DoorDash, Inc. (NASDAQ:DASH)

The financial performance, as measured by economic profit, demonstrates a consistent negative trend over the five-year period. Net operating profit after taxes (NOPAT) fluctuates significantly, while the cost of capital remains relatively stable. Invested capital generally increases, contributing to the persistent negative economic profit.

NOPAT Trend

Net operating profit after taxes begins at a loss of US$414 million in 2020 and remains negative, increasing to a loss of US$1,420 million in 2022. A substantial improvement is observed in 2023, with NOPAT decreasing to a loss of US$662 million, followed by a further, though smaller, improvement to a loss of US$5 million in 2024. This suggests a potential, albeit slow, progression towards profitability.

Cost of Capital

The cost of capital exhibits stability throughout the period, ranging from 22.18% to 22.49%. This indicates consistent financing costs, with minimal fluctuation in the required rate of return for investors. The relative consistency suggests the company’s risk profile, as perceived by the market, has remained largely unchanged.

Invested Capital

Invested capital decreases from US$4,792 million in 2020 to US$3,179 million in 2021. It then increases to US$5,320 million in 2022 and remains relatively stable at US$5,237 million in 2023 before rising to US$6,261 million in 2024. This growth in invested capital, coupled with negative NOPAT, exacerbates the negative economic profit.

Economic Profit

Economic profit is consistently negative across the entire period, ranging from a loss of US$1,488 million in 2020 to a loss of US$2,600 million in 2022. While the magnitude of the loss decreases in 2023 and 2024 to US$1,835 million and US$1,414 million respectively, it remains substantially negative. This indicates that the company is not generating returns exceeding its cost of capital.

The observed trends suggest that while the company is showing signs of improving operational performance as indicated by the NOPAT trend, it continues to destroy economic value. The increasing invested capital, combined with a consistent cost of capital and historically negative NOPAT, contributes to this ongoing negative economic profit.

The financial data reveals several notable trends with respect to profitability over the five-year period analyzed.

Net Income (Loss) attributable to common stockholders

The net income figures demonstrate a pattern of significant losses from 2020 through 2023, with the largest loss occurring in 2022 at -1,365 million USD. There is an improvement in 2023 with a reduced loss of -558 million USD, followed by a positive net income of 123 million USD in 2024. This indicates a potential turnaround from consistent losses to profitability.

Net Operating Profit After Taxes (NOPAT)

NOPAT shows a similar trend to net income, with losses recorded each year from 2020 to 2023. The largest negative impact is observed in 2022 at -1,420 million USD. By 2023, the losses have decreased substantially to -662 million USD and further improve to near breakeven at -5 million USD in 2024. This suggests operational efficiency and profitability are improving, approaching a positive NOPAT by the end of the period.

Overall, the data indicates that while the company experienced substantial losses in the early years, especially in 2022, both net income and operating profitability have improved significantly by 2024. The swing from large negative values towards a positive net income highlights enhanced financial performance and potential stabilization of the business operations.

The financial data for the given periods from 2020 through 2024 indicates variations in both the provision for income taxes and cash operating taxes.

Provision for (benefit from) income taxes

The provision experienced a positive value in 2020 and 2021, increasing slightly from 3 million USD to 5 million USD. In 2022, there was a significant change with the provision showing a benefit (negative value) of -31 million USD, indicating a tax benefit or reversal. This trend reversed again in 2023 and 2024 with positive provisions of 31 million USD and 39 million USD, respectively, reflecting an increasing tax expense during these years.

Cash operating taxes

Cash operating taxes declined steadily over the five-year period. Starting at 13 million USD in 2020, the amount dropped to 12 million in 2021, and then more sharply to 5 million USD in 2022. There was a slight increase to 7 million USD in 2023, followed by another decrease to 4 million USD in 2024. Overall, the cash tax payments have diminished substantially, suggesting either improved tax efficiency, changes in profitability, or other tax planning strategies.

In summary, the data reflects significant fluctuations in the provision for income taxes with a notable tax benefit in 2022 that reverted back to increasing tax expenses thereafter, alongside a general downward trend in cash operating taxes paid over the five-year span. These patterns suggest changes in taxable income recognition and actual cash outflow related to taxes vary distinctly over time.

The financial data reveals several noteworthy trends regarding the company's capital structure and financial position over the five-year period ending in 2024.

Total Reported Debt & Leases

This metric demonstrates a general downward trend from 617 million USD in 2020 to 399 million USD in 2021, indicating a significant reduction in leverage or obligations during that year. Following 2021, there is a gradual increase each year, reaching 536 million USD by the end of 2024. This suggests a cautious reaccumulation of debt or lease obligations after the initial reduction.

Stockholders' Equity

Stockholders’ equity shows relative stability between 2020 and 2021, with a slight decline from 4700 million USD to 4667 million USD. However, from 2021 onwards, it exhibits a strong upward trajectory, climbing to 6754 million USD in 2022 and steadily increasing through 2023 and 2024 to reach 7803 million USD. This upward trend indicates augmented net assets, which could result from retained earnings, capital injections, or revaluation increases, reflecting an improving equity base and potentially greater shareholder value.

Invested Capital

Invested capital displays notable volatility throughout the period. From 4792 million USD in 2020, it sharply declines to 3179 million USD in 2021, a significant contraction of nearly one-third, possibly due to divestitures, asset disposals, or changes in capital allocation. Subsequently, invested capital rebounds robustly to 5320 million USD in 2022, followed by a slight decline to 5237 million USD in 2023, before rising again to 6261 million USD in 2024. The fluctuations suggest active management of capital employed in the operations, possibly reflecting strategic investments, operational adjustments, or shifts in asset composition.

Overall, the data points to a strategic approach to balancing debt obligations and equity growth, with indications of strengthening shareholder equity and active capital management despite variability in invested capital levels. The initial reduction in debt and invested capital in 2021 is followed by a phase of measured increase and growth, signaling possible initiatives aimed at financial optimization and expansion.

The economic spread ratio demonstrates a concerning trend over the five-year period. Initially negative, the ratio exhibits increasing negativity before showing signs of improvement in the most recent year. Economic profit consistently remains negative throughout the period, while invested capital fluctuates.

Economic Spread Ratio

The economic spread ratio declined significantly from -31.05% in 2020 to -48.87% in 2022, indicating a widening gap between the company’s return on invested capital and its cost of capital. This suggests a deteriorating ability to generate returns exceeding its capital costs during this timeframe. However, the ratio improved to -35.04% in 2023 and further to -22.58% in 2024, suggesting a potential stabilization or modest improvement in the company’s economic performance. The movement from -48.87% to -22.58% represents a substantial, though still negative, shift.

Economic Profit

Economic profit remained negative across all observed years, ranging from a low of -2,600 US$ million in 2022 to a high of -1,123 US$ million in 2021. While the magnitude of the loss decreased from 2023 (-1,835 US$ million) to 2024 (-1,414 US$ million), the continued negative value indicates that the company is not generating sufficient profit to cover its cost of capital.

Invested Capital

Invested capital decreased from 4,792 US$ million in 2020 to 3,179 US$ million in 2021, before increasing to 5,320 US$ million in 2022 and remaining relatively stable at 5,237 US$ million in 2023. A further increase to 6,261 US$ million is observed in 2024. This suggests a period of capital restructuring followed by reinvestment, potentially influencing the economic spread ratio. The increase in invested capital in 2024, coupled with a less negative economic profit, may be contributing to the improved economic spread ratio.

The interplay between negative economic profit and fluctuating invested capital results in the observed trend in the economic spread ratio. The recent improvement in the ratio warrants further investigation to determine its sustainability and the underlying drivers of the change.

The economic profit margin demonstrates a fluctuating, yet generally improving, trend over the five-year period. While consistently negative, the magnitude of the economic loss relative to revenue has decreased in recent years.

Economic Profit Margin Trend

In 2020, the economic profit margin was -51.55%, representing the largest proportional economic loss. This figure improved significantly to -22.98% in 2021. However, the margin deteriorated in 2022, reaching -39.50%, indicating a substantial increase in the economic loss relative to revenue.

A positive shift occurred in 2023, with the economic profit margin improving to -21.25%. This trend continued into 2024, where the margin reached -13.19%, the least negative value observed throughout the period. This suggests a strengthening ability to generate returns exceeding the cost of capital, although an absolute economic profit remains elusive.

The economic profit margin’s movement appears correlated with revenue growth. Revenue increased consistently year-over-year, while the economic profit margin exhibited volatility. The most significant improvement in the margin occurred alongside substantial revenue increases in 2021 and 2024. However, the increase in revenue in 2022 did not translate to a similar improvement in the economic profit margin, suggesting potential issues with cost management or capital efficiency during that year.

Economic Profit

The absolute economic profit remained negative throughout the period, ranging from a loss of US$1,488 million in 2020 to a loss of US$1,414 million in 2024. While the magnitude of the loss decreased in the latest year, it still represents a significant shortfall in generating returns above the cost of capital.

Overall, the trend in the economic profit margin indicates a gradual improvement in the company’s ability to generate economic profit, despite continuing to operate at an economic loss. The decreasing negative margin suggests that the company is becoming more efficient in converting revenue into economic value, but further improvement is necessary to achieve positive economic profit.