TechDogs-"DoorDash Releases Second Quarter 2023 Financial Results"

E-Commerce

DoorDash Releases Second Quarter 2023 Financial Results

By Business Wire

Business Wire
Overall Rating

SAN FRANCISCO--(BUSINESS WIRE)--DoorDash Inc. (NYSE: DASH) today announced its financial results for the quarter ended June 30, 2023. In addition to our financial results below, our letter to shareholders is available on the DoorDash investor relations website at http://ir.doordash.com.

Q2 2023 was our best quarter ever for Total Orders, Marketplace GOV, and revenue. At the same time, we maintained our focus on operational efficiency and disciplined expense management, which drove an improvement to our Q2 2023 GAAP net loss including redeemable non-controlling interests versus Q2 2022 and contributed to all-time high Adjusted EBITDA. We are excited by our progress so far in 2023 and are already hard at work building more features, tools, and services that can improve local commerce.

Second Quarter 2023 Key Financial Metrics

  • Total Orders increased 25% Y/Y to 532 million and Marketplace GOV increased 26% Y/Y to $16.5 billion.
  • Revenue increased 33% Y/Y to $2.1 billion and Net Revenue Margin increased to 13.0% from 12.3% in Q2 2022.
  • GAAP net loss including redeemable non-controlling interests was $172 million compared to $263 million in Q2 2022, and Adjusted EBITDA increased to $279 million from $103 million in Q2 2022.

Three Months Ended

(in millions, except percentages)

Jun. 30,

2022

Sept. 30,

2022

Dec. 31,

2022

Mar. 31,

2023

Jun. 30,
2023

Total Orders

426

439

467

512

532

Total Orders Y/Y growth

23

%

27

%

27

%

27

%

25

%

Marketplace GOV

$

13,081

$

13,534

$

14,446

$

15,913

$

16,468

Marketplace GOV Y/Y growth

25

%

30

%

29

%

29

%

26

%

Revenue

$

1,608

$

1,701

$

1,818

$

2,035

$

2,133

Revenue Y/Y growth

30

%

33

%

40

%

40

%

33

%

Net Revenue Margin

12.3

%

12.6

%

12.6

%

12.8

%

13.0

%

GAAP Gross Profit

$

686

$

714

$

762

$

921

$

951

GAAP Gross Profit as a % of Marketplace GOV

5.2

%

5.3

%

5.3

%

5.8

%

5.8

%

Contribution Profit

$

381

$

420

$

447

$

533

$

620

Contribution Profit as a % of Marketplace GOV

2.9

%

3.1

%

3.1

%

3.3

%

3.8

%

GAAP Net Loss including redeemable non-controlling interests

$

(263

)

$

(296

)

$

(642

)

$

(162

)

$

(172

)

GAAP Net Loss including redeemable non-controlling interests as a % of Marketplace GOV

(2.0

)%

(2.2

)%

(4.4

)%

(1.0

)%

(1.0

)%

Adjusted EBITDA

$

103

$

87

$

117

$

204

$

279

Adjusted EBITDA as a % of Marketplace GOV

0.8

%

0.6

%

0.8

%

1.3

%

1.7

%

Basic shares, options and RSUs outstanding as of period end

448

446

452

444

449

Our Performance in Q2 2023

We focus on steadily improving the quality of experience we offer to consumers, merchants, and Dashers. The cumulative impact of these improvements, along with effective execution and durable end markets, drove strong growth and improved efficiency in Q2 2023. On a reported basis in Q2 2023, we drove Total Orders up 25% Y/Y, Marketplace GOV up 26% Y/Y, and revenue up 33% Y/Y. On a pro forma basis in Q2 2023, including the results from Wolt for both periods, we drove Total Orders up 18% Y/Y, Marketplace GOV up 20% Y/Y, and revenue up 27% Y/Y.

On a pro forma basis, including the results from Wolt for both periods, Y/Y growth in Total Orders accelerated slightly in Q2 2023 compared to Q1 2023, driven by stable Y/Y growth in our U.S. restaurant marketplace, and accelerated Y/Y growth in our U.S. non-restaurant categories and international markets. Our consumer cohorts performed well in Q2 2023, which contributed to strong Y/Y growth in MAU and drove order frequency to a new all-time high. Based on third-party data, we believe we gained share in the U.S. restaurant, U.S. convenience, and U.S. grocery categories, as well as in many of our international markets during the quarter.

Total Orders from Platform Services grew modestly on a Y/Y basis in Q2 2023. However, merchant demand for our services has remained strong. We expect this to contribute to accelerated Y/Y growth in Total Orders and revenue in Platform Services in the second half of 2023, as we anniversary the end of a large partnership.

In addition to strong growth in Total Orders and Marketplace GOV in Q2 2023, improvements to logistics quality and efficiency and a growing contribution from advertising helped drive revenue up 33% Y/Y on a reported basis in Q2 2023 and up 27% Y/Y on a pro forma basis, including the results from Wolt for both periods. Y/Y growth in revenue was higher than Y/Y growth in Total Orders and Marketplace GOV despite increased investment in consumer retention and acquisition initiatives.

The combination of continued efficiency gains in our U.S. restaurant marketplace and our key investment areas drove GAAP net loss including redeemable non-controlling interests to $172 million in Q2 2023 compared to a GAAP net loss including redeemable non-controlling interests of $263 million in Q2 2022. Adjusted EBITDA reached an all-time high in Q2 2023 of $279 million compared to $103 million in Q2 2022.

GAAP sales and marketing expense increased to $471 million in Q2 2023, up 12% Y/Y and down 5% Q/Q. Dasher acquisition costs declined on both a Y/Y and Q/Q basis in Q2 2023. Steady product improvements have made dashing attractive to millions of people and helped generate leverage in our sales and marketing expenses in recent years. Although we continue to see room for further product improvements over the long-term, Dasher acquisition costs were lower than we expected in Q2 2023 and we do not expect the same level of acquisition efficiency in the second half of 2023.

We continued to manage operating expenses with discipline in Q2 2023. Combined, GAAP research and development expenses and GAAP general and administrative expenses were $610 million in Q2 2023, up 23% from $496 million in Q2 2022, and up 18% from $516 million in Q1 2023. We expect to remain disciplined in our management of operating expenses in the remainder of 2023, with moderate growth in headcount, most notably in research and development roles.

Operating cash flow in Q2 2023 was $393 million and Free Cash Flow was $311 million. On a trailing 12-month basis, we generated operating cash flow of $1.0 billion and Free Cash Flow of $653 million.

In February 2023, our board of directors authorized the repurchase of up to $750 million shares of our Class A common stock. To date, we have repurchased a total of 11.2 million shares of our Class A common stock for $693 million under the February authorization. Based on our current forecast for stock issuances, we now expect net dilution in 2023 to be well under 1%, prior to any additional potential stock repurchases. There is currently $57 million remaining under the current stock repurchase authorization. We may or may not repurchase any portion of the remaining amount.

Financial Outlook

Period

Marketplace GOV

Adj. EBITDA

Q3

$15.8 billion - $16.2 billion

$220 million - $270 million

2023

$64.2 billion - $65.2 billion

$750 million - $1.05 billion

Additionally, we currently expect stock-based compensation expense for the second half of 2023 to be between $600 million and $620 million. Detail around certain components of our stock based compensation expense is included in the table at the end of this press release.

Our outlook assumes that key foreign currency rates remain relatively stable at current levels. Our outlook also anticipates significant levels of ongoing investment in new categories and international markets. We caution investors that consumer spending in any of our geographies could deteriorate relative to our outlook, which could drive results below our expectations. Additionally, our increasing international exposure heightens risks associated with operating in foreign markets, including geopolitical and currency risks. Changes in the international operating environment could negatively impact results versus our current outlook.

We have not provided GAAP net loss outlook or a reconciliation of Adjusted EBITDA to GAAP net loss as a result of the uncertainty regarding, and the potential variability of, reconciling items such as taxes and other items. Accordingly, a reconciliation of Adjusted EBITDA to GAAP net loss is not available without unreasonable effort. However, it is important to note that material changes to reconciling items could have a significant effect on future GAAP results. We have provided historical reconciliations of GAAP to non-GAAP metrics in tables at the end of this release. For more information regarding the non-GAAP financial measures discussed in this release, please see "Non-GAAP Financial Measures" below.

Analyst and Investor Conference Call and Earnings Webcast

DoorDash will host a conference call and webcast to discuss our quarterly results today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Those interested in listening to the call can register and attend by visiting our Investor Relations page at https://ir.doordash.com. An archived webcast will be available on our Investor Relations page shortly after the call.

Available Information

We announce material information to the public about us, our products and services, and other matters through a variety of means, including filings with the SEC, press releases, public conference calls, webcasts, the investor relations section of our website (ir.doordash.com), our blog (doordash.news), and our Twitter account (@DoorDash) in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” "aim", "try", “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements in this release include, but are not limited to, our expectations regarding our financial position and operating performance, including our outlook and guidance for future periods, our expectations regarding the Wolt business and our international business, our plans and expectations regarding our investment approach, our ability to manage our expenses, our expectations regarding our local commerce opportunity, trends in our business, including the effect of the macroeconomic environment, Dasher acquisition costs, consumer spending, and demand for our platform and for local commerce platforms in general, and our plans and expectations regarding share dilution, including our share repurchase authorization, and our ability to manage dilution. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including risks and uncertainties related to: competition, managing our growth and corporate culture, financial performance, including our ability to forecast our performance due to our limited operating history, investments in new geographies, products, or offerings, our ability to attract merchants, consumers, and Dashers to our platform, legal proceedings and regulatory matters and developments, any future changes to our business or our financial or operating model, and our brand and reputation. The forward-looking statements contained in this release are also subject to other risks and uncertainties that could cause actual results to differ from the results predicted, including those more fully described in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2022 and our quarterly reports on Form 10-Q. All forward-looking statements in this release are based on information available to DoorDash and assumptions and beliefs as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law.

Use of Non-GAAP Financial Measures

To supplement our financial information presented in accordance with U.S. generally accepted accounting principles ("GAAP"), we consider certain financial measures that are not prepared in accordance with GAAP, including adjusted cost of revenue, adjusted sales and marketing expense, adjusted research and development expense, adjusted general and administrative expense, Contribution Profit, Contribution Margin, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, and Free Cash Flow. We use these financial measures in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our business and financial performance. We believe that these non-GAAP financial measures provide useful information to investors about our business and financial performance, enhance their overall understanding of our past performance and future prospects, and allow for greater transparency with respect to metrics used by our management in their financial and operational decision making. We are presenting these non-GAAP financial measures to assist investors in seeing our business and financial performance through the eyes of management, and because we believe that these non-GAAP financial measures provide an additional tool for investors to use in comparing results of operations of our business over multiple periods with other companies in our industry.

We define adjusted cost of revenue as cost of revenue, exclusive of depreciation and amortization, excluding stock-based compensation expense and certain payroll tax expense, allocated overhead, and inventory write off related to restructuring. Allocated overhead is determined based on an allocation of shared costs, such as facilities (including rent and utilities) and information technology costs, among all departments based on employee headcount. We define adjusted sales and marketing expense as sales and marketing expenses excluding stock-based compensation expense and certain payroll tax expense, and allocated overhead. We define adjusted research and development expense as research and development expenses excluding stock-based compensation expense and certain payroll tax expense, and allocated overhead. We define adjusted general and administrative expense as general and administrative expenses excluding stock-based compensation expense and certain payroll tax expense, certain legal, tax, and regulatory settlements, reserves, and expenses, transaction-related costs (primarily consists of acquisition, integration, and investment related costs), impairment expenses, and including allocated overhead from cost of revenue, sales and marketing, and research and development.

We define Adjusted Gross Profit as gross profit plus (i) depreciation and amortization expense related to cost of revenue, (ii) stock-based compensation expense and certain payroll tax expense included in cost of revenue, (iii) allocated overhead included in cost of revenue, and (iv) inventory write off related to restructuring. Gross profit is defined as revenue less (i) cost of revenue, exclusive of depreciation and amortization and (ii) depreciation and amortization related to cost of revenue. Adjusted Gross Margin is defined as Adjusted Gross Profit as a percentage of revenue for the same period.

We define Contribution Profit as our gross profit less sales and marketing expense plus (i) depreciation and amortization expense related to cost of revenue, (ii) stock-based compensation expense and certain payroll tax expense included in cost of revenue and sales and marketing expenses, (iii) allocated overhead included in cost of revenue and sales and marketing expenses, and (iv) inventory write off related to restructuring. We define gross margin as gross profit as a percentage of revenue for the same period and we define Contribution Margin as Contribution Profit) as a percentage of revenue for the same period.

Adjusted EBITDA is a measure that we use to assess our operating performance and the operating leverage in our business. We define Adjusted EBITDA as net income (loss) including redeemable non-controlling interests, adjusted to exclude (i) certain legal, tax, and regulatory settlements, reserves, and expenses, (ii) loss on disposal of property and equipment, (iii) transaction-related costs (primarily consists of acquisition, integration, and investment related costs), (iv) impairment expenses, (v) restructuring charges, (vi) inventory write off related to restructuring, (vii) provision for (benefit from) income taxes, (viii) interest income, net, (ix) other expense, net, (x) stock-based compensation expense and certain payroll tax expense, and (xi) depreciation and amortization expense.

We define Free Cash Flow as cash flows from operating activities less purchases of property and equipment and capitalized software and website development costs.

We define Total Orders as all orders completed through our marketplaces and platform services businesses over the period of measurement.

We define Marketplace GOV as the total dollar value of orders completed on our marketplaces, including taxes, tips, and any applicable consumer fees, including membership fees related to DashPass and Wolt+. Marketplace orders include orders completed through Pickup and DoorDash for Work. Marketplace GOV does not include the dollar value of orders, taxes and tips, or fees charged to merchants, for orders fulfilled through Drive, Storefront, or Bbot.

We define Net Revenue Margin as revenue expressed as a percentage of Marketplace GOV.

Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Further, these metrics have certain limitations in that they do not include the impact of certain expenses that are reflected in our condensed consolidated statements of operations. Thus, our adjusted cost of revenue, adjusted sales and marketing expense, adjusted research and development expense, adjusted general and administrative expense, Contribution Profit, Contribution Margin, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA, and Free Cash Flow should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

DOORDASH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

December 31,
2022

June 30,
2023

Assets

Current assets:

Cash and cash equivalents

$

1,977

$

1,904

Short-term marketable securities

1,544

1,552

Funds held at payment processors

441

297

Accounts receivable, net

400

383

Prepaid expenses and other current assets

358

469

Total current assets

4,720

4,605

Long-term restricted cash

211

144

Long-term marketable securities

397

381

Operating lease right-of-use assets

436

417

Property and equipment, net

637

677

Intangible assets, net

765

708

Goodwill

2,370

2,396

Non-marketable equity securities

124

142

Other assets

129

131

Total assets

$

9,789

$

9,601

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

157

$

173

Operating lease liabilities

55

58

Accrued expenses and other current liabilities

2,332

2,495

Total current liabilities

2,544

2,726

Operating lease liabilities

456

440

Other liabilities

21

28

Total liabilities

3,021

3,194

Redeemable non-controlling interests

14

11

Stockholders’ equity:

Common stock

Additional paid-in capital

10,633

11,257

Accumulated other comprehensive (loss) income

(33

)

9

Accumulated deficit

(3,846

)

(4,870

)

Total stockholders’ equity

6,754

6,396

Total liabilities, redeemable non-controlling interests and stockholders’ equity

$

9,789

$

9,601

DOORDASH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share amounts which are reflected in thousands, and per share data)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2023

2022

2023

Revenue

$

1,608

$

2,133

$

3,064

$

4,168

Costs and expenses:

Cost of revenue, exclusive of depreciation and amortization shown separately below

880

1,135

1,643

2,204

Sales and marketing

421

471

835

967

Research and development

205

269

353

500

General and administrative

291

341

536

626

Depreciation and amortization

81

128

140

251

Restructuring charges

3

3

2

Total costs and expenses

1,881

2,344

3,510

4,550

Loss from operations

(273

)

(211

)

(446

)

(382

)

Interest income, net

4

34

5

61

Other income (expense), net

(3

)

(4

)

2

(5

)

Loss before income taxes

(272

)

(181

)

(439

)

(326

)

Provision for (benefit from) income taxes

(9

)

(9

)

(9

)

8

Net loss including redeemable non-controlling interests

(263

)

(172

)

(430

)

(334

)

Less: net loss attributable to redeemable non-controlling interests

(2

)

(3

)

Net loss attributable to DoorDash, Inc. common stockholders

$

(263

)

$

(170

)

$

(430

)

$

(331

)

Net loss per share attributable to DoorDash, Inc. common stockholders, basic and diluted

$

(0.72

)

$

(0.44

)

$

(1.21

)

$

(0.85

)

Weighted-average number of shares outstanding used to compute net loss per share attributable to DoorDash, Inc. common stockholders, basic and diluted

363,961

388,737

356,630

389,563

DOORDASH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

Six Months Ended June 30,

2022

2023

Cash flows from operating activities

Net loss including redeemable non-controlling interests

$

(430

)

$

(334

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

140

251

Stock-based compensation

360

541

Reduction of operating lease right-of-use assets and accretion of operating lease liabilities

35

60

Other

14

19

Changes in assets and liabilities, net of assets acquired and liabilities assumed from acquisitions:

Funds held at payment processors

109

142

Accounts receivable, net

20

12

Prepaid expenses and other current assets

(51

)

(27

)

Other assets

(44

)

(23

)

Accounts payable

38

20

Accrued expenses and other current liabilities

(6

)

181

Payments for operating lease liabilities

(32

)

(59

)

Other liabilities

(8

)

7

Net cash provided by operating activities

145

790

Cash flows from investing activities

Purchases of property and equipment

(77

)

(66

)

Capitalized software and website development costs

(73

)

(97

)

Purchases of marketable securities

(1,078

)

(930

)

Maturities of marketable securities

992

962

Sales of marketable securities

245

3

Purchases of non-marketable equity securities

(16

)

Net cash acquired in acquisitions

71

Other investing activities

(1

)

Net cash provided by (used in) investing activities

80

(145

)

Cash flows from financing activities

Proceeds from exercise of stock options

8

3

Repurchase of common stock

(693

)

Other financing activities

(8

)

Net cash provided by (used in) financing activities

8

(698

)

Foreign currency effect on cash, cash equivalents, and restricted cash

(8

)

(2

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

225

(55

)

Cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash, beginning of period

2,506

2,188

Cash, cash equivalents, and restricted cash, end of period

$

2,731

$

2,133

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets

Cash and cash equivalents

$

2,727

$

1,904

Restricted cash included in prepaid expenses and other current assets

85

Long-term restricted cash

4

144

Total cash, cash equivalents, and restricted cash

$

2,731

$

2,133

Non-cash investing and financing activities

Purchases of property and equipment not yet settled

$

39

$

20

Stock-based compensation included in capitalized software and website development costs

$

66

$

80


Contacts

IR Contact:
ir@doordash.com

PR Contact:
press@doordash.com

Read full story here

First published on Thu, Aug 3, 2023

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