Instacart posted better-than-expected order growth and provided an upbeat earnings outlook for the current period, indicating that demand for its core grocery delivery service has been holding strong.
Orders grew 14% to 83.4 million in the July-to-September period, the company said in a shareholder letter on Monday. Wall Street was expecting 82.9 million, according to Bloomberg-compiled estimates. Total revenue, which also includes sales from advertising and enterprise software for grocers, was $939 million, again beating expectations.
Adjusted earnings before interest, taxes, depreciation and amortization came to $278 million, ahead of the average analyst estimate of $267.7 million.
Shares of Instacart, which publicly trades as Maplebear Inc., jumped 8% in premarket trading after the results were announced.
The results are the latest evidence that demand for grocery and restaurant delivery services has remained strong, despite lingering concerns about the health of the US consumer. Peers Uber Technologies Inc. and DoorDash Inc., which have been expanding beyond restaurant takeout into the grocery category, similarly reported robust growth for their delivery businesses last week.
Affordability initiatives remain key to retaining customers, Instacart said in the letter. More retailers, such as Pattison Food Group and Best Buy Co., have adopted pricing on Instacart that matches their in-store promotions, which has helped build brand loyalty, it added. Several national and regional grocers have also begun testing price parity in markets including Chicago, Dallas, Nashville, Tampa and Tucson.
The company also authorized a $1.5 billion increase to its stock buybacks, bringing the total authorization to $2.5 billion since it began the current program, which doesn’t have an expiration date. The company had about $290 million of capacity remaining prior to announcing the expansion, it said in a separate exchange filing.
Instacart added that it plans to enter a $250 million accelerated share repurchase agreement with Goldman Sachs & Co., with transactions there expected to begin on Nov. 11 and be completed by the end of the first quarter in 2026.
The earnings results indicate Instacart’s investments outside of its core delivery business have been paying off. The company made nearly 29% of its revenue from non-delivery transactions in the third quarter, including grocery technology solutions and advertising sales.
As app-based delivery services have become more ubiquitous and competitive, Instacart has attracted retail partners by developing enterprise products, including a white-label service that powers more than 350 grocers’ e-commerce sites.
More than 80% of its gross transaction value comes from non-exclusive partnerships, according to the letter. Among retailers that are exclusively teaming with Instacart, the majority are using at least one of the company’s enterprise solutions, it added.
For the current quarter, Instacart sees gross transaction value in the range of $9.45 billion to $9.6 billion, the mid-point of which exceeds the consensus estimate of $9.47 billion. Adjusted Ebitda for the holiday period will be $285 million to $295 million, slightly better than expected at the midpoint.
In providing the guidance, the company said it observed 「strong performance」 in October, and said it has also factored in disruptions to food aid payments from the Supplemental Nutrition Assistance Program, or SNAP, amid a prolonged US government shutdown.
The positive forecast follows the company’s launch of several new tools for grocers last week, including a white-label artificial intelligence-powered assistant that can make product recommendations.
Instacart has also said it will strike more deals to embed its ordering interface inside other apps. Last month, it announced such a tie-up with Grubhub in a bid to reach more customers and increase order volumes.