DASH

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How DASH rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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These risks include the following: • We expect our results of operations to fluctuate on a quarterly and annual basis due to a number of factors, which may make it difficult to predict our future performance; • We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to consistently maintain or increase profitability in the future; • Our business may not continue to grow on pace with historical rates; • We face intense competition and if we are unable to compete effectively, our business, financial condition, and results of operations could be adversely affected; • If we fail to retain our existing merchants and consumers or acquire new merchants and consumers in a cost-effective manner, our revenue, revenue growth, and margins may decrease and our business, financial condition, and results of operations could be adversely affected; • If we fail to cost-effectively attract and retain Dashers or to increase the use of our platform by existing Dashers, our business, financial condition, and results of operations could be adversely affected; • We rely on merchants on our platform for many aspects of our business, and to the extent they fail to adequately maintain their service levels or materially increase the prices they charge consumers on our platform, our business could be adversely affected; • Systems failures and resulting interruptions in the availability of our websites, mobile applications, technology infrastructure, or platform could adversely affect our business, financial condition, and results of operations; • If we are unable to make acquisitions and investments, or successfully integrate acquisitions into our business, our business, financial condition, and results of operations could be adversely affected; • Our international operations and any future international expansion will subject us to additional costs and risks and our plans may not be successful; • We have been subject to cybersecurity incidents in the past and anticipate being the target of future attacks.
Any actual or perceived cybersecurity incident or security or privacy breach, particularly those involving our key systems, data, or critical third-party providers, could interrupt our operations, subject us to claims, litigation, regulatory investigations and liability, and adversely affect our reputation, brand, business, financial condition, and results of operations; • The impact of adverse economic conditions and other trends, including the resulting effects on consumer spending and merchant operations, may adversely affect our business, financial condition, and results of operations; • If Dashers that utilize our platform as independent contractors are reclassified as employees under U.S. federal or state law, or the laws of other jurisdictions in which we operate, it could have an adverse effect that is material to our business, financial condition, and results of operations; • We are subject to various claims, lawsuits, investigations, and proceedings, and face potential liability, expenses, and harm to our business as a result; • Our business is subject to a variety of laws and regulations globally, many of which are unsettled and still developing, and any of which could subject us to legal claims, increased costs, operational burdens, or otherwise adversely affect our business, financial condition, or results of operations; • The multi-class structure of our common stock and the voting agreement and irrevocable proxy (the "Voting Agreement"), between Tony Xu, Andy Fang, and Stanley Tang (our "Co-Founders"), has the effect of concentrating voting power with Tony Xu, our co-founder, Chief Executive Officer, and Chair of our board of directors, which will limit your ability to influence the outcome of matters submitted to our stockholders for approval; and • The trading price of our Class A common stock may be volatile, and you could lose all or part of your investment.
Risks Related to Our Business and Operations We expect our results of operations to fluctuate on a quarterly and annual basis due to a number of factors, which may make it difficult to predict our future performance.
Since launching in 2013, we have expanded our platform features and services, expanded into new categories, changed our pricing methodologies, and entered new geographies.
As a result of these expansions and changes, as well as a variety of factors that may be out of our control, such as the macroeconomic and regulatory environment, our results of operations have, and we expect that they will continue to, vary from quarter to quarter and year to year.
In addition to other risk factors described elsewhere in this “Risk Factors” section, factors that may contribute to the variability of our quarterly and annual results include: • our ability to attract and retain merchants, consumers, and Dashers in a cost-effective manner; • our ability to successfully compete with current and future competitors; • our ability to successfully expand and manage our business in existing markets and categories and successfully enter new markets and categories; • the impact of acquired technologies and businesses and our ability to successfully integrate acquired technologies and businesses into our own; • the mix among various aspects of our business, including our Marketplaces and Commerce Platform, our U.S. and non-U.S. operations, our restaurant and non-restaurant categories, and contributions to our overall business by new products and services, such as our membership products and our advertising products; • the impact of worldwide economic conditions, and our ability to anticipate and respond to macroeconomic changes and changes in the jurisdictions in which we operate, including any resulting effect on consumer spending; • the impact of weather and seasonality on our business, including the effect of academic calendars on college campuses and seasonal patterns in restaurant dining; • our ability to maintain and enhance the value of our reputation and brand; • the success of our sales and marketing efforts; • the effects of changes in search engine placement and prominence; • our ability to keep pace with technology changes in our industry and to adapt to rapidly evolving trends in the ways merchants and consumers interact with technology; • our ability to develop and maintain a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased usage, as well as the deployment and integration of new features, services, and technologies; • costs associated with defending claims, including intellectual property infringement claims, and related judgments or settlements; • our ability to hire, integrate, motivate, and retain talented technology, sales, customer service, and other personnel; • our ability to effectively adapt to and manage the regulatory environment and new laws related to our business, including, but not limited to, regulations regarding the classification of and the rates that we pay Dashers that utilize our platform, regulations governing our terms and transparency with consumers, and regulations impacting the commission rates we charge to merchants; • the impact of payment processor costs and procedures and any changes in the online payment transfer rate; • changes in our tax rates or exposure to additional tax liabilities; • the effectiveness of our internal control over financial reporting; and • the effects of natural or human-made catastrophic events that may impact our business or have an impact on a more global scale.
As a result of the changes to, and expansion of, our business, as well as risks and challenges that are outside of our control, we may not be able to accurately forecast our revenue and plan our operating expenses, which may harm our ability to achieve or sustain profitability or meet our forecasted cash flows.
In addition, if we fail to meet or exceed the expectations of analysts that cover us or our investors, the market price of our Class A common stock could fall substantially, and we could face costly lawsuits, including securities class action suits.
Prior to the year ended December 31, 2024, we incurred net losses in each year since our founding.
We expect that our costs will increase over time and we expect to invest significant additional funds to grow our business.
For example, we have expended and expect to continue to expend substantial financial and other resources on developing our business, including expanding our platform offerings, developing or acquiring new platform features and services, acquiring and integrating technologies and businesses, attracting and retaining merchants, consumers, and Dashers, expanding into new markets and categories, and increasing our sales and marketing efforts.
These efforts may be more costly than we expect, may not result in sufficient increased revenue or growth in our business to offset such costs, and may come at the expense of, or in lieu of, pursuing other strategic initiatives with higher potential returns on investment.
Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving, maintaining, or increasing profitability on a consistent basis, which could also negatively impact our cash flow.
Our past revenue growth rate, growth in demand for our offerings, and financial performance may not be, and should not be relied upon as, indicative of our future performance.
We may also experience a declining revenue growth rate as a result of slowing demand for our platform, insufficient growth in the number of merchants, consumers, and Dashers that utilize our platform, increasing competition, a decrease in the growth of our overall market, our failure to capitalize on growth opportunities, increasing regulatory costs, or other reasons that may be identified in this "Risk Factors" section.
If our growth rate declines, public perception of our business and the trading price of our Class A common stock could be adversely affected.
Globally, we compete with other local on-demand delivery companies, such as Amazon, Uber Eats, Prosus, Delivery Hero, and other local incumbents.
In addition, we compete with traditional offline ordering channels, such as in-store dining, take-out offerings, telephone, and paper menus that merchants distribute to consumers.
If certain merchants choose to partner with our competitors in a specific geographic market, if merchants choose to engage exclusively with our competitors, or if merchants decide to not partner with us at all, we may lack a sufficient variety and supply of merchant options or lack access to the most popular merchants, such that our offering would become less appealing to consumers.
Our competitors have completed in the past, and may complete in the future, acquisitions or establish cooperative or other strategic relationships among themselves or with others, including by integrating their services or membership products with the offerings of another company that provides expanded distribution.
Our competitors have introduced in the past, and may introduce in the future, new offerings with competitive price and performance characteristics or undertake more aggressive marketing campaigns than ours.
If we lose existing merchants, consumers, or Dashers that utilize our platform, fail to attract new merchants, consumers, or Dashers, or are forced to reduce our commission rate or make pricing or other concessions as a result of increased competition, our business, financial condition, and results of operations could be adversely affected.
We believe that growth of our business and revenue is dependent on our ability to cost-effectively grow our platform by retaining our existing merchants and consumers and adding new merchants and consumers.
An increase in merchants attracts more consumers to our platform and an increase in consumers attracts more merchants.
We expect to continue to incur substantial expenses to acquire additional merchants and consumers with the possibility that the return on such investments will not be achieved in the expected timeframe or at all.
If merchants on our platform cease operations, temporarily or permanently, or face financial distress or other business disruption, we may not be able to provide consumers with sufficient merchant selection, which may cause us to lose consumers or cause consumers to use our services less frequently.
Our agreements with partner merchants generally remain in effect until terminated by us or partner merchants, and partner merchants may generally terminate such agreements by providing us at least 7 or 30 days' advance notice.
For example, the increased growth of our membership products, and how compelling these offerings are to consumers, depends in part on our ability to sign up eligible merchants to our membership products.
We strive to demonstrate the value of our platform and offerings to such consumers, encouraging them to access our platform regularly or become a paid user of our membership products.
However, these consumers may never convert to a paid version of our membership products or access our platform after they take advantage of our promotions.
If we are not able to expand our consumer base, convert our consumers to regular paying consumers, or increase the spending of our current consumer base on our platform, demand for our full-price or paid services and our revenue may grow slower than expected or decline.
Dashers have the ability to decline offers, stop using our platform entirely at any time, or choose to spend their earning hours on other opportunities outside of our platform.
In addition, we may modify our logistics models from time to time and Dashers may or may not find such modifications useful or favorable.
If we do not continue to provide Dashers with accessibility to and flexibility on our platform and compelling opportunities to earn income, we may fail to attract new Dashers, retain existing Dashers, or increase their use of our platform, or we may experience complaints, negative publicity, or work stoppages that could adversely affect our users and our business.
To attract and retain Dashers, we regularly invest in removing friction from the dashing process, offer monetary incentives and perquisites, and provide opportunities to quickly access Dasher earnings.
We frequently test Dasher incentives with subsets of existing and potential Dashers; however, these incentives could fail to attract and retain Dashers, could fail to increase the use of our platform by existing Dashers, or could have unintended adverse consequences, including negative press, adverse reactions from existing and potential Dashers, and harm to our brand and reputation.
Changes in, and variations in the interpretation of, certain laws and regulations, including immigration and labor and employment laws, or laws that require us to make changes to our platform that decrease or remove the accessibility or flexibility provided to Dashers in certain jurisdictions, may result in a decrease in the pool of Dashers, which may result in a decrease in the availability of local Dashers, increased competition for Dashers, or higher costs of recruitment and engagement.
If these merchants experience difficulty servicing consumer demand, producing quality goods, or meeting our requirements and standards, or price their goods on our platform at unreasonable rates, our reputation and brand could be damaged.
Systems failures and resulting interruptions in the availability of our websites, mobile applications, technology infrastructure, or platform could adversely affect our business, financial condition, and results of operations.
It is critical to our success that merchants, consumers, and Dashers be able to access our platform at all times and we expect to continue to make significant investments to maintain and improve the availability of our platform.

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Gone since FY2024

These risks include the following: • We have a limited operating history in an evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful; • We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to consistently maintain or increase profitability in the future; • Our business may not continue to grow on pace with historical rates; • We face intense competition and if we are unable to compete effectively, our business, financial condition, and results of operations could be adversely affected; • If we fail to retain our existing merchants and consumers or acquire new merchants and consumers in a cost-effective manner, our revenue, revenue growth, and margins may decrease and our business, financial condition, and results of operations could be adversely affected; • If we fail to cost-effectively attract and retain Dashers or to increase the use of our platform by existing Dashers, our business, financial condition, and results of operations could be adversely affected; • We rely on merchants on our platform for many aspects of our business, and to the extent they fail to adequately maintain their service levels or materially increase the prices they charge consumers on our platform, our business could be adversely affected; • We expect a number of factors to cause our results of operations to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance; • Systems failures and resulting interruptions in the availability of our websites, mobile applications, or platform could adversely affect our business, financial condition, and results of operations; • If we are unable to make acquisitions and investments, or successfully integrate acquisitions into our business, our business, financial condition, and results of operations could be adversely affected; • Our international operations and any future international expansion will subject us to additional costs and risks and our plans may not be successful; • If Dashers that utilize our platform are reclassified as employees under U.S. federal or state law, or the laws of other jurisdictions in which we operate, it could have an adverse effect that is material to our business, financial condition, and results of operations; • We are subject to various claims, lawsuits, investigations, and proceedings, and face potential liability, expenses, and harm to our business as a result; • Our business is subject to a variety of laws and regulations globally, including those related to worker classification, Dasher pay and conditions of work, merchant pricing and commissions, and consumer fees and taxes, many of which are unsettled and still developing, and any of which could subject us to legal claims, increased costs, operational burdens, or otherwise adversely affect our business, financial condition, or results of operations; • The multi-class structure of our common stock and the voting agreement and irrevocable proxy (the "Voting Agreement"), between Tony Xu, Andy Fang, and Stanley Tang (our "Co-Founders"), has the effect of concentrating voting power with Tony Xu, our co-founder, Chief Executive Officer, and Chair of our board of directors, which will limit your ability to influence the outcome of matters submitted to our stockholders for approval; and • The trading price of our Class A common stock may be volatile, and you could lose all or part of your investment.
Risks Related to Our Business and Operations We have a limited operating history in an evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.
We launched operations in 2013 and we have since frequently expanded our platform features and services, expanded into new categories, changed our pricing methodologies, and entered new geographies.
This limited operating history and our evolving business make it difficult to evaluate our future prospects and the risks and challenges we may encounter.
These risks and challenges include our ability to: • accurately forecast our revenue and plan our operating expenses; • increase the number of and retain existing merchants, consumers, and Dashers using our platform; • successfully compete with current and future competitors; • successfully expand our business in existing markets and categories and enter new markets and categories; • successfully integrate acquired technologies and businesses into our own; • anticipate and respond to macroeconomic changes and changes in the jurisdictions in which we operate, including with respect to inflation and other fluctuations in prices such as gasoline and food costs; • maintain and enhance the value of our reputation and brand; • adapt to rapidly evolving trends in the ways merchants and consumers interact with technology; • avoid interruptions or disruptions in our service; • develop and maintain a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased usage, as well as the deployment and integration of new features, services, and technologies; • hire, integrate, motivate, and retain talented technology, sales, customer service, and other personnel; • effectively manage rapid growth in our personnel and operations; • effectively adapt to and manage the regulatory environment and new laws related to our business; and • effectively manage our costs related to Dashers.
If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above as well as those described elsewhere in this “Risk Factors” section, our business, financial condition, and results of operations could be adversely affected.
Further, because we have relatively limited historical financial data and operate in a rapidly evolving market, any predictions about our future results of operations may not be as accurate as they would be if we had a longer operating history or operated in a more predictable market.
If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition, and results of operations could be adversely affected.
While we achieved net income in the year ended December 31, 2024, we incurred net losses in each preceding year since our founding.
We incurred a net loss of $558 million and achieved net income of $123 million in 2023 and 2024, respectively, and as of December 31, 2023 and 2024, we had an accumulated deficit of $5.2 billion and $5.3 billion, respectively.
We expect our costs will increase over time and we expect to invest significant additional funds towards growing our business.
To the extent that we are unable to earn sufficient revenue to offset such costs, we may incur losses in certain future periods.
We have expended and expect to continue to expend substantial financial and other resources on developing our platform, including expanding our platform offerings, developing or acquiring new platform features and services, acquiring and integrating technologies and businesses, expanding into new markets and categories, and increasing our sales and marketing efforts.
These efforts may be more costly than we expect and may not result in sufficient increased revenue or growth in our business to offset such costs.
Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from consistently achieving, maintaining, or increasing profitability on a consistent basis, which could also negatively impact our cash flow.
If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition, and results of operations could be adversely affected.
In addition, the stock-based compensation expense related to our restricted stock units ("RSUs") and other outstanding equity awards will result in increased expenses in future periods.
As of December 31, 2024, we had $1.6 billion of unrecognized stock-based compensation expense related to RSUs and other outstanding equity awards.
Our business has grown rapidly during various periods since our founding.
Our past revenue growth rate, growth in demand for our offerings, and financial performance should not necessarily be considered indicative of our future performance.
You should not rely on our revenue or key business metrics for any previous quarterly or annual period as any indication of our revenue, revenue growth, key business metrics, or key business metrics growth in future periods.
We may also experience a declining revenue growth rate as a result of slowing demand for our platform, insufficient growth in the number of merchants, consumers, and Dashers that utilize our platform, increasing competition, a decrease in the growth of our overall market, our failure to capitalize on growth opportunities, or increasing regulatory costs.
We also expect to continue to make investments in the development and expansion of our business, which may not result in sufficient revenue or growth to offset the cost of such investments.
If our revenue growth rate declines, investors’ perceptions of our business and the trading price of our Class A common stock could be adversely affected.
Globally, we compete with other local on-demand delivery companies, such as Uber Eats, Just Eat Takeaway, Delivery Hero, and other local incumbents.
In addition, we compete with traditional offline ordering channels, such as take-out offerings, telephone, and paper menus that merchants distribute to consumers.
If certain merchants choose to partner with our competitors in a specific geographic market, or if merchants choose to engage exclusively with our competitors, we may lack a sufficient variety and supply of merchant options or lack access to the most popular merchants, such that our offering would become less appealing to consumers.
Our competitors have in the past, and may in the future, also make acquisitions or establish cooperative or other strategic relationships among themselves or with others, including by integrating their services or membership products with the offerings of another company that provides expanded distribution.
Our competitors could also introduce new offerings with competitive price and performance characteristics or undertake more aggressive marketing campaigns than ours.
Further, the markets in which we compete have attracted significant investments from a wide range of funding sources, and we anticipate that many of our competitors will continue to be highly capitalized.
These investments, along with the other competitive advantages discussed above, may allow our competitors to continue to lower their prices and fees, or increase the incentives, discounts, and promotions they offer, and compete more effectively against us.
As a result of the reasons described above, we may not be able to compete successfully.
If we lose existing merchants, consumers, or Dashers that utilize our platform, fail to attract new merchants, consumers, or Dashers, or are forced to reduce our commission rate or make pricing concessions as a result of increased competition, our business, financial condition, and results of operations could be adversely affected.
We believe that growth of our business and revenue is dependent on our ability to cost-effectively grow our platform by retaining our existing merchants and consumers and adding new merchants and consumers, including in new markets.
The increase in merchants attracts more consumers to our platform and the increase in consumers attracts more merchants.
We expect to continue to incur substantial expenses to acquire additional merchants and consumers.
In expanding our operations into new markets to acquire additional merchants and consumers, we may be placed into unfamiliar competitive environments, and we may invest significant resources with the possibility that the return on such investments will not be achieved for several years or at all.
We cannot assure you that the revenue from the merchants and consumers we acquire will ultimately exceed the cost of acquisition.
In addition, if merchants on our platform were to cease operations, temporarily or permanently, or face financial distress or other business disruption, or if our relationships with merchants on our platform deteriorate, we may not be able to provide consumers with sufficient merchant selection.
Our agreements with partner merchants generally remain in effect until terminated by partner merchants or us.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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