DoorDash reported stronger-than-expected orders and revenue for the third quarter but cautioned investors that spending will rise sharply next year as it ramps up product development.

Shares of the San Francisco-based food delivery giant tumbled in after-hours trading Wednesday after the company warned of higher expenses ahead.

DoorDash said total orders grew 21% year-over-year to 776 million in the July–September quarter, surpassing Wall Street’s forecast of 770 million, according to FactSet data. Revenue climbed 27% to $3.45 billion, also beating expectations of $3.35 billion. The company attributed the strong results to an increase in monthly active users and DashPass subscribers, along with growing delivery demand in new areas such as home improvement and beauty products.

However, the company acknowledged that its growth is being accompanied by mounting costs. Research and development expenses rose 23% to $355 million during the quarter — the highest level in its history. DoorDash said it has more new products under development than ever before.

In recent months, the company has expanded its offerings, including adding restaurant reservations to its app and unveiling “Dot,” an autonomous delivery robot that will soon begin operating in the Phoenix area. It is also developing a mapping platform and a “smart scale” to help retailers detect missing items before delivery.

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Despite solid sales, profits fell short of expectations. Net income rose 51% to $244 million, or 55 cents per share — below analysts’ projection of 68 cents.

DoorDash said it expects investments to accelerate in 2026, with spending on new initiatives set to rise by several hundred million dollars compared to 2025.

CEO Tony Xu told investors the short-term costs would pave the way for greater efficiency, saying the company is working to unify its technology platform across DoorDash and its newly acquired delivery services, Wolt and Deliveroo.

Source: AP