Instacart Forecasts Q3 Above Estimates on Higher Fees and Orders

Aug 6 (Reuters) - Instacart projected its third-quarter gross transaction value and core profit above analysts' estimates on Tuesday, betting on higher transaction and advertisement fees and more orders on its online grocery delivery platform.

Shares of the company jumped more than 8% after the bell.

Instacart has partnered with retailers to offer same-day delivery of products ranging from home improvement to beauty and skin care to fight competition in the U.S. It has also forayed into food delivery through a tie up with Uber.

The company expects its third-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be between $205 million and $215 million, above the LSEG estimates of $204.6 million.

Earlier in the day, Uber said initial trends from its ties with the company were "encouraging", particularly in less densely populated areas where Instacart has a stronger presence.

"We're also seeing higher average basket sizes for restaurant orders than those on other platforms," Instacart CEO Fidji Simo said.

Total orders rose 7% to 70.8 million in the quarter ended June 30, but growth was slower than the previous three-month period.

"Instacart has proved that it still has room to grow, even as it matures into a major force in the delivery space, which is an exciting prospect for investors," Emarketer analyst Blake Droesch said.

Instacart — which sells ad spaces on its site — has also been doubling down on its advertising business on hopes of increasing demand from consumer-facing companies that want to promote products online.

Advertising and other revenue climbed 11% in the quarter. Total revenue rose 15% to $823 million, beating analysts' expectation of $806.6 million.

Instacart expects third-quarter GTV — a key metric that shows value of products sold based on prices shown on its platform — to be between $8.10 billion and $8.25 billion, versus estimates of $8.10 billion.

Last week, rival DoorDash also provided upbeat third-quarter core profit forecast on resilient online ordering.