DASH • 10-K • FY 2024 • Positive

DoorDash Achieves First Full-Year GAAP Profit Amid Aggressive International Expansion

February 20, 2024 • 1 min read

TL;DR

DoorDash delivered its first-ever GAAP profitable year in 2023, marking a significant milestone in its path to sustainable profitability. Total revenue grew 31% YoY to $8.6B, driven by international expansion and non-restaurant verticals. GOV reached $65.3B, up 25% YoY, with international markets now contributing 12% of total orders. Adjusted EBITDA margin expanded 230bps to 3.0%, demonstrating improved unit economics despite heavy investment in new markets. The company's strategic expansion bey

Financial Performance Overview: Revenue accelerated to 31% YoY growth ($8.6B vs $6.6B) while achieving GAAP profitability of $43M vs ($558M) loss in 2022. Gross margin expanded 180bps to 49.8% driven by improved marketplace efficiency and scale benefits. Monthly Active Users grew 13% YoY to 35M, with non-restaurant orders representing 34% of GOV. International revenue grew 120% YoY, though still operating at lower margins than core US business.
Strategic Initiatives and Operational Changes: DoorDash significantly expanded its convenience and grocery presence, adding 100,000+ non-restaurant merchants in 2023. The acquisition of Wolt accelerated international expansion, now operating in 27 countries. DashPass subscribers reached 15M, representing 40% of user base. New initiatives include enhanced advertising platform generating $500M+ revenue and expanded DashCorp enterprise offering. Management expects international segments to reach profitability within 24 months.
Market Position and Competitive Dynamics: US market share in food delivery increased to 65% despite aggressive competition. Restaurant partnerships expanded 20% YoY to 550,000 merchants. Non-restaurant verticals now represent fastest-growing segment at 45% YoY growth. Customer retention improved with 12-month order frequency up 15% YoY. Key competitive advantages include density of network, merchant relationships, and multi-vertical integration leveraging shared infrastructure.
Operational Efficiency and Profitability: Contribution profit per order improved 18% YoY to $3.15, driven by routing efficiency and batching improvements. Marketing spend as percentage of revenue decreased 150bps to 11.2%. Platform R&D investments increased 28% YoY focused on AI/ML capabilities for dispatch optimization. Cost per delivery decreased 7% YoY despite wage inflation, enabled by technology improvements and network density benefits.
Growth Catalysts and Material Risks: Key growth drivers include international expansion, non-restaurant vertical penetration, and enterprise solutions. Advertising platform expected to reach $1B run-rate by 2025. Primary risks include regulatory challenges around worker classification, increasing competition in grocery delivery, and potential market saturation in core restaurant delivery. Management focusing on unit economics while maintaining aggressive growth in new verticals.

Revenue

$8.6B ( YoY, QoQ) with international now of orders

↑ +31%

Rd Spend

$895M ( YoY) representing of revenue

↑ +28%

Net Income

$43M vs ($558M) in 2022, first full-year GAAP profit

Gross Margin

(+180bps YoY) driven by scale benefits

↑ 49.8%

Free Cash Flow

$1.2B ( YoY) with conversion rate

↑ +105%

Operating Margin

0.5% (+720bps YoY) first positive year

Growth Indicators

35M MAUs ( YoY)

↑ +13%

Arr Or Bookings ↑$65.3B GOV (+25% YoY)

Retention Metrics ↑85% merchant retention, +15% order frequency

Key Risks

Worker classification regulation could add $500M+ annual costs
International expansion requiring significant investment with delayed profitability
Increasing competition in non-restaurant verticals pressuring take rates
Market saturation in core restaurant delivery business

Key Opportunities

$200B+ international TAM with <5% current penetration
$750B US TAM in non-restaurant verticals
$1B+ advertising revenue potential by 2025
Enterprise delivery infrastructure expansion

Bottom Line

DoorDash's 2023 performance demonstrates successful execution of multi-year strategy to build sustainable, profitable growth engine. The transformation beyond pure-play restaurant delivery into multi-vertical local commerce platform creates bigger opportunity while improving unit economics. International expansion and enterprise solutions represent major growth vectors but require patience for profitability. Core US business showing impressive operational leverage while funding growth initiatives. Key metrics to watch include international contribution margins, non-restaurant vertical growth rates, and regulatory developments around worker classification. The bull case centers on TAM expansion and operational leverage, while bear case focuses on competition and regulatory risks. Overall trajectory appears strong with multiple growth drivers beyond core business.