Memo and sources: Instacart told employees that its Q4 revenue increased 50%+ YoY, Q4 gross profit rose 80%+ YoY, and 2022 revenue grew 39% YoY to ~$2.5B
Wall Street Journal :
Context & Ripple Effects
Six months after sources described Instacart's Q2 2022 results showing 39% revenue growth on an accelerating order base, a leaked employee memo now claims Q4 revenue rose more than 50% YoY and Q4 gross profit jumped over 80% — a reacceleration at exactly the moment the company was preparing its pitch to public-market investors.
The memo also restates the full-year figure — 2022 revenue up 39% to roughly $2.5B — that later appeared in the company's IPO filing, which disclosed $428M net income versus a $73M loss in 2021. The gap between top-line growth and much faster gross-profit growth is the story investors were being handed: margin expansion, not just volume.
First-order effects
- Instacart enters its IPO process with a leaked proof point that Q4 growth accelerated past the 39% pace of mid-2022, strengthening the valuation narrative for underwriters and early shareholders.
- Retailers and advertisers on Instacart's platform are selling into a marketplace whose Q4 gross profit grew four times faster than its order volume had in Q2, signaling where the company's own emphasis sits.
Second-order effects
- Competing grocery-delivery players courting the same public investors face a raised bar: Instacart's memo frames profitability-at-scale, not order counts alone, as the sector's benchmark metric.
- If gross profit is compounding faster than revenue, ad and high-margin services revenue is doing the heavy lifting — pressuring retailers who host Instacart to negotiate harder over who captures that margin.
Third-order effects
- If the pattern holds through the reported quarters that follow — Q3 2023 adjusted EBITDA up 120% YoY, then single-digit-to-low-teens revenue growth by 2025 — it sketches the arc of a maturing marketplace: hypergrowth gives way to margin harvesting once the public listing locks in.
- A delivery platform whose profit engine outruns its transaction engine points toward grocery e-commerce consolidating around advertising-financed intermediaries rather than pure logistics businesses.
The trend: Pre-IPO grocery platforms are trading headline growth rates for demonstrated margin expansion, with leaked metrics serving as the marketing vehicle for their public-market debuts.