Why Instacart Stock Popped Today
Key Points
Instacart beat top-line estimates and issued better-than-expected guidance.
The company acquired a computer vision firm, Arpalus.
Instacart continues to benefit from a large and expanding addressable market.
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Shares of Maplebear (NASDAQ: CART), the company better known as Instacart, were moving higher today after the company topped revenue estimates in the second quarter and issued a strong outlook.
As of 11:05 a.m. ET, the stock was up 11.9% on the news.
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Instacart delivers strong growth
Instacart said gross transaction value rose 14% to $10.35 billion, with orders up 9% to 90.3 million. Revenue rose 14% to $1.043 billion, which was ahead of the consensus at $1.03 billion.
That was made up of transaction revenue of $746 million, up 13%, and advertising and other revenue of $297 million, which was up 16% in the quarter.
On the bottom line, growth was solid as well, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) up 19% to $313 million. Generally accepted accounting principles (GAAP) earnings per share rose from $0.41 to $0.45, primarily driven by recent share buybacks, but that was short of the consensus at $0.54. Stock-based compensation also rose by $37 million, weighing on GAAP profits.
CEO Chris Rogers said, "Our business is performing incredibly well. We've meaningfully accelerated our growth over the past three quarters, including a strong Q2 where we grew GTV 14%."
What's next for Instacart
Instacart still has a lot of levers to pull to drive growth, including expanding retail partnerships and product selection, and growing its advertising business.
During the third quarter, which is seasonally weak for the grocery industry, Instacart expects GTV of $10.3 billion-$10.55 billion and adjusted EBITDA of $320 million-$340 million, which represents 14% and 19% growth, respectively. That was ahead of analyst expectations at $10.29 billion in GTV and $318.6 million in adjusted EBITDA.
The company also acquired a computer vision company in the quarter, Arpalus, showing it's making investments in technology to drive margin improvement and stay ahead of the competition.
Overall, Instacart is delivering accelerating growth, beating estimates, and tackling a large addressable market. As delivery demand grows, the stock looks poised to be a winner.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Instacart. The Motley Fool has a disclosure policy.
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