DoorDash

DoorDash delivered a solid second quarter with orders and revenue up 17% and 24%, respectively, excluding Deliveroo. Adjusted EBITDA rose 40% to $914 million. Strong consumer engagement, grocery growth, international expansion, and advertising demand supported the platform’s economics.

Why it matters: Grocery is increasingly validating our view that DoorDash can extend its network advantage beyond restaurants. Rising frequency and larger baskets are maintaining the flywheel and improving unit economics, supporting our positive long-term growth and margin outlook. DashPass members, who pay a recurring fee, drove roughly 75% of US grocery and retail orders. Deeper cross-category engagement should strengthen network effects by improving order density. Higher density translates to efficient order batching and better unit economics. We also see improving engagement across cohorts, not just new users. New verticals (grocery and retail) remain on track to become profitable in the second half of 2026. Improving economics, as measured by revenue per order and revenue per user, suggest that scale is translating into more profitable growth, which could strengthen merchant monetization, though not enough to raise our take-rate assumptions.

The bottom line: We maintain our narrow-moat Rating and $205 fair value estimate as the quarter increases our confidence in DoorDash's long-term growth, margin trajectory, and ability to generate cash, but it does not materially change our expectation for intense competition with Uber. Shares are fairly valued following the earnings reaction, but we would consider an investment should the shares trade in four-star territory or below, as we see food delivery marketplaces capable of seizing autonomous upside. Sidewalk robots and delivery drones can remove courier fees and increase profitability if scaled effectively.

Our $205 per share fair value estimate represents an enterprise value of 4.7 times our 2026 revenue estimate. We project DoorDash’s revenue to grow 20% annually over the next five years, on average, consistent with our expectation that DoorDash can penetrate and preserve network effects in application-based delivery markets.

To build our revenue forecast, we developed a model that captures the dynamics of a fast-growing yet maturing technology and accounts for new opportunities in grocery and drone delivery, as well as international expansion. We forecast gradually decreasing year-over-year growth in gross order volumes, starting at 30% in 2026 and declining to 6% in 2035. We believe DoorDash will maintain its 25%-30% share of the global food delivery market over this projection period, but fierce competition from Uber and others will prevent extended market capture.

DoorDash has been diversifying its geographic revenue streams, and we believe there is a meaningful opportunity to grow the top line by expanding into new countries through its international Wolt platform. We also believe we are in the early stages of growth in the grocery delivery business, and we value the larger basket size and operating efficiency this revenue stream delivers. We expect consumers to gravitate to convenience as e-grocery catalog sizes continue to improve. We also expect a moderate expansion in take rate (the amount DoorDash keeps from each order), with human couriers gradually becoming less involved as drone deliveries roll out successfully. The technological and financial impact will be most pronounced in suburban markets, where DoorDash is focused on growth.

We expect revenue to grow faster than key expenses, such as costs associated with placing orders with non-partner merchants and onboarding new merchants, which should drive gross margin expansion. Specifically, ventures like DashMart should drive efficiency because DoorDash is operating micro-fulfillment logistics facilities that require minimal onboarding knowledge from merchants. While DoorDash is taking on some complexity by running the facility, we expect this strategy to scale well in densely populated areas where merchants will look to DoorDash to facilitate the movement of their goods.

DoorDash’s continually improving machine-learning algorithms should enable increased order batching and higher route density, further enhancing per-order cost efficiency. In sales and marketing, DoorDash has seen a downward trend, which correlates with achieving critical mass as its network effects become self-sustaining. DoorDash has achieved strong brand awareness in its largest markets, so sales and marketing expenses are expected to decline as a percentage of revenue over time.

As of June 2026, the firm reported its eighth consecutive GAAP-profitable quarter. We project the firm will remain profitable in all future quarters, with an adjusted operating margin of 4.5% in 2026, gradually expanding to 13.4% by 2030.

DoorDash operates as a marketplace in the e-delivery industry, connecting three main constituents: eaters, restaurants/grocers, and couriers. We believe DoorDash warrants a narrow-moat rating, driven primarily by network effects and intangible assets. Other players in the e-delivery market also experience network effects, but only Uber can compare to DoorDash’s scale. Even so, DoorDash has far superior customer engagement, which strengthens its network effect as a moat source. DoorDash also collects data with each incremental order, which informs its understanding of consumer behavior and optimizes its algorithms and advertising offerings. The strength of DoorDash’s network effect and intangible assets is the critical determinant of its ability to maintain returns above its cost of capital over time.

The network effect can be thought of loosely as "supply informing demand and demand informing supply." Supply is couriers and restaurants/grocers, while demand is eaters. Food marketplace companies such as DoorDash incentivize restaurants (supply-side) to join their network by providing an online presence and access to millions of consumers (demand-side). It also enables couriers (a supply-side contingent) by creating a marketplace where they can earn wages and work flexible hours. At the same time, the food marketplace provides an on-demand service for eaters (demand-side). Combining supply and demand creates a network in which DoorDash acts as an aggregator.

Critical to DoorDash’s network effect is achieving and maintaining critical mass, the tipping point at which network effects become self-maintaining. For DoorDash, this means having enough restaurants, Dashers, and eaters such that all three parties benefit. Reaching critical mass initiates a virtuous cycle: more orders generate more data and improved algorithms, which increase the application’s understanding of human behavior, which in turn optimizes performance and encourages more consumers, which also encourages more restaurants to join the network.

Dash’s platform is sticky with strong user loyalty. Dash has shown impressive growth from 39 orders per user per year in 2020 to 62 orders per user per year in 2024, 10% annual growth, significantly outpacing Uber’s 3% and Grubhub/JustEatTakeaway’s 1%. Dash is rapidly increasing engagement and is on track to surpass Uber in absolute trips or orders per user, despite focusing exclusively on food delivery, while Uber benefits from cross-selling opportunities across its mobility and delivery segments.

High engagement enables DoorDash to collect more data, strengthening its value proposition to restaurants by providing insights into customer ordering behaviors and trends. At the same time, it directly benefits Dashers by increasing delivery opportunities, improving supply-side stickiness. Moreover, DoorDash’s high engagement lowers per-order costs (such as customer acquisition costs) while improving operating leverage across a fixed cost base. Higher order volume in specific areas lets DoorDash batch orders and optimize routes, improving margins through greater order and route density.

DoorDash completed 3.2 billion orders in 2025, whereas the nearest pure-play e-food marketplace likely completed less than 1 billion. DoorDash has outpaced competing food delivery marketplaces like JET/Grubhub and Instacart, growing order volume a whopping 26% annually compared with JET’s 1% and Instacart’s 3%. This results in top-of-class scale as measured by gross order value. Dash has a GOV of $102 billion, while Uber Eats is at $91 billion, and other competitors are just a fraction of that.

To generate revenue, DoorDash charges consumers delivery and service fees, as well as fees or commissions to restaurants, while also allowing consumers to leave tips, which effectively subsidizes its supply-side expenses. New York City and San Francisco still have restaurant fee caps at 15%-20% of total order value, but we believe these fee caps will be rolled back, which could allow for additional margin expansion. JET’s inability to expand into suburban markets without fee caps effectively doomed its North American ambitions and allowed DoorDash to grow even more rapidly, emblematic of the winner-take-most nature of network-effect industries. DoorDash reached critical mass by rapidly signing up restaurants, couriers, and consumers across a variety of markets, allowing network effects to become self-sustaining.

DoorDash shows no signs of slowing down in suburban expansion, exemplified by its first-mover adoption of innovative technologies like eVTOL or drone deliveries. In December 2024, DoorDash began rolling out a partnership with Alphabet’s Wing drone service in suburban Virginia and the more urban Dallas-Fort Worth metro area. Early reviews of the nascent technology have been extremely enthusiastic. DoorDash is a natural partner for the firms developing drone technology. DoorDash’s strong network of restaurants/stores and customers should help these firms drive higher return on investment more quickly than they could on their own.

DoorDash is the premier food delivery demand aggregator in North America with a dominant 60%-70% market share.

Strong order growth and engagement outpace the competition and reinforce DoorDash’s network effect. Market share will likely continue to shift in the firm's favor.

DoorDash’s partnerships with drone delivery companies like Alphabet Wing should allow it to expand margins by removing the human courier.

DoorDash lacks Uber’s revenue diversification since it focuses exclusively on food and convenience delivery.

DoorDash could face new competition from drone companies that decide to build apps and aggregate demand themselves.

The gig industry is nascent and has plenty of room for increased regulation. The mandatory classification of gig workers as full-time employees would compress margins and hurt the company.