Ravi Inukonda: Yeah, Mark, I’ll take the second one, but just try to, what Tony talked about in the first one, right, we’ve not disclosed the ad revenue, but it is growing. It’s growing fast. It’s contributing to both revenue as well as EBITDA that you’re seeing in the business. Our goal has always been how do we think about merchant ROAS as well as consumer conversion? And we believe we are best-in-class for both of those. Those are the constraints we’re using to measure the quality of our ad business. Mark, as it comes to your second question around quantum of investment, whether it’s new verticals or international business, when we operate and manage the business, we are not thinking about quantum of dollars. Our focus has always been, are we growing order frequency, are we growing retention, are we growing unit economics across any investment that we make, whether it’s a restaurant business or grocery or international business.
Just to give you a sense of performance for our new vertical business. I mean, grocery, Tony touched on this earlier, that business is growing at 100% year-on-year, with the fastest growing, we’re gaining share. Our focus has been to continue to drive more selection, improve the quality, as well as make the product more affordable. When I look at the unit economics, last call, I made the comment that the unit economics have increased step function change compared to last year. We’ve continued to improve the unit economics from that point. When I look at the third-party component of our new verticals portfolio, that business has been unit economic positive for several quarters. If you have a business that’s growing very fast and the unit economics are continuing to improve, we like what we are seeing and we are continuing to invest behind that strength.
Very similar dynamics on international business, where if I look at the growth rate for our business compared to peers, we’re growing substantially faster. In some cases, we’re growing five times to six times faster, which is causing us to gain share in majority of the markets that we operate. Very similarly on the unit economics, very good improvement year-on-year, where the unit economics for the international business as a whole has been positive for a few quarters now. At the same time, the restaurant portion of our international business, there are several countries which are contribution margin profitable. So you put that together, right, like, both the investment areas are growing nicely. They’re improving in terms of unit economics.
We like what we’re seeing in both of those businesses that’s causing us to continue to invest. And I do expect the growth as well as unit economic improvement to continue through the rest of the year.
Mark Mahaney: Thank you, Ravi. Thank you, Tony.
Operator: Your next question comes from the line of Michael Morton with MoffettNathanson. Please go ahead.
Michael Morton: Hi. Thanks for the question. First one, maybe for Tony, just to follow up on Nikhil’s. And then the second question for Ravi. Tony, you’ve spoken a lot about the importance of selection and improving selection in the grocery business, and you’ve added several new grocers recently. We’d love to know if there’s any restricting factors in bringing all the nation’s grocers onto the platforms. And then what’s the timeframe for having your selection at parity with the largest competitors? And then for Ravi, we get a lot of investor inquiries looking into better understanding where the incremental investment dollars are going, especially like DashPass for restaurant has hit the scale it has. Is there any way that you could kind of bucket for us or help us think about the different segments of investments within restaurant new verticals and international? And if you still feel the same level of confidence about the inflection in the second half of ’24. Thanks.
Tony Xu: Sure. I mean, I can take the first one. I mean, I think, Michael, I guess, as an add-on or maybe in part a repeated message from the first question, we’re seeing increasing, I guess, inbound interest on the retail segment. That’s true in grocery. That’s also true in other retail segments. We added, for example, Lowe’s, which is our first retailer in the home improvement category. We’re now quite active in terms of what we offer to consumers in the health and beauty category, the apparel category, the electronics category. So I think this goes much beyond grocery, I guess, would be the way I think about this. I mean, I think to stop just at grocery would be certainly not what our customers would expect or what they would demand.
And it’s also not what retailers want either. And so I think increasingly retailers and consumers alike are seeing DoorDash as a one-stop shop for buying everything inside the city. So we’re actually seeing the opposite of resistance in terms of joining the platform. I think the question is just like, how do we prioritize the roadmap, how do we make sure that the sequencing is right so that we can get all of these things to work. Because a lot of times how we work with these retailers, it’s not just adding them to the marketplace, which obviously serves one job of bringing them incremental demand, but we also work with them by helping them with their own platforms, right, like their own e-commerce capabilities, and selling first party to their own consumers in an increasingly digital way.
And there’s a lot of products there, too, in which we integrate. And so, there’s a lot of work in both first party and third party. It’s more a matter of sequencing than it is anything.
Ravi Inukonda: Yeah, Mike, I’ll take the second one. Maybe I’ll broaden out the question a little bit. Look, I mean, I feel really good about the progress we’ve made in the business, not just in Q1, but the last several quarters. The business is growing quite nicely across all major lines of business, whether it’s restaurant, grocery, new verticals, or international. And like I said before in the Mark’s question, we’re seeing improvement in unit economics across the board. I do expect the second half EBITDA to be higher than the first half. What’s driving that is the same thing that we saw in ’23 as well as ’22. I expect the volume to be higher in the second half across all lines of business, unit economics are continuing to progress quite nicely.
I do expect further improvement in unit economics. The investments we are making in H1 that will drive both scale as well as leverage in the second half. The scale plus the leverage, that’s going to lead to increasing EBITDA in the second half compared to the first half. So overall, when I look at Q1 as well as the Q2 guide, I’m very pleased with the performance, and I expect the full year to be pretty strong as well.
Michael Morton: Thank you so much.
Operator: Your next question comes from the line of James Lee with Mizuho. Please go ahead.
James Lee: Great. Thanks for taking my questions. I was wondering — my question is relating to regulations. Obviously, you guys saw a little bit impact in Seattle and also in New York. And how should we think about maybe other cities potentially moving to a similar wage policy? And also, how should we think about the EBITDA impact? You mentioned 1% impact on orders and just wondering what is the impact on EBITDA. Thanks.
