Hello, and welcome to the DoorDash Q1 2025 Earnings Conference Call. I would now like to turn the call over to Wes Twigg, Investor Relations. Mr. Twigg, the floor is now yours. All right. Thanks, Dustin. Good afternoon, everyone, and thanks for joining us for our Q1 2025 earnings call. I’m very pleased to be joined today by Co-Founder, Chair and CEO, Tony Xu; and CFO, Ravi Inukonda. We’ll be making forward-looking statements on 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-Ks and 10-Qs. 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. During 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. As a special note by now, you should have seen our formal offer to purchase delivery at 180 pence per share. Our rationale for the offer, intentions and other offer-related details are available in our Rule 2.7 announcement. We understand there will be additional questions for now; we are unable to provide details beyond what is available in that document. We may also make forward-looking statements regarding both Deliveroo and SevenRooms during today's call. These statements are also subject to the risks and uncertainties that I mentioned earlier and are described in our SEC filings. 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.

Our first question, this comes from the line of Shweta Khajuria from Wolfe Research. Your line is open.

Thank you for taking my question. Let me try two, please. On just international competitive landscape, could you please talk about now with DoorDash Wolt and Deliveroo what the combined share is as it stands in your 40 markets? And then how fast is the European market growing from your vantage point? And is it fair to assume Deliveroo's unit economics and retention rates are as attractive? I remember when you acquired Wolt, one of the reasons was the unit economics and retention rate as you saw them. So could you please comment for Deliveroo as well? And then my second question is on the tariff impact, if prices were to increase through the year, you kind of touched on it in your release. How are you positioning yourself for the rest of the year in terms of what you could do as it relates to pricing, whether it's price parity, loyalty integration discounts, anything that you can talk about, that would be great. Thanks a lot.

Hi, Shweta. It's Tony. I'll address both questions. Regarding the first, we are excited as this is business as usual for us, focusing on adding and investing in each of our five business lines. Specifically, our partnership with Deliveroo enhances our international business. We have successfully collaborated with Wolt for over three years, leading in most of our markets with a strategy we trust. If the deal with Deliveroo goes through, it will increase our scale in Europe and help us introduce our local commerce products. While I can't share specific details, I hope this gives you a general idea of the investment opportunity we see. If we invest wisely in this partnership and leverage potential economies of scale, I believe it will unlock even greater profit opportunities, especially in markets where Deliveroo operates, enabling us to invest further in the future. As for your second question about tariffs, we are currently not experiencing any effects. Many tariffs have been paused, and we have not noticed changes in consumer behavior despite shifts in sentiment. History shows that food and convenient delivery remain a consistent spending category, showing resilience. We remain confident in this trend. We are focusing on what we can control, primarily by enhancing our selection of merchants and items. We continue to invest in our affordability and quality initiatives.

Thanks, Tony.

Thank you. Our next question comes from the line of Deepak Mathivanan from Cantor Fitzgerald. Your line is open.

Great. Thanks for taking the questions. One for Tony and one for Ravi. Tony, historically, you've been somewhat hesitant to make big acquisitions you've done to this quarter. Has the philosophy on how you generally think about M&A has now changed at all? What are maybe some of the other areas you think M&A could help improve DoorDash? And then one for Ravi. On grocery specifically, can you discuss on the factors that's accelerating the spend per customer? Are you seeing kind of the use case broaden out into larger baskets, maybe from weekly runs or monthly refills, anything you're specifically doing to drive this behavior? Thank you so much.

Hi, Deepak. The short answer to your first question is no. The standards for M&A remain high. The timing of some announcements can be unpredictable. However, it's business as usual for us. When we assess M&A opportunities, our primary considerations are whether it expands our market or enhances our portfolio, and whether we have experience in that area, including the management capability and understanding of execution required. For example, in the case of Deliveroo, we're focused on expanding our presence in Europe. If the deal closes, we would be operational in about 30 countries in Europe and 45 worldwide. This would increase our scale and position us in profitable markets, enabling us to introduce more products and positively impact the European local economy. With SevenRooms, we aim to enhance our platform business. Our commerce platform began in 2016 with the launch of DoorDash Drive, followed by DoorDash Storefront, transitioning from logistics to online ordering as a service. SevenRooms allows us to provide more insights into customer behavior for merchants, functioning almost as a marketing service that helps restaurant owners strengthen direct relationships with their guests.

Hi, Deepak. On the second one, let me broaden it out and talk about the performance of the overall new verticals business, right? When I look at the performance of new verticals in Q1, I mean it was very strong, continues to grow. We increased the number of MAUs. Q4, we talked about the fact that about one-fourth of our MAUs are ordering grocery as well as restaurants that number continues to increase. What you're seeing on the platform is as the cohorts continue to habituate they're ordering more with us. They're using us for more use cases. And truly, the key differentiator is we've added more selection. Today, when I look at the top 20 grocers, we have a majority of them on the platform. We've extended that. We'll continue to add more grocers even in the regional markets. Through the quality of the product continues to get better. I mean we have the product today versus about a year ago, the quality of the product and what we hear from customers and consumers continues to be good. That's obviously driving order volume share, when I look at the share gain year-over-year, that's been meaningful. Like we wrote in the letter last quarter, right? Like we expect to be volume share leaders in the course of the next year. And even when I look at the overall margin performance of the business, I mean, it's pretty promising. I mean, margins have continued to improve. Net-net, the key thing for us is what we're seeing is we're focused on scale. And as we are continuing to drive improvements in the product, that's driving improvement in retention order frequency, which is increasing the scale of that business.

Great. Thanks, Tony. Thanks, Ravi.

Thank you. Our next question comes from the line of Nikhil Devnani from Bernstein. Your line is open.

Hi. Thank you for the opportunity to ask a question. I wanted to discuss EBITDA in the context of the recent M&A announcements. While it may be early to talk about 2026, I have noticed consistent government growth and steady improvement in EBITDA over the past few quarters. Regarding the acquisitions of Deliveroo and SevenRooms, do you think this affects the earnings algorithm in any way? These acquisitions might lead to further investments in new markets or products, which could be beneficial in the long run. However, considering the level of investment required and the anticipated spending to boost these businesses, does it significantly alter your view on DoorDash's earnings potential in 2025 and 2026? Thank you.

Hey, Nikhil, it's Ravi. I mean I'll take that, right? I mean let me broaden out that question, right, Nikhil. I mean, talking about the performance of the business. Look, when you look at the performance of the business, the business is doing really well. We're extremely pleased with the performance of the business, not just in Q1, but over the course of the last several quarters, right? The formula for us has always been grow the business while continuing to increase overall profit dollars. If you look at the EBITDA profit dollar growth in Q1 as well as the Q2 guide that we've given, we're very pleased with the year-over-year growth. For us, the philosophy has always been investing behind strength. You've heard us say this before, right? Our goal is to improve unit economics, take that and continue to drive improvements in retention and order frequency, which ultimately drives scale and that scale drives profitability in the business. That is not going to change, right? Nothing about how we operate the business is going to change. And in terms of how we operate together with Deliveroo, that formula will continue to be the case. We're trying to drive duration of profit dollar growth over a long period of time. And when we think about investment, the key formula we think about is, is it going to generate a healthy amount of IRR, a strong return. And as long as we feel comfortable with that, our goal is to continue invest to drive scale.

Thanks, Ravi.

Thank you. Our next question comes from the line of Youssef Squali from Truist Securities. Your line is open.

Good morning. Thank you for answering my question. Could you provide more details on the affordability initiative and the mix shift that led to a decline in net revenue margins from last quarter? What factors will help boost those margins again? I noticed in the release you mentioned guidance for Q2 indicating a potential increase year-over-year and quarter-over-quarter. Also, Tony, regarding Deliveroo, their growth and margins have been significantly lower than those of DoorDash. Are there any structural challenges in Europe, perhaps related to Deliveroo's competitive position, that contribute to these lower margins? Is there a possibility, even if it's early to tell, for you to align their margins more closely with yours over time? Thank you.

Hi, Youssef, so let me take the first one, right, on net revenue margin take credits off. I mean just a broader point, Youssef, I mean just to clarify, our goal has not been to optimize margin percentage. We're trying to grow profit dollars. We've always been focused on driving overall EBITDA profit dollars up and you're seeing that in the business, right? Whether you look at Q1, whether you look at the last few quarters. I mean, that's what's visible in the business. That said, when I look at the take rate, there's a few factors. I mean there's some natural seasonality in the business. You've seen that in Q1 of last year as well. The second point I would make is, look, I mean, our goal is to improve unit economics and invest that back in the business. We found some specific initiatives both around affordability as well as selection that we invested back in Q1 that drove not just the GOV growth, but the order growth, which we feel very good about. So look, I mean the business is scaled. Now you're at the point where you're starting to see all of our categories grow. So the impact of mix shift is visible from a take rate perspective, when you look at the overall business. But you put all that together, right, that's what impacted the take rate in Q1. But if you're thinking about it, Youssef from a modeling perspective, I would expect Q2 take rate to be higher than Q1 and the second half take rate to be higher than the first half. And to your question around what are the key factors that are driving, right? One is we talked about seasonality. Q1, we lean into Dasher supply that gets better as we go through the rest of the year, primarily because Q1 is a strong growth quarter for us. Two, unit economics will continue to improve as we go through the rest of the year, and that will continue to be a tailwind from a take rate perspective. As business continues to grow, that will also be a tailwind. Net-net, I mean, we feel good about where the overall business is and our focus continues to be to drive the strong GOV growth that you're seeing in business as well as overall EBITDA dollar production.

And in regards to your second question, it's actually a similar story in terms of how we think about things, which is really how do we maximize long-term profit dollars versus looking at unit margins. And again, obviously, I'll be limited in terms of what I'll be able to say about Deliveroo. But with respect to how to think about it, our mental model, why we might be able to actually generate more profit dollars in the long run and you're really adding more scale to the same geography in this case, Europe. And we believe that if we can do that and take some of the lessons that we've learned in operating across other European countries, as well as other parts of the world and bring it into the markets where Deliveroo operates. We believe not only we can increase the scale of the business, but that if we do it in a disciplined way that we have done historically across all of DoorDash's initiatives, that we could actually improve the underlying profit potential as well, which will allow us to even have more opportunities to invest should those be good investment opportunities. But I think one of the important things to remember always about DoorDash is our capital allocation strategy has never changed. We only invest when we see something is actually working. For a start-up project or if there's something earlier stage, a lot of that starts with finding product market fit, finding great retention and frequency of use, building a product that is 10 times better than what's currently available. For later-stage initiatives, a lot of it is looking at scaling the unit economics, improving those unit economics, reinvesting it back to give customers more value and then ultimately generating and maximizing long-term profit dollars.

Great. Thank you both and good luck.

Thank you.

Thank you. Our next question comes from the line of Michael Morton from MoffettNathanson. Your line is open.

Good morning, everyone. Thank you for the question. Ravi, could you elaborate on the net revenue margin? I assume that a significant portion of the affordability comes from grocery. What specific behaviors are you aiming to encourage? Are you looking to attract new grocery orders from new users, or are you focused on increasing order frequency? Also, are you noticing any changes in competitive pressure within the grocery market that might be influencing the affordability strategy? And for Tony, regarding European food delivery and the situation with Deliveroo, it seems like the market is consolidating. Over the next few years, do you anticipate any significant changes in competitive dynamics in those markets, and how do you see this concentration developing? Thank you.

Hi, Mike. It's Ravi. I'll take the first one, right, on affordability and take rate. I mean, look, I mean, Mike, the goal for us has always been to reinvest back in the business, right? That's always been the number one goal as long as the investments make sense. The way we try to do it is we try to generate efficiency in every dollar of efficiency, we put that back in the business. Sometimes we invest behind consumers. Sometimes it goes towards merchants and other times, it goes towards our courier supply or Dasher supply. We invest in driving selection, quality and affordability. And depending on what opportunities we find, that changes depending on where we are in the cycle. This quarter, I mean, it was around specific affordability initiatives. I would say DashPass has been a key affordability level for us. When I look at the performance of DashPass, I mean, DashPass had a really strong quarter, all-time high in terms of number of subscribers, the number of users grow, order frequency continues to grow. You're seeing that in the growth of DashPass itself. When you look at the growth in DashPass in Q1, it accelerated compared to the prior quarter. Overall, what you're trying to do is ultimately bring efficiency back in the pockets of consumers to ultimately drive more order volume and you're doing that across both restaurants as well as grocery. I mean, to your second point around, is it driving MAUs and order frequency? I mean, I think it's a combination of both, right? For us, it's two sides of the same coin. I think we are seeing more users come back and order more with us, both across restaurants as well as grocery. And from a competitive dynamics perspective, nothing really has changed. I mean if I look at the category share gain in our grocery business. We are very pleased, right? We gained a healthy amount of share in Q1 compared to last year. We continue to gain share quarter-on-quarter. And as we wrote in the letter last time, our expectation is that we'll be order volume share leaders the course of the next year.

Yes. I mean I would say similar things to both of your questions, which is that we don't really focus on the competitive intensity. I mean, take something like affordability. I mean customers are always going to want greater affordability, more selection, better service, higher quality. And that's something that we've been investing in since day one of the company. It's something we'll continue to invest in irrespective of external factors and we've continued to see gains across the board. And that's something that I kind of view with respect to the European landscape. I mean I think you know that. It's always been a competitive market, regardless of where we play, whether it's in the United States, Europe, other countries. And I think what I can say is that this at the end of the day is a scale business, and it's also a business about, at least for us, always doing better for customers and always introducing more local commerce products, because we think we're in the earliest innings still of connecting every local business to every local consumer.

Yeah. Mike, what I would add, really, when you think about us talking about investments to meet the underlying product better because ultimately that's what's driving the scale leading to the profit dollar production that you've seen in the business, right? Whether it's the organic portion of the business or even some of the inorganic things that you're talking about, it gives us an opportunity to invest more ultimately to drive more profit dollar production. That's the key formula that we try to use when we think about all of our lines of business.

Thanks so much, guys.

Thank you. Our next question comes from the line of Andrew Boone from Citizens. Your line is open.

Thanks so much for taking the question. I wanted to go back to take rate and part with sales and marketing. Take rate step down, applying more promotions and sales and marketing also showed less leverage in 1Q. Can we just step back and talk about the efficiency in which you guys are driving demand? Was there incremental pressure there? Is there anything else you guys are seeing? And then, Tony, in the press release, you talked about DashPass evolving and adding more value. Can you just speak to your vision for DashPass, and how do you see that evolving over the next couple of years? Thanks so much.

Sure. I mean, Andrew, I'll take the take rate on the sales and marketing, right? Let me start with sales and marketing. I mean, I would not read too much into it, right? Q1, typically a seasonal quarter for us where you see strong volume growth. We lean into Dasher acquisition. We've done that last year. We've seen that year-over-year. This is very seasonal for us in the fact that both Q4, Q1 tend to be really good from a growth perspective, and we lean into supply to ensure that we can drive strong quality. That said, when I look at the sales and marketing line over the last couple of years, we're very pleased with the leverage that we've driven, right? When I look at the product improvements that we made, whether it's on the consumer side or the Dasher side, all of that is driving the efficiency gains. And look at the list of features that we have yet to implement. I feel pretty comfortable that there's still a lot of room for us to continue to drive leverage from an overall sales and marketing perspective. I will go back to the take rate, right? I mean, like I said, if you're trying to model it into what I would say is the second half take rate is going to be higher and what's going to drive that is, again, the business is going to grow. Volume in second half is going to be higher than the volume in the first half. Unit economics are going to continue to increase. There is seasonality in the business, which you've seen last year as well. Look, 2025 is going to be no different than '24 or '23. We've executed against '24, '23, just like we said we would, and '25 is going to be exactly the same. The focus continues to be, again, like I said, overall EBITDA dollar production. And when I look at that in Q1 or the Q2 guide that we've given, when I compare that on a year-over-year basis, we feel pretty good about that.

Regarding the second question about DashPass, we see it as a membership program that connects consumers to the physical world. It's rooted in high levels of consumption. Our belief is that by enhancing the ways we link local businesses with local consumers, DashPass can provide significant value. This is our primary goal: to make the product more beneficial. We aim to connect local businesses and consumers in additional ways, improve our existing services, and develop new offerings to meet this objective. We are confident that DashPass has the potential to become the most valuable membership program for users.

Thank you.

Thank you. Our next question comes from the line of Ken Gawrelski from Wells Fargo. Your line is open.

Thank you. Good morning. I'd like to revisit the questions about Deliveroo and Europe. While I understand you can only discuss this at a high level, could you elaborate on your strategy for entering some of these markets from a number two or number three position? I recognize this expands your addressable market in Europe, but the UK consumer differs significantly from the Norwegian consumer, who may not prioritize the restaurant supply in Norway. Please help us understand your approach to these markets, given that you are not currently in a leadership position. How are you considering this, and what does the investment profile look like in comparison to ongoing growth? Let's pause there.

Sure. I can start. It's important that we have a shared understanding of the context. The first thing to note is that the key to profit generation is scale, more than your competitive positioning. To really grasp this, you need to look at the details. In our operations across the US, Europe, and other locations, as well as with Deliveroo, we see a strong potential for significant investment returns. Otherwise, we wouldn't pursue this path. However, achieving these returns requires in-depth analysis, which we have conducted. I can't provide specific comments on that right now. That's the essence of the situation. Additionally, beyond the foundational elements that allow us to scale our investments in Europe, we also have opportunities to launch new products. We believe the combination of these efforts positions us well for substantial investment returns. We've experienced this with Wolt, which we partnered with three years ago, and we anticipate a similar scenario here.

Okay. Thank you very much.

Thank you. Our next question comes from the line of Doug Anmuth from JPMorgan. Your line is open.

Thanks for taking the question. Really good progress in grocery, and you talked about quarter of users purchasing across restaurants and grocery. What do you think is required to exceed the in-store experience going forward? What kinds of innovations and improvements? Thanks.

I appreciate it, Doug. The team has done an outstanding job getting us to this point, and our numbers reflect that performance. However, it's true that we have a long way to go before we can create a product that significantly surpasses the current top option, which is shopping in a grocery store. There are many elements we need to address. We're not judged by just one standard; it's crucial that we ensure you receive exactly what you ordered, that the products are affordable, and that they are delivered with high accuracy and service quality. Additionally, having excellent customer support is vital, especially when issues arise. Investments will be necessary in all these areas to compete with the physical shopping experience. That being said, I believe — and this was a theory a few years ago — that we are beginning to see evidence that online shopping can sometimes outperform offline experiences. For example, our DoubleDash product illustrates this. Even when shopping offline, it's easy to forget items. With DoubleDash, you can shop from multiple stores in one go, creating a seamless experience that enhances your ability to browse an entire catalog available in the city. We still have a lot of work to do to enable shopping across all catalogs, but I genuinely believe that one day the online shopping experience could surpass the offline experience. Right now, we’re focusing on getting the fundamentals right. We see customer expectations as our biggest competition. While we've made significant improvements over the past four or five years, we recognize that there is still much to accomplish.

Doug, I'll just add a couple of points, like you talked about the fact that over a quarter of our users, that number continues to grow. And if you think about it, right, we have a strategic advantage because we have tens of millions of consumers that are active on the platform. for us when we expose consumers to grocery, whether it's are DoubleDash or other product interfaces, that number continues to grow, which is ultimately driving the retention as well as the growth that you're seeing in the business.

Thank you both.

Thank you. Our next question comes from the line of Mark Mahaney from Evercore. Your line is open.

Thank you. I have a question regarding cash levels and the SevenRooms acquisition. Could you discuss what you consider to be the minimum cash level needed to operate the business moving forward? You are planning to spend around $4 billion on these two acquisitions, so I'm curious about your comfort levels regarding the necessary cash balance. Additionally, regarding the SevenRooms acquisition, while it may not represent a significant shift, it appears to be an expansion of your service offerings. Can you elaborate on how much more you can provide Marketing as a Service? You mentioned that this could be applicable to a wide range of customers beyond just restaurants. How far do you believe you can extend the SevenRooms concept to your entire customer base? Also, how much effort do you intend to invest in promoting Marketing as a Service? Thank you.

Sure. Mark, I'll take the first one on cash. I mean the way we think about minimum cash is roughly from a working capital perspective, roughly about $1 billion. So anything on top of that, our goal has been to invest back in the business to ultimately try to generate long-term free cash flow per share. And what you see in the business is the business is free cash flow generative. So our view on capital allocation in general, has not changed. If there's good opportunities for us to invest to ultimately drive long-term production of more profit dollars, we are happy to do that. But the key for us is it has to meet sort of our IRR thresholds.

And Mark, on the second question, I mean, you're absolutely right. I think one of the hardest things about running DoorDash is that, there there's so much to do when you want to connect every local business to every local consumer. There's a depth component to that answer or objective. There's also a breadth component to that. And I mean, take for example, just restaurant delivery, which is probably our longest chapter almost 12 years long at this point. Even after generating what we have produced in a market, take for example, the United States, we're still single-digit percentages of the restaurant industry when it comes to sales. We're proud of the results. But at the same time, I think even something as old for us is restaurant delivery still has a long runway ahead of it. When it comes to our DoorDash commerce platform, I think we're even earlier in that journey where most of it has been focused on restaurants, whether it's DoorDash drive or storefront. When you add SevenRooms into the mix, it's still focused on restaurants. You're right to say that there could be opportunities to also expand a different dimension, a breadth component, if you will, but building a business I found a lot of it is about sequencing, making sure that we have the right amount of focus, but also increasing our ability to walk and chew gum at the same time. So that's what we're doing. But I mean, again, everything that we're announcing today, to me really is business as usual and only something that we're investing in because we're seeing success in the five business lines that we have.

Thank you.

Thank you. Our next question comes from the line of Brian Nowak from Morgan Stanley. Your line is open.

Thanks for taking my questions. I have two. One big picture and one excel question. So the big picture on kind of goes back to your last answer about sequencing and sort of prioritization. With Deliveroo, you're attempting to buy a business where 75% of the GMV is essentially a market laggard arguably. Can you give us some examples of what you've learned with Wolt or other European countries as sort of give you excitement or where you see opportunities for Deliveroo to execute better than it is right now than it has historically? And then the second one on the Excel question. CapEx was up quite a bit in the quarter. What's driving the increase in CapEx? And how should we think about CapEx for the rest of the year? Thanks.

Yes. I mean I guess I'd say a couple of things, Brian. First, I think it's important to understand where profit pools are and also where market shares move because sometimes it's easy to look at a country at the aggregate level and not understand that. And what I would say is that Deliveroo has done an amazing job building leading positions and the strongest profitable places within Western Europe, which may suggest that they've concentrated their efforts in a different way than other players and allow them to set up in a way in which if they had extra firepower, they can actually take a leading position. The other thing we've learned, and this comes more to our relationship with Wolt is that, you're absolutely right that we can exchange lessons learned. I mean we've brought along a lot of the products that we built at DoorDash over to Wolt and we've seen quite a lot of improvement from that exchange of learnings and also the other way as well, by the way. So I think only until we had a proof point internally where we saw that we can actually both improve, I think, the offering in the market so that we can make the biggest difference to the audiences in that market, as well as knowing how to do it from a management bandwidth perspective, did we get comfortable to actually increase our investment levels internationally.

Brian, I'll take the CapEx one, right. Like first, there's two points. One is we've done a refresh of tablets for some of our merchants because we're trying to improve the hardware experience, the software experience. But ultimately, we think that drives merchant satisfaction. So we're seeing an impact of that. We talked about the fact that we are making investments from an autonomous perspective, you're starting to see some impact of that as well. And to your point around what the rest of the year looks like, you should think of it in terms of the overall G&A guidance that we've given. Similar level, sort of what you would expect in Q2 for the rest of the year.

Thank you, both.

Thank you. Our next question comes from the line of Ron Josey from Citi. Your line is open.

Hi, thanks for taking the question. Maybe just another question on DashPass. I know you've gotten a few, but in the letter, you talked about extending the value prop of DashPass in 1Q and more things to come. So, I just wanted to maybe get more insights on how the value prop continues to grow and how that's driving just accelerating growth on DashPass. And then just more tactically speaking, I think we saw in New York recently, the City Council raised delivery cap fees and wondering I know we've talked about New York and the impact quite a bit since the pandemic, but we'd love your thoughts on that, particularly with the SevenRooms acquisition. Thank you.

Regarding DashPass, our primary goal remains focused on enhancing the product to encourage more frequent use of DoorDash. While it may seem straightforward, this has been our guiding principle from the start and continues to be. We aim to drive greater usage and increase the value that subscribers receive from using the service. Concerning the situation in New York, we are consistently in dialogue with city officials. We believe that many policies, particularly in cities like New York, are often problematic legally and tend to counter their intended effects. These policies can reduce opportunities for Dashers, decrease sales for businesses of all sizes, and raise prices for consumers due to fees imposed. We are collaborating with the city to implement reasonable policies. While we achieve positive outcomes at times, we also encounter challenges. Nonetheless, we remain hopeful about finding practical solutions while engaging with sensible elected officials.

Thank you.

Thank you. Our next question comes from line of Mark Zgutowicz from The Benchmark Company. Your line is open.

Thank you. I was just hoping we could take a step back and if you could maybe discuss how your affordability initiatives are being directed to restaurant versus grocery and domestic versus international? And how your promo activity in 1Q compared to last quarter and year-over-year? Thanks.

I mean our affordability work is through everywhere in every category. I mean and that's because customers are always seeking more and more affordable options. So it doesn't mean that's the only thing we get judged on our work on. We always work on the same four things, how we improve selection, how do we increase affordability and how do we set a higher bar for the quality of service and how do we do better in terms of customer service, especially if we get it wrong. But our affordability initiatives really tackle every geography, every category because what we're doing is we're just trying to continuously build more and more value into our products and increase the scale of what we can do and reinvest back into customers.

We can go to the next question.

Thanks for taking my question. Just wanted to ask about average order value. You picked up nicely in the quarter. Maybe talk about the drivers of that improvement from U.S. restaurants, international restaurant and grocery and convenience and specifically curious how basket sizes have shifted across those three businesses in the quarter. And second, just a quick one on AOV guidance. Can you just give us a little sense for how much FX is contributing to your outlook there? Thanks.

Sure. I'll begin with the average order value and then discuss the foreign exchange impact. The overall average order value for the company is experiencing some changes due to a shift in our business mix. Grocery is becoming a more significant part of our overall operations, and this is starting to affect the company's average order value. The average order value for restaurants has remained relatively stable over the past few quarters. However, when focusing on grocery, the basket size is increasing, primarily because consumers are becoming more accustomed to our platform. As they get used to using our service for a variety of needs—not just for quick top-ups but also for stock-ups—we see more cohorts increasing their spending with us over time, including both perishable and non-perishable items. Additionally, the overall commerce platform is contributing to our volume and revenue, although it does not affect gross order value, which also plays a role in the average order value from a modeling perspective. Regarding the impact of foreign exchange on gross order value in the first quarter, there was about a 1% effect on a year-over-year growth basis. We anticipate some impact in the second quarter as well, which is already factored into the guidance we have provided for both gross order value and EBITDA.

Okay. Great. Thank you.

Thank you. Our next question comes from the line of Michael McGovern from Bank of America. Your line is open.

Hi guys. Thanks for taking my question. I have two. You mentioned autonomy in terms of your uptick in CapEx this quarter. And I think you had some interesting announcements in the quarter about your first delivery robots in L.A. and also drone testing. Can you just provide an update on your efforts there in autonomy and how you view the long-term opportunity? And then secondly, a question on regulatory. Recently, there is a bill proposed in the Senate about independent workers getting access to portable benefits at the federal level. I think you provided portable benefits in some states. Has that driven a big impact in those states and just how do you view the possibility of that expanding more broadly?

Yes, I can address both questions. Starting with the autonomy topic, we are very enthusiastic about our initiatives in this area and the potential they bring, something we've been developing for about eight years now. A significant challenge with autonomous delivery, which differs from other autonomous projects like taxis, is solving the first and last 10 feet problem. This involves efficiently loading and unloading items from a vehicle. The integration of operations and technology is crucial in making autonomous delivery scalable and improving the value of the product experience now and in the future. Additionally, it may seem obvious, but a 4,000-pound vehicle isn't necessary to deliver a one or two-pound package, so the design needs to align with the specific use cases. We have many initiatives underway and will share more details soon, but we are really excited about our progress and the growing partnership ecosystem in bringing this to fruition. Regarding your second question about regulatory matters and portable benefits, we are very passionate about this topic. You are correct that we initiated this effort in Pennsylvania with support from Governor Shapiro, and we are currently in discussions with other states to extend this initiative. We understand that Dashers value the flexibility of the work we offer while also wanting access to benefits, something we are committed to. We are pleased to see pioneering states leading the charge in this area, and there is growing momentum at the federal level. We hope to not only innovate our products for customer value but also work together with all stakeholders for meaningful changes in the legal framework, allowing individuals to work freely wherever and whenever they choose while having access to benefits.

Thank you.

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

Thanks for the question. You mentioned earlier in the call that the first quarter for DoorDash is a very strong growth quarter. So I'm wondering in this context, are there any sectors, geographies or demographic groups within the DoorDash U.S. restaurant business that grew ahead of your expectations or lagged significantly below your expectations?

Sure, Jim. I'll take this one. I mean, look, the first quarter was a good quarter from an overall restaurant growth perspective because. I assume you're talking about only the restaurant business. But even when I take a step back and look at the performance of the business, right, over the last 5 or 6 quarters, I mean, the growth has been pretty stable. I think what you're seeing in business is users continue to grow our frequency continues to grow. The retention has been very stable. When I look at the newer cohorts versus the existing older cohorts, all of the cohorts continue to perform extremely well. Look, I mean we get over 8 million signals on a daily basis, and we have a team of analysts that look at the underlying performance. And when we look at the outlying cohort health, I mean, it looks pretty healthy, whether it's low income or high income or the new versus the existing cohorts. Again, a lot of that is being driven by the underlying improvements that we're making in the product. And if you if you think about really, even peel back and look at the performance of the business over the last several years, I mean the business has continued to be very resilient. We've operated the business in a variety of demand cycles. So we are pretty comfortable operating the business in different kinds of environments and the overall restaurant business, both from a growth and profitability continues to be very healthy and very strong.

Thank you. That concludes our question-and-answer session. That also concludes this call. Thank you all for joining. You may now disconnect.