DASH Earnings Call

OperatorLadies and gentlemen, thank you for joining us and welcome to the DoorDash Q1 2026 earnings call. After today's opening statement, we will host a question and answer session. If you would like to ask a question, please press *1 on your telephone keypad. To withdraw your question, please press *1 again. I will now hand the call over to Weston Twigg. Weston, please go ahead.

Weston TwiggAll right. Thank you, Elizabeth. Good afternoon, everyone, and thanks for joining us for our Q1 '26 earnings call. I'm pleased to be joined today by co-founder, chair, and CEO Tony Xu and CFO Ravi Inukonda. We'll be making forward-looking statements during today's call, including without limitation our expectations for our business, financial position, operating performance, profitability, our guidance, strategies, capital allocation approach, and the broader economic environment. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those described. Many of these uncertainties are described in our SEC filings, including our most recent Form 10-K and 10-Q. You should not rely on our forward-looking statements as predictions of future events or performance. We disclaim any obligation to update any forward-looking statements except as required by law.

Weston TwiggDuring this call, we will discuss certain non-GAAP financial measures. Information regarding our non-GAAP financial measures, including a reconciliation of such non-GAAP measures to the most directly comparable GAAP financial measures, may be found in our earnings release, which is available on our investor relations website at ir.doordash.com. These non-GAAP measures should be considered in addition to our GAAP results and are not intended to be a substitute for our GAAP results. Finally, this call is being audio webcasted on our investor relations website. An audio replay of the call will be available on our website shortly after the call ends. Operator, I'll pass it back to you and we can take our first question.

OperatorThank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device.

OperatorPlease stand by while we compile the Q&A roster. Your first question comes from the line of Shweta Khajuria with Wolfe Research. Your line is open. Please go ahead.

Shweta KhajuriaThanks a lot for taking my questions. Let me try two, please. One is on product and the other is on partnership. So first on product, could you please talk about how you envision your product develop over the next 12 to 24 months as you integrate more of agentic and AI capabilities. So will we have an opportunity to sort of communicate via voice and put a cart together and execute a transaction, even saving us more time or better search and discovery, whatever it may be? If you could please talk to that. And then the second one is on partnership. You announced extension and expansion of your partnership with Lyft. As you think about the greater value proposition around local commerce and becoming the operating system for local commerce, how do you think about travel as an adjacency with Uber partnering with Expedia? Is partnering with Airbnb and Booking.com type partnership a value add or something else?

Shweta KhajuriaYour thoughts on that would be great. Thanks a lot.

Tony XuHey, Shweta, it's Tony. Maybe I'll take both of those and feel free to add in. You know, anything you want, Ravi. Look, on the first question with respect to product, you know, the DoorDash philosophy and story has always been the same here, which is we have to create the best end-to-end shopping experience. If we do that, we will continue to be the ones that innovate, lead, we'll continue to deliver great results like the ones that you saw in the quarter and, you know, in the many years, you know, leading up to, you know, the results that we've just shared. And so there's not one way to do that. You know, you talked a bit in your premise, Shweta, this idea that you should be able to, with the assistance of agentic-like tools, to have better discovery search experiences. And we agree with you. You know, I think that, you know, we absolutely will have agentic ordering experiences in which it'll be a lot easier for customers to, you know, do many things that they do today with much lower friction, to discover things that they, you know, perhaps didn't know existed on DoorDash, to, you know, formulate complicated queries and solve those in the best possible way.

Tony XuAnd the most important thing in delivering this is making sure that we actually can do it so that we don't just win on discovery and the upper funnel, but the end-to-end experience. Because what's the point of having the best discovery experience if we can't bring you that exact item, or that if that exact item were out of stock or it doesn't meet your, you know, personalized preferences, that we can't actually solve for that need. And so, you know, for us, the way I think about it is there's no one thing. There's no one trick. It's making constant and continuous improvements to the selection quality, the accuracy of the catalogs, making sure that we offer the widest choice in terms of affordability and different price points, offering certainly the best quality of experience in speed, in timeliness, in accuracy, and then obviously in customer support, which I think also is having an agentic revolution in and of itself.

Tony XuAnd so you will see all of these things play out in the DoorDash product experience. The most important thing, though, is that we have to build the best end-to-end experience. And we are the only company that has the most robust catalog, much of which is actually about the physical world that does not exist in any digital repository, that cannot be scraped, and that we ourselves uniquely own access to. Because of all the work that we do to actually build up a repository of the physical world. And so that is something that we will continue to build, I think, greater and greater advantage in, especially in the world of agentic commerce. Your second question on membership and kind of this idea of how will partnerships evolve, the way to think about it is that membership experiences and the benefits that kind of live underneath the umbrella of membership programs they kind of only matter if they are best-of-breed experiences to customers, right?

Tony XuThis is why, you know, you see, you know, different customers, for example, choose a variety of different memberships even for the same product. Like if you take streaming, for example, some people prefer shows of a certain format on one network, whereas some others, you know, prefer shows of a different format on a different network. And that's why they end up, you know, having multiple membership programs and things like this. And it would really, you know, stand— and there's so many examples in which I can give you of this where being best of breed is really ultimately what customers care about and why they will choose to either adopt your program or not adopt your program. And as you saw in some of the results that we, you know, kind of discussed, record engagement in DashPass as well as our other membership programs around the world, you know, what we're doing is we're building the best of breed product experience when it comes to eating and in shopping increasingly as we go outside of the restaurant category.

Tony XuNow, there's a long ways to go, right? I mean, there are 20 to 25 occasions for eating alone every single week, so over 100 every single month. And then if you add in shopping, it's even higher than that. And, you know, on that combined sum, we are a tiny fraction of what's actually available and addressable, which in some sense means that there's a large runway and opportunity for us to become even better in breed in terms of what it is that we can offer. And if we can keep doing that, I think we're going to be just fine. I think that's why, you know, you see that, you know, you see it in our numbers, you see it in our growth rates, both in the US and outside of the US. We were gaining share virtually in every single market, and we're growing at, you know, near historical highs pretty much in all of our geographies. And so I think that's happening even at the scale that we've developed over the last few years, because we're continuing to build the best-in-breed experiences in our categories that have a very large runway for growth.

Shweta KhajuriaThat was great. Thank you, Tony.

OperatorYour next question comes from the line of Michael Morton with MoffettNathanson. Your line is open. Please go ahead.

Michael MortonGood evening. Thank you for the question. One for Tony and then a quick one for Ravi. Kind of following up on what you were just speaking about, Tony, AI and partnerships. As the AI platforms become more capable, there's a concern from investors that like personal agents could layer themselves in between the on-demand marketplaces and the consumer. I would love to know Dash's long-term strategic view on this and if there's a risk to your business to becoming an API or logistics offering to these and why or why not you'd want to work with one of these third-party AI platforms. And then the quick one for Ravi, as you've been operating Dot for a bit now in some cities, are you willing to share any learnings about what percentage of the US delivery market you think is addressable for AVs and then maybe thoughts on how to incentivize consumers to come out and meet the Dot or where the opportunity costs are around cost to serve with AV.

Michael MortonThank you so much.

Tony XuYeah. Hey, Michael, I'll start on your question related to, you know, agentic commerce and just kind of agents and whether or not there's, you know, any, you know, intermediation or disintermediation risk. I mean, I really think like what's instructive here is what we've seen historically with all top-of-funnel, you know, programs, right? You know, for at least a decade, you can argue companies like Google or Apple, you know, and many other large platforms, you know, were top-of-funnel drivers to a lot of different commerce platforms, ours included. You know, take for example Google Food Ordering, which allowed you to order through various Google channels, whether it was Google Maps, Google Search, I believe there are a few others too in which you can order restaurant delivery. This started in the mid-2010s, and it went for about 8 years before they shut it down, where you can order delivery from any one of these Google services.

Tony XuAnd from a traffic perspective, you know, they absolutely could drive, you know, a lot more traffic than virtually anyone else, you know, could to any one of these restaurants. Yet the retention of that traffic was a fraction of what platforms like DoorDash saw. And as a result, customers effectively moved all of their shopping experiences to DoorDash. And I would argue something similar happened with Amazon, where perhaps at the beginning of the 2010s, Amazon was not a leading player in the product search kind of category, but by the end of the 2010s, Amazon ended up owning a significant percentage of all product search terms related to commerce. And you may ask, why did that happen? And what lessons can we learn or borrow from history to kind of instruct what's happening in this moment and in the years to come? What I would say is customers ultimately don't care about any top of funnel, DoorDash included, or any of these agents.

Tony XuWhat they care about is did they get the order that they wanted? Did they get the item that they actually were looking for? Did they get it in the best possible experience? You know, that means in terms of price, the speed, the timeliness, the accuracy. Obviously, if something were to go awry or wrong, that it was fixed appropriately and quickly. And, you know, when I look at it from the customer's perspective, they're going to ultimately judge us on the best end-to-end experience. And so, and that's what we're, you know, focused on maniacally at DoorDash, in which we're not just trying to build agentic ordering experiences on DoorDash to make the discovery or the search experience easier, you know, kind of echoing what I said in the previous question, but we're also building a catalog, a digital catalog of structured information for the physical world, collecting where every banana sits or every ripe or unripe avocado to every size shoe in whatever color and style that a customer is looking for.

Tony XuAll of that information about the physical world, of which there are billions of items, tens of millions per city, and getting that annotated and having that unique and proprietary to DoorDash, in which we don't have to share with anybody.

Tony XuAnd I think if we can do that, and, you know, improve our discovery experience as time progresses, given the power of some of these agentic tools, I think we're going to be the best end-to-end shopping experience for customers. And ultimately, that's how we're going to get judged. I think that's, you know, that's the reason for why, for instance, even our restaurant delivery business, which is, you know, the oldest of the areas in which we operate, continues to grow at above historical highs because we're constantly trying to build the best end-to-end experience and be best of breed in doing so. So it doesn't mean we're perfect. We got a long ways to go, and it doesn't mean that it's a guarantee that, you know, we're going to be able to get there. But if we can keep executing like we have, I think the numbers will continue to speak for themselves, and these top-of-funnel, you know, players will be partners of ours in which they'll drive, you know, a, you know, small percentage of our traffic, and, and a lot of that will be a choice that we'll have.

Ravi InukondaHey, Michael, it's Ravi. On your second point around, you know, Dot, right? Look, I mean, I think we are very happy with the progress that we're making. Maybe I'll talk a little bit about the vision. Look, the vision for us is we are building an autonomous delivery platform because ultimately we think different formats are needed for different types of deliveries. That's how we build the most efficient network. We're obviously happy to partner with others. We're happy to build ourselves. I think there's going to be different formats both on land as well as air that we are working on. Look, we're early on this journey. We are scaling. And what we are trying to do is obviously operate at scale, manufacture at scale. That's gonna be important for us. We've seen good results. We've launched it in a couple of markets. I think in terms of the end customer benefit, 'cause I think that was one part of your question, it's gonna be a combination of the key things that we focus on, right?

Ravi InukondaIt's gonna help us with speed, it's gonna help us with quality, it's gonna potentially help us with overall range of deliveries. But the key I would say is, The work that we are doing is starting to look good. We are early in our journey as well as the overall progress that we're making is going really well according to the plans that we made at the beginning of the year.

Tony XuYeah, one thing, Michael, I'll add to the autonomy story that I think sometimes perhaps it's harder to see from the outside is that there's a pretty big difference between just shipping a vehicle or having a vehicle ready for a demonstration and a vehicle that can really operate at scale under any condition and is really battle-tested, right? It's kind of like saying I can shoot a 3-point shot and so can Steph Curry, but one of us is the greatest shooter of all time and one of us maybe hits it once in a while. And, you know, this year for us, it's really climbing that curve for the autonomy program and making sure that we can harden our I mean, it's not just the autonomy, it's the autonomy, the hardware, the remote operations, all the work around regulatory with the different cities so that, you know, we can do this at scale and truly be the, again, best of breed. And I believe the only way you can really do that is if you actually get in there and do all of the things yourself.

Tony XuAnd so that's what's happening this year with DoorDash Dot and also our broader autonomy program.

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

Eric SheridanGreat. Thank you so much for taking the questions. You know, as we get deeper into 2026, any updated views around either the depth or the duration of some of the strategic investments, especially in the platform that we've talked about over the last couple of earnings calls? And more importantly, any updated views on how the tech platforming might position you for different forms of innovation than you envisioned 6+ months ago? Thanks so much.

Ravi InukondaSure, Eric, I'll start. Tony, feel free to add anything. Look, I mean, I think we talked about, you know, 2 calls ago that we are investing several hundred million dollars back into the platform. Obviously, the largest component of that is our global tech infrastructure stack. It's going well. The biggest component of that is just being able to design and map all the domains, which is what the team has done over the last you know, several quarters. That part is done. Now we're focused on execution. We're starting to see production traffic go through. We're already starting to see some early benefits come through. I think on the cost side, Eric, which I think was the second part of your question, look, I talked about the fact that this was the biggest component of the investment that we're making. My view on the overall quantum of dollars that we are investing behind this has stayed the same. It's largely in line with what I had expected, you know, 2 quarters ago.

Ravi InukondaAnd both the program from an execution perspective as well as a cost perspective is going well. And finally, to your point around benefits of this, look, ultimately the benefit is going to accrue in terms of us being able to do more, us being able to release features earlier. The feature development velocity is going to improve, which will ultimately result in retention, order frequency, and unit economics increasing. That was the goal for this. We're starting to see benefits, and I feel good about where the trajectory of the overall program is.

Tony XuYeah, the two things around your second part of your question, Eric, that I'd add to what Ravi said about innovation is, You know, one is really around the velocity and the second is around the quality. So the velocity increases for the simple fact that instead of shipping one feature, which, you know, if we were to do it today, we'd have to ship 3 separate times, you know, across DoorDash, Wolt, and Deliveroo. We'd only have to do that once. That's the velocity comment. But the second point is really around the quality in which we can see benefits. You know, what we're doing by choosing to build a new tech stack versus, say, just replatforming, you know, um, uh, you know, a couple of different brands into the same tech stack that we currently have, um, is that you get to kind of take the best of breed experiences from different, you know, brands and different products and put them into a new product that all three get the benefit from.

Tony XuFor example, You know, one of the things that we've learned is that there are different logistics challenges in places like London, as an example, or cities in Europe that are a lot smaller, a lot tighter, not always perfectly gridded like some of the cities in the United States or in other parts of the world. Perhaps they were older cities historically, and therefore they weren't really meant for driving. In under any circumstance or condition in which you need different logistics approaches. And we can borrow and take the best of what we're seeing from our European operations and bring those over here to the US. Whereas in the US, because we have, you know, larger physical geographies that travel longer distances, that, you know, have perhaps a greater retail network that has a larger catalog of items, those are advances that we get to see, that we get to port over to Europe. And so that's, that's what I mean by quality.

Tony XuAnd so I'm pretty excited about, you know, we're on track, which is great news when you're taking on a project, you know, as large and ambitious as the one that we're thinking about. But, you know, I'm very, very excited that not only are we already seeing some velocity and quality wins across all of the brands, but I think there'll be a lot more to come as we actually roll this thing out.

Eric SheridanGreat, thank you.

OperatorYour next question comes on the line of Youssef Squali with Truist. Your line is open, please go ahead.

Youssef SqualiExcellent, thank you so much. Hi guys, um, maybe just following up on the prior question and maybe looking at it more from a competitive, uh, lens, can you maybe talk a little bit about what you're seeing in Europe in particular, maybe Northern Europe, with Uber becoming a little more aggressive. There is a line of thinking out there that maybe as you guys are going through your replatforming, it may make you potentially a little more vulnerable to competition. So maybe if you can comment on that. And then Ravi, thank you for quantifying the the, the support to drivers for Q2? I think you said $50 million. Obviously, we don't know how long this thing is going to last, but is $50 million a good run rate to assume going out for the rest of the year, just assuming we have status quo on, on the macro environment? Thank you.

Tony XuYeah, I can take the first question, which is around kind of our competitive position in Europe. I mean, we've never been stronger, is the short answer, in Europe. I mean, if anything, Deliveroo is seeing the highest growth rates it has in the past 4 years, and it's actually been reaccelerating in growth each of the months in which we've been now operating it. Wolt is seeing the highest share performance in each one of the countries in which we operate. But I think those are just outcome metrics, and candidly, they're not things that I stare at all the time. I mean, what I'm looking at instead is kind of what I was saying in some of the earlier questions around what are the improvements that we're actually shipping for our different audiences? You know, if we're seeing logistics, you know, improvements, like how's that translating into lower wait times at different stores, higher accuracy of picking, or, you know, faster delivery ultimately.

Tony XuAnd if we can continue executing the way that we have, I think the share performance, the reaccelerated growth, I think is only gonna continue. And again, it goes to the DoorDash story, which is how do you build what's best in breed? And if you can continue building what's best in breed, I think customers will continue voting with their wallets and they're voting DoorDash.

Ravi InukondaHey Youssef, on the first one, I'll just question your premise, 'cause if you look at the underlying consumer input metrics, whether it's users, order frequency, we talk a lot about subscription in the press release, Look, I mean, we are seeing accelerated growth in subscription. Users are growing. We're gaining share in majority of the markets that we're operating in. The other thing I would offer is if you actually look at the overall MAU growth in the industry, majority of that is being driven by DoorDash. I mean, that should tell you, you know, the business is doing really well, both from a demand as well as an underlying improvement in the customer metrics perspective, right? To your second point around the impact from a gas rewards perspective, Look, roughly the impact of that is about $50 million in Q2. I'll say a couple other things. We did have to find offsets in the business. We will push out some investments into the first half into the second half.

Ravi InukondaOur goal is to make those investments in the second half of the year. To your second point around, are we going to extend it? Look, we've not made any decision. Obviously, we'll monitor the situation very closely and we'll do what's right for the business. But that said, my broader view on EBITDA for the full year has not changed. Look, last couple of quarters I talked about the fact that I expect overall EBITDA margins for '26 to be slightly higher compared to '25, excluding ROO, and ROO to produce roughly about $200 million of EBITDA. That view has remained very consistent. That view has not changed. If we do decide to extend the gas rewards program, we'll find offsets in other parts of the business in order to make sure we still feel good from a top line as well as a bottom line perspective.

Youssef SqualiThat's very clear. Thank you both.

OperatorYour next question comes from the line of Nikhil Devnani with Bernstein. Your line is open. Please go ahead.

Nikhil DevnaniHey there. Thanks for taking the question. Tony, in a world with, I guess, AI workloads and a more productive workforce, is your mental model for headcount growth and even organizational structure for DoorDash changing at all?

Tony XuYeah, it's a really good question. I mean, like, in, in short, I mean, the answer is yes. And the longer answer is, you know, we're trying to figure out, you know, what that really looks like. Because, you know, we're seeing, for instance, a lot of productivity gains, you know, right now from AI, about, you know, well north of half of our code as an example, you know, probably closer to two-thirds of our code is written by AI today. But You know, that, that doesn't alone, you know, kind of articulate how workflows and team setups ought to change, right? It means that we're being more productive, we're shipping more code, but, you know, the ultimate question I have is, are we actually delivering better outcomes for customers? Because at the end of the day, that's the only thing that really matters. And, and so we're in that period where we're seeing productivity gains, We're trying to figure out how do productivity gains now translate to what team setups should look like.

Tony XuYou know, that's the phase where we're at. And I think if we— the top priority for us right now is definitely making sure that we can get all teams onto a single tech stack. The second priority is to make sure that I think everyone in the company, not just the engineers, but everyone in the company I think is as AI capable as, you know, anyone else. I think then we can start thinking about what are the actual workflows that have to change to actually truly deliver, you know, things faster. Like right now we're delivering features faster, we're delivering like projects faster, components faster. But, you know, I think, I think the customer holds us to a higher bar than that, which is can you actually deliver outcomes much faster? And I think that's a tricky question that all companies, ourselves included, are wrestling with right now. And, you know, we'll figure it out.

Ravi InukondaHey, Nikhil, it's Ravi. I'll get back to it, right? Very similar to what Tony talked about, we are using it across the board. We are seeing productivity improvements. Look, the goal for us from a productivity improvement perspective is, you know, just as always been, right? We want to do more with more. We want to try to drive more features. We want to do more for our audiences. We want to do more, you know, internally as well. Ultimately, the way we think about it is how do we channel the productivity improvements into ultimately developing more features? But if it's purely from a modeling perspective, Nikhil, that you're trying to think about it, look, I would expect from a near-term model perspective for OpEx to roughly be in the 2% range that I've talked about before. We are being very judicious, we are being disciplined. Goal is to generate leverage on it, you know, just like any other part of the P&L over time.

Nikhil DevnaniThat's helpful, thanks. And Ravi, if I could just follow up on, I guess, the order growth dynamics in Q1 as well. Could you just elaborate a bit on the deceleration there? Is that just weather or are there other things you want to call out? And how are you thinking about that as you think about the Q2 guidance you've given for GOV? Thank you.

Ravi InukondaYeah, look, I mean, Nikhil, the question broadly is around consumer demand on the platform. I mean, look, demand continues to be quite strong. The impact purely from a winter storm perspective is roughly about 1% on a year-over-year growth perspective from a GOV basis. Look, when I look at the underlying demand, Nikhil, it continues to be very good, right? We've talked about MAUs reaching an all-time high, order frequency is growing. Subscription had a record quarter, in fact, across the board, across DoorDash, Deliveroo, as well as Wolt. What we're seeing in the business is member growth has accelerated on a year-over-year basis. That follows last few quarters where the member growth has been quite healthy. We're seeing that both from sign-up as well as an overall retention perspective. When I look at the other parts of the business, look, we're gaining share. New verticals is continuing to do well.

Ravi InukondaWe were volume share leaders in Q4. We've continued to extend that even across the board international. We touched on Deliveroo acceleration as well as the rest of the international portfolio also growing. Q2 is off to a good start. Feel good about the demand patterns that we're seeing on the business.

Nikhil DevnaniThank you.

OperatorYour next question comes from the line of Deepak Mathivanan with Cantor Fitzgerald. Your line is open. Please go ahead.

Deepak MathivananGreat. Thanks for taking the question, Tony. So on groceries, in the last few months you've got a lot of new partners. Can you talk about the trends in the business broadly, maybe in terms of penetration, how use cases have evolved, potentially some color on growth, and maybe also where the unit economics have seen the biggest gains in? And then similarly, DashMart Fulfillment Services is also another big area of is a big, big area of focus this year. Where does it currently stand in terms of where you want the service to get to ultimately before it starts becoming another incremental key growth driver? Thanks so much.

Tony XuYeah, I mean, those are related questions. So, I mean, I'll start with just like where grocery is at today, which is— I mean, you kind of said it, which is it's pretty much at record highs for us, right? We were— we became the share leaders by volume you know, last fall and/or last winter, and it's kind of continued to go in one direction, you know, amidst a lot of activity, I would say, in the field. And you're right, in part it's because we have added, you know, a lot of grocers there that— and, you know, we like the trajectory of the selection we're adding, but we're also improving the service experience. So it's not just adding more and more selection, but, you know, I always ask myself, why is grocery not a lot bigger? Why shouldn't it be even bigger than, say, restaurants? Well, it's because the online delivery experience is just not yet good enough compared to the offline experience, right, of buying it for yourself.

Tony XuAnd, but we're really closing that gap, and the team deserves a ton of credit for making us a lot more accurate, making us a lot more affordable, making basket building a lot easier, making customer support better, making the experience easier for shoppers.

Tony XuAnd a lot, you know, literally tens of thousands of little things over the last 6 or 7 years, I think, are accumulating.

Tony XuBut it's still, I think, reasons for me that that, you know, over time, if you truly want to marry the best possible selection, which is, you know, every store inside your neighborhood with the best possible quality, which means, you know, every— you get exactly the item you order without any substitutions or any changes, and obviously certainly no out-of-stocks or canceled items or canceled orders. I think you do have to work the fulfillment problem, which is where Dasher, where DashMart Fulfillment Services comes in. And so, you know, there we're trying to build an inventory management and fulfillment setup, you know, with, with, you know, all of the grocers and retail partners that we work with. And I think if we can do that, I think then finally you can actually unlock what is truly a magical experience where it's more similar to restaurant delivery, where yes, there might be a small premium you pay, but at least you get exactly what you ordered, which is, which is not the experience today.

Tony XuIn terms of where DashMart Fulfillment Services is, we're doing it with a handful of grocery and retail partners today. That's kind of where it is. And, you know, if you think about, you know, that journey, I mean, we're trying to work with grocers and retailers who for decades now, you know, are used to running their supply chains and their stores in one particular way. Now we're introducing a second way.

Tony XuAnd so there's a lot of things that you have to figure out, you know, in terms of technology, people, processes, the interaction of business models, you know, and kind of everything in between. We like what we see with a handful of partners we have, but, you know, kind of in the spirit of all things at DoorDash really, where we really wanna make sure we nail the experience before we scale it, because I think this is both quite disruptive in a positive way to the customer experience. It's also quite disruptive to how retailers are used to working and buying and running their own businesses for so many decades that we have to make sure that we get it fully right end to end, and then we can replicate the playbook.

Ravi InukondaDeepak, on the unit economics side, right? I think that was part of your question. Look, we made a lot of good progress. Last call, I made the point that we expect the overall new vertical portfolio to be gross profit positive in the second half. We are trending well towards that. Look, we're not worried about what the profitability profile of this business looks like. It's something we understand quite well and what we need to do. It's not like there's any structural change that we need to make happen. It's just continued execution on a number of lines up and down the P&L. What we are truly focused on is how do we scale the business. Q4, we talked about the fact that about 30% of our monthly active users order from categories outside of the restaurant. We truly think that could be 100% over time, and that's going to come with a lot of improvements in selection, quality, improving the underlying product.

Ravi InukondaAnd when I look at the underlying consumer metrics, I mean, look, order frequencies improve, basket sizes for mature cohorts are continuing to improve, which means that people are using us for more use cases. And over time, what we're seeing is the underlying order rate also continues to improve. These are all good signs, which is driving both the growth as well as the improvement in scale, which will ultimately drive the unit economics in the business as well.

Deepak MathivananGreat. Thank you so much.

OperatorYour next question comes from the line of Josh Beck with Raymond James. Your line is open. Please go ahead.

Josh BeckYeah, thank you so much for taking the question. Maybe more on the cost side. Rather, you kind of mentioned the $50 million gross cost as you kind of look to relief for those investments? Maybe, you know, what are some of the big topics that you're kind of looking to uncover there? And then going to some of your points on new verticals, certainly a very nice watermark to achieve gross profit breakeven. You know, to get to the next milestone, you know, what are going to be some of the really important elements? I mean, generically, it seems like within new verticals, advertising is a bit more of a weighting factor there. So just kind of curious how we think about maybe some of the real important drivers beyond where we're scaling into the second half.

Ravi InukondaHey, Josh, I'll take the first one. Tony, why don't you take the second one? Look, I think, Josh, your broader question is around costs, gas rewards, and impact on the model for the rest of the year, if I understood it correctly. Look, the impact— I'll talk more broadly, right? Q1, we obviously had the impact from both winter storms as well as the introduction of gas rewards. Q2, we did extend the gas rewards program. Rough impact of that in Q1 was about $50 million. The projection for the impact in Q2 is also going to be about $50 million. Like I said earlier, we did find offsets in the business. Look, for us, it's a very dynamically managed business, right? We take our plans very seriously. We look at input metrics to make sure we're doing the right investments. We did have to push out some investments in H1. In order to make room for this. And my expectation, and we're fully convicted that we are going to make these investments in the second half of the year.

Ravi InukondaIf we do decide to extend the program, our goal is to find offsets just like we did in H1. But my view on the full year EBITDA has not changed. Look, what we've said about a couple of quarters ago is overall 2026 EBITDA margin is going to be higher slightly compared to '25 excluding Roo. That view still stands. When I look at the trajectory of the business, I would expect second half EBITDA dollars to be higher than first half. Second half EBITDA margins to be higher than the first half, largely similar to what I had expected at the beginning of the year. Overall, you know, right here when we sit, like we look pretty good from a bottom line perspective for the rest of the year, as well as the demand on the platform continues to be strong as well.

Tony XuYeah. And with respect to your second question about what else do we need to do to make, you know, to achieve higher levels of profitability within grocery, I mean, the short answer is more of the same. Which is we're not trying to rely on any one source of revenue like ads, for example, to make grocery profitable. We don't need to. We fundamentally have created, we believe, a lower cost structure that allows us to make grocery delivery profitable, but it's just not good enough yet, right? I mean, if you think about it from the perspective of the customer, not the perspective of our P&L, you know, we still need to be more accurate, we still need to have more items available even from existing stores, and we need to do it at better, better price points. And, you know, I think if we keep doing that, I mean, you already see in our cohort behavior, it's not true for, you know, all across the business because we're still gaining a lot of new customers.

Tony XuIn fact, we gain about 1 in every 2 new customers that comes into the industry for grocery delivery for the first time.

Tony XuBut you see with cohorts over time that they actually buy bigger and bigger baskets and achieve the profitability milestones without any unnatural, shall we say, or overreliance on any one cost or revenue driver. And so that tells me that at current course and speed, it'll get there. And the question is like, how do you get there faster? But perhaps most importantly, how do you actually unlock a much bigger industry? I mean, grocery delivery fundamentally should be as large, if not larger, than restaurant delivery. It's just that the product isn't good enough yet. And so if we can— we already are leading from what we've been told by some of the top grocers in the country in terms of quality, but we still think there's miles to go. Perhaps we've brought some innovations to the market, but we think that we have to keep innovating on all things accuracy, price points, and we have, you know, some, you know, interesting ideas on how to do that.

Tony XuBut we don't have to do anything unnatural or over-rely or perhaps even rely at all on any source of any one line item to make the math work.

Josh BeckSuper helpful. Thanks, guys.

OperatorYour next question comes from the line of Brian Nowak with Morgan Stanley. Your line is open. Please go ahead.

Brian NowakThanks for taking my questions, guys. I have two. The first one, Tony, in the letter you talk about making some new tools that helped design— there was a streamline the merchant onboarding process. Can you just sort of talk to us about areas you've made the most progress in bringing on new merchants and sort of more inventory per merchant? And what are some of the technological advancements you're still looking to make to really make that easier to get more of those, you know, bananas and avocados they talked about earlier, and even carving knives? And then Ravi, one for you just on the replatforming. You know, you say that you have live production traffic ramping up across all three of the global marketplace brands. Does that mean that you're sort of running all 3 tech stacks now, so we're burdening the P&L with the max costs, and then we should start to turn some of those off in the back half?

Brian NowakOr how does this sort of, you know, triple platforming down to one platforming timeline work?

Tony XuYeah, I'll take the first one, Brian. Yeah, so you're right, we continue to ship a lot of different tools to make it a lot easier to work with us, or a lot easier for customers to, you know, find what they're looking for, or dashers to perform deliveries. On the specific question with respect to the merchant tools, you know, a lot of what I found AI to be helpful, especially now with more powerful models that can reason, you know, in a multi-turn kind of fashion, is that you can start looking at repetitive processes that kind of are stitched together and actually get them done perfect, with perfect quality every single time. And you, you know, and you can actually do that with just an agent, whereas, you know, I would say even perhaps 6 to 7 or 6 to 8 months ago, this was even less true because you would kind of need to build a lot of, you know, backup or redundant systems to kind of make sure that agents don't just kind of go off the rails and actually can, you know, finish the task.

Tony XuAnd so that has happened with something like what you said around, you know, with onboarding as an example where whether it's helping you with your menu or your catalog as a restaurant or a retailer, or with your photos and your metadata and kind of the annotation of that data. You know, all of these things are effectively repetitive tasks, if you will, in which you can create, you know, agents to stitch them together and to do that in a really, really productive way. And I think, you know, like with all things, the removal of friction increases activity and activity— increased activity increases the business that we get to do together. And that's kind of what we're seeing with— so we are already seeing, you know, benefits to the P&L from some of the AI work that we're doing. You know, some of it is on our own products like the ordering agent stuff I mentioned on a separate question, and some of it is on, you know, tools that you're talking about, whether it's related to merchants or customer support or dashers.

Tony XuSo we're already seeing that. And with respect to like things we still have to do, you know, you were mentioning about like all the inventory inside of a city. Well, we still are just a tiny fraction of all items, you know, sold or even represented, I would argue today, DoorDash is, the collective. And that's becoming more interesting now as, You know, some of those items, you know, are also different when it's an in-store shopping experience, for example, right? Some restaurants, as an example, you know, offer different in-store products and experiences and services that they don't offer in the kind of takeaway or in the offline world. And so there's a lot of things we have to document. That's one thing we have to go and do. The second we have to go and do is build structure and cleanliness out of what is inherently very messy. And constantly changing, which is, which is a challenge, I would argue.

Tony XuBut if we can do both of those things across every one of the categories, as we kind of, you know, march from, you know, restaurants to grocery to different categories within retail, and to do that, you know, through the merchant's channel online, the DoorDash channel online, and the merchant's channel offline or in-store, I think that just builds a really rich data set that's kind of A, nonexistent anywhere, B, extremely valuable for the merchant to have a full view of all the different types of customers that they may want for different, you know, occasions, and C, I think really interesting opportunities also for DoorDash to build both products as well as businesses.

Ravi InukondaHey, Brian, on your second question around the global tech side, right, I'll make two broad points and I'll get into the P&L dynamic question. Look, I mean, I think the team has done an incredible job. I mean, this is a massive project. I have to give kudos to the team. It's going according to plan. Really happy with the progress that we're making. Even on the cost side, my view on the overall cost has been very similar to what I talked about last, uh, 2 quarters ago. So both on progress as well as cost, I feel very good about where it is. I think your point around, you know, the mechanics of the P&L— look, I think I talked about the fact that There's a portion of the spend which is redundant in the sense that we are going to run all 3 tech stacks in parallel while we're working on the global new tech stack. That is going to phase in, it's going to phase out. My expectation is majority of that will run through '26.

Ravi InukondaMaybe some portion will bleed into early 2027, but that'll bleed out. And hopefully that should give you a mechanic of how the rest of the P&L is going to work for the rest of the year.

Brian NowakThank you both.

OperatorYour next question comes from the line of Justin Patterson with KeyBanc. Your line is open, please go ahead.

Justin PattersonGreat, thank you very much. Good afternoon. I saw you recently launched workplace catering for DoorDash for Business. Can you talk more about how you're thinking about that opportunity and what you see as some of the key challenges towards scaling this? Thank you.

Tony XuSure. DoorDash for Business, I think, is off to a very, very great start. And it's actually only something that we've really, really recently focused on in the last few years. But, you know, DoorDash for Business really is a set of, or a suite of a few products. And there's really three. You talked about one of them, which is catering. There's also meal manager. And then there's also, you know, corporate solutions related to DashPass as well as group ordering. And the idea is, you know, when you're a company or an organization— doesn't have to be a company, it could be, you know, a nonprofit or a government institution or a school— as long as you're serving multiple different use cases, you know, sometimes it's a group meeting with just a few of us, perhaps sometimes you're hosting an event in which you need catering, Sometimes you need individual meals as kind of, you know, your sales teams perhaps travel to do different things or client, you know, demos, things like this.

Tony XuYou're going to want, you know, to work with one place ideally, which, you know, you can see everything in one view and offer your organization the best-in-breed selection, price, and quality. And, you know, because we offer, you know, what we believe is the best in breed, you know, in price selection, quality, and service, you know, DoorDash for Business is kind of naturally growing really, you know, very, very quickly. So that's something that we're doing. But I think the biggest challenge to your question around something like catering is it's really how do you solve the kind of perennial hard problem of cooking for a large group of people. It sounds really simple, but if you think about it, as you cook you know, for yourself, and then you start adding, you know, the number of guests around the table, I would argue, you know, that logistics problem is a bit of an exponentially difficult problem as you kind of increase the count of guests.

Tony XuAnd so, you know, the challenges are numerous. It starts with understanding, well, things around kitchen capacity, then understanding things around menu design, then understanding things around staffing, then understanding things around, you know, the logistics. Operations. And, you know, we kind of have to do all of that. And I think to actually truly create the industry, because I think the industry by itself is, is perhaps somewhat limited because not every restaurant is built as a manufacturing facility that can actually, you know, cook up to the needs of a larger organization or even a team of people. It's really working hand in hand with merchants and Dashers together to co-create that solution and hopefully create a very large industry.

OperatorYour next question comes in the line of Lloyd Walmsley with Mizuho. Your line is open. Please go ahead.

Lloyd WalmsleyThank you. Wondering if you can give us an update on what you're seeing in the ads business, you know, on both the 1P basis and syndicating ads outside of Dash. And then second one, Tony, earlier you talked about miles to go in terms of improving the user experience in grocery. Just wondering if you can elaborate on some of the things you're doing, if you've found any big locks, unlocks, or anticipate any big unlocks to kind of drive a step function improvement in the grocery experience that can help you guys penetrate deeper with your customers. Thanks.

Tony XuSure. Maybe I can take both and feel free to add in, Ravi. I mean, on the ads question, it's never gone better for us in the world of ads. Ads is at a record high, continuing to grow extremely fast compared to any previous year. And I think the kind of the recent trajectory or kind of continued strong trajectory really comes from the fact that our team deserves a ton of credit and cracking the code, not just in solving problems for SMBs, you know, whether they be restaurants or retailers, but also larger advertisers, both in the restaurant world as well as in the retail world. And then the other, you know, unlock has been cracking the code on CPG advertisers where, you know, I think just there's no one thing. It's like a relentless checklist of just making the product a lot better for advertisers and delivering upon two, I mean, really competing objectives. One is you have to deliver the best return on ad spend for advertisers, which we do.

Tony XuAnd the second is you have to deliver the best consumer experience where you don't spam people. And, um, you know, and I think we have a much lower ad load than, than some, you know, other platforms. And, and, and I think the teams have been, you know, just working really, really hard to balance those two competing objectives. And then, you know, you're— so I think the opportunity besides kind of scaling some of the unlocks in ads, as well as discovering some of the, you know, kind of offsite stuff that you're talking about, which also includes things around all of our in-store activities, in addition to our work just buying on behalf of advertisers off of DoorDash, I think there's a very large runway for the ads business. I think your second question was about, you know, just the early innings of grocery. I mean, we've been at grocery for about, you know, 5 years now. And yes, I am on the one hand super proud of the team and, you know, becoming the volume leader in which consumers both shop on as well as new consumers find out about grocery delivery for the first time.

Tony XuBut on the other hand, yes, I actually do stand by the statement that we are miles to go on building an experience that I think can outcompete you going into a grocery store and buying the items yourself, because that is still the winning product. Uh, if you just look at all of the data out there, it doesn't mean that we're not growing extremely fast. It does not mean that, you know, we're making a lot of improvements. It does not mean that, you know, we're not gaining share and doing so and improving the profitability while we do it. But I think there's a lot of work to do. So, um, a lot of the work has to do with just continuing to build a cost structure that allows you to offer items at around the same price as in-store and delivering with perfect quality. I think the hardest problem to solve in grocery is that because consumers, you know, all of us, when we go into grocery stores and move items around, and because of how supply chains and inventory systems and payment systems, you know, don't necessarily always talk to each other and kind of how grocery stores are run, and how they were built, you know, both historically and then as well as they made the move into e-commerce, it's really hard for them to know where things are.

Tony XuAnd that's still the fundamental, you know, problem to solve. And so we've done lots of things already in that space that we're, that, you know, we've pioneered and are really proud about. There's a long ways to go on just scaling that work to all of the stores in which we work with, not just the ones in which we've tested. But we also have to kind of do the next hill climb, if you will, to make sure that we can again achieve perfect quality at the prices that you would expect and be happy to pay and do it for every single item, every single time.

Ravi InukondaAnd Lloyd, on your first question on ads, right? Like the question is around, if you're thinking about it from a flow-through perspective, look, it's growing, it's obviously having an impact from a margin as well as a profitability perspective. But the way we think about ads is very similar to how we think about the rest of the business, right? An ad dollar is very similar to how we think about improvements we generate from unit economics. Ultimately, the goal for us as operators is to find opportunities to reinvest that back in the business, ultimately to drive, you know, long-term free cash flow production. And that's largely what we're doing with advertising or any other efficiency that we generate in the business.

Lloyd WalmsleyAll right, thank you.

OperatorYour next question comes from the line of Justin Post with Bank of America. Your line is open, please go ahead.

Justin PostGreat, thank you. I just want to follow up on advertising. How do you think about integrating that with agentic capabilities on your own platform, and is there any way you could generate ad revenues on agentic platforms on other platforms? Uh, thank you.

Tony XuI'll take that. Well, you know, ads are just a means to connect consumers with merchants who are, you know, hoping to be discovered and making sure that you do that in the perfect possible way. So with respect to agentic commerce, I mean, that's just a one way of, you know, shopping. And so I don't think it'll change in terms of our ability to advertise. It may increase the, you know, some of the opportunities in surface areas, but I think a lot of that remains to be seen. Just as, you know, I don't think the ideal agentic shopping experience is just going to be a chat assistant. I think it's going to take on various forms, and we're iterating on that. I think with respect to what, you know, happens with ads on third-party agentic sites, I think you'll have to ask them.

Justin PostGreat, thank you.

OperatorAnd this concludes today's Q&A session. This also concludes today's call. Thank you for attending. You may now disconnect.