DoorDash
DASH · NasdaqSlower overhead, not pricing, widened the operating margin
Operating margin rose 2.09 points to 9.6% while the share kept from order value slipped, so slower-growing costs did the work.
Q3 FY2026, the quarter to Sep 30, 2026 · 10-Q filed Oct 30, 2026
- Operating margin
- 9.6%
- Net income
- $466.0M
- Free cash flow, quarter
- $904.0M
Where DoorDash's money goes
- 01
Slower overhead, not pricing, widened the operating margin
Operating margin rose 2.09 points to 9.6% while the share kept from order value slipped, so slower-growing costs did the work.
Why it matters
Revenue rose 34% to $4.6B. General and administrative cost rose only 6.5% to $426M, falling to 9.2% of revenue from 11.6%, a drop of 2.38 points. Cost of revenue rose 28.7%, in step with Total Orders up 28%, and fell to 47.0% of revenue from 49.0%. Each of those two lines on its own moved almost as much as the 2.09-point gain in operating margin.1
Two lines moved the other way. Depreciation and amortization rose 84.6% and took 6.8% of revenue against 4.9% a year earlier, up 1.85 points. Research and development rose 40.6%, which the filing ties mainly to staff and third-party software, and gained 0.51 points. Sales and marketing held near 16.6% of revenue.1
Pricing did not help. Net Revenue Margin, revenue as a share of Marketplace GOV, fell to 13.6% from 13.8%, which the filing attributes primarily to the acquisition of Deliveroo. The margin gain came from costs growing slower than revenue, not from keeping more of each order.1
AnalysisThe quarter stands apart within the year. Operating income was $442M, against $151M and $156M in the two earlier quarters. The filing ties the year's higher general and administrative cost mainly to legal, tax and regulatory expense, and the year's restructuring to country exits in the first quarter; restructuring was $1M this quarter. Part of the jump may reflect costs that fell away rather than a new run rate.
- 02
Depreciation and amortization equal 71% of operating profit
Depreciation and amortization of $312M, up 84.6%, match 71% of the $442M operating income, so reported profit carries the cost of past acquisitions.
Why it matters
Depreciation and amortization rose to $312M from $169M. The filing attributes the increase mainly to amortization of acquired intangible assets, which follows the Deliveroo purchase, and to amortization of capitalized software. A year earlier the line equalled 65.5% of operating income; now it equals 70.6%.1
These charges do not use cash in the quarter. Operating cash flow was $994M, about 2.1 times net income of $466M, while purchases of property and equipment were $90M. The cash flow statement adds depreciation and amortization back to net income as a non-cash expense.1
AnalysisGAAP operating income here shows what the business earns after the cost of the networks it bought, not only the cost of running them. The filing's amortization schedule for acquired intangibles declines in later years, while the pending Instacart purchase would add a new layer, so the gap between reported profit and cash generation could widen again.
Capitalized software is a cash cost even though it reaches the income statement later as amortization. The filing deducts it, alongside purchases of property and equipment, in its own Free Cash Flow measure, so operating cash flow less equipment purchases alone overstates the cash left over.1
- 03
Operating profit is 1.3% of the order value handled
Of $33.9B in marketplace orders, DoorDash kept 13.6% as revenue and 1.3% as operating income, so small take-rate shifts weigh heavily on profit.
Why it matters
Marketplace GOV, the value of orders on the marketplaces including taxes, tips and consumer fees, was $33.9B, up 36%. Revenue was $4.6B, a Net Revenue Margin of 13.6%. Operating income of $442M equals 1.3% of that order value, and net income of $466M equals 1.4%.1
AnalysisBecause the profit slice is roughly a tenth of the revenue slice, losing a fraction of a point on the take rate would cost a large share of operating income. That makes the mix inside the 13.6% matter: consumer fees fell as a share of order value this quarter, and the filing says advertising and fewer discounts and promotions offset that decline.
AnalysisThe ratio is approximate. Marketplace GOV excludes orders fulfilled through the Commerce Platform, while revenue includes Drive fees, so dividing by marketplace order value slightly overstates what the marketplaces alone earn on each dollar of orders.
- 04
Net profit topped operating profit on interest and light tax
Net income of $466M exceeded operating income of $442M because interest income added $37M and tax took only 3.9% of pretax profit.
Why it matters
Pretax income was $484M: operating income of $442M, interest income of $37M and other income of $5M. Tax was $19M, 3.9% of pretax income. A year earlier other expense of $81M, which the filing ties to a deal-contingent forward contract for the Deliveroo purchase, pulled pretax income to $248M, below operating income of $258M.1
The low tax charge reflects a valuation allowance against U.S. federal and state deferred tax assets, so past losses are not yet carried as assets. The filing says there is a reasonable possibility that enough positive evidence becomes available in a future period to release it, which would lower income tax expense in the period the release is recorded.1
Interest income fell to $37M from $71M because the prior-year quarter earned interest on cash held in escrow for the Deliveroo purchase. Net margin was 10.1%, against an operating margin of 9.6%. Diluted earnings per share were $1.06, against $0.55.1
AnalysisNet income is the less steady guide to how the business earns. It benefits from a tax charge far below a normal corporate rate, could jump on a valuation allowance release with no change in cash, and would lose its interest income cushion if the company borrows to fund the Instacart purchase.
Sources
- 1.DoorDash 10-Q for the period to 2026-09-30 (the filing), Oct 30, 2026, read Nov 2, 2026
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Growth, profit and margin
Revenue went from $291.0M in FY2018 to $13.7B in FY2025, the operating margin from -72.2% to 5.3%, over 7 years.
- Revenue$13.7B
- Operating income$723.0M
- Operating margin5.3%
- Period
- Q3 FY2026
- Revenue
- $4.6B
- Operating income
- $442.0M
- Operating margin
- 9.6%
- Net income
- $466.0M
- Free cash flow
- $904.0M
Does the profit turn into cash?
Q3 FY2026: free cash flow of $904.0M against net income of $466.0M in the quarter.
- Operating cash flow$2.4B
- Capital expenditure$257.0M
- Free cash flow$2.2B
- Net income$935.0M
Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.
Financial data and sources
The figures
Margins, cash and growth for the period, each with what it was computed from.
Not reported, or not derivable
- gross margin: the company reports expenses by nature: no cost of revenue or gross profit line exists
Where revenue comes from
Every breakdown the filing reports for the period, with each item's share.
This filing reports no breakdown of revenue by product, segment or region for the period.
What it costs
The cost lines beneath operating income, each as a share of revenue, then the operating result.
Costs are reported by nature: what they are (food, labor, occupancy, personnel, marketing), not what they were for, so there is no cost-of-revenue line and no gross profit.
| Cost line | Q3 FY2026 | Of revenue | Source |
|---|---|---|---|
| Total costs and expenses | $4.2B | 90.4% | Source10-Q, us-gaap:CostsAndExpenses, as reported in the 10-Q filed 2026-10-30 |
| Income from operations | $442.0M | 9.6% | Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-10-30 |
Operating figures the company states
From the text of the filing rather than its statements, each with the sentence that states it.
View source
In the third quarter of 2026, Marketplace GOV increased to $33.9 billion, or 36% growth compared to the same quarter of 2025
View source
In the third quarter of 2026, Marketplace GOV increased to $33.9 billion, or 36% growth compared to the same quarter of 2025
View source
In the third quarter of 2026, Net Revenue Margin decreased to 13.6% from 13.8% in the same quarter of 2025, primarily due to the acquisition of Deliveroo.
View source
In the third quarter of 2026, Total Orders increased to 993 million, or 28% growth compared to the same quarter of 2025.
View source
In the third quarter of 2026, Total Orders increased to 993 million, or 28% growth compared to the same quarter of 2025.
The statements, as filed
The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.
Income statement20 lines, as presented in the 10-Q
Cash flow statement3 lines, as presented in the 10-Q
Year to date, as a quarterly filing reports it.
| Line | Q3 FY2026 | A year earlier | Change | Source |
|---|---|---|---|---|
| Cash flows from operating activities | ||||
| Net income including redeemable non-controlling interests | $465.0M | $243.0M | +91% | Source10-Q, us-gaap:ProfitLoss, as reported in the 10-Q filed 2026-10-30 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation and amortization | $312.0M | $169.0M | +85% | Source10-Q, us-gaap:DepreciationDepletionAndAmortization, as reported in the 10-Q filed 2026-10-30 |
| Statement of Cash Flows | ||||
| End of period | $5.50B | $7.40B | -26% | Source10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 10-Q filed 2026-10-30 |
Balance sheet29 lines, as presented in the 10-Q
About this data
- Source
- DoorDash 10-Q, accession 0001792789-26-000070, filed Oct 30, 2026, read on Nov 2, 2026.
- History
- From the SEC's XBRL company facts, the value from the latest filing that stated each period.
- Reading
- Paragraphs marked Analysis are CXProWealth's reading; everything else is the filing's own numbers and words, or a cited source.
- Version
- methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02
What holds DoorDash's model up, and what could bend it
Competitive edge
Order growth accelerated while costs only kept pace with orders
Total Orders rose 28%, against 21% a year earlier, and cost of revenue rose 28.7%, so revenue growing 34% widened the spread.
The detail
Total Orders reached 993 million, up 28%, against growth of 21% in the same quarter a year earlier. Marketplace GOV grew 36%, against 25%. The filing credits order growth primarily to more consumers and the acquisition of Deliveroo, and order value growth to more orders and a higher average order value.1
Cost of revenue, which covers payment processing, insurance, support, onboarding and local operations staff, rose 28.7%. The filing says the increases in order management and platform costs were driven primarily by growth in Total Orders. With revenue up 34%, cost of revenue fell to 47.0% of revenue from 49.0%.1
AnalysisThis is the density effect of a network of merchants, consumers and Dashers: more orders in the same streets give Dashers more jobs per hour and spread support costs further. Part of this quarter's acceleration is Deliveroo, which sits only in the current period, so the next comparisons would show the organic pace more clearly.
Advertising and fewer promotions refill a falling consumer fee
Consumer fees fell as a share of order value, yet Net Revenue Margin held at 13.6% against 13.8%, as advertising and leaner promotions filled the gap.
The detail
The filing says fees charged to consumers fell as a percentage of Marketplace GOV and "were offset by increased contribution from advertising revenue and reductions in discounts and promotions". It attributes the small net decline in Net Revenue Margin, to 13.6% from 13.8%, primarily to the acquisition of Deliveroo.1
The membership programs, DashPass, Wolt+ and Deliveroo Plus, charge a recurring fee in exchange for lower delivery and service fees on each order, and advertising is sold to merchants and consumer packaged goods companies. Both are booked inside marketplace revenue, and the filing gives no separate figure for either.1
AnalysisRevenue that rides on orders already being delivered adds little delivery cost, which lets the price a consumer sees fall while the take rate holds. Its limit is how much merchants will pay in commission and ads combined, a pressure the risk factors acknowledge when they describe merchants favoring the platform with the lowest commission.
Operating cash runs at about twice net income
Operating cash flow of $994M was 2.1 times net income, while equipment purchases took 1.95% of revenue, so growth needs little physical capital.
The detail
Operating cash flow was $994M in the quarter, against $871M a year earlier, and 2.1 times net income of $466M. Purchases of property and equipment were $90M, 1.95% of revenue of $4.6B.1
AnalysisConsumers pay when they order, while merchants and Dashers are paid afterwards, which is why the balance sheet carries a large Dasher and merchant payable. Depreciation, amortization and stock-based compensation are expensed but use no cash in the period, so cash flow runs ahead of reported profit.
The filing's own Free Cash Flow measure also deducts capitalized software and website development costs, which exceeded equipment purchases this quarter. Stock-based compensation is a real cost even without cash: shareholders bear it through dilution.1
What to watch
Easy switching keeps pressure on fees and commissions
The filing says consumers, Dashers and merchants all use several platforms, and that competition has already forced changes to commissions, fees and promotions.
The detail
The company names Amazon, Uber Eats, Prosus, Delivery Hero and local incumbents as competitors, and says switching is relatively easy: consumers move on cost, quality and selection, Dashers work several platforms at once, and merchants may prefer the platform with the lowest commission. It says such pressure has led it to change commissions, fees, incentives and promotions, which has hurt and will likely keep hurting financial performance.1
AnalysisWith operating income at 1.3% of order value, a small concession on the take rate would weigh heavily on profit. Consumer fees already fell as a share of order value this quarter; the filing does not attribute that to competition, and advertising and fewer promotions offset it.
Dasher classification and pay rules could reset the cost base
Reclassifying Dashers as employees could have a material effect, the filing says, and minimum earnings standards have already pushed fees higher.
The detail
The company maintains that Dashers are independent contractors, but says reclassification as employees would force changes to its pricing and pay models, with an effect that could be material. Minimum earnings standards in some jurisdictions have already caused it to raise fees to consumers and merchants.1
It is contesting a California payroll tax assessment tied to Dasher classification and has recorded an accrual for it. Litigation reserves rose, which the filing ties partly to regulatory audits of delivery worker pay requirements. The company's adjusted measures exclude legal costs on worker classification, so GAAP operating income is the measure that carries them.1
The Instacart purchase would add debt and integration risk
After the quarter DoorDash agreed to buy Instacart, funding the cash part with cash on hand and new debt backed by a bridge loan commitment.
The detail
Shortly after the quarter the company agreed to acquire Instacart, with closing expected no earlier than the end of next year and subject to regulatory approvals. The cash portion is to be funded with cash on hand and debt financing, supported by a bridge loan commitment, and the filing says additional equity or debt financing may be required.1
The risk factors list integration risks for acquired businesses: keeping their merchants, consumers and couriers, combining systems and controls, and regulatory review. Depreciation and amortization already rose 84.6% this quarter, mainly on intangible assets acquired in earlier deals.1
AnalysisThe company now holds more cash and investments than debt. Borrowing for a large cash purchase would turn net interest income into a cost and add amortization of newly acquired relationships, so GAAP profit would show the deal's cost before any benefit from adding grocery orders to the network.
Sources
- 1.DoorDash 10-Q for the period to 2026-09-30 (the filing), Oct 30, 2026, read Nov 2, 2026
DoorDash, further in
Member research, then your own questions on ChatGPT.
What could change the outlook
What DoorDash's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.
- What the margin gain depends on from here
Which of this quarter's cost shifts can repeat once Deliveroo is in both periods, how the take-rate mix holds up, and what Instacart would change in reported profit.
- Reading DoorDash's profit through amortization, tax and debt
How acquisition amortization, a possible tax valuation allowance release and new borrowing would move net income away from the cash the business generates.
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Have a question about DoorDash?
Explore its profit drivers, competitive edge, risks, or your own investment and business questions with CXProWealth on ChatGPT.
- How much of DoorDash's operating margin gain came from general and administrative costs growing far slower than revenue?
- Why did DoorDash's net income exceed its operating income, and what would a U.S. tax valuation allowance release change?
- How would the Instacart deal change DoorDash's amortization, interest and the gap between its reported profit and cash flow?
Business Lens describes DoorDash from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.