DoorDash's Q3 2025: Contradictions Emerge on Tech Platform Investments, European Strategy, and Advertising Revenue

Guidance:

• Expect several hundred million of incremental investments in 2026 across a new global AI-native tech platform, new products, and Deliveroo integration.
• Building a single global tech stack to ship features simultaneously across markets to increase velocity and engineering efficiency.
• Plan to commercialize some autonomy efforts in 2026 but view autonomous delivery as a multi-year, multimodal build.
• EBITDA margin for the existing business (excluding Deliveroo) expected to be up slightly in 2026 vs 2025.
• Deliveroo expected to contribute roughly $200M to overall EBITDA; Roo-to-DoorDash EBITDA mapping implies an ~$8–10M modeling adjustment.

Business Commentary:

* Investment in Tech Platform and New Products: - DoorDash is investing hundreds of millions in building a new global tech platform and new product initiatives like in-store solutions and autonomous delivery vehicles. - The investment is aimed at enhancing the tech stack to make it AI native, improving product development velocity, and increasing engineering capacity to support growth.

• Strong Performance in New Verticals:
• DoorDash's new verticals business saw strong growth, with order volume share leading the market and unit economics improving year-over-year.

• This growth is attributed to increased consumer product adoption and improving quality, selection, and service levels.

• Expansion in International Markets:

• The company's international business, excluding Deliveroo, is expected to have EBITDA margins slightly up compared to 2025, indicating strong performance.

• Growth in international markets is driven by operational rigor and efficiency, which is a result of effective GOV management and strategic product improvements.

• Strategic Acquisition and Integration of Deliveroo:

• DoorDash acquired Deliveroo for $8.1 billion, aiming to leverage synergies from a combined European presence and operational playbook.
• The acquisition is focused on improving product and consumer experience to drive scale and increase gross profit dollars in a competitive market.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management repeatedly emphasized acceleration and confidence: "growth accelerated for the fourth straight quarter"; "business is growing exceedingly — exceeding our expectations"; they announced large 2026 investments with the intent to "ship faster," improve efficiency and expect "margins to be up slightly compared to 2025."

Q&A:

• Question from Deepak Mathivanan (Cantor Fitzgerald): Two-part question on the several hundred millions of incremental investments for 2026. First, how much of this is towards tech platform initiatives versus perhaps more direct product and expansion efforts that tend to have a very defined near-term payback? And then the second part is can you expand on the tech platform efforts. Are you sort of essentially rewriting the tech for AI development? Or is it more about integrating AI tools with additional token expenses into the service? And in addition to sort of opportunity for accelerating the product development, do you also see any potential for cost savings from these efforts over time?
  Response: Most 2026 incremental spend will build an AI-native, single global tech platform (plus product commercialization efforts); management expects faster global feature rollout, freed engineering capacity, improved efficiency and eventual margin benefits.

• Question from Shweta Khajuria (Wolfe Research): Could I at least try 2? First one is also on investment. Could you please talk about where you're planning to invest as it relates to Deliveroo, what your goals are for the first year in terms of order of business and then -- and strategic focus areas? And then the second one is on automation. Could you please talk about where you are in terms of expanding your robots and your third-party partnerships? And how do you think about scaling it and deploying the opportunities over the next year or maybe 1 to 3 years?
  Response: Deliveroo: prioritize product improvements to raise retention/frequency and unit economics, then drive cost efficiencies; Autonomy: pragmatic, multimodal approach with market tests and some commercialization in 2026 but a multi-year scale-up.

• Question from Ross Sandler (Barclays): Glad to be back on the call. I guess just following up on just the broader consolidation that we've seen from you guys and from Prosus acquiring JET, how do you see the overall landscape in Europe evolving next year on the back of all of this? And Ravi, it sounds like you're investing in Deliveroo to grow a little bit faster. I assume that the $200 million of EBITDA is reflecting that investment and the platform consolidation investment that Tony just talked about a few questions ago would be kind of a separate thing, not included in reducing Deliveroo's run rate from what it was before to this $200 million based on some kind of like allocation of that platform investment. Just any clarity on that, that minutia would be helpful.
  Response: Management views a large opportunity to lead local commerce in Europe; the ~$200M is Deliveroo's EBITDA contribution reflecting product/people/selection investments, while platform consolidation costs are largely separate and temporary.

• Question from Josh Beck (Raymond James): I wanted to kind of go back to the tech platform that you've been building in the background. I'm curious kind of what you've learned thus far and kind of why this moment in time was the right moment to inflect upwards. There's a lot of external changes in the AI stack. The international scale of the business is obviously very different. Robotics is having breakthrough. So I'm just kind of curious if there was maybe a smaller list of items that drove the step up. And then with respect to the integration, I think in some cases, they can be messy. You have obviously a lot of consumer-merchant-Dasher ecosystem. How do you minimize the disruption and kind of keep the strength? It sounds like the Roo business maybe is kind of in the double-digit range, so it seems to be in a pretty good spot. How do you maintain that throughout the integration?
  Response: The inflection reflects common product/service across geographies plus AI-driven changes; management will invest now to build a unified stack while incurring temporary costs to protect Roo's customer experience during integration.

• Question from Jason Helfstein (Oppenheimer): Just one and a follow-up. How should we think about advertising broadly? I mean it obviously comes in at a high incremental margin. There's flow-through versus reinvestment. So just how are you thinking about how we should think about how that flows through? And then second, there's been some questions, a report floating around about kind of documented workers and the government kind of cracking down undocumented workers and certain reports like talked about what percentage. Just any color you can have about how you manage making sure that you don't have undocumented workers on the platform and how you manage through that? And any exposure there?
  Response: Ads are a high-margin, fast-growing business but will be balanced to protect consumer experience and reinvested into the business; Dasher supply remains healthy with long-standing authenticity and verification processes and no reported supply impact.

• Question from Michael Morton (MoffettNathanson): I guess maybe one for Ravi to start. If I'm just doing like quick math here, looking at your guide and kind of what it means for the core business, it seems like this incremental step-up cost could maybe be like $100 million a quarter. You feel free to correct me on that. And then if -- Tony highlighted the buckets where the spending is going, and sorry, it's a stupid question, but from the outside looking in, just understanding maybe like where the platform development spend, like how that hockey sticks so much if it's something that's been going on for several years. And then what I found interesting was the DashMart Fulfillment Services comment he made. And I was just looking for any more details if you're really stepping on the gas there and if this is like maybe part of a partnership with some of like the, I'd just say, large AI platforms, where maybe you work local commerce more into these e-commerce searches. And is there more cost involved as you build out DashLink? Anything there would be really helpful.
  Response: Tech spend steps up in 2026 because active development/deployment (parallel stacks, cloud instances) occurs then; DashMart Fulfillment Services is focused on retailer inventory/fulfillment to achieve near-perfect accuracy (not primarily AI partnerships).

• Question from Andrew Boone (Citizens): I wanted to ask about new verticals. You guys talked about the fact that unit economics are still negative. Can you talk to us about the path and maybe the visibility that you have to breakeven? What are the key kind of operational things do you guys need to do to get there? And then in terms of just U.S. kind of growth overall, now gross adds were higher year-to-date versus 2024. Can you guys just talk about the opportunity of where you guys are finding new users? I know we've talked about this on past calls. But can you just revisit what pockets you guys unlock in there?
  Response: New verticals are scaling rapidly with improving unit economics and should reach breakeven through continued scale and product/quality improvements; U.S. growth comes from years of product enhancements that boost selection, quality and retention across cohorts.

• Question from Nikhil Devnani (Bernstein): I had a clarification on the investment commentary. Is the bulk of the spend fixed cost investment that you get leverage on as you compound the top line? Or is it a step-up in variable costs as well? And then on new verticals beyond grocery and convenience, which categories of the retail or local commerce opportunity, do you feel, are showing the most promise from a demand perspective that becomes the next big category for DoorDash going forward?
  Response: Spending is across the P&L (mix of fixed and variable hitting COGS, S&M and R&D) and will drive leverage as scale increases; promising retail categories include pets, electronics (seasonal), health & beauty and home improvement.

• Question from Lloyd Walmsley (Mizuho): I wanted to go back to the DashMart Fulfillment Services and just better understand the plan there in terms of integrating all this 3P inventory, especially on the grocery side. Is this going to require like a lot of build-out of new facilities? Or do you just sort of take control, pick and pack inside some of the partner facilities? And then as we think about the time line of that, and it seems like this could be a really big and attractive area of investment, is that something -- is this something where '26 is sort of continuing to experiment on this and maybe you scale it more in '27? Just like anything more you can help us understand like how that will work and the time line around that would be great.
  Response: Approach is retailer-specific—solutions range from using partner stores to building DashMart fulfillment services; pilots are underway with custom implementations and broader scale expected over time rather than an immediate one-size-fits-all roll‑out.

• Question from Youssef Squali (Truist Securities): Tony, one subcategory we did talk about is perishables. I wanted to just pick your brain on how you think the entry of Amazon in that space is likely to kind of impact you guys. Not even sure how big perishables is to you. I'm assuming it's small again, but maybe you can help clarify that. And just how are you guys kind of positioned to kind of defend your turf? And then maybe just comment on the change in the guards at least in some cities like New York after the win of the Democrats last night, Mamdani, and how that potentially could impact Dashers pay, eventually Dashers organizing and just really not just in New York City but in other big cities as well?
  Response: Perishables/grocery remain underpenetrated due to inventory/accuracy challenges—DoorDash focuses on improving fulfillment accuracy and broad retailer choice; on policy, management emphasizes working with governments, existing Dasher protections and affordability efforts, expecting coexistence of business and regulation.

• Question from Justin Post (Bank of America): I don't think you've really had a chance to outline synergies with Deliveroo on the -- maybe on the order and the top line side revenues, but I would love for you to talk about that if you can. And then maybe talk a little bit about the take rate differences in the accounting. That would be helpful.
  Response: Primary synergies are product-driven scale and cost efficiencies over time; Deliveroo's EBITDA contributes about $200M and Roo-to-DoorDash EBITDA mapping implies an ~$8–10M expense impact for modeling differences.

• Question from Lee Horowitz (Deutsche Bank): I guess going back to investments. I guess, how should we be thinking about the payback period? I mean a lot of talk about taking time, past dependency and spinning up an environment. So it sounds like payback periods are perhaps getting extended relative to your typical investment plans. Is there anything in this new bucket of investments that is perhaps more of the traditional quicker payback periods that is part of your typical playbook? And then maybe relatedly, retail obviously sounds like a big and compelling greenfield opportunity for you guys. Any way to contextualize how much of this new investment plan may be specifically targeted at this vertical and driving faster growth outcomes there?
  Response: Payback discipline unchanged—investments still evaluated on retention/frequency and IRR; software/B2B investments have shorter paybacks while platform/tech stack are longer-term, and retail is early-stage but showing accelerating consumer demand.

• Question from Miles Jakubiak (KeyBanc, on for Justin Patterson): This is Miles Jakubiak on for Justin. I'd like to start with one on grocery. Just curious if you're seeing -- you had some nice grocer adds during the quarter. Curious if you're seeing any increase from grocers to move a bit faster on the delivery side and coming to the platform. And then one just on going out or dine-in, in-person dining. Saw you had the Going Out launch and some SevenRooms stuff launched during the quarter, so curious if you could just expand on how you view that dining out experience fitting within the DoorDash ecosystem and the opportunity there.
  Response: Grocery momentum is strong with national and local grocers joining (e.g., Kroger); Going Out and SevenRooms expand DoorDash into dining discovery and merchant analytics, complementing delivery and B2B offerings.

• Question from Ronald Josey (Citi): Going back to Roo really quick. Understood the investments needed here and the acquisition literally closed, what, around 4 weeks ago. But would love to hear what you all think or learned thus far on ways to improve the product and the consumer experience as we think about these investments. And then I believe it was mentioned in the letter or the press release that unit economics were flat quarter-to-quarter for U.S. restaurants. I'm just wondering if that's a change in trajectory or anything to call out there.
  Response: Roo improvements will be driven by many portable product experiments DoorDash/Wolt have run; U.S. restaurant unit economics remain healthy and improving overall with strong incremental margins over recent quarters.

Contradiction Point 1

Tech Platform Investment Focus

It involves the strategic focus and allocation of significant investments, which directly impacts the company's operational efficiencies and financial sustainability.

How is the $several hundred million in 2026 incremental investments allocated between tech platform initiatives and direct product/expansion efforts with immediate returns? Can you elaborate on the tech platform initiatives? - Deepak Mathivanan(Cantor Fitzgerald)

20251106-2025 Q3: The investments are primarily in three areas: building a new global tech platform, investing in new products, and investing in new markets. - Tony Xu(CEO)

Explain the $700 million incremental 2026 investment plan allocation between tech platform initiatives and direct product/expansion efforts? - Deepak Mathivanan(Cantor Fitzgerald & Co., Research Division)

2025Q3: The majority of the $700 million investment will go into building a new global tech platform to streamline operations and integrate AI. - Tony Xu(CEO)

Contradiction Point 2

European Market Strategy

It involves the strategic approach to expanding and consolidating operations in the European market, which directly impacts the company's global footprint and competitive positioning.

How will the European market evolve next year with the Deliveroo acquisition consolidation? - Ross Sandler(Barclays Bank PLC, Research Division)

20251106-2025 Q3: We aim to be the leading local commerce platform in Europe by leveraging our presence in over 20 countries. - Tony Xu(CEO)

How will the European market evolve next year with the Deliveroo acquisition? - Ross Sandler(Barclays Bank PLC, Research Division)

2025Q3: We aim to be the leading local commerce platform in Europe by leveraging our presence in over 20 countries and building a strong foundation in Europe. - Tony Xu(CEO)

Contradiction Point 3

Advertising Revenue Strategy

It involves the strategic approach to balancing advertising revenue with consumer experience, which directly impacts the company's revenue growth and market competitiveness.

How do you view advertising growth and manage undocumented workers on the platform? - Jason Helfstein(Oppenheimer)

20251106-2025 Q3: Advertising is growing, with a focus on balancing consumer experience versus monetization. - Tony Xu(CEO)

How do you think about flow-through versus reinvestment in the advertising business? - Jason Helfstein(Oppenheimer & Co. Inc., Research Division)

2025Q3: The advertising business is growing rapidly and meets our criteria of improving retention and engagement without sacrificing consumer experience. - Tony Xu(CEO)

Contradiction Point 4

Technology and Product Platform Investments

This contradiction pertains to the strategic focus and prioritization of investments in technology and product platform initiatives, which are crucial for the company's growth and competitiveness.

How much of the 2026 incremental investments is allocated to tech platform initiatives versus direct product and expansion efforts with defined short-term payback? Can you elaborate on the tech platform initiatives? - Deepak Mathivanan(Cantor Fitzgerald & Co.)

20251106-2025 Q3: The investments are primarily in three areas: building a new global tech platform, investing in new products, and investing in new markets. The tech platform aims to build a single global tech stack for all markets, enhancing AI and tooling, and improving agent workflows. - Tony Xu(CEO)

How does Dash plan to use AI to improve user experience and operational efficiencies? - Deepak Mathivanan(Cantor Fitzgerald & Co.)

2025Q2: From a tech platform perspective, we're building out the next generation of DoorDash, which is really a rewrite of the platform. It's a long-term project that will enable us to go scale faster, do more rapid iteration, and deploy features faster. - Tony Xu(CEO)

Contradiction Point 5

Advertising Revenue Strategy and Growth

This contradiction involves the strategic approach and expectations regarding advertising revenue growth, which is a significant revenue stream for the company.

What drives advertising growth, and how are undocumented workers managed on the platform? - Jason Helfstein(Oppenheimer)

20251106-2025 Q3: Advertising is growing, with a focus on balancing consumer experience versus monetization. DoorDash ensures a healthy marketplace and does not degrade the consumer experience. - Tony Xu(CEO)

Advertising revenue has exceeded $1 billion in annualized revenue. How do you plan to scale on-platform and off-site advertising opportunities? - Shweta R. Khajuria(Wolfe Research)

2025Q2: We're operating ads with discipline, focusing on merchant return on ad spend (ROAS) and consumer conversion. The goal remains to build a successful marketplace, enabling effective ad spend. Symbiosys acquisition leverages our know-how and data to optimize marketing for merchants. - Ravi Inukonda(CFO)