By Instacart, the popular grocery delivery company, has exceeded expectations in its first earnings report since going public in September. The company, officially known as MapleBear Inc. (ticker: CART), recorded revenue of $764 million for the third quarter, a 14% increase compared to the previous year. This surpasses the Street consensus of $737 million as reported by FactSet.
Gross transaction value (GTV) also saw positive growth, reaching $7.49 billion, a 6% increase from the previous year. This figure includes the price of goods sold through the platform, as well as associated fees, taxes, and tips. Although slightly above consensus at $7.46 billion, it demonstrates Instacart’s ability to facilitate a high volume of transactions.
Instacart reported a third-quarter loss of $2 billion; however, this includes $2.6 billion in stock-based compensation expense. It is worth noting that the loss is slightly narrower than the anticipated loss of $2.2 billion forecasted by industry experts.
Adjusted Ebitda (earnings before interest, taxes, depreciation, and amortization) for the quarter was $163 million, showing an impressive 120% increase and surpassing the consensus of $120 million. Instacart revealed that operating cash flow in the quarter amounted to $111 million, which is $18 million less than the previous year due to timing differences in collecting accounts receivable.
In terms of revenue breakdown, transaction revenue in the quarter was $542 million, up 12%, while advertising and other revenue reached $222 million, marking a 19% increase. Notably, the number of orders rose by 4% to 66.2 million. Furthermore, the average order value remained consistent at approximately $113, aligning with consensus estimates.
Overall, these strong Q3 results indicate Instacart’s success in the competitive grocery delivery market. The company continues to provide value to its customers while demonstrating financial growth and stability.
Instacart’s Resilience in Challenging Times
By Eric J. Savitz
Instacart, the leading online grocery delivery service, continues to face headwinds in the midst of various macroeconomic factors. Despite this, the company remains confident in its market position and long-term prospects.
Gross Transaction Value (GTV) for “mature cohorts” – customers who signed up in 2021 or earlier – has experienced a year-over-year decline. However, Instacart highlights that the rate of decline has improved compared to the previous quarter.
CEO Fidji Simo acknowledges the challenges posed by factors such as the end of the pandemic tailwind, reduced government aid, high interest rates, and persistent inflation. However, these obstacles do not deter Instacart from its belief in the long-term adoption of online grocery shopping and its competitive advantages.
Looking ahead to the fourth quarter, Instacart expects an increase in GTV by 5% to 6% compared to the same period last year. This growth will be driven by a rise in both order volume and order size, as the impact of inflation gradually eases. The company also anticipates adjusted Ebitda for the quarter to be between $165 million and $175 million, surpassing the consensus estimate of $155 million. This remarkable performance is attributed to seasonal growth in advertising revenue.
In terms of full-year GTV growth, Instacart aims for mid-single-digit expansion in percentage terms. Furthermore, the company expects adjusted Ebitda to be three times higher than that of 2022.
Despite the challenges posed by external factors, Instacart remains resolute in its commitment to delivering exceptional online grocery services and solidifying its position as a market leader.
Comments