San Francisco / CA. (ddi) DoorDash Inc. announced its financial results for the quarter ended June 30, 2023. 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 percent Y/Y to 532 million and Marketplace GOV increased 26 percent Y/Y to USD 16.5 billion.
- Revenue increased 33 percent Y/Y to USD 2.1 billion and Net Revenue Margin increased to 13.0 percent from 12.3 percent in Q2-2022.
- GAAP net loss including redeemable non-controlling interests was USD 172 million compared to USD 263 million in Q2-2022, and Adjusted Ebitda grew to USD 279 million from USD 103 million in Q2-2022.
|(in millions, except percentages)||Q2-2022||Q3-2022||Q4-2022||Q1-2023||Q2-2023|
|Total Orders Y/Y growth||23||%||27||%||27||%||27||%||25||%|
|Marketplace GOV Y/Y growth||25||%||30||%||29||%||29||%||26||%|
|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||USD||714||USD||762||USD||921||USD||951||USD|
|GAAP Gross Profit as a % of Marketplace GOV||5.2||%||5.3||%||5.3||%||5.8||%||5.8||%|
|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||)USD||(296||)USD||(642||)USD||(162||)USD||(172||)USD|
|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 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|
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 percent Y/Y, Marketplace GOV up 26 percent Y/Y, and revenue up 33 percent Y/Y. On a pro forma basis in Q2-2023, including the results from Wolt for both periods, we drove Total Orders up 18 percent Y/Y, Marketplace GOV up 20 percent Y/Y, and revenue up 27 percent 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 Q2-2023, 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 percent Y/Y on a reported basis in Q2-2023 and up 27 percent 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 USD 172 million in Q2-2023 compared to a GAAP net loss including redeemable non-controlling interests of USD 263 million in Q2-2022. Adjusted Ebitda reached an all-time high of USD 279 million compared to USD 103 million in Q2-2022.
GAAP sales and marketing expense increased to USD 471 million in Q2-2023, up 12 percent Y/Y and down 5 percent 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 USD 610 million in Q2-2023, up 23 percent from USD 496 million in Q2-2022, and up 18 percent from USD 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 USD 393 million and Free Cash Flow was USD 311 million. On a trailing 12-month basis, we generated operating cash flow of USD 1.0 billion and Free Cash Flow of USD 653 million.
In February 2023, our board of directors authorized the repurchase of up to USD 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 USD 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 percent, prior to any additional potential stock repurchases. There is currently USD 57 million remaining under the current stock repurchase authorization. We may or may not repurchase any portion of the remaining amount.
|Period||Marketplace GOV||Adjusted Ebitda|
|Q3||USD 15.8 billion to USD 16.2 billion||USD 220 million to USD 270 million|
|2023||USD 64.2 billion to USD 65.2 billion||USD 750 million to USD 1.05 billion|
Additionally, we currently expect stock-based compensation expense for the second half of 2023 to be between USD 600 million and USD 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.