Earnings Call Transcript Analysis Report #
Financial Performance #
Key Financial Metrics #
- Instamart Average Order Value (AOV): Grew by 14% year-on-year (YoY).
- Instamart Take Rate: Expanded and continues to expand sequentially.
- Instamart Cost of Delivery: Decreasing due to network densification.
- Instamart Contribution Margin (CM): Negatively impacted by investments in store expansion and customer acquisition.
- Instamart Monthly Transacting Users (MTU): Increased by 12% sequentially in Q3 FY25.
- Food Marketplace MTU: Reached 14.9 million in Q3 FY25, up from 14.7 million in Q2 FY25. YoY growth was 19.2%.
- Food Marketplace Contribution Margin: Expanded.
- Food Marketplace EBITDA: Expanded.
- Working Capital: An increase in receivables was noted, primarily due to the growing advertising business in quick commerce.
- Fixed Costs (Food Delivery): Remained stable over the past 4-5 quarters.
- Fixed Costs (Quick Commerce): Increased meaningfully due to branding-related expenses and new hirings.
Revised Guidance or Forecasts #
- Instamart Store Expansion: Reiterated guidance of doubling square footage coverage from 2 million to 4 million in H2 FY25.
- Instamart Contribution Margin Breakeven: Maintained guidance of achieving positive CM by the October-November-December (OND) quarter of FY26.
- Food Marketplace Growth: Maintained guidance of 18% to 22% category growth.
- Food Marketplace EBITDA: Reiterated target of 5% EBITDA.
- Corporate Level Profitability: Maintained guidance of achieving adjusted EBITDA breakeven by the OND quarter of FY26.
- Instamart AOV Growth: Maintain guidance of delivering double-digit Y-o-Y growth for the near future.
Areas of Growth and Decline #
- Growth: Strong MTU and AOV growth in Instamart; MTU and AOV growth in Food Marketplace; Expansion of contribution margin in Food Marketplace.
- Decline: Instamart contribution margin per order declined in Q3 FY25 due to heightened investments.
Strategic Initiatives & Business Updates #
Major Strategic Announcements #
- Aggressive expansion of Instamart store footprint, focusing on densification in existing cities and entering new ones.
- Emphasis on “megapod” expansion for Instamart to increase category access and selection without a proportional increase in the number of physical stores.
New Products, Services, or Markets Discussed #
- Bolt (Food Delivery): Launched and rapidly scaled