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Highlights
- Revenue Growth: Fourth-quarter revenue rose 10% to $883 million, missing Wall Street’s $891.1 million estimate.
- Profit Increase: Net income climbed to $148 million (53 cents per share) from $135 million (44 cents per share) a year ago, beating expectations of 38 cents.
- Gross Transaction Value (GTV): Increased 10% to $8.65 billion, surpassing analyst estimates of $8.62 billion.
- Order Surge: 77.5 million orders were processed, up 11% year-over-year, but the average order value fell 1%.
- Future Outlook: Company forecasts 8%-10% growth in GTV for Q1, below some analyst expectations.
Grocery delivery giant Instacart (NASDAQ:CART) reported higher revenue for the fourth quarter, though it cautioned investors about a slowdown in sales growth for the current quarter due to shrinking order sizes. This announcement led to an 11% decline in the company’s stock price during postmarket trading.
The company, officially known as Maplebear, posted a net income of $148 million, or 53 cents per share, surpassing the previous year's $135 million (44 cents per share) and beating analysts' expectations of 38 cents per share.
Despite reporting $883 million in revenue, reflecting a 10% increase year-over-year, the figure fell short of Wall Street’s projection of $891.1 million.
Instacart processed $8.65 billion in gross transaction value (GTV) for the quarter, a 10% increase from the same period last year and slightly exceeding the $8.62 billion forecasted by analysts. The company attributed this growth to a holiday shopping season, during which it logged 77.5 million orders, up 11% from the prior year. However, the average order value declined by 1%, signaling a shift in customer spending patterns.
Outlook for 2024: Growth Challenges Ahead
Looking ahead, Instacart projects that order volume will continue to grow at a faster rate than average order value. This trend is partly driven by the company’s recent move to eliminate the delivery fee for Instacart+ members on orders over $10, down from the previous $35 minimum. Additionally, the company expects an increase in smaller transactions, particularly from restaurant orders.
For the first quarter of 2024, Instacart estimates a GTV between $9 billion and $9.15 billion, representing 8%-10% growth—a slight deceleration compared to Q4’s performance. Analysts had been expecting around $9 billion.
In terms of profitability, Instacart forecasts adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between $220 million and $230 million, falling short of Wall Street’s expectation of $237.3 million. The company cited its aggressive reinvestment strategy as a factor in this projection, suggesting that resources will be allocated toward growth initiatives.
