Online grocery delivery platform Instacart (NASDAQ: CART) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 10.2% year on year to $939 million. Its non-GAAP profit of $0.51 per share was 32.9% below analysts’ consensus estimates.

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StockStory’s Take

Instacart’s third quarter results reflected stable performance, as the company modestly exceeded Wall Street’s revenue and profit expectations. Management attributed this to steady growth in its core online grocery marketplace, improved customer retention, and rising order frequency. CEO Chris Rogers emphasized that Instacart’s technology-driven approach, including enhancements in delivery speed and reliability, has fostered a loyal customer base and increased engagement. Rogers stated, “We’re attracting new customers to Instacart. We’re retaining customers at higher rates year-over-year and increasing their order frequency.”

Looking ahead, Instacart’s forward guidance is built on expanding its enterprise technology platform, deepening advertising partnerships, and disciplined international expansion. Management believes the company’s investments in artificial intelligence, affordability, and new retailer collaborations will drive further adoption and profitability. CFO Emily Maher noted that ongoing growth from enterprise partnerships and the launch of new AI-powered tools position Instacart for durable, long-term expansion. Rogers added, “We’re just getting started, and we believe deeply in the strength of this business and the opportunities ahead.”

Key Insights from Management’s Remarks

Management pointed to improvements in customer engagement, enterprise platform adoption, and advertising as the main drivers of Instacart’s quarterly performance and future outlook.

• Marketplace engagement gains: Instacart reported that customer retention rates and order frequency continued to climb, with Instacart+ membership growth fueling higher usage and larger basket sizes. Management said that longer-tenured customers spend more and shop more often, increasing the platform’s profitability over time.
• Enterprise platform expansion: The company’s white-label technology now powers over 350 retailer websites, including major grocers such as Costco and Publix. CEO Chris Rogers highlighted that these partnerships let retailers customize their digital strategies and benefit from Instacart’s scale without building in-house solutions.
• Advertising ecosystem diversification: Instacart’s advertising network grew to over 7,500 brand partners, leveraging its Carrot Ads technology and partnerships with platforms like TikTok, Pinterest, Google, and Meta. Management explained that mid-market and emerging brands are driving ad revenue growth, while large brands are adjusting spend amid macroeconomic uncertainty.
• AI product launches: Instacart introduced generative AI and agentic AI tools for retailers, aiming to enhance online and in-store experiences. Rogers described early retailer interest as strong, with AI expected to improve operations, product discovery, and personalization.
• Operational discipline and profitability: CFO Emily Maher noted improved unit economics and operating leverage, with positive profitability across all basket sizes. She credited technology-driven efficiencies in order batching and fulfillment as key contributors to margin expansion.

Drivers of Future Performance

Instacart’s outlook centers on scaling its enterprise and advertising solutions, while managing affordability and exploring international markets.

• Enterprise and AI expansion: Management believes deepening retailer relationships and launching AI-powered tools will accelerate enterprise platform adoption, both in North America and select international markets. Rogers noted that extending Storefront Pro, Caper, and FoodStorm to new geographies should drive incremental growth without major new product development.
• Advertising growth and diversification: Instacart expects its advertising business to return to double-digit growth next year, driven by innovations in ad formats, off-platform partnerships, and greater adoption of Carrot Ads. Management cautioned that large brand partners remain cautious, but mid-market and emerging brands continue to increase spend, underpinning a diversified ad revenue base.
• Affordability and regulatory risks: The company is investing in pricing strategies and affordability initiatives to retain customers and attract new users, including pilots in price parity with major retailers. Management also acknowledged that regulatory changes, such as New York City’s delivery minimum wage, could impact profitability in specific markets but are not expected to materially affect company-wide results.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will focus on (1) the adoption rate and monetization impact of Instacart’s new AI-powered tools and enterprise solutions, (2) progress in broadening advertising partnerships and achieving double-digit ad revenue growth, and (3) the pace of international expansion and its contribution to overall results. Continued improvements in affordability initiatives and potential regulatory changes, especially in key urban markets, will also be critical signposts to watch.

Instacart currently trades at $37.39, up from $36.75 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).

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