DoorDash, Inc. (DASH) Earnings Call Transcript & Summary

Hello, everyone, and thank you for joining us, and welcome to the DoorDash Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the call over to Weston Twigg. Please go ahead.

All right. Thank you, Dustin. Good afternoon, everyone, and thanks for joining us for our Q3 2026 earnings call. I'm pleased to be joined today by Co-Founder, Chair and CEO, Tony Xu; and CFO, Ravi Inukonda. 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. When we -- we will also be making forward-looking statements about our pending acquisition of Instacart, including, without limitation, the expected timing and likelihood of completion of the acquisition and our plans, objectives, intentions and expectations with respect to the acquisition and the combined company. 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-Q. 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 most directly comparable GAAP financial measures may be found in our earnings release, which is available on our Investor Relations website at ir.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 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.

[Operator Instructions] The first question comes from the line of Andrew Boone with Citizens Bank.

Tony, you laid out a pretty compelling case in terms of adding additional demand to DashMart. Can you just plus that out, help us understand what your vision is for DashMart and how Instacart plays into that?

Yes. I mean if you think about where grocery delivery is, it really is just a fraction of what its potential could be. And I think the reason I've said this quite a lot in the past that the product really isn't there yet. Customers today are still being asked to pay a premium for imperfect delivery. So the question is, how can we actually ensure that we offer perfect deliveries at the most affordable prices? And the way I think about this is it really is a sequencing road map. And our journey really started 5 years ago when we began our own work in new verticals. And it's been a very successful endeavor. As part of that journey, we recognize that in order to offer the best possible service at the most affordable prices, we really needed to manage the inventory because stock outs were a key issue. And when you look at, for example, the deliveries that we fulfill from DashMarts versus the delivery that we do third party, even though we have best-in-class logistics operations quality in the third-party stores, we are near perfect in our deliveries with DashMarts, but we're only in the low 90s in terms of our accuracy through the third-party stores. So there's a meaningful gap. But we've been able to prove demonstrably that we can close it both first by holding our own inventory and now actually managing thousands of items for fantastic retail partners like Giant Eagle or Albertsons and many others. But when you think about this business, it's a fixed cost business when we're managing inventory. So scale is really helpful. And when I think about today's news and partnering with Instacart and the fact that they have unique demand or orders that are unique to our network that not only helps certainly, on a day 1 scenario post close, where the added density in the last mile network brings fulfillment efficiencies to offer faster delivery as well as lower cost throughout the system, but it allows us to continue to invest on our end-stage journey of building what we believe will be the best-in-class product for all retailers to be able to compete against the world's biggest companies. And that will enable faster delivery that will enable more affordable prices, which in turn will generate more sales for every grocery and retailer and more earnings opportunity for every shopper.

Our next question comes from Shweta Khajuria from Wolfe.

Okay. Let me try 2 please. One is you talk in your release and letter that you expect multiyear path to $500 million or more in annual synergies, net of investments. Could you please talk about where those synergies will be coming from? And where do you expect to invest in year 1, over 100% of those synergies will be invested. So could you please talk about how do you see that play out? And then second, on DoorDash is just core business, U.S. Marketplace GOV accelerated on tougher grounds, which is impressive. And I guess you've talked to rise in frequency as well as new consumers ordering. Could you please talk to that a little bit more. How do you see demand trend and what going forward will drive organic U.S. market -- restaurant marketplace growth.

Shweta, it's Ravi. Look, I mean, I'll take both of them, and Tony feel free to chime in. Look, I think there's an opportunity, Shweta, for us to build a really large and attractive business, right? If you think about synergies, which is the part of your question, there's a number of big blocks that you could think about. Let's start with the growth ones first. If there's an opportunity for us to cross list merchants. For example, there's categories that are not available on both platforms, there's a clear opportunity for us to be able to cross-list them, which drives growth. One of the clearest examples is where are you going to be able to list our restaurants platform on Instacart, which is going to drive top line growth. Second, I would talk about is just purely as CPG advertisers will now have more consumers to reach which will not only drive quality, but also a higher ad spend, which will in turn drive more road. The third one that I would think about is -- there is an opportunity for us to cross-sell products. Instacart has built a really strong first-party software infrastructure, which we can now cross-sell to grow service on our platform as well as Tony touched on DashMart fulfillment services is going to be an opportunity for us to make that available to more customers across both platforms. Look, I mean, on the efficiency side, Dasher density, Shopper density is going to be pretty critical as you increase the volume, going to drive efficiency in the fulfillment network. And finally, if you look up and down the P&L, there is a number of opportunities, whether it's opportunities on sales and marketing opportunities and support. There's many opportunities that we could jointly work on together. And we thought about the opportunities that can jointly arise from combining both platforms. One thing that's pretty clear is putting both platforms together will actually rise to leading in growth as well as increasing in overall profit dollar production. The key for us, however, is how do you take some of the profit dollars and reinvest that back in the business to ultimately build a better product for consumers as well as grocers. Look, that's historically what we've done. And to the second point in your question, which is what's driving the growth in the core marketplace, largely because of the reinvestment back in the product. Our playbook is going to be very similar here. You can see examples from that in our acquisition of Deliveroo as well, where we've reinvested back in the product to ultimately drive the growth that you're seeing in the business. In fact, when I look at the new verticals platform, our core business is doing really well. That's growing quite nicely. We've become volume share leaders. We've continued to improve the customer outcomes, whether it's increase in order rate, increase in order frequency, the basket sizes are growing. So the way we think about this is this is actually an accelerant to our core business, which continues to do well. And the other side, which is the core business continues to well, which gives us the conviction and the capacity to be able to do if you're thinking about it from a modeling perspective, the way I would think about the model is year 1 is going to be the investments that we'll make to build a better product. Year 2, we'll make progress. And finally, in year 3, my expectation is we'll drive $500 million of incremental synergies to the bottom line, that is net of the investments that we plan to make. On the second one, look, I mean, you're right, I mean, the core business is doing really well. It's firing on all cylinders, right? If you look at the growth that we are seeing in the business, Q3, our restaurant business actually accelerated from Q2 to Q3. In fact, when you look at the sequential growth rate in Q3 is the fastest we've seen in the last 5-plus years. New verticals continues to grow, both Wolt as well as Deliveroo they also accelerated from Q2 to Q3. But more broadly, when you look at our overall U.S. restaurants, growth, it's been stable actually for the last 4 years. A lot of that has got to do with the underlying improvements in the product. We've invested back in selection. We've made subscription better overall paid subscribers continue to set all-time records. The combination of the work that we've done in improving the product, while continuing to drive subscription is what you're seeing in terms of the growth that you're seeing in the business. And again, the growth is coming from sustainable levels which is user growth subscription growth. And the way at least I think about it from a mental model perspective is these are compounding growth that will come in the future, which gives us a lot more confidence as we look ahead into what we can drive in terms of both growth as well as profit dollar production for the next several years.

Our next question comes from the line of Deepak Mathivanan from Cantor Fitzgerald.

Great. Tony, so on the acquisition of Instacart, can you talk about why now is the right time? I mean your grocery business is strong and you have most of the retail partners too. DashMart is offering a very differentiated value prop to retailers. Can you talk about why now is the right time? And then also a second one, a high-level strategy question on AI agents. How much of the agent experience, specifically for food use case, be it grocery delivery or food delivery or maybe meal planning and others, do you Dash to kind of directly power for consumers with seeding some of that to more generic agents like views. Or maybe asked another way, should we expect Dash to have its own set of personal agents, specifically catered for food use cases for consumers? How should we think about that?

Yes. back, I'll take both of those. On the first question about why now. I mean it's a great question because M&A is very, very hard to do successfully. And so we always take these decisions extremely seriously. I would say the first thing is our core business is doing really, really, really well. Ravi touched upon a bit of this. And as you can see in the results that we just published, this morning on the quarter, I mean, record highs in top line, bottom line, accelerating growth in the U.S. restaurants business, continued fast growth on new verticals, accelerating growth in our international properties, you continue to see product innovation from us. For example, our most recent Dashboard event with the announcements of DoorDash Air, DashOS and merchant software as well as speaking of AI agents, updates to our own AI agents. So the core business is truly firing on all cylinders. I would say the second thing is our big projects for the year are on track. Obviously, the year is not over. But if you look at the projects around building a single tech stack, if you look at the projects around integrating Deliveroo. And some of the results kind of speak for themselves. We're seeing customer benefits already from the single tech stack work, whether it's faster onboarding of merchants, better conversion from improved search, better SLAs for support across all audiences. These are just some of the ones that come top of mind. If you look at the route side, we grew in Q3 at twice that we did a year ago before we acquired the business. So all of the big projects we had for the year or projects that are doing really, really well. And so from a management bandwidth perspective and a sequencing perspective, we felt like we had the space to do something offensive. And -- this is a space we understand really well, the grocery marketplace space, both because we built our own grocery marketplace very successfully to your -- to the premise of your question, as well as the fact that we've integrated other marketplaces very successfully into the DoorDash family, whether it's Wolt, whether it's Deliveroo, whether it's actually even thinking about how we've reinvested over the years back into product innovation and driving durable growth for our own U.S. restaurant marketplace. I think those would be all 3 demonstrable examples of our understanding of how to run a marketplace at scale, both driving top line growth durably, but also generating long-term total profit dollars. And that's what we intend to do here and play offense, When I think about Instacart, I talked a little bit about how it feeds us on the journey towards building this end state, which is being able to manage inventory on behalf of every retailer of every size -- but when I think about this, this really is about giving every retailer, every size the ability to compete in a world where technology is only accelerating faster. Disruption is happening more quickly, and the world's biggest companies are becoming larger. And when I think about the capabilities that the combined companies will have, will have best-in-class software to help each 1 of these grocers. That's something that Instacart has done a fantastic job building over a decade and helping grocers build their first-party online channels. You combine that with our first-party logistics capabilities, which we pioneered with DoorDash Drive also over a decade ago. And you can offer merchants the ability to build the best-in-class first-party experience for fast delivery, their own loyalty programs, their own data, their own customers. Then you look at the third-party side of the house, the combined marketplace and the combined reach gives every grocer higher-quality orders, faster delivery, which is going to generate more sales. And so I think it was just the time to play offense. And you're right. I mean everything is going great with the core business. This only adds to it. Your second question was around AI agents. I would say that this is something that is still a very dynamic area. And my take on all things technology is you never want to fight gravity. But at the same time, you don't want to be delusional. What I mean by that is if you look at where AI agents are today, we're seeing maybe several hundred orders in total from some of these third-party agents, some of which you've cited in terms of whether or not customers are placing orders. And I think it's because they still largely view these third-party assistance, not necessarily for what I call these easier tasks, whether it's ordering food, like you said. The predominant use case of that is actually through our app. And what we've been doing is actually in learning with some of these third parties what are the features that actually drive incremental orders in which case we can build a very healthy partnership with some of these third-party assistance. But this is one of the features that actually just make the DoorDash app and our own AI agents, whether it's DoorDash ask that the tech DoorDash, which is something that we released recently our MCP that we've been giving to third parties and to use for things like corporate lunch orders, things like this to just make our app easier to use. And I think that is the win-win of what we've been able to see where the volumes are very low, as I kind of cited it. But I do believe there's a path in which you can get incremental orders and allow customers to order the way that they want to order especially for long consideration purchases or purchases they're not even thinking about that might be proactively made on their behalf. But for -- the everyday ordering, what we see is people come to DoorDash and they come back to DoorDash. It's easy to use. We're making it easier to use, and we expect to continue to do so.

Deepak, going back to your first question, right, I'll just reason point. Look, I mean, you're absolutely right. Our core business on new verticals is doing really all right? Look, we've been operating this business for the last 5 years, a lot of performance that we've demonstrated over the last 5 years. If you look at the performance of that business, that business is growing really fast. When I look at the cohorts, MAUs are increasing, basket size is increasing, people are using us for different use cases. We actually think the combination is truly going to be an accelerant for us. we talked about efficiency. A couple of calls have mentioned that the overall new vertical portfolio is going to be gross profit positive by the end of the year. We're pretty close to doing that. We're pretty close to be breakeven on a gross profit level. So the combination of both Instacart and us actually adds to that vision. So we're doing it from a position of strength the way we think about it.

Our next question comes from the line of Nikhil Devnani from Bernstein.

Maybe just a follow-up to what you were just talking about, Ravi. I guess, have you found the organic effort in the category to be harder than you initially expected when it comes to building wallet share or recurring habitual behavior around grocery. I appreciate that the growth has been quite strong, but I'm just wondering the extent to which you feel Instacart might help with some of the more challenging aspects of the build-out? And then maybe a related question on the deal is just given the replatforming and integration exercise you're going through this year for the other assets, how does that help your overall integration ability and sort of the speed at which you can move with this deal once it eventually closes?

Yes. Nikhil, I'll take the first one. Look, I mean, I think quite the quarter, right? Like actually, in my answer to Deepak's question. I talked about what we're seeing from an underlying cohort perspective, right? The way at least we run the business is ultimately is a quoted business. I look at the historic cohorts to see what the behavior of the future cohorts is going to be. When I look at mature cohorts, the behavior that we're seeing is people are using us more, more of those cohorts are coming back, which tells me that the product has gotten better, people are getting habituated to the product. Their basket sizes are increasing, their engagement on the platform is increasing. And that is now starting to translate into newer cohorts as well where we're seeing similar signs of strength in the newer cohorts. That to me truly is what we think is actually going to happen in the overall business as well as you continue to add more and more newer cohorts. Our goal has been, how do you tie to improve the product? Was it adding more selection we just added Costco on the platform, which is off to a great start. We've increased the quality of the platform. Overall, more number of DashPass are continuing to use categories outside of the core restaurants, and that number continues to grow. All of this gives us confidence that people are using the product more than engaging with us even more, which is also driving into some of the efficiencies that I talked about, right? As we continue to scale that platform, we're seeing efficiency gains also come back and benefit the overall platform, which we are reinvesting back in the business. Towards the combination of both Instacart and us is actually going to accelerate this vision. And the simple metal model that we have is, look, when you put both companies together, there's an obvious opportunity in driving both higher top line growth as well as higher profit dollar production. On top of that, we're going to have synergies. Our goal is how do you take a portion of that reinvest that back in the business. Historically, like we've done with Deliveroo, like we've done with our core restaurant business, which is what's driving the stable growth, use that to ultimately drive a better product, which, in fact, will drive more growth over the longer term as well as get the customers to adopt a better product.

Nikhil, I'll just add a little bit to that before I talk about your question on the integration of the tech stack, to get, I guess, 1 level deeper, A lot of what I think about here is actually how can we actually help improve the Instacart business as well as how can they help improve ours. And -- it's actually, I think that because of the success we've seen in running our marketplace as well as the marketplace, as I've mentioned, of the ones we've integrated as well as how we reinvested back into the U.S. restaurant marketplace and some of the things we've learned on how to do that. I think we'll actually be able to reaccelerate the Instacart marketplace, and I actually think that they'll help us grow a lot of the first-party software products for grocers and retailers, something that they started ahead of us, whereas we kind of focus on first party on the restaurant front. And so I actually think that it's quite a nice mutual combination here where you're bringing the best of both where on the DoorDash side, the best-in-class understanding of logistics operations, how to manage the marketplace to total profit dollars how to generate product innovation in a continuous way. And then on the Instacart side, the best-in-class tools for software tools for grocers and their own online channels. Your second question was around tech stack. I'm glad you asked it. So I mean, this is a huge endeavor for us, and I actually don't even think most people appreciate how big of a deal it is because we're not only trying to get all of our features into 1 tech stack sac, which means that we ship once, we ship everywhere. But we're actually building new infrastructure. like actually new infrastructure to run core DoorDash, which will make any future integration much easier to run because it will just kind of work out of the box. So it will actually speed things up quite a bit. And that's why we decided to undertake such a large investment both in terms of dollars as well as people, I mean literally rebuilding this airplane as we're flying it part by part, engine by engine. And so it will actually speed things up in the future.

Our next question comes from the line of Michael Morton from MoffettNathanson.

One for Tony and then one for Ravi. Tony, I was curious to how you expect this deal to be perceived by your grocery customers. Will it land with them that DoorDash is becoming at similar scale to Amazon and Walmart and going to help them in that competition? Or will it raise concerns that they have now 1 concentrated like service provider because those grocers are obviously powerful with kind of local regulatory bodies? And then my next question for Ravi, is just I was curious to why you're using your shares. Historically, you've been very disciplined with repurchasing shares and it's trading at a level where you have been active repurchasing. So just trying to get a better understanding to why you see it's an opportunity to use your currency at these prices and not just more cash?

Michael, I'll take the first one. We expect a very positive response grocers. And a lot of what we talk about with grocers is just how are -- how can we together help them compete against the largest companies in the world online off -- and how do we actually help them build the capabilities of great technology, a modern tech stack as well as fast delivery. You really need all of these component parts to have a fighting chance. I mean if you -- I mean, if you've seen what has happened in the grocery industry, in particular, I mean the largest companies are only getting larger and needing more of the pie. And the question is how do you give everybody else a fair fighting shot. And I think the grocers view things very similarly. I mean these are conversations about what's happening in the industry in terms of the biggest companies eating more of the pie. I mean, that conversation has been happening for the past decade. And it's only kind of gone in that direction of travel. The question is how do we give everybody else, the capability is to have a level playing field. And that's what we see in this potential partnership, which is we're going to give you the tools, we're going to give you the business with added density, which will help with faster delivery times, more affordable prices for everyone. Greater earning opportunities for shoppers. And we think it really puts together the best possible chance where you have a modern tech stack that we are only going to continue investing and innovating more and new fulfillment models, which we are inventing as we speak. And certainly, reinvestment, which has been the philosophy all along the way at DoorDash and how we've built our own marketplace.