A Legal Question Three Years in the Making Gets Answered
DoorDash's Q1 2024 10-Q showed the new $1.1 billion buyback authorization sitting entirely unspent, and flagged that the Proposition 22 California Supreme Court review - granted in June 2023 - remained pending with no timeline. This Form 10-Q, covering the quarter ended June 30, 2024 and filed with the SEC in August 2024, closes that thread: in July 2024, the Supreme Court of California upheld the Court of Appeal's March 2023 ruling, leaving nearly all of Proposition 22 in place as state law. This resolves, as a matter of California's highest court, a legal question this site has tracked across every DoorDash filing since Q1 2021 - the ballot measure DoorDash helped fund in 2020 has now survived a trial-court loss, an appellate win, and a state Supreme Court review, arriving at the outcome DoorDash originally campaigned for.
Financially, the quarter continued the now-familiar pattern of decelerating revenue growth alongside accelerating profitability: Adjusted EBITDA» grew 54% year-over-year to $430 million from $279 million, and free cash flow» grew 45% to $451 million from $311 million. Revenue grew 23% to $2,630 million, and GAAP net loss attributable to DoorDash, Inc. common stockholders narrowed to $157 million from $170 million - a smaller improvement than recent quarters, in part because of a new $83 million impairment charge tied to vacated office space (see Beyond the Usual).
The Prescription
DoorDash should now update its risk-factor disclosure to reflect that Proposition 22's core legal challenge is resolved, rather than continuing to describe it as an open question in future filings - this is a genuine change in the company's legal-risk profile that investors have waited three years for, and the filing should say plainly what it means for Dasher-classification costs going forward rather than folding it into the same paragraph structure used when the outcome was still uncertain.
What it should stop doing: letting the $1.1 billion buyback continue at its current near-standstill pace without comment. DoorDash has now had two full quarters under this authorization and spent a combined $2 million of it - effectively nothing, five months after announcing the largest buyback in the company's history. The company disclosed no reason for the near-total pause in Q1 and offers none here either. If the size of the authorization was calibrated to signal confidence in the stock at announcement, a program that isn't being executed sends the opposite signal by default.
Key Financial Metrics
Q2 2024 vs. Q2 2023 - consolidated, reported in USD (DoorDash reports natively in USD, no FX conversion needed)
| Metric | Q2 2024 | Q2 2023 | YoY |
|---|---|---|---|
| Revenue | $2,630M | $2,133M | ✅ +23% |
| Adjusted EBITDA» | $430M | $279M | ✅ +54% |
| Operating Income (Loss) | $(201)M | $(211)M | ✅ loss narrowed 5% |
| Net Income (Loss) attributable to common stockholders | $(157)M | $(170)M | ✅ loss narrowed 8% |
| Free Cash Flow» | $451M | $311M | ✅ +45% |
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 Jun 2024 vs. Dec 2023
| Balance sheet metric | Jun 2024 | Dec 2023 | Change |
|---|---|---|---|
| Total Assets | $11,837M | $10,839M | ✅ +9% |
| Total Liabilities | $4,665M | $4,026M | ⚠️ +16% |
| Total Stockholders' Equity | $7,162M | $6,806M | ✅ +5% |
Free Cash Flow was $451 million for the quarter, per the company's own disclosure. Total cash and marketable securities (cash and cash equivalents of $3,430 million plus short-term marketable securities of $1,424 million and long-term marketable securities of $669 million, excluding $396 million of funds held at payment processors and $12 million of long-term restricted cash) stood at $5,523 million as of June 30, 2024, up from $5,136 million three months earlier - cash kept building even faster than the prior quarter, since the new buyback remains almost entirely unused.
DoorDash's Adjusted EBITDA grew 54% year-over-year to $430 million and free cash flow grew 45% to $451 million, while in July 2024 - just after quarter-end - the California Supreme Court upheld Proposition 22, closing a legal question this site has tracked since 2021, even as the $1.1 billion buyback authorized in February 2024 had spent only $2 million through six months.
Key Operational Metrics
Q2 2024 vs. Q2 2023
| Metric | Q2 2024 | Q2 2023 | YoY |
|---|---|---|---|
| Total Orders | 635M | 532M | ✅ +19% |
| Marketplace GOV» | $19,711M | $16,468M | ✅ +20% |
| Contribution Profit» | $825M | $620M | ✅ +33% |
| Contribution Profit as a % of Marketplace GOV | 4.2% | 3.8% | ✅ +0.4pp |
| Net Revenue Margin (Revenue ÷ Marketplace GOV) | 13.3% | 13.0% | ✅ +0.3pp |
| GAAP Gross Profit | $1,195M | $951M | ✅ +26% |
Contribution Profit grew 33% year-over-year, again outpacing revenue's 23% 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 31%, another new high. Total Orders growth decelerated further to 19% from 21% last quarter - the fifth consecutive quarter of order-growth deceleration - though Marketplace GOV growth (20%) and Net Revenue Margin (13.3%, up from 13.0%) both continued expanding modestly. DoorDash still does not disclose exact merchant, consumer, or Dasher headcounts, or an absolute DashPass subscriber count.
Beyond the Usual
The California Supreme Court Upheld Proposition 22, Ending a Three-Year Legal Fight
In July 2024 - a subsequent event disclosed in this filing - the Supreme Court of California upheld the Court of Appeal's March 2023 ruling, leaving nearly all of Proposition 22 in place as state law. This resolves the case this site has tracked since the Q1 2021 post: the 2020 ballot measure DoorDash helped fund survived an August 2021 trial-court ruling against it, a March 2023 appellate win, and now a state Supreme Court review, arriving at the exact outcome DoorDash campaigned for. Proposition 22's provisions - preserving independent-contractor classification for California Dashers while providing certain minimum-earnings and benefits guarantees - are now settled state law rather than a live legal question.
An $83 Million Impairment on Vacated Office Space
In June 2024, DoorDash ceased use of and made available for sublease certain corporate office spaces, triggering an $83 million impairment charge on the related operating lease right-of-use assets and leasehold improvements, recorded within general and administrative expenses for the quarter. This is the first real-estate-footprint reduction of this kind and size this site has recorded for DoorDash, and it's a meaningful part of why GAAP operating loss narrowed by only 5% this quarter versus double-digit narrowing in recent quarters - without this one-time charge, the underlying operating-loss trend would look considerably stronger.
The $1.1 billion buyback authorized in February 2024 remained almost entirely unspent: DoorDash repurchased just 14 thousand shares for approximately $2 million during the second quarter, at a weighted-average price of $109.92. Combined with zero repurchases in Q1, this means only about $2 million of the $1.1 billion authorization has been used through two full quarters - a pace dramatically slower than either of DoorDash's two prior buyback programs, both of which were substantially spent within their first two quarters.
DoorDash's $465 million insurance collateral requirement remained fully posted, and its $400 million revolving credit facility remained fully undrawn - no funded debt, consistent with every quarter this site has tracked.
Stock Price Since Last Quarter
DoorDash's stock fell in the second quarter of 2024, from a March 28, 2024 close of $137.72 to a June 28, 2024 close of $108.78 - a 21% decline, the first quarterly decline this site has recorded for DoorDash since Q3 2022, breaking a streak of five consecutive quarterly gains (DoorDash has not split its stock since its IPO, so these remain actual nominal prices). The stock is now down roughly 47% from its $205.98 peak recorded at the end of Q3 2021, giving back a meaningful portion of the ground recovered over the prior five quarters, though it still stands 123% above the December 2022 low of $48.82.
Target Valuation Range
~4.3x TTM EV/Revenue, down from ~5.6x 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 compressed sharply this quarter as the stock price fell 21% while fundamentals kept improving - a partial correction of the prior quarter's re-rating that had outpaced earnings growth, leaving DoorDash cheaper on both revenue and EBITDA multiples than three months ago despite continued fundamental progress.
With 386.17 million Class A and roughly 27.0 million Class B shares outstanding (413.14 million total, per the balance sheet as of June 30, 2024) and no funded debt:
| Market cap → enterprise value | Q2 2024 (period-end) |
|---|---|
| Share price (period-end, June 28, 2024 close) | $108.78 |
| Shares outstanding (Class A + B) | 413.14 million |
| Market capitalization | ~$44.9 billion |
| Less: cash and marketable securities | $5.52 billion |
| Funded debt | none |
| Enterprise value | ~$39.4 billion |
| Peer-multiple sanity check (TTM basis) | Q1 2024 | Q2 2024 | Change |
|---|---|---|---|
| TTM Revenue | $9,113M | $9,230M | ✅ up |
| TTM Adjusted EBITDA | $1,357M | $1,416M | ✅ up |
| Enterprise value | ~$51.1 billion | ~$39.4 billion | ⚠️ down |
| EV/Revenue» | ~5.6x | ~4.3x | ⚠️ down |
| EV/Adjusted EBITDA» | ~38x | ~28x | ⚠️ down |
TTM figures are computed as Q1 2024's TTM minus Q2 2023 plus Q2 2024 (revenue: $9,113M − $2,133M + $2,630M = $9,230M; Adjusted EBITDA: $1,357M − $279M + $430M = $1,416M). Enterprise value fell 23% while TTM revenue grew 1% and TTM Adjusted EBITDA grew 4% - the stock-price decline drove nearly the entire multiple compression, a mechanical reversal of last quarter's price-driven expansion rather than any change in the underlying business trajectory, which kept improving throughout.
A full DCF still isn't attempted here: the Proposition 22 resolution removes one long-standing legal variable, which is a genuine simplification, but the near-dormant buyback program and this quarter's one-time office impairment both still leave open questions about near-term capital allocation and cost structure that argue for another quarter of data before modeling multi-year cash flows with confidence. The peer-multiple read remains the more honest tool, and it now shows DoorDash trading meaningfully cheaper than three months ago on every multiple tracked, despite fundamentals that kept moving in the same positive direction.
DoorDash, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed with the SEC in August 2024.