Instacart’s fourth-quarter earnings, released , revealed more than just a financial beat. The company is actively transforming itself from a grocery delivery service into a broader retail-tech platform, leveraging partnerships and artificial intelligence to expand its reach and capabilities.
While the headline numbers – a 14% year-over-year increase in Gross Transaction Value (GTV) to $9.852 billion, a 16% rise in orders to 89.5 million, and a 12% revenue increase to $992 million – were positive, the strategic shift is what’s capturing attention on Wall Street. Adjusted EBITDA rose 20% to $303 million, and the company reported a GAAP net income of $81 million (30 cents per share), partially attributed to a $60 million settlement with the FTC related to legal and regulatory matters.
Central to this evolution is Instacart’s strategy of “being everywhere” customers shop, according to CEO Chris Rogers. This isn’t limited to its own platform; the company is actively integrating with third-party platforms like OpenAI, Google, and Microsoft. Notably, Instacart was the first grocery partner to launch native checkout directly within ChatGPT, signaling an ambition to embed its payment and fulfillment infrastructure into a wider range of consumer touchpoints.
The company is positioning itself as a technology provider for grocers seeking omnichannel capabilities without the complexity of building solutions in-house. Instacart’s marketplace now encompasses over 2,200 retail banners and nearly 100,000 locations. Its Storefront technology currently powers the eCommerce sites of more than 380 grocers, demonstrating a significant footprint in the retail technology space.
Instacart’s Q4 playbook included deepening price parity initiatives with grocers like Hy-Vee and Raley’s, expanding its marketplace with partners such as 1-800-Flowers and Lush, and integrating with Toast, bringing Toast’s retail customers onto the Instacart Marketplace. Instacart Business is also being positioned as a procurement partner for Toast’s restaurant customers, further diversifying its revenue streams.
The integration of “Instant Checkout” within ChatGPT is particularly noteworthy. This move suggests Instacart aims to extend its checkout, payment, and fulfillment services beyond its own app, potentially becoming a foundational layer for commerce across various platforms. This is a significant step towards becoming a core component of the digital commerce infrastructure.
Artificial intelligence is playing a crucial role in accelerating this transformation. Rogers highlighted a nearly 40% increase in average output per engineer over the past year, with some teams experiencing even greater gains. This increased efficiency is enabling faster project delivery and innovation.
Instacart is also developing “agentic” shopping capabilities, framing it as the next interface layer for grocery. The company is building a white-label AI assistant, dubbed “Cart Assistant,” intended for use by partners, including grocers operating their own eCommerce platforms. This suggests a move towards more personalized and automated shopping experiences.
However, the deployment of AI isn’t without its challenges. A recent report from CNBC highlighted that Instacart paused an AI pricing test following criticism that shoppers were shown different prices for the same items. This underscores the potential for algorithmic pricing to raise concerns about fairness and transparency, particularly in a price-sensitive sector like grocery.
Looking ahead, Instacart is projecting strong growth. Rogers stated the company is guiding towards the strongest year-over-year GTV growth it has ever provided as a public company for the first quarter of . This optimistic outlook reflects the company’s confidence in its strategic shift and its ability to capitalize on the growing demand for integrated retail technology solutions.
The company’s success will likely hinge on its ability to navigate the complexities of AI implementation, maintain consumer trust, and effectively scale its technology platform to meet the evolving needs of its retail partners. The transformation from a delivery service to a retail-tech enabler is underway, and Instacart’s Q4 performance suggests This proves making significant progress.
