A Third Straight Quarter of Non-GAAP Improvement, and the Sharpest GAAP Narrowing Yet
DoorDash's Q2 2023 10-Q showed Adjusted EBITDA up 171% year-over-year and the $750 million buyback authorized in February 2023 nearly exhausted, with only about $57 million left. This Form 10-Q, covering the quarter ended September 30, 2023 and filed with the SEC in November 2023, shows the improvement accelerated rather than leveled off: Adjusted EBITDA» grew 295% year-over-year to $344 million from $87 million, and free cash flow» grew 227% to $324 million from $99 million. Revenue grew 27% to $2,164 million, and GAAP net loss attributable to DoorDash, Inc. common stockholders narrowed 75% to $73 million from $295 million a year earlier - the sharpest year-over-year GAAP loss narrowing this site has recorded for DoorDash, following smaller narrowings in Q1 and Q2 2023.
The buyback thread this site has tracked since February 2023 also reached its conclusion. DoorDash spent only about $6 million more on repurchases during the third quarter itself (bringing the cumulative total to $699 million as of September 30, 2023), but the filing discloses that in October 2023 - after the quarter closed - DoorDash repurchased the final 689 thousand shares for $51 million, completing the entire $750 million authorization. The program that started with $392 million spent in Q1 2023 alone ended up taking roughly eight months from authorization to completion.
The Prescription
DoorDash should state its capital-allocation plan for the gap the completed buyback now leaves - the company has spent $750 million across three consecutive share-repurchase efforts (a $400 million program in 2022, this $750 million program through October 2023) while free cash flow keeps compounding ($324 million this quarter alone), and management has not yet disclosed whether or when a successor authorization will follow. Investors who assumed the pattern of "authorize, spend fast, re-authorize" from 2022-2023 need to know if that pattern holds or if DoorDash intends to let cash accumulate for something else - an acquisition, debt-free balance-sheet flexibility, or simply a pause.
What it should stop doing: letting the California Supreme Court's Proposition 22 review sit unresolved across multiple quarters without commenting on timing. The Court granted review in June 2023, and as of this filing - five months later - there is still no indication of when a ruling might come. DoorDash's risk-factor disclosure continues to describe the case accurately, but a reader following only the quarterly filings has now gone two full quarters (Q2 and Q3 2023) with no new information on a legal question the company itself has flagged as material to its Dasher-classification costs.
Key Financial Metrics
Q3 2023 vs. Q3 2022 - consolidated, reported in USD (DoorDash reports natively in USD, no FX conversion needed)
| Metric | Q3 2023 | Q3 2022 | YoY |
|---|---|---|---|
| Revenue | $2,164M | $1,701M | ✅ +27% |
| Adjusted EBITDA» | $344M | $87M | ✅ +295% |
| Operating Income (Loss) | $(108)M | $(308)M | ✅ loss narrowed 65% |
| Net Income (Loss) attributable to common stockholders | $(73)M | $(295)M | ✅ loss narrowed 75% |
| Free Cash Flow» | $324M | $99M | ✅ +227% |
Balance sheet: DoorDash's 10-Q compares quarter-end to the prior fiscal year-end, not the year-ago quarter, so the columns below are Sep 2023 vs. Dec 2022
| Balance sheet metric | Sep 2023 | Dec 2022 | Change |
|---|---|---|---|
| Total Assets | $10,013M | $9,789M | ✅ +2% |
| Total Liabilities | $3,445M | $3,021M | ⚠️ +14% |
| Total Stockholders' Equity | $6,559M | $6,754M | ⚠️ -3% |
Free Cash Flow was $324 million for the quarter, per the company's own quarter-over-quarter disclosure - consistent with deriving it from the nine-month figure of $951 million less the $627 million already disclosed for the first half of 2023 across Q1 and Q2 2023. Total cash and marketable securities (cash and cash equivalents of $2,344 million plus short-term marketable securities of $1,477 million and long-term marketable securities of $474 million, excluding $385 million of funds held at payment processors and $11 million of long-term restricted cash) stood at $4,295 million as of September 30, 2023, up from $3,837 million three months earlier - strong free cash flow generation this quarter outpaced the modest remaining buyback spend.
DoorDash's Adjusted EBITDA grew 295% year-over-year to $344 million and free cash flow grew 227% to $324 million, while GAAP net loss attributable to common stockholders narrowed 75% to $73 million - the sharpest improvement this site has recorded for DoorDash - and the $750 million buyback authorized in February 2023 was fully completed in October 2023, just after quarter-end.
Key Operational Metrics
Q3 2023 vs. Q3 2022
| Metric | Q3 2023 | Q3 2022 | YoY |
|---|---|---|---|
| Total Orders | 543M | 439M | ✅ +24% |
| Marketplace GOV» | $16,751M | $13,534M | ✅ +24% |
| Contribution Profit» | $640M | $420M | ✅ +52% |
| Contribution Profit as a % of Marketplace GOV | 3.8% | 3.1% | ✅ +0.7pp |
| Net Revenue Margin (Revenue ÷ Marketplace GOV) | 12.9% | 12.6% | ✅ +0.3pp |
| GAAP Gross Profit | $962M | $714M | ✅ +35% |
Contribution Profit grew 52% year-over-year, again outpacing revenue's 27% growth, extending the margin-expansion trend this site has tracked in every quarter since Q1 2022. Contribution Margin (Contribution Profit as a percentage of revenue) reached roughly 30%, its highest level yet, up from roughly 25% a year ago. Net Revenue Margin also expanded again, to 12.9% from 12.6%, though the pace of margin expansion was noticeably smaller than the prior two quarters - Q1 2023 and Q2 2023 both showed larger sequential gains, worth watching as growth in Marketplace GOV and Total Orders converge to roughly the same rate (24% each this quarter, versus GOV growth outpacing orders in earlier 2023 quarters). DoorDash still does not disclose exact merchant, consumer, or Dasher headcounts, or an absolute DashPass subscriber count.
Beyond the Usual
The $750 Million Buyback Program Was Fully Completed in October 2023, Closing a Thread Tracked Since February
DoorDash spent only about $6 million more on Class A common stock repurchases during the third quarter itself, bringing cumulative spend under the February 2023 authorization to $699 million by September 30, 2023 - a marked slowdown from the $693 million spent in the first six months alone. But the filing discloses a subsequent event: in October 2023, DoorDash repurchased the remaining 689 thousand shares at a weighted-average price of $74.33 for $51 million, completing the entire $750 million program. Across its history, DoorDash has now run two share-repurchase programs to completion - a $400 million program finished in roughly ten weeks in 2022, and this $750 million program that took roughly eight months (February to October 2023). No new authorization has been disclosed as of this filing.
The Insurance Collateral Requirement DoorDash Hasn't Fully Posted Yet
DoorDash is required to maintain $465 million in collateral connected to certain insurance policies, payable in a combination of cash, surety bonds, and letters of credit. As of September 30, 2023, only $335 million of that collateral had actually been posted, with the remaining amount due in 2024 - a real future cash or credit-facility commitment that doesn't show up as a liability on the balance sheet today.
DoorDash's $400 million revolving credit facility (extended to an August 2025 maturity, amended most recently in October 2022) remained entirely undrawn as of September 30, 2023, consistent with every prior quarter this site has tracked - DoorDash continues to operate with no funded debt of any kind, financing its buybacks and operations entirely from cash on hand and operating cash flow.
Stock Price Since Last Quarter
DoorDash's stock rose again in the third quarter of 2023, from a June 30, 2023 close of $76.42 to a September 29, 2023 close of $79.47 - a 4% increase, the third consecutive quarterly gain this site has tracked (DoorDash has not split its stock since its IPO, so these remain actual nominal prices). The stock remains down roughly 61% from its $205.98 peak recorded at the end of Q3 2021, while the three-quarter recovery from the December 2022 low of $48.82 now totals 63%. The pace of the rally slowed markedly this quarter compared to the 20% gain in Q2 2023, even as the underlying fundamentals (Adjusted EBITDA, free cash flow, GAAP loss narrowing) all improved by a wider margin than in Q2.
Target Valuation Range
~3.4x TTM EV/Revenue, roughly flat versus three months earlier. Verdict: too-early-to-call on a numeric fair-value range — the peer-multiple read below is the honest substitute (see the DCF-timing note further down). Bottom line: the valuation multiple stopped re-rating upward this quarter even as fundamentals improved faster than at any point in 2023, meaning the stock got fundamentally cheaper on a profitability basis even though the headline revenue multiple barely moved.
With 370.92 million Class A and 27.47 million Class B shares outstanding (398.39 million total, per the balance sheet as of September 30, 2023) and no funded debt:
| Market cap → enterprise value | Q3 2023 (period-end) |
|---|---|
| Share price (period-end, September 29, 2023 close) | $79.47 |
| Shares outstanding (Class A + B) | 398.39 million |
| Market capitalization | ~$31.7 billion |
| Less: cash and marketable securities | $4.30 billion |
| Funded debt | none |
| Enterprise value | ~$27.4 billion |
| Peer-multiple sanity check (TTM basis) | Q2 2023 | Q3 2023 | Change |
|---|---|---|---|
| TTM Revenue | $7,687M | $8,150M | ✅ up |
| TTM Adjusted EBITDA | $687M | $944M | ✅ up |
| Enterprise value | ~$26.2 billion | ~$27.4 billion | ✅ up |
| EV/Revenue» | ~3.4x | ~3.4x | ➡️ flat |
| EV/Adjusted EBITDA» (TTM) | ~38x | ~29x | ✅ down |
TTM figures are computed as FY2022 minus the first nine months of 2022 plus the first nine months of 2023 (revenue: $6,583M − $4,765M + $6,332M = $8,150M; Adjusted EBITDA: $361M − $244M + $827M = $944M). Enterprise value rose 5% while TTM revenue grew 6% and TTM Adjusted EBITDA grew 37% - the near-flat EV/Revenue multiple reflects enterprise value tracking revenue growth almost exactly, while EV/Adjusted EBITDA compressed meaningfully because profitability is now growing far faster than the market is re-rating the stock. This is the same direction as the compression flagged in Q2 2023, now more pronounced.
A full DCF still isn't attempted here: the completed buyback removes one near-term variable (there's no longer an "exhaustion date" to model around), but the absence of any disclosed successor program, combined with the still-unresolved Proposition 22 review, leaves enough open questions that a multi-year model would rest on assumptions rather than disclosed facts. The peer-multiple read remains the more honest tool, and it now shows a valuation that's holding roughly steady on revenue while getting meaningfully cheaper on a profitability basis - three consecutive quarters of Adjusted EBITDA growth outpacing enterprise-value growth.
DoorDash, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed with the SEC in November 2023.