Deliveroo H1 2025 Earnings Report

Deliveroo EPS Results

• Actual EPS: -GBX 0.01
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Deliveroo Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Deliveroo Announcement Details

• Quarter: H1 2025
• Date: 8/7/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 4:00AM ET

Deliveroo (LON:ROO) is an award-winning delivery service founded in 2013 by William Shu and Greg Orlowski. Deliveroo works with approximately 178,000 best-loved restaurants, grocers and retail partners, as well as around 130,000 riders to provide the best on-demand delivery experience in the world. Deliveroo is headquartered in London, with offices around the globe. Deliveroo operates across 9 markets, including Belgium, France, Italy, Ireland, Kuwait, Qatar, Singapore, United Arab Emirates and the United Kingdom. Further information regarding Deliveroo is available on the Company's website at https://corporate.deliveroo.co.uk/

Deliveroo H1 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Deliveroo delivered 9% year-on-year GTV growth and a 46% increase in adjusted EBITDA to £96 million, while generating positive free cash flow for the third consecutive half.
• Positive Sentiment: Growth momentum accelerated in Q2 with 10% GTV growth, supported by improved customer retention and order frequency driven by enhancements to the consumer value proposition.
• Positive Sentiment: Core restaurant vertical growth rebounded strongly, grocery accounted for 18% of group GTV with double-digit expansion, retail selection scaled up, and the advertising business progress lifted contribution to 150 bps of GTV.
• Negative Sentiment: Revenue take-rate contracted by 20 bps year-on-year due to mix shifts into lower-margin categories and the new UK digital services tax, weighing on gross margin.
• Neutral Sentiment: Shareholders approved the DoorDash transaction and Deliveroo expects completion in Q4 pending regulatory clearance, in line with the original timeline.

Presentation

[Will Shu, Founder, CEO & Director at Deliveroo]

Good morning and welcome to our half year '25 results. I'm Will Shu, Founder and CEO of Deliveroo and I'm joined by Silla, our CFO. It's going to be a short presentation today. I'm going to start with a quick overview of our performance and take you through some of the progress we've made across our growth initiatives. Then Silas is to get into the financials and we're going to give you a status update on the DoorDash transaction.

[Will Shu, Founder, CEO & Director at Deliveroo]

And then I'm going to wrap up at the end. So let's get started. It's been a great first half in twenty five for Deliveroo. We posted year on year GTV growth of 9% and adjusted EBITDA of £96,000,000 that's up 46% year on year and we've generated another half of positive free cash flow, which is great. We also exit the half with really good momentum, year on year GTV growth accelerated to 10% in Q2.

[Will Shu, Founder, CEO & Director at Deliveroo]

The fundamentals of the business feel good, retention and frequency across all cohorts continue to improve. And that's a trend that you know, we've seen over the last six quarters or so. And we think this is the result of great work by the teams to relentlessly improve the CVP. And on the back of this strong first half performance, we're gonna update our fiscal year twenty five guidance. So Silo is going to take you through that shortly.

[Will Shu, Founder, CEO & Director at Deliveroo]

Now let's get into the business update. I want to start by reminding people of our strategic framework. You've seen this, I think many times on these presentations, but this really starts from our mission. And our mission is to transform the way you shop and eat, bringing the neighborhood to your door by connecting consumers, restaurants, shops and riders. And we have three pillars that support the delivery of that mission.

[Will Shu, Founder, CEO & Director at Deliveroo]

We want to drive the best CVP on a hyper local neighborhood basis. We want to do that across key verticals, like restaurant, grocery retail. And we want to do that very efficiently in all these areas that we operate. Alright, so let's get into the CVP part. Probably my favorite part.

[Will Shu, Founder, CEO & Director at Deliveroo]

So we've continued to build on market leading selection, we've added further 4,000 sites globally across restaurant, grocery and retail. We've also continued to selectively extend our delivery radii, we've increased the selection that consumers see in the app, giving people greater choice On the price value, you know, I've talked about our commercial architecture and value program a lot. And I'm really happy to say that I think these initiatives continue to yield good results. What we've seen is further markup reductions in France. And then in The UK, what we've seen of course is national insurance and minimum wage has increased.

[Will Shu, Founder, CEO & Director at Deliveroo]

And that's increased in April. And that's put merchant partners under pressure. So we have seen some menu price inflation, but it has been lower than we have anticipated. And the price increases have been quite consistent across both dining and on delivery. So markups in The UK have remained stable.

[Will Shu, Founder, CEO & Director at Deliveroo]

We've also continued to be relentlessly focused on reducing defects. I've talked a lot about the work the team's done over the years on this. But in the first half, we took actions such as launching auto acceptance of orders. That's led to further reductions in order rejections and cancellations. We've extended receipt scanning to the customer handoverside.

[Will Shu, Founder, CEO & Director at Deliveroo]

So when the rider comes to you, sometimes the rider will ask to scan something, as opposed to just doing it at merchants. We've also implemented tighter rider behavior policies to more accurately address rider driven OMD and ours. And that OMD and ours of course is when you actually don't get your food, which is the worst defect possible. And we've reduced this critical defect to a new all time low. And this is on top of the 70% decrease in '23 and further improvements to in '24.

[Will Shu, Founder, CEO & Director at Deliveroo]

So it's an enormous reduction in this terrible defect. And then on the CVP, we also have loyalty. '24 is a big year of innovation for Plus and '25 has been about refining that proposition. So we've implemented a number of actions to reduce subscriber churn, we've launched a discounted annual plan to provide subs with access to savings and to boost annual retention. We've rolled out new partnerships to help expand the program.

[Will Shu, Founder, CEO & Director at Deliveroo]

And then finally, we've offered more partner funded benefits to offer value to subs. What all of that means is the output what we've seen is a strong year on year increase in plus orders, GTV, Max and paying plus gold subscribers have reached a new all time high in Q2. So we've executed well across our CVP. Now let's talk about each vertical. Let's start with restaurants.

[Will Shu, Founder, CEO & Director at Deliveroo]

So at the full year March, I said that restaurants are the heart of our business, but the category has lagged in growth over the last few years compared to verticals like grocery and retail. I am however pleased to say that growth in our restaurant vertical has accelerated strongly in the first half. It's been a key driver to our overall growth acceleration in the second quarter, which I think makes us feel good because it is our core business at the end of the day. Obviously, of these, you know, all of these verticals help support each other. But you know what, you know, it's still a, know, the majority of our business today.

[Will Shu, Founder, CEO & Director at Deliveroo]

And then in March, I talked about other exciting opportunities to accelerate that restaurant growth. We talked about growing share by pushing harder in certain areas where we think we have a big CVP differentiation or we think we can develop one. But we also talked I think at length about unlocking new occasions so growing the market and we remain very excited about these opportunities. We've made good progress laying these foundations in the first half. So our grocery business continues to perform well, it's 18% of group GTV in the first half strong double digit growth.

[Will Shu, Founder, CEO & Director at Deliveroo]

Retail continues to scale, we've added more selection, we've continued to raise awareness on that. And our advertising business reached 150 basis points of GTV, making further progress to 2% plus by '26. So we've grown strongly across our key verticals and we've got exciting growth opportunities ahead. So the output of all these actions in regards to our growth initiatives is a continued improvement in consumer engagement, I. E.

[Will Shu, Founder, CEO & Director at Deliveroo]

The cohort. So this slide is something, we show, I believe every results. And I think it's worth showing again because the are absolutely moving in the right direction. So if you look at the frequency by cohort, these are annual cohorts are presented on a quarterly basis. You can see the inflection that has started in about a year ago or a little before that.

[Will Shu, Founder, CEO & Director at Deliveroo]

And you can see that those lines are getting steeper and steeper, which is good. And if you look at the year on year average frequency growth for the, you know, more settled cohorts, you're looking at something around, you know, 5% year on year growth. That is below the historical average of 10% year on year growth per annum, but that is absolutely moving in the right direction. And you can kind of see the progress that has been made over the last few years on that. And then retention, I think as quite a similar story, that lapse rate is continuing to improve and has been for looks like about 10 quarters or so, right.

[Will Shu, Founder, CEO & Director at Deliveroo]

So I think the outputs of what we're doing is driving that really, really important consumer engagement improvement, which is fantastic. So I'm now going hand over to Sila, she's going go into the financials.

[Scilla Grimble, CFO & Director at Deliveroo]

Thanks, Will, and good morning, everyone. Before I get started, just a reminder that the numbers in this presentation are on our continuing operations basis, I. E. They exclude Hong Kong. As Will said, performance in the first half has been really positive as we've continued to make progress on a number of our growth and profitability levers.

[Scilla Grimble, CFO & Director at Deliveroo]

GTV grew 9% in constant currency, underpinned by strong growth in orders, which continued to improve in the period. Revenue growth was also 9% in constant currency, with that 20 basis points contraction in revenue take rate, mainly due to mix effects and the impact of UK digital services tax, which I flagged with prelims. We continued to work hard on network efficiencies, and so gross profit grew strongly, up 7%. Adjusted EBITDA of £96,000,000 was up 46% year on year, with EBITDA margin expanding 60 basis points to 2.5%, as we continue to drive both marketing efficiencies and broader operating leverage. Whilst at a headline we had a statutory loss of £19,200,000 this was driven by various charges we took in relation to the costs of the DoorDash acquisition.

[Scilla Grimble, CFO & Director at Deliveroo]

Excluding deal related costs, we made another statutory profit of £31,800,000 up from £1,300,000 in H1 last year. And finally, we delivered a free cash flow of £46,000,000 the third consecutive half of positive free cash flow, further reinforcing our sustainable cash generation. So we closed the half with net cash of £624,000,000 a 44,000,000 reduction during the half, driven by £90,000,000 of share buybacks. So a strong performance, good GTV growth, really pleasing order growth, and near 50% increase in adjusted EBITDA, cash generation and an underlying statutory profit. Now turning to a more detailed look at our top line.

[Scilla Grimble, CFO & Director at Deliveroo]

First half GTV grew 9% in constant currency, accelerating to 10% in Q2. This momentum has been supported by good execution as we continued to see the benefits of our investments into the CVP. Growth was also broad based across our key verticals, with a marked improvement in restaurant growth, as well as strong double digit growth in grocery and further progress in retail. Order growth is now the biggest driver of GTV growth, accelerating strongly, up 8% in H1 compared to 35% in H1 and 2024. And this is evident in the improvements in consumer engagement that Will's just talked about, with both Group average order frequency and Max up 4% year on year.

[Scilla Grimble, CFO & Director at Deliveroo]

GTV per order growth moderated to 2% in constant currency, with ongoing food inflation partly offset by a growing proportion of lower value QSRs in the overall mix. In The UKI, we've continued to perform very well, with GTV up 10% year on year and an acceleration into Q2. And within that, order growth has continued to improve through the period, up from 5% in Q4 last year to 7% in Q1 and 9% in Q2 as we executed well on our initiatives. International growth remains consistent, having been 9% in each of the last three halves. The UAE and Italy remain strong contributors to growth, while France continues to be impacted by softer market conditions and the competitive environment.

[Scilla Grimble, CFO & Director at Deliveroo]

Moving on to revenue and gross profit. And as I've said many times before, we continue to optimise for absolute quantum rather than rate, so increasing the actual users, orders, revenue, gross profit and EBITDA that we make. And that's exactly what we've continued to do during the first half. We've driven more orders from Plus, Retail and Grocery, as well as mixing more into QSRs. All of these, as you know, are slightly dilutive to unit economics, but they scale our orders and GTV and drive higher revenue and gross profit. So as we look at revenue, this increased by 9% year on year in constant currency. However, take rate dropped by 20 basis points year on year, and that was due to the mix effects I've just mentioned. And due to our progress on profitability, we're now also fully in scope for UK digital services tax, and that's treated as an offset to revenue, amounting to a drag of about 15 basis points in H1. These dilutive effects were partially offset by higher advertising revenue, as well as lower discounts and refunds, as we improve both our promotional efficiency and we continue to reduce order defects.

[Scilla Grimble, CFO & Director at Deliveroo]

So looking now at gross profit and the flow through of that take rate dilution was only partly offset by delivery efficiencies, meaning gross margin also dropped 20 basis points to 10.4%. Delivery efficiencies included further progress on stacking, where improvements to our assignment algorithm enabled us to stack 16% more orders year on year. We also further reduced rider wait time at both the Merchant and the Consumer. All in all, Gross Profit grew 7% year on year and was a strong driver of our EBITDA growth. And we've also continued to make good progress on driving operating leverage, with Marketing and Overheads as a percentage of GTV improving by 80 basis points year on year and 50 basis points half and half.

[Scilla Grimble, CFO & Director at Deliveroo]

Overheads were up 3%, within which total people costs were up 6% due to both higher average headcount and wage inflation in the period. On non people costs, we've worked hard to continue to optimise our cost base. Marketing was down 14% year on year as we continued to optimise our spend as we discussed at the prelims. And the net effect of this was overall marketing and overheads costs decreasing by 2% year on year, despite increasing order volume and general cost inflation. All in all, a testament to our improving efficiency.

[Scilla Grimble, CFO & Director at Deliveroo]

I'm really pleased that we've also continued to make great progress on cash generation, delivering another half of positive free cash flow. Looking at some of the component parts outside of EBITDA, spend on capital items increased slightly year on year as we continued to invest in key growth initiatives, such as the foundational development work on our new restaurant missions. The £12,900,000 working capital outflow was largely due to the timing of the period end within the week. And so putting all of it together, we generated £46,000,000 of free cash flow during the half. You'll remember that outside of our definition of free cash flow is cash interest income, which was £13,000,000 in the half, broadly in line with the prior year.

[Scilla Grimble, CFO & Director at Deliveroo]

We bought back shares amounting to £90,000,000 and within that we hand about £61,000,000 to complete the £150,000,000 buyback programme announced in August and about £29,000,000 related to the £100,000,000 buyback programme we announced with our prelims in March. As a reminder, that programme was suspended towards the April when we confirmed the DoorDash approach. Finally, you'll see a cash outflow of £12,000,000 for discontinued operations, which relates to cash flows in Hong Kong up to the date of exit, as well as any cash in that market that fell into the liquidation process. As a significant creditor in the liquidation, we would expect to recoup some of this when the liquidation completes in the second half. So overall, good progress on free cash flow generation, and I'll now move on to our guidance.

[Scilla Grimble, CFO & Director at Deliveroo]

So after that strong H1, you'll have seen we've updated our full year guidance. We now expect GTV growth around the top end of our previously guided range of high single digits percentage growth in constant currency. We're also narrowing our EBITDA range to the upper half of the previously guided range of £170,000,000 to £190,000,000 As a reminder, some of the investments we flagged we're making this year, such as into our restaurant growth initiative, are second half weighted, so the EBITDA shape half on half will look a little different to previous years. So finally, a quick update on where we are with the DoorDash transaction. As you know, shareholders approved the transaction on the June 16, but the regulatory process is still ongoing.

[Scilla Grimble, CFO & Director at Deliveroo]

We do still expect to complete in Q4 of this year, in line with the timeline that we set out in the scheme document. So all progressing in line with expectations. And I'll now hand you back to Will to wrap up.

[Will Shu, Founder, CEO & Director at Deliveroo]

Thank you, Silla. So each one is a great half and the business clearly has great momentum. I'm so proud of where we are today, what we've achieved to date. We have this mission and we have this vision to transform the way people shop and eat, and to bring the neighbor to your door. And we're delivering it against that vision.

[Will Shu, Founder, CEO & Director at Deliveroo]

And you know, I've been at it thirteen years, have pioneered this, I would say ever evolving, ever changing category. We built the sector, we redefined it multiple times, you know, whether that's the introduction of things like additions, plus starting verticals like grocery and retail, like I said, this category is ever evolving. And it is always surprising to me how big it is and how quickly it changes. And here we think about everything through the eyes of the consumer. And today, as we always have, we obsess about the consumer value proposition across selection, service price.

[Will Shu, Founder, CEO & Director at Deliveroo]

And as a result of that, you see the growth, right, the growth is accelerating. The cohorts are continuing to improve profitability is both sustainable and increasing as well. And we're delivering positive free cash flow. So I think, you know, I take a step back and you know, we're really proud of what we've accomplished and I just want to remind everyone a bit about Deliveroo and who we are as a company. So I'd say that, you know, and I talked a little bit about this at the at the Capital Markets Day back in November 22, but we are consumer obsessed.

[Will Shu, Founder, CEO & Director at Deliveroo]

We are operators, but in the details, we are innovators and builders, and we are relentless. And then that is who we are. And these are the reasons why we've succeeded as a company. And, you know, as you know, these are likely to be our last set of financial results as a listed business. And I am so proud of what we've done.

[Will Shu, Founder, CEO & Director at Deliveroo]

The challenges we have overcome the achievements we have delivered. It's never been easy. It's never been predictable. But I'm really, really proud of everything we've done. And now pending completion of the takeover, we enter an exciting new chapter.

[Will Shu, Founder, CEO & Director at Deliveroo]

And the partnership with DoorDash will further accelerate our full potential. And I'm sure that DoorDash will be a great partner to Deliveroo. I want to give a huge thank you to everyone who has helped deliver the success today and over the years, our employees, our merchant partners, our riders and most of all, our consumers. I'm sure the best is yet to come. Thank you very much.

[Will Shu, Founder, CEO & Director at Deliveroo]

With that, I'm going to hand back to the operator for any Q and A. Thanks.

[Operator]

Thank you very much, sir. Our very first question is coming from Giles Thorne calling from Jefferies. Please go ahead. Your line is open.

[Giles Thorne, Analyst at Jefferies LLC]

Good morning. Thank you. So yes, given this is probably the last public markets call, my questions rather reflect the feeling of being a bit demob happy. So, Will, two for you. It's been, I think, almost exactly twelve years to the month since you got on your your bike, or I think it was a scooter, to launch Deliveroo in Chelsea.

[Giles Thorne, Analyst at Jefferies LLC]

I'm assuming the business has been every moment of your waking life since then, but now the business is about to change ownership and the offer document from DoorDash was quite light on details as to what's next for Will Shu. So I guess that's my first question. What is next for Will Shu? And then my Yes, second go question ahead. My second question is sorry, Will.

[Giles Thorne, Analyst at Jefferies LLC]

Why don't you go ahead on that one, Will, then I'll come to my second question.

[Will Shu, Founder, CEO & Director at Deliveroo]

Will Well, was going say it's actually been thirteen years since Greg and I started the business. So sort of August 12 is when we incorporated the company. So we've been at it for quite a long time. Look, today is not about me, right? Today is really just about our results.

[Will Shu, Founder, CEO & Director at Deliveroo]

And really, we're just focused on executing on the business. And once the completion happens, you know, we can talk a lot more about that when the time is right. Oh, sorry, what was your second question, Jaz? I interrupted you.

[Giles Thorne, Analyst at Jefferies LLC]

No, no problem. So the second question is the different tack. We hear pretty regularly about the failings of London as a place for technology companies to list. And indeed, today's results suggest that you are a much higher quality company than the London markets we're giving you credit for. So the question for you, Will, is were you to get the tap on the shoulder from someone within the NFC or the Treasury or the FCA, whoever it is, as to how our institution served you or failed you, what would your answer be?

[Giles Thorne, Analyst at Jefferies LLC]

And what advice would you give to the next technology company thinking about London as a listing vendor? I think

[Will Shu, Founder, CEO & Director at Deliveroo]

I mean, I think thank you for the question. I wasn't anticipating such high level philosophical questions, but very happy to engage. So, I appreciate it.

[Giles Thorne, Analyst at Jefferies LLC]

James We're deep into August, K. Will.

[Will Shu, Founder, CEO & Director at Deliveroo]

Yeah, yeah, yeah. I was kind of hoping he'd ask about the CVP, but that's fine. I think The U. K. Is a phenomenal place to do business.

[Will Shu, Founder, CEO & Director at Deliveroo]

And, you know, we have been, I think, beneficiaries of, you know, a great business environment here. To me, I'm always sort of less focused on listing venue, because, you know, in my mind, sort of, is London a great place to do business, full stop? You know, yes. You know, you've got amazing talent here. You've got a, you know, predictable rule of law.

[Will Shu, Founder, CEO & Director at Deliveroo]

You've got, you know, things, you know, if you work hard here and you have a good product, I think you can do really, really well here. I would say for me, what I think really will motivate more and more people to build businesses and to join startups is the ecosystem itself, right? When I started this business thirteen years ago, there were a few sort of successful startups and scale ups, but, you know, there really weren't that many back then. And I look at sort of the last decade, you know, with people like, you know, Revolut or Monzo or TransferWise and a whole host of others. I think the optimism that you have as a young person to start a business today is really different.

[Will Shu, Founder, CEO & Director at Deliveroo]

And obviously, you've got VC money in from, you know, almost every major fund here in The U. K. So I think it's a fantastic place to do business. And I think, you know, succeed, as more and more companies grow and go public, I think that'll be a really positive sense of optimism for people to attempt to do this really, really hard thing, right? Because it is really hard and it is all consuming.

[Will Shu, Founder, CEO & Director at Deliveroo]

But if you've seen other people succeed, I think that gives you, you know, a bunch of hope that you can do the same.

[Giles Thorne, Analyst at Jefferies LLC]

Very good. Thanks, Will. All the best.

[Will Shu, Founder, CEO & Director at Deliveroo]

VICE Thanks, Charles.

[Operator]

Thanks for your questions. Sorry, sir. Thanks for your questions, Mr. Thorne. We'll now move to Annick Maas of Bernstein. Please go ahead. Your line is open.

[Annick Maas, Director - Media & Internet Equity Research Analyst at Bernstein]

Good morning. So my first question is, these results are really very, very good. So one could even argue that the takeover offer here is way too low. So I kind of want your view on that point. And my second one is on the competitive dynamics you're seeing in The U.

[Annick Maas, Director - Media & Internet Equity Research Analyst at Bernstein]

K. I'm just kind of I'd like to understand how sustainable basically the order growth is that you've been seeing in The U. K. And if you can just comment on what you've been seeing from your peers. And the last one is on how you are thinking about group take rate for the rest of the year. Thank you.

[Will Shu, Founder, CEO & Director at Deliveroo]

Thank you. I think we've got, you know, a number of different questions here. Silid, maybe you want to start at the bottom one with take rate and then I can answer, I guess the first two.

[Scilla Grimble, CFO & Director at Deliveroo]

Sure. So, Anik, you heard in the kind of prepared remarks, the take rate, the sort of 20 bps year on year degradation was really a mix of factors as ever. So I I was continuing to shift into lower margin, but still accretive in terms of quantum orders. By that, I mean, moving into grocery, moving into plus as we've flagged before, and then actually particularly in this half we've seen more shift into QSR. But with that offset by, or partially offset I should say, by our continuing progress on ads and also our continuing progress on, you know, refunds and reducing defects.

[Scilla Grimble, CFO & Director at Deliveroo]

So I expect those things to continue to play out and broadly kind of, I know, offset one another. What we have seen though in the half, as I flagged in the prelims, is as a result of that profitability improvement, we're now fully in scope for UK DST, so we did get a drag of 15 basis points on take rate cut as a result of that. That's a sort of one off shift in this year, again, as I flagged, so we'll continue into second half, but isn't repeatable in 2026.

[Will Shu, Founder, CEO & Director at Deliveroo]

Yeah, and just on your question, first of all, thank you for the kind words on the second quarter and first half. You know, we're really proud of that. And again, a big thank you for the Deliveroo team on this. You know, this is the result of, you know, work we've done over the last few years. We came out, I think it was November 23, Capital Markets Day, and we talked about what we were going to do over the next few years.

[Will Shu, Founder, CEO & Director at Deliveroo]

And the outputs of that the improvement in the cohorts on the growth rate and the profitability. So, we're really proud of that. And all of this, I think I don't want to say everything's predictable, but we had a plan and we executed on it is the short of it, right? And to your question then, you know, nothing has fundamentally changed since the Board and the independent committee recommended the transaction. We laid out, I think, very clearly why we think this is a good deal for shareholders and Deliveroo.

[Will Shu, Founder, CEO & Director at Deliveroo]

And all these results do, I think, is no different than our view from a couple months ago, right? Because obviously, you know, these results today are not a surprise to us. So, think, you know, to that point, what I would encourage you to do is, you know, take a look, in the deal documents, the rationale is clearly stated. And we are, I think, really excited about the future with DoorDash. And what was the second, sorry, what was your second question again? Was it on the The growth rates or

[Annick Maas, Director - Media & Internet Equity Research Analyst at Bernstein]

dynamics you're seeing in The UK just to see how sustainable the order growth is that you've seen there?

[Will Shu, Founder, CEO & Director at Deliveroo]

I would say this, right? I mean, like I said, the initiatives that we plan are over, you know, a multiyear period. You can see the cohorts improving over the last, you know, eight to ten quarters or so with acceleration over the last four. These things usually to me are a pretty good leading indicator that, you know, our growth rates are sustainable. And obviously, we don't stop there.

[Will Shu, Founder, CEO & Director at Deliveroo]

You know, we're always thinking about the next few years as well. So it's an ongoing process of execution and vision. And so, I feel really great about what we've accomplished, and I feel really great about the future, and I feel great about the future with DASH as well.

[Annick Maas, Director - Media & Internet Equity Research Analyst at Bernstein]

Okay. Thank you very much.

[Operator]

Thank you, ma'am. We'll now move to Monique Pollard of Citigroup. Please go ahead.

[Monique Pollard, Director - Equity Research at Citi]

Hello, morning everybody. Thank you for taking my questions. The first one was just to come back on this point on The UK competitive dynamics. I guess, you know, when we look at your results today, which are very good, there's a meaningful difference versus a major competitor, let's say, in terms of the order growth dynamics particularly. And given that Takeaway had talked about, you know, material investment that they were planning to make this year, just wondering if on the ground you're seeing that show up in any way?

[Monique Pollard, Director - Equity Research at Citi]

The second question I had was just on AOV growth. So, you know, it's brilliant to see that the growth in the GTV is very much volume driven because I imagine for you guys that seems much more sustainable. And just wondered, the AOV growth that you're showing is actually far lower in The UK than takeaway. I'm just wondering if that's a deliberate strategy. I understand there'll be some mix effects, sort of talked about higher QSR growth in the quarter, but there's also strong growth in grocery, etcetera.

[Monique Pollard, Director - Equity Research at Citi]

So it feels to me like that's part of a deliberate strategy to keep pricing lower than perhaps you could achieve. And then the final question was just on The UAE. Obviously, that's called out as one of the strong areas of growth, countries of growth in the international. Just wondered how you're preparing for Maitland's potential entry before the end of the year and what you've learned from Hong Kong that will allow you to compete more effectively second time around? Thanks very much.

[Will Shu, Founder, CEO & Director at Deliveroo]

Sure. I think there's probably some here for hey, Monique. Think there's some here for Priscilla, some here for me. Let me just start on the first one, which I think are UK competitive dynamics. So, like I said, you know, we really focus on our own business.

[Will Shu, Founder, CEO & Director at Deliveroo]

You know, we focus on our CVP, and we do that over years. And I think the outputs are obviously, I think, pretty good growth at this point. And I definitely think we are taking share, which is positive. I really, you know, can't really comment on other people's results. We're really just thinking about, you know, what we're doing here.

[Will Shu, Founder, CEO & Director at Deliveroo]

I would say, though, yes, we are taking share. We are proud of, you know, the momentum our business has, and, you know, we think it's very sustainable. The second question was Cilla, is that one for you, Ethan?

[Scilla Grimble, CFO & Director at Deliveroo]

Yeah, I can pick that up, because I think it was about sort of shape of our AOV growth and a bit of contrast to what you've seen reported by UK peer a few days ago. Monique, as I described really in terms of some of the component parts for us, so we are continuing to see larger baskets in grocery, but we're getting some and we're continuing to see some inflation, but clearly not the levels that we saw, you know, in the previous few years. Offsetting that a bit though is some mix, so you know, things like us moving into QSR, as I flagged, you know, we report GTV as we move more into plus orders, clearly the fee structure is a little bit different for those as well, so you know, that can change the shape in terms of GTB per order growth. So that's probably all I was saying in relation to our business. If you contrast a bit with Jet and this is, you know, a lot of us outside in, clearly we don't know the exact structure, but clearly people will take different views in relation to their pricing mechanics and they have more or less sort of loyalty loyalty members within the mix.

[Scilla Grimble, CFO & Director at Deliveroo]

And the other bit probably to flag is just in terms of grocery where they were a little bit later than us in terms of some of the adoption, and I would expect that that's, you know, they're continuing to see some more penetration or the year on year growth in terms of the mix being a bit different to us.

[Will Shu, Founder, CEO & Director at Deliveroo]

I mean, I think philosophically, like, you know, from our perspective, you want to obviously attract users to your platform. You want to, you know, increase their engagement, I. E, frequency and retention, right? And I think, you know, obviously there's a balance between unit economics and all of that. But at the end of the day, you know, we want to solve for, you know, gross profit dollars and, know, user satisfaction and, you know, user growth user engagement, right?

[Will Shu, Founder, CEO & Director at Deliveroo]

So, I think that stuff feels like it's moving in the right direction. And then, the UAE point, I think we're really happy with our business there, right? We think we have a uniquely positioned value prop there. And The UAE market is really different than Hong Kong. You know, like I said, why did we, you know, decide to leave Hong Kong?

[Will Shu, Founder, CEO & Director at Deliveroo]

Think one of the key reasons was, you know, a lot of I think Hong Kong is a city that changed a lot over ten years, and I think the user base that we had sort of pre COVID was just quite a different user base, you know, five years later as a lot of people moved out. And so, you know, for us, I think the situation with UAE is very, very different. And I think that we are, you know, really well positioned. Obviously, know, definitely learned from our Hong Kong experience as well.

[Annick Maas, Director - Media & Internet Equity Research Analyst at Bernstein]

That's very clear. Thank you very much. Thanks.

[Operator]

Thank you very much, Ms. Pollard. We have one more question left in the queue and that question will be coming from Sylvia Kuno calling from Deutsche Bank. Please go ahead. Sylvia, your line is open.

[Operator]

Could you just please check that your line is unmuted?

[Silvia Cuneo, Director at Deutsche Bank]

Hello? Can you hear me now?

[Scilla Grimble, CFO & Director at Deliveroo]

Yes. You

[Silvia Cuneo, Director at Deutsche Bank]

hear me now?

[Silvia Cuneo, Director at Deutsche Bank]

Thanks. So congratulations on the results. I have a couple of questions. The first one is on grocery and retail categories. With this business now representing a significant 18% of group GDP, could you elaborate on which specific categories within retail are currently demonstrating the strongest performance in driving this growth?

[Silvia Cuneo, Director at Deutsche Bank]

Are there any particular trends or consumer preferences you are observing within these categories that are informing your expansion strategy and you would like to talk about? And then secondly, on your algorithm, with the meaningful improvement in the stacked orders, I wanted to ask if you could provide some insights about the technological advancements underpinning this stacking performance and to what extent AI is contributing to this efficiency, And do you see this as a sustainable competitive advantage for Deliveroo? Thank you.

[Will Shu, Founder, CEO & Director at Deliveroo]

Sure. Okay, so the first question on retail, guess mostly was where your focus was. I'd say retail is really early, right? It's something that we have a lot of confidence that consumers want. But really what we've been doing over the last eighteen months is building that merchant base and driving excuse me, I need to sneeze.

[Will Shu, Founder, CEO & Director at Deliveroo]

Okay, I didn't have to sneeze. Sorry. You know, we've been really building that merchant base, right, and driving awareness at the right moments. And we have a lot of confidence that, retail business will scale up. And that's the stage we're at, right?

[Will Shu, Founder, CEO & Director at Deliveroo]

I don't think there's that much more to say on retail. Sila, anything you want to add on that?

[Scilla Grimble, CFO & Director at Deliveroo]

So nothing on retail. I think it's the categories that we've talked about before, where we're continuing to pursue the rollout of those. The 18% that you're quoting, Sylvia, actually just grocery, so that's the number that we've consistently quoted. And I guess the learning there is just now how broad the basket can be within grocery. And that's part of, you remember, that's part of what gave us the confidence that retail was also a compelling opportunity as we looked forward.

[Will Shu, Founder, CEO & Director at Deliveroo]

Yeah, and I think in terms of, you know, your question on riders and stacking and all of that, yeah, this for us is, you know, something we've been working on for the better part of ten years, right? Through machine learning. And, you know, I think we're just seeing our models improve over time. And as we sort of add the ability to do certain things in our rider network, you know, whether that's grocery, whether that's retail, and obviously grocery and retail, I think, have different types of urgency, versus restaurant food just in terms of the temperature and all of that. That opens up a lot of different possibilities, you know, for us.

[Will Shu, Founder, CEO & Director at Deliveroo]

But, yeah, I mean, look, AI is obviously, you know, changing a lot of, you know, what we're doing. So I'll give you a few examples of, you know, how AI, you know, has helped with, let's say, data enrichment, right? So, in the past, you probably would need to label each, you know, type of grocery product individually. So, for example, you know, if you labeled each pizza, whether it's ambient temperature, whether it's heated or chilled, the level of spice on it, or the cuisine of each restaurant, I think Gen AI is really great at making a pretty good guess based on the information it has, obviously, on the internet. I think when it comes to riders, right, that's a really structured data problem that we're trying to solve.

[Will Shu, Founder, CEO & Director at Deliveroo]

That's really much more reliant on our own machine learning models as opposed to AI. But I think, you know, over time, you may see some of these things converge. So, helps. And do we have any other questions, guys, or is that it?

[Scilla Grimble, CFO & Director at Deliveroo]

I think that's it.

[Operator]

Okay. No other questions in the queue, sir.

[Will Shu, Founder, CEO & Director at Deliveroo]

Okay, great. Well, then I would say thank you to the Deliveroo team for a great first half. And thank you for everyone's questions on this call. Have a great day.

[Operator]

Thank you very much, sir. Ladies and gentlemen, that will conclude today's conference. Thank you for your attendance. You may now disconnect. Have a good day and goodbye.

Participants

Executives

• Will Shu, Founder, CEO & Director
• Scilla Grimble, CFO & Director

Analysts

• Giles Thorne, Analyst at Jefferies LLC
• Annick Maas, Director - Media & Internet Equity Research Analyst at Bernstein
• Monique Pollard, Director - Equity Research at Citi
• Silvia Cuneo, Director at Deutsche Bank