Delivery Hero: Operational Improvements But Still Many Uncertainties

The food delivery giant Delivery Hero has made strides in improving its margins and unit economics in 2025, but lingering macroeconomic and regulatory risks cast a shadow over its near-term investment appeal. While the company's Q2 and first-half results demonstrate operational resilience, investors must weigh these gains against currency volatility, geopolitical tensions, and legal challenges that could undermine its progress.

Margin Gains and Unit Economics: A Bright Spot

Delivery Hero's financial performance in H1 2025 was nothing short of impressive. Adjusted EBITDA surged 71% year-over-year to €411 million, with margins expanding to 1.7% of Gross Merchandise Value (GMV) Q2 and H1 2025 financial results: Delivery Hero accelerates growth and expands profitability^[1]. This improvement was driven by cost efficiencies, higher gross profit margins, and operational gains in key markets like Asia and South Korea. The integration of Glovo, for instance, yielded a 6.7% improvement in conversion rates and a 9.5% reduction in cost per order Delivery Hero's Q2 2025 Earnings: A Strong Performance^[2]. Free Cash Flow also improved significantly, reaching -€8 million in H1 2025, a €96 million improvement year-over-year Delivery Hero Trims 2025 Profit Outlook Despite Q2, H1 Revenue Growth^[3].

The company's multi-vertical strategy—combining food delivery with quick commerce (q-commerce)—has further bolstered profitability. Customers ordering from both food and q-commerce services now account for 52% of GMV, and these users spend 5.2 times more than food-only customers Delivery Hero reaches FY 2024 targets with very strong …^[4]. This diversification has allowed Delivery Hero to leverage its logistics infrastructure more effectively, particularly in markets where it owns inventory and delivery operations, such as South Korea.

Currency Headwinds and Macroeconomic Risks

Despite these gains, Delivery Hero has revised its full-year guidance downward, citing foreign exchange headwinds. The stronger euro against the U.S. dollar and Korean won is expected to reduce adjusted EBITDA to €900–940 million, down from the previous range of €975–€1,025 million Delivery Hero SE updates FY 2025 guidance to reflect foreign exchange rate headwinds, now expecting lower adjusted EBITDA and Free Cash Flow^[5]. Free Cash Flow guidance was similarly cut by 40% to at least €120 million Delivery Hero Trims 2025 Profit Outlook Despite Q2, H1 Revenue …^[6]. These adjustments highlight the company's vulnerability to currency fluctuations, a risk that is likely to persist as global inflation remains stubbornly above target in key markets World Economic Outlook Update, July 2025: Global Economy: Tenu…^[7].

Broader macroeconomic trends also pose challenges. The Congressional Budget Office (CBO) projects that U.S. GDP growth in 2025 will be 0.5 percentage points lower than previously expected, partly due to higher tariffs and reduced immigration CBO’s Current View of the Economy From 2025 to 2028^[8]. Meanwhile, geopolitical tensions—ranging from the Russia-Ukraine war to U.S.-China trade frictions—threaten to disrupt supply chains and increase operational costs. As the World Economic Forum's Global Risks Report 2025 notes, conflict and environmental degradation are among the top global threats, which could exacerbate regional instability and inflationary pressures Global Risks Report 2025 | World Economic Forum^[9].

Regulatory and ESG Challenges

Delivery Hero's business model faces mounting regulatory scrutiny, particularly in Europe. The European Commission fined the company €329 million for its role in a no-poach cartel with Glovo, a violation of antitrust laws Stakes, consequences: Lessons from the Delivery Hero/Glovo case^[10]. Additionally, the EU's new Platform Work Directive and Corporate Sustainability Due Diligence Directive are forcing companies to reclassify gig workers as employees, a move that could significantly increase labor costs. Delivery Hero acknowledges that rider classification is its top strategic risk, with ongoing litigation in Spain and Italy Delivery Hero’s hidden risks: why investors must act now^[11].

Investors are also increasingly concerned about the company's ESG practices. Riders report being penalized or deactivated by opaque algorithms without clear explanations, raising questions about transparency and fairness Delivery Hero’s hidden risks: why investors must act now^[12]. While Delivery Hero's 2024 Corporate Report highlights progress in safety and sustainability, its fragmented brand structure—spanning 11 delivery platforms—complicates oversight and accountability.

A Calculated Investment Case

Delivery Hero's operational improvements are undeniably impressive. Its margin expansion, multi-vertical strategy, and strong cash position (€2.8 billion in cash reserves) provide a buffer against near-term headwinds Q2 and H1 2025 financial results: Delivery Hero accelerates …^[13]. However, the company's exposure to currency swings, regulatory risks, and geopolitical instability suggests that its path to sustained profitability remains uncertain.

For investors, the key question is whether these operational gains can offset the risks. The company's ability to adapt to regulatory changes, invest in AI-driven logistics to mitigate labor costs, and diversify its revenue streams will be critical. Yet, given the current macroeconomic climate and the scale of its legal and ESG challenges, a cautious approach is warranted.