(Bloomberg) -- Instacart posted better-than-expected sales in the second quarter, signaling that the grocery-delivery business has a strong enough user base to support its longer-term bet on advertising.
Revenue gained to US$823 million, far surpassing analysts’ expectations of $806 million. The value of orders placed during the quarter totaled $8.19 billion, also beating estimates. That’s even while the San Francisco firm reported that overall orders grew at a slower pace than expected.
Instacart’s results come on the heels of big earnings beats by other delivery companies in recent days. Uber Technologies Inc. reported better-than-expected orders in the second quarter earlier on Tuesday. Last week, DoorDash Inc. — the largest food-delivery platform in the US — posted its biggest share gain in nine months after giving a stronger-than-expected profit forecast.
The reports have worked to affirm that US consumer spending remains resilient, particularly as it relates to gig-economy companies, and served as a counterpoint to recessionary fears. The industry has also emerged as a bright spot in the broader tech sector, which has been weighed down by investors’ concerns over the long-term profitability of artificial intelligence.
Instacart’s shares gained as much as 6 per cent in after-market trading to $33.50.
Instacart said Tuesday that it expects the value of orders in the third quarter to total between $8.1 billion and $8.25 billion, the high end of which surpasses estimates. The company expects adjusted earnings before interest, taxes, depreciation and amortization of $205 million to $215 million, also exceeding estimates.
Instacart, which publicly trades as Maplebear Inc., announced earlier this year that it was cutting hundreds of jobs and restructuring leadership to focus on higher-margin businesses such as advertising and selling e-commerce technology to grocers. These businesses account for about a quarter of its total revenue.
Revenue from advertising and other non-delivery sources rose 11 per cent from a year earlier to $228 million, also beating estimates.
Instacart said earlier on Tuesday that it would begin selling some of its grocery tech internationally. The company’s Caper shopping carts, which can push customized ads to shoppers and scan and weigh items, will be used in ALDI South Group’s grocery store in Sattledt, Austria.
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