Shares of Serve Robotics Inc. (NASDAQ: SERV) plummeted 6.61% in Friday's trading session, continuing the downward trend that began after the company's second-quarter earnings release. The robotics firm, which specializes in autonomous food delivery, reported mixed results that left investors concerned about its path to profitability.

In its Q2 2025 earnings report released after market close on Thursday, Serve Robotics posted revenue of $642,000, beating analyst estimates of $624,800 and marking a 37.07% increase year-over-year. However, the company reported a loss of $0.24 per share, missing the consensus expectation of a $0.21 loss. This earnings miss, coupled with lower-than-expected guidance for the third quarter, triggered a sell-off in after-hours trading that carried into Friday's session.

Investors were particularly disappointed by Serve Robotics' Q3 revenue guidance of $600,000 to $700,000, which fell short of Wall Street's projections of around $1.7 million. This guidance suggests a potential slowdown in growth, despite the company's efforts to expand its robot fleet and enter new markets.

CEO Dr. Ali Kashani attempted to reassure investors, stating, "This quarter marked a major step forward as we expanded into new markets, scaled operations, and fueled our autonomy flywheel to an unprecedented degree." However, the market's reaction indicates that investors are looking for more concrete signs of a path to profitability as the company continues to scale its operations.

While Serve Robotics maintains its long-term goal of deploying 2,000 food delivery robots by the end of 2025 and achieving an annual revenue run-rate of $60 million to $80 million in 2026, the near-term concerns about widening losses have overshadowed the company's revenue growth. As the autonomous delivery market becomes increasingly competitive, Serve Robotics will need to demonstrate its ability to control costs while maintaining its expansion trajectory to regain investor confidence.