With a potential slowdown on the horizon, DoorDash (DASH 2.77%) is looking at expanding into adjacent services. In this clip from "IPO & SPAC Show" on Motley Fool Live, recorded on April 11, Motley Fool contributor Nicholas Rossolillo discusses DoorDash's financials and performance over the past two years and analyzes where it's headed.
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Nicholas Rossolillo: I'm trying to imagine a company in 2020 that didn't have more hype than DoorDash. As we all may have had a personal experience with, if you wanted to eat out at some points in 2020, you couldn't do it unless you got the food delivered to you. Against that backdrop, here comes DoorDash with their IPO. Mind you, at the point that they had their IPO, this is like a seven-year-old company. So very, very young, and here they come out and they raise almost $3.4 billion in cash with their IPO, probably for good reason. Everybody was excited to see that revenue number over 200% year-over-year growth throughout 2020 because everyone wanted to eat out still, but where do you do it? DoorDash. DoorDash is the go-to option. I should mention, up 85% from the IPO price in the debut in public trade. Then, things got tumultuous from there as everybody started to worry about the reopening of the economy. Is DoorDash's growth story going to hold? But, it was a pretty resilient stock. It was up over 150% in November 2021 before the horrific looking chart from that point forward. In 2020, free cash flow was positive despite the huge operating losses of $436 million. Let's catch up with it now. It's been an enduring growth company. Fourth-quarter revenue was up 34%, but a big slow down. Full-year revenue in 2021 was only up 69%. It was free cash flow positive, $455 million. Again, big divergence from the operating loss. A lot of that has to do with stock-based compensation, which is a hefty amount that was paid out last year, as well as a percentage of the company's overall market cap and they made some acquisitions as well, that's despite the free cash flow positive nature of this business. Less cash in short-term investments on their balance sheet compared to a year ago, $3.75 billion. One of the big, more recent acquisitions they made was a company called Wolt. It was actually an all-stock transaction, so that didn't eat up any cash, but expanding their delivery services into Europe. I think the big story here is, as we head into 2022, another big expected slowdown in their growth. Their marketplace, basically the value of orders on their marketplace only expected to grow 14% this year and so their key initiative for them is trying to expand into adjacent services like delivering groceries and convenience store orders, that type of thing, so beyond just restaurant delivery services. That's going to be a key component for DoorDash at this point.