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DoorDash expects bigger investments next year and a little less from Deliveroo; stock sinks
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Published in Stocks and Investing on Thursday, November 6th 2025 at 5:17 GMT by MarketWatch- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Quarterly Highlights
In the third quarter, DoorDash reported revenue of $1.09 billion, up 33 % year over year, a pace that outpaced the broader market for food‑delivery services. Gross merchandise volume (GMV) also grew, fueled by a surge in “Grocery + Essentials” orders as consumers continued to embrace a hybrid work‑and‑home lifestyle. However, the company’s operating income widened to a loss of $71 million, a reflection of higher marketing spend and investment in new technology initiatives. DoorDash’s chief financial officer noted that while these expenses are short‑term, they are essential for sustaining long‑term momentum.
Strategic Investment Focus
During a brief remarks segment, DoorDash’s CEO highlighted three priority areas for next year’s investment. First, the firm plans to expand its logistics network by adding more “regional hubs” that support faster, more efficient last‑mile delivery. The company expects to roll out these hubs in key metro areas across the United States and Europe, leveraging advanced data analytics to predict demand and optimize routes. Second, DoorDash will deepen its “Grocery + Essentials” offering by partnering with an expanding roster of retailers and by introducing a subscription service that promises free delivery on a set number of orders per month. Third, the company is set to launch a new advertising platform that will allow merchants to place targeted offers within the DoorDash app, a move that could generate significant incremental revenue.
The CEO emphasized that the company’s operating model is “scalable,” meaning that as the volume of orders grows, the incremental cost per order should decline. Accordingly, the leadership team believes that the increased investment in technology and logistics will pay off as the delivery economy expands beyond the pandemic‑era spike.
Share Performance and Market Reaction
DoorDash’s shares rallied more than 8 % in early trading after the earnings announcement, reflecting investor confidence in the company’s growth trajectory. The move came as the market digested the news that the firm plans to allocate an additional $500 million in capital to product development, marketing, and infrastructure over the next 12 months.
In contrast, Deliveroo’s stock has been on a downward swing, falling more than 12 % since the last earnings report. Deliveroo’s Q3 results showed a decline in revenue growth and a narrower margin, leading to a downgrade in analyst sentiment. Market analysts cited rising labor costs and increased competition from other delivery players as key factors weighing on Deliveroo’s prospects. The share slump also reflects concerns over Deliveroo’s ability to sustain its subscription-based “Deliveroo Plus” program at scale.
Contextualizing the Industry Landscape
The article also references an earlier piece that highlighted the impact of inflation on the delivery sector. Rising food and fuel costs have squeezed margins for companies that rely heavily on gig‑economy workers. Both DoorDash and Deliveroo have responded by increasing driver payouts in some markets, a strategy that can further elevate operating expenses.
Another link in the article points to a press release about DoorDash’s partnership with a leading AI firm to develop real‑time route optimization software. The technology is designed to reduce delivery times by up to 20 % and lower energy consumption, thereby cutting operational costs. DoorDash’s investment in AI also aligns with the company’s broader strategy to differentiate itself through technology, positioning it as a more efficient alternative to traditional food‑delivery services.
Outlook
As DoorDash continues to invest in expanding its logistics infrastructure, enhancing its product suite, and launching new advertising solutions, it aims to capture a larger share of the burgeoning delivery economy. The company’s guidance suggests a continued increase in operating expenses for the next fiscal year, but this is viewed as a necessary expense for achieving long‑term scale and profitability.
Deliveroo, on the other hand, appears to be reeling from a combination of lower revenue growth and cost pressures, which is evident in its declining share price. Investors are watching closely to see how the London‑based firm will navigate the competitive landscape and whether it can implement cost‑saving measures without compromising service quality.
In summary, DoorDash’s recent earnings report paints a picture of a company that is willing to invest aggressively in growth, even in the face of rising costs, while Deliveroo’s stock decline underscores the challenges that can arise when a company’s expansion strategy does not translate into immediate financial benefits. The industry’s trajectory will likely hinge on how effectively these firms can balance investment with profitability as consumer preferences continue to evolve in a post‑pandemic world.
Read the Full MarketWatch Article at:
[ https://www.marketwatch.com/story/doordash-expects-bigger-investments-next-year-and-a-little-less-from-deliveroo-sinking-shares-79306e1a ]
