Thank you for standing by, and welcome to the DoorDash Q3 2023 earnings call. I would now like to welcome Andy Hargreaves, VP of Investor Relations, to begin the call. Andy, over to you. Thank you very much. Good afternoon, everybody, and thanks for joining us for our Q3 2023 earnings call. I'm very pleased to be joined today by Co-founder, Chair, and CEO, Tony Xu, and CFO, Ravi Inukonda. We'll be making forward-looking statements during today's call, including our expectations for our business, financial position, operating performance, our guidance, strategies, our investment approach, and the consumer spending environment. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those described. Many of these uncertainties and risks are described in our SEC filings, including Form 10-Ks and 10-Qs. You should not rely on our forward-looking statements as predictions of future events. We disclaim any obligation to update any forward-looking statements except as required by law. During this call, we will discuss certain non-GAAP financial measures. Information regarding our non-GAAP financial measures, including a reconciliation of such non-GAAP measures to the most directly comparable GAAP financial measures, may be found in our earnings release, which is available on our investor relations website. These non-GAAP measures should be considered in addition to our GAAP results and are not intended to be a substitute for our GAAP results. Finally, this call is being audio webcasted on our Investor Relations website, and an audio replay of the call will be available on our website shortly after the call ends. Operator, I will pass it back to you, and we will begin taking questions. At this time, I'd like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile any questions. Again, if you'd like to ask a question, please press star one on your telephone keypad now. Our first question comes from the line of Nikhil Devnani with Bernstein. Please go ahead. Hey, guys. Thank you for taking my question. I had a two-parter on the U.S. marketplace. So everyone's obviously worried about a variety of headwinds and a softening consumer, yet your business is accelerating in the U.S. Can you comment on, one, what drove that acceleration? And then as a follow-on, I think the perception is your marketplace is highly discretionary, but, you know, given all the data you see and how consumers actually use your service, would you agree with that assessment, and how do you think about the sensitivity of demand? Hey, Nikhil, it's Tony. Maybe I'll start, and, Ravi, feel free to chime in. You know what? On the first part of the question, I mean, you're absolutely right. I think we saw, you know, a phenomenal quarter where, frankly, you know, every line of business has accelerated in growth and improved in its unit economics. And that's impressive, especially given the fact that we're a lot larger today than we were a quarter ago, and certainly a year ago. In terms of the U.S. restaurants business, or the marketplace in general, I mean, a few phenomena are going on, but really it's the result of product improvements we've made. Whether you look a quarter ago, a year ago, we've added selection to the platform on the restaurant side, and we've added a lot of selection on the non-restaurants front. You know, literally going from zero nearly three years ago to a multi-billion dollar business that's, you know, at scale now, growing fast and contributing quite significantly. We have over 100,000, you know, stores on the platform that are outside of restaurants. When you look, you know, outside of restaurants and into the convenience or grocery or alcohol segments, almost half of new customers that come into the industry in the U.S. come to DoorDash first, and so that's certainly adding in terms of the selection. You know, second, we've continued to improve the quality of service, whether it's our timeliness, our speed, our accuracy. Third, we've improved the affordability of the programs, both for our non-DashPass members as well as for our DashPass cohorts. You know, fourth, we've improved customer support all along the way, and so it's really the result of, you know, many years of work on the fundamentals and mastery of that, and continuing to see opportunities to continue improving the product, both in terms of efficiencies and just product quality to the customer, that's leading to the growth of all of the lines of business in the U.S. And that's what you kind of saw culminate in some of the numbers that were reported in Q3. I think with respect to the second question, it's, y ou know, I think we've—our business has always been very dynamic in terms of all of the headwinds and tailwinds it's faced in the 10 years that we've been building DoorDash, and, you know, that's certainly been true in the last three years. Obviously, we lived through a global pandemic, we lived through peak pandemic, we lived through peak inflation, we've lived through lots of other macro factors, including some of the ones impacting, you know, us today. I think, you know, it's important to remind ourselves of, of, of a few things. While it's virtually impossible, you know, to estimate or isolate the quantum, impact of any one of these macro factors, I think it's a lot easier to think about, you know, things that we do control. As mentioned in, you know, the, the answer to the previous question, we've continued to improve our product, and, you know, that's certainly within our control, and as dynamic, if not more dynamic, than some of the macro changes that we face. I think second, you know, we benefit from the fact that our first category, the Restaurants category, stems in the sense that while, sure, maybe not every meal has to be eaten, when it comes to delivery or takeout, but when you think about every category that lends itself towards convenience, and we all know that convenience only lends itself towards the direction of greater convenience, food is the most resilient and highest frequency category. I mean, this is true in every, you know, every line of e-commerce. In fact, if you looked at our cohort performance, which we talked a little bit about in our shareholder letter this quarter, you see that virtually every single cohort, including those, you know, that just joined our platform, you know, a couple months ago, are doing way better than any of the cohorts even during the pandemic. I think as you see, you know, that behavior across every line of, you know, every segment of customers, every cohort across time, I think you start to, you know, gain a different picture of just the fact of, you know, the product improvements as well as the number of shots on goal that we get to take relative to others in capturing that customer. The final comment I'd make is, you know, in spite of our performance and our market leadership, we're still a tiny fraction of what's addressable. I mean, in the U.S. Restaurants category, as one example, we're less than double-digit percentage sales of the industry. I think if you looked globally within restaurants, we're a much tinier single-digit percentage, and if we included all the other categories that we've now entered, we're barely noticeable. So I think we have a long runway left. We have a lot more work to do to get our product to where we would like it to be, but I think the product improvements that we've made in the years leading up to, you know, these moments have certainly helped us build a product that endures. Thanks, Tony. Our next question comes from the line of Ross Sandler with Barclays. Please go ahead. Hey, guys. If I can ask three quick ones, that'd be great. First, Tony, on the international footprint, we're now into well past a year into the Wolt integration. How you feel about that? And are there any geographies that you think might be interesting from a M&A perspective in the future for international? Second question is, we keep getting this one a lot from the investment community. Maybe you guys can clear the air on the GLP-1 diet drugs. Is there any way to think about how that might impact your business in the future? It's obviously not impacting it now. And then lastly, Instacart's now, there is a public company. Just curious to get any milestones on grocery GOV as we sit here at the end of 2023 from you guys. Thanks a lot. Great. Hey, Ross, I'll do my best to take them, you know, the first two in order, and maybe I'll let Ravi take the third one. So I think the first question was around international. I mean, you're absolutely right. We're very excited about our execution on the international front. We continue to grow at multiples of what we see around the world, virtually across any geography. That doesn't mean that, you know, we're pleased yet with where our product is. We still have a lot of room left to go, but I think it does stem from, you know, why our outperformance has occurred, which is, I think the hallmarks of any great marketplace have the fundamental characteristics of great retention, order, frequency, and unit economics. And I think when you look at our international business or our new categories business or our restaurants business, you see all of these characteristics present. And that's why we've been very interested in leaning in and making the investments that we have at size, at scale, because of what we see. And the international business, you know, continues to see, you know, those points of execution. I think if we remind ourselves, even a couple of years ago, of the investment thesis behind our partnership with Wolt, it really centered on two big pieces. One of which was, you know, here is a business that has leading world-class retention and order frequency. And the question is, you know, can we invest behind that in a concentrated way and hopefully, you know, add to the excellent execution that they've already seen? And so far, the answer has been, you know, yes to that. In fact, you know, Miki and the team now runs our entire portfolio, certainly the Wolt portfolio, as well as the DoorDash portfolio outside of the United States. And the second part of the thesis was that there is a long runway for growth in a lot of these countries, and we continue to see that, too. In the 27 countries outside of the U.S. that we operate in, we are, you know, in some ways behind, where the U.S. is from a penetration perspective and also product adoption perspective. There just is a lot more population we have to address. There are more merchant partners we've yet to partner with. There's a lot more customer problems given the fact that, you know, some of these places are a little bit behind from a technology, you know, footprint. And so there's a lot of work to do, but it also means that there's a lot of runway ahead, and I think that's why you've seen, you know, continued momentum, and it's adding now to the overall growth of the company. I think your second question was around, you know, some of the recent discussions externally around a certain class of drugs. You know, first and foremost, I hope that they actually work, these drugs. I, as a former scientist, I'm a big believer whenever great science can actually meet the challenges of its time, and I do think that they're solving a worthy problem. So first and foremost, for the patients, I hope that they work for the long term. Second, we don't see any immediate or noticeable impacts, you know, in the business relative to, I guess, what commentary may be out there about this class of drugs. And I think this kinda goes a little bit to the first question that was asked, which is, it's been really hard to size any one macro, you know, economic factor, whether it's, you know, a headwind, a tailwind, a sidewind. I think instead, what we focused on is just continued improvement on our product velocity, product quality, and execution. And I think that, you know, the dynamic changes we make in our product can outweigh many of the macro factors that may be at play. Ross, on your third question around grocery, I mean, look, we're really pleased with the performance of the grocery business. Our focus over the last couple of years has been: how do we increase the usage? How do we increase the adoption of not just our grocery business, but really, in fact, the entire new verticals, all of the categories that we operate in? What we think in the business today is a couple things, right? One is more number of users are ordering from both restaurants as well as new verticals, and that's driving two things. We are seeing the new verticals business overall accelerate from the prior quarter, as well as when you look at the grocery business itself on the GOV, to the specific question you asked, our GOV has doubled year-on-year. If you look at that paired with the efficiency that we've seen in the business, we've driven a ton of efficiency across the business. In fact, when I look at the unit economics, there's been a dramatic improvement in unit economics. You have to realize we have a strategic advantage 'cause we have a network of consumers, we have a network of Dashers already built out, and that's allowing us to improve unit economics at a much faster pace. For us, the way we operate the business is we look at signals around retention, we look at signals around order frequency, we look at signals around unit economics. We're continuing to be very pleased with the improvement across all three. Our goal is to continue to invest behind improving selection, improving the product quality, 'cause our strong belief is that this is going to be a strong long-term ROI-generating business for us. Our next question comes from the line of Deepak Mathivanan with Wolfe Research. Please go ahead. Hey, guys. Thanks for taking the question. Just wanted to ask a couple of ones. So first, wanted to ask about the product initiatives for 2024. You know, you entered into a lot of categories and new markets in 2022, and 2023 was more of a year of execution and sort of like a refinement that helped profitability, obviously, as an incremental driver. What are the big business opportunities for 2024, or should we view it as another year of execution and refinement of existing businesses? That, that's the first question. And then second one, the acceleration in the order frequency at this scale, you know, the core restaurant business is pretty impressive. Are you seeing some of the maybe, you know, less common use cases, I don't know, maybe breakfast orders or corporate orders or anything that's helping incrementally in the recent quarters? Can you help unpack the trends and, you know, use cases a little bit? Thank you so much. Sure. Deepak, maybe I can start and take the questions and then, you know, Ravi, feel free to chime in. You know, the first question, which stems on 2024 and some of the initiatives that we're thinking about, you know, first, our goal is to grow and to empower local economies. So we're always looking for problems to solve and jobs to be done. And obviously, we want to make sure that we have a strong point of view where we can do it at least 10 times better than, you know, however the problem is currently being solved. And so when we looked at, you know, if we rewound the clock, for instance, to 2019, we were thinking quite a lot about, you know, what other problems we could solve. Many of the problems that we actually heard came from our customers directly. I'll give a few examples. You know, when it came to consumers, a lot of the challenges that we had heard were really making sure that we can help solve their other problems. Again, because we started in the Restaurants category, which has the highest frequency of activity, and the fact that we would, you know, show up to many consumers' doors many times a week, I think consumers started asking the question: "Well, what else can you do for me?" And similarly for merchants, I think there were many questions that they wanted our help with, this is even well before the pandemic, of how can they become an omni-channel business? And that's why we certainly made further investments into products like DoorDash Drive, but also started the creation of DoorDash Storefront, which has continued to serve various merchant cohorts and segments. And we continue to, you know, build further services as we think about how can we help a merchant build their first-party channel as much as we help build their third-party channel on DoorDash. You know, as I kind of, you know, keep thinking along the years, I mean, advertising came in that perspective way as well. You know, many merchants, as well as advertisers that are new to our ecosystem, kind of approached us and said: "You know, hey, it looks like you have a high-frequency setup with the largest number of local commerce business, where you can measure everything very, very closely and directly. Is there a way in which, you know, you can be more useful, I think, to all of the audiences?" And that's kind of how we've thought about all of the different problems. When I think about 2024 or 2025 or 2026, that's generally how we think about things, too, where we start with certainly our core set of businesses, which today is five businesses, where in 2019, it was closer to one business. And so it's a little bit more varied now and complicated in terms of thinking about all the different opportunities, because we believe each one of these five businesses are still actually in their earliest innings, even the U.S. restaurants business. But we're also, you know, looking at opportunities to always solve more problems. And I, you know, hope that as we listen to our audiences more deeply and can get... and operate at a lower level of detail, we'll actually be able to pick up new problems to solve. Now, we always do this in a fairly disciplined way. Again, I think at DoorDash, we really believe in investing appropriately towards the stage of the project. And so usually, when we're solving these problems, and we have many of these experiments going on, we tend to take fairly small bets, and it's only until we believe that we've nailed product market fit, as well as finding an efficient way to grow, do we actually concentrate, you know, behind that bet and go all in for it. And so that's how we're thinking about 2024 and, in that way, too. I think your second question was around, you know, the continued growth in engagement and frequency of our customer base in restaurants, even at our current scale. Well, I think there's a lot of things that drive this. I think sometimes, you know, when we think about businesses like our oldest business, the U.S. restaurants business, we tend to think that perhaps it's closer to the ninth inning of progress versus the third inning of progress. And I tend to think, at least when I talk to our customers, that we're way closer towards the third inning than the ninth inning, and we just have a lot more work to do in terms of making improvements to the product. There isn't one single thing that we're doing that's yielding, I think, some of the improvements that you're seeing in the results. But really, it's years of working on the selection, the quality of service, the affordability of the program, the added value to our DashPass members, as well as improved customer support, that's producing some of the results today. It would be really hard, candidly, to look backwards and say, "Hey, in which year did, you know, the product work actually lead to the results that led to this quarter's efforts?" But I think instead, what we do is we're always just trying to make continued improvement. And I think whenever we've taken that focus, we've surprised ourselves to the upside of how much more there is to go, as well as the compounding effects that can happen over time. Yeah, Deepak, maybe just to add a couple of thoughts to what Tony talked about, right? Like, look, I mean, we've had a phenomenal year so far, what we're seeing both on the top line as well as the bottom line. Part of that is, in fact, being driven by all the investments we've made, whether it's on the product side or investments in new verticals, as well as the investments we've made in international over the last couple of years. You know, what you're seeing is, you know, we're seeing really strong growth across all lines of business that we operate in. These categories that we operate in are large. There's really lots of customer problems, as Tony talked about, that we need to continue to work on and improve. Our goal and philosophy is we will continue to invest as long as we see good signal on both volume as well as unit economics, 'cause this is the blueprint for us to drive really strong free cash flow, in the many years to come, in our business. Got it. Thank you so much. Our next question comes from the line of Ron Josey with Citi. Please go ahead. Great, thanks for taking the question. Tony, I wanted to ask a little bit more about just take rates and on a year-over-year basis, you know, they continue to expand and roll down a little bit sequentially. Just talk to us a little bit more on the progress you're making to keep and/or drive take rates higher. So progress around wait times, incentive spend, how you see advertising fit in there, any insights on where take rates might go. And then we're now a quarter into Dash's new app and layout, and we heard some of the comments around grocery prior, but any change in behavior that you've seen from the new app now that we're a quarter in? Thank you. Let me, let me take the first one on take rate, and then, I'll let Tony chime in on the second one. Look, I mean, we are not managing the business, Ron, to a specific margin target, let alone a margin across, you know, any line of the P&L. You know, what you're seeing on the take rate side is, if you actually look at the underlying drivers of the business across the various lines of business, the net revenue margin has actually increased, sequentially as well as year-over-year. What you're seeing on the output is really the mix shift of various lines of business. If you recall the comments that we made earlier, new verticals, our international business is actually growing faster than our restaurant business. You're really seeing the mix shift of those two businesses, which are still early in terms of their journey, starting to take impact from an overall take rate perspective. You know, that said, you know, our goal is always: how do we find efficiencies across every line of the P&L, and using that efficiency to continue to reinvest back in the business to drive growth? We did that exactly the same in this quarter, right? Like, we found a lot of efficiencies. Ads was a good contributor to the revenue upside that you're seeing in the business. We used that to continue to drive efficient growth, which gave result to some of the accelerated growth that you're seeing in the business. In terms of your second question about, you know, consumer behavior, given some of the app changes that we announced, you know, earlier this summer, I mean, we continue to see, I guess, more confirmatory evidence that consumers really like the changes. I think it's usually pretty rare to see this, because whenever you make a pretty sizable change, like the one that we made to our consumer app, you tend to get a "Who moved my cheese?" reaction. I think instead, we actually saw, you know, behavior that suggested the opposite, where customers were naturally shopping across different categories. And I think the... You know, one of the drivers of this was that we actually made sure that, our progress within each vertical, was fairly robust in terms of the level of product market fit that we wanted to achieve before we actually redesigned the entire app experience, such that we weren't reorienting consumers to something that we were pushing upon them, but rather it was meeting them where they wanted to be, given that they were pulling us in terms of the demand that they naturally suggested and showed, you know, across each line of business. So we are seeing, as mentioned before, customers continuing to cross-shop across different categories quite naturally, and those numbers continue to increase. We're seeing many, for many consumers, it's, you know, the first interaction with DoorDash actually tends to be, sometimes outside of the restaurant category. I think, you know, these are some of the factors that have contributed to the fact that when you look outside of restaurants and you look at the convenience grocery, alcohol segments, you know, customers that are adopting e-commerce in these categories for the first time, about half of them are coming to DoorDash first. Thank you, Tony. Our next question comes from the line of Eric Sheridan with Goldman Sachs. Please go ahead. Thanks so much for taking the question. Maybe just one on a broader topic. We've seen a ruling in New York City on compensation, and investors continue to ask a lot about how the Department of Labor might play out. Any updated thoughts on the regulatory environment overall, and how you're thinking about aligning investments against that potential for nuance in the regulatory environment in the quarters ahead? Thanks so much. Yeah. Hey, Eric, it's Tony. I'll start, and, you know, feel free, Ravi, to chime in. You know, I think in general, we have the same point of view on the regulatory landscape today as we had, you know, shockingly, even 10 years ago, which is that, you know, by and large, governments, lawmakers, regulators, they actually want to work productively with, you know, companies like ourselves to really co-create, I think, what the future of work and future of labor will be. And if you think about it, you know, the reason why tens of millions of Dashers have come to the DoorDash platform, you know, over time, or millions come to our platform every single month, or the fact that the DoorDash Dasher App is actually one of the most downloaded consumer apps on the Apple iTunes Store, is because it's because they simply don't earn enough income from the full-time jobs that they do have. You know, 90% of our Dashers dash fewer than 10 hours a week. The average Dasher does 3 hours-4 hours a week. Over 80%+ of them have full-time jobs. And so they're really seeing DoorDash as a bridge between, you know, what income they earn today and the income that they hope to earn to meet the cost of living. And so, and I think that most regulators actually understand this point, but we, you know, our hypothesis ten years ago and kind of our views updating, you know, to this day, has always been that there might be a handful of jurisdictions who, you know, perhaps don't want to work productively with businesses and support this new paradigm, and instead, you know, candidly create policy that's just bad policy that will achieve unintended consequences that go counter to their goals. And we think the New York City, you know, legislation or proposed legislation is one of those, you know, bodies. We see similar activities in Seattle. But when you, again, count up all of, you know, the regulatory discussions, I think it still favors kind of our original hypothesis, which is outside of a handful of jurisdictions, most governments, lawmakers, and regulators want to work productively with companies like DoorDash to do the right thing for Dashers. Eric, just to add to what Tony said, right? Like, on the New York City one, we've gotten a couple of questions about this as well. That is not live yet. We do expect to hear back from the judge at any point, just like, you know, everybody else. Our goal and philosophy and, you know, how do we respond to some of these changes has always been, the first and foremost priority is to drive efficiency in every market that we operate in, 'cause our goal is to ensure we have sustainable unit economics. To the extent we are not able to meet our goals around unit economics, we do realize there's going to be increased costs in the system. Like Tony talked about, we don't think it's great because that just reduces the transaction activity across the ecosystem, which means, you know, lower sales for merchants, as well as, in turn, lower earnings for Dashers. And from the financial impact perspective itself, you know, any impact from New York City ruling in Q4, we've included that in our EBITDA guidance that we've given. Our goal is to manage the business to be within that range that we've talked about. Great. Thank you for the color. Our next question comes from the line of Doug Anmuth with J.P. Morgan. Please go ahead. Thanks for taking the questions. Recognize that product improvement factors are outweighing macro, but we have heard a number of companies call out some early 4Q volatility from either macro or geopolitical. Just curious if you think anything has changed there at all into 4Q. And then, Ravi, can you talk a little bit more about your improvements to GAAP profitability and just how we should think about that path in upcoming quarters? Thanks. Sure. I can start on the first question and, you know, Ravi, feel free to chime in and also take the second question. You know, with respect, you know, to the macro dynamics, again, I think it's just really, really hard to size any one of these things. And I think when you sum it all up, and as you mentioned, there's lots of things going on in the world today, you know, with the economy, with other events across the globe, and there's certainly plus and takes, I think, to each one of these things. And I think that when... It's not just the fact that we have product improvements, but I think that has helped outweigh and helped execute very efficiently and continue to grow at high rates, even at our increased scale. It's also the fact that when you look at every category of spend, food is one that everyone has to spend in. Sure, one may argue that you don't have to spend it on delivery, but what we tend to see is that there's also the macro trend of convenience increasing in the direction of greater convenience. And so if someone has, you know, some dollars to spend, it tends to start with the category of the highest frequency, where they also seek convenience. And there's just more opportunities to do that, given that someone, you know, consumes food 20-25 times a week. So we're not seeing any of the activity, perhaps that you know, I think some other categories in commerce are seeing, but I think, you know, it, it's really multifaceted. There's the product improvements, there's the fact that people, you know, have to spend on food, and it tends to therefore lend itself towards the category where for e-commerce, it's the most resilient and the highest frequency. You, I mean, you can study this for the past 60 years, which obviously has a lot of macro dynamics as well. And you see that in only two out of the 60 years, I think, did the restaurant industry in the U.S. at least ever decline. And so I think it gives you a sense of the robustness of this category. And then I think, you know, the final point is, we're still a lot earlier than people think in the category than perhaps our scale suggests. That means that we're not where we need to be at in terms of where our selection of merchants are, whether it's restaurants or new categories, the affordability of the program, the quality of the service, and our customer support. We have to make improvements in all areas. Doug, just a few more points to, you know, what Tony touched on, and then I'll talk about the second question that we asked. We obviously have a lot of signal in the business. I mean, we watch this, you know, very closely. When I look at the underlying cohorts, I mean, they're really strong. If you look at the performance of not just Q3, but actually the first nine months of the year, cohorts continue to improve. When I look at retention, it's very stable. Our users, in fact, at our scale, are growing double digits. Order frequency, like we talked about earlier, continues to grow. So we're very pleased with the performance of the business and, you know, a lot of strength that we're seeing in the business. To your, you know, second point around, you know, GAAP profitability itself, as we've mentioned before, you know, GAAP net income in and of itself is not an explicit target that we are managing the business towards. Our financial North Star has always been: how do we maximize the long-term free cash flow in the business? And what you're truly seeing in the business today is, you know, every single line of business is becoming more efficient. We've dramatically improved the unit economics across the restaurants business, new verticals, as well as our international business. I do expect every business to be profitable over time, and as and when that happens, the overall business is going to get to be GAAP net income positive as well. But that's not an explicit target that we're driving the business towards. Thank you both. Our next question comes from the line of Brian Nowak with Morgan Stanley. Please go ahead. Great. Thanks for taking my questions, guys. Tony, I wanted to go back to one of the comments you made earlier, where you talked about investing appropriately toward the stage of the product. So can we talk a little bit about grocery through that lens? So give us some examples of areas of investment that you made this year based on the stage of the product that maybe you now would say, "Okay, one year later, we can do more of this in 2024." I'm just trying to get an understanding for what are the areas you've pressed on hardest in investment in grocery, and what are the areas where you think that there could be more investment to come to really drive that business faster for longer in 2024 and beyond? Thanks. Sure. I mean, okay, we can take many flavors of, you know, this question because, I mean, this is probably something that I spend the majority of my time on, which is in, you know, initiative and product reviews, because I do think it's really hard to apply the correct judgment, certainly correctly every time, you know, depending on the phase of the project. But take a few instances, right? For instance, we really didn't. You know, one of the first choices we made on grocery was, well, what's the right product to build? And, you know, I think there were, you know, many external beliefs of perhaps what you have to build in order to create a sustainable grocery business. But we took the view of, well, what is the actual problems left to be solved, that's, you know, first and foremost, coming from our customers? And one of the things that we heard, for example, was that, well, you know, what's really frustrating about grocery delivery is that, you know, the items that either perish the fastest or that we consume as consumers the most frequently, so think about your berries or your milk or your eggs or your cereals or your coffees, you know, it's really annoying in the middle of the week to have to go back into the store and somehow go and get it. Whereas, you know, for other types of, you know, shopping behavior, if I'm already out on the weekends anyways and I'm buying other things for the week, maybe it's less of a big deal. And so the first product we built was actually, at, to solve a smaller basket top-up use case, which really introduced ourselves to consumers in helping address a problem we heard. And then I think, it had the byproduct of introducing ourselves to grocers, too, because this was a use case that, you know, they hadn't been, investing, that much into. And then I think it surprised, everyone, you know, how large that opportunity, you know, occurred. So that's like one version of this, which is, you know, before we kind of just look at, you know, what everyone else is doing, let's first and foremost start by building the correct product. I think building the correct product has a lot of, you know, implications on, you know, do we use engineers and, you know, business people and other functions, you know, correctly and therefore, you know, get the most out of, you know, the team's potential? I think, you know, there's a version of that that shows up. I think number two, another example would be, well, we didn't really spend much on marketing when it came to building the grocery business. Now, Ravi echoed some of the kind of reasons why, because, well, one, we do have the largest audience of local commerce, you know, customers coming to our app, shopping, as well as just coming to the app and including those that don't shop. We had a bit of a benefit there. At the same instance, we also didn't want to invest in marketing because the product wasn't good enough yet. I think those are two, I guess, examples I would call out, where you have to make the right call on how to make the most efficient use of your resources. You know, first and foremost, for us, it starts with solving the right customer problem correctly. Whenever we see something that's not being solved correctly, and we think there's an opportunity to build something 10 times better, we're gonna go for it. Then the question becomes: Well, is there an efficient way to grow? We're gonna think about that, and if we have an advantage there. And then finally, you know, what's the path towards building a very large cash flow-generating business that will maximize total, you know, profit dollars in the long run? And I think that's kind of the sequencing of how we've thought about things. I think so far, we've made good decisions in grocery and, you know, a lot of these bets, I think you're seeing some of the culmination or the middle of impact of the results in this quarter. But we've got a long ways to go, and we have to keep making good decisions. Great. Thanks, Tony. Our next question comes from the line of Michael Morton with MoffettNathanson. Please go ahead. Thank you. Two questions, if I can. One, start with for Tony, and then the second for Ravi. On the advertising business, kind of following up to the prior question, how do you feel about your product's ability to serve some of the larger enterprises? That goes for the QSRs, who kind of demand sophisticated solutions, but also now moving into the grocery business. In our conversations with CPGs, there's a concern about incrementality in advertising for grocery, retail marketplace, retail media networks, because the fact that there's not a lot of unit growth there. So whoever can win the incrementality measurement, kind of like, wins the market for advertising. So curious to how you think about your product there. And then just second, for Ravi, really impressive levels of operating leverage. Just curious if maybe some details of the drivers behind it. Like, is this, like, DashMart hitting some type of maturity, natural, like, attrition in the employee base, and, like, if this is kind of a level we should think about going forward and how operating expenses philosophy could maybe change there. Thank you so much. So to your first question, I, I think I really agree with the premise of the customer research that you did, which is that, you know, incrementality obviously is a huge driver of return on ad spend. And, you know, I think that's why, at least, you know, my view and our company's view on advertising is: You know, the most important thing about building a highly incremental advertising business is to build the biggest and most robust marketplace, and, and, and not to confuse the sequence or the order of operations there. And, and so when our grocery business is, you know, growing, you know, more than doubling year-over-year, I think that's a good start, especially relative to other choices in the marketplace from an advertiser's perspective. But look, I mean, there's a lot of work to be done. I think, you know, we have a long ways to go in building out our advertising product. We're super excited about, I think, the growth we've seen. We're even more excited about, I think, the amount of demand that is coming into the ecosystem for a product like ours, where I think they recognize, you know, in addition to our growth and, you know, especially at our scale, they also see, you know, the opportunity across different categories. And so there's a lot of excitement, both from enterprise merchants, whether it's in the restaurant category or in the non-restaurant categories, as well as from advertisers. And so we got a lot of work to do. We're not certainly pleased with, you know, where we are with the product. That's usually how we feel about all of our products. But I think we've got a lot more to go. Certainly in advertising, it's been a 2.5-year effort. I think it's already among some of the most desired online advertising platforms, yet I think we have a very, very long road ahead. Mike, on your second point on the, you know, efficiency and leverage that you're seeing in the business, I mean, you're right. I mean, really pleased with the performance, really proud of the team's execution here. I think what you're seeing is a combination of couple things. One, I mean, look, I mean, Q3 was a really strong quarter for us, you know, not just across the top line, but also across unit economics. Every single line of business has continued to outperform our expectations, both on volume as well as unit economics. A lot of the EBITDA upside that you're seeing in the business is being driven by that. Two, to your point, we've done a lot of things around operating expenses. You know, operating expenses, as you can see, have been relatively flat for the last, you know, four quarters in a row. The team has expressed a lot of discipline around the cost structure in general, while we've continued to grow revenue, you know, north of 25%-30% over the same time frame. That said, there are also a couple of things that helped us in Q3. There was a one-time sales tax benefit that helped us in Q3, as well as, you know, the continuity and leverage that we're seeing, you know, across the board. But when I look ahead, our goal is to continue to drive further leverage in the business, whether it's improvement in unit economics or the fixed cost leverage that you're seeing in the business, and you can see that in the strong, you know, Q4 guide that we've given as well. Our next question comes from a line of Michael McGovern with Bank of America. Please go ahead. Hey, guys. Thanks for taking my question. Just a couple on the cohort chart. If you look at some of these post-COVID cohorts, it seems as though the slope in trajectory for marketplace GOV is a little bit lower than the steeper slope for pre-COVID cohorts, even after the COVID spike. So I'm curious, what gives you confidence that you can get the post-COVID cohorts to that same slope in growth? And then also curious what kind of contribution you're seeing from non-restaurant in the newer cohorts versus older cohorts. Do you see newer users ordering more frequently from non-restaurant? Thank you. Yeah, let me take both of those. I'll start with the cohort chart, right? Like, the two big takeaways, you know, that, you know, at least from the cohort chart, is, one, when I actually look at the annual cohorts going as back as, you know, seven years, I mean, every single cohort still continues to grow. And the second one is, if you actually look at the 2023 cohorts, in fact, it's the second-best cohort that we've ever had, second only to the Jan 2020 cohort, which obviously had some impact from COVID. What you're seeing in the underlying cohorts is, as we are continuing to improve the selection, as we're making the quality of the product better, as the service levels continue to increase, we are seeing strength across all the cohorts that we operate in. When I look at the newer cohorts from an order frequency perspective, in fact, the newer cohorts are starting out at a higher level than many of the older cohorts are starting out. And to your second point around what is the contribution from both restaurants as well as new verticals, the behavior that we're seeing from user base is the number of users that use both restaurants as well as new verticals, that number continues to increase every single quarter. The impact that's having on the business is that's lifting overall engagement of the cohorts up. You're starting to see that in the order frequency for the entire cohorts. Again, to be very clear, right, we're not trying to drive the order frequency of just restaurants or new verticals. The way we think about it is, how do we bring more users back? Which is helping us drive overall users at a double-digit rate. How do we get them to use the product more, which is what's being reflected in the overall order frequency going up. In fact, I mean, we're very pleased with the progress, and this is contributing to the strong growth that you've seen over the last, you know, couple of years. Got it. Thank you. Our next question comes from the line of Andrew Boone with JMP Securities. Please go ahead. Thanks so much for taking my questions. I wanted to go back to operating expenses and specifically sales and marketing. It continues to be very efficient. Understood you guys called out Dasher acquisition costs in the letter, but is there anything you can share on customer acquisition costs, just as DoorDash's awareness continues to be higher? And then for my second question, I wanted to ask about the elasticity of grocery delivery costs. Tony, you've mentioned the customer cost side a couple of times in your past responses. What are the largest levers you have to pull to make grocery delivery cheaper for the consumer? Thanks so much. Andrew, let me take the first one on sales and marketing, and, Tony, feel free to take the second one. Yeah, you're right. I mean, we've seen a ton of leverage on the sales and marketing in general. You know, one of the biggest areas where we've driven a ton of leverage is Dasher. For us, whenever we think about efficiency in the business, it always starts with product. We've done a ton on the logistics side over the last couple of years. We've redesigned the Dasher app, we've given Dashers the opportunity to both Earn by Time as well as, you know, Earn per Offer. The combination of, you know, both of those things, what that does is it improves retention, it improves order frequency on the Dasher side. We're seeing retention on Dashers go up. We're seeing engagement levels go up. The effect that's having on the P&L is we're seeing leverage on both Dasher pay as well as the Dasher acquisition cost. Second, to your specific point around consumer acquisition, I mean, we operate the business to a payback period. We're seeing healthy unit economics. We are seeing the unit economics continue to grow. As long as we are comfortable with the payback period, our goal is to continue to drive new user adoption. In fact, part of what's driving the overall growth in MAUs is we're continuing to see still healthy levels of user acquisition. Hey, with respect to your second question about lowering the costs of grocery delivery, I mean, I think there are quite a few dimensions. You know, I probably won't be able to share in much detail about all of the initiatives we're working on. But, you know, it starts with, obviously, how do you create the lowest possible cost structure for everybody involved? If you can do that, I think we can all agree that, you know, we all have then the choice of, you know, to what degree we actually want to lower the cost of the program. Obviously, we always want to continuously lower the cost of the program so that we can drive greater and greater adoption and engagement in a way that still makes sense for the business, especially when it comes to maximizing total profit dollars in the long run. But I think there's other things too, and so, you know, you should expect to see us continue to work on, you know, co-creating interesting products that haven't yet been built, you know, together with grocers, and really just continue to, you know, solve all of the different challenges that they have. Hopefully, it won't just lower the cost of delivery, for, you know, grocers on DoorDash, but also for grocers through their first-party channels and their in-store businesses as well. There are no further questions at this time. I'd like to thank our speakers for today's presentation, and thank you all for joining us. This now concludes today's call. You may now disconnect.