Revenue of $1,095 million grew 17% year-over-year and GTV of $10,528 million grew 15%, on orders of 91.4 million, up 10%; diluted EPS of $0.60 compares with $0.51 a year ago.
Guidance is gone, not lowered: financial guidance is suspended, previously issued long-term guidance is withdrawn, and the November 5 earnings call is cancelled, following a definitive agreement to be acquired by DoorDash at an equity value of approximately $17 billion.
Advertising carried the quarter: advertising and other revenue of $331 million grew 23% against 14% growth in transaction revenue of $764 million, and adjusted EBITDA of $342 million grew 23% with margin at 31% from 30%.
Cash generation held: operating cash flow of $324 million and free cash flow of $307 million were both up 13%, alongside $230 million of share repurchases and $1 billion in cash and similar assets at quarter end.
The one thing that matters: the operating business inflected in the quarter it stopped being a standalone story. Advertising revenue up 23%, adjusted EBITDA up 23% and EBITDA margin at 31% from 30%, while GAAP net income grew just 2% as stock-based compensation rose to $120 million from $82 million.
Key metrics
Metric
Reported
Prior year
Change
GTV
$10,528 million
$9,170 million
15%
Orders
91.4 million
83.4 million
10%
Advertising and other revenue
$331 million
—
up 23% year-over-year
Adjusted EBITDA
$342 million
$278 million
23%
Adjusted EBITDA margin
31%
30%
—
Free cash flow
$307 million
$272 million
13%
Guidance changes
Item
New guidance
Prior guidance
Quality of earnings
Per-share growth is the share count, not the earnings. Net income of $147 million grew 2%, while diluted EPS of $0.60 from $0.51 grew 18% on a diluted share count of 247.6 million against 283.2 million a year ago.
The adjusted-to-GAAP gap widened on costs that recur. Adjusted EBITDA of $342 million grew 23% against 2% net income growth: stock-based compensation rose to $120 million from $82 million and depreciation and amortization to $35 million from $25 million.
Cash fully backs the earnings. Operating cash flow of $324 million ran 2.2 times net income of $147 million, and free cash flow of $307 million was up 13%.
Gotchas & watch items
Margin is weaker than the GTV view suggests: GAAP gross margin fell to 72% from 74% as cost of revenue grew 25% to $309 million against 17% revenue growth, with depreciation and amortization inside cost of revenue up to $29 million from $20 million, even as gross profit held at 7.5% of GTV.
Underlying cost discipline is better than reported profit shows: adjusted total operating expenses were 4.5% of GTV against 4.8% a year ago, and income from operations rose to $174 million from $166 million, despite GAAP operating expenses growing 17% to $612 million.
The balance sheet is materially thinner: cash, cash equivalents and restricted cash ended the period at $923 million against $1,833 million a year earlier after $921 million of nine-month repurchases, and interest income fell to $6 million from $16 million.