11/9/2023: Instacart Reports First Earnings after IPO
Instacart reported its first quarterly earnings after IPO yesterday after market close. Revenue was $764M vs. $737M expected. Adjusted EBITA was $163M vs. $120M expected. Technically, the company’s GAAP loss was $2B this quarter. This big loss was due to stock based compensation costs from the IPO. Basically, all the vested RSUs were delivered at IPO and counted as stock based compensation costs. But this is a one time thing. The future SBC cost will be a lot lower. I thought this is a pretty good report but CART 0.00%↑ stock tanked 10% during today’s session. It is true though that the $2.6B worth of CART 0.00%↑ stock the company issued to its current and former employees results in significant shareholder dilution and the drop in stock price reflects that.
Instacart CEO Fidji Simo said that the company is facing various headwinds in the short-term but urged Instacart investors to think long-term:
We are confident in our position, even as several macroeconomic factors work against the online grocery industry: COVID is no longer a tailwind, consumers are receiving less government aid, interest rates remain high, and inflation persists. Given our substantially larger scale, these headwinds impact us more than smaller, new entrants. While we expect these and other factors to continue to dampen our current and near-term growth, they do not change our long-term view on online grocery adoption or our competitive advantages.
Overall, Instacart had a good quarter. There’s a lot of uncertainty ahead but I believe Instacart is a sustainable business and will be here to stay for the long run.