Shares of DoorDash (DASH 1.20%) declined on Thursday after the food delivery platform's third-quarter profits fell short of investors' expectations and management warned of a step up in spending in 2026.
As of 1:30 p.m. EST, DoorDash's stock price was down more than 15%.
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More people are ordering food online
DoorDash's revenue rose by 27% year over year to $3.4 billion. The online food ordering marketplace saw its gross order volume (GOV) -- the total dollar value of all transactions facilitated by its platform -- grow by 25% to $25 billion, driven by a 21% jump in orders to 776 million.
DoorDash's net revenue margin, which measures the percentage of GOV it converts into sales, ticked up to 13.8% from 13.5% in the year-ago period. Growth in the company's high-margin advertising sales contributed to the gains.
NASDAQ: DASH
Key Data Points
DoorDash's net income, in turn, surged 51% to $244 million, or $0.55 per share. Wall Street, however, expected earnings per share of $0.68.
Growth investments will take a toll on profits in 2026
DoorDash also told investors to expect "several hundred million dollars" in additional expansion-related spending in 2026. Management plans to invest aggressively to strengthen the company's fulfillment network and build a new global technology platform. These costs will weigh on DoorDash's near-term profitability.
"We wish there was a way to grow a baby into an adult without investment, or to see the baby grow into an adult overnight, but we do not believe this is how life or business works," the company said in its earnings release.
