Prime Highlights:
- Instacart shares surged 14% in extended trading after the company reported fourth-quarter revenue that exceeded expectations and issued stronger-than-forecast guidance for the first quarter.
- The company posted its fastest gross transaction value growth in three years, signaling renewed momentum despite intensifying competition in online grocery delivery.
Key Facts:
- Fourth-quarter revenue rose 12% year over year to $992 million, while gross transaction value increased 14% to $9.85 billion, with 89.5 million total orders placed.
- Instacart projected first-quarter gross transaction value between $10.13 billion and $10.28 billion and adjusted EBITDA of $280 million to $290 million, both above analyst estimates.
Background:
Instacart shares surged 14% in extended trading on Thursday after the grocery delivery platform reported fourth-quarter revenue that beat estimates and issued strong guidance for the current quarter.
The company posted revenue of $992 million, up 12% from a year earlier and ahead of market forecasts. The company increased its gross transaction value by 14% to $9.85 billion, achieving its fastest growth in three years. Customers placed 89.5 million total orders, which also exceeded expectations.
Instacart projected first-quarter gross transaction value between $10.13 billion and $10.28 billion, higher than analyst estimates. It also expects adjusted EBITDA of $280 million to $290 million, topping forecasts.
Chief executive Chris Rogers said stronger execution on customer needs is boosting engagement across its marketplace and enterprise platform, which he called a key strategic advantage. The enterprise business added 70 net new retailers last year and contributed significantly to growth, finance chief Emily Reuter said.
Net income stood at $81 million, or 30 cents per share, while adjusted EBITDA reached $303 million, beating estimates. Operating expenses increased because the company had higher administrative costs, including a $60 million refund settlement paid to the Federal Trade Commission over alleged deceptive practices.
Instacart is investing in artificial intelligence, technology systems, and expanding into other countries. It has launched AI tools for grocery stores and connected its platform with OpenAI’s ChatGPT. However, it recently stopped testing a new pricing plan after customers criticized it.
Competition in online grocery delivery is intensifying as DoorDash and Uber Eats expand their grocery and AI features. Despite this, Instacart said the market remains large enough for multiple players and maintained that it leads among digital-first platforms.