Deliveroo reports strong underlying profit, swings to loss due to DoorDash deal fees

Deliveroo PLC reported robust H1 2025 underlying EBITDA growth of 46% to £96 million, surpassing analyst forecasts by 12%, yet posted a reported loss of £19.2 million, primarily due to fees from its impending acquisition by DoorDash. Despite the strong operational performance, Deliveroo's shares remained unmoved, as shareholders have already approved the DoorDash takeover, which is now awaiting regulatory clearance and is viewed as a strategic 'European kingmaker asset' for DoorDash.

Analysis

Deliveroo's first-half 2025 results present a clear division between robust underlying performance and a reported loss driven by M&A activity. Operationally, the company demonstrated significant strength, with underlying EBITDA growing 46% to £96 million, a figure that surpassed average analyst forecasts by approximately 12%. This performance, supported by CEO Will Shu's commentary on improving consumer engagement and accelerating profitability, underscores the health of the core business. However, these strong fundamentals were overshadowed by a swing to a reported loss of £19.2 million, directly attributable to costs from the pending acquisition by DoorDash. Excluding these one-off charges, profit for the period was a solid £31.8 million. The lack of share price movement is logical, as the market has already priced in the DoorDash takeover, which has secured shareholder approval. Consequently, Deliveroo's valuation is now tethered to the deal's completion rather than its standalone earnings. Analyst commentary reinforces this view, framing Deliveroo as an "exceptional quality" asset and a "European kingmaker" for DoorDash, with little anticipated challenge to the final regulatory approval.

Key Decisions for Investors

• Investors should recognize that Deliveroo's equity is now primarily an M&A arbitrage play, with its value dictated by the successful completion of the DoorDash acquisition rather than its strong standalone operational metrics.
• The primary risk to monitor is the pending regulatory approval, as this represents the final significant hurdle for the deal's closure and the realization of the takeover value.
• Given the lack of a counterbid from Amazon and positive analyst outlook on the deal's approval, the investment thesis is now linked to the strategic value Deliveroo provides to DoorDash as a key European asset.