DoorDash, Inc. (DASH) Q2 2026 Earnings Call Transcript

grocery business, as you've talked about improving the unit economics, from our understanding, there are some grocers on the platforms who are paying, your platform specifically, who are paying effectively zero or very low take rates. They came on looking to see if you could drive demand and how well they could work with DoorDash. I was wondering if that's the case and then what the opportunity is to reprice these relationships going forward, maybe pushing some of the affordability burden that's lending on DoorDash right now back to the grocers. Thank you.

Yeah. Hey, Michael, it's Tony. I can start and feel free to chime in, Ravi. You know, what I would say is like we see extremely strong performance in our grocery business. It's the fast growing part of our marketplace business, and we have very healthy relationships with all of the partners on the platform. I mean, in terms of of the economic relationships, I'm not going to really comment about, you know, any one in particular. I mean, what I will say is that when you are the fastest grower in the market for them and you are their source of growth, you know, you know, put a different way, we might be a hundred percent of the growth that they see in terms of their actual business. You certainly, you know, have opportunities to grow your business with them as well as improve, you know, your relationships with them. I mean, I think if you look at, you know, our business as a whole, I think one of things you see from you know this quarter and frankly you know i think many of the time periods leading up to now is that there are many sources of improving economics with improving unit economics across all of our categories um you have improving unit economics in our restaurants business too you have improving unit economics in our different geographies in which we operate you have increasing adoption of our um dash pass program as well as you know accelerating growth in our ads business. And I think when you add all of that in, we have a business in which there are many levers in which we can control the kind of financial profile in order to make great investments. Ultimately, we're here always seeking the next best investment. It doesn't mean that we always make those investments, but when we see the opportunity, we're always leaning in. That includes all of the work that we're doing in grocery, which we think there's a long runway, as well as all the other opportunities in front of us.

And Mike, just to add, right, like, look, I mean, if you take a step back and think about our overall grocery business as well as new verticals, we talked about the fact that we became order volume share leaders in Q4. We've continued to extend that lead to when you look at the underlying growth in MAUs, which is the number of users that use categories outside of restaurants, that number is growing, order frequency is growing. We talked about the fact in the letter that basket sizes are growing. If you look at our historic cohorts, consumers are using us for more use cases, which is driving overall basket sizes higher. Last call, I think I mentioned the fact that we expect our overall new vertical business to be gross profit positive. We're on track for that in the second half of the year. Look, I mean, we think about the business as a whole. We think about, you know, retention, order frequency, as well as underlying improvement in unit economics. And they're all headed in the right direction for us.

The next question is from Mark Mahoney from Evercore ISI. Your line is open. Please go ahead.

Thanks. I'll ask you a question about Deliveroo. You've had now three quarters in a row of kind of accelerating growth, I think, in orders, yes, and in GOV, and then I think in revenue. So just peel that back a little bit. How many different opportunities you've had, what you've been able to pull, what you've been able to change in order to deliver that better performance? And it's a little hard to tell, but is it also showing up on the bottom line? Are you able to – have you been finding ways to improve the profitability of Deliveroo as well? Thank you very much.

Hey, it's Tony. I can start. You know, what I would say on, you know, Deliveroo is it really is a story that probably started way back in 2021, you know, when we first made our first large acquisition overseas, which was with Volt. And we've learned a ton, obviously, about building our own U.S. business, and we've learned a lot in terms of how Volt has operated in different geographies across Europe, as well as how to integrate, you know, the lessons that we've learned, as well as the lessons that maybe don't apply into each one of these local geographies. So, what you're seeing in Deliveroo, I agree with you, Mark, is just accelerating performance, you know, frankly, across the board. And that's super exciting because I think, A, it's validation that our integration work is really working and that the lessons that we've learned in building these marketplace businesses around the world do translate into some of these, you know, very meaningful geographies and foundational places where, you know, we're just seeing, you know, growth in all of our big international markets. And this doesn't even include, you know, the majority of benefits that we expect to see once we actually finish all of our work on building a single tech stack. So, you know, as that work kind of, you know, comes more fully online toward the beginning of next year, you know, we expect to see even more benefits as time goes on.

And, Mark, just to put a finer point, right, like when you look at the actual performance of Deliveroo itself, to your point, volume growth or MAU growth or subscription growth, actually, when you look at it on a year-over-year basis, it's been the highest that we've seen in the last couple of years. At the same point, to your second part of your question, we've increased the unit economics as well, but the way in which we're operating the business is very similar, right? We're finding great opportunities to drive investments back in selection. Quality subscription is a big area of focus for us. So we're going to continue to invest back in the business, and my expectation is we'll continue to drive higher top line as well as meet the profitability targets that we set out, you know, in the last letter.

The next question is from Nikhil Divnani of Bernstein. Your line is now open. Please go ahead.

Hi, thanks for taking my question. I'll stick with the theme of international. And I guess broadly, there's a, I guess, a common perception that international might be lower quality growth because maybe you're not number one everywhere, or maybe the competitive set now is better funded and more consolidated today. I would love your perspective on that overall sentiment and really how you structurally see the longer-term earnings power or quality of growth out of these international markets relative to the domestic business. And how important is it to have a pure market share number versus more minimum viable scale in these jurisdictions that allow you to then operate well? Thank you.

Hey, Nikhil. I can start. I think there are a couple of different questions that you're asking. And, you know, the first is really what do we see happening internationally? You know, our aspiration is to be the global leader in local commerce. And, you know, we think we are best positioned to do that, given that we bring the deepest and the broadest portfolio of products in order to serve those audiences. But like you said, it's a game that is played locally. You know, there are no global network effects in these kinds of businesses. And, you know, one of the points you raise is the right one where, you know, sometimes there isn't an obvious tie between, you know, the market position and, you know, kind of your economic profile. And that's because it is a minimum viable scale business. You know, that said, though, when I actually look at our current execution, you know, the vast majority of our international business is concentrated in our top 10 markets outside of the U.S. And in those markets, we are the leader or we are a very strong number two and we're gaining share in all of the markets. You know, some of these markets include places like the UK, Italy, Germany, the Nordics, Israel, Canada. I mean, I can keep going, but we like kind of what we see. And it kind of really is a follow on to the previous question where, you know, Ravi was talking about how we're making improvements, you know, fundamentally to the actual core propositions to all the audiences. We're offering wider selection, better prices, better quality of delivery in terms of reliability, accuracy, and speed, and we're improving our customer service. And so, whenever I see that, and I also see the opportunity for the runway to bring our portfolio of B2B products, which, you know, have done really well in the U.S., but even have more opportunity outside of the U.S., just given the more nascent development of digital technologies in the restaurant and retail categories overseas, I mean, I just think the potential is very, very big.

And Nikhil, I mean, the results are pretty clear, right? We've talked about the fact that on Deliveroo side, I mean, the growth is accelerating. In fact, when you look at the underlying cohorts, the growth is, you know, some of the highest that we've seen over the last couple of years. Even outside of that, when I look at the portfolio excluding Roo, we are growing. EMEs are growing. The order frequency is growing. Volt Plus, in fact, our subscription program in Volt, had one of the best quarters, which is a record quarter in terms of overall paid subscriber growth. At the same point, it's not just purely about growth for us, right? like we are improving the unit economics not just across rule but across world as well when you look at whether it's gross profit or contribution both of them have continued to improve on a year-over-year basis operator are you there can we take the next question

sorry we were having some technical issues uh the next question is from deepak mafanan from canter fitzgerald um thanks for taking the question great thank you um tony last month Andy Frank talked with Boris at Claude about how Dash is aiming to translate AI spend into outcomes somewhat closer to the business metrics now, while also letting employees to experiment aggressively with AI tools. Can you talk about where you're seeing this attribution clearly now and how we should broadly think about AI spend at Dash over the next 12 to 18 months? And then maybe one for you, Ravi, U.S. restaurant GOV acceleration. Can you expand on the drivers of the growth? I but you also had factors like World Cup. Curious if we can talk a little bit more about the factors of acceleration in 2Q. Thank you so much.

On the AI question, Deepak, I would say a couple things. The first thing is we want to make sure that any technology that we need, whether it's AI or frankly anything else, that it's actually rooted in delivering a better customer experience. Because if it's not, I'm not exactly sure what problem we're actually trying to solve. And I don't think it makes sense to just play with the technology for the technology's sake. And so when you look at some of the things that we've seen success, for example, one of the more recent products we launched was called DoorDash Ask, which is an ordering agent that helps customers discover restaurants that are similar to ones that they've ordered in the past, but that are new to them. That helps them build a grocery cart in under two minutes. So really solving actual pain points that we see in using, you know, an increasingly larger and, you know, more diversified marketplace. That's one example. You know, on the merchant side, we've seen automation in building catalogs for retailers or menus for restaurants, which includes all of the photos, the metadata around, you know, all of the different, you know, SKUs and items so that we can actually onboard a merchant faster in order to get sense for sales growth. You know, for dashers, we're seeing improvements in routing as well as, you know, how we can help dashers, you know, find the best areas to dash. Those are some examples of, you know, how we actually have, you know, applied AI in a way that is actually meaningful in terms of driving customer outcomes, which ultimately deliver business results. The other thing that we've done is kind of with all things at DoorDash, we care as much about how we do it in order to be efficient as we do about allowing some degree of inefficiency towards invention. And, you know, we build a lot of tools, you know, tools like DashBench and other, you know, systems internally that allow us to model, you know, the appropriate tools and give those tools, you know, to be used for the right level of token spend or intelligence required. And so I think those are some of the things in which we found ourselves – that's kind of our approach in terms of how we've applied it towards AI or, frankly, any technology. It's why we're excited to keep going and lean in in a way that I think is disciplined on the one hand, but on the other hand, allows us to bring real customer benefits.

Hey, Deepak, on your second question around restaurant growth. Yeah, I mean, restaurant growth was quite strong in the quarter, if you look at it. In fact, growth accelerated from Q1 to Q2. A lot of the growth is coming from just increase in DashPass subscribers. A couple of points, right? We wrote in the letter as well. We added more number of DashPass subscribers in the last year compared to the two prior years. Number two, when I look at the paid subscriber growth in DashPass, it was one of the highest that we've seen in the last couple of years. A lot of that is the underlying product continuing to get better. A lot of that is the increased investment that we made in selection as well as quality. In fact, if you look at mature cohorts, they're continuing to engage higher than what we've seen before. New consumers continue to be quite strong as well. Ultimately, all of this is driving the growth that you're seeing in restaurants. And what I would also say is if you think about Q2 of last year, it was unusually strong for us. So comping against what was a strong Q2 of last year and still putting up the strong numbers in Q2, that's a true testament to A, the demand that we're seeing in the business as well as the underlying improvements in product.

The next question is from dominic ball of rothschilds and co redburn your line is now open hey guys please go ahead hey guys yeah hey thank you for the question um interesting commentary about kind of investing more in merchant services and software i think it's somewhat well known that you know doordax has been testing its pos product in a few markets in the us with both smbs and enterprise restaurants so which is a lot to know about how these test trials are going what products and features are kind of resonates in what is kind of driving some restaurants maybe choosing to use the last year then how do we think about a potential more broader commercial launch going forward thanks guys our

vision is to be the best partner to you know every local business that probably is pretty clear from the mission since day one and the way we do this is that we want to give every business you know the same tools that we built for ourselves so that they can grow their digital business so if you think about, you know, what that, you know, looks like, I mean, we kind of play in this ecosystem where we have, you know, at least, you know, at least three offerings today, right? We have our marketplace, we have tools to help build the digital businesses of restaurants and retailers. In fact, you know, that business, you know, serves over 150,000 businesses and has grown 40%, you know, year every year in the quarter. And then more recently, we've introduced products that actually drive customers inside the store. You know, some of these products include, you know, going out as well as reservations. And then on the business side, it includes, you know, Seven Rooms, which is a company that we acquired about a year ago. And, you know, when I think about what this ecosystem allows us to do i mean it allows us to help customers um build their relationships with the local businesses and ideally forge you know regulars uh for each one of these local businesses and the reason why we can do this is because we have the you know biggest scale as well as the deepest customer data set to allow us to actually drive this engagement you know for example A customer may start by ordering delivery from the DoorDash app, and then perhaps they sign up for a loyalty program on a merchant's first-party channel, something that we've built for them. And when it makes sense, both DoorDash and the merchant can incentivize the customer to go inside the store or go inside the restaurant and actually have a meal. And so when you think about the interaction effects here, what we really are able to do is be the best growth partner for all these businesses and, you know, for consumers, give them, you know, the most choice in terms of how they actually want to interact with all these businesses. I think the proof points we kind of highlighted in our quarterly update are really, really strong. And, you know, we think that this ecosystem is one that has a very long runway.

The next question is from Jason Helfstein of Oppenheimer. Your line is now open. Please go ahead.

Thanks. So just two questions. One, you talked a little bit about DOT deliveries in the release. I guess anything you want to share on how you're thinking about unit economics kind of like today versus where we think it goes long term and how you think that impacts demand around elasticity. And then is it possible to share the ALV for the most recent period in the chart on page three where you're comparing the restaurant versus the grocery and retail? Thanks.

Sure. Maybe I can start with the question on DOT, and then Ravi, feel free to chime in on the second question. I would say a few things about DoorDash DOT. The overall vision for autonomous delivery, at least at DoorDash, is that we want to offer AVs throughout the network so that we can deliver the best service to customers. The best service could be the fastest delivery, the most affordable delivery, delivery from the widest selection, including from very far away places. And I would say that the real secret sauce or the magic that we've learned in building DoorDash. is that it's really the complexity of marrying the operations with the technology that actually allows you to even have a chance at delivering scaled autonomous delivery. Put a different way, DoorDash. or any AV, for that matter, alone will not make autonomous deliveries actually scaled, certainly not at any level of meaningful penetration you know for customers i mean at the end of the day you have to solve you know very challenging operational problems in the physical world you have to solve uh the the loading problem you um at the merchant you have to estimate merchant prep times in the case of restaurants or inventory levels in the case of retailers and grocery stores uh you got to solve for difficult drop-off issues like you know perhaps a doorman inside of a high-rise building or, you know, a complicated gate entry in an apartment unit, these are all of the issues that we've encountered and are, you know, candidly like maybe one one thousandth of the issues that we've encountered in building DoorDash DOT in our test market. And so I think to get to the milestone that we have today with DOT, where we have meaningful scale in our test market, has been a huge accomplishment by the team. And it gives us confidence that, you know, you can actually truly scale autonomous delivery if you both can master the operations and the technology. And that's why I think we're the best position to do it, because we run the network and we're also building the technology ourselves, which gives us the lowest level of detailed understanding of how to actually make this happen. And it doesn't mean that, you know, we have to build everything. I mean, we actually, you know, whether it's by land or by air, we have a variety of partners that we interact with. And, you know, for everyone, we kind of, you know, solve all of the challenging operational problems for them. And we do that through our autonomous delivery platform. So, you know, for a merchant, you can take your existing DoorDash integration and you get access to any and all ADs. And for customers, you're going to actually one day get the benefit, you know, of these technologies. And, you know, with respect to, you know, the cost profile, we're very excited by what I mean, it's exponential progress. But I think, you know, that the first milestone for us has really been, you know, can you actually commercialize this in a way that you've seen, you know, certain Robotaxi providers like Waymo actually do it with Rideshare, you know, we've been able to now do it with Hey Jason, it's Ravi.

The second point, right? Let me start with what we're seeing in the business. As we continue to operate and expand our new verticals in grocery business, what you're seeing is as the product is getting better, the basket sizes are increasing. This is what we had originally expected, which is as we add more selection, as the quality of the product continues to get better, you would have customers use us for more use cases, which will ultimately drive the basket sizes to be higher. We're seeing that in older cohorts. We're seeing that in newer cohorts, which is visible overall in the business as well. But let me actually take a step back and walk you through what our thesis was and why we put the second chart in the letter. Look, our core thesis was twofold. One is we knew that as customers or consumers habituate on the platform, they will spend more with us. They'll spend more with us on the restaurant business. They'll adopt your categories. They'll spend more with us on the new vertical business. The example that we took in that chart was one of our older cohorts, which is largely representative actually of the other cohorts that we see in the business where consumer spend on restaurants is increasing, consumer spend on new verticals is increasing, and at the same time, DashPass penetration is increasing. And if you think about it, right, this is almost like a self-reinforcing loop where the product gets better, consumers adopt and habituate to DashPass. As they adopt DashPass, they continue to use the product more, which ultimately leads to more growth as well as more profit dollars in the system. This has largely been the focus for us. And that's largely what you're seeing in the underlying cohort. And we're very pleased with the performance of that in the underlying business.

The next question is from Shweta Kajuria of Wolf Research. Your line is now open. Please go ahead.

Thank you for taking my questions. Let me try two, please. First is on the Dashmark fulfillment services. Since your launch and since working with a handful of partners, I understand, what have you learned so far that you could potentially quantify or some sort of tangible learnings that you could share, whether it is on the magnitude of customer experience improvement or something else, and then what metrics do you look at to be able to make that decision to scale Dashmark fulfillment services? And then the second question is just overall EBITDA growth, where now we are in the back half of this year and in the light of investments this year, but more importantly as we think about balancing growth and top-line growth and EBITDA growth. Ravi, how are you thinking about that as we think about the demand trends that you see right now and balancing growth with profitability? Thanks a lot.

Yeah, I can start by answering about Dashmark fulfillment services. To state the obvious, we want every local business to be successful in their local communities. And, you know, that's true in every category, you know, from restaurants to grocery to retail. And one of the things that we learned, you know, five years ago when we launched our grocery business, even though, you know, it's going so well and we're helping lots of grocers compete, is that there's this, you know, structural challenge with grocery delivery where grocers don't know their inventory. In some ways, it's almost impossible for a whole host of reasons, one of which is because consumers come in and they move things around. And so it's a very difficult proposition then to offer customers a use case where you're asking them to pay a premium for delivery, but they don't get exactly what they ordered. So, you know, our solution to this is Dashmark Fulfillment Services, where we are managing, you know, warehouses where we control the inventory and sell exactly what's in stock so that we can actually offer, you know, near perfect accuracy and give customers the selection that they want from any place inside the city and also very, very quickly. And so in terms of what we've seen so far since our announcement last fall and the launch that we've had with several partners is we're seeing lots of incremental demand because, you know, these warehouses are running near 24-7. And if you compare that to traditional store operating hours, that's a dramatic increase in TAM as well as, you know, really just solving the needs of customers. Because customers sometimes don't, you know, get freed up until maybe after store closing hours before they can think about, you know, the next day or planning their groceries or their shopping needs. So, we're seeing lots of incremental demand. And we're also seeing, you know, 10 times better error rates because, you know, we're running the inventory. And as a result, you know, we're selling customers exactly – the customers are getting exactly what they ordered, and we're selling them exactly what's actually in stock. And so, you know, all the signs right now are really positive, you know, for us to scale Dashboard Fulfillment Services. But, look, this is complicated. I mean, this is building physical infrastructure. You're obviously adding technology to it by managing the inventory and obviously running the entire fulfillment. But you can imagine a world in which these warehouses can power all of the needs inside of a city. And what you can really do when you do something like that is you can really unlock the amount of selection available to customers. Because today, I would say DoorDash is delivering probably one-tenth in most cities the available selection in terms of retail and grocery and the like. And so we can actually build this capability and, you know, do it in concert with all of the great retail and grocery selection inside of the city. I think customers get the best product. They get all the selections that they want at perfect quality very quickly.

And Shira, to your second question around, look, I mean, trying to balance both growth as well as profitability, right? You had asked about the demand trend. Look, when I look at the underlying business, the demand trend continues to be quite strong. I mean, as you know, we focus and spend a lot of our time on cohorts. You know, MAUs, when I look across the board, they have it all-time high. Subscription, I talked about the fact that both domestically and internationally, those are one of our best quarters in the sense that the subscription continues to be at record high. Restaurant growth has accelerated. Deliveroo continues to do quite well. Overall, when I look at the underlying improvements in the product, that's driving the improvements that you're seeing both from retention as well as order frequency. At the same point, I mean, look, I mean, the quarter was very strong from an underlying profitability perspective as well. A lot of that is because the underlying unit economics continue to improve. For us, the philosophy has always been the same, right? We're consistently trying to improve efficiency. There's many sources across the board, whether it's sales and marketing, fixed costs, you know, up and down the P&L. And our goal is to consistently reinvest back in the business. Look, we talked about the fact that we're investing, you know, back into the business and building products, some of which we've talked about earlier on the call, whether its autonomy, unification of the global tech stack, or investing back in merchant services, all of those are going well. They're all going on budget and on plan, according to what I'd estimated a couple of quarters ago. These will increase the surface area. Ultimately, the goal for us is to continue to drive both growth as well as profit dollars. As long as we make the product better, what we're seeing in the business is we're able to do both, right? This is how we think about balancing both growth as well as profit dollar production in our business.

The next question is from Josh Beck of Raymond James. Your line is now open. Please go ahead.

Thanks for taking the question. I have maybe a product-oriented question. So on DOT getting to high single digits within a market by the end of the year, could you give us maybe like some characteristics? Is this because it's maybe more of a longer route, suburb type of market? And, you know, if you were to maybe add in all of the different modalities between maybe sidewalk, pathway, drones, you know, autonomous vehicles, is there some type of, you know, ceiling that you have in your mind in terms of maybe the percentage of orders that could be filled through autonomous? And then just secondarily on the AI assistant, obviously lots of attractive characteristics, discovery, baskets, et cetera. I'm curious if there's been other observations with respect to better frequency of these customers. I'm curious on maybe what you have to say about ad monetization. It seems like maybe time spent could be less, but conversion could be better. So I'm just curious on those two topics.

All right. I think he had, like, maybe seven or eight questions in there, Josh, but I'll do my best. Look, on DoorDash.it, it is a representative DoorDash market. You know, we're testing in Phoenix, and so – and we're testing it, you know, with real scale now, which is, like, it's a real accomplishment when you think about, you know, these are not demos. These are not prototypes. There are no fixed routes. This is real life, and this is real life for, you know, tens of thousands of years. thousands of customers, you know, that are receiving real deliveries. And so that's very exciting. It's also very challenging. You know, I mentioned, you know, maybe five or six issues that might be literally one one thousandth the number of issues that you have to solve to actually have a chance at making autonomous deliveries actually happen. And that's true, whether you're doing it by land, and it's also true whether you're doing it by air. I mean, And, you know, we've seen this with DoorDash Air as well, in addition to, you know, all the partners that, you know, we test with and bring our scale to. And so, you know, what I would say is what's going to determine, you know, the ceiling or the penetration of autonomous delivery is whether or not you can master both the operations and the technology. And, you know, I believe we're best positioned to do that because we're actually doing both in-house. And so we are getting to the lowest level of detail, you know, chopping down the very heavy wood of every issue that exists in the real world, that exists in every single restaurant, retailer, on the road. I mean, DA travels road, sidewalk, and bike lane. It's the only vehicle in the world to do that autonomously. um and there's a lot of challenges when you when you actually try to you know take on that multi-modality you know and and you know one of the interesting things um perhaps the most interesting thing of what we're building with autonomy is this autonomous delivery platform you know you can think of this as the brains that actually makes it all happen you know you that you know deciphers which vehicles go to which orders that you know decides whether you have a you know, a mixed route, you know, where you have human dashers as part of the legs of the journey and autonomous vehicles and other parts of the journey, you know, that looks into the configuration of the package size and the package design and the package weight. And, you know, there's a lot of complexity, but all of that gets reduced and kind of goes and disappears because we kind of handle it through our autonomous delivery platform so that merchants get the same integration that they have with DoorDash today. They don't have to change a single thing about their workflow, and customers just get access to the benefits of autonomous delivery, which, you know, will be in the future speed, cost, and more selection. And so, I think that's going to be, you know, really, really, really exciting. And again, like, you know, it's really going to be the execution that determines, you know, the ceiling, and I think we're best suited for that execution. You know, I think your second question on the AI assistant, I mean, the short answer is, of course, if you're, whenever you're making, whenever you're reducing friction in a product, you get more usage, you know? So if we're making it easier to build a grocery cart, you get more grocery carts and you get bigger grocery carts and it doesn't change at all the ads profile or, you know, anything else. If anything, you actually get just more incremental orders and more incremental opportunities because people order more often. The same thing is true about ordering, you know, restaurants. If, you know, you now discover that there's something slightly healthier or faster or cheaper or just better or different from what you typically order, then you tend to order more often, possibly for more use cases. You know, eat 20 to 25 times a week. And DoorDash only touches a fraction of that. And that is really the runway we have. When I think about the number of meal occasions and shopping needs on top of that, it's north of 100 per month. And so, we have a lot of shots on goal that we can go capture. And if we just reduce the friction of actually ordering and then master and continue to master the operations of fulfillment, you know, all of the metrics will go in the right direction.

The next question is from Yusuf Squally of Truist Securities. Your line is now open. Please go ahead.

Awesome. Thank you so much. So, guys, I just want to double click on the margin question again. Can you, Ravi, can you maybe just talk about the drivers for the material beats in Adjusted Deep Dighton Q2? It came quite a bit outside of the guidance range. More recently, you guys have been batting to, at some point, hit somewhere in the midpoint. This one is dramatically higher. Were there any investments that got pushed back into Q3 and then Q4? And then are we still tracking to show higher year-on-year adjusted EBITDA margin for 2026 ex-deliveroo? Thank you.

Hey, Yusuf. Yeah, let me take that. Like, look, at the highest level, what I would say is the core restaurant business continues to perform on all cylinders. Growth, like I said on Deepak's question, right, like growth accelerated, unit economics continue to improve. New verticals growing much faster than a restaurant business, as well as, you know, which is on track to being gross profit positive by the end of the year. International continues to do well. We've talked about some of the strength that you're seeing in Deliveroo, as well as the beat on unit economics there. more specifically what we saw in the quarter was the unit economic improvement came in ahead of our expectations specifically in a couple of areas ads was one of them subtotal was the other one where in the second half of the quarter those unit economics came in slightly ahead of what we had expected in addition ru beat our own internal volume expectations ru is contribution profit positive that led to some of the upside that you're seeing in the business but look I mean more broadly what i would say is our philosophy in how we operate the business that is not changing look it's a very tightly managed business there are a lot of levers that we control up and down the pnl what we're consistently trying to do is try to find sources of efficiency like i said earlier there's many sources of efficiency that we work on and take those and reinvest that back in the business we're not trying to optimize the last dollar from one quarter to the next Look, our focus has always been on how do you build a large, durable business over time while continuing to increase the overall profit dollar production. To your second point, look, I mean, our focus has always been on landing inside the range. And if you're thinking about the second half from a modeling perspective, I would expect us to land inside the range of the guidance that we've given in Q3. There are going to be times like in Q2 where the EBITDA beat comes in later in the quarter. In those times, we just don't have enough time to reinvest back in the business, especially at the levels of efficiency that we desire. Q2 was one of those quarters where we're happy to drop it to the bottom line.

The next question is from Ross Sandler of Barclays. Your line is now open. Please go ahead.

Thanks, guys. Just a quick follow-up on the AV, and then I had a question about the charts in the letter. So, Tony, I think you have a few robots in Phoenix. How quickly is the plan to kind of bring this to other cities? That's the first question. And then on those charts, we love the DoorDash charts, but I'm guessing if Uber were to put together their sub-penetration relative to gross profit, it would probably look kind of the same for their leading markets. So are there examples of like cities or countries that you are kind of demonstrating the same trend as the U.S., but you've either come from behind or you've kind of come like head to head and overtaken one of your competitors on, you know, DashPass or Volt penetration for subscribers? Thanks a lot.

Sure. I can start on the A.V. question. Yeah, I mean, we're very excited about what's happening in Phoenix. But like, as I mentioned, I mean, there's a lot we got to go figure out. And, you know, I'm a big believer that you really have to nail something before you scale it, especially in the area of autonomy, where, you know, you're really solving like, you know, the problems of like six separate individual companies almost. And you kind of have to be great at all. And it's this tightly orchestration, again, between the operations and the technology. I can't, you know, stress that enough because that is the name of the game. I think just doing one or the other is not going to get it done. And so there's a lot of work to be done. We are in parallel, of course, securing permits because, you know, we work with cities to actually unlock a lot of this. And, you know, we do have plans to expand. We'll share certainly more as time comes, but we thought that'd be helpful to offer just one milestone that we've accomplished and are excited about. But look, the road ahead for AV is very exciting, but it's going to take time, and mostly it's going to take great execution between the operations and the technology, and that's what we're most excited about.

Hey, Rodan, your second point, right? Like, let me take a step back and talk about, you know, subscription more broadly. I mean, if you think about subscription, it's been a key area of focus for us for the past couple of years. Subscription continues to do well. Whether it's subscribers in the U.S. or international, the growth rate are some of the highest that we've seen in the last couple of years. And the whole thesis for us was as DashPass penetration continues to increase, overall gross profit per mile continues to increase and I look at the penetration levels we're still very very early. We're seeing similar behavior in the international markets compared to what we see in the U.S. albeit some of the international countries are slightly behind because we launched subscription slightly later than what we did in the U.S. and for specific examples right I'm going to talk about some of the examples on Deliboo look if you're thinking about the UK market we are gaining share we're one of the fastest growing in that market we're accelerating growth we're accelerating you know paid subscriber growth volume growth compared to what we've seen in the last couple of years. Even outside of Deliveroo, when you look at some of the countries that we operate in Bolt, in majority of the countries that we operate, we're continuing to gain share. And the key thing for us is we're not just looking at share gains, we're looking at what the order rate improvements are. We look at either the three months or the six months, we have continued to improve order rates. At the same point across both Deliveroo as well as Bolt, it's been a way for us to drive efficient growth, where when you look at the unit economics either on a year-over-year basis or over the last couple of years, we've done a pretty good job of improving that. Net-net, I mean, look, you know, we've talked about some of the countries before, right, whether it's UK, you know, Israel, or some of the other markets. We're continuing to do really well in terms of overall share gain as well as the underlying improvements in cohort metrics.

The next question is from the line of Brian Novak with Morgan Stanley. Your line is now open.

Please go ahead. hey guys hey guys excuse me thanks for taking my question i want to ask one about the uh the global tech stack and sort of the unification of global tech stack so now that you've got the the tech stack sort of built as of the the spring and you've been testing a lot of modules and new capabilities can you give us some examples where you're you're seeing early signal with actual quantifiable benefits of the new modules that give you confidence you're going to get real return and ROIC on these investments as we go into 2027?

Sure. Yeah. Hey, Brian. Yeah. I mean, I would say we're still building the way you build these single tech stacks. It's not like, I mean, the better analogy is not like, you know, it's not like a Lego project where there's like a finishing step, you know, in the instruction manual. It's more like you're constantly, well, first you have to like replace an engine while you're flying a plane that's, you know, growing in speed and climbing in an altitude, and then you're constantly making tweaks. That's probably the more appropriate analogy, but we're doing it. And, you know, where are we seeing benefits? I mean, a lot of places already. I mean, you're seeing, you know, conversion wins from improvements in search. You're seeing wins in automation in terms of our customer support flows. And, you know, by bringing things, you know, from one place that was more automated to another place that that was less automated. I mean, the theme really is what we're trying to do and why, you know, there's a thesis for a return here is because you're taking the best of breed feature and literally, you know, offering it to all of our 41 markets. And so this is not like taking one stack and then just like copying and pasting everything into, you know, all of the brands. It's actually literally taking the best of each and then putting it into a completely new engine and then running. I mean, it's like building a new company. And so and that's why it's really hard. And, you know, candidly, it's not something that you would do if you do not believe more in the future than you did in the past. And, you know, and that doesn't even take into account the velocity benefits, you know, after you complete the project, where if you were to ship once from an infrastructure perspective, that it actually gets shipped everywhere.

The next question comes to the line of Ronald Jose of Citigroup. Your line is now open. Please go ahead.

Great. Thanks for taking the questions. I wanted to go back to the gross profit and dash pass chart that we have in the letter here. And so the slip of the lines more recently are steepening for both, which is talking to all the trends that we saw. So I'd love to hear more, maybe Tony, on just the plans or strategies to continue adding value to the program and the push and pull, what that value does to overall gross profit. And then more recently, I think the company launched newer or greater fees for larger delivery radiuses. To talk to us about the reasoning for those fees and the benefits, thank you.

Yeah, hey Ron, let me take a stab at both of those, right? Like look, subscription continues do well. Our thesis has always been as consumers habituate and we graduate into DashPass, their overall value proposition from not just a gross profit but order frequency as well as retention goes up. And the example that we put in the chart was, you know, largely a Jan 2021 cohort. And we wanted to use that because it was sufficiently old enough where you could actually see the trends. Also, it's largely representative of what we see in the other cohorts, you know, the rest of the portfolio as well. Where what we see is as consumers order more with us, as they retain more, they graduate to DashPass. And as they graduate to DashPass, they continue to spend more with us. And we think that not just in the older cohorts, but in some of the newer cohorts as well, which is ultimately leading to some of the growth that you're seeing in DashPass, right? I talked about the fact that in U.S., in DashPass Q2, the growth rate in terms of paid subscribers was one of the highest that we've seen probably in the last, you know, two years. We added more number of paid subscribers in the last year compared to the two prior years. A lot of that is because the underlying product continues to get better, right? Now, if you're on DashPass, you get to access retail, grocery, other categories, which ultimately drives more value to DashPass subscribers. The way we increase the value proposition of DashPass, to your question, is making the underlying product better, right? With more selection, making the quality of the product better, continuing to drive affordability. And when we do that, we see clear improvements in both adoption of DashPass as well as the engagement from a DashPass perspective. And your second point, look, I mean, if you're thinking about the new fee service that we talked about, you know, last couple of weeks ago, look, it's largely a realignment of consumers, what they pay compared to the time and effort that Dashers put in a delivery. If you're thinking about it from like an impact to the P&L perspective, I wouldn't think of it that way. Based on what we've seen in the market so far, the fee is largely similar or slightly less actually for the vast majority of the orders. So I would expect it to be a massive impact, especially in the markets that we've launched it so far.

The next question is from the line of Justin Post of Bank of America. Your line is now open. Please go ahead.

Thanks for my question. I just wondered if you can give us any agentic traffic update, if you're seeing any traffic from there. And then given your huge merchant scale, are there ways where you could really capitalize on that traffic as they roll out booking capabilities and maybe even lower your marketing costs?

Yeah, I think, Justin, I'll take that one and feel free to add, Robbie. I mean, what I'd say in short is no. the volume is quite low, you know, I think from, you know, some of the agentic partners that we've been testing with. But it also isn't that surprising, I think, for a couple reasons. You know, I think first, you know, I think especially for some of the larger platforms out there, you know, their core focus has been on the enterprise and much less, especially on coding agents and, you know, probably less on the agentic side. But, you know, the second thing is just structurally speaking, if you look at it from a consumer's perspective, consumers don't really care what you call this thing, whether you call it agentic flows and pre-agentic flows, post-agentic flows. They honestly just care about getting their burrito or their pair of Nikes or their stock of weekly groceries. That's what they care about. And at the end of the day, what that means is they care about the end-to-end experience, right? And so if you think about it, we're effectively the only place that can offer that, whether that starts by knowing where all the inventory sits. What's in stock, what's not in stock, obviously managing the logistics at both the merchant as well as that drop-off. And then of course, solving exception handling when things were to go awry, if there's the wrong item or the wrong promotion apply to an item. I think these are all the details you kind of have to get right if you want to do a gent of commerce for our category. And that's just not something that I think a lot of people are doing, but we're kind of filling the void, right? It's why DoorDash launched, DoorDash asked, where we effectively are solving that. But we're still, you know, very open, very excited to test, you know, all sources of incremental traffic, which is what we believe, you know, can happen. You know, something I said probably five years ago is that in the business world, this is 2021, you know, I was forecasting that there'd be two big wars that would occur. One is kind of the battle for attention. And you You see that playing out with, you know, chat assistants and other types of more powerful assistants now. And then the other is kind of, you know, the battle for atoms. And I do think that the two services will come and partner with one another. And our focus is squarely on, you know, making sure that we master the physical role so we can be the most useful to all these digital assistants, you know, when they kind of, you know, come around to focus on Agenda Commerce that, you know, will be, you know, willing partners and grow together.

The next question is from the line of Doug Anmus of JP Morgan. Your line is now open. Please go ahead.

Great. Thanks for taking the question. I know you don't manage for take rate, but just wanted to get a little bit more color just on net revenue margin and the pickup that you saw kind of in 2Q.

Just trying to understand some of the drivers there in terms of how much might have been Deliveroo contribution versus advertising and fee changes and how you think about that going forward thanks hey doug let me take that one look i mean you're right i mean we're not operating the business towards a take rate or net revenue margin percentage our goal has been always to optimize for overall profit dollars and as you can see pretty strong quarter from that perspective as well as the q3 guide look lots of moving parts within the take rate the q1q increase which is what i think you're referring to is largely from Dasher. Look, Dasher costs are seasonal for us. When you go from Q1 to Q2, Dasher costs are lower in Q2. That's what gave rise to sort of the tick-up intake rate that you saw from Q1 to Q2. And if you're thinking about from a modeling perspective, what I would expect for the rest of the year, I'd expect take rate to slightly be in the similar range in Q3, so flattish from Q2 to Q3, and lower in Q4. Again, as a reminder, I've mentioned this before, Q4 Dasher costs are higher for us that'll impact take rates so you should expect q4 take rate to be slightly lower than where q3 is but net net look i mean the goal for us is not to manage to a specific line in the pnl especially the take rate percentage our goal is to invest flexibly up and down the pnl the next question is from the line of tom champion of piper sandler your line is now open please go ahead good afternoon thanks for taking the question uh ravia just be curious about your big picture view on AI spending and the ROI that you're seeing.

And I'm curious if it's impacted your future hiring plans at all. Thank you.

Sure. I mean, I think, let me start. I mean, not just purely about driving cost efficiency for us, right? Like we said earlier on the call, look, we are encouraging our teams to use AI across the board. For us, ultimately, the goal is how do you build better products for customers, which will ultimately drive both growth as well overall profit dollars ask was one of the examples in which we're driving benefit to customers we've done similar things on both merchant side we were helping merchants on board faster on the dasher side we've been with conversational bodies where dashers if they're stuck they can actually chat with the agent to help themselves get unstuck at the same point look we're seeing productivity gains across the board you know internally we're using it in sales you know accounting marketing finance as well the goal for us has always been it's not just purely about encouraging the usage How do you actually drive efficiency as well? We've taken a number of steps. We've built models where internally the tasks are routed to the right model, depending on what the actual cost, quality, and efficiency is. We've put caps in place. We've also incorporated some of the AI budgets into teams' existing budgets. Look, we are seeing gains from the usage of AI. The sharper question for us is, how do you take the efficiency gains and reinvest that back in the business? Look, we are investing in building some large areas. We've talked about autonomy. We've talked about AI. We've talked about the unification of the tech stack. These are all areas where we think it's going to be strong, long-term ROI for us. The goal for us is how do you take the efficiency gains, whether it's AI or any other part of the P&L, but the philosophy is the same, right? How do you reinvest that back in the business, ultimately to build scale and durability over a longer period of time, which leads to higher overall free cash flow production? That's largely how we're thinking about the efficiency gains, but we're happy with what we're seeing in the business today.

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.

Goodbye.