Q4 2021 DoorDash Inc Earnings Call

with J.P. Morgan. Your line is open.

In Morgan your line is open.

Thanks for taking the question. I know you're focused on maximizing the long term profit dollars. She's hoping you can provide some more color on how to think about the near term investment and loss levels in some of the new categories, just relative to the profit and cash generation that you mentioned in the core restaurant business. Thanks.

Thanks for taking the question I know you are focused on maximizing the long term profit dollars just hoping you could provide some more color on how to think about the near term investment and loss levels and some of the new categories, just relative to the profit and cash generation that you mentioned in the core restaurant business. Thanks.

Hi, Doug Thanks for the question Yeah. That's right. We are focused on maximizing the scale and the reason for that is because we operate in very large categories that are under penetrated today.

What I will say is we're not breaking out the margins of the investments in new categories other than to say that the U S business is growing nicely and as they increase in contribution margins both on a quarter on quarter and year on year basis. So that increase in profit is what were funding into these investments and we're watching for core signals around retention and order frequency to make sure.

is growing nicely and has an increase in contribution margins both in a quarter and quarter and a year on year basis. So that increase in profit is what we're funneling into these investments. And we're watching for core signals around retention and order frequency to make sure that they hit on term pressures.

The hit on it doesn't thresholds.

Okay.

Okay. Thank you.

Yeah.

Your next question comes from the line of Yusef Squali with Truist Securities. Your line is open.

Your next question comes from the line of Youssef Squali with <unk> Securities. Your line is open.

Great, thank you very much. Two questions for me please. One, did you guys see any benefits from Omicron during the quarter and how has January ...

Great. Thank you very much.

Two questions from me. Please one did you guys see any benefits from omicron during the quarter and how has January .

early February trend versus your expectations? And second, can you maybe speak to recent trends in the competitive landscape and do you believe is your...

In early February trended.

Versus your expectations and second can you maybe speak to recent trends and the competitive landscape and do you believe is your.

your main competitor has been talking about that you guys may have lost some share in the US and if so, maybe he can flesh that out for us in terms of geo's and product types where you feel you need to maybe regain some share.

Your main competitor has been talking about that you guys may have lost some share in the U S.

And if so maybe just if you can.

Flesh that out for us in terms of Geos and product types, where you feel you need to maybe regain some share. Thank you.

So maybe I'll start the Omicron question, and then Tony can chime in with the competitive landscape. On Omicron specifically, the impact in Q4, even January , has been relatively muted. It's not significant, I would call it out, and certainly not significant when compared to Omicron.

So maybe I'll start the question and then Tony can chime in with the competitive landscape.

On the chrome specifically.

In Q4, even January it's been relatively muted, it's not significant that I would call it out and certainly not significant when compared to the.

the impact we saw from COVID in early in Q2. In fact, with every sort of successive variant, the impact on our business has basically diminished. And so, the Q4R performance.

In fact, we saw from Covid in early Q2 in fact with every sort of successive VAT and the impact on our business is basically diminished and so.

Q4 outperformance.

I wouldn't attribute that to Aamkaraan. And then Tony if you want to comment on the comment.

I wouldn't I wouldn't attribute that to ground.

And then Tony if you want to comment on the competitive landscape.

Yeah, hey, Yusef, we actually haven't noticed any share loss in any time period, you know, recently in the fourth quarter or for the year of 2021. And I think when you think about, you know, maybe why this is, it really just breaks out into, I think.

Yeah, Hey, yes, we actually haven't noticed any share loss.

Any time period.

In the fourth quarter or for the year of 2021, and I think when you think about maybe why this is it really just breaks out into I think the basic math on new customers. We continue to be the leading acquirer of all customers that come into the industry for the first time.

basic math, right? On new customers, we continue to be the leading acquirer of all customers that come into the industry for the first time. And then when you think about, you know, the possibility of new customer acquisition, especially just given how deep some of these channels are, they're really deeper than any other possible channel in which you can acquire new customers into the industry. I think the second part of, you know, how you can gain shares certainly is

And then when you think about the <unk>.

Possibility of new customer acquisition, especially just given how deep some of these channels are there really a deeper than any other possible channel in which you can acquire new customers into the industry I think the second part of.

How you can gain share certainly is just what is the retention and order frequency of these customers and we continue to have leading.

just what is the retention and order frequency of these customers. And we continue to have leading

retention and order frequency in the category. And you know, this has always been our focus, by the way, which is to make sure that we build the best product.

Retention and order frequency in the category and this has always been our focus by the way, which is to make sure that we build the best product, which you can see as demonstrated through the leading on both new customer acquisition as well as retention metrics.

you can see is demonstrated through these leading, both new customer acquisition as well as retention metrics.

And as a result, when I think about just this ties a little bit to, I think, the previous question that Doug was asking, just how large the core business opportunity is in US restaurants, the fact that even as the share leader and, you know, continuing to be the fastest growing, you know, part of the industry, we're only 5% of US industry sales. And I think when you look at all...

And as a result, when I think about is just if this ties a little bit to I think the previous question that Doug was asking just how large the core business opportunity is in U S restaurants, the fact that even as the share leader and continuing to be the fastest growing part of the industry. We're only 5% of U S industry sales and.

I think when you look at all of our.

active users while we had a record quarter of 25 million monthly active consumers, we're a single digit percentage of the populations that we serve. And certainly as you start adding into some of these new categories as well as international geographies and there's the platform side of what we do with products like Drive and Shortfront. I mean, we're a tiny, tiny, tiny fraction of the opportunity in front of us. And that's why we're very excited in investing. But that said, in terms of how we view...

Active users, while we had a record quarter of 25 million monthly active consumers were Ah.

Single digit percentage of the populations that we serve and certainly as you start adding into some of these new categories.

As well as international geographies and there is the platform side of what we do with products like driving storefront. I mean, we are a tiny tiny tiny fraction of the opportunity in front of us and that's why we're very excited and investing but that said in terms of how we view.

the future, besides staying disciplined in terms of how we make investments, it's

The future besides staying disciplined in terms of how we make investments.

first and foremost starts with making sure that we have the best product, which is going to offer the best combination of selection, quality, affordability and service. And so long as we continue doing that, I think the scoreboard will continue taking care of itself.

First and foremost starts with making sure that we have the best product, which is going to offer the best combination of selection quality affordability and service and so long as we continue doing that I think the scoreboard, we'll continue taking care of itself.

And just to add to Tony's points, you should answer your question directly. Over the last 12 months, we've gained two points of share, over two points of share according to third party data sources. And specifically with respect to Q4, we believe we've gained shares. We do faster than our peers based on their publicly reported numbers for the US businesses.

And just to just to add to Tony's point too. So to answer your question directly over the last 12 months. We've gained two points of share over two points of share kind of third party data sources, and then specifically with respect to Q4. We believe we are gaining share as we do faster than our peers based on the publicly reported numbers for the U S businesses.

Great. Thanks for the color.

Your next question comes from Ross Spencer with Barclays. Your line is open.

Your next question comes from Ross Sandler with Barclays. Your line is open.

Hey guys, two questions. So is there anything unique about the experience thus far in Canada and Australia that gives you confidence that once a vault comes into the fray that you'll be able to run the same playbook successfully? I think there's some skepticism in the investment community that what you see in the US is replicable in these international countries. So maybe just talk a little bit about that. And then, Prebir, your sales and marketing expense was actually down a bit, quarter on.

Hey, guys two questions.

So is there anything unique about the experienced thus far in Canada, and Australia that give you confidence that once it comes into the Fray that youll be able to run the same playbook successfully I think there is some skepticism in the investment community.

What you're seeing in the U S is replicable.

National countries. So maybe just talk a little bit about that and then premier your sales and marketing expense was actually down a bit quarter on quarter. In contrast to the <unk> being up nicely. So I think the letter mentioned customer acquisition being a little more efficient can you just elaborate a little bit on that.

in contrast to the GOV being up nicely. So I think the letter mentioned customer acquisition being a little more efficient.

Can you elaborate a little bit on that? Is that some of that retention you're talking about kicking in or anything else on marketing efficiency? Thanks a lot.

Some of that retention you are talking about kicking in or.

Anything else on.

Marketing efficiency, thanks, a lot.

Yeah, why don't I take the first question on some of our performance and progress internationally, and then I'll have Perrier take the second question on sales and marketing.

Yeah why don't.

Do I take the first question on some of our performance and progress internationally and then I'll have premier can take the second question on the sales and marketing expenses.

You know, with respect to our international progress, I mean, we're super excited in what we've seen. And that's why we're only continuing to invest more there. And again, it starts with how do we find product market fit? And then how do we actually scale up our investments, you know, appropriately given what we're seeing?

With respect to our international progress I mean, we're super excited in what we've seen and that's why we're only continuing to invest more there and again it starts with how do we find product market fit and then how do we actually scale up our investments appropriately given what we're seeing and what we see is increased.

And what we see is increased selection that we're offering customers better quality of experience.

Selection that we're offering customers better quality of experience more greater and greater affordability levels, especially with our investments through programs like dash past and better service levels. As a result, we're seeing higher order frequency is higher retention.

greater and greater affordability levels, especially with our investments through programs like DashPass and better service levels. As a result, we're seeing higher order frequencies, higher retention, increased.

Increased.

engagement with some of our new categories as well in these countries. That's really what we're seeing from customers and frankly, their voice as well as how they choose to spend their dollars is really what informs us and guides us.

Engagement with some of our new categories as well in these countries and so.

That's really what we're seeing from customers and frankly.

Their voice as well as their how they choose.

Choose to spend their dollars is really what informs that guides us.

And so we're only seeing progress there. And I think those inputs are what has translated into certain outputs such as our revenue growth, order growth, category share growth, all of these things. So I think, you know,

And so we're only seeing progress there and I think those inputs are what has translated into certain outputs such as our revenue growth order growth category share growth all of these things so I think.

once we've nailed these inputs, that's why you're seeing, you know, the growth of the investments behind them. And that's why we're also really excited about the Volt partnership because we'll get to do this on a bigger scale across over 20 countries. And, Kabir, you want to...

Once we have nailed these inputs.

Thats why youre seeing the growth of the investments behind them and that's why we're also really excited about the bold partnership because we'll get to do this on a bigger scale across over 20 countries.

And prepared to answer questions.

Yeah, just to finish up that point, I mean, there's obviously been categories shared growth that only needed to, but in addition, I mean, you know, we stay super disciplined when it comes to these investments. You know, that's what allowed us to grow the US business and we're playing the same rigor to what is new categories or international and we are seeing major improvement.

Yeah, and just to finish up that point I mean, there's obviously been category share grew between alluded to but in addition.

We stay Super disciplined when it comes to these investments.

It's allowed us to grow the U S business and we're bringing the same rigor to whether it's new categories or internationally and we are seeing margin improvement and so that then allows us to invest more with greater confidence. So let me just conclude at that point.

And so that then allows us to invest more with greater confidence. So let me just conclude that point. And on your question on sales and marketing, the reason why sales and marketing declined was because our driver acquisition that our acquisition cost?

On sales and marketing.

The reason why sales and marketing declined was because our driver acquisition for Diageo acquisition costs were lower quarter on quarter as we had.

were lower quarter and quarter, as we had said earlier.

Said in earlier quarter.

quarters, you know, we've fixed the under supply situation that we faced earlier in Q2, and we find ourselves well supplied and we expect to be well supplied in 2022. And the big reason for that is because the people that generally become dashers are a very different audience than the types of people that the other gig economy companies are competing for. So specifically, I think we've said over 90% of dashers said that they have no plans to drive for ride share, and only 4% say they prefer to drive ride share compared to food delivery. And so, you know, the reasons for that is because

Quarters with fixed under supply situation that we faced earlier in Q2, and we find ourselves well supplied and we expect to be well supplied endpoint is going to do and the big reason for that is because the people agenda become that shows that are very different audience than the types of people.

The other gig economy compete as companies are competing for it. So specifically I think we had said over 90% of dashes said they have no plans to drive from nature and only 4% to 14.

To drive ratio compared to food delivery and so.

The reasons for that is because.

you don't need a car to dash. You can dash on a scooter. You can dash on a bike. It tends to be safer because you're not sharing your personal space with another human being. So as a result of that, it's a very different audience that we can go after. And because we find ourselves well supplied, those dash acquisition costs are going to result in sales and marketing costs decline quarter and quarter.

You don't need a car to the dash compassionate scooter and compassion of bike.

It tends to be safer, because we're not sharing your personal space with another human being so as a result of that it's a very different audience that we can we can go after and because we find those roes.

It was applied to those dash acquisition costs and that is only consumer marketing guns decline quarter on quarter.

Your next question comes from the line of Deepak Matthew Vannen with Wolf Reeser. Your line is open.

Your next question comes from the line of Deepak Matthew Monaghan with Wolfe Research. Your line is open.

Hey, guys. Thanks for taking the questions two questions from us. So first Tony in 2021, you guys launched a lot of new offerings and expanded across many verticals. The pace of innovation was pretty strong, but as we think about 2002 and maybe even 'twenty three what are one or two main initiatives you feel is ready to graduate.

Two questions from us. So first Tony in 2021, you know, you guys launched a lot of new offerings and expanded across many verticals. The base of innovation was pretty strong. But as we think about 22 and maybe even 23, you know, what are one or two main initiatives you feel is ready to graduate and kind of become more meaningful on financial KPIs in the next like, you know, 24 to 24 months?

And kind of become more meaningful on financial Kpis.

In the next 12.

12 to 24 months and then second question maybe for prepare it seems like <unk> was up 20% last year and frequency was also up pretty nicely.

And then second question, maybe for Prabir, seems like MAU was up 20% last year, and frequency was also up pretty nicely. But as we think about your guidance, 19% GOE growth at the high end for full year, how should we think about the assumptions for MAU growth frequency and AOV for this year?

But as we think about your guidance, 19% growth at the high end for full year, how should we think about the assumption for miu growth frequency in <unk> for this year. Thank you.

Yeah, hey Deepak, on the first question, you know, appreciate the comments on, you know, product innovation. We're always trying to accelerate that, especially when we hear signals from how we can serve customers better, whether they be consumers, merchants or dashers.

Yeah, Hey, Deepak on the first question appreciate the comments on product innovation, we're always trying to accelerate that.

Really when we hear signals from how we can serve customers better whether they'd be consumers merchants, where doctors and so we're constantly trying to increase the pace.

So we're constantly trying to increase the pace.

when we see that opportunity and only until we find product market fit do we actually scale them into.

When we see that opportunity and only until we find product market fit do we actually scale them into.

you know, fairly large businesses. And I think we've had a track record of doing this now, whether it's

Fairly large businesses and I think we've had a track record of doing this and how whether it's.

certainly our core US restaurants business, then building products on our platform like Doordash Drive as well as.

Certainly our core U S restaurants business then.

Building products on our platform like tore asked drive as well as storefront.

storefront. We're the leading category player in the convenience category, in the pickup category. We've taken, you know, businesses pretty much from scratch in these new categories of convenience, grocery, and other categories from zero into now, you know, billion dollar, you know, plus scale businesses that 14% of our monthly active users, you know, spend time in. And so I think there's been a lot of progress to your point.

We are the leading category player in the convenience category and the pickup category.

We've taken business is pretty much from scratch in these new categories that convenience grocery and other categories from zero into now a $1 billion plus scale businesses that 14% of our monthly active users and timing and so I think theres been a lot of progress to your point.

you know, in terms of, you know, just focusing on one or two things, what we tend to do is

Yeah.

In terms of.

Just focusing on one or two things, where we tend to do is.

Our investment philosophy is really it starts with building the best product.

Our investment philosophy is really it starts with building the best product and so long as we like what we're seeing from a product market fit perspective, but we're constantly trying to make every detail right within each one of these categories than do we stage gate further investment into growing DS.

And so long as we like what we're seeing from a product market fit perspective, and we're constantly trying to make every detail right within each one of these categories, then do we stage gate further investment into growing these, whether it be into new geographies, into more merchants. We doubled the number of non-restaurant partners, for example, in our marketplace in 2021. But we have a lot of work to do. And so the way I think about it is, you know, so long as we stick to our investment philosophy of

Whether it would be into new geographies.

Into more merchants, we doubled the number of non restaurant partners for example on our marketplace in 2021, but we have a lot of work to do and so the way I think about it is.

So long as we stick to our investment philosophy of May.

making sure that we build the best possible product as measured by our retention and order frequency and we stay disciplined in how we can scale them, not just with capital, but frankly with the right leaders placed in these initiatives as well as the right team allocated to those leaders, we'll be in a great spot.

Making sure that we build the best possible product as measured by our retention and order frequency.

And we stay disciplined in how we can scale them not just with capital, but frankly with the.

The rice leaders placed in these initiatives as well as the right team allocated to those leaders will be in a great spot.

And Deepak, on your question around the 22 and obviously the longer term outlook, look, as it's simple as the goal is to increase the menus and to continue driving up order frequency. We don't run the business on a one year clock and we think about planting seeds for many, many years in the future. So the way to think about it is these categories, in the food category, is ready to be underpinned.

And then Deepak on your question around 22, and obviously the longer term outlook.

Okay.

As simple as the goal is to increase revenues and to continue building upon our sequencing, we don't run the business on a one year block and we think about planting seeds for when you can use in the future. So the way to think about it is these categories in the food categories.

in that core business at a current run rate were less than you know still a little to five percent of total US restaurant sales and so even in core food there's the significant room for continued adoption engagement.

David and Doug.

Core business at our current run rate were less and so when you move to 5% of Protiviti much Armstrong sales and so even in core food the significant room for continued adoption and engagement cruises.

Now you add to that these other categories that were made initial for you into, whether it's convenience, grocery, alcohol, pet food, retail, and so on. These are massive markets that are also in lower, lesser penetrated compared to the food category.

You add to that these other categories that we have made initial forays into it whether it's convenience grocery alcohol that food retail and so these are massive markets that are also in Europe , and lesser penetrated compared to the food category. So when you put these two things together, there's some exciting opportunities that are ahead and based on these signals.

So we put these two things together, it's an exciting opportunity set ahead and basically signals that we're seeing in terms of early adoption and engagement as we transition from being a food delivery app to basically serving all of your local commerce needs. It gives us confidence that we can sustain a healthy growth here for a long period of time.

In terms of really adoption and engagement as we've transitioned from being spoken to react to this new oilfield sorting all of your local commerce needs.

Gives us confidence that we can sustain a can we go do it for a long period of time.

Got it okay. Thanks, Thanks, Tony.

Your next question comes from the line of Andrew Boone with JMP Securities. Your line is up.

Your next question comes from the line of Andrew Boone with JMP Securities. Your line is open.

Hi guys, thanks for taking my questions. Two, please. One, can you just update on your progress on advertising and can that contribute to 2022 or is it a longer term initiative? And then secondly, on non-restaurant particles, where are you seeing traction with consumers? Is it grocery? Is it alcohol? Can you be a little bit more specific there? Thank you so much.

Hi, guys. Thanks for taking my questions. Two please one can you just update on your progress on advertising and can that contribute to 2022 or is it a longer term initiative and then secondly on non restaurant articles, where are you seeing traction with consumers as a grocery as an alcohol can you be a little bit more specific.

Thank you so much.

Yeah, sure. I'll take both of those and feel free to add the beer. On the first question around advertising, we're seeing tremendous excitement pretty much actually from all of the stakeholders, from advertisers, from retailers, from restaurants, from consumers. And to me, what's really important is making sure that we can achieve two objectives, which sometimes can come at odds with one another. One is that we offer the best return.

Yes sure.

I'll take both of those and feel free to add on.

And our first question around advertising.

We're seeing tremendous excitement pretty much actually from all of the stakeholders from advertisers from retailers from restaurants from.

Consumers and to me.

What's really important is making sure that we can achieve two objectives, which sometimes can can come at odds with one another one is how do we have.

Offer the best return and Advertiser return in terms of their return on spend.

in terms of their return on spend. And the second is how do we make sure that we certainly not degrade but ideally improve the consumer shopping experience? And these are the two things that we're constantly focused on. And so we're in no rush to monetize, although we're really excited by what we're seeing.

And the second is how do we make sure that we certainly not degrade but ideally improve the consumer shopping experience and these are the two things that we're constantly focused on and so we're in no rush to monetize although we're really excited by what we're seeing.

But these are kind of, you know, our objective functions, if you will, when it comes to advertising. It's doing really well, it's off to a tremendous start. There is extraordinary demand, but I think staying disciplined on, again, building the best possible product to allow us to have these long-term sustained periods of growth is how we think about this. With respect to, I think, the new categories, we're actually seeing

But these are kind of our objective functions. If you will when it comes to advertising.

Doing really well is off to a tremendous start there is extraordinary demand, but I think staying disciplined on again building the best possible product to allow us to have these long term sustained.

Periods of growth as it is what it is how we think about this with respect to I think the new categories, we're actually seeing.

Traction within each category and I think in some regards this is probably not a surprise I mean, just think about some of these categories, whether it's things that youre stocking up in your pantry or grocery shopping or.

Everything in between I mean, these are the highest frequency possible categories. When it comes to consumer spend and all we're really doing is I think adding to the incremental demand on one side by.

possible categories when it comes to consumer spend. And all we're really doing is, I think, adding to the incremental demand on one side by making sure that customers can get things delivered in minutes, not hours or days. And then on the other side, we're enabling.

Making sure that customers can get things delivered in minutes not hours or days and then on the other side, we're enabling these retailers and merchants to be able to do it through their own channels their own apps their own websites.

these retailers and merchants to be able to do it through their own channels, their own apps, their own websites.

And so I think for those reasons, that's why we're seeing this growth. I mean, I think as you saw in our shareholder letter, you know, on an aggregate basis, about 14% of our monthly active shoppers have...

And so I think for those reasons.

That's why we're seeing this growth I mean, I think as you saw in our shareholder letter.

On an aggregate basis about 14% of our monthly active shoppers have.

you know, shopped in a category outside of restaurants. But that number is substantially higher than that in hundreds of markets already. And so, and this is pretty universal across categories.

Haven't shopped in a category outside of restaurants.

But that number is substantially higher than that in hundreds of markets already and so and this is pretty universal across categories.

And Andrew, just to go back to the advertising question, we are expecting advertising revenues to grow in 2022, but we will invest those incremental profits into growth initiatives with the aim of maximizing long-term profit.

And Andrew just on your just to go back to the advertising question. We are expecting advertising revenues to grow in 2022, where we will invest those incremental process into the growth initiatives with the remarks maximizing long term profitability.

Great. Thanks.

Your next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is open.

Your next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is open.

Thanks so much. Maybe just dovetailing with some of what we talked about so far, you know, as you move into more categories and you think about more product evolution of the long-term, I think in the shareholder letter there was a comment about retention and frequency and LTV. You know, how should we be thinking about the long-term margin structure or the long-term LTV to CAC in this business now versus maybe the pre-pandemic period when you IPO it a couple years ago? And how would you frame what you've learned over the last couple of years with respect to that? Thanks.

Thanks, So much maybe just dovetailing with some of them we've talked about so far as you move into more categories and just thinking about more product evolution of the long term I think in the shareholder letter there was a comment about retention and frequency and LTV.

Should we be thinking about the long term margin structure of the long term LTV to CAC in this business now versus maybe the pre pandemic period. When you IPO a couple of years ago, and how would you frame what you've learned over the last couple of years with respect to that.

Thanks for the question.

Thanks for the question. Just to let me take that question.

Thanks for the question.

Due to.

Let me take that question.

<unk>.

The first thing I'd say is what we shared in the latter was meant to be a framework for how we think about how we manage

The first thing I'd say is what we shared in the letter was meant to be a framework for how we think about how we manage the business. So today, we're not managing the business through a certain margin, we're not trying to increase margins quarter on quarter, we're not going to manage to an absolute amount of EBITDA and.

So today, we're not managing the business to a certain margin. We're not trying to increase margins quarter and quarter. We're not trying to manage the maximum amount of people.

Instead, what we do is we invest. And we invest in that as we start small and we look for signals along two dimensions.

Instead, what we do is we invest and we invest in areas. We start small we look with signals along two dimensions, the closest product market fit.

versus product market fit. So we alluded to the fact that 14% of our NAUs use verticals outside of food. That's a similar product market fit. We're looking forward to it.

We alluded to the fact that 14% O'brien, who use us.

Verticals outside of food.

A similar product market fit we're looking forward to frequency signals, we're looking for the impact of initial.

We're looking for the impact of initiatives and actions we take on retention on the core platform, whether it's a data to the core platform. If we see product market signals, that's one criteria that's been met. The second is are we making progress on unit economics? And we have a view for each business what, you know, what target unit economics need to be in order to meet our return threshold. And so we're looking for steady progress.

Initiatives and actions, we take on retention in the core platform, whether it's a difficult platform. If we see product market fit signals. That's one criteria are met the second is are we making progress on unit economics than we ever view for each business.

Our target unit economics need to be in order to meet our return thresholds and so we're looking for steady progress when you see both of these things like we have with our new verticals like we have with our international business and we got back on business. That's when we start scaling up on our investments and so that's the framework, we generally use versus trying to.

When you see both of these things like we have with our new verticals, like we have with our international business and with our platform business, that's when we start scaling up our own Arab dance software.

And so that's the framework we generally use versus trying to target a certain margin. The reason we included that example in the shareholder letter was to provide a case study of how we think about it because if you were trying to grow margins period and period, a product like Dash

Sure.

Target a certain margin. The reason we include that example in the shareholder letter was to was to provide a case study of how we think about it because if you were if you were trying to grow margins period on period, a product like <unk> would never come to be.

it just wouldn't because on each order DashPass has lower unit margins. But as we said from the beginning, if you're optimizing for long-term profit dollars and we have confidence in the increasing order frequency of the DashPass program, as a result, the total dollars we can generate per user on the platform are higher compared to the alternative.

It just wouldn't because on each order that plus the lower unit margins, but as we said from the beginning if you're optimizing for long term proper donors and we have confidence in the increasing order frequency of the dashboards program. As a result, the total dollars we can generate per user on the platform are higher compared to the alternatives.

And so I'm not avoiding the question legitimately because we aren't running the business to certain target margins, but we're happy with the progress we're making on maximizing long term profit.

And so I'm.

Im not avoiding the question is legitimately because we aren't running the business to target margins would we're happy with the progress we're making on maximizing long term comfort on this the one thing that gives me further confidence sort of room for upside is the advertising opportunity.

The one thing that gives me further confidence or sort of room for upside is the advertising

The advertising opportunity only grows as our users and our engagement grows. And today compared to a year ago, we are 20% more than we used compared to several years ago, where three, four times the size of our business. And these individuals are engaging with us, not just in the restaurant vertical, but across all of these different other verticals and over multiple surfaces within the app, which then gives up a tremendous opportunity to not just create new business lines, but also generate advertising revenue with a healthy role.

If there is an opportunity only grows as our users and engagement growth and today compared to year ago with a 40% more revenues compared to several years ago with three to four times the size of our business and these individuals are engaging with us not just in the restaurant vertical because all of these different for other verticals and over multiple services within the App, which then gives us the <unk>.

Remembers opportunity through not just.

Great New business lines, but also generate advertising revenue with these early rollouts and so I think of that as upside to the model, it's not something that that.

And so I think of that as upside to the model. It's not something that you should make in the near term, because we need to be very careful about how we not just enable advertising rewards, but do so in a way that doesn't degrade the consumer.

You should be concluded in the near term because we need to be very careful about how we.

Enable an advertising wise, but do so in a way that doesn't degrade the consumer experience.

The only thing I'd add to what Prabir said is really, you know, I think the latter part of the question around, you know, what have we learned kind of, you know, during the pre-COVID kind of post-COVID era of behavior.

Yeah.

The only thing I'd add to what <unk> said is really I think the latter part of the question around what have we learned kind of during the pre COVID-19 kind of post COVID-19 era of behavior.

is just the resilience of the category and how I think was put to rest. I think this question of what happens to demand is...

Just the resilience of the category and how I think we've put to rest I think this question of.

What happens to demand.

Diners go back and eat inside restaurants. Well, I think clearly takeout and delivery as shown by our performance, not just in the fourth quarter, but also in 2021.

Diners go back and eat inside restaurants, well I think clearly takeout and delivery as shown by our performance not just in the fourth quarter, but also in 2021.

in an aggregate is that they're complimentary. You know, it's very possible to eat inside of a restaurant and get delivery because we eat three times, you know, or more maybe per day. And that's over a hundred shopping moments per month. And then you start adding in these other categories.

And in aggregate is that they're complementary.

Possible to eat inside of our restaurants and get delivery, because we need three times or more maybe per day and that's over 100 shopping moments.

And then you start adding these other categories and you just ask yourself. The question what was the complementary to go inside a shopping malls or other types of stores.

ask yourself the question, well, is it complementary to go inside, you know, shopping malls or other types of stores and maybe get it.

delivered online or over the Internet. And I think that's kind of what we've seen, certainly, in the restaurant delivery business, and we're starting to see that in all of our other cases.

And maybe get it.

Delivered online or over the Internet and I think that's kind of what we've seen certainly in the restaurant delivery business and we're starting to see that in all of our other categories.

Your next question comes from the line of Bernie Mcternan with Needham <unk> Company. Your line is open.

Your next question comes from the line of Bernie McTernan with Needham & Company. Your line is open.

Great, thanks for taking the question. I've seen examples on the app when I ordered dinner, for example, and they pushed me to order ice cream from another local store. I imagine new categories like grocery and alcohol and convenience are probably incrementally less time sensitive. So there's probably even a greater opportunity for dashers to go to multiple stores for the same customer. But is that a substantial opportunity either from a cost efficiency perspective or higher GOV or maybe some potential advertising opportunity?

Great. Thanks for taking the question.

These examples on the App when I order dinner for example in my pushing me to order ice cream from another local store.

<unk>, new categories like grocery and alcohol and convenience are probably incrementally less time sensitive. So there's probably even a greater opportunity for dash has to go to multiple stores for the same customer but is that a substantial opportunity either from a cost efficiency perspective are higher year over year, maybe some potential advertising opportunity.

Hey, it's Tony. Yeah, I'll take the question. I think it's a really good point and I think this kind of, you know, really is very exciting for us because it's a thesis we've had since really day one of the company, which is, you know, this business, anything, you know, last mile and local commerce is really about building greatest order.

Hey, it's Tony.

I'll take the question.

I think it's a really good point and I think that's kind of.

It really is very exciting for us because it's the thesis we've had since really day one of the company, which is this business.

Anything less.

Smile and local commerce is really about building greatest order density. That's why we started with restaurants right. It has the highest count of stores across every category of local retail restaurants, who that is.

That's why we started with restaurants, right? It has the highest count of stores across every category of local retail, restaurants do that is, and it has the highest frequency of use.

And it has the highest frequency of use which is what gives you the possibility for the highest order density and if you can start with the highest order density then you have a lot of Optionality optionality to do some of the things that you described to bring other types of things and I think hopefully being useful to consumers in different kinds of merchants, which therefore.

which is what gives you the possibility for the highest order density. And if you can start with the highest order density, then you have a lot of optionality. Optionality to do some of the things that you described of bringing other types of things, and I think hopefully being useful to consumers and different kinds of merchants, which therefore provides more flexible work opportunities for dashers. It also provides opportunities to do, I think some of the things you described around, you know, logistic efficiency.

I'll provide more.

Flexible work opportunities for <unk>. It also provides opportunities to do I think some of the things you described around logistics efficiency.

But to us, it's just, again, it goes back to how do we become more and more useful in people's lives? How do we solve more jobs for a consumer as we think about every shopping occasion they have? You know, while we have impressive order frequency, it's a...

But to us its just again it goes back to how do we become more and more useful and People's lives right. How do we solve more jobs for a consumer as we think about.

Every shopping occasion, they have and again, while we have impressive order frequency.

small fraction of actually how much shopping that actually takes place, right? So we have a lot of work to do, I think, to solve even more jobs. And I think the same is true for merchants, and not only in helping them build their channels, but doing other types of jobs for them, that's why we have our platform services business. And I think together, if we can do these two things, we'll provide the greatest number of work opportunities for dashers as well. And so you're absolutely right in I think a lot of the assumptions behind the question, but to us it just starts with how do we build the best possible experience consulting the most number of jobs.

A small fraction of actually how much shopping that actually it takes place right. So we have a lot of work to do I think to solve even more jobs and I think the same is true for merchants and not only in helping them build their channels, but doing other types of jobs for them. That's why we have our platform services business and.

And I think together if we can do these two things will provide the greatest number of work opportunities for doctors as well and so youre, absolutely right and I think a lot of the assumptions behind the question, but to US. It just starts with how do we build the best possible experience and solving the most number of jobs.

Great, thanks Tony.

Great. Thanks, Tony.

Your next question comes from Michael McGovern with Bank of America. Your next question comes from Michael McGovern with Bank of America.

Your next question comes from Michael Mcgovern with Bank of America. Your line is open.

Yeah.

Hey, guys. Thanks for taking my question.

I was just wondering if you could dig a little bit more into the chart about DashPass order mix versus contribution profit per active consumer. I thought it was pretty surprising and interesting to see that there's such a wide variance of DashPass order mix and also the contribution dollars. So I was wondering, you know, what causes some cohorts to lag and then is it kind of just a function of time to get those lagging cohorts up to that close to $25 mark of contribution profit per active consumer? Thanks.

I was just wondering if you could dig a little bit more into the chart about dash pass order mix versus contribution profit per active consumer I thought it was pretty surprising and interesting to see but there is such a wide variance of dash has order mix and also the contribution dollars. So I was wondering what causes some cohorts to lag and then.

Is it kind of just a function of time to get those lagging cohorts up to that close to $25 Mark of contribution profit per active consumer.

Thanks for the question, Mike. It's a good opportunity to explain exactly what the chart is because we've got a few questions ahead of the call. So each dot on the chart is a quarterly cohort. So each quarterly cohort starting from 2019 all the way through to the third quarter 2021.

Okay. Thanks for the question Mike.

It's a good opportunity to explain exactly what the charters because you've got a few questions.

Recall so.

Each dot on the chart is a quarterly cohorts so each quarterly cohort starting from 2019, although it through the third quarter going into any one.

And along the x-axis is the percentage of the orders from that cohort that are Dashboard's orders.

And along the X axis is the percentage of the orders from that cohort that are dash bus orders.

On the y-axis is the in-quarter, the Q4 2021 contribution profit per active user in that quarter.

<unk> is the Q.

In the quarter. The Q4 2021 contribution profit per active user in that quarter.

for each of these cohorts. And as you can see, there's this positive correlation where the higher the dash pass order mix, the higher the contribution profit per MAU. And this goes back to the answer I gave to Eric, to his question, which is with dash pass, we're making a trade-off to accept lower unit margins in exchange for significantly higher order frequency. And so as the order frequency is increasing, we're making a trade-off to accept lower unit margins in exchange for significantly higher order frequency.

Each of these cohorts and as you can see business. This positive correlation with the higher the dash bus order mix the hydro contribution profit.

And.

It goes back to the answer I gave.

Hey, Eric Good question, which is with dashboards, we're making a tradeoff could accept lower unit margins in exchange for significantly higher order frequency and.

And so as the order frequency increases.

you generate more orders and those orders translate into greater cumulative contribution profit for each user.

You generate more orders and those orders translate into greater cumulative contribution profit for each user.

Now to your question on what drives the variance, it's largely tight.

To your question on what drives the variance is largely time.

on the left side of this chart are basically newer cohorts, the right side of the chart are the older cohorts. And so generally as time goes by, consumers get increasingly habituated, they start using the product, and Dashpad starts making financial sense because once you start placing more than two to one-half orders, the product pays for it.

On the left side of this chart, obviously newer cohorts that outside of the sharp on the older cohorts and so Germany as time goes by consumers getting increasingly habituated. They started using the product and dashboard thats, making financial sense, because once you start producing more than beat on our borders.

Pays for itself.

And so what you see is over time, as consumers save more money, they start using them, they're opting DashPass, but then further drives up their order frequency.

And so what you see is overtime as U S consumers save more money they start using the new often dash costs have been further drives up the order frequency.

Got it. That's really helpful. And I guess 1 quick follow up on order frequency. I was just wondering and on the 14% of customers that are now trying non restaurant ordering for the 1st time or excuse me just just using it.

Got it that's really helpful.

Yes, one quick follow up on order frequency frequency I was just wondering on the 14% of customers that are now trying non restaurant ordering for the first time or excuse me just just using it.

Do you expect that restaurant and non-restaurant can exhibit similar order frequency trends long term or do you think that eating and ordering from restaurants is fundamentally a higher order frequency kind of market?

Do you expect that restaurant and non restaurant can exhibit similar order frequency trends long term or do you think that.

Eating and ordering from restaurants as fundamentally a higher order frequency you kind of market.

In general, people's activity on our app.

In general the People's activity in our on our App resembles how they operate in their daily lives right. So if you think about this question came up sort of a few quarters ago and public around.

resembles how they operate in their daily lives, right? So if you think about, you know, this question came up sort of, you know, a few quarters ago in public around, you know, the mix between national brand restaurants versus local restaurants and frankly it replicates what you see in the industry.

The mix between national brand restaurants versus local restaurants, and frankly, it replicates what you see in the industry Similarly, with with areas, such as convenience and grocery and alcohol and pet food essentially overtime as people's awareness of door dash builds and as our selection bills in the neighborhoods where they live in.

Similarly with areas such as convenience and grocery and alcohol and pet food, essentially, over time as people's awareness of DoorDash builds, and as our selection builds in the neighborhoods that they live in, their behavior offline and online will converge.

Their behavior offline and online.

Will converge Judy it's lower because that level, we're still making progress in terms of the selection quality affordability better then in order to hit the sweet spots that more and more consumers started becoming aware of door dash.

Today, it's lower because that level, you know, we're still making progress in terms of the selection quality affordability paradigm in order to hit the sweet spots that more and more consumers start becoming aware of DoorDash, you know, as an on-demand way to actually get access to these verticals that are adjacent to food delivery and the ones that they use. So short answer to your question is.

As an on demand where it actually get access to these verticals that are adjacent to food delivery and the ones that they use so short answer to your question is.

Over time, I expect the auto frequency to basically mimic how people shop in their daily lives.

Overtime I expect the order frequency to basically limit how people show up in there.

Daily lives.

Got it that's great. Thanks, so much.

Yeah.

Your next question comes from the line of Lloyd Walmsley with UBS. Your line is open.

Your next question comes from the line of Lloyd Walmsley with UBS. Your line is open.

Thanks have a couple if I can first just thanks for sharing the updated cohort data. If we just focus on maybe the narrower subset of users added during the pandemic.

Alright, Thanks have a couple if I can first just thanks for sharing the updated cohort data. If we just focus on maybe the narrower subset of users added during the pandemic do you see consistent frequency and retention.

Do you see consistent frequency and retention on those newer cohorts compared to older cohorts, and in particular in markets that have reopened more than others? And anything you can kind of share on how you think that's going to play out over the rest of this year in terms of the cohort behavior and what's embedded in the guidance. And then second.

Those newer cohorts compared to older cohorts and in particular.

In markets that have reopened more than others.

And anything you can kind of share on how you think that's going to play out over the rest of this year in terms of the cohort behavior and what's embedded in the guidance and then secondly.

On grocery at the time of the IPO, I think there were still some question marks around the unit economics and scalability of grocery. As you guys have progressed and learn in that category, how do you feel today about your ability to generate attractive unit economics? And how is that informing how you get a market on the grocery side? Thanks.

On grocery at the at the time of the IPO I think there were still some question marks around the unit economics and scalability of nursery as you guys have progressed and learn in that category. How do you feel today about your ability to generate attractive unit economics, and how is that informing how you go to market on the graph.

Gary side. Thanks.

Great. So the first thing let me just say is that the retention...

Great. So the.

Firstly, let me just say that.

The retention.

pre-COVID versus COVID, when we were in the middle of COVID in 2020, retention spiked. It was at all-time highs. And then from there on, in 2021, you start to see a slow normalization to retention, especially as vaccination rates increased and in-store dining resumed.

Pre COVID-19 versus Covid.

When we were in the middle of Covid and 2020 with pension spiked. It was at all time highs and then from there on in 2021, you start to see a slow normalization to retention, especially the vaccination rates in Greece and in store dining resumed.

We're at a point now where in 2021, early on in 2021, we were bolstered by the effect of stimulus payments that had an upward impact on both attention and auto-frequency.

<unk> now.

And by the way in 2021 early on in 2021, we were bolstered by the effect of stimulus payments that had.

An upward impact on both retention and order frequency where we're at.

where we're at today is still better than pre-pandemic.

Today is still better than pre pandemic levels, but the retention has now normalized with slightly above pre pandemic levels, but not substantially order frequency substantially higher compared to pre pandemic levels as well as.

But the retention has now normalized with slightly above pre-pandemic levels, but not substantially. Order frequency is substantially higher compared to pre-pandemic levels as well as 2020 levels, but that's because of continued improvements to order frequency both within the Dash pass cohorts as well as the non-Dash pass cohorts.

2020 levels, but thats because of continued improvements to order frequency both within the dashboards cohorts as well as the non basketball courts.

Yeah, and on the second question around grocery, I mean, here's like the way we think about it, right? I mean, when you look at our portfolio of priorities, we have the US core business of restaurant delivery. We have these new categories, one of which you're referencing grocery platform services, international and advertising.

Yes.

On the second question around grocery I mean, here's the way, we think about it right I mean, when you look at our portfolio of priorities, we have the U S core business our restaurant delivery. We have these new categories, one of which you are referencing the grocery.

Platform services International and advertising.

You know, the way we think about them is really how are we doing against their life state?

We think about them is.

How are we doing against their life stage rate, obviously, a lot of these businesses.

Right. Obviously, a lot of these businesses, you know, performed actually quite recently. You know, a product like grocery, for example, is only about 12 to 14 months old. We love the trajectory of the business, both top and bottom line, but it's still in its earliest innings. And so right now the focus

Performed actually quite recently.

A product like grocery for example, it was only about 12 to 14 months old.

The trajectory of the business, both top and bottom line, but it's still in its earliest innings and so right now the focus continues to be making sure that we keep improving.

continues to be making sure that we keep improving the product experience, the selection of partners that we can bring on and the inventory from these partners, the quality of the experience itself, the affordability of...

The product experienced a selection of partners that we can bring on and the inventory from these partners the quality of the experience itself the affordability of these.

of these deliveries as well as the service levels. And so that's really the focus right now on grocery. And again, like.

These deliveries as well as the service levels and so that's really the focus right now on grocery and and again like.

the way we think about making these investments is in a fairly disciplined way of making sure that we find product market fit before we actually scale these things out. And so when we do scale these things out, they tend to already have very, very robust unit economics and cohort performance.

The way, we think about making these investments is in a fairly disciplined way of making sure that we find product market fit before we actually scale. These things out and so when we do scale these things out there.

They tend to already have very very robust unit economics in cohort performance.

Alright, thank you.

Your next question comes from the line of James Lee with Mizuho. Your line is open. Great. Thanks for taking my questions. My question is on Dashmark. Maybe can you guys talk about the expansion plan maybe for FY22 and what are the key learnings so far? I'm just curious, what do you need to see for this business to scale? Would you consider M&A or partnership to expand this segment? Thanks. Thanks.

Your next question comes from the line of James Lee with Mizuho. Your line is open.

Great. Thanks for taking my questions. My question is on Dash Mark maybe can you guys talk about the expansion plan may be for FY 'twenty, two and what are the key learnings so far.

Just curious what do you need to see for this business to scale, what you consider M&A a partnership to expand this segment.

Yes.

Yeah. Hey, James, it's Tony. So on Dashmark, we really like what we see. Again, like this is another one of these newer initiatives, you know, about a year and a half old.

Yes, Hey, James it's Tony So on dashboards, and we really like what we see again. This is another one of these newer initiatives about a year and a half old.

And what we're learning, I think, are benefits really for starting with a couple of audiences, and I'll talk about how it translates into a third audience. So first, for consumers, a lot of these dash marks are just bringing selection of inventory into geographies where, frankly, it didn't previously exist.

And what we're learning I think our benefit is really for.

Starting with a couple of audiences and all to all.

Talk about how that translates into a third audience. So first for consumers a lot of these dashboards, they're just bringing selection of inventory into geographies, where frankly didn't previously exist, whether literally never existed or the hours.

Whether literally it never existed or the hours of operation is now opened pretty wide to 24-7 now, which is a big improvement for what consumers are seeking. I think with respect to merchants, this is...

Operations has now opened pretty wide 24, 7% which is.

It is a big improvement for what consumers are seeking I think with respect to merchants.

This is Mike.

critical infrastructure for a lot of them, either to expand into new geographies or to increase into different hours of operation.

Critical infrastructure for a lot of them either to expand into new geographies works it increase into different hours of operations.

And so, what we see is really dashboards on a fairly long investment time horizon. Again, same discipline around finding product market fit before we choose to scale these things out. But what we're seeing is quite a lot of demand for them. And I think it really speaks to, again, what we're trying to create at DoorDash, which is really the largest local commerce app or marketplace where we're bringing incremental demand, and the largest local commerce platform

And so what we see.

Is is really dashboards on a fairly long investment time horizon again same discipline around finding product market fit before we choose to scale these things out.

But what we're seeing is quite a lot of demand for them and I think it really speaks to again, what we're trying to create a door dash, which is really the largest local commerce app or marketplace, where we're bringing incremental demand.

The largest local commerce platform, where we're building.

building tools and infrastructure, you know, obviously starting with delivery with products like breast drive. But if you think about all the other

Building tools and infrastructure, obviously, starting with delivery with products like the restaurants, but if you think about all the other products and services that merchants need to build in order to compete digitally in today's economy, well, it's certainly expands far beyond just the logistics and so that's why it's a really a form of infrastructure.

products and services that merchants need to build in order to compete digitally in today's economy.

Well, it certainly expands far beyond just logistics and so...

Dashmarts are really a form of infrastructure, you know, to store inventory, to possibly enter new geographies and certainly expand their hours of service. And so we plan on investing in this line of work for a really long time, you know, for those reasons. And obviously if we can build both, you know, a marketplace and a platform with dashmarts, I think it will provide tremendous work opportunities for dashers.

To store inventory to possibly enter new geographies and certainly expand.

Their hours of service and so we plan on investing.

It's kind of in this line of work for a really long time for those reasons and obviously, if we can build both.

Marketplace and a platform with dashboards.

Tremendous work opportunities for doctors.

But again, the investment philosophy stays the same given how young dash marks are. It's making sure that we have great product market fit and then we'll continue to scale to see if we can grow the customers more powerful.

But again the investment philosophy stays the same given how young dashboard or it's making sure that we have great product market fit and then we'll continue to scale them.

And one quick follow-up question Tony here when you look at the non restaurant business in general I two parts to this question we look at user behavior Do they tend to be more recurring in nature of a more impulsive and also second for your? Non restaurant business in general. Can you be profitable over time without advertising?

And one quick follow up question Tony here when you look at the non the restaurant business and generally two parts to this question. When you look at your user behavior did they tend to be more recurring in nature or are there more impulsive and also second for your non.

Non restaurant business in general can you be profitable over time without advertising.

So on the non-restaurant category, what we're seeing is pretty much quite a lot of.

So.

On the non restaurant category, where we're seeing is.

Pretty much it.

Quite a lot of different kinds of use cases or are there are people, who just shop for impulse purchases for whatever the occasion might be yes.

different kinds of use cases. Are there people who just shop for impulse purchases for, you know, whatever the occasion might be? Yes.

But predominantly we're seeing people come back for, I think, a lot of use cases where the recurring behavior is looking for that middle of the week run now being solved by somebody else. That's really the job that we're solving for a lot of these customers. When you think about the items in your pantry that get consumed the earliest or the items in your refrigerator that maybe perished the earliest, those are the...

But predominantly we're seeing people come back for I think a lot of use cases.

Where.

The recurring behavior is looking for.

That middle of the week run now being solved by somebody else right. That's really the job that we're solving for a lot of these customers right like when you think about the items in your pantry that get consumed the earliest or the.

Items in your refrigerator that maybe Paris. The earliest those are the things that actually.

that actually, those are the types of things where you have to go back every single week, no matter how much you buy on a weekly basis, right? And those are the jobs where people have to do every single week.

It does.

Those are the types of things, where you have to go back every single week no matter how much you buy on a weekly basis right and those are the jobs, where people have to do every single week and and so we are seeing certainly both with although more of the behavior is recurring.

And so we are seeing certainly both, although more of the behavior is recurring. And then I'll let Premier take, I think, your second question, which is really around, I think, the business model.

And then I'll, let out from your take I think your second question, which is really around I think the business model.

And James, we have not disclosed anything about the business model around non-restaurant verticals, so no comment on that question. Okay, thank you.

Yeah, and James we have not.

Is there anything about the business model around.

Non restaurant verticals and.

So no comment on that question.

Okay. Thank you.

Your next question comes from the line of Mark Mahaney with Evercore ISI. Your line is open.

Your next question comes from the line of Mark Mahoney with Ebercor ISI. Your line is open.

Okay, thanks. Two questions. When you think about the number of DashPass members now, you have it at over 10 million out of whatever 25 million MAUs. What do you think are the obstacles to getting that penetration higher? I know it's high, 40%, but I would think given the value prop and the frequency of the activity that that could get into 60, 70% maybe long term. What are the biggest things you have to solve for in order to get that penetration higher? Any quick updated comments on Prop 22?

Okay. Thanks, two questions. When you think about the number of dash past members now you have it over $10 million out of whatever $25 million and they use what do you think are the obstacles to getting that penetration higher I know, it's high 40%, but I would think given the value prop and the frequency of the activity that that could get into $60.

70%, maybe long term so what's what's what are the biggest things you have to solve for in order to get that penetration higher and then any quick updated comments on prop 22, and I know there was a.

I know there was the AG reversed or challenged the judge's decision earlier this month. Any updated thoughts on how that's going to play out or when we'll know? Thank you.

The AG reversed or challenge the judge's decision earlier this month any updated thoughts on how thats going to play out or what or when we'll know thank you.

Yeah.

Yeah.

Prabir, you want to take the first one? Yeah, I want to take the first one and you take the second one. OK, so, Mark, on your question on the $10 million out of $40 million, yes, the $10 million was a...

So Barry you want to take the first one yes I think the first one is if you take the second one okay. So.

On your question on the $10 million.

Yes with them.

a milestone we're happy with, it's 40% of our MAUs. But there's a lot of runway here, right? As you think about, with 25 million MAUs, we're a small fraction of the US population. Now add in the other countries we operate in, whether it's Canada, Australia, Japan, Germany, we have access to over 500 million people.

A milestone we're happy with its 40% of <unk>.

But there's a there's.

There's a lot of runway here as you think about.

But with 25 aluminum at us we're a small fraction of the U S population now add in the other countries. We operate in whether it's Canada, Australia, Japan, Germany, we have access to 500 million people right and so in the context of that 501 and people in with you.

So in the context of that 500 million people, even if you adjust for that for adults and so on, the 10 million membership size is a small fact.

You adjust for that sort of adults and so on the 10 million membership sales is a small fraction. So the path to get there is going to be back to the basics of selection quality and affordability. So in selection as we keep adding these new categories and new stores.

So the path to get there is going to be back to the basics of selection, quality and affordability. So in selection, as we keep adding these new categories and new stores,

These neighborhoods that cross sell percentage, 14% will start creeping up and order frequency in these new verticals.

And to the point I made earlier about.

about purchase behavior in our platform ultimately mimicking or reflecting how human beings operate in their daily lives. So over time as that order frequency increases, the savings opportunity increases and DashPass starts making sense. So even if it's someone that doesn't order enough restaurant delivery today, over time DashPass may end up making sense for them because they use DashPass to order their convenience goods or their grocery goods or their liquor purchases or their pet food or retail and so on and so forth. So there's opportunity in that front and there's opportunity to continue improving quality. Today we've made consistent improvements but still a reasonable number of deliveries are defective and so we've got a bunch of work to do to make the product reliable a hundred percent of the time so that if you're a DashPass member the experience truly feels special. Yeah and Mark with respect to your second question on Prop 22, you know nothing has changed I mean we still think.

About purchase behavior on our platform ultimately mimicking a reflecting how human beings operate.

So over time as that order frequency increases the savings opportunity increases and dashboard starts making sense. So even if it's someone that doesn't order enough restaurant delivery today overtime dashboards may end up making sense for them because they use Bash bus, Florida, the convenience goods or the grocery goods at a nickel purchases.

The pet food retail and so on so forth. So there is opportunity in that front and then there's opportunity for continued improving quantity today, we've made consistent improvements with them.

A reasonable number to the readout of effective and so we've got a bunch of work to do to make the product reliable 100% of the time, so that if you're a dashboard member of the.

The experience truly feels thresholds.

Yeah, and Mark, with respect to your second question on Prop 22, nothing has changed. I mean, we still think we're absolutely right on the law here.

Yes, and Mark with respect to your second question on prop 22.

Nothing has changed I mean, we still think we're absolutely right on the law here in fact, I think even the California Attorney General has supported US in this regard that 58% to 59% of the state population and voting population are saying.

even the California Attorney General has supported us in this regard that when 58 to 59 percent of the state population and voting population are saying that they passed something into law, that should be legalized, I think it's just common sense that that's the right legal answer. But I think even more importantly than this, just more broadly speaking, we feel the same way about this issue anywhere in the sense that

That they pass something into law.

That should be legalized.

I think it's just common sense.

<unk>.

That that's the right legal answer, but I think.

Even more importantly than this just more broadly speaking we feel the same way about this issue anywhere in the sense that.

drivers in this type of economy ought to be able to take wherever they want to work, whenever they want to work, and that flexibility is critical. I mean, that's what Prop 22 stands for, while giving them the protections that they deserve. And we, whether it's in the state of California or frankly any geography globally, that's what we stand for, which is to support the Dasher. And the voters of California believe in this, the drivers believe in this, and the California Attorney General believes in this.

The drivers and.

In this type of economy ought to be able to take it wherever they want to work whenever they want to work and that flexibility is critical and that's what <unk> stands for a while giving them the protections that they deserve and we whether it's in the state of California, or frankly, any geography globally. That's what we stand for which is to support the dasher.

And the voters of California, I believe in this the drivers believing this.

And the California Attorney General isn't it.

Okay. Thank you Tony Thank you Premier.

Your next question comes from the line of Brad Erickson with RBC Capital Markets. Your line is open.

Your next question comes from the line of Brad Erickson with RBC capital markets. Your line is open.

Thanks. Just a couple, I guess. First, between the different categories, all the different categories you have going here in the US, and then obviously Volt coming on here later this year, hopefully, and then Canada and Australia.

Thanks.

A couple of I guess.

Between the different categories all the different categories, you have going here in the U S. And then obviously volt coming on here later this year, hopefully and in Canada and Australia.

Does all of that expansion, I guess, right in front of you, probably keep you from, say, exploring other international expansion, or should we assume other markets are sort of always under exploration? And then second, if you think about the regulatory work likely to occur in the future, if not already.

Does all of that expansion I guess right right in front of you probably keep you from say exploring other international expansion or should we assume other markets are sort of always under exploration and then second if you think about the regulatory work likely to occur.

Not.

In the future if not already in Europe .

you know, a lot of these international markets talk about just kind of how prepared you feel you are in terms of

These international markets talk about just kind of how prepared you feel you are in terms of.

personnel and the associated expense necessary to kind of support those works and hopefully constructive dialogues. Thanks.

Personnel and the associated expense necessary to kind of support those works and hopefully constructive dialogues.

Yeah, hey, it's Tony. I'll take both of those questions. With respect to the first, I think you're certainly right in saying that we have quite a lot on our plate and we're constantly again trying to invent the best possible products. And again, when you think about the portfolio of initiatives of US restaurants, new categories, our platform services, international markets, and advertising, there's a lot of work to go around. So we always believe that we have to earn the right to serve customers in a second way by doing an excellent job in the first way. And so that's really what we're focused on. But look, I mean, it doesn't mean that we're not scanning for opportunities. We're always looking for opportunities regardless. And especially when we have such a robust core business that's producing positive cash flow and with a very healthy balance sheet, it gives us lots of opportunities to be opportunistic and go on the offensive.

Yeah, Hey, it's Tony I'll take both of those questions with respect to the first.

Youre certainly right in saying that we have quite a lot on our plate and we're constantly again trying to invent the best possible products and <unk>.

And again when you think about the.

<unk> portfolio of initiatives U S restaurants, new categories, our platform services international markets and in advertising. There is a lot of work to go around so.

We always believe that we have to.

Earned the right to serve customers in a second away by doing excellent job in the first way and so that's really what we're focused on but look I mean.

It doesn't mean that we're not scanning for opportunities we're always looking for opportunities.

Regardless, especially when we have such a robust core business, that's producing positive cash flow and with a very healthy balance sheet. It gives us lots of opportunities to be opportunistic.

And go on the offensive.

I think with respect to your second question around regulatory preparation, yes. I think this has been something that's been a part of DoorDash really since 2013 when the company was founded. These beliefs that we've had since day one of making sure that workers should be able to have this new standard where they get the flexibility that they're telling us over and over again with their words as well as with their feet.

I think with respect to your second question around regulatory preparation, yes, I mean I think that this is this has been something that's been a part of door dash really since 2013, when the company was founded and.

These beliefs that we've had since day, one of making sure that workers should be able to have this new standard.

Where they get the flexibility that that theyre, telling us over and over again with <unk>.

Their words as well as with their feet.

and also the protections that we believe they deserve. And frankly, just like expire, you know, outdated laws that, you know, deserve to be expired. And we think the productive way in doing this is that governments...

And also the protections that we believe they deserve and frankly, just like expire outdated laws that deserve to be expired.

And we think the productive way in doing this is that governments and businesses such as ourselves should work together across any geography to make sure that this actually happens from the perspective of the worker.

and businesses such as ourselves should work together across any geography to make sure that this actually happens from the perspective of the worker, not from any other person.

Not from any other perspective, and so that's what we're working really hard on and we have.

And so that's what we're working really hard on, and we have best-in-class teams to get that work done.

Best in class teams to get that work done.

Got it thank you.

Your next question comes from the line of Brian Fitzgerald with Wells Fargo. Your line is open.

Your next question comes from the line of Brian Fitzgerald with Wells Fargo. Your line is open.

Thanks, guys. A couple of questions on the marketplace side of things. Non-restaurant partners doubled to 21. Clearly, you have a lot of runway there, and you have a focus on product market fit for scaling. But how do you think about ways to grow partners on the platform? And then any dynamics to call out with respect to the different commission points you launched earlier in 21, 15, 25, 30%?

Thanks, guys a couple of questions.

On the marketplace side of things non restaurant partners doubled 21, clearly a lot of runway there.

And you have a focus on product market fit before scaling, but how do you think about ways to grow partners on the platform and then.

Any dynamics to call out with respect to the different commission points you launched.

Earlier in 'twenty 115, 25, 30%.

as cohorts of partners experience or use that model, are they moving up to the different commission points?

Cohorts of partners experience or user model or are they moving up to the to the different commission points.

Yeah, I'll take the first question and maybe Prebir can take the second on the kind of different tiers of commission points. With respect to the first of adding more selection in these new categories, a lot of it is just doing the work quite candidly. I think what has been really attractive to all of these customers is, well, I mean, look at what we're bringing. We're bringing the largest on-demand audience for local commerce that has the highest frequency of shopping. It's an incremental use case.

Okay.

Yeah.

I'll take the first question and maybe Premier can take the second one.

Kind of.

Current tiers of commission points with respect to the first of adding more selection and these new categories. A lot of it is just doing the work quite candidly I think what has been really attractive to all of these customers as well.

Look at what we're bringing her bring the largest on demand audience for local commerce that has the highest frequency of shopping that's an incremental use case.

Both from their physical activities their own digital activity than other any other previous digital partnerships that they've signed and so as a result of that.

Actually we're seeing quite a lot of excitement and where people are starting to think of door dash not just at lunch and dinner, but really everything inside the neighborhood. So we're actually seeing quite a lot of progress and but that doesn't mean that there isn't work to be done I mean, we have to build a lot of <unk>.

<unk> now that makes sense for categories outside of restaurants right.

restaurants, everything from the catalog to the in-store shopping process to how we think about customer support, to think about how do we support people not just again on our channel but also their own channel. So there's a lot of work to be done, but I would say that the excitement from partners has been tremendous. I think some of those names you've seen in the press and things like this, and we expect adding a lot more partners to come.

Everything from the catalog to the in-store shopping process to how we think about customer support to think about how do we support people not just again on our channel, but also their own channel. So there's a lot of work to be done, but I would say that the excitement from partners has been tremendous. I think some of those names you've seen in the press and things like this and we expect adding a lot more partners to come.

Everything from the catalog to the in store shopping process to how we think about customer support to think about.

How do we support people not just again on our channel, but also their own channel.

So theres a lot of work to be done, but I would say that the excitement from partners has been tremendous I think.

Some of those names you've seen in the press and things like this and we expect adding a lot more partners to come.

Brian , on the question about the pricing tiers, just as a reminder, this was aimed at SMB restaurants, not larger restaurants, but, quite predominantly, those that were coming through our self-serve channel. So, a small fraction of those have actually opted into the pricing tiers versus the prior pricing, and off the number that opted in, the majority have picked the two higher tiers, which was in line with what we expected and, you know, kind of makes sense given the value that we drive at the higher pricing tiers.

Hey, Brian on the question about the pricing.

As a reminder, this was aimed at SMB restaurants, Mike larger restaurants.

Normally those that are coming through our site so channel.

So a small fraction of those.

Those are actually opted into the pricing tiers versus the buyer pricing and off the number that that after than the majority.

Have picked the two higher tiers, which was in line with what we expected and kind of make sense given the value that we drive at a higher pricing tiers.

Okay.

Got it thanks guys.

Yeah.

Your next question comes from the line of Jim Sanderson with North Coast Research. Your line is open.

Our next question comes from the line of Jim Sanderson with Northcoast Research. Your line is open.

Thanks for the question. Just wanted to follow up a little bit more on DashPass. I'm wondering if you could help us to understand how the new DashPass members were recruited if this is primarily through credit card marketing programs. And then going forward as you try to expand these types of programs internationally, if your client acquisition strategy for DashPass is going to have to adjust away from credit cards, just a little bit more texture on how that growth has.

Thanks for the question I, just wanted to follow up a little bit more on dash paths and wondering if you could help us understand how the new Dash pass members were recruited if this is primarily through credit card marketing programs and then going forward as you try to expand these types of programs internationally if your clients.

Client acquisition strategy for Dash past is going to have to adjust away from credit cards, just a little bit more texture on how that.

Growth has has developed.

Yeah, the vast majority of the DashPass members are through our own channels and the minority are through Grant Card channel.

Yes, the vast majority the vast majority of the dashboard.

Members are through.

Our own channels and theirs.

The minority.

Gregg go channels.

And then are the percentage or share of Dashpath past members that pay full membership, is that changing over time?

And then are the percentage of share of desktop past members that pay full membership is that changing over time.

No, it's relatively consistent, but again, it depends on, you'll remember one of the ways we get people activated and Dash passes through a free trial period. So depending on the intensity of our marketing efforts, the trial versus pay mix changes, but it's relatively consistent.

It's relatively consistent but again it depends on.

You'll remember that one of the ways, we get people activator in dash process through a free trial periods, depending on the density of our marketing efforts.

The trial versus <unk> mix changes of Brazil and consistent.

Alright, thank you.

There are no further questions. This does conclude today's conference call, and thank you for your participation. You may now disconnect.

There are no further questions. This does conclude today's conference call. Thank you for your participation you may now disconnect.

And.

Okay.

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