Instacart (NASDAQ:CART) shares jumped more than 14% in early trading on Friday after the grocery delivery company posted its strongest quarterly volume performance in three years, even as profit margins came under pressure.
For the fourth quarter, gross transaction value (GTV) rose 14% year-over-year to $9.85 billion, while orders climbed 16% to 89.5 million. Total revenue increased 12% to $992 million, slightly above Wall Street expectations of $974 million.
GAAP net income fell 46% to $81 million, weighed down by a $60 million Federal Trade Commission settlement and higher operating costs. Adjusted EBITDA rose 20% to $303 million, representing 3.1% of GTV and 31% of revenue.
Advertising revenue, a key profitability driver, grew 10%, lagging overall GTV for the first time and compressing the ad take rate to 3%.
Management displayed confidence with $1.1 billion in share buybacks in the quarter. “Overall, 2025 was a defining year for Instacart. Our strategy is working. Our operating fundamentals are strong,” the company said.
Wedbush analysts noted the strong near-term results but cautioned on longer-term durability. “We remain cautious on the durability of the business versus omnichannel retailers and grocers…recent announcements suggest peers have been competing more aggressively,” they wrote.
Wedbush highlighted that recent order growth benefited from higher-frequency, lower-AOV restaurant transactions and lower delivery thresholds for Instacart+ members, and said the company’s pivot to an enablement platform for local grocers could help offset competitive pressures.
Wedbush raised near-term GTV and adjusted EBITDA estimates but lowered its intermediate-term outlook, reiterating an Underperform rating with a $36 price target.
Looking ahead, Instacart issued 2026 guidance exceeding analyst expectations, projecting GTV growth around 12% year-over-year and advertising revenue growth of 11 to 14%, signaling sustained demand for online grocery services.