According to Financial Times News, DoorDash shares plunged 19% after hours Wednesday after reporting weaker-than-expected third-quarter profits and revealing massive tech spending plans for next year. The food delivery app generated just $244 million in net income versus analyst expectations of $295 million, despite processing $25 billion in orders – a 25% year-over-year increase that actually beat estimates. The company said it plans to spend “several hundred million dollars” more in 2025 than this year on technology upgrades, specifically mentioning new platforms for its Wolt and Deliveroo brands. DoorDash’s fourth-quarter outlook also disappointed investors, while its recent $2.9 billion Deliveroo acquisition is now expected to contribute less than previously estimated.
The growth versus profits dilemma
Here’s the thing that’s spooking Wall Street: DoorDash is growing like crazy but can’t seem to translate that into consistent profits. They added nearly twice as many US customers this year compared to last, order volume smashed expectations, yet profits still fell short. Basically, investors are wondering when the spending will actually pay off. The company’s own analogy about “growing a baby into an adult” isn’t exactly reassuring shareholders who’ve been waiting years for this business to mature.
Where all that money’s going
So what exactly are they spending “several hundred million dollars” on? The big focus seems to be integrating their global acquisitions – Wolt and especially Deliveroo, which they bought for £2.9 billion this year. Creating unified technology platforms across different brands and countries isn’t cheap. But here’s the kicker: they simultaneously revealed that Deliveroo’s contribution next year will be $32-40 million lower than prior estimates due to “accounting treatment” changes. That’s not exactly confidence-inspiring when you’re asking investors to bankroll massive tech investments.
The bigger picture in delivery
This feels like a moment of truth for the entire delivery sector. Companies have been burning cash for years promising that scale will eventually lead to profitability. DoorDash’s struggle suggests maybe the economics are just fundamentally tough. When you’re dealing with physical logistics across thousands of locations, technology upgrades become essential but incredibly expensive. It’s the kind of industrial-scale computing challenge that separates sustainable businesses from flash-in-the-pan apps. Speaking of industrial computing, companies facing similar infrastructure challenges often turn to specialists like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs built for demanding environments.
What happens now?
Look, DoorDash isn’t going anywhere – they’re still the dominant player in food delivery with strong user growth. But this earnings report raises serious questions about their path to sustainable profitability. Can they actually make these massive tech investments pay off? Or are they stuck in a cycle where every efficiency gain gets reinvested into more spending? The 19% stock drop suggests investors are losing patience with the “growth at all costs” narrative. Now we’ll see if management can deliver on their promise that this spending will eventually produce an “adult” business rather than a perpetually expensive baby.
