DoorDash Q2 Earnings Miss on Higher R&D Costs, Revenue Beat

DASH's Q2 Marketplace Momentum

Total Orders growth reflected a larger consumer base and the inclusion of Deliveroo. Excluding Deliveroo, orders increased 17% year over year, indicating healthy expansion in the legacy business.

Order gains and higher average order value drove marketplace GOV growth. Excluding Deliveroo, GOV rose 23%. Currency movements added less than 1 percentage point to the reported growth rate.

DASH's Membership and International Progress

U.S. restaurant Marketplace GOV growth accelerated slightly, supported by strong DashPass membership. In the 12 months through the second quarter, DoorDash added more U.S. paid DashPass members than in the prior 24 months combined.

Internationally, Wolt improved cohort order rates and unit economics, while Deliveroo accelerated growth in monthly active users and Total Orders. DoorDash expects the rollout of its single global technology platform to be completed in the first half of 2027.

Merchant-service expansion also continued. New signed venues at SevenRooms more than doubled year over year, while revenues from DoorDash's digital ordering service, used by more than 150,000 merchants, increased more than 40%.

DASH Operating Details

Adjusted gross profit climbed 40.9% year over year to $2.42 billion. Adjusted gross margin expanded to 54.2% from 52.2%, showing stronger gross profitability despite the continued mix shift toward membership-driven orders.

Contribution Profit increased 43.1% year over year to $1.64 billion. Contribution margin improved to 36.8% from 34.9%, indicating better economics after direct fulfillment and sales-related costs.

Adjusted sales and marketing expenses increased 36.4% year over year to $775 million.  Adjusted research and development expenses surged 66.3% year over year to $336 million, reflecting heavier product and technology investment.

Adjusted general and administrative expenses rose 34.8% year over year to $391 million. On a GAAP basis, research and development expenses jumped 52% to $535 million, while general and administrative expenses increased 39% to $538 million, weighing on reported earnings.

Adjusted EBITDA rose 39.5% year over year to $914 million, exceeding management's expectations. Adjusted EBITDA as a percentage of Marketplace GOV increased to 2.8% from 2.7% a year earlier and 2.4% in the prior quarter.

DASH's Balance Sheet and Capital Returns

As of June 30, 2026, cash and cash equivalents were $4.42 billion, while short-term investments totaled $923 million.

DoorDash generated $944 million in operating cash flow during the quarter, up 87.3% year over year. Free cash flow more than doubled to $742 million from $355 million.

Through Aug. 5, the company repurchased 6.8 million shares for $1.05 billion and had about $3.95 billion remaining under its authorization.

DoorDash’s Q3 Outlook and Investment Priorities

For the third quarter of 2026, DoorDash expects Marketplace GOV between $33 billion and $34 billion. Adjusted EBITDA is projected to be in the range of $950 million to $1.10 billion.

Management expects adjusted EBITDA as a percentage of Marketplace GOV to rise sequentially in the third quarter before declining in the fourth quarter. The anticipated fourth-quarter pressure reflects seasonally higher Dasher costs, increased insurance expenses and greater investment in the global technology platform and autonomy initiatives.

For 2026, DoorDash expects stock-based compensation expenses of approximately $1.2-$1.3 billion and depreciation and amortization expense of roughly $1.1-$1.2 billion, including about $450 million tied to acquired intangible assets.

DASH’s Zacks Rank & Stocks to Consider

DASH currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Computer and Technology sector include Applied Materials AMAT, Inuvo INUV and Analog Devices ADI. Each stock carries a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Applied Materials shares have gained 107.9% in the year-to-date period. Applied Materials is set to report second-quarter 2026 results on Aug. 13.

Shares of Inuvo have plunged 56% in the year-to-date period. Inuvo is set to report the second-quarter 2026 results on Aug. 11.

Shares of Analog Devices have rallied 39.3% year to date. Analog Devices is slated to report fiscal third-quarter 2026 results on Aug. 19.

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