Did DoorDash become profitable on a GAAP basis in Q1 2024?

No. DoorDash still reported a GAAP net loss including redeemable non-controlling interests of $25 million in Q1 2024. That was a substantial improvement from a $162 million loss a year earlier, but the company has not yet reached GAAP profitability. Adjusted EBITDA, a non-GAAP measure that excludes stock-based compensation, D&A, and other items, was positive at $371 million.

What is driving the gap between GAAP results and Adjusted EBITDA?

The largest reconciling item is stock-based compensation and certain payroll tax expense, which totaled $255 million in Q1 2024. Depreciation and amortization of $142 million and legal, tax, and regulatory settlements and reserves of $35 million also account for much of the difference. Investors should weigh stock-based compensation carefully, since management guides it to $1.1 to $1.2 billion for 2024.

How much could the Seattle and New York City earnings rules affect DoorDash?

Management estimates local merchants will earn at least $40 million less annually in Seattle and at least $110 million less annually in New York City on the DoorDash Marketplace. It estimates the rules reduced Q1 2024 Total Orders by less than 1%. The company also cited a 20% drop in new Dashers in New York City. Because these markets are a small share of total volume, the near-term financial impact appears limited, but the rules could spread to other jurisdictions.

Is the Q2 2024 outlook a sign of slowing growth?

The guidance implies roughly flat sequential performance at the midpoint, with Marketplace GOV of about $19.2 billion versus $19.2 billion in Q1, and Adjusted EBITDA of about $375 million versus $371 million. Management attributes the outlook partly to ongoing investment in new categories and international markets. It also cautioned that consumer spending could weaken and that foreign currency and geopolitical risks could affect results.

How strong is DoorDash's liquidity position?

At March 31, 2024, DoorDash held $3.1 billion in cash and cash equivalents, up from $2.7 billion at year-end 2023. It also held about $2.0 billion in short- and long-term marketable securities. Operating cash flow was $553 million in Q1 2024, and the company repurchased no stock during the quarter, compared with $392 million of repurchases in Q1 2023.

DASH 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed May 1, 2024. Cited figures are marked; the original filing is the authoritative source.

DoorDash reported record first-quarter 2024 results, with Total Orders up 21% year-over-year to 620 million, Marketplace GOV up 21% to $19.2 billion^a, and revenue up 23% to $2.5 billion.

Net Revenue Margin rose to 13.1% from 12.8% a year earlier, driven mainly by growth in advertising. GAAP net loss including redeemable non-controlling interests narrowed to $25 million^b from $162 million, and Adjusted EBITDA reached an all-time high of $371 million, up from $204 million. Free Cash Flow was $487 million, up from $316 million.

The company's trailing twelve-month Free Cash Flow reached $1.52 billion^c. The second-quarter outlook calls for Marketplace GOV of $19.0 billion to $19.4 billion and Adjusted EBITDA of $325 million to $425 million. The midpoints imply roughly flat sequential GOV and Adjusted EBITDA versus Q1, which suggests management is prioritizing continued investment in new verticals and international markets.

Cost pressures remain visible. GAAP cost of revenue rose to 6.9%^d of GOV from 6.7% a year earlier, driven by insurance costs and first-party distribution costs. Management also flagged that new earnings standards in Seattle and New York City are reducing merchant sales and Dasher activity there, though it estimates the impact on total orders was less than 1% in the quarter.

Balance sheet liquidity improved, with cash and cash equivalents of $3.1 billion at March 31, 2024, up from $2.7 billion at year-end 2023, alongside short- and long-term marketable securities of about $2.0 billion. Stock-based compensation remains large, guided to $1.1 billion to $1.2 billion for 2024, and is a meaningful driver of the gap between GAAP and Adjusted EBITDA results.

02—Key points

Key Highlights

Record Q1 2024 operating metrics: Total Orders of 620 million (+21% Y/Y), Marketplace GOV of $19.2 billion (+21% Y/Y), and revenue of $2.5 billion (+23% Y/Y).
Adjusted EBITDA reached an all-time high of $371 million, up from $204 million in Q1 2023, or 1.9% of Marketplace GOV versus 1.3% a year earlier.
GAAP net loss narrowed to $25 million from $162 million a year earlier, improving to (0.1%) of Marketplace GOV, with Q1 benefiting from interest income of $45 million.
Net Revenue Margin expanded to 13.1% from 12.8% Y/Y, reflecting an increasing contribution from advertising.
Free Cash Flow was $487 million in Q1 2024, up from $316 million, and trailing twelve-month Free Cash Flow reached $1.52 billion.
Q2 2024 outlook: Marketplace GOV of $19.0 to $19.4 billion and Adjusted EBITDA of $325 to $425 million. Full-year 2024 stock-based compensation is guided to $1.1 to $1.2 billion, and D&A to $560 to $590 million.
Management estimates New York City and Seattle earnings standards reduce annual merchant sales by at least $150 million combined and cut total Q1 orders by less than 1%, while Dasher wait times in Seattle more than tripled.

03—Questions

Frequently Asked Questions

Did DoorDash become profitable on a GAAP basis in Q1 2024?
No. DoorDash still reported a GAAP net loss including redeemable non-controlling interests of $25 million in Q1 2024. That was a substantial improvement from a $162 million loss a year earlier, but the company has not yet reached GAAP profitability. Adjusted EBITDA, a non-GAAP measure that excludes stock-based compensation, D&A, and other items, was positive at $371 million.
What is driving the gap between GAAP results and Adjusted EBITDA?
The largest reconciling item is stock-based compensation and certain payroll tax expense, which totaled $255 million in Q1 2024. Depreciation and amortization of $142 million and legal, tax, and regulatory settlements and reserves of $35 million also account for much of the difference. Investors should weigh stock-based compensation carefully, since management guides it to $1.1 to $1.2 billion for 2024.
How much could the Seattle and New York City earnings rules affect DoorDash?
Management estimates local merchants will earn at least $40 million less annually in Seattle and at least $110 million less annually in New York City on the DoorDash Marketplace. It estimates the rules reduced Q1 2024 Total Orders by less than 1%. The company also cited a 20% drop in new Dashers in New York City. Because these markets are a small share of total volume, the near-term financial impact appears limited, but the rules could spread to other jurisdictions.
Is the Q2 2024 outlook a sign of slowing growth?
The guidance implies roughly flat sequential performance at the midpoint, with Marketplace GOV of about $19.2 billion versus $19.2 billion in Q1, and Adjusted EBITDA of about $375 million versus $371 million. Management attributes the outlook partly to ongoing investment in new categories and international markets. It also cautioned that consumer spending could weaken and that foreign currency and geopolitical risks could affect results.
How strong is DoorDash's liquidity position?
At March 31, 2024, DoorDash held $3.1 billion in cash and cash equivalents, up from $2.7 billion at year-end 2023. It also held about $2.0 billion in short- and long-term marketable securities. Operating cash flow was $553 million in Q1 2024, and the company repurchased no stock during the quarter, compared with $392 million of repurchases in Q1 2023.

04—Continue

← View all 8-K filings