DoorDash, Inc. 2022 Form 10-K Summary
Business context and reporting period
DoorDash filed its annual report for the fiscal year ended December 31, 2022. The company operates a local-commerce platform connecting merchants, consumers, and independent delivery contractors. Its principal offerings are the DoorDash Marketplace in four countries, the Wolt Marketplace in 23 countries following the May 2022 acquisition, and Platform Services including Drive, Storefront, and Bbot.
At December 31, 2022, the company reported more than 32 million monthly active users, more than 15 million DashPass and Wolt+ members, over 16,800 employees, and operations in 26 countries outside the United States through its international businesses. The filing does not provide a separate, clearly identified fourth-quarter financial statement summary; the figures below are primarily full-year results.
Key financial and operating metrics
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Total Orders | 1.736 billion | 1.390 billion | Up 25% |
| Marketplace GOV | $53.4 billion | $41.9 billion | Up 27% |
| Revenue | $6.583 billion | $4.888 billion | Up 35% |
| Net Revenue Margin | 12.3% | 11.7% | Up 0.6 percentage points |
| GAAP gross profit | $2.824 billion | $2.452 billion | Up 15% |
| GAAP gross margin | 42.9% | 50.2% | Down 7.3 percentage points |
| Loss from operations | $(1.124) billion | $(452) million | Loss widened |
| Net loss attributable to DoorDash | $(1.365) billion | $(468) million | Loss widened |
| Basic and diluted net loss per share | $(3.68) | $(1.39) | Loss per share worsened |
| Adjusted EBITDA | $361 million | $289 million | Up 25% |
| Contribution Profit | $1.567 billion | $1.071 billion | Up 46% |
| Free Cash Flow | $21 million | $455 million | Down $434 million |
Revenue growth exceeded Marketplace GOV growth primarily because of improvements in Dasher supply. Contribution Profit benefited from higher Marketplace GOV, improved Net Revenue Margin, and sales and marketing leverage, partly offset by higher cost of revenue.
GAAP results were affected by $889 million of stock-based compensation, $369 million of depreciation and amortization, $92 million of restructuring charges, and a $312 million impairment of a non-marketable equity investment. The company reported a $31 million income-tax benefit, primarily related to losses from non-U.S. operations, although the filing states that the related benefit is not expected to recur because of valuation allowances.
Cash flow, liquidity, debt, and balance sheet
- Cash provided by operating activities was $367 million, compared with $692 million in 2021.
- Capital expenditures were $176 million and capitalized software and website development costs were $170 million, resulting in $21 million of Free Cash Flow.
- Cash, cash equivalents, and marketable securities totaled approximately $3.9 billion at year-end, including $2.0 billion of cash and cash equivalents, $1.5 billion of short-term marketable securities, and $397 million of long-term marketable securities.
- Funds held at payment processors were $441 million. Restricted cash was $211 million, including $199 million deposited for insurance collateral at year-end; the remaining $66 million required collateral was deposited in February 2023.
- The company had a $400 million unsecured revolving credit facility maturing August 7, 2025. No revolving loans were outstanding, and $99 million of letters of credit were issued under the facility.
- The company repaid its $340 million convertible notes in full in February 2021 and had no reported convertible-note debt outstanding at year-end 2022.
- Management stated that existing liquidity and available revolving commitments should be sufficient for working capital and capital expenditures for at least the next 12 months and beyond, but the company continues to report substantial operating losses and may require additional capital for growth, acquisitions, or strategic investments.
Material changes versus the prior comparable period
- Wolt was acquired on May 31, 2022 for $2.838 billion, primarily through issuance of DoorDash Class A shares. The transaction added $1.994 billion of goodwill and $772 million of acquired intangible assets. Wolt contributed $259 million of revenue and $345 million of net loss from acquisition through year-end.
- Revenue increased 35%, Total Orders increased 25%, and Marketplace GOV increased 27%, but cost of revenue increased 53% to $3.588 billion.
- Research and development expense increased 93% to $829 million, general and administrative expense increased 44% to $1.147 billion, and depreciation and amortization increased 137% to $369 million, primarily reflecting greater investment, Wolt-related costs, and acquired intangible amortization.
- Sales and marketing expense increased only 4% to $1.682 billion, as lower advertising expense partly offset higher personnel costs.
- Gross margin declined materially to 42.9% from 50.2%, while Contribution Margin improved to 23.8% from 21.9% and Adjusted EBITDA Margin remained approximately 0.7% of Marketplace GOV.
- Free Cash Flow declined sharply because of higher capitalized software and website development spending, higher property and equipment purchases, and changes in operating assets and liabilities.
- The company announced a workforce reduction of approximately 1,250 positions, or about 7% of its employee workforce at the time. Total 2022 restructuring charges were $92 million, with most payments expected to be completed by the end of the first quarter of 2023.
- DoorDash repurchased $400 million of Class A common stock during 2022. In February 2023, it authorized an additional repurchase program of up to $750 million.
Guidance, outlook, management commentary, risks, and unusual items
The 10-K does not provide a formal 2023 revenue, EBITDA, order, or margin guidance framework. Management cautions that the unusually high growth rates experienced during the COVID-19 period are unlikely to recur and expects growth rates for consumer demand, revenue, Total Orders, and Marketplace GOV to decline relative to 2020 and 2021.
Management emphasizes continued investment in international expansion, new categories such as convenience and grocery, merchant services, membership products, advertising, logistics efficiency, and integration of Wolt. The company expects to prioritize long-term engagement and platform expansion even where that may reduce short-term financial results.
- Worker classification remains a central risk. The company continues to defend claims that Dashers should be employees rather than independent contractors. A $100 million California and Massachusetts settlement was paid in 2022, while the San Francisco District Attorney action remains pending and the possible loss range is not estimable.
- The California Employment Development Department issued a negative assessment in January 2023 relating to payroll tax liabilities. DoorDash intends to appeal, and the filing states that a loss was not probable or estimable at year-end.
- Price controls, commission limits, Dasher compensation requirements, taxation, privacy, payment processing, consumer protection, and evolving international regulations could increase costs or reduce demand.
- Competition is intense from Uber Eats, Just Eat Takeaway, Delivery Hero, merchant-owned platforms, grocery and convenience providers, and traditional ordering channels.
- Cybersecurity and vendor risks remain significant. The company disclosed an August 2022 vendor incident involving unauthorized access to personal data of certain consumers and Dashers.
- The company relies heavily on Amazon Web Services, Stripe, PayPal, background-check providers, and other third parties.
- Insurance reserves for retained deductibles increased to $418 million at December 31, 2022. Actual claims may exceed estimates.
- The company recorded a $312 million impairment of a prior investment in a European grocery delivery platform, reducing non-marketable equity securities to $124 million.
- Stock-based compensation and dilution are material: 2022 stock-based compensation expense was $889 million, and unrecognized expense related to outstanding equity awards was approximately $2.8 billion at year-end, including the CEO Performance Award.
Most important facts for investors to verify
- Whether order and Marketplace GOV growth can remain positive as post-pandemic normalization, inflation, consumer price sensitivity, and competition affect demand.
- Whether improved Contribution Profit and Adjusted EBITDA translate into sustainable GAAP profitability and stronger Free Cash Flow.
- The impact of Wolt integration, international losses, acquired intangible amortization, goodwill, and potential additional restructuring or impairment charges.
- Developments in Dasher classification proceedings, the San Francisco District Attorney case, the California EDD assessment, and related regulatory changes.
- The adequacy of insurance reserves, litigation reserves, tax reserves, and collateral requirements.
- The effect of $2.8 billion of unrecognized stock-based compensation, equity issuance, and share repurchases on future dilution and cash allocation.
- Whether the $750 million repurchase authorization is executed and how it affects liquidity relative to continued investments and potential acquisitions.
- Changes in cybersecurity exposure, data-protection obligations, third-party service dependencies, and any further incidents.