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DoorDash - $DASH - Earnings Analysis: Consistent revenue growth and improving profitability.

By sagebytes in Business —

Business Model

DoorDash generates revenue primarily through commissions from merchants, fees from consumers, and advertising revenue.

Revenue Sources

  • Commissions from merchants for providing delivery and order fulfillment services.
  • Fees from consumers for delivery, service, and membership programs like DashPass and Wolt+.
  • Advertising revenue from merchants promoting their businesses on the DoorDash platform.

Income Statement Analysis

  • Revenue increased by 25% year-over-year, primarily driven by growth in Marketplace GOV and advertising revenue.
  • The company achieved GAAP net income attributable to DoorDash, Inc. common stockholders of $141 million, compared to a loss of $(154) million in Q4 2023.

Balance Sheet Analysis

  • Total assets increased by 18.51% from December 31, 2023, to December 31, 2024, indicating growth in the company's resources.
  • Total stockholders' equity increased by 14.65%, reflecting an increase in the company's net worth.
  • Total liabilities increased by 25.24%, suggesting increased financial obligations, potentially due to expansion or strategic investments. The liabilities were derived by subtracting Total assets from Total stockholders equity.

Cash Flow Analysis

  • Net cash provided by operating activities increased by 27.49%, indicating improved operational efficiency and profitability.
  • Net cash used in investing activities increased by 29.82%, suggesting increased investment in long-term assets.
  • Net cash used in financing activities decreased significantly (-72.87%), primarily due to a lower repurchase of common stock.
  • Cash, cash equivalents, and restricted cash at the end of the period increased by 52.23%, indicating a strong liquidity position.

Capital Allocation

DoorDash's capital allocation strategy includes reinvesting in the business to drive growth, opportunistic share repurchases, and strategic investments. The company's board authorized a share repurchase program of up to $5.0 billion, inclusive of the remaining authority from a previous program.

Management Commentary

In 2024, we grew revenue 24% year-over-year (Y/Y), generated our first full year of positive GAAP net income.

Improvements to merchant selection, the breadth of categories we offer, and quality on our Marketplaces helped drive monthly active users (MAUs) to an all-time high of over 42 million in December 2024

Overall Sentiment: Positive. Management expresses confidence in the company's performance and future potential, emphasizing strategic investments and operational efficiencies.

Recommendation

Rating: Buy

Reason for Rating: Strong financial performance, positive trends, and strategic capital allocation warrant a Buy recommendation.

Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.

Generated on: 2/12/2025, 2:43:31 AM