DoorDash reports record orders and revenue in Q2 earnings beat

DoorDash is raising its forecast after reporting record orders and revenue in its second-quarter earnings beat. Yahoo Finance Live's Myles Udland and Julie Hyman discuss the potential for the food delivery app to pivot and expand into another service industry.

Video Transcript

MYLES UDLAND: All right. Shares of DoorDash on the move this morning hitting a record total orders in the most recent quarter. Stock up about 8/10 of 1%. Company also went out and raised its full-year forecast. DoorDash, a company that does the thing, Julie, that I like more than any other, which is writing a nice letter to investors along with its earning release. Founder Tony Xu out with a great letter where they just talk-- honestly, it's just business theory, how he thinks about investing in businesses, what the long term value of their investments might be.

And I think in this, we get to the discussion of the marketplace business for DoorDash. Because we hear DoorDash, and you think, oh, it comes to my door. But them setting up the suite of services for companies, they are now doing delivery. They do point of sale. And that vertical for them, really being the growth driver, I think has been an interesting revolution in the company-- evolution of the company, I should say. And getting away, frankly, just from the name that's on the front door of the company.

JULIE HYMAN: Right. Then it does not just DoorDash but like stack.

MYLES UDLAND: It's a stack, yes.

JULIE HYMAN: I don't know. Yeah, it's a stack.

MYLES UDLAND: It is the tech stack for a restaurant operator. And then, yeah, sure, if you actually order the delivery, you're hit with $7,000 worth of fees. But you don't have to just do that. There are other ways for them to partner with restaurants that I think are a lot more palatable both for consumers and for restaurants. And that really is the growth driver. And I think over time, there's never going to not be a delivery part of this business.

But if you can almost-- and you get this theory in the letter. It's the classic kind of Amazon thought around, well, this is our best business now. But what if it just wasn't? What if we intentionally tried to make something that was better than what makes us money now? And what would our company look like longer term? And I think you start to see some of the outlines. For a company that came public, had a very positive reception, had a lot of problems last year like everybody who was public in the stock market in this kind of general space, and is now getting kind of on the other side of that, and starting to really think about what is our life look like long-term as a public company.

JULIE HYMAN: Right. So there's this sort of stack in technology, and there's also the stack beyond restaurants, strictly speaking, right? Delivering other stuff, other-- whether it's other food, or sundries, whatever you want to call it. And it's hard to know if that's as big an opportunity as offering a bigger suite of services to its customers.

MYLES UDLAND: I mean, to bring Amazon back into it, the experience on Amazon's retail site I think has been talked about enough at this point.

JULIE HYMAN: But now, they're-- remember, they're-- the reporting was out yesterday that they're now changing that. They're consolidating their various food things, which makes sense because it's pretty dumb the way it exists.

MYLES UDLAND: Yeah, so I guess, always going to say is I think there's been an opening here for other marketplaces of any sort. It could be food. It could be pharmacy. It could be all kinds of clothing. There is an opportunity here for someone-- for many players. And we're seeing it across spaces. To offer a better, let's say, retail aggregation experience, perhaps, than the original.

JULIE HYMAN: Yeah. Yeah. And then there's little players like Gopuff that are out there too doing grocery delivery.

MYLES UDLAND: Yeah. Well, I mean, if you go through the letter, they talk about the example of how much money they were losing on their delivery business. But the unit economics were actually good. The problem is there's a lot of smaller players that have-- lose a ton of money and don't have good [INAUDIBLE] on some of that delivery. And so--

JULIE HYMAN: Yeah, DoorDash has the advantage.

MYLES UDLAND: It's still-- we're still like in the zerp era of thinking in a lot of ways, if that makes sense.

JULIE HYMAN: Interesting, that does make sense.