DoorDash (DASH, Financial) saw its stock drop by 7% following its Q1 report. Despite a 20.7% year-over-year revenue increase to $3.03 billion, this marked the first revenue miss for DASH in five years. Total orders grew by 18% year-over-year to 732 million, and Q1 Marketplace GOV increased by 20% year-over-year to $23.1 billion, surpassing the earlier guidance of $22.6-23.0 billion.

• DoorDash doesn't provide adjusted EPS, so investors should focus on adjusted EBITDA as a profitability metric. Adjusted EBITDA rose 59% year-over-year to $590 million, aligning with the high end of its $550-600 million guidance. Adjusted EBITDA as a percentage of Marketplace GOV increased to 2.6% from 1.9% a year ago but slightly decreased from 2.7% in Q4.
• The company reported stable growth in restaurant partnerships, user numbers, order frequency, and retention over the past 5-6 quarters. New and existing customer cohorts performed well, driven by service improvements.
• DoorDash announced plans to acquire Deliveroo, a London-based food delivery platform, for an equity value of £2.9 billion and an EV of £2.4 billion. This acquisition complements DoorDash's existing operations in Europe and the Middle East.
• DASH will also acquire SevenRooms, a hospitality software company, for $1.2 billion in cash. This acquisition will enhance DoorDash's Commerce Platform capabilities, helping merchants boost in-store sales. The deal is expected to close in the second half of 2025.

Two factors are driving the stock lower: the rare revenue miss, which raises concerns about consumer spending on quick-service restaurant meals, and the two major acquisitions, which make investors nervous about large expenditures amid economic uncertainty.

While the Deliveroo acquisition expands DoorDash's international presence, investors are cautious about the timing of such a significant purchase given the revenue miss. The SevenRooms deal is also substantial, prompting questions about the timing of these cash outlays.