DoorDash, Inc.

would like to ask a question this time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press star one again. I would like to turn the call over to Wes Dweig. Please go ahead, Wes.

Good afternoon, everyone, and thanks for joining us for our Q2 25 earnings call. I'm pleased to be joined today by co-founder, chair, and CEO, Tony Hsu, and CFO, Robbie Inaconda. We'll be making forward-looking statements during today's call, including, without limitation, our expectations for our business, financial position, operating performance, profitability, our guidance, strategies, capital allocation approach, and the broader economic environment. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those described. Many of these uncertainties are described in our SEC filings, including our most recent form 10-K and 10-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. Finally, this call is being audio webcasted on our investor relations website. An audio replay of this 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.

Absolutely. We will now begin the question and answer session. If you would like to ask a question, simply press star followed by the number one on your telephone keypad. And your first question comes from the line of Shweta Kajoria with Wolf Research. Shweta, please go ahead.

Okay, thanks a lot for taking my questions. Let me try two, please. On the U.S. marketplace orders accelerating year over year, you continue to see strength in restaurants. So it sounds like the strength was driven by Dash fast membership growth frequency uptick and potentially some product improvements around personalization and maybe faster delivery. So I guess my question is, could you perhaps point to some specific examples around what you did on personalization and what specifically drove strength in membership growth and frequency? And then the second question is on advertising revenue. You've now exceeded a billion dollars in annualized revenue run rate and you got there fairly quickly. So post symbiosis acquisition, could you please share your thoughts on how you're thinking about scaling the on platform and offsite ads opportunity as you see it in the near to midterm? Thanks a lot.

Hey, Shweta, it's Tony. I'll start and Ravi, feel free to chime in. You know, on the first question about the accelerated growth at, you know, bigger scale, look, a lot of these improvements and developments were the results of our team's work, probably dating back, you know, a couple of years ago. You know, I've always believed that it's very, very difficult to make changes, especially at our scale that can have material impact, you know, within a short time period, whether it's the quarter, or even the year. And in many ways, you know, that goes to the work that we do today, which is, you know, the work that our teams are working on right now, likely will have an impact on, you know, a quarter, you know, a few years into the future. And I think if we're doing our work right, that is always going to be the cadence here at DoorDash, where the North Star focus is always to make improvements, first and foremost, to our products, to the selection that we offer of both stores and items to the affordability of those items and stores, the quality of delivery, the timeliness, the accuracy, and certainly the customer service, especially when we get things wrong. And I think that's been a consistent narrative that reflects a consistent, you know, execution at the company for, you know, the 12 years that we've been doing this. And it remains to be the case today. So, you know, we've seen improvements across the board in our various products that have achieved the results that you're seeing today. You know, with respect to the second question on ads, you're right, you know, at some point last year, we did across, you know, a billion dollars of revenue run rate in the ads business, making it the fastest in history to get there. And I mentioned all along that, you know, the ads business has been progressing really healthily. But the focus for the ads business, you know, today and, you know, three years ago, when we started the business and in the future, will always remain the same, which is we have to achieve the best consumer experience and build the most successful marketplace, which is we'll enable us to build the most successful return on ad spend products for the most successful advertising business for retailers, CPGs and restaurants. And that's, that remains the focus. With respect to, you know, symbiosis and acquisition that we close, you know, one of the, you know, developments we've always had is that we've always been privileged where there is more dollars that advertisers want to spend with us than we are willing to give in terms of the services in which we allow them to advertise. Again, we're trying to make sure that we have a best in class consumer experience and therefore, you know, whether it's compared to peers or just compared to what we think the right thing to do is, we don't allow, you know, advertising to just show up in the product. And so that doesn't mean though that there isn't a good use of dollars or proceeds from these advertisers. This is why we purchased symbiosis where, you know, together with our know-how, as well as our information that we collect, we believe that we can be the best marketer. You can almost think of it as we're the agent of choice where we can do the best marketing spend for each one of these merchants and advertisers. And, you know, a lot of times, I think when you think about our relationship with everyone we work with, we are not just a delivery provider. Many times, you know, we are the growth engine or the growth button, both in terms of what we can bring incrementally from our marketplace, as well as the know-how that we bring from our first party business in teaching these retailers and advertisers on how to build most successful digital powerhouses in their own rights. And so we see that, again, here in the symbiosis example as part of our advertising business.

I think one of the things that you mentioned was the exploration of the ad business. I mean, I would clarify, right, I would not read into the disclosure as us changing the way in which we are operating the ad business. We're operating the business at the same level of discipline. The two metrics are merchant ROAS, as well as consumer conversion. We think we're best in class for both of those. The goal for us has always been to build a great marketplace business. And if we do that, the ad business will scale and will continue to grow. But we are going with the same level of discipline as we've done before.

Thanks, Tony. Thanks, Ravi.

And your next question comes from the line of TPAC Mati Vana with Canter Fist for All. TPAC, please go ahead.

Great. Thanks for taking the questions. Tony, I wanted to ask an AI question. We're seeing big improvements in search and recommendation systems across a lot of consumer Internet platforms, basically using AI models with reasoning capabilities. You obviously have a very strong engineering team that's on top of these tech breakthroughs. Can you talk about some of the ways Dash is planning to use these larger AI models to both improve user experience and also find additional pockets of operational efficiencies, maybe say in the next six to 12 months? And then the second question, maybe for Ravi, with all the supply growth and value prop improvements that you've done with new verticals, how meaningfully is new verticals now contributing to new customer growth to the platform? And also maybe talk a little bit about the cross-platform benefits for the U.S. restaurant business from new customers acquired through grocery and perhaps convenience. Thank you.

Sure. Hey, Deepak. On the first question, AI, I'll start. Whenever you see a revolutionary technology that seems to be improving by the hour, you kind of have to rethink your entire business. And I think this is a thought that dawned on me probably four years ago when we started seeing kind of the beginnings of what these things can do. Because I think that in many ways, it's not just a new technology, it's also a new way of how you attack different problems. So there are a few areas in which we found a lot of fruit in terms of how we thought about applying it. So the first is thinking about what should the consumer product actually look like in a world to your point, there's a different way of doing everything from search to personalization to ranking. And I would say that there's a lot of different iterations that I think you'll see us take in terms of shipping a version of the product that will really, I think, marry the best of what technology brings in a way that actually brings pragmatic benefits to different use cases to the consumer. The second area is a lot of our business happens in the physical world. It's not just the deliveries, whether it's the creation of inventory lists or menus from restaurants or all the work we do to onboard different merchants and retailers and advertisers, there's a lot of physical activity or repetitive activity that happens. All of those processes can be and are being rethought right now at DoorDash in terms of how we can do that in much more efficient ways with higher quality and fidelity. And the final way is, and we see this most notably in our engineering teams, is really how do we become a more productive organization if we were to start this company from scratch in 2025 versus getting our start back in 2013? We see this a lot in coding, certainly, where obviously, probably not a surprise when you're talking about large language models, when you're talking about domains where there are correct answers and easy ways to produce evaluations that can tell you whether you're on the right track or wrong track. Coding has been a natural use of productivity for DoorDash now for a few years in a row, and I think that's only going to increase. And so that should also be true, though, in other functions. If you're starting, I were building DoorDash from scratch today, we would have a very different approach given all of the tools available. But this is kind of like when DoorDash started 12 years ago where you had the the real acceleration of cloud computing services where DoorDash no longer needed to manage data centers. We can kind of get easy access to AWS instances and kind of get up and running. This is kind of true today, but just at the functional level, instead of just the compute level, where across every discipline inside the company, I think you can from first principles, re-derive how you would build a company from scratch. And that's what we're thinking about.

Hey, Deepak, it's Ravi. I'll talk about new verticals, right? I know your question was around new CAC, but let me take a step back and give you how we're thinking about overall new verticals and the performance of the business. I mean, look, new verticals had a really strong quarter. They're growing really fast, growing much faster than our core restaurants business. In fact, we grew share, and I think, like we said last time, our expectation is that we'll be volume leaders within the next year. If you actually break that apart, we are seeing strength both from new as well as existing cohorts. On the new cohorts, today the size of new cohorts ordering from new verticals is higher than same time last year. The engagement levels of mature cohorts, think of them as existing cohorts. The size of those cohorts is also larger than what we saw last year. At the same time, these cohorts are engaging with us more, which means order frequencies continue to increase. So when you look at the underlying cohort performance, it's very strong. Both users are growing, order frequency is growing. We've hit all-time highs across both of those metrics. The real question is what's actually driving that growth, right? If you look at the performance of the business, we've increased the selection on the platform quite considerably. The quality of the product is continuing to get better. We've made the product more affordable, more dash-pass users are ordering from more categories. Look, in Q4, we talked about the fact roughly about a quarter of our users order from new verticals. That number is continuing to increase. All of these are signs pointing to cohorts getting value, consumers getting value from the product. For us, the focus continues to be to improve the underlying value proposition. As long as we continue to do that, we're confident that it's going to be a large business for us over time.

Awesome. Thank you so much.

Your next question comes from the line Ron Chilcy with CD. Ron, please go ahead.

Great. Thanks for taking the question. I wanted to ask a little bit more of the letter, or the press release talks quite a bit about cohort trends, particularly within dash-pass members as you still continue to have records. So talk just a little bit more about how dash-pass cohorts have been trending here, maybe on the newer cohorts in the last year or two. What's the difference between dash-pass and cohort? I think we're seeing similar results. Then as we think about sort of just the maybe bigger picture, and I know we're still yet to close Deliveroo, any updated thoughts on the integration there? Thank you.

Yeah, Ron. I think the first one on dash-pass and Tony, feel free to chime in. Look, dash-pass, Ron, had a very, very solid quarter. Look, we've been investing in dash-pass for years. Ultimately, the thing that is driving growth for dash-pass for us is the underlying product continuing to get better. We're focused on adding more selection. We're focused on driving higher quality. We're making the product continue to be more affordable. There's more features and services available as a part of dash-pass. Ultimately, all of this is driving the user journey. What we see is we're acquiring more new consumers than ever before. Those consumers are joining the platform that are trading more. They continue to graduate to dash-pass. And dash-pass, they continue to graduate. The order of frequency is higher. One of the things that we're seeing from a cohort perspective, Ron, in dash-pass, even the older cohort, even as old as five, six years ago, those cohorts continue to engage with us at higher levels. All of this is pointing to the underlying strengths that we're seeing in this business. I mean, look, it's not anything that we've done over the last couple of quarters, right? We've been investing in the product for several years now. The underlying product is getting better. That's what's driving the strength both in dash-pass as well as the underlying cohorts.

And Ron, it's Tony. I think your second question is about Deliveroo. Probably, obviously, there's not much I can say about it, besides the fact that

we

anticipate closing on the timeline we have communicated, which is at some point in Q4. It's obviously still subject to regulatory review. But look, with any acquisition, we're going to run the company, should it close, in the way that we run anything at DoorDash, which is first and foremost, we have to build and invest in the best product experience. If we can do that and improve the order rates as well as improve the Unity comics, where we see efficiency gaps, those are the tools in which we can use to reinvest back into each one of the audiences. Again, our investment philosophy has always been one of maximizing long-term margin dollars, not short-term unit margins. And that will continue to be the focus that we take to Deliveroo project, should it close, and any other project at DoorDash.

And your next question comes from the lineup, Nikhil Devnani with Bernstein. Nikhil, please go ahead.

Hey, thank you for taking the question. Tony, are you surprised by the ongoing strength and the size of new customer cohorts in the US? I mean, it would seem like your audience in the US is pretty large already in the high tens of millions of people, which is a big number relative to US households, but that doesn't seem to be affecting the funnel for new customer acquisition at all. So when you step back and take a multi-year view, I mean, how durable do you think this trend is? And are you able to also break down how much growth this business gets from new customers versus pre-existing cohorts in a given year? Thank you.

Yeah. Hey, Nikhil. No, I'm not surprised is the short answer. And I think I may have said this in a few different calls before, whether when we were discussing this during COVID, peak inflation in 21, the normalization of COVID or COVID reopenings in 22, where food is the most resilient category and most sought after category for convenient consumption. If you just think about the fact that it is the activity in which we engage with three times a day, 20 to 25 times a week, and more than 100 times a month, and then now you include all of the shopping categories and use cases outside of food that DoorDash has been markets and the market expansion that you've seen. But look, I mean, a lot of the credit also goes to the fact that we're always trying to make our products better. So our product today in 25 is better than our product yesterday in 24. And our product next year will be better than our product this year. So you have this big market out there where we're a single-digit percentage of that when you look at the number of occasions that we actually capture today, we still lose the vast majority of those occasions to the pantry or a different form of consumption. And so it tells me that we actually have a very large runway ahead so long as we can keep improving the product. And I think one of the things that tends to get underestimated is how much you can actually keep improving the product. And my take on this is that there's a lot of room. I said this before about our products into other categories, but even our product in the restaurant category, I believe while it's best in class, I think in the eyes of the consumer, it still has a lot of gaps in terms of where we can improve. And that's what we're working on every single day. And that's why perhaps they don't necessarily yield material benefits in the current quarter or even the next quarter. But I do know that if we keep working on this, the compounding does have that effect in the years to come. And so sure, perhaps we've been fortunate to serve lots of customers today. But when I look at the actual occasions that we capture today, whether it's food consumption, retail consumption, and then when I look at this on a global basis, and then when I also include shopping inside stores, not just ordering to the home or to the office, I think we still are very, very, very small and early. And we can't underestimate just how much work we still have left to do to satisfy increasing customer expectations.

Thank you, Ravi. Look, I think the second part of your question was around like, hey, what's driving the growth? Look, everything is important, right? Size of new cohorts is important. Size of existing cohorts is important. Obviously, mathematically, the size of the existing cohorts is larger than new cohorts. What we're seeing is the size of new cohorts is larger today than last year. Size of existing cohorts today is larger than last year, which points to two things. One is people are coming back more often, which means retention is increasing. All of that is being driven by the underlying improvements that we're making in the product. The second dimension you should think about is order of frequency. Again, order of frequency hit an all-time high. But again, we're a small fraction of the total number of usable moments just across restaurants. If you add other categories, there's still a lot of opportunity for us to grow. So, if you're thinking about it from a model perspective, Nikhil, I would say growth is being driven by both users as well as order of frequency. On the user side, both new as well as existing are higher than before.

Thanks for that. And Ravi, if I could just follow up with a separate question. The net revenue margin expanded as promised. How are you thinking about that for the back half of the year?

Thanks for saying that, as promised, Nikhil. I mean, look, I mean, you know, talked about the fact that, you know, take rate was going to be higher in Q2. It was in line with our expectation. I mean, look, our business, there's, you know, factors that drive, you know, the take rate specifically in Q2. Dasher cost is seasonal for us, right? Again, we've talked about this before. Dasher costs are higher for us in Q1. Dasher costs are higher in Q4. So, you're thinking about the model, Nikhil, in Q4. Dasher costs are going to be higher. They're more reasonable in Q2 and Q3. So, as we came into Q2, we saw benefit from Dasher costs. Two, we are driving improvements in the underlying product, especially quality, which gave us benefit in terms of credits and refunds. The third factor was ads is becoming a larger portion. So, if you put all that together, that's what drove the increase in take rate in Q2. Now, if you're thinking about the rest of the year, right, Nikhil, I would think that H2, the second half take rate, is going to be higher than the first half take rate. But just taking a step back, I mean, look, we're not optimizing the business towards a specific take rate, let alone a specific take rate within a specific quarter. Our goal has been to focus on overall profit dollars. Our goal is to invest flexibly up and down the P&L. That's actually what's driving the strength that you're seeing in the business, right? We have the ability. We have the opportunity when we see opportunities to invest, we double down. That's what's driving strength, both in the top line as well as the bottom line.

Thank you both.

And your next question comes from the line of Michael Martin with Moffitt-Nathanson. Michael, please go ahead.

Hi, thank you for the question. I think this is probably for Ravi. I wanted to ask some of the operating expenses, you typically refer to them as fixed operating expenses. They're running maybe a little bit hotter than some of us might have expected, not that you should manage the business to our expectations. But we're living in a very interesting time where you hear a lot of the tech leaders talk about no headcount growth utilizing AI within their corporate structure. So I was curious to how you think we should think about your needs for headcount growth going forward. And then maybe it just could be helpful with kind of the fixed cost line item in the model. Thanks, Ravi.

Yeah. Hey, Mike. You know, I'll give you the model part first and then talk about the philosophy. Look, you're just trying to model, I would say, OPEX, roughly you should think about it as 2% of GOV in that range, which we've talked about for the past couple of quarters. Over long term, like look, I mean, we think of that as any other part of the P&L, goal is to drive efficiency. Philosophically, I mean, here's how I think about it, right? Like, Mike, look, we are investing in the business. We're still finding great pockets to continue to drive investment in the business. We're being very disciplined. We've added people both on the product and the engineering side in specific areas where the return on investment continues to be great. When you look at the output, I mean, the output is showing up in terms of retention, output is showing up in terms of order of frequency. The output is showing up in terms of improvement in unit economics, right? For us, all of that is being driven by the underlying improvements we're making in the product. We still think there is a lot of opportunity for us to continue to invest. But look, I mean, longer term, goal is to drive leverage on this. We're driving a lot of automation inside the business, across the board. In general, the way I think about this is the real cost of operating the business and goal is to generate leverage, you know, just like any other part of the P&L.

Really appreciate it.

The only thing I'd add to what Robby said is you got to think of DoorDash as a, you know, growing set of businesses, right? So DoorDash five years ago was largely one product and, you know, operating in one country, restaurant delivery inside the United States in terms of what contributed to our financial results. Today, you know, we have five businesses. We have a business outside of the U.S. We have a business outside of U.S. restaurant delivery in all of our category expansion. We have a business with our commerce platform. We have an ad business and we're working on new businesses. And so, you know, I think one of the ways in which we've thought about this is, you know, where do we actually deploy our best people and are they actually working on the right problems and do we have the right number of people doing that? And, you know, a lot of our, you know, edge-can growth is really geared towards working on new problems that we see that we can solve for local commerce versus some of the existing ones. That's maybe a bit hard to see in the averages, but that's a bit more what's happening under the hood.

And your next question comes from the line of Andrew Boone with Citizens. Andrew, please go ahead.

Thanks so much for taking the questions. It sounded like WALT had a projected quarter in terms of frequency as well as unit economics. Can you guys just help unpack what are the improvements you guys are making in that business? And then I wanted to go back to frequency. Frequency continues to improve in terms of the U.S. and was at all-time highs. Can you guys unpack that? Is that new verticals? Is that wider cohorts that you guys talked about maybe a year ago of people that order once a quarter and out order once a month? Is there anything else you guys can shed in terms of light on why frequency continues to just hit new highs? Thanks so much.

Yeah, hey Andrew. It's Ravi. I'll take the first one on international look. I mean, international business is really strong quarter. When I think about it from a growth perspective, growth continues to be quite strong coming from both growth and users as well as order frequency. When I look at the MAUs just for the international business, they have hit an all-time high. A lot of that is being driven by look, I mean, the underlying improvements we're making in the product, right? We've added more selection. We've added more categories. We have a new vertical business and international that's also growing quite nicely. Volt Plus has been a good addition to our overall portfolio. That's a subscription program internationally. We've launched that about two years ago. That continues to do quite well. And when I look at the slope of the Volt Plus curve, actually it's growing faster than Dash Pass at the same time. At the same time, the improvements in both quality as well as affordability that's driving people to come back to us and order more. So order frequency has also hit an all-time high. So when I put all of that together, international business, not only is it growing, but we're gaining share across most of the countries that we operate in. We're really proud of the progress that the team has made. And on the second point I would make is when I look at the unit economics, I mean, I mentioned that gross profit positive for overall international. That continues to be the case. And even on a unit economic basis, year over year, we've seen a good amount of improvement. So NetNet, I mean, business is strong both on the top as well as the bottom line for our overall international portfolio.

Yeah, Andrew, I'll take the...Tony, I'll take the second question on frequency. The way I've always thought about this is how do we solve more and more customer problems and so that there's more than one way to win, so to speak, where we can actually engage customers that makes the most sense for them in terms of actually increasing their frequency. No customer, and to put it a different way, thinks about DoorDash's order frequency as a metric that they care about. And the short answer is it is different for different customer groups. There is obviously the introduction of new categories and new use cases. There is the introduction of DashPass and the growing benefits from DashPass. There is also improvements within each one of the use cases, whether it's restaurants. Within restaurants, there's different occasions within meal times, for example. There's different categories, obviously, outside of restaurants. Within each one of those categories, there's various different things beneath that too, so that you can actually improve each one of these things. There's no one thing or two or three things that drives the growth frequency. This is in general how we set up a lot of our product teams so that A, it's actually solving for that specific unique customer what it is that actually solves a problem for them so that we can grow a metric we care about. And then finding more than one way, ideally several dozen ways to win so that the growth is not only enduring but also geometric.

Thank you.

And your next question comes from the line of Yosef Squali. We true is Yosef, please go ahead.

Great, thank you so much. So two quick questions. One on seven rooms, I think that acquisition closed in early or maybe mid-June. I'm assuming, Ravi, that that contribution was de minimis. But maybe just talk about, Tony, how does it unlock new opportunity for you if you had to dream the dream with kind of building a SAS model around seven rooms? Can you maybe just share it? How you kind of see that evolve for you? And then in terms of profitability for new verticals, can you maybe, IE, non-restaurant, can you just provide an update on how has it progressed as your growth is accelerated? Does it continue to improve on the margin or are you holding the profitability relatively flat to maximize top line growth? Thank you.

Yeah. Hey, Yosef. On the first question on seven rooms, I'll take that one. I mean, look, we started our commerce platform business in the fall of 2016 and in earnest in the first quarter of 2017 where we shipped DoorDash Drive. And the dual mission of the company has always been on the one side, we want to help you grow and bring you incremental sales. That's the job of our marketplace. And on the other side, we want to empower you to do it on your own. So every physical business, small, medium, and large inside cities can win in the digital economy. And we now have built or shipped two of the most successful B2B products in our category with DoorDash Drive and Storefront, each serving hundreds of thousands of businesses. But it still is a very small or solves a very small fraction of all the problems that a business needs to solve. Or even compared to the DoorDash marketplace, it's still a very small fraction of the product portfolio of what we've built for ourselves. And, you know, what products like seven room that, you know, bring is really it brings a marketing component and a data analytics component to understand, you know, all of the different customers that engage with each one of these merchants in a omnichannel 360 way. And obviously, if you can marry, you know, the best in class product, which we believe seven rooms has built with the know how as well as the data sets that DoorDash has access to, I think we can build something very remarkable as, you know, a third B2B product that will be very, very successful to, you know, many, many merchants, both in restaurants and beyond. And so I, you know, this is less thinking about, you know, the business model. Although you're right, this is a very different type of business or B2B commerce platform, which, you know, contributes to, you know, metrics like revenue, but not not GOV. But, but really, the way I think about it is what are the what are all the different problems we can solve? Because if you can solve all the different problems for these physical businesses, I think you're going to grow the GDP of the cities in which these businesses reside. And if you can grow the GDP of the cities, then I think that's a win for everybody. And so that that continues to be, you know, how we've always thought about this. And it's, it's why we're really, really excited about, you know, closing the acquisition of Seven Rooms.

Hey, you're the one, Seven Rooms, you're right. I mean, we are investing in the product, but from a bottom line perspective, you're not going to notice the impact in the second half compared to the rest of the portfolio. To your second point around new verticals, I mean, look, you know, tactically speaking, right, when you purely think about it from a unit economics perspective, yes, unit economics improved in our unit, new vertical business year over year. The thing that you have to remember is like, look, we have a structural advantage. We have consumers existing on the platform, we have dashers existing on the platform. So when you're thinking about it from, you know, modeling perspective, right, like the flow through from gross profit to contribution is going to be very high. Whenever we stand up, you know, newer categories. I feel very good about where we are on unit economics. What we're focused on is driving scale in the business. Look, ultimately, what we're trying to do is the same playbook, right? We're trying to improve the unit economics, take that back in the business to drive retention as well as order frequency because that ultimately drives scale, scale drives efficiency in the business. And you're seeing that come through in the business, right? When I talked about Q2 to Debug's question earlier, look, I mean, cohort sizes are increasing, both new as well as existing for new verticals, order frequency is growing at the same time the unit economics are improving. We feel really good about the performance. We feel business is scaling and we're going to continue to scale that business.

Awesome. Thank you both.

And your next question comes from the line of Jason Astin with Oppenheimer. Jason, please go ahead.

Thanks. I wanted to ask a bit more about DashBash. I appreciate the split in the quarter. So, you know, what has been basically the kind of most effective method for growing DashBash users? Does it differ by country? And then talk about how some of the co-marketing partners have played into the DashBash expansion.

Thanks. Yeah. Hey, Jason, it's Tony. I'll take this one. I don't know which earnings call I may have said this before, but look, when it comes to DashBash, you know, the 80 in the 80-20 of DashBash has always been first and foremost, make the product more useful. Make DoorDash, make Volts more useful. And the more useful we can make it, the more likely that a product like VoltPlus or DashPass will actually get used. We don't want any leakage in the system. We want a product that, you know, people see, you know, a large multiple in terms of the benefits they receive versus the amount they have to pay for the subscriptions. That's the 80. That continues to be the 80. There's no one thing that contributes to the 80. And so it's mostly an obsession over focusing on every product detail and increasing the number of benefits. The 20, though, to your point, in my opinion, gets earned after you achieve the 80, which is if you can achieve the 80 and build the -in-class or the most useful ones, and I can't think of any other program, you know, that can connect or get used as often, if you can maximize the number of connections between consumers and businesses, then you can achieve the 20, which is to build a successful partner ecosystem. We've been very lucky in that where, you know, starting in 2018, 2019, we partnered with Chase, we haven't done that many of these, but we tend to go deep and partner with a few like-minded partners. More recently, we partnered with T-Mobile, where we get to go super deep in ways that benefit both audiences from both companies. But, you know, that really is the 20. And it can only happen if we've actually built the most useful products to start with. And so that continues to be what the focus for both DashPass and Volt Plus are.

And your next question comes from the line of Michael McGovern with Bank of America. Michael, please go ahead.

Hey, guys. Thanks for taking my question. I have two, maybe one for Tony and one for Ravi. I'm curious on the Coco Robotics Partnership for Sidewalk Robots that I think occurred in April. Any insight into how that launch has gone in LA and Chicago, or any other new thoughts on robotic delivery methods? And then second, it looks like the AOV or basket size has continued to see this uptick in growth for a couple quarters in a row now. Anything to call out there in terms of just normal kind of growth in food costs? Thank you.

Yeah. Hey, Michael, I'll take the first question on robotics. You know, our work in robotics started in 2017 when we were really trying to understand how autonomous delivery, you know, can actually be shaped and built and ultimately commercialized. And I think the biggest thing that we've learned there is that doing autonomous delivery is actually very different from doing autonomous passenger driving or robotaxes. And that's because obviously in a passenger context, the passenger can walk in and walk out of the car, even if the drop off or pickup locations aren't perfect. But in the case of delivery, that's obviously not true. And in order to, you know, make sure that you can make autonomous delivery happen and achieve its full potential, you kind of have to solve for the engine system. And that's kind of, you know, probably the single biggest learning we've had. And so, you know, we made a few partnerships as noted in your question. Those have gone great. You know, we definitely see great potential in building that out. But we've also, you know, done our own work as well. And so, you know, we don't have any announcements to make at the time. But it's something that, you know, we've been studying and working on for several years now. And it's something we're very excited about.

Okay, Mike, on the second point, I think you're probably looking at the OV for the overall business. I mean, look, largely a result of mix shift. We're seeing new verticals become a larger portion of the business. Even within new verticals, what you're seeing is an increase in basket sizes as users, you know, try to use us for more use cases. A lot of that is being driven by the underlying improvements we've made in the product. There'll be more selection than ever before the underlying product continues to get better and more easier to use. That's what's driving the baskets in new verticals. But the overall, you know, AOV at the total company level is largely mixed shift to new verticals.

Got it. Thanks so much.

No

problem.

And your next question comes from the line up, the Harwitz with the Wisha Bank. Lee, please go ahead.

Great. Thanks so much for the time. You know, well, we appreciate grocery seems to be a big priority today. Can you maybe update us on the state of your retail business and the applications on the pace of growth here? How the union economics are trending and how you may be thinking about investing a bit more aggressively in this vertical? And then maybe, you know, an update on drone delivery, if you could. You know, some regulatory news in the U.S. making it easier. You guys have been running some tests in Europe as it relates to drone delivery. I guess, how do you see that product perhaps changing the union economics of your business over time? And how do you think about maybe leveraging partners versus building yourself?

Yeah. Hey, Lee, it's Tony. Maybe I'll take both and feel free to add, Robby. You know, the first question on retail, retail is a really exciting business for us. I mean, it's kind of it reminds me a bit of where it is today, kind of where grocery was for us, maybe in 2021, something like that. We put a different way. We're just at the beginning and we're just scratching the surface. You know, I think the biggest learning that we've had on retail is that it is just very, very different

buying

something that is non-perishable and also very different based on each category in terms of, you know, the skewed depth or the item coverage that you need to build a product that actually addresses real customer problems, as well as, you know, everything from redoing the entire shopping experience to, you know, the post checkout experience and all of that. And so all of this to say that it's, you know, it's a sizable business growing for us today, growing super fast. But it is so early in terms of where it is as a product. And so, you know, back to one of the comments I made earlier on this call, you know, I think it tends to get underestimated the number of things you can do to improve a product or the amount of time it takes to actually do it. And then once you do it, you know, the customer says thank you. And then they say, what's next? And so those expectations always go up. And so we got a long, long, long ways to go in retail. We may be a leader or perhaps even D leader in third party today in that category. But I would say, you know, as a product, it is a baby in terms of where we are. You know, the second question I think was about drones. You're right. We're first excited, very excited about some of the recent work that we and others have done with the administration in, you know, hopefully green lighting drone delivery in the U.S. As you kind of noted in your question, you know, other parts of the world actually have kind of come to this development even before the U.S. And, you know, we've done a lot of that with partners like Google Wing, for example. We've announced, you know, other partnerships as well in other parts of the world. And we're very excited about those partnerships. The way I think about how this plays out, and, you know, we'll have more to share later, but it's that you kind of have to think about all the this case, whether you're talking about a drone or in the case earlier of the previous question about, you know, a land vehicle, those products in themselves, as complicated as they are, actually only addresses maybe 20% of the complexity to actually deliver something that I think could be scalable, economically viable, and most importantly, actually solve customer problems in a way that, you know, human drivers cannot. And so a lot of work needs to be done. We certainly have very strong points of view given that we've been working on this for about eight years at this point, and we look forward to sharing at some point in the future.

Thank you.

And your next question comes from the line of Brian Nowak with Morgan Stanley. Brian, please go ahead.

Thanks for taking my question. Kony, you made so many impressive improvements to the platform, and we're looking to see it in the results. Let me ask you a little bit of a tricky one. Can you talk to us about the areas where you've had more challenges than you expected in sort of improving the product, improving the customer experience, improving the merchant service? What are those areas that are proven to be harder that we should sort of look for the next unlocks to come from long term on the platform?

Thanks. Yeah. Hey, Brian, I wish you get to, you know, have a peek into my inbox because I get several hundred emails a week, you know, from all of our audiences, whether it's consumers, dashers, or merchants. And I don't know if they think that our improvements are very impressive. Those emails tend to perhaps suggest the opposite, which is a daily reminder, given that I've done customer support now daily for each day for the last 12 years, that we seem to be falling short, actually. So I'm not so sure that I agree with the premise of the question. It's not tricky at all, the question, because I actually think we're pretty far behind in each one of the areas that, you know, from the perspective of the customer, not the perspective of what our business metrics suggest or our competitive position. And so, look, I mean, this is true. Maybe we can take an example this morning. I received an email about how we showed up at the wrong parking lot inside a apartment complex. And, you know, that caused both a delay in delivery, as well as, you know, a fear that perhaps the driver wasn't even going to show up. And so whether it's very small things like that, that sounds very small, but when you compound them to the billions of orders that we do, to, you know, understanding how do we product off the change, you know, given where the world is going with AI, or how business models, you know, might be adding complexity to our own business. We talked a bit about SAS earlier. I would say there are many areas, Brian, in which we're struggling. And every day, I think, is a daily struggle where the job is to try to make an improvement for that day. And one of the things I've learned over the last 12 years of doing this is if you can actually do that, you'd be surprised at both how much progress you can make over a year, but also how systemically you can actually create an environment, a team that actually knows how to repeat this in any new domain, which I think is the most important skill in a world where, you know, things are changing ever so fast and, frankly, increasingly faster every hour of the day. And that's kind of what I keep stressing to the teams. We kind of make the next improvement. So is there one area that I feel like, oh, it's been harder to crack than another? The answer is no, because I literally talk to our customers every single day, and it seems like we've got opportunities everywhere.

That's really helpful. Thanks, Tony.

There's no further question at this time. That concludes today's call. Thank you all for joining. You may now disconnect.