout so far but I thought I'd take the second to give you of.
Eight of the guiding principles or the design principles behind why we shipped on what we announced a couple of weeks ago.
If you take a step back we took quite a lot of actions during the pandemic to make sure that these businesses would be successful that the entirety of <unk> was founded to make sure that these local businesses would succeed and so during the pandemic I'm very proud that the actions, we took as well as hundreds of millions of.
On the investments we've made allow these businesses to have eight times the odds of survival of the pandemic versus the average restaurant in the industry now as we get out of the pandemic and as we start heading into the reopening which I'm very excited about given.
The country is in terms of vaccination rates, increasing and such is that we wanted to give these business centers and speaking with them for about six seven months about this.
The best chance of getting out of the gate as fast as possible and what we heard over and again was they really wanted choice choice on the spectrum of investing in growth and in which case. They can take some of the higher priced plans that allows them participation in programs like dash password. The rash is covering the cost of delivery or choice in the form of.
Greater profitability, depending on how theyre seeing staffing and things like that as they get into recovery.
Choice in the form of whether the orders are coming from the door ash app or their own channel, where we're offering commission free no cost.
Out of called door Dash, storefront, which will allow them to build their own digital channels as well as choice in the form of non delivery of use cases like pick up where we slash rates from 15% to 6%.
And so that really was the the reason why we shipped what we announced and we had been working on these merchants for about six months of on it and in terms of the financial impact of the impact on the business all of that is reflected in our guidance.
And just to add one point of that if you actually look at the programs.
There is an offset between the newer commission rate.
It comes with the higher consumer fee, it's not a perfect offset but just keep that in mind as you think about the ramifications.
Okay, Thanks, guys nice quarter.
Next in line of Douglas Anmuth from J P. Morgan Your line is open.
Thanks for taking the questions.
First just a couple of you could talk more about your thoughts on impact of the reopening and perhaps just how your thoughts of changed relative to three to six months ago.
And then.
The second question just on the Azure supply I guess, just how do you get comfortable.
With how that can play out here in the coming months given some of the supply issues of course, but it should be with ride sharing and in some of the aircrafts.
Hey, Thanks for the question. So the first thing I'll say, we were encouraged by the trends that we saw in the first quarter, particularly as markets reopened in the in store dining grew the negative impact of consumer behavior was smaller than we initially anticipated and debt enabled us to beat our Q1 guidance by 9%.
What's driving that is the commentary we made the.
Earnings call.
When we talked about consumer behavior of being sticky so as consumers begin to use the product new habits of developing doing kind of it is going to persist and part of that is being bolstered by the fact of the product conducting the team the better over the course of time just over the course of this past year. The selection of on the platforms and tools in terms of the number of restaurants as one of the new guidance with convenience.
Stores and grocery stores quality has improved on affordability has gotten better in all of the screens continue to back from support of continued stickiness as far as consumers go on so as we look to the to the future. We are optimistic about the balance of the year, which which led to an increase of the guidance by about 15% to 35.
There'll be $1 billion of junior will be.
On your second question.
I know rideshare is focused on this but it's important to remember that ride share drivers of a different pool of people then of dashes over 75 per cent of our bashers.
Students sort of other partner channel full time jobs on average the dash less than four hours per week.
The actions don't require cash.
All of the conversion on volume.
On a population of bachelors kind of.
The skew more female and debt slightly because.
You don't have to share your personal space within other individuals and so even in our survey data show the 21% of our dashboards that we didnt provide shadow and only 6% sales.
Full range so the completely different pool of people, we had a little bit of the supply.
In March the song of the issue reacted quickly we took a bunch of actions, including improving the efficiency of the the logistics network expanding on marketing funnels, improving the conversion rates for doctors and the result of went out acquiring more dashes per week. When we were compared to Q1, so while supply at the end, we expect that to be the case for the course.
In the future.
Thank you.
Next question Youssef Squali from two of Securities. Your line is now open.
Great. Thank you very much on and congrats on the quarter just two if I may 1st can you just speak to the recent trends that you've seen so far in May I think your guidance speaks to it that anything to highlight in terms of just the competitive intensity.
And how you guys feel.
Two it on.
Second.
As you look at the the diversification that you're in.
Embarking on into non true convenience grocery et cetera. I was wondering if you can just speak to the broader well first how how big do you think that business could become over time is this is this a situation where you could see a scenario where half of your business is coming from these new initiatives sales.
Over the next side on the three to five years, but probably.
Also just how do you see that impacting the the take rates over time. Thank you.
Sure Hey, it's Tony I'll start.
So far the.
<unk> is off to a great start and what I'll say is that.
The impact of.
Reopening of really has been more muted.
Then we expect that certainly when we were looking at this.
Last fall and even as we're starting to prepare for this towards the even last summer with respect to some of the new categories.
We're very excited about our progress.
The around 40% quarter on quarter.
Our non restaurant orders now are totaling over 7% of our total orders.
And again, that's happened in a pretty short period of time, we really in earnest launched our second category outside of restaurants, and convenience, where we're now the market leader in just under a year. So.
Things are certainly ahead of plan and exceeding our expectations there with respect to I think the broader question of how this plays out and unfolds.
As to sort of to.
To remind all of us on the call as I mentioned during our actually our very first earnings call. We're really investing in four areas. We're investing certainly to grow our core business and we are seeing.
Greater strength, there, especially as we saw record engagement in the quarter as well as our investment into the other use cases such as pickup.
We're also the market leader now.
Or.
The office business like the rash for work, we are investing certainly into new categories. We're also investing into.
The the Buildout of our platform. So the rash is as much a marketplace our app at grocery orders as well as the platform that gives your products like the rest of drive the rash storefront to help merchants build their own channel and then finally international market growth and so those are the four buckets of where we're investing.
And we're very very excited by both how things are progressing in all of these areas as well as what that might mean for diversification of the future.
And you sort of if I could just add to that I mean, some of the markets you mentioned, whether it's convenience of grocery because of extremely large markets the means of doing.
The other important 50 billion groceries in the 800 billion per drilling dollars market, but the thing that's unique as both of these of a very low penetration rates on when you think about our platform and the success. The word of enjoyed inconvenience up to this point despite.
The launching of that business 12 months ago, because of the extensibility of our platform because we think of hybrid approach the beds together not just third party partners on our marketplace like Cvs like Walgreens ex 711 in fact Rite aid the recently announced but also we're bringing on the wound first party.
The selection to the consumers of it.
In order to provide consumers the choice and sort of them and I'm, just sort of the neighborhood and so penetration of extremely low today and there's a lot of runway for growth.
Next question is from the line of Ross Sandler from Barclays. Your line is now open.
Hey, guys.
Just a quick follow up on that last one on and then one on the one.
So the 7% of orders from non restaurant can you just talk about the <unk>.
Unit economics of that business and you're doing the marketing like if the current I think is mostly of giving us.
Profit pool from the ads drove profit was a one P business.
So how do we think about.
The blended.
Often that you guys kind of in.
EBITDA per order on as you mentioned the <unk> is a little bit lower for convenience of any color there would be helpful on on EBITDA per order.
And then it sounds like based on the letter that you guys are expecting a little bit of a drop off into the summer, which I think everybody can totally understand the space reopened. The question here is more of like as you look at the data on are you seeing new customers of came in.
The 'twenty are those the ones that are going to drop off or is it the higher frequency cash pass folks on the order like five times, a month or just kind of order less from you sort of summer any color on that would be helpful. Thanks guys.
So on the first question in terms of the unit economics.
We're not actually breaking out.
Economics of these other what I will say is we're we're fortunate of the net our core U S business is cash generative and we're taking that cash and we're investing at the group some of the new verticals with the convenience of grocery or expand into new merchant services like storefront as.
As well as expanding internationally. So we're fortunate to have it.
Profitable core businesses that allows us to invest in these areas.
On the question regarding the summer seasonality.
That's exactly right. It was baked into the guidance of the fact that starting about April and going all the way through the labor day.
Usually as the weather improves we see consumers.
Good day and that behavior was generally consistent across both new customer of the recently acquired is one of those.
One of those existing customers that have been on the platform total while interest computers behaviors of we tend to see.
Weather improves and people want to go out kind of like more so.
You don't see you do not historical numbers, partly because of the the rapid pace of customer acquisition, but if you look at it on the cohort level.
From the on existing core.
The next to ask Ralph Shakur share caught from William Blair. Your line is now open.
Good afternoon. Thanks for taking the question just curious if you could provide maybe a little bit more color on the dash of pay in the incentive trends that you've seen both on the quarter, maybe kind of quarter to date.
On the letter you talked about 40% pay increase at 13% of think decrease the cost of consumers of our two year period.
Like you are in the better supply situation now, which is great. But just curious if you give some more color on kind of recent trends on the incentives.
Some of that's getting passed on the consumer and then eventually as government incentive programs.
Besides you think the driver of incentives will normalize over time. Thank you.
Maybe I'll take that question I mean the.
The summary is we're expecting the grades to improve sequentially from Q1 to Q2 and in part that's driven by the fact, the Bachelor B will normalize because of the supply state of the action better debate. The problem has been resolved and the broad markets back to back the help.
You can step back just in terms of overall of Dash IP, We've said before in the current.
<unk> of our overall strategy.
The North star is to reduce customer prices consumer prices reduce the fees and commissions and jobs from merchant and increase earnings for dashes and so the 40% year over the will increase in dash of learnings for lack of hour.
Consistent with our general philosophy, so as we continue to squeeze out more efficiency out of the logistics network. As you continue to do by the factory and that results from the unit economic improvement, we invest a lot of the back into the ecosystem by taking down the fees and by increasing the national news.
Great and if I could squeeze one more in just on the pick up opportunity you talked about on the call on the letter it seems like a pretty good opportunity for you on a post COVID-19 environment, maybe just talk about sort of of how that's been received by consumers.
Kind of what you've learned and as you had sort of technology to that long terms of innovation.
Your views on this opportunity thank you.
Yeah.
Sure I'll take that it's Tony.
I think the greatest privilege will probably have in this business is that people eat 20 to 25 times a week.
Maybe more maybe lost during the pandemic, but what.
What I will say is that.
When someone is doing that kind of frequency of consumption, that's never going to happen in one method, it's never going to be all in cooking, it's never going to be all on eating out or eating in or getting deliveries I think especially as we get out of the pandemic. We're going to go back into doing some of the things that I think are now priced commodities by grabbing of coffee.
On the way to work or doing the work along the block with your colleague.
And grabbing on snack or what have you and so.
We're seeing quite a lot of.
Excitement.
Two of the pick up products.
I think not just because people are.
The tired of.
Being stuck at home, but I think people are.
There's just the mere fact that because we consume so often.
That this is one of the natural use cases.
That governs our behavior and so.
Okay.
We're very excited to continue investing there.
Great. Thanks, Tony Thanks for.
Next is Deepak from Matthew Bannan from Wolfe Research. Your line is now open.
Great. Thanks for taking the question guys, one for Tony and one follow up per Behr.
Can you talk about your partnership strategy for the new categories. I mean, you've entered into partnerships of lot of retailers directly but as you kind of think about expanding it further over the next few years, how should we think about your.
Desire to work with the platforms that have offline business integrations like the online presence systems point of sales software companies Shopify and even companies like Facebook the scale of the months of side.
Rapidly on both marketplace and drive.
Yeah, I'll start Hey, Deepak, it's Tony so.
The way that we.
Look at.
All things of how do we build the best product and the four.
Our marketplace, what that really means is how do we offer the best selection of quality price and customer service and for our platform business, where we're building tools for merchants to allow them to grow their own digital businesses.
It's really about how do we allowed them to be.
Very successful.
Across all of the activities that they have to perform in order to build a digital business and so.
With that I suppose is the guiding principle.
We would consider any partnerships that achieved those means.
And they can look different depending on whether or not they fit into our marketplace or whether or not they fit into our our platform and so.
A door dash, we really are thinking about building the system debt that has both components. One of the system is our app, which is trying to grow all of local commerce and bring everything inside your neighborhood CEO of minutes not hours or days and then on the other side. We are trying to empower you the merchants too.
Replicate and grow on top of your four wall business.
And competes in today's digital economy, so any partnerships that fit.
Each respective part of our business and then the two jobs that we do which is to grow into the empower local commerce.
Yes.
Got it now that's very helpful. Tony and then Premier can you talk about the second half guidance on <unk>.
Should we expect the deal we did bottom out in <unk> and the start improving sequentially in <unk> into 2022, how are you thinking about like the slope in the second half. Thank you so much.
Yes.
The second half of <unk> impact daily body by two factors. The first we're baking in some of uncertainty with respect to consume of the users markets continue to reopen and the increase vaccination rates per second to your point the summer season and to win in that the usually continues through labor day until you've got you've got true.
Q2, and Q3 and the evolution of the lull and then as the winter season start setting and you start to see growth from the other amount so.
Basically what you pointed out the the one thing I will say the.
The bulk of just stepping back the.
The GOP guidance from the Euro is materially higher than what we thought at the beginning of the year. So I would.
I point to the shape of the growth. This year you get the model right, but at the end of the day, let's not lose sight of the Big picture, which is we.
And the more optimistic than you were earlier on.
Got it that's very helpful. Thanks, guys.
Next is Michael on the Girlfriend's from Bank of America. Your line is now open.
Great. Thanks for taking my question and congrats on the great quarter I just wanted to ask maybe about maybe just like a regulatory overview seems like theres been a lot of these items on the regulatory side recently, so maybe first if you could comment about the federal side and the <unk>.
Comments from the Department of Labor Secretary of recently and just any.
Views on what could happen long term on the federal side, and then I think some of your peers in the gig economy of of Rideshare space have talked about potentially working out deals with states that might look similar to profit 'twenty. Two so can you share with us. If you are participating in those kind of discussions or just what you think about the potential for.
Regulatory developments on the state side as well thank you.
Yeah, Hey, Mike, It's Tony I'll take that so we're very excited about what we heard the secretary Walsh and the buying the administration, saying, which two art years was that the very excited and figuring out with us with the private sector companies how to actually construct the model that takes us into the the <unk>.
21st century of instead of I guess moving backwards tour of the 20th century.
If you think about it.
What door Dash stands for is optimizing for the worker. So in this case the dash are the millions of the drivers on our platform.
And the number one thing we hear over and again from doctors is that they want this flexibility that has never existed in any labor environment before and and the question is how do we marry that in the face of traditional labour definitions with benefits of protections that we believe they deserve and what we heard.
Really anyone of you speak to is our willingness to engage in that conversation and construct forward a third way in which we can.
Per this independence and flexibility with benefits and what the and that's true at the federal level, that's true at the state level.
And any elected officials that we speak with.
And Mike just to be clear the deal was made.
The arent, taking immediate action and you said one thing gauge what goes on we're in dialogue with.
With the continued deserves the discrete level.
Got it and maybe just as one quick follow up to that I thought the prior comments about the difference between <unk> and rideshare drivers for really important, especially on the regulatory front. So could you talk about just like the possibility of that rideshare drivers and food delivery couriers are regulated separately.
With different rules or do you think that gig economy workers could just all of the kind of.
Lumped together long term in terms of like that regulatory response and development.
Yes, I'm not sure.
Sure that we've got.
The phone confusion on this matter.
As the as Tony indicated the secondary launches comments actually suggesting the openness to engage with the private sector of the figure this stuff out so it's a little from the need to do the signal whether the nature.
So there wasn't the group together with the broader get economy of the kept separate we'll come back if there's any update on this topic.
The conversations progressed.
Got it thanks, so much.
Next is Jason <unk> from Oppenheimer <unk> co. Your line is open.
Thanks. This is Sean on the call for Jason.
So just one on how are you guys thinking about the risk around local pricing cash and how does this.
How has this taken into account with the new merchant pricing model and the.
Then second can you talk about the competitive environment around non food sales relative to the environment and food delivery is it more.
More competitive about the same less competitive what are you guys seeing there.
Okay.
Yeah, Hey, Sean its.
Tony I'll start so on on the first question around COVID-19.
The cash what we expect is that these commission capsule will be rolling out pretty soon in fact.
We've already seen some of this in some very large cities, where the Chicago, Kansas City Cincinnati.
I saw some even roll off earlier this week and.
And so we're very encouraged by what we're seeing which is elected officials, allowing capitalism to do its job and allow.
Every one to two.
Make things work for all audiences.
And we're the first the to be excited of door dash to have lots of folks go back inside restaurants.
And I think people will and I think that as that continues to happen is the reopening of <unk> occur.
The more and more folks will see delivery as an augment the way to help grow the physical businesses.
The one part of the portfolio of how they do business moving forward.
I think.
With respect.
To the second question, which is around I think you asked about the competitive environment.
And some of these newer categories.
I mean look I would say that certainly things have exceeded our expectations. If you look at the fact that we started just a year ago in our first non restaurant category of convenience and in about a year's time, we've become the market leader in that category I think really just showed the strength of.
Both.
Actually across all audiences the.
On the receptivity to our platform how doctors are willing to do <unk>.
Deliveries across different hours of the day of different categories, how consumers are willing to.
Helps solve different jobs at different times of the week and how different types of merchants, we would like to have access to the.
The largest on demand through the audience on that comes to us at the highest frequencies every month and so.
So far we're seeing quite a lot of progress in these areas, but to premier's earlier points on.
To an earlier question.
We're at the beginning of a massive transformation that is unfolding I mean, just to remind all of us even in the core of restaurant business. Even if you added all of the sales up for the largest platforms in the U S were about 10% or less of the entire restaurant industry. If you did the same math for some of these other categories that we're entering via convenient square.
<unk> and others on that number is very very very small single digits and so there is a massive runway ahead.
Next question is from the line of Ron Josey from JMP Securities. Your line is open.
Great. Thanks for taking the question and really great quarter I wanted to ask two please more on one on dash path and you talked about.
Subscribers more than doubled year over year average order frequency of an all time high and I think of you even mentioned the new users joining the <unk>.
<unk> was somewhat of a record, but can you talk about the strategic nature of Dash pass here, just specifically as you think about increasing the penetration of new categories and they are increasing the MAA used for new categories.
Just how you see both dash path of new categories of working together and then and then Tony maybe as a follow up to your prior answer this.
Weird question, maybe but.
Could it be that with the reopening the amount of change in consumer behavior of the reopening of might actually help longer term about how we as consumers. This order of things restaurants, food et cetera online and how youre thinking about how the reopening might actually be a tailwind. Thank you.
From COVID-19 I think.
The first one on <unk>.
That's most of the end of the day of the core pillar of our strategy you could think about what we're trying to do for consumers to deliver the widest selection, the best quality and superior affordability and dashboards strike length of the heart of boot collection as well as.
And Jim is price because we're benchmarking, we know consumers the zero delivery fees introduce sort of the skus on the on the orders and so what we're finding is consumers, particularly of the start of increasing the engagement with the right value out of the fact that the 10 all of a subscription fee to freeze the cash.
Cost of <unk>.
Multiple deliveries due to the multiple on what goes on to assume the value proposition of.
Cash bumps translate into the into sign ups that had been allowed us to grow the cash plus members should be.
And it could be two ex what it was a year ago and above.
Other aspect of the strategy of should continue adding verticals into dashboards. So much the same way Brian allows you Amazon brain allows you to consume products across multiple categories that sort of vision for dash balance from Starwood food and over time, we've added convenience stores and then at the time as you continue the category, you'll see the would get slotted into the nationals to improve.
The value proposition.
Yeah, and with respect to the second question around the reopening of the possible tailwind I guess.
No one has the crystal ball in terms of how this.
Cape of recovery occurs and.
I think some of the earlier discussion how the slope of change.
Happens.
But what I would say is that the long term trend is that.
When it comes of the convenience of things always move towards the direction of of greater convenience.
Which means that over the long term and I suppose if you looked at it from that perspective.
The tailwind thesis would be that.
The.
All of that is happening is that we've kind of shifted.
Some of the growth that was otherwise going to happen.
Who knows some period of time and I think what it.
It has allowed is just that it's allowed more and more people to be more and more comfortable with this type of business, which.
Allows possibly faster entry into.
Other categories as we power all of local Commerce for example, and so.
I think that's kind of where we're seeing it but.
But I do just want to remind people that convenience only moves in the direction of greater convenience I mean, if if someone was.
Wanted to go and eat inside of the restaurant for example, they're probably not thinking about delivery. Conversely, if they are thinking about takeout or delivery. They probably were never going to go inside the restaurant and the first systems and so I think it's again I always like the step back in moments, where we're trying to figure out what seems like a very difficult question to take a slightly longer time horizon intake.
The greatest privilege. We have here is that people eat $20 to 25 times of weekend do we see some share of that growing into more convenience.
We believe the answer is yes.
That's helpful. Thank you guys.
We have our next question is on the sponsor Tan from Evercore ISI. Your line is open.
Hi, Thanks for taking my question just wanted to I had one question around the guidance. So it looks like if you were to take the midpoint of your <unk> on EBITDA guidance that on.
You're guiding to EBITDA accretion versus prior prior.
Prior quarters.
Just wondering if that's of directories.
The commission structure change that you.
Announced this quarter and how we should think about that maybe you're just providing a little bit more color around.
That specifically and then secondarily I guess.
Looking into the recovery are you seeing any of restaurants consolidate the.
Platform is that the utilized and do you think.
That door Dash has the competitive advantage from that standpoint by offering other types of <unk>.
Operating the service on storefront.
Maybe some of the smaller competitors out there I E on having the ability to maybe gain a little bit more share from some of your comps. Thank you.
Yeah.
Sure. So if I understood the question correctly, but other two would be the EBITDA margins of the central search you'll be picking up slightly.
Yes.
Got you.
Okay.
What I'd say is.
We will be providing a range of the EBITDA, but the Q.
Just to reiterate the way, we manage our business that you're trying to maximize scale on them. So.
Can you extended the opportunities available to invest in in order to beat the top line, we will do that on the long the easing for expanding the guidance compared to the prior quarter simply.
Don't want to feel compelled to have to spend the money on the quarterly if we don't find the right from thresholds and sort of what this allows us to do is true.
If you drop the profitability to the bottom line.
In the event of the non.
Net investment opportunities on the slight margin accretion that you see is because of the sequential increase and decrease that we're expecting in the Q3 because of the price it is normally.
Got it okay perfect.
And with the this is Tony with respect to the second question.
Yes, we do believe that by having a wider portfolio of products. We can certainly serve more use cases, both from a consumer perspective as I was mentioning earlier.
People eat 20 to 25 times, a week and so by having more use cases, whether it be in delivery pickup of the office business.
We're serving a bigger addressable market.
And I suppose share of stomach on that regard and then with respect of the merchants on the platform piece, where we're not only.
The largest source of incremental demand through our app, but the fact that we also powered their own channels powered their deliveries.
That gives us greater ordered entity.
Which drives lower fulfillment cost, but it also allows us.
To take up.
The greater kitchen capacity.
As we are powering the majority of the space that is being used up to produce the food in the first instance, and so on.
I think those are some ways in which.
Our suite of products are generating competitive advantage both for the consumer in terms of just giving a lot more of value beyond the delivery as well as some of the things the Premier said earlier, where we're adding more categories at no extra charge into a program like dash past and then on the merchant side the wide portfolio of.
The choosing either to grow through the largest source of incremental demand of our app or the fact of the powering.
All of their channels allows us to certainly work with merchants more but also take up more of the production capacity.
Got it. Thank you so much and congrats on the quarter.
Next question is from the line of Clark Lumpkin from BPI <unk>. Your line is now open.
Hi, good evening, Tony or per the year in light of some speculation on M&A, that's come up somewhat recently.
I wanted to see if we could revisit how you guys sort of thinking about.
Both new market entry and also specifically weighing up sort of build versus buy options for doing that.
Thanks.
Yeah look on <unk>.
Sure.
Previously the one of my aspiration is to bring the global company and.
Today, we operate in the U S, Canada on Australia, and all the time over a long horizon, we will kind of expand outside of the regions now as far as the as far as the ammonia goes.
So as we look at all of the opportunities around us.
Fortunately on that we've got the core business and the use of that generates cash we can invest organically to build out of dozens of their machines to the extent of M&A makes sense it might be something we consider but the bar is extremely high just given the revenue frankly that is a complicated market and getting the right of the difficult. So unless we've got absolute conviction that M&A has the right to you.
You shouldn't rely on on the organic mechanisms.
No further questions at this time I'll turn the call back over to Mr. Andy <unk>.
Perfect. Thank you for the questions and thank you everybody for joining us today have a great afternoon or evening and we'll talk to you again in the few months.
This concludes today's conference call you may now disconnect.
Yes.
The.
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