DoorDash Inc Earnings - Q3 2025 Analysis & Highlights

Key Takeaways

DoorDash Inc. reported accelerated growth for the fourth consecutive quarter in Q3 2025, with improving unit economics and increasing profit dollars. The company is making significant investments in a new global tech platform, new product initiatives, and the integration of Deliveroo, all aimed at extending growth duration and driving strong internal rates of return (IRR).

Key financial results

  • Growth accelerated for the fourth straight quarter.
  • Overall unit economics are improving across the business.
  • Profit dollars continue to increase.
  • The ads business was the fastest in history to reach $1 billion in annualized revenues.
  • Bottom line contribution margins and EBITDA margins are growing.

    • Business segment results

  • New Verticals had a strong quarter and is growing very fast, believed to be a leader in order volume share.
  • The number of users ordering from new verticals has continued to grow, with increasing miles, order frequency, and overall basket size.
  • New verticals' unit economics continue to improve sequentially and year-on-year, with a focus on scaling the business and improving the product.
  • Growth in new verticals is seen across categories such as pets, electronics (gifting), health and beauty, and home improvement.
  • The US marketplace performance is strong, showing increasing strength for four quarters in a row on a bigger base.
  • US restaurant incremental margins over the last eight-quarter average were above 7% and continue to be so.
  • The Deliveroo business was found to be in better shape than expected, with growth exceeding expectations and growing double digits.
  • Deliveroo's profit generation is in line with underwriting, assuming some level of investment.
  • The international business is close to being contribution profit breakeven.
  • The ads business is growing quite nicely, with extra budgets wanting to spend more on the platform than available ad space.
  • The Autonomous Delivery Platform vision is a multimodal world, with 2026 being the year for commercialization of some efforts.
  • DashMart Fulfillment Services aims to enable any retailer to offer same-hour or same-day delivery with near-perfect accuracy by managing inventory and fulfillment end-to-end.
  • Going Out, an experiment for in-person dining, is running well in select markets, aiming to connect customers to restaurants and build loyalty.

    • Capital allocation

  • The company's philosophy is to reinvest back in the business when Gross Order Volume (GOV) is ahead of expectations and unit economics are improving.
  • All investments are made with a focus on IRR and are expected to extend the duration of growth and drive strong IRRs.
  • The investment philosophy is to maximize long-term free cash flow per share.
  • The framework for investments considers improving retention and order frequency, and driving free cash flow and IRR.

    • Industry trends and dynamics

  • The local commerce market presents many different problems to solve.
  • AI development and robotics breakthroughs are significant external changes impacting the industry.
  • Grocery penetration is very low compared to restaurant delivery, primarily due to inventory fulfillment challenges.
  • The market is still very underpenetrated, with only a single-digit percentage of the tens of millions of items in cities being delivered through DoorDash.

    • Competitive landscape

  • The space has always been competitive, but DoorDash continues to grow faster at a bigger scale.
  • The company aims to be the leading local commerce platform in Europe, with a presence in over 20 countries and strong positions in cities with the biggest profit pools.
  • DoorDash is a leader in acquiring new customers across restaurant, grocery, and other retail categories.
  • The company believes in providing maximal consumer choice from any retailer, not just one or two.
  • The goal is to connect every local business to every local consumer.

    • Macroeconomic environment

  • The company discussed affordability as a hot topic in coastal cities, including San Francisco.
  • DoorDash is aggressive in ensuring it is the most affordable platform.
  • The company took the lead in ensuring SNAP benefits could continue for those who needed them most.

    • Growth opportunities and strategies

  • Three major investment areas include building a new global tech platform, investing in new products, and investing in Deliveroo.
  • The global tech platform effort, with majority investments in 2026, aims to create a single global tech stack for simultaneous experiment deployment across all markets and audiences.
  • The new tech platform is designed to be AI native, incorporating tooling for agent workflows, software deployment, testing, and engineering roles, expecting faster shipping, global improvements, increased efficiency, and a better cost structure.
  • New product investments are focused on experiments that have found product-market fit, such as in-store products (Going Out, reservations, SevenRooms CRM), DoorDash Dot (autonomous delivery vehicle), and DashMart Fulfillment Services.
  • Deliveroo investment focuses on building a best-in-class product experience, improving unit economics, and driving long-term free cash flow by investing in product and consumer experience.
  • The autonomous delivery strategy is pragmatic, involving testing in single markets, and addressing manufacturing, partnerships, hardware/software integration, repair, teleoperations, and city government relations.
  • The company continues to invest in Dasher authenticity and has seen no challenges to its Dasher funnel or supply.
  • DoorDash believes in governments and businesses working together to produce the best outcomes for all constituents.

    • Financial Guidance and Outlook

  • For 2026, the EBITDA margin for the existing business (including investments but excluding Deliveroo) is expected to be up slightly compared to 2025.
  • Deliveroo is expected to contribute approximately $200 million to overall EBITDA, reflecting investments in product, selection, quality, and people.
  • There will be an estimated $8 million to $10 million impact or expense to EBITDA when converting from Deliveroo's EBITDA definition to DoorDash's.
  • The company's payback period bar for investments remains unchanged, with more projects now qualifying for increased investment due to demonstrated product-market fit.
  • Investments in software are expected to have shorter payback periods and drive revenue, while tech stack investments will increase feature development velocity, leading to faster releases, improved retention, and unit economics.