DoorDash, Inc.

Hello, and welcome to the DoorDash Q1 2025 earnings conference call. I would now like to turn the call over to Wes Twigg in Invest Relations. Wes Twigg, the floor is 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 Hsu, and CFO, Ravi Anaconda. We'll be making forward-looking statements today 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-K 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 .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 Deliveroo at $0.180 per share. Our rationale for the offer, intentions, and other offer-related details are available on the tool 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 Seven Rooms 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.

Thank you. If you'd like to ask a question, please press star and the number one on your telephone keypad. Again, there's star and the number one on your telephone keypad. With our first question, this comes from the line of Shweta Kajiria from Wolf Research. The line's 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, Vault, 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 as... I remember when you acquired Vault, one of the reasons was the unit economics and retention rates 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 integrations, discounts, anything that you can talk about? That'd be great. Thanks a lot.

Hey, Schweda. It's Tony. I'll take both. On the first question, we are excited. I think in many ways this is business as usual for us where we're adding and investing behind success in each one of our five business lines. Specifically with respect to Deliveroo, that really is adding, obviously, to our international business. We've had a strong track record now in teaming up with for over three years where we're leading in a majority of our markets with a playbook that we believe in. And when I think about the possible combination, should the deal close, 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. I can't get into all of the details, obviously, beyond that, but hopefully that gives you a high level view of what we believe the investment opportunity is. And I think that if we do a great job in terms of investing wisely into the partnership, as well as what the scale economies can produce, I believe that will even unlock even greater profit pools for us, especially given in some of the markets that Deliveroo plays in to allow us to invest even further in the future. With respect to the second question, which I believe is on tariffs, right now we're not seeing any effects. Obviously, as you know, a lot of the tariffs have have been paused, and we haven't seen any changes in consumer behavior, even if there are changes in consumer sentiment. I've always believed, and I think we saw this even as far as whether it was during things returning back to normal after COVID-19, or peak inflation in 2021 and 2022, I think what you really saw was that food, or getting convenience delivered, really is the most frequent form of spending consumption. And food really is the most resilient category. We continue to believe that, we continue to see signs of that. Obviously, we're going to focus on what we can control. Most of what that means is we've always been trying to increase the selection that we offer, both of merchants as well as items. We are continuing to invest behind our affordability initiatives, as well as our quality and service initiatives.

Thanks,

Joni. Thank you. Our next question comes from the line of Deepak Mahivanan from Fitzgerald. The 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's now changed at all? What are maybe some of the other areas you think M&A's 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.

Hey, Deepak. Yeah. And the first question, the short answer is no. The bar continues to remain high for M&A. Sometimes, obviously, the timing of some of these announcements can't be perfectly forecasted. But what I would say is, it really is business as usual. And again, I guess, just as a refresher, for us, when we look at something like M&A, the first thing, obviously, we consider is whether or not this increases the available market or the addressable market in front of us or whether or not it adds to our proven track record in operating in that particular area, which includes both the management bandwidth but also the question around whether or not we believe that we know how to execute in that area. So if I take that one by one, in the case of Deliveroo, as mentioned in that last question, it really is about continuing our expansion across Europe. If the deal were to close, we would operate in about 30 countries in Europe, 45 globally, 30 in Europe. And I think it's adding scale to the same place and also giving us a foothold in strong profitable markets that will allow us to continue to introduce more and more products and hopefully have the biggest positive impact to the entire European local economy. In the case of Seven Rooms, it's really about adding to our platform business. So our commerce platform started in 2016 when we introduced DoorDash Drive. Later on, we introduced DoorDash Storefront. So we went from logistics as a service to online ordering as a service. And with something like Seven Rooms, and especially what we hear all the time from merchants, is this desire to understand everything that's actually happening about their guests and inside their dining rooms as well as their other channels. And so really, you can almost view this as marketing as a service and adding more intelligence into what restaurant owners can do in order to build their strong direct relationships with guests.

Hey, Deepak, on the second one, let me broaden it out and talk about the performance of the overall new verticals business. When I look at the performance of new verticals in Q1, it was very strong, continues to grow, we increase the number of MAUs. Q4, we talked about the fact that about a quarter 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 majority of them on the platform. We've extended that. We've continued to add more grocers, even in the regional markets. Through the quality of the product, continues to get better. I mean, if I look at 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, like we expect to be volume share leaders the course of the next year. And even when I look at the overall margin performance of the business, I mean, it's very 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. All right. Next question comes from the line of Lee Q. Desan from Burstein. The line's open.

Hi. Thank you so much for taking the question. I wanted to ask on EBITDA in light of the M&A announcements. I know it's quite early to be talking about 2026, but I guess in recent quarters, there's been pretty consistent GOV growth, pretty consistent EBITDA improvement. In your mind, when you think about the acquisitions of Deliveroo and Seven Rooms, does this change any of that in terms of the earnings algorithm? I think they could open the door to further investment in new markets or new products, which is a good thing long term. But when you think about the quantity of investment required and you anticipate spending to accelerate these businesses, I mean, does it materially change your perspective on how earnings, the earnings power for DoorDash 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, talk 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 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 to invest to drive scale.

Thanks, Ravi.

Thank you. Our next question comes from the line of Youssef Squalye from Truer Securities. The line's open.

Good morning. Thank you for taking the question. So, can you expand a little bit more on the affordability initiative and makeshift that caused net revenue margins to be down quarter on quarter? And what will drive it back higher? I think in the release, you talked about the guidance for it to flip back higher on your quarter on quarter. And then maybe, Tony, again, on Deliveroo, Deliveroo's growth and margins have been much lower than DoorDash's. Are there any structural issues in Europe, maybe Deliveroo's competitive positioning, et cetera, that makes margins structurally lower? And is there a chance for you guys, I know it's early, but is there a chance for you guys to kind of get those margins more in line with yours over time? Thanks a lot.

Hey, Youssef. Let me take the first one right on net revenue margin take it itself. 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've seen 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, 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 makeshift is visible from a take rate perspective when you look at the overall business. They 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 your question around, you know, 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 border 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 about where the overall business is and our focus continues to be to drive the strong, you know, GOV growth that you're seeing in the business as well as overall EBITDA dollar production.

And, you know, in regards to your second question, it's actually a, you know, a similar story in terms of how we think about things, which is really how do we maximize, you know, long-term profit dollars versus looking at unit margins? And, you know, again, obviously I'll be limited terms of what I'll be able to say about, you know, Deliveroo, but with respect to, you know, how to think about it or a mental model, why we might be able to actually generate more profit dollars in the long run. I mean, you're really adding more scale to the same geography in this case, you know, Europe. And we believe that if we can do that and, you know, 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 can we increase the scale of the business, but that if we do it in a disciplined way that we have, you know, done historically across all of DoorDash's initiatives, that we can 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, you know, 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 startup project or for something, you know, 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. Our next question comes from the line of Michael Morton from Ofet Nafenson. The line's open.

Hey, good morning, everybody. Thank you for the question. Can we follow up, Robbie, on the net revenue margin commentary? And I would assume a lot of the affordability is coming in groceries. And I would love to know what type of behavior you're looking to drive in that. Is that to bring new grocery orders, new users, or is it to increase frequency? And then, is there any, like under the hood, is there any changes in competitive intensity you're seeing in the grocery market that are maybe driving some of the affordability push? And then one for Tony, to the extent you can talk about European food delivery due to limitations with the delivery room. It seems like it's consolidating. Wondering, over the next several years, do you see any step changes in competitive intensity in those markets and how you maybe see the concentration playing out? Thanks, guys.

Hey, Mike. It's Robbie. I'll take the first one, right, on affordability and take rate. I mean, look, 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, and 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 efficiencies 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, 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 grocery. From a competitive dynamics perspective, nothing really has changed. When I look at the category share gain in our grocery business, we are very pleased. We gained a healthy amount of share in Q1 compared to last year. We continue to gain share quarter on quarter. As we wrote in the letter last time, our expectation is that we'll be order volume share leaders over the course of the next year.

Yeah, 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. That's something that we've been investing in since day one at the company. It's something we'll continue to invest in irrespective of external factors. We've continued to see gains across the board. 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. I think what I can say is that this, at the end of the day, is a scale business. 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 early ascending skill of connecting every local business to every local consumer.

Yeah, my thought I would add, when you think about us talking about investments, is to make the underlying product better because ultimately that's what's driving the scale leading to the profit dollar production that you're seeing in the business. Whether it's organic portion of the business or even some of the organic things that we'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,

Matt. Thank you. Our next question comes from the line of Andrew Boone from the Citigens. The line's open.

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

much. Sure. I mean, Andrew, I'll take the take rate and the sales and marketing. Let me start with sales and marketing. I would not read too much into it. 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 years, I'm very pleased with the leverage that we've driven. 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. 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. I mean, like I said, if you're 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 to on a -over-year basis, we feel pretty good about that.

With respect to the second question on DashPass, I mean, DashPass is the membership program or your membership program to the physical world, and that's kind of how we view it. Obviously, it starts with two, the highest form of consumption, but we believe that if we can maximize the number of ways in which we connect local businesses to local consumers, there would be no other program in which you would gain more utility from. So that's really the ultimate goal for DashPass. Primarily, the focus is on making sure that we can make the product more useful. And if we can connect local businesses and local consumers in more ways, if we can improve the service offering of the products we currently have as well as build new products in order to achieve that objective, then we believe that DashPass has the potential to be the membership program in which you would derive the most utility from.

Thank you.

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

Thank you. Good morning. If I could come back to the questions around Deliveroo and Europe, and I know you can only speak to these at a high level, but could you just talk a little bit more about entering into some of these markets in a number two or number three position? I understand it increases the addressable market for you in Europe, but a UK consumer is different than a Norwegian consumer, and they don't care about the restaurant supply in Norway. So help us understand the approach to these markets, not being in a leadership position currently, how you're thinking about that, and maybe even the investment profile of those markets relative to the growth today. And maybe we'll just hold it there.

Sure. I can start. Look, a few things to make sure that we see eye to eye on context. The first thing I would say is that the most important thing to profit production, or the ability to generate profit, is actually scale, less so your relative positioning. And I think you actually have to get a lower level of detail to understand this. And in terms of what we see, both in terms of our own operations, whether it's in the US, in Europe, in other places, as well as what we've seen in Deliveroo, we think there's strong ability to generate great investment returns. Otherwise, we wouldn't be doing this. But that takes a lower level of study and analysis, which we've done, and can't really comment on it at this point. That's really the key. And back to the other comment I made earlier, in addition to having the foundation in which we can add scale to our investments in Europe, we also have the possibility to introduce new products to the market. We think that the combination of both of those activities is what allows us to have the opportunity to generate great investment returns. We've done this with Volt, in which we partnered three years ago at this point, and have seen that. And we believe a similar story can play out here.

Okay,

thank you

very much.

Thank you. Our next question comes from the line of Doug Amneth from JP Morgan. The line is open.

It's her taking the question. Really good progress in grocery, and you talked about a 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. I mean, look, I mean, the team's done a remarkable job getting us to this point. And, you know, I think our numbers kind of speak for themselves in terms of the performance. But you're right in saying that there's still a long ways to go before we can actually build a product that is 10 times better than the current leading product, which is shopping inside of a grocery store yourself. There's a lot of things that have to be done. And I mean, it's not necessarily one dimension in which we get judged, but making sure that we can get you exactly what you ordered, making sure that those products are affordable, making sure that the products are delivered with high accuracy and quality of service. And then obviously making sure that the customer support experience is excellent, especially if something goes wrong. I mean, there are investments in all of those areas required in order to have a chance at being able to to match the physical shopping experience. You know, that said, I actually believe, and these were hypotheses four or five years ago, but we're starting to see evidence that there are opportunities in which the online experience can actually beat the offline shopping experience. To give you one example, I mean, you see this, for instance, with our Double Dash product, where it's hard, right? Even when you're shopping offline, even when you're in the store, even when you're in the intent of, you know, thinking about all of your shopping needs, that you may forget things. And as a result, when you have products like Double Dash, where you can shop from multiple stores on the same go, that's a pretty cool experience where it makes it even easier to be able to shop the entire catalog from the city. Now, we got a lot of work to do to be able to actually allow you to from every single catalog in the city. We're working on that. But I do think that at some point, there is the potential in which the online shopping experience can even exceed the offline shopping experience. But, you know, we're still in the work of just getting the basics right. We feel like, you know, the biggest form of competition is always the customer expectation. We certainly have done a lot better than when we got started four or five years ago, but we got a long ways to

go. 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, we have a strategic advantage because we have tens of millions of consumers that are active on the platform. But when we expose consumers to grocery, whether it's via Double Dash 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. The line is open.

Okay, thanks. Let me ask you a question on cash levels and then on the seven rooms acquisition. So just talk about what you think is kind of a minimum level of cash you want to run the business with going forwards. You're obviously putting out, I don't know, four billion and cash for these two acquisitions, given where you are now. So just talk about what are the right comfort levels in terms of the cash balance that you need or want to carry. And then on the seven rooms acquisition, it's not a huge pivot, but it is a pivot or it's an expansion of your offerings. So just talk about how much more, I think it's marketing as a service, I think you mentioned in there. You could do that with a lot of customers beyond just restaurants. So how far do you think you can extend seven rooms or that idea to the rest of your customer base? I guess how much of a push do you want to make behind offering 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 a billion dollars. So anything on top of that goal has been to invest back in the business to ultimately try to generate long-term free cash flow per share. And what you're seeing in the business is the business is free cash flow generative. So I view capital allocation in general is not changed. 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'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, you know, I think even something as old for us as restaurant delivery still has a long run way 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 seven rooms 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 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 Novak from Odin Stanley. The line's open.

Thanks for taking my questions. I have two, one big picture and one Excel question. So the big picture one, Tony, 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 VOLT or other European countries that sort of give you excitement or where you see opportunities for Deliveroo to execute better than it is right now or 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.

Yeah, I mean, I guess I'd say a couple 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 in the strongest profit pool 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 fire power, then they can actually take a leading position. The other thing we've learned, and this comes more to our relationship with VOLT, 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 VOLT 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 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. 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, because 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 DNA 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 Josie from Citi. The line is open.

Great. Thanks for taking the question. Maybe just another question on DashPass here, Tony. I know you've gotten a few, but in the letter you talked about extending the value prop of DashPass in one queue 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 love your thoughts on that, particularly with the seven rooms acquisition. Thank you.

With respect to DashPass, the main focus continues to be the same, which is to keep improving the products such that people want to use DoorDash more. And it sounds really basic, but it's actually, I think it's been the North Star from day one and it continues to be. We want people to keep using it and increase the consumer surplus, if you will, that consumers or that subscribers see from using the service more often. With respect to the second issue in New York, I think that's something that we're always in discussions with cities about. Our take has always been that a lot of the policies, especially in cities like New York, not only sometimes are questionable from a legal perspective, but they almost always do the opposite of what they're intended to do, which is they actually farm the number of opportunities for dashers, they lower the sales for small, medium and large businesses within that city, and they exclude consumers because of the higher prices that usually get passed on as a result of these fees. So we're working with the city to see if we can enact some common sense policies. Sometimes we get very productive outcomes, other times we face headwinds, but over the long run, we're really optimistic in finding common sense ways to work with common sense elected officials.

Okay, thank you.

Thank you. Our next question comes from the line of Mark Zdudovic from the Benchmark Company. The 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 one queue compared to last quarter and year over year. Thanks.

I mean, our affordability work is true everywhere in every category. I mean, and that's because customers are always seeking more and more affordable options. It doesn't mean that's the only thing we get judged on or work on. We always work on the same four things. How do we improve selection? How do we increase affordability? 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.

Thank you. Our next question comes from the line of John Carlton Tony from Jeffries. The line's open.

Thanks for taking my questions. Just wanted to ask about average order value. You picked up nicely in the quarter. Maybe talk about the drivers of that improvement from sort of US restaurants, international restaurants, and grocery and convenience. And specifically, curious how basket sizes have shifted across those three businesses in the quarter. And second, just a contributing to your outlook there.

Thanks. Sure, John. I'll take the AOV one first and then talk about the FX one. Look, when I look at the overall average order value at the total company level, there's definitely some impact from a makeshift perspective, right? Groceries becoming a larger component of the overall business and you're starting to see that impact the overall company from an AOV perspective. Restaurants, AOV in general, been relatively stable over the course of the last several quarters. When I think about groceries specifically, the basket size continues to increase. That's largely being driven by consumers getting more habituated on the platform. And as they get more habituated to the earlier answer that I gave, they are starting to use us for all use cases, not just the top up, but also the top up use case. You are starting to see increasing number of cohorts increase their spend with us over time. They're increasing both perishable as well as non-perishable. You're also seeing the impact from an overall commerce platform, which is driving volume and revenue, but it does not contribute to GOV. So that also impacts AOV if you're thinking about it from a modeling perspective. FX, when I think about the impact on GOV in Q1, there was roughly about a 1% impact on a year over year growth basis. For the second quarter, we do think there's going to be some impact, but that's embedded in the guidance for both GOV as well as EBITDA that we have given.

Okay, great. Thank you. Thank you. Our next question comes from the line of Michael McGovern from Bank of America. The line's open.

Hey 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 your quarter about your first delivery robots in LA 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 was 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 how do you view the possibility of that expanding more broadly?

Yeah, I'll start. I can take both. I'll start with the autonomy question. We're very excited about the autonomy initiatives and also just I think the promise of what it could bring up. Something that we've been thinking about and working on for about eight years now. The key challenge with autonomous delivery that might be a little bit different from other autonomous efforts out there like autonomous taxis and things like this is that you really have to solve that first and last 10 feet problem of putting in items and taking out items from a vehicle. Obviously, that marriage of the operations and the technology to me is really what's going to be key in unlocking the possibility of autonomous delivery in a way that is highly scalable, that increases or improves the value proposition of the product experience today and builds us towards the future. The second thing that I would say about autonomous delivery is that it probably sounds obvious, but you don't need a 4,000 pound vehicle to deliver a one or two pound item or package. The form factors are also very different and they really have to match the use cases in which you're considering it. There's lots of things that we're doing. We'll have more to share later, but we're super excited about both the progress as well as I think the partnership ecosystem that is developing as well as we bring more of this into reality. Your second question on regulatory, which is around portable benefits, is definitely something that we're really, really looking at. We started this effort and we started the effort in Pennsylvania with support from Governor Shapiro and we're talking with other states right now of taking the initiative that we brought forth in Pennsylvania into those states. We've always believed that, and this is really coming directly from the dashers themselves, that they want the flexibility of the work that we provide, but they also want to have access to benefits which we believe in. That's really what you see with respect to the portable benefits initiatives. We're excited that we have leading states who are kind of the tip of the spear people, really innovating in this area. We see momentum and excitement now, possibly at the federal level. These are all things I think moving in the right direction and we really hope that we don't just innovate on products and build more value for customers, but we also can innovate, although it may take a little bit longer, as we work collectively with all the stakeholders involved to make productive changes to the legal system too, such that we can set up a world where people can choose to work freely anytime they want, anywhere they want, and also have access to benefits.

Thank you.

Thank you. Next question comes from the line of Jim Sanderson from the Coast Research. The line's open.

Thanks for the question. You mentioned earlier in the call that the first quarter for DoorDash is a very strong growth quarter. 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?

Jim, I'll take this one. Look, the first quarter was a good quarter from an overall restaurant's 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 five or six quarters, the growth has been pretty stable. I think what you're seeing in the business is users continue to grow, order frequency continues to grow, 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. I mean, look, 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 underlying 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 think about it, even if you 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 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. Give me now.