Instacart Reports Strong Sales and Expands Services with Uber Eats Partnership

Instacart posts sales beat, issues strong earnings outlook

(Bloomberg) -- Instacart posted better-than-expected sales in the second quarter, signaling that the grocery-delivery business has a strong enough user base to support its longer-term bet on advertising. Revenue gained to US$823 million, far surpassing analysts' expectations of $806 million. The value of orders placed during the quarter totaled $8.19 billion, also beating estimates. That's even while the San Francisco firm reported that overall orders grew at a slower pace than expected. Instacart's results come on the heels of big earnings beats by other delivery companies in recent days. Uber Technologies Inc. reported better-than-expected orders in the second quarter earlier on Tuesday. Last week, DoorDash Inc. -- the largest food-delivery platform in the US -- posted its biggest share gain in nine months after giving a stronger-than-expected profit forecast. The reports have worked to affirm that US consumer spending remains resilient, particularly as it relates to gig-economy companies, and served as a counterpoint to recessionary fears. The industry has also emerged as a bright spot in the broader tech sector, which has been weighed down by investors' concerns over the long-term profitability of artificial intelligence. Instacart's shares gained as much as 6 per cent in after-market trading to $33.50. Instacart said Tuesday that it expects the value of orders in the third quarter to total between $8.1 billion and $8.25 billion, the high end of which surpasses estimates. The company expects adjusted earnings before interest, taxes, depreciation and amortization of $205 million to $215 million, also exceeding estimates. Instacart, which publicly trades as Maplebear Inc., announced earlier this year that it was cutting hundreds of jobs and restructuring leadership to focus on higher-margin businesses such as advertising and selling e-commerce technology to grocers. These businesses account for about a quarter of its total revenue. Revenue from advertising and other non-delivery sources rose 11 per cent from a year earlier to $228 million, also beating estimates. Instacart said earlier on Tuesday that it would begin selling some of its grocery tech internationally. The company's Caper shopping carts, which can push customized ads to shoppers and scan and weigh items, will be used in ALDI South Group's grocery store in Sattledt, Austria.

Instacart Expands Services, Partners With Uber Eats to Integrate Restaurant Orders

On Tuesday (Aug. 6), Instacart announced an expansion of its service portfolio as part of its strategy to solidify its position in the online grocery market. The company has forged a new partnership with Uber Eats, enabling customers to order both groceries and restaurant meals through the Instacart app. This integration aims to attract new users and boost order frequency, the company said as it released its earnings report. In addition, Instacart is broadening its retail collaborations with new partners such as Sally Beauty and The Home Depot, while also upgrading its Storefront technology to drive growth for these retailers. In her second-quarter letter to shareholders, CEO Fidji Simo noted Instacart is investing in an "ambitious portfolio of longer-term bets that are starting to show promise and have the ability to unlock new growth opportunities. We already offer the best grocery selection, and now we've added hundreds of thousands of restaurants to Instacart through our partnership with Uber Eats. This means customers can get groceries for the week and dinner for the night all from our app." Early data, Simo added in the letter, "affirms our belief that restaurants can be incremental to grocery by attracting new customers to our ecosystem and increasing order frequency for existing ones, especially Instacart+ members. We're also seeing higher average basket sizes for restaurant orders than those on other platforms. Longer term, we believe we can create a flywheel effect where restaurants help grow our grocery orders too." To enhance customer convenience, Instacart introduced a $0 delivery option through its new SuperSaver delivery windows, catering to cost-sensitive consumers. The company is also refining its Instacart Business initiative to better serve companies with larger and more frequent orders. Instacart -- which saw its gross transaction volume (GTV) rise 10%, to $8.2 billion in the second quarter -- launched eCommerce storefronts for more than 30 new retailers, including regional favorites like Bi-Rite, Coborn's, and Woodman's. Additionally, Instacart expanded service offerings with major partners, including EBT SNAP support to four additional large retailers, implementing nationwide pickup and virtual convenience delivery for Albertsons' largest banners, and extending FoodStorm ordering kiosks pilot to more Sprouts Farmers Market locations. Technological innovation remains a priority for Instacart, with a focus on its artificial intelligence (AI)-powered Caper Carts. These smart carts, which are being piloted in both the U.S. and Austria, feature digital screens designed to streamline the checkout process and improve the overall shopping experience. Instacart plans to scale this technology to further elevate customer convenience. In response to growing consumer concerns about grocery costs, Instacart is implementing several affordability measures. These include integrating digital flyers into its app to offer in-store savings and optimizing retailer pricing strategies to provide better deals. The company is also developing more affordable delivery options to encourage broader adoption of grocery delivery services. On the advertising front, Instacart broadened its capabilities by introducing new ad formats such as Recipes, Occasions, and Bundles, which aim to enhance brand visibility and consumer engagement. The company is also expanding its retail media offerings across platforms like YouTube and Meta, offering a comprehensive advertising solution for consumer-packaged goods (CPG) brands. Instacart's growth in its business customer base is marked by new partnerships with HVN Travel Group, PetSmart and Industrious, alongside features tailored to business clients. "Overall, our business is performing well, and we're making good progress on new growth initiatives that will set us up as an ever more critical partner to retailers and advertisers," Simo added in the letter.