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    DASH
    Earnings call· Mar 2025(Q1 FY25)

    DoorDash Q1 FY25 earnings call DASH

    May 6, 2025 Source

    Executive summary

    DoorDash Q1 FY25 — Strong Growth Across Verticals and Strategic International Expansion

    DoorDash delivered a strong Q1 FY25, marked by robust growth in new verticals and record DashPass subscriptions, underscoring the resilience of its core business and effective reinvestment strategies. The company is strategically expanding its international footprint and product offerings through the proposed Deliveroo acquisition and the SevenRooms deal, aiming to leverage scale and enhance merchant intelligence. While net revenue margins saw a seasonal dip, management anticipates a recovery in the latter half of the year, maintaining focus on long-term profit dollar generation and addressing regulatory challenges.

    Highlights

    5

    • New verticals business showed strong growth, increasing MAUs and order volume share.

    • DashPass subscribers reached an all-time high, with accelerated growth in Q1 compared to the prior quarter.

    • Grocery business gained a healthy amount of market share in Q1 compared to last year.

    • EBITDA profit dollars grew year-over-year in Q1 and are guided to continue growing in Q2.

    • Strategic acquisitions (Deliveroo offer, SevenRooms) aim to expand international scale and product portfolio.

    Concerns

    3

    • Net revenue margins were down quarter-on-quarter due to seasonality and specific affordability initiatives, though expected to recover in H2.

    • Increased CapEx in Q1 driven by tablet refreshes for merchants and investments in autonomous delivery.

    • Regulatory headwinds in New York City regarding delivery cap fees, which management believes harm Dashers, businesses, and consumers.

    Guidance & targets

    4
    CategoryTargetConfidence
    Net revenue margin (take rate)
    higher than Q1
    medium materiality
    Medium
    Net revenue margin (take rate)
    higher than the first half
    medium materiality
    Medium
    Grocery order volume market share
    order volume share leaders
    high materiality
    High
    Capital expenditure
    Similar level
    medium materiality
    High

    Operational metrics

    9
    New verticals business growth
    very strongcontinues to grow
    Q1 FY25

    New verticals business, including grocery, continues to grow strongly, increasing MAUs and order volume share.

    MAUs ordering grocery and restaurants
    over 25%continues to increase
    Q1 FY25

    The percentage of monthly active users ordering both grocery and restaurants continues to increase from Q4's "about 1/4".

    Top grocers on platform
    majority
    Q1 FY25

    DoorDash has a majority of the top 20 grocers on its platform.

    Grocery order volume share gain
    healthy amountcompared to last year
    Q1 FY25

    DoorDash gained a healthy amount of share in the grocery business in Q1 compared to last year, and continues to gain share quarter-on-quarter.

    DashPass subscribers
    all-time highaccelerated compared to the prior quarter
    Q1 FY25

    DashPass had a strong quarter with an all-time high in subscribers, and growth accelerated compared to the prior quarter.

    Minimum cash balance for working capital
    $1B
    Ongoing

    Management aims to run the business with approximately $1 billion in cash for working capital, investing anything above that back into the business.

    Restaurant industry sales penetration
    single-digit percentages
    Current

    Even in the US, DoorDash's penetration of the restaurant industry sales is still in the single digits, indicating a long runway for growth.

    Daily signals processed
    over 8M
    Daily

    The company processes over 8 million signals on a daily basis, which helps in analyzing underlying performance and cohort health.

    FX impact on GOV growth
    1%year-over-year growth basis
    Q1 FY25

    FX had approximately a 1% impact on year-over-year GOV growth in Q1.

    Product announcements

    2
    ProductTypeDetails
    First delivery robotsmilestone
    Drone testingmilestone

    Deals & partnerships

    2
    DeliverooFormal offer to purchase Deliveroo to expand international business, specifically in Europe.180p per share

    Proposed acquisition to expand DoorDash's presence in Europe, leveraging existing playbook from Wolt. An analyst noted that 75% of Deliveroo's GMV is in 'market laggard' positions, but management sees strong profitable places within Western Europe and potential for improvement by applying DoorDash's operational discipline and scaling unit economics. The offer details are available in a Rule 2.7 announcement.

    SevenRoomsAcquisition to add to DoorDash's platform business, specifically marketing-as-a-service and intelligence for restaurants.

    SevenRooms adds "marketing-as-a-service" and intelligence capabilities to DoorDash's commerce platform, which previously included logistics-as-a-service (DoorDash Drive) and online-ordering-as-a-service (DoorDash Storefront).

    Risks & headwinds

    2
    Regulatory policies in New York CityCurrent

    delivery cap fees

    Mitigation: Working with the city to enact common sense policies, believing current policies harm Dashers, businesses, and consumers.

    Tariff impactCurrent

    not seeing any effects

    Mitigation: Focus on increasing selection, affordability initiatives, and quality/service. Believes food delivery is resilient.

    What to watch in Q2 FY25

    5

    Net revenue margin (take rate)

    Q2 FY25
    CurrentDown QoQ in Q1
    TargetHigher than Q1

    Why it matters

    Indicates the effectiveness of affordability investments and overall business growth on profitability.

    I would expect Q2 take rate to be higher than Q1 and the second half take rate to be higher than the first half.

    Q&A highlights

    5

    Inquires about the combined market share with Deliveroo, European market growth, and Deliveroo's unit economics/retention compared to Wolt.

    Tony Xu states the Deliveroo offer is about adding scale in Europe, laying the foundation for local commerce products, and unlocking greater profit pools. He cannot provide specific details beyond the Rule 2.7 announcement.

    “what I really see is adding more scale to the same continent, in this case, Europe and being able to lay the foundation for introducing all of the local commerce products that we are building.”

    asked by Shweta Khajuria · answered by Tony Xu

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic M&A Philosophy

    DoorDash's M&A strategy remains highly selective, focusing on deals that expand its addressable market or product portfolio, and where the company has a proven track record for execution. The proposed Deliveroo acquisition aims to scale European operations and introduce local commerce products, while SevenRooms enhances the platform's offerings for restaurants with marketing-as-a-service and guest intelligence.

    02

    New Verticals Performance

    The new verticals business, particularly grocery, demonstrated strong growth in Q1, increasing monthly active users and order frequency. A significant portion of MAUs now order both grocery and restaurants, driven by expanded selection (majority of top 20 grocers on platform) and improved product quality, leading to meaningful year-over-year share gains.

    03

    Affordability and Take Rate Dynamics

    DoorDash actively invests in affordability initiatives, including DashPass, to drive order volume and customer retention. While these investments and seasonal factors led to a quarter-on-quarter dip in net revenue margins in Q1, management expects take rates to improve in Q2 and the second half of the year, emphasizing a focus on maximizing profit dollars over margin percentage.

    04

    DashPass Evolution

    DashPass is envisioned as a "membership program to the physical world," extending beyond food to connect local businesses and consumers in more ways. The program saw record subscriber numbers and accelerated growth in Q1, with ongoing efforts to enhance its utility and value proposition.

    05

    Autonomy and Future Delivery

    DoorDash is actively investing in autonomous delivery, focusing on solving the "first and last 10 feet" problem and developing appropriate form factors for different delivery needs. The company sees significant long-term potential in autonomy to improve scalability and the value proposition of its services.

    06

    Portable Benefits Advocacy

    DoorDash is a proponent of portable benefits for independent workers, having initiated efforts in Pennsylvania and engaging with other states and potentially the federal government. The goal is to combine the flexibility of gig work with access to benefits, working with stakeholders to evolve the legal system.

    AI-generated summary of the company’s earnings call. Not investment advice.