DoorDash's Delivery: A Discounted Reality?
DoorDash's Q3 earnings are a mixed bag, as usual. The company reported revenue of $3.45 billion, a bump above the expected $3.36 billion. But the real story lies in the earnings per share (EPS): 55 cents against an expected 69 cents. That's a 20% miss, and Wall Street reacted accordingly, sending the stock down 9%. Doordash stock sinks 9% as company misses earnings, says it expects further spending - CNBC
On the surface, things look rosy. Total orders climbed 21% year-over-year to 776 million, edging past the 770.13 million that analysts were predicting. Net income is up, too, from $162 million to $244 million. Revenue increased 27% from a year earlier. But here's the kicker: DoorDash anticipates spending "several hundred million dollars" on new initiatives and development in 2026. And that’s before we even get to the Deliveroo acquisition.
So, what are these "new initiatives"? DoorDash trotted out its Dot autonomous delivery robot back in September 2025. Are they doubling down on robots? Are they chasing some other shiny object? Details remain scarce, but that kind of spending commitment suggests a major strategic shift. It's like a tech company saying they're going to "invest heavily in the future" – vague enough to mean anything, specific enough to worry investors. I've looked at hundreds of these filings, and that kind of ambiguity almost always precedes a period of uncertainty.
The Deliveroo Dilemma
Then there's the Deliveroo acquisition, finalized on October 2nd. DoorDash shelled out roughly $3.9 billion for the UK-based company. While they anticipate Deliveroo adding about $45 million to adjusted EBITDA in Q4 and around $200 million in 2026, let's put that in perspective. DoorDash expects its own depreciation and amortization expense to hit $700 million for fiscal year 2025 (excluding Deliveroo). And stock-based compensation? A cool $1.1 billion. That Deliveroo contribution, while welcome, looks like a drop in the bucket compared to DoorDash's overall financial picture.
The adjusted EBITDA forecast for Q4 is another point of contention. DoorDash projects a range of $710 million to $810 million (midpoint of $760 million). Analysts, however, were expecting $806.8 million. It's a relatively small difference, but it highlights a trend: DoorDash is consistently underperforming relative to expectations, even as it grows.
Here's where I start to get skeptical. DoorDash is developing a new global tech platform, with progress slated to accelerate in 2026. The question is: are they building a platform that generates sustainable profits, or one that simply burns cash faster? Because the recent history of tech platforms is littered with companies that prioritized growth over profitability (WeWork, anyone?). And this is the part of the report that I find genuinely puzzling—why not focus on the core US market and extract efficiency before taking on the world?
Discounted Expectations
The market is clearly pricing in a future where DoorDash's growth comes at a significant cost. The EPS miss, the vague "new initiatives," the Deliveroo acquisition – it all adds up to a company that's chasing growth at the expense of immediate profitability. The orders are up, sure, but the profits per order? That's the number I'm watching.
