Instacart Releases 1st Earnings Report Since Going Public
On Nov. 8, Instacart officially released its first earnings report since going public in September, reporting total revenue of $764 million, up 14% year-over-year (YoY).
In third quarter, Instacart grew gross transaction value to $7,494 million, up 6% YoY, and orders to 66.2 million, up 4% YoY, representing continued improvement compared to YoY growth in Q2 and Q1. The company also delivered a higher-quality mix of gross transaction value growth, with orders driving the majority of gross transaction value increase and average order value (AOV) growth tempering as it lapped the onset of higher inflation last year.
Instacart credits its continued focus on driving fulfillment efficiencies and strong advertising performance in the quarter to helping deliver total revenue and GAAP gross profit year-over-year growth of 14% and 16%, respectively. According to the company, this, combined with ongoing financial discipline, drove solid bottom line results.
The company did experience a GAAP net loss of $2.0 billion, primarily driven by $2.6 billion of stock-based compensation expense that was significantly elevated in the period of its initial public offering (IPO). However, it did generate adjusted EBITDA of $163 million, up 120% year-over-year. Instacart established a new $500 million share repurchase program to opportunistically buy back shares.
In a letter to its shareholders, Instacart writes: “We are confident in our position, even as several macroeconomic factors work against the online grocery industry: COVID is no longer a tailwind, consumers are receiving less government aid, interest rates remain high, and inflation persists. Given our substantially larger scale, these headwinds impact us more than smaller, new entrants. While we expect these and other factors to continue to dampen our current and near-term growth, they do not change our long-term view on online grocery adoption or our competitive advantages.”
[Read more: "How Grocery Stores Can Thrive in the Age of E-Commerce"]
According to Reuters, Instacart forecasted fourth-quarter core profit above Wall Street estimates, sending its shares up 4% after the bell.
San Francisco-based Instacart partners with more than 1,400 national, regional and local retail banners to deliver from 80,000-plus stores across more than 14,000 cities in North America.
