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The Spoon

Daily news and analysis about the food tech revolution

earnings

DoorDash Exceeded Revenue Estimates but More Than Doubled its Losses in Q4 2020

DoorDash exceeded analyst estimates with its 2020 fourth-quarter revenues. However, the third-party delivery service also more than doubled its losses during that time period, and DoorDash stock took a dip this afternoon, after trading. Total revenue for the quarter represented a 226 percent year-over-year growth. 

The company went public in December 2020 after experiencing a boom fueled largely by the COVID-19 pandemic and the restaurant industry’s shift to off-premises formats like delivery. In its first financial report since that time, DoorDash said its sales increased 225 percent from 2019 during the fourth quarter 2020. Sales for Q4 totaled $970 million, beating analyst expectations of $926.7 million. However, the company also posted a net loss of $312 million, up from $134 million the previous year. 

DoorDash told shareholders it expects “declines in consumer engagement and average order values” as markets open back up and restaurants are able to open their dining rooms once more. How sharp that decline is remains unclear, the company said. 

The pandemic forced pretty much every restaurant that managed to stay open to adjust their focus towards delivery and takeout orders. Needless to say, this created a lot of business for companies like DoorDash, Uber Eats, and Grubhub as homebound customers ordered in. 

Off-premises orders are likely to remain popular for the foreseeable future. At the same time, third-party delivery services remain steeped in controversies (hello, Prop. 22) and many restaurants are fed up with them. There has of late been a push to bring more of the digital ordering process back under restaurants’ own roofs, promote pickup orders, and, in some cases, build native delivery platforms that cut out the need for a third-party aggregator like DoorDash.

That might be one reason DoorDash has in the last year expanded its services to include grocery and convenience store delivery. By diversifying the types of goods it can get to customers’ doorsteps, the company may have a better chance of staying relevant long term, regardless of what happens in the restaurant biz.

Uber Q3: Delivery Up 190 Percent Year-Over-Year

Uber reported its third-quarter earnings today, and as expected during this ongoing pandemic, the company’s delivery business, which includes Uber Eats continues to be its moneymaker.

Here are the topline Q3 stats:

  • Uber Delivery’s gross bookings grew 135 percent year-over-year, hitting $8.55 billion
  • Delivery’s adjusted net revenue grew 190 percent year-over-year, hitting $1.14 billion in revenue.
  • Restaurant partners on Uber Eats grew by more than 70 percent year-over-year

For comparison, in Q2 of this year, gross bookings for Uber’s delivery business was $6.96 billion.

Adjusted net revenues for Uber’s mobility, which includes its ridesharing business, declined 52 percent year-over-year, to $1.37 billion. Overall, Uber lost $1.09 billion, which is better than the $1.16 billion lost over the same time last year.

That delivery continues to be the main driver (pardon the pun) for Uber isn’t surprising. Though the pandemic flattened a little bit during the three months ending September 30, people just are not traveling as much as they did pre-pandemic. They are, however, getting restaurant delivery to eat at home, which kept Uber Eats busy.

Something to keep an eye for next quarter is whether Uber Eats’ expansion into grocery in Florida, Texas and New York City will have any impact on earnings. It’s been a record-setting year for online grocery, the winter months are just about upon us and the pandemic resurging. Will all these factors make Uber’s nascent entry into the grocery biz pull big numbers?

It should be noted that Uber’s Q3 earnings report is coming out the same week that it won a victory at the ballot box in California. Prop. 22, which Uber backed, was approved by the state, allowing the company to keep its drivers classified as independent contractors and not employees. That means it won’t have to pony up for benefits or other protections. While this is good for the company’s bottom line, Prop. 22 could have more unfortunate results overall.

Uber Q2: Eats Generates More Revenue than Rides

There are two stories coming out of Uber’s Q2 earnings report today. The first is the straight ahead numbers: The company did $2.18 billion in revenue for the quarter, which was down 29 percent year-over-year, but beat analyst expectations. Uber’s net losses were $1.8 billion, narrower than the $2.94 billion in Q1.

Of course, much of this was due to the fact that the COVID-19 pandemic has hit the company’s mobility business. Uber’s mobility division had gross bookings of $3.046 billion for the quarter, which was a decline of 73 percent year-over-year. With people on lockdown, they had no need to hail a ride.

But while the coronavirus kept people from catching an Uber across town, it also pushed them to ordering more food delivery while they stayed home, which leads us to the other story.

Gross bookings for Uber’s delivery business (Uber Eats) hit $6.96 billion in Q2, which was up 113 percent year-over-year and up 54 percent over Q1 2020. That’s a lot of french fries delivered to people’s front doors.

In addition to getting a pandemic push, Uber Eats also streamlined some of its costs in Q2. The company ceased Uber Eats operations in eight different markets around the world where it wasn’t in a leading position.

In the Q2 earnings release, Uber also said that it now has more than 500,000 partnered restaurants on the platform, a 50 percent jump year-over-year.

With Q2 in the books, it’s time to look ahead to Q3 which will include the $2.65 billion all-stock purchase of rival food delivery service, Postmates, as well as the expansion into grocery delivery here in the U.S.

Amazon Q2: Online Grocery Sales Tripled Year-Over-Year

Amazon announced its Q2 earnings yesterday, and unsurprisingly, the company’s grocery business went gangbusters during that time. Amazon said that its online grocery sales tripled in Q2 compared with the same time period last year.

Of course, this growth can be attributed to the COVID-19 pandemic, which was in full swing during the last few months. With large swaths of the country sheltering in place, people were pushed into grocery e-commerce. So much so that online grocery shopping experienced record sales month after month in Q2, hitting $7.2 billion in June.

This sudden demand for e-groceries caught every retailer, including Amazon, off-guard. Overwhelmed by demand, Amazon had to put new Amazon Fresh and Whole Foods delivery customers on a waitlist before they could place any orders.

To help ease the strain Amazon even went to more extreme measures, like converting the first of its full-on grocery stores in Woodland Hills, CA into a delivery-only fulfillment center. According to its earnings release yesterday, the company has increased grocery delivery capacity by more than 160 percent and tripled grocery pickup locations.

The COVID tide is raising all grocery retail boats as restaurants yo-yo between being open and closed. Amazon’s news comes days after grocery retailer Albertsons said that sales rose 21 percent to $22.8 billion for the quarter ending June 20, and that digital sales more than tripled.

The question Amazon, Albertsons and the entire grocery industry now face is how much of this record e-commerce spending is permanent. We’ve had basically five months of restricted movement/lockdowns, which is plenty of time for a new habit like buying groceries online to set in. Will people stick with it? And specifically for Amazon, will this alter any of it plans as it expands its real world grocery footprint? Amazon did debut its new smart shopping cart during Q2 as well, which indicates that it still expects people to shop at brick-and-mortar stores in some fashion in the future.

Like everything in the world right now, we’re watching it change in real time, and its unlikely anything will be settled by the end of Q3.

Pandemic Helps Push Blue Apron into Profitable Q2

Meal kit company Blue Apron announced profitable second quarter 2020 earnings today, driven in large part by the global pandemic. Blue Apron’s net revenue for Q2 was $131 million, up 20 percent over the previous quarter and 10 percent year-over-year. The company reached a net income of $1.1 million, or $0.08 diluted earnings per share.

In its earnings release, Blue Apron attributed the good numbers to the “impact on consumer behavior from the COVID-19 pandemic.” Translation: Q2 was smack dab in the middle of restaurants closing and people stuck at home, cooking more. It didn’t hurt that early on in the pandemic, panic shopping meant groceries at the store were harder to come by, pushing people to find alternate ways of getting dinner ingredients.

Blue Apron added 20,000 customers during Q2, and the average revenue per customer increased 25 percent year-over-year to $331. Orders per customer were also up 17 percent to 5.4 and average order value increased to $61, the highest level since 2015. You can see the company’s growth in this chart from the earnings release:

While Blue Apron was a pioneer in the meal kit space, it’s a market that consumers seemed to have soured on in recent years. While meal kits send you all the ingredients, those meals still take a long time to prepare and cook. But the pandemic turned everything on its head, creating an any-port-in-a-storm situation. If you’re stuck at home for many months, may as well try out a meal kit shipped directly to your door.

Today’s earnings report is the first time in a while that we’ve written anything positive about Blue Apron. The last few stories we’ve done on Blue Apron here at The Spoon were basically preparing its coffin:

Will this bump be sustained? In providing guidance for its Q3 results, Blue Apron said its outlook is “reflecting certain assumptions regarding the company’s business, trends, historical seasonal factors, and the continuing impact of COVID-19 on its business, including as a result of changes in consumer behavior and grocery alternatives.” The company is expecting revenue to grow year-over-year to $112 million with a net loss of no more than $18 million.

Uber Q3: Uber Eats Grew 140 Percent Year Over Year, Has 320,000 Restaurant Partners

Uber had a bummer of a Q2 earnings call, with the ride logistics company reporting $3.17 billion in revenues but $5.2 billion in losses for the quarter. While the overall health of Uber is something we keep tabs on, The Spoon is more interested in its Uber Eats division, which generated $3.9 billion in gross bookings.

While that figure missed analysts’ projections, there was some good news accompanying it. From Uber’s earnings release:

In Q2 2019, Uber Eats Monthly Active Platform Consumers (MAPCs) grew over 140% year-over-year. Over 40% of new Eats consumers had never used Uber’s platform before. Uber Eats restaurant selection continues to improve, reaching 320,000 restaurant partners at the end of Q2 2019. New delivery fees (service and small-basket fees) resulted in improved Adjusted Net Revenue take rates quarter-over-quarter.

Uber CEO Dara Khosrowshahi provided this good news/bad news quote to CNBC during the call:

“The Eats business is still a business that carries very significant growth going forward and that continues to attract a lot of capital. Not just in the US, but all over the world. With the eats business there’s a lot of capital chasing a lot of growth and we’re the leader on a global basis. So, I don’t expect that business to be profitable in the next year or year after frankly.”

Despite that somewhat dour note, Uber Eats has had a busy third quarter so far. While the food delivery business lost its exclusive partnership with McDonald’s, it went national with Starbucks delivery, is experimenting with a dine-in feature, testing out an uber subscription service, launched a restaurant accelerator program in London, and partnered with OpenTable for delivery.

Now we’ll have to see if any of these moves deliver better results for the company.