Shares of Instacart (NASDAQ:CART) fell by 4% Thursday morning, following a Q3 earnings report that surpassed expectations but also revealed a significant loss. The company posted a loss of $2 billion for the quarter, which included a stock-based compensation expense of $2.6 billion.
Despite the loss, Instacart's gross transaction value (GTV) increased by 6% to reach $7.49 billion. The company's adjusted Ebitda was up by 120% to $163 million, while operating cash flow dipped to $111 million, attributed to collection timing. Transaction revenue rose by 12% to $542 million, and advertising revenue saw an increase of 19% to $222 million.
On Wednesday, Instacart reported Q3 revenues of $764 million, leading to a surge in the stock price by 4.3% to $28.40 in late trading. However, this is still down from its initial price and opening trade.
Orders increased by 4%, with the average order value recorded at $113. Despite challenging macroeconomic factors, CEO Fidji Simo expressed confidence in the company's position.
Looking ahead to Q4, Instacart forecasts GTV growth of 5-6%, adjusted Ebitda of $165-$175 million, and full-year GTV growth in the mid-single digits. However, it is worth noting that the GTV of mature cohorts was reported as down year over year.
InvestingPro Insights
InvestingPro's real-time data offers a deeper dive into Instacart's financial performance. The company's Price to Earnings (P/E) ratio stands at -0.3, indicating that it's currently not profitable. Additionally, Instacart's Debt to Equity ratio is at 1.2, suggesting a moderate level of debt relative to equity. Lastly, the company's Return on Equity (ROE) is -20%, showing that the company is not generating a positive return on the money invested by its shareholders.
InvestingPro Tips offer key insights for potential investors. Firstly, a negative P/E ratio could mean the company is investing heavily for future growth, which could pay off in the long run. Secondly, a moderate Debt to Equity ratio can be a good sign, as it means the company isn't overly reliant on debt for its operations. However, a negative ROE might be a red flag, indicating that the company isn't currently generating profits from its equity.
For more in-depth analysis and tips, InvestingPro offers over 100 additional insights tailored to individual investor needs and preferences.
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