Instacart on Wednesday predicted a fourth-quarter core profit above analysts’ expectations in its first financial report since its public offering in September, due to increased transaction and advertisement fees. The grocery delivery company’s shares rose 4% after the news. Additionally, the firm announced a $500 million share repurchase program.
Instacart anticipates the current-quarter adjusted EBITDA to be between $165 million and $175 million, higher than the expected $155.6 million. The firm’s gross transaction value (GTV) – the value of products sold based on prices shown – escalated 6% year-over-year to $7.49 billion in the third quarter, surpassing the estimated $7.46 billion. Total orders were up 4%, and total revenue grew 14% to $764 million, exceeding the projected $736.9 million.
CEO Fidji Simo stated in a Reuters interview that Instacart has a “significant competitive advantage” over newer, smaller competitors. The company posted a net loss of $2 billion, or $20.86 per share, in the third quarter due to stock-based compensation expenses related to the IPO. For full year 2023, Instacart anticipates GTV to increase in the mid-single digits, and three times more adjusted EBITDA than the $187 million reported in 2022. Last week, rival DoorDash also projected a positive fourth-quarter core profit.