## Analysts Q&A Session
1) Shweta Kajuria, Wolfe Research:
– Question: How does the combination of DoorDash, Wolt, and Deliveroo affect your market share in the 40 markets you’re operating in, especially Europe? Also, what are Deliveroo’s unit economics and retention rates like when compared to past acquisitions such as Wolt?
– Response: The acquisition of Deliveroo is expected to enhance our international operations, similar to our success with Wolt over the past three years. We aim for scale and broader local commerce through this acquisition. Regarding tariffs, despite potential changes in consumer sentiment, we’re not witnessing significant impacts. Our focus remains on enhancing merchant selection and reinforcing our affordability and service quality initiatives.
2) Deepak Mathivanan, Cantor Fitzgerald:
– Question: Your recent acquisitions suggest a shift in your M&A strategy. Has your philosophy on these changed? And regarding grocery, what trends are you seeing in customer spending and order sizes?
– Response: Our threshold for M&A remains unchanged; timing may vary with opportunities. Deliveroo fortifies our European expansion. On grocery, we’ve expanded our merchant selection, improving product quality and thereby increasing our user cohort retention and order frequency. Performance and margins are robust, aiming for scale and efficiency which drive growth and retention.
3) Nikhil Dazali, Bernstein:
– Question: With the Deliveroo and Seven Rooms acquisitions, does this alter DoorDash’s earnings expectations for 2025-2026 amid consistent growth trajectories?
– Response: The acquisitions won’t distract from our mission to grow the business and improve profit dollars. Both acquisitions align with our strategy of driving duration and reaching profit growth across multiple markets, ensuring our EBITDA improves with prudent investments.
4) Youssef Squali, Truist Securities:
– Question: Can you elaborate on the initiatives behind affordability and the dip in net revenue margins this quarter? Is Deliveroo’s lower growth structurally concerning, and can it align with DoorDash’s margins?
– Response: We prioritized growing profit dollars over margin percentages, with certain affordability investments impacting take rates short-term. As for Deliveroo, scale and local market expansion are our focus, intending to leverage our established models to improve its profitability within competitive European markets.
5) Michael Morton, MoffettNathanson:
– Question: On your entry into competitive European markets and differing consumer bases, how does DoorDash plan to navigate challenges as a non-leader?
– Response: Focus is more on building scale than immediate leadership positions. The strategy involves leveraging our learning, aligning with successful aspects from Wolt’s integration, and expanding product offerings to enhance European market operations.
6) Doug Annes, JPMorgan:
– Question: With growth in grocery, how do you plan to exceed the in-store experience, and what innovations are necessary as online begins to rival offline?
– Response: The aim is to continually improve order accuracy, affordability, service quality, and support structures. Experiences like our Double Dash option illustrate the potential to surpass traditional methods by enabling comprehensive multi-store shopping with convenience.
7) Mark Mahaney, Evercore:
– Question: What minimum cash level does DoorDash aim to maintain post-acquisitions? Regarding SevenRooms, how will marketing as a service be pushed out across your consumer base?
– Response: We maintain around $1 billion minimum cash to support working capital needs. Beyond that, investments need to yield high IRR. As for SevenRooms, our current focus remains on restaurant integrations with potential for broader service expansion on a sequenced and strategic basis.
8) Brian Novak, Morgan Stanley:
– Question: Regarding Deliveroo and its non-leading market positions, what successful strategies from Wolt or other ventures will inform better execution?
– Response: The analysis shows strong ability to achieve returns even from lower starting points by leveraging strong localized profit pools. Some of Wolt’s strategic adaptations will enhance our approach in similar Deliveroo markets.
## Sentiment Score Distribution Table:
| Analyst Name | Firm Name | Sentiment Score (1-10) |
|——————–|——————–|————————|
| Shweta Kajuria | Wolfe Research | 8 |
| Deepak Mathivanan | Cantor Fitzgerald | 7 |
| Nikhil Dazali | Bernstein | 8 |
| Youssef Squali | Truist Securities | 7 |
| Michael Morton | MoffettNathanson | 7 |
| Doug Annes | JPMorgan | 8 |
| Mark Mahaney | Evercore | 6 |
| Brian Novak | Morgan Stanley | 7 |
## Sentiment Score Conclusion:
The overall sentiment of the earnings call remains generally positive, with sentiment scores primarily in the 7 to 8 range. Analysts appreciated the strategic alignment and potential growth from recent acquisitions, such as Deliveroo and SevenRooms. However, concerns remain about competitive positioning and profitability in European markets where DoorDash isn’t a leader. Moreover, while the company’s focus on product improvements and profitability is seen positively, pressures on net margin and market dynamics, particularly in response to affordability initiatives, are noted as areas needing attention. DoorDash’s cautious approach to M&A and strategic investments reinforces confidence, yet market performance and competitive strategies remain observed factors moving forward.