DoorDash (DASH) - Q2 2025 Earnings Call
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Call Details
Call Title: DoorDash Q2 2025 Earnings Call
Date Held: August 6, 2025
Management Team Members Present:
Tony Hsu, Co-founder, Chair & CEO
Robbie Inaconda, Chief Financial Officer
Wes Dweig, Head of Investor Relations
Call Summary
Financial Performance
DoorDash reported significant growth in its ads business, surpassing a billion dollars in annualized revenue run rate.
Gross margin improved, partially driven by increased ads revenue and improved product quality.
Unit economics across all verticals have seen year-over-year improvements, leading to increased profitability.
International business showed robust growth, achieving all-time high MAUs, and is gross profit positive.
The company’s overall net revenue margin expanded, attributed to lower Dasher costs in Q2 and increased ad sales.
Guidance
DoorDash expects the second half of the year to see continued improvement in net revenue margins compared to the first half.
New verticals are predicted to contribute significantly to future growth, with the company aiming to be the volume leader in the next year.
Expansion plans include closing the Deliveroo acquisition in Q4, pending regulatory approvals.
Capital Allocation
Investment continues in product and engineering talent, focusing on enhancing product capabilities and operational efficiencies.
Strategic acquisitions, like Seven Rooms, are leveraged to expand B2B offerings, supporting a broader business ecosystem.
Resources are allocated to grow international and new vertical markets, prioritizing long-term margin dollar maximization over short-term unit margins.
Macro & Demand Trends
Food delivery remains the most resilient and sought-after category for convenient consumption, underlining stable demand.
Emerging retail and grocery sectors are growing rapidly, with a focus on improving product offerings to address different consumer needs.
Improvements in order frequency and customer cohorts are attributed to enhancements in availability and accessibility of services.
International Trends
International operations are growing faster than domestic, driven by enhanced selection, quality, and the introduction of Volt Plus subscription.
DoorDash is gaining market share across various countries, with strong impacts from new product and category introductions.
Gross profit and unit economics in international markets have improved through strategic operational enhancements.
AI Trends
DoorDash views AI as transformative, rethinking product design, operational efficiencies, and consumer engagement.
AI is enhancing search, recommendation, and personalization capabilities, contributing to ongoing product improvements.
In-house and external AI developments are used to increase productivity across engineering and operational functions.
Expense and Headcount Trends
Operating expenses remain steady at around 2% of GOV, with a focus on driving efficiency through automation.
Headcount growth focuses on areas with high ROI, primarily within product and engineering teams, emphasizing disciplined investment.
Scale and leverage in new verticals are achieved through strategic labor deployment and operational efficiencies.
Product Updates
Continuous improvements in DashPass, with significant growth in member acquisition and engagement due to added selection and quality enhancements.
New features and services under DashPass are key drivers for improved user experience and cohort engagement.
Product advancements contribute to a marked increase in order frequency, driven by introduction and refinement of new categories.
Competition
DoorDash is positioned strongly against competitors, with focus areas including maximizing order occasions and expanding marketplace offerings.
The company leverages its vast user base and network to outpace rivals in ad revenue generation and international market penetration.
Ongoing innovations in service offerings are designed to maintain competitive advantages across various market segments.
NOTABLE QUOTES:
“The North Star focus is always to make improvements, first and foremost, to our products, to the selection that we offer...”
“The ads business has been progressing really healthily... making it the fastest in history to get there.”
“It’s not just a new technology, it’s also a new way of how you attack different problems.”
“We’re not just a delivery provider; we are the growth engine or the growth button...”
“DashPass had a very, very solid quarter... driving growth is the underlying product continuing to get better.”
“The size of new cohorts is larger today than last year... people are coming back more often, which means retention is increasing.”
“Our focus is to invest flexibly up and down the P&L. That’s what’s driving the strength that you’re seeing in the business.”
“We’ve been working on autonomous delivery for several years now, and it’s something we’re very excited about.”
“If you can solve all the different problems for these physical businesses, I think you’re going to grow the GDP of the cities...”
“Every day, I think, is a daily struggle... but if you can make the next improvement, the compounding effect is powerful.”
Q&A SUMMARY:
Q: Shweta Kajoria (Wolfe Research), regarding U.S. marketplace orders and advertising revenue growth.
A: Tony Hsu highlighted strategic improvements, including personalization and faster delivery, playing a role in membership growth. The ads business benefits retailers by focusing on consumer experience and effective return on ad spend.
Q: Deepak Mati Vana (Cantor Fitzgerald), on AI implications and new verticals contribution.
A: Hsu explained AI’s role in transforming user experience and finding operational efficiencies. New verticals are rapidly contributing to customer growth, providing cross-platform benefits.
Q: Ron Chilcy (CD), on DashPass cohort trends and Deliveroo integration plans.
A: Inaconda emphasized the continuous investment in improving DashPass, while Hsu confirmed plans to integrate Deliveroo aiming for enhanced product experience.
Q: Nikhil Devnani (Bernstein), on new customer cohort durability and business growth drivers.
A: Hsu is confident in long-term potential due to product improvements and market expansion. Inaconda emphasized growth from both new and existing users, driven by increased order frequency.
Q: Michael Martin (MoffettNathanson), on operating expenses and headcount growth.
A: Inaconda outlined operating expenses management within 2% of GOV and stressed disciplined investment in headcount, particularly in product and engineering sectors.
Q: Andrew Boone (Citizens), on international expansion and user order frequency.
A: International business growth continues strong, with frequency benefits from broadening product categories and enhanced user engagement.
Q: Yosef Squali, on Seven Rooms acquisition and new verticals profitability.
A: Hsu sees Seven Rooms augmenting business offerings, driving GDP growth for cities. Inaconda stated improved unit economics in new verticals amid growth.
Q: Jason Astin (Oppenheimer), regarding DashPass user growth and partnership impact.
A: Hsu pointed to product usefulness as key to DashPass success, with partnerships like T-Mobile adding value to the offering.
Q: Michael McGovern (Bank of America), on robotics and average order value trends.
A: Hsu shared insights on robotic delivery developments while Inaconda noted AOV growth as a result of new vertical expansion.
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