Instacart’s AI Boost Powers 40% Faster Engineer Output

Date of Call: Feb 12, 2026

Guidance:

• GTV for Q1 2026 expected to range between $10.25B and $10.275B, representing YOY growth of 11% to 13%.
• Advertising and other revenue expected to grow 11% to 14% YOY.
• Q1 adjusted EBITDA expected to be $280M to $290M, up YOY by 15% to 19% (down quarter-over-quarter due to advertising seasonality).
• For fiscal 2026, committed to steady annual adjusted EBITDA YOY growth outpacing GTV growth, though rate of expansion expected to moderate due to reinvestment and lapping prior efficiencies.

Business Commentary:

Strong GTV and Revenue Growth:

• Instacart reported GTV of $9.85 billion for Q4, up 14% year-over-year, marking the strongest growth in three years. Advertising and other revenue grew 10% year-over-year.
• The growth was driven by increased orders, strong user growth, and engagement, as well as enhancements in product offerings and enterprise platform expansion.

Enterprise Platform Expansion:

• Instacart now powers more than 380 grocery e-commerce sites through its enterprise platform, reflecting significant growth in deeper retailer partnerships.
• This expansion is attributed to custom integrations, shared planning, and joint initiatives with retailers, exemplified by partnerships with Costco and Sprouts.

Advertising Ecosystem and Diversification:

• Advertising and other revenue grew 10% year-over-year, with over 9,000 brands advertising on Instacart, up from 7,000 the previous year.
• The growth is due to diversification across supply and demand on the platform, expansion of Carrot Ads, and successful off-platform partnerships.

AI and Technological Advancements:

• Instacart is leveraging AI to enhance its platform, leading to a nearly 40% increase in average output per engineer and enabling production-grade software to be built more than 4x faster.
• AI is being used to improve execution across the board, from enterprise solutions to advertising, reinforcing Instacart's position as a leader in grocery technology.

Financial Discipline and Share Repurchase:

• The company generated operating cash flow of $184 million, up 20% year-over-year, and repurchased $1.1 billion worth of shares in Q4.
• This reflects financial discipline and confidence in the business, supported by strong GTV growth and profitability expansion.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted 'strongest GTV growth in 3 years,' 'strongest year-over-year GTV growth' in guidance, 'real momentum,' and 'confidence in our ability to drive durable, profitable growth.' They noted 'positive start to the year,' 'encouraging' early engagement in new initiatives, and being 'well positioned to be the clear winner with AI.'

Q&A:

• Question from Douglas Anmuth (JPMorgan Chase & Co, Research Division): How should we think about the scope of the opportunity in terms of both marketplace as well as enterprise adoption? And how do you think about the addition of new retailers versus deeper penetration with existing?
  Response: Enterprise is a strategic advantage and underappreciated growth driver, enabling deeper retailer integrations, innovation, and efficiency. Significant future opportunity exists both in expanding with new international retailers and in expanding product/service offerings with existing partners.

• Question from Nikhil Devnani (Bernstein Institutional Services LLC, Research Division): What do you think has driven the acceleration in the business? Also, what are you seeing on the ground in markets with more competition, and are we at an inflection point in grocery e-commerce adoption?
  Response: Growth driven by strong user metrics, higher retention, deeper engagement, and multi-channel initiatives. Competition impact is 'overblown'; GTV growth accelerated despite competition, with Instacart leading in large baskets and market share among digital-first players.

• Question from Charles Larkin (Oppenheimer & Co. Inc., Research Division): Advertising came in a little bit stronger than initially feared. Could you talk about the puts and takes?
  Response: Strong ad revenue driven by GTV growth, diversification across supply and demand, Carrot Ads scaling to over 310 partners, and expansion of off-platform partnerships, making the ecosystem more resilient and successful.

• Question from Shweta Khajuria (Wolfe Research, LLC): How are you thinking about unlocking international growth opportunity? And is there an opportunity in local commerce with smaller baskets and non-grocery merchants?
  Response: International markets are promising but different; approach is to leverage existing enterprise tech (e.g., Storefront Pro) and localizing it. Focus remains primarily on grocery, not local commerce; already serve small baskets with initiatives like lower Instacart+ minimums.

• Question from Stefanos Crist (Needham & Company, LLC, Research Division): How many of your other partners have international business? Is that the main strategy or are you also approaching new customers?
  Response: Mix of both: expanding with existing partners (e.g., Costco) and building new relationships with retailers in major European markets.

• Question from Josh Beck (Raymond James & Associates, Inc., Research Division): How are price parity discussions progressing? How do you think about tailwinds from AI on platform (e.g., easing basket creation) and off-platform economics?
  Response: Price parity traction growing (e.g., Hy-Vee, Ralphs), with retailers seeing benefits. AI focus is on building seamless, comprehensive agentic experiences on Instacart and partnering off-platform to attract incremental demand.

• Question from Eric Sheridan (Goldman Sachs Group, Inc., Research Division): Any update on Instacart+ adoption rate, investment in growing it, and differences in user behavior?
  Response: Instacart+ remains majority of GTV/orders; paid members growing, with higher engagement and retention. Program designed to unlock value via $0 delivery and expanded benefits.

• Question from Colin Sebastian (Robert W. Baird & Co. Incorporated, Research Division): Are there distinct consumer use cases for Instacart vs. competitors? And what is the appetite for advertising on Caper Carts?
  Response: Instacart excels in large baskets (over $75, 75% of market). Competitor expansions often serve smaller fill-in orders. Caper Carts sees strong momentum with thousands of commitments, early ad revenue signals encouraging, and focus is on accelerating momentum.

• Question from Andrew Boone (Citizens JMP Securities, LLC, Research Division): Can you talk about advertising intensity from ChatGPT partnership? How do you think about retail media evolution as channels mature?
  Response: AI platform partnerships (OpenAI, Google, Microsoft) aim to ensure discoverability and drive users to Instacart; long-term opportunity in agentic ads and AI-powered ad tech improvements for relevance and efficiency.

• Question from Deepak Mathivanan (Cantor Fitzgerald & Co., Research Division): Are you seeing meaningful change in consumer grocery shopping behavior with AI tools? When will AI experiences be broadly available? Any competition impact from Uber/DoorDash retailer rollouts?
  Response: Consumer behavior shifts are early and not material; Cart Assistant in beta testing, with rollout planned by end of Q1. Retailer marketplace expansions not concerning; Instacart remains share leader on key retailers.

• Question from Ross Sandler (Barclays Bank PLC, Research Division): Could you talk about what you're seeing thus far in advertising for Q1 and the pipeline? Is the rough patch with large CPG over? Also, could you discuss COGS leverage in 2026 from publisher fees and impact on margins?
  Response: Advertising off to strong start; strategy focused on diversification and AI innovation. Payments to publishers scaled in 2025 but expected to moderate in 2026; overall EBITDA expansion to moderate due to reinvestment, not directly tied to publisher fee leverage.

• Question from Michael Morton (MoffettNathanson LLC): Could you speak about contributors to advertising growth between on-site and off-site in the guide? Also, quantify contribution from Kroger's fulfillment changes?
  Response: Advertising growth primarily on-platform (marketplace and Carrot Ads); off-platform smaller but growing. Kroger's fulfillment partnership benefits Instacart's same-day logistics, but specific contribution not quantified.

• Question from Mark Zgutowicz (The Benchmark Company, LLC, Research Division): How do you see the time line for ads opportunity in Europe developing given lack of 1P data? Will benefit come from net new brands or existing global partners?
  Response: Ads in Europe will follow technology rollout (Storefront Pro, Caper Cart); advertising will be a 'fast follow-on' once service areas at scale, with focus on building relationships first.

Contradiction Point 1

Advertising Growth Trajectory and Drivers

Contradiction on the primary driver for advertising growth in Q1 2026.

Could you provide more details on the company's Q3 revenue growth? - Ross Sandler (Barclays)

2025Q4: The company is off to a very strong start in 2026, with Q1 guidance of 11-14% ad growth. The strategy is sound... Building blocks include innovation on-platform with AI, driving performance for brands, expanding Carrot Ads... and scaling off-platform data partnerships. - Chris Rogers(CEO)

How is Q1 advertising performance aligning with the 11-14% growth guidance and the pipeline, and have large CPG challenges been resolved? - Colin Sebastian (Robert W. Baird & Co. Incorporated, Research Division)

2025Q3: While some large brand partners are moderating spend due to macro uncertainty (Q4 growth guide of 6-9% reflects this), the foundation is in place to return to double-digit ad growth in 2026. This will be driven by a combination of: 1) On-platform innovation... 2) Expansion of Carrot Ads... 3) In-store ads on Caper Carts, and 4) Off-platform partnerships... - Chris Rogers(CEO)

Contradiction Point 2

Impact of AI Tools on Consumer Behavior and Business Metrics

Contradiction on the materiality and observed impact of AI-driven consumer referrals.

What are your thoughts on the recent earnings results? - Deepak Mathivanan (Cantor Fitzgerald)

2025Q4: It's still very early days; referral traffic from external AI platforms is not material. Instacart is investing to be prepared for future shifts. - Chris Rogers(CEO)

Are you observing notable shifts in consumer grocery shopping habits driven by AI tools like weekly/recipe-based cart planning? When will expanded AI features like Cart Assistant be available? - Ross Sandler (Barclays Bank PLC, Research Division)

2025Q3: AI solutions are designed to accelerate adoption across the entire grocery ecosystem. The approach is: 1) Innovate on Instacart's marketplace... then 2) Take that technology to retail partners... - Chris Rogers(CEO)

Contradiction Point 3

Primary Growth Drivers for GTV/Orders

Contradiction on whether new marketplace retailers or enterprise/retailer integrations are the main growth engine.

Could you discuss the earnings results? - Nikhil Devnani (Bernstein Institutional Services)

2025Q4: GTV growth resulted from a compounding strategy across product enhancements, enterprise momentum, and club channel integrations. - Chris Rogers(CEO)

What factors drove the acceleration in GTV and orders, and how is the competitive landscape with Amazon, DoorDash, etc., impacting grocery e-commerce adoption? - Nikhil Vijay Devnani (Sanford C. Bernstein)

2025Q2: Accelerated order growth... is largely driven by the addition of restaurants and the lower minimum basket size. - Emily Maher(CFO)

Contradiction Point 4

Assessment of Competitive Threat from Amazon

Contradiction in characterizing the competitive impact, from dismissing it to acknowledging specific pressures.

What are your thoughts on the company's recent financial performance? - Nikhil Devnani (Bernstein Institutional Services)

2025Q4: Competition is not a surprise... The sentiment on competitive impact is 'overblown.' GTV growth accelerated despite Amazon headlines. - Chris Rogers(CEO)

What drove the acceleration in GTV and orders, and what competitive dynamics with Amazon, DoorDash, etc., are affecting grocery e-commerce adoption, particularly regarding an inflection point? - Lee Horowitz (Deutsche Bank)

2025Q2: The CPG environment remains uncertain... Large CPGs are taking a wait-and-see approach, focusing on profitability, which can lead to pullbacks. - Fidji Simo(CFO)

Contradiction Point 5

Advertising Growth Outlook and Strategy

Contradiction on the pace and drivers of advertising revenue growth.

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2025Q4: Advertising & other revenue grew 10% year-over-year, driven by strong GTV growth, diversification across supply and demand, and execution of the strategy. - Chris Rogers(CFO)

What factors contributed to stronger-than-expected Q4 advertising revenue, and was it driven by better adoption or macro impacts? - Jason Helfstein (Oppenheimer)

2024Q4: Advertising revenue is expected to grow faster than GTV in Q1. The food and beverage advertising environment remains challenged macroeconomically... - Fidji Simo(CFO)