Instacart to cut 250 jobs as slowing ad business counters upbeat Q1 forecast
Instacart reversed course to be down about 5% after the bell following Instacart's lower-than-expected fourth-quarter revenue on slowing advertisement business. As of June 30, Instacart had 3,486 employees, according to a regulatory filing.
Also Read | Good Glamm Group shifts gears: Cuts costs, eyes profitability ahead of stock exchange debut "We are seeing (some weakness among advertisers) in pockets, but it is not widespread," said CEO Fidji Simo on a post-earnings call. Ad and other revenues increased 7 percent in the fourth quarter, compared with a 19 percent growth in the previous quarter.
"Advertising business has slowed down," CFRA Research's Arun Sundaram said, adding that this would cause a bit of concern because it was historically a very fast-growing and high-margin business for the company. Also Read | Paytm Bank gets a knock on the door from ED Total revenue rose 6 percent to $803 million, falling short of analysts' expectations of $804.2 million.
Transaction revenue growth slowed sequentially to 6 percent, as Instacart offered more incentives and promotions to attract customers, especially during the holiday season, amid stiff competition from rivals such as DoorDash, UberEats, Amazon.com and Walmart. Total orders rose 5 percent to 70.1 million in the reported quarter as the grocery-delivery company also saw growth among its newer customer base.
Also Read | A Tesla as your rooftop? Not as far-fetched as it sounds The company expects current-quarter GTV - a key industry metric that shows the value of products sold based on prices shown on Instacart - to come between $8 billion and $8.2 billion, compared with analysts' estimates of $7.92 billion. It sees adjusted EBITDA between $150 million and $160 million,
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