Delivery Hero posts record 2025 profit, takes $1.4 bln loan to repay bonds

Delivery Hero reported a 30% rise in full-year adjusted core earnings to €903m in 2025, with total segment revenue up to €14.8bn (from €12.8bn) and group GMV broadly flat at €49.2bn; adjusted EBITDA margin improved to 1.8% (from 1.4%) and free cash flow rose 15% to €250m. The company secured a $1.4bn term loan to repay 2026 convertibles and repurchase 2027 convertibles, leaving a pro forma cash balance of €2.7bn, and agreed to sell foodpanda Taiwan to Grab for $600m (subject to approval). Guidance for 2026 is adjusted EBITDA €910-960m (1-6% growth) and FCF above €200m (below 2025), with GMV growth guided 8-10% and segment revenue +14-16% LFL; quick commerce GMV is expected to approach €10bn.

Analysis

Regional consolidation in food delivery/quick-commerce is now a game of density and cash-cycle optimization rather than headline GMV growth; the winner will be the operator that converts faster order frequency into positive unit contribution at scale in high-density corridors. That favors platforms with multi-product customer wallets (ride-hailing, payments, ads) because cross-subsidies reduce payback times and raise incremental LTVs — a 10–20% improvement in order frequency in core cities can translate into 200–400bps of margin expansion if fulfilment density holds.

Access to term financing in stressed credit windows is a tactical advantage: issuers that convert equity-like liabilities into plain-vanilla amortizing debt shrink rollover risk but transfer volatility into interest servicing. For creditors and convertible arbitrage desks, this creates predictable catalysts (maturities/extensions) over the next 3–12 months and a two-way trade where spreads tighten on perceived prudence but widen rapidly if macro liquidity tightens.

Key catalysts to watch are transactional approvals and asset-sale closings over the next 3–9 months, plus guidance execution on customer-facing investments over 6–12 months; each will re-price both equity multiples and credit spreads. Tail risks cluster around an EM consumption slowdown or a sudden credit repricing — either would compress GMV, unwind density economics, and force asset disposals within a 6–12 month window.

Contrarian read: the market can be too binary on M&A wins versus financing strain. If integration synergies materialize at the city-level, upside is underappreciated; if financing volatility returns, downside may be larger than consensus models that assume steady refinancing. Position sizing should therefore be event-conditioned rather than buy-and-hold.

Key Decisions for Investors

• GRABW — Tactical long (6–12 months): Build a core long position on a regulatory-approval pullback or on any >10% dip ahead of approval. Target +30–40% upside if integration synergies and cross-sell lift urban ARPU; hard stop -20% on deal rejection or clear signs of funding stress. Size 3–5% NAV initial, add on confirmatory post-approval volume/ARPU prints.
• GRABW options — Calendar/LEAP spread (12–24 months): Buy an 18–24 month LEAP call to capture upside from successful consolidation, financed by selling 3–6 month calls (rollable). This converts a directional view into limited-cost, multi-quarter carry: max loss = net premium; target 2–3x payout if city-level synergies expand contribution margins by 200–300bps.
• Convertible/credit trade (issuer-specific) — 3–12 months: Play the refinancing arbitrage: buy protection or short long-dated convertibles of issuers that recently extended maturities (if liquid) to capture spread widening if liquidity tightens. Target spread capture of 400–800bps; tighten stop if primary credit market conditions improve or if issuer shows concrete deleveraging (asset sales locked/in proceeds delivered).