DoorDash Posts Record Revenue While Rising Costs and Soft Guidance Temper Investor Optimism

2026-02-19 companies

San Francisco, Wednesday, 18 February 2026.
On February 18, 2026, DoorDash (NASDAQ: DASH) revealed a complex financial landscape for Q4 2025, characterized by robust top-line growth overshadowed by rising operational costs. While the company achieved a 38% surge in revenue to $4.0 billion and a 32% increase in total orders, it missed earnings expectations with an EPS of $0.48 against a projected $0.59. Most significantly, investors reacted to softer-than-expected guidance for Q1 2026, attributed to the costly integration of Deliveroo and a $20 million impact from severe storms Gianna and Fern. This report highlights a critical pivot point: despite cementing its dominance in delivery volume, DoorDash faces immediate margin pressure as it prioritizes long-term infrastructure and market expansion over short-term profitability.

Earnings Miss Amidst Revenue Growth

Despite the upbeat revenue figures released on Wednesday, February 18, 2026, DoorDash’s bottom-line performance failed to meet Wall Street’s targets. The company reported fourth-quarter earnings per share (EPS) of $0.48, falling short of the analyst consensus estimate of $0.59 [1][2]. While revenue climbed 38% year-over-year to $4.0 billion, driven by a 32% increase in total orders to 903 million, the earnings miss triggered immediate volatility in the stock [1][3]. Shares, which had rallied 6.9% during the regular trading session in anticipation of the report, dropped as much as 11% in after-hours trading following the release [3][4]. This disparity between sales growth and profitability underscores the heavy costs associated with the company’s aggressive expansion strategies.

The Deliveroo Effect

A significant portion of the reported growth stems from the integration of Deliveroo, which DoorDash officially acquired on October 2, 2025 [1]. The newly added division contributed $347 million to revenue and $45 million to Adjusted EBITDA in the fourth quarter alone [5]. However, even without this acquisition, the core business demonstrated resilience; excluding Deliveroo, Marketplace Gross Order Value (GOV) grew by 25% year-over-year, and total orders increased by 20% [1]. This indicates that while the acquisition is padding the top-line numbers, organic demand for DoorDash’s services remains on an upward trajectory, albeit at a maturing pace compared to the pandemic-era boom.

Operational Headwinds and Strategic Investments

Looking ahead to the first quarter of 2026, DoorDash provided guidance that disappointed some market observers. The company projects Marketplace GOV to land between $31.0 billion and $31.8 billion, with Adjusted EBITDA estimated between $675 million and $775 million [1][3]. The EBITDA midpoint falls below the analyst expectation of approximately $801.9 million [3]. Management attributed this softer outlook to several specific headwinds, including an estimated $20 million direct impact from severe storms Gianna and Fern in the U.S., as well as rising Dasher costs per order [1]. Furthermore, the company plans to make incremental investments in the Deliveroo integration, which is expected to contribute less than $25 million to Adjusted EBITDA in the current quarter [1].

Cash Flow and Capital Allocation

The costs of expansion were also visible in the company’s cash flow metrics. Free Cash Flow for the fourth quarter came in at $254 million, a significant decrease from the $420 million reported in the same period a year prior [1]. This decline was driven by transaction costs related to the Deliveroo acquisition, increased funds held at payment processors, and up-front payments to technology providers [1]. Despite these expenditures, the company maintains a massive capital return program on paper; in February 2025, the board authorized a $5.0 billion share repurchase program. However, as of February 17, 2026, DoorDash has not repurchased a single share under this authorization, signaling that management may be prioritizing liquidity for operational investments over stock buybacks at current price levels [1].

Market Sentiment and Leadership Outlook

Investor sentiment has been tested recently, with DoorDash stock down over 20% year-to-date in 2026 even before the post-earnings drop [3]. Insider activity has also drawn attention; CEO Tony Xu sold 288,410 shares in November 2025, totaling over $56 million, and Director Andy Fang sold 30,000 shares in early January 2026 [6]. Despite the market’s skepticism regarding the short-term costs, CEO Tony Xu defended the company’s aggressive investment strategy. Addressing the scale of their current projects, Xu stated, “This is a massive and expensive undertaking and honestly one you shouldn’t do if you thought your best days were behind you” [3]. This long-term conviction contrasts with the immediate reaction from analysts, with Ethan Feller of Zacks Investment Research noting that “soft guidance is soft guidance,” suggesting the market is unlikely to forgive the short-term margin compression easily [3].

Sources

Earnings DoorDash