Maplebear Inc. ((CART)) has held its Q4 earnings call. Read on for the main highlights of the call.
Instacart’s latest earnings call painted a picture of robust growth tempered by some challenges. The company reported strong growth in Gross Transaction Value (GTV) and advertising revenue, alongside significant gains in adjusted EBITDA and Instacart+ membership. However, the call also highlighted some hurdles, including a decline in average order value and a decrease in cash reserves.
Strong GTV Growth
Instacart showcased impressive growth in Gross Transaction Value (GTV), achieving results at the high-end of their guidance range with a 10% year-over-year increase in Q4 2024. This growth underscores the company’s ability to maintain momentum in a competitive market.
Advertising Revenue Increase
The company reported a 10% year-over-year increase in advertising and other revenue. This growth was fueled by strong performances from both emerging brands and large brand partners, highlighting Instacart’s expanding influence in the advertising sector.
Adjusted EBITDA Growth
Instacart’s adjusted EBITDA reached $252 million, surpassing the high-end of their guidance and marking a 27% year-over-year increase. This achievement reflects the company’s effective cost management and operational efficiency.
Instacart+ Member Growth
Instacart+ membership is growing at a faster pace than monthly users, indicating a highly engaged and loyal customer base. This growth is a testament to the value that Instacart+ offers to its members.
Expansion in Enterprise Solutions
In 2024, Instacart launched 30 net new retailer sites, more than doubling the previous year’s efforts. This expansion, coupled with strong adoption of new storefront technologies, demonstrates Instacart’s commitment to broadening its enterprise solutions.
Average Order Value Decline
The company experienced a 1% decline in average order value, primarily driven by restaurant orders. This decline slightly impacted overall GTV growth, highlighting a potential area for improvement.
Decrease in Operating Cash Flow
Instacart reported a decrease in operating cash flow to $153 million year-over-year, attributed to fluctuations in working capital. This decrease points to the need for careful cash flow management moving forward.
Reduction in Cash and Similar Assets
The year ended with Instacart holding $1.5 billion in cash and similar assets, down from $2.3 billion the previous year. This reduction was influenced by ongoing share repurchases, which totaled 46 million shares for $1.4 billion.
Forward-Looking Guidance
Looking ahead, Instacart remains optimistic about its growth trajectory. The company projects GTV growth of 8% to 10% for Q1 2025, with adjusted EBITDA expected to range between $220 million and $230 million. Instacart plans to continue expanding its enterprise solutions and enhancing advertising performance, while also focusing on affordability initiatives like the $10 minimum basket. Despite macroeconomic challenges, Instacart is committed to delivering steady annual adjusted EBITDA growth and leveraging its market leadership for long-term profitability.
In conclusion, Instacart’s earnings call reflected a positive sentiment overall, with strong growth in several key areas. While challenges such as declining average order value and reduced cash reserves were noted, the company’s strategic initiatives and forward-looking guidance suggest a promising path ahead. Investors and market watchers will be keen to see how Instacart navigates these challenges and capitalizes on its growth opportunities.