Dive Brief:
- Instacart reported strong first-quarter results on Wednesday, as the company’s total revenue, number of orders and gross transaction volume (GTV) were all up sharply year over year.
- The grocery e-commerce provider’s adjusted EBITDA for Q1 came in at $198 million — above what it had projected — as GTV exceeded the company’s expectations and operating expenses were lower than expected.
- Instacart also said CFO Nick Giovanni is resigning and named Emily Reuter, its current vice president of finance, as his replacement.
Dive Insight:
Instacart’s latest results reflect what Reuter characterized as an “exceptionally strong quarter” for the company, which has been working to diversify beyond its legacy business providing delivery and pickup services for grocers.
The company posted total revenue of $820 million during Q1, an 8% increase compared with the same period in 2023, and brought in nearly 73 million orders, a 9% year-over-year increase. Notably, Instacart’s gross transaction volume, which the company uses as a key measure of its vitality, was up by 11%, to over $8.3 billion, its highest level since Instacart went public last September.
Speaking during an earnings call on Wednesday, CEO Fidji Simo said the company is looking to its newly announced restaurant delivery partnership with Uber to help it further strengthen its business by increasing customer engagement. The deal “is positive unit economics day one for us” and Instacart intends to invest further in its relationship with Uber “to ensure success of the service and adoption,” she said.
“We are not really looking at the restaurant business specifically. What we are really looking at is how each deal can help our business overall by making Instacart an even more engaging app, a more frequent use case by getting us more Instacart+ subscribers,” said Simo.
Simo emphasized that Instacart’s focus remains squarely on the grocery industry: “We are still going to compete in grocery. And we continue to have leading category share in grocery.”
Asked about the competition it faces from Amazon, Simo said Instacart is confident that it has a superior value proposition. The company’s advantages include its ability to handle orders on demand and its new partnership with Uber, Simo said, describing that arrangement as making Instacart’s membership program “twice as valuable.”
“We feel really good that under any construct from this competitor, we will be able to continue gaining share as we have in the past,” Simo said.
Simo added that Instacart is “pleased with the results” of its partnership with Amazon-owned Whole Foods Market in Canada and is open to again working with the grocery chain in the United States, where the companies ended their partnership in 2019.
“There is no reason why we wouldn’t be able to expand to Whole Foods, but that’s their decision, not ours, Simo said. “We would be thrilled to work with them.”
Instacart said Reuter will replace Giovanni as CFO once the company files its first-quarter report with the Securities and Exchange commission. Giovanni, a former Goldman Sachs investment banker who became Instacart’s finance chief in January 2021, will remain with the company until July 1 “to assist with the transition of his duties," the company said.
Reuter, who joined Instacart in January and previously served as head of corporate finance for Uber, said during the earnings call that she came to the company “because of its clear leadership position within online grocery and its impressive vision for the future of grocery technology.”
“I have seen very highly competitive markets and seeing what it looks like to deepen those competitive positions. And I have also seen what it looks like to lose ground. So I am very focused on that,” Reuter added.
