Company Reports

Maplebear, which operates as Instacart, has built a network that connects supply (grocers and couriers) with demand (consumers). The platform helps grocers grow, allows couriers to earn income, enables consumer packaged goods companies to advertise at the point of purchase, and provides consumers with on-demand grocery delivery. Instacart charges a service fee to both shoppers and grocers, either as a percentage of the total purchase value or a flat fee. Advertisers can purchase sponsored ads, display ads, and other advertising services through Instacart Ads. A significant portion of this advertising revenue flows to net income. The firm has generated strong free cash flow in recent years, but we believe the grocery delivery industry's competitive intensity will pressure profits.

Instacart delivered strong second-quarter results. Gross transaction value and revenue rose 14%, advertising rose 16%, and adjusted EBITDA rose 19%. Continued customer growth, improving fulfillment, and stronger monetization are encouraging, though competitive risks are unchanged.

Maplebear, which operates as Instacart, has built a network that connects supply (grocers and couriers) with demand (consumers). The platform helps grocers grow, allows couriers to earn income, enables consumer packaged goods companies to advertise at the point of purchase, and provides consumers with on-demand grocery delivery. Instacart charges a service fee to both shoppers and grocers, either as a percentage of the total purchase value or a flat fee. Advertisers can purchase sponsored ads, display ads, and other advertising services through Instacart Ads. A significant portion of this advertising revenue flows to net income. The firm has generated strong free cash flow in recent years, but we believe the competitive intensity of the grocery delivery industry will pressure profits.

Maplebear, which operates as Instacart, has built a network that connects supply (grocers and couriers) with demand (consumers). The platform helps grocers grow, allows couriers to earn income, enables consumer packaged goods companies to advertise at the point of purchase, and provides consumers with on-demand grocery delivery. Instacart charges a service fee to both shoppers and grocers, either as a percentage of the total purchase value or a flat fee. Advertisers can purchase sponsored ads, display ads, and other advertising services through Instacart Ads. A significant portion of this advertising revenue flows to net income. The firm has generated strong free cash flow in recent years, but we believe the competitive intensity of the grocery delivery industry will pressure profits.

Instacart topped first-quarter analyst expectations per FactSet, posting over $1 billion in revenue and surpassing $10 billion in gross transaction value, or GTV, for the first time. We suspect increased payments to advertising partners spooked the market.

Maplebear, which operates as Instacart, has built a network that connects supply (grocers and couriers) with demand (consumers). The platform helps grocers grow, allows couriers to earn income, enables consumer packaged goods companies to advertise at the point of purchase, and provides consumers with on-demand grocery delivery. Instacart charges a service fee to both shoppers and grocers, either as a percentage of the total purchase value or a flat fee. Advertisers can purchase sponsored ads, display ads, and other advertising services through Instacart Ads, and a significant portion of this advertising revenue flows to net income. The firm has generated strong free cash flow in recent years, but we believe the competitive intensity of the grocery delivery industry will pressure profits.

Instacart is trading higher after hours following third-quarter earnings that exceeded management’s forecast for gross transaction value and adjusted EBITDA by 3% and 4%, respectively. Still, its advertising business is increasing payments to publishers, pressuring gross margins.

Reuters reported that the US FTC is probing Instacart regarding its pricing tool, Eversight. This follows a study by various nonprofits, including Consumer Reports, in which 437 shoppers saw significantly different prices for the same basket, in the same location, at the same store.

Maplebear, which operates as Instacart, has built a network that connects supply (grocers and couriers) with demand (consumers). The platform helps grocers grow, allows couriers to earn income, enables consumer packaged goods, or CPG, companies to advertise at the point of purchase, and provides consumers with on-demand grocery delivery. Instacart charges a service fee to both shoppers and grocers, either as a percentage of the total purchase value or a flat fee. Advertisers can purchase sponsored ads, display ads, and other advertising services through Instacart Ads, and a significant portion of this advertising revenue flows to net income.

Maplebear (Instacart) reported solid third-quarter earnings that exceeded management’s forecast for gross transaction value and adjusted EBITDA by 1% and 5%, respectively. Under the hood, there is declining average order value and a prolonged trend of post-covid growth normalization.

Maplebear, which operates as Instacart, has built a network that connects supply (grocers and couriers) with demand (consumers). The platform helps grocers grow, allows couriers to earn income, enables consumer packaged goods, or CPG, companies to advertise at the point of purchase, and provides consumers with on-demand grocery delivery. Instacart charges a service fee to both shoppers and grocers, either as a percentage of the total purchase value or a flat fee. Advertisers can purchase sponsored ads, display ads, and other advertising services through Instacart Ads, and a significant portion of this advertising revenue flows to net income.

We are reinitiating coverage of the grocery platform Instacart. Instacart experienced rapid growth during pandemic lockdowns but has been losing market share since, amid an increasingly competitive landscape featuring viable alternatives such as Uber, DoorDash, Amazon, and Walmart for delivery.

Maplebear, which operates as Instacart, has built a network that connects supply (grocers and couriers) with demand (consumers). The platform helps grocers grow, allows couriers to earn income, enables consumer packaged goods, or CPG, companies to advertise at the point of purchase, and provides consumers with on-demand grocery delivery. Instacart charges a service fee to both shoppers and grocers, either as a percentage of the total purchase value or a flat fee. Advertisers can purchase sponsored ads, display ads, and other advertising services through Instacart Ads, and a significant portion of this advertising revenue flows to net income.

We will discontinue analyst coverage of Maplebear (Instacart) on or about May 30. We provide analyst research and ratings on over 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

Maplebear (Instacart) announced on May 7 that CEO Fidji Simo plans to step down in a few months. Simo accepted the role of chief executive officer of OpenAI's Applications business, prompting the change. A successor hasn't yet been named, but Instacart intends to appoint an internal candidate.

With a network of about 8 million monthly active customers and over 600,000 drivers, Instacart’s grocery delivery platform boasts a strong presence across the United States. The firm benefited from a pandemic-induced surge in online grocery ordering in 2020, with its gross transaction value eclipsing $20 billion (versus $5 billion in 2019) as retailers hastily joined forces with Instacart to meet consumers’ evolving purchasing preferences that favored home delivery. In the years that followed, Instacart has managed to maintain a resounding position in the grocery delivery industry, as the platform’s more than $30 billion in gross transaction value gives it about 60% share of grocery sales placed on third-party intermediary platforms and about 30% of total grocery delivery sales (per eMarketer).

Maplebear (Instacart) posted 9% revenue growth in the first quarter, driven by a 10% increase in gross transaction value. Adjusted EBITDA grew 23% to $244 million, as EBITDA margin expanded 300 basis points to 27%.

With a network of about 8 million monthly active customers and over 600,000 drivers, Instacart’s grocery delivery platform boasts a strong presence across the United States. The firm benefited from a pandemic-induced surge in online grocery ordering in 2020, with its gross transaction value eclipsing $20 billion (versus $5 billion in 2019) as retailers hastily joined forces with Instacart to meet consumers’ evolving purchasing preferences that favored home delivery. In the years that followed, Instacart has managed to maintain a resounding position in the grocery delivery industry, as the platform’s more than $30 billion in gross transaction value gives it about 60% share of grocery sales placed on third-party intermediary platforms and about 30% of total grocery delivery sales (per eMarketer).

No-moat Maplebear (Instacart) delivered a solid fiscal 2024 fourth quarter as top-line growth of 10% closely aligned with our 9% forecast, and adjusted EBITDA margin expanded nearly 400 basis points to 28.5%. However, shares plunged 10% in after-hours trading as management’s outlook for the first quarter of fiscal 2025 implied a more muted benefit from operating leverage relative to the prior year. The midpoint of management’s guidance implies gross transaction value and adjusted EBITDA growth of about 9% and 14%, respectively, which contrasts with the firm’s fiscal 2024 full-year results that saw GTV expand 10% and adjusted EBITDA grow by a prodigious 38%. We were already expecting the benefits of operating leverage to abate in coming years, and thus anticipate raising our $39 fair value estimate by a mid-single-digit percentage due to the time value of money and a slight uptick to our midcycle EBITDA margin forecast that currently sits in the mid-20% range.

With a network of about 8 million monthly active customers and over 600,000 drivers, Instacart’s grocery delivery platform boasts a strong presence across the United States. The firm benefited from a pandemic-induced surge in online grocery ordering in 2020, with its gross transaction value eclipsing $20 billion (versus $5 billion in 2019) as retailers hastily joined forces with Instacart to meet consumers’ evolving purchasing preferences that favored home delivery. In the years that followed, Instacart has managed to maintain a resounding position in the grocery delivery industry, as the platform’s more than $30 billion in gross transaction value gives it about 60% share of grocery sales placed on third-party intermediary platforms and about 30% of total grocery delivery sales (per eMarketer).