DoorDash NASDAQ: DASH executives emphasized the company’s proposed acquisition of Instacart, product investments and continued momentum in its core restaurant and new-verticals businesses during its third-quarter 2026 earnings call.
Co-founder, Chair and CEO Tony Xu said the combination with Instacart is intended to help grocers and retailers compete through improved technology, logistics and fulfillment capabilities. DoorDash expects the transaction to add delivery density, broaden product offerings and support investments in faster, more affordable grocery delivery.
Instacart deal centers on grocery capabilities
Xu said grocery delivery remains “just a fraction” of its potential because consumers are often asked to pay a premium for imperfect delivery. He highlighted inventory management as a central challenge, saying DashMart orders are nearly perfect in delivery accuracy while orders fulfilled through third-party stores are in the low 90% range.
DoorDash has sought to address that gap by holding inventory through DashMarts and managing thousands of items for retail partners including Giant Eagle and Albertsons, Xu said. However, managing inventory is a fixed-cost business where scale is important.
“The added density in the last mile network brings fulfillment efficiencies to offer faster delivery as well as lower cost throughout the system,” Xu said of the planned Instacart combination.
Xu said the combined company would bring together Instacart’s software tools for grocers’ first-party online channels with DoorDash’s first-party logistics capabilities, including DoorDash Drive. The company expects those capabilities to help retailers operate loyalty programs, maintain their own customer relationships and offer faster delivery.
DoorDash expects a positive response from grocery customers, Xu said, arguing that the combination would give retailers more tools to compete with larger companies that have invested heavily in technology, delivery and fulfillment models.
Synergies expected to exceed $500 million by year three
CFO Ravi Inukonda said DoorDash expects a multiyear path to $500 million or more in annual synergies, net of planned investments. The company expects to reinvest more than 100% of total synergies in the first year after the deal closes, make progress in year two, and deliver $500 million in incremental bottom-line synergies by year three.
Inukonda identified several potential sources of growth and efficiency:
- Cross-listing merchants and categories across the DoorDash and Instacart platforms, including listing DoorDash restaurants on Instacart.
- Expanded advertising opportunities as consumer packaged goods advertisers gain access to more consumers.
- Cross-selling Instacart’s first-party software products to DoorDash grocers and DashMart Fulfillment Services across both platforms.
- Improved Dasher and shopper density, which DoorDash expects to increase fulfillment-network efficiency.
- Potential savings in sales and marketing, customer support and other operating functions.
Inukonda said the company’s goal is to reinvest some of the increased profit dollars into improving products for consumers and grocers, following a playbook DoorDash has used in its core marketplace and acquisitions including Wolt and Deliveroo.
Addressing the consideration mix for Instacart, Inukonda said Instacart wanted stock in the transaction to participate in the combined company’s potential upside. He said DoorDash still values its shares highly and that its approach to buybacks has not changed: the company expects to remain conservative and opportunistic when returns warrant repurchases.
Core marketplace growth and new-verticals progress
Inukonda said DoorDash’s restaurant business accelerated from the second quarter to the third quarter, with its sequential growth rate in the third quarter representing the fastest seen in more than five years. He also said new verticals, Wolt and Deliveroo each accelerated from the second quarter.
DoorDash’s U.S. restaurant growth has been stable for the past four years, he said, supported by product improvements, increased selection and subscription growth. Paid subscribers continue to set all-time records, according to Inukonda.
The CFO said growth is being driven by user growth and subscription growth, while customer order rates, order frequency and basket sizes have improved. He also said that DoorDash’s new-verticals portfolio is nearing gross-profit breakeven and remains on track to become gross-profit positive by the end of the year.
Executives pointed to improving behavior among grocery cohorts, including higher monthly active users, larger basket sizes and growing engagement. Inukonda said the recent addition of Costco to DoorDash’s platform was off to a strong start, while more DashPass subscribers continue to use categories beyond restaurants.
DashMart, technology platform and AI
Xu said DoorDash’s long-term DashMart vision is to build local infrastructure for last-mile delivery across cities, encompassing merchant software, new fulfillment models and logistics. He said existing grocery stores already provide much of the real estate and inventory needed, but stores were generally designed for browsing rather than delivery.
DoorDash intends to use greater network density and scale to reduce costs, expand the range of items it can manage and eventually bring more of a store’s selection to consumers quickly, Xu said. He described that effort as a sequencing process involving technology, operations and people rather than a purely digital change.
The company’s single technology-stack project is on track in both cost and timing, Inukonda said. Several modules are already live, with merchants onboarding faster and customer support beginning to improve in areas using the new system. DoorDash expects the overall re-platforming project to be completed in the first half of 2027.
Xu said the new infrastructure is designed to make future integrations and product development faster, including the potential integration of Instacart after the transaction closes.
On artificial intelligence, Xu said third-party AI agents have generated only several hundred orders in total so far. DoorDash is evaluating features that could create incremental orders through third-party assistants while continuing to build its own tools, including Ask DoorDash and Text DoorDash. He said consumers still predominantly come directly to DoorDash for everyday food ordering, while AI may be more useful for longer-consideration purchases or proactive tasks.
About DoorDash (NASDAQ:DASH)
DoorDash, Inc NASDAQ: DASH operates a local commerce platform that connects consumers with restaurants, grocery stores, convenience retailers and other merchants. Through its website and mobile applications, customers can browse products, place orders for delivery or pickup, and access related services.
The company provides merchants with ordering, delivery, logistics, marketing and payment tools. Its offerings include the DoorDash Marketplace, subscription programs such as DashPass, and delivery infrastructure that merchants can use through services including DoorDash Drive.
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