Summary of Instacart (CART) FY Conference Call - May 14, 2025 Company Overview - Instacart is a leading grocery technology company in North America, partnering with over 1,800 retail banners and powering enterprise storefronts for about 600 retail banners [3][5] Key Points and Arguments Leadership Transition - CEO Fiji Simo has stepped down, leaving a strong foundation for the company, with a management team that has been effective and a clear strategic vision [5][6] - The board intends to appoint an internal candidate as the new CEO, indicating confidence in the current strategy and financial discipline [6][7] Market Opportunity and Growth - Instacart is focused on driving online penetration in the grocery market, particularly in the large basket segment [8][9] - The company has experienced double-digit growth for several quarters, with a 10% growth in Gross Transaction Value (GTV) in 2024 [17][25] Consumer Behavior and Resilience - Instacart has not observed significant changes in consumer behavior despite macroeconomic challenges like inflation [13][15] - The convenience of grocery delivery remains a priority for consumers, even in recessionary environments [15][16] User Engagement and Retention - Strategies to attract new users include brand marketing and improving user engagement through incentives and enhanced platform features [19][20] - The company has improved its order quality, with a 15% increase in the perfect found and fill rate over the last three years [20][21] Partnerships and New Offerings - The partnership with Uber Eats has positively impacted user engagement and spending, with expectations for continued growth [27][29] - The introduction of a $10 minimum basket for Instacart Plus users aims to enhance accessibility and drive order frequency [30][31] Operational Efficiency - Instacart is focused on improving shopper efficiencies, utilizing technology to reduce order processing time and enhance customer experience [35][36] - The company has implemented AI in various operational aspects, improving logistics and personalizing consumer experiences [61][63] Financial Performance and Profitability - Instacart aims to maintain a transaction take rate between 6.5% and 7.5%, with fluctuations expected based on reinvestment strategies [44][45] - The company is committed to EBITDA growth and margin expansion while reinvesting in opportunities that drive long-term profitability [57][59] Advertising and Revenue Growth - Advertising revenue is expected to grow modestly faster than GTV, with a focus on building a robust advertising business [50][52] - The company is expanding its advertising capabilities and partnerships to enhance scale and effectiveness [53][54] Capital Allocation - Instacart has been opportunistic in its capital allocation, including significant stock buybacks, and plans to continue this approach moving forward [66][68] Additional Important Insights - The company is leveraging data to provide personalized shopping experiences, addressing dietary restrictions and preferences [64][65] - Instacart's operational capabilities allow for batching of orders, enhancing efficiency and cost-effectiveness [32][33] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Instacart's focus on growth, operational efficiency, and consumer engagement in the grocery technology sector.

Part I [Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited):) The unaudited Q1 2025 financial statements reflect increased total assets and operating cash flow, alongside revenue growth, despite a decline in net income [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets reached **$4.29 billion**, driven by increased cash, with liabilities and equity also rising Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,558 | $1,278 | | Total current assets | $2,873 | $2,697 | | Total assets | $4,292 | $4,115 | | **Liabilities & Equity** | | | | Total current liabilities | $887 | $798 | | Total liabilities | $928 | $836 | | Total stockholders' equity | $3,176 | $3,093 | | **Total liabilities, redeemable convertible preferred stock, and stockholders' equity** | $4,292 | $4,115 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 revenue grew **9.4%** to **$897 million**, but increased operating expenses led to a **23.6%** drop in operating income and an **18.5%** decrease in net income Statement of Operations Summary (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | Change YoY | | :--- | :--- | :--- | :--- | | Revenue | $897 | $820 | +9.4% | | Gross Profit | $671 | $614 | +9.3% | | Income from Operations | $110 | $144 | -23.6% | | Net Income | $106 | $130 | -18.5% | | Diluted EPS | $0.37 | $0.43 | -14.0% | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash from operations significantly increased to **$298 million**, with financing activities using **$46 million**, a substantial reduction from prior year repurchases Cash Flow Summary (in millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $298 | $105 | | Net cash provided by investing activities | $1 | $13 | | Net cash used in financing activities | $(46) | $(750) | | Net increase (decrease) in cash | $254 | $(636) | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue disaggregation, legal contingencies, and equity, highlighting revenue breakdown, share repurchases, and recent acquisition and CEO resignation Revenue Disaggregation (in millions) | Revenue Type | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Transaction | $650 | $603 | | Advertising and other | $247 | $217 | | **Total revenue** | **$897** | **$820** | - The company accrued a legal reserve balance of **$96 million** as of March 31, 2025, related to independent contractor misclassification claims and proceedings[256](index=256&type=chunk) - In June 2024, the board authorized a **$500 million** share repurchase program, later increased to **$750 million**. In Q1 2025, **2.4 million** shares were repurchased for **$94 million**, leaving **$218 million** available under the program[113](index=113&type=chunk) - Subsequent to the quarter end, on April 30, 2025, the company acquired Wynshop for approximately **$105 million** in cash. On May 7, 2025, CEO Fidji Simo announced her intent to resign, but will remain Chair of the Board[142](index=142&type=chunk)[143](index=143&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, highlighting **10%** GTV growth to **$9.1 billion**, **14%** order increase, and **23%** Adjusted EBITDA growth to **$244 million** [Key Financial and Operational Highlights](index=37&type=section&id=Key%20Financial%20and%20Operational%20Highlights) Q1 2025 saw strong operational growth with orders up **14%** to **83.2 million** and GTV up **10%** to **$9.1 billion**, driving revenue up **9%** and Adjusted EBITDA up **23%** Q1 2025 vs. Q1 2024 Key Metrics (in millions, except percentages) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Orders | 83.2 | 72.8 | +14% | | GTV | $9,122 | $8,319 | +10% | | Revenue | $897 | $820 | +9% | | Net Income | $106 | $130 | -18% | | Adjusted EBITDA | $244 | $198 | +23% | - The increase in orders was driven primarily by new customers and increased engagement of existing customers[153](index=153&type=chunk) - GTV growth was driven by the increase in orders, partially offset by a lower average order value[155](index=155&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Q1 2025 total revenue increased **9%** to **$897 million**, driven by transaction and advertising growth, but a **19%** rise in operating expenses, including legal accruals, led to a decline in operating income - Transaction revenue increased by **$47 million** (**8%**) in Q1 2025, driven by **10%** GTV growth, lower consumer incentives, and fulfillment efficiencies[188](index=188&type=chunk) - Advertising and other revenue grew by **$30 million** (**14%**) in Q1 2025, due to increased advertising volume and activity from brand partners[189](index=189&type=chunk) - General and administrative expenses increased by **$28 million** (**29%**), primarily due to a **$41 million** increase in accruals for legal matters and sales and indirect taxes[197](index=197&type=chunk) - Research and development expenses increased by **$29 million** (**25%**), mainly due to a net increase in compensation costs, which in Q1 2024 included a large benefit from the reversal of stock-based compensation for executive departures and restructuring[194](index=194&type=chunk) [Non-GAAP Financial Measures](index=46&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBITDA, which increased **23%** to **$244 million** in Q1 2025, with its margin improving to **27%** of revenue Reconciliation of Net Income to Adjusted EBITDA (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net income** | **$106** | **$130** | | Provision for income taxes | 18 | 35 | | Interest income | (14) | (22) | | Depreciation and amortization expense | 19 | 12 | | Stock-based compensation expense | 66 | 9 | | Payroll taxes related to stock-based compensation | 10 | 13 | | Certain legal and regulatory accruals and settlements, net | 40 | 3 | | Reserves for sales and other indirect taxes, net | (1) | (1) | | Restructuring charges | — | 18 | | **Adjusted EBITDA** | **$244** | **$198** | [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company maintained strong liquidity with **$1.6 billion** in cash and equivalents, **$298 million** net cash from operations, and repurchased **$94 million** in stock - As of March 31, 2025, the company held **$1.6 billion** in cash and cash equivalents and **$72 million** in marketable securities[227](index=227&type=chunk) - During Q1 2025, the company repurchased **2.4 million** shares of its common stock for an aggregate price of **$94 million** under its share repurchase program[113](index=113&type=chunk)[230](index=230&type=chunk) - Net cash provided by operating activities was **$298 million** for the three months ended March 31, 2025, a significant increase from **$105 million** in the prior-year period[234](index=234&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency, interest rates, and inflation, with inflation posing a more significant threat due to its potential impact on consumer demand and shopper availability - The company's primary market risks are identified as foreign currency exchange risk, interest rate risk, and inflation risk[244](index=244&type=chunk) - Inflation is a key risk, potentially leading to reduced consumer demand, lower order volumes, and smaller average order values as consumers face higher grocery costs and reduced discretionary income[248](index=248&type=chunk) - A hypothetical **10%** change in foreign currency exchange rates or interest rates would not have a material impact on the company's financial statements[245](index=245&type=chunk)[247](index=247&type=chunk) [Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during Q1 2025 - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[250](index=250&type=chunk) - There were no changes in internal control over financial reporting during Q1 2025 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[251](index=251&type=chunk) Part II [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company faces numerous legal proceedings, primarily related to shopper classification, with a **$96 million** legal reserve, and a pending securities class action lawsuit concerning its IPO - The company faces regular claims and government investigations challenging the classification of its shoppers as independent contractors rather than employees[254](index=254&type=chunk) - As of March 31, 2025, the company has accrued a legal reserve balance of **$96 million** related to these misclassification claims and proceedings[256](index=256&type=chunk) - A securities class action lawsuit was filed in January 2024 alleging violations of the Securities Act and Exchange Act in connection with the company's IPO. The company filed a motion to dismiss, which is pending[259](index=259&type=chunk)[87](index=87&type=chunk) [Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) The company identifies numerous risks, including limited operating history, dependence on customers and partners, intense competition, significant legal and regulatory challenges (especially shopper classification), technology failures, and macroeconomic pressures - **Business & Industry Risks:** - Historical growth may not be indicative of future performance - Failure to attract and retain customers, shoppers, and retail partners could harm the business - Intense competition from well-capitalized players like Amazon, Walmart, and DoorDash - A history of losses and potential inability to sustain profitability[264](index=264&type=chunk) - **Legal & Regulatory Risks:** - Successful legal challenges to the independent contractor status of shoppers could have adverse business, financial, and legal consequences - The business is subject to a complex and evolving web of laws, including those related to e-commerce, data privacy (CCPA, GDPR), and consumer protection[264](index=264&type=chunk)[378](index=378&type=chunk)[390](index=390&type=chunk) - **Operational & Technology Risks:** - Reliance on third-party payment processors, hosting providers (cloud services), and mobile operating systems (iOS, Android) - Potential for system interruptions, performance problems, or security breaches, which could disrupt operations and harm reputation - Risks associated with adopting and implementing new technologies like Artificial Intelligence (AIML)[323](index=323&type=chunk)[333](index=333&type=chunk)[429](index=429&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=109&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **2.405 million** shares for **$94 million** during Q1 2025 under its share repurchase program, with **$218 million** remaining available Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased (in thousands) | Average Price Paid Per Share | Approximate Dollar Value Remaining Under Program (in millions) | | :--- | :--- | :--- | :--- | | Jan 2025 | — | $— | $312 | | Feb 2025 | 121 | $41.26 | $307 | | Mar 2025 | 2,284 | $39.10 | $218 | | **Total** | **2,405** | | **$218** | [Other Information](index=110&type=section&id=Item%205.%20Other%20Information) CFO Emily Reuter adopted a Rule 10b5-1 trading plan on February 27, 2025, for the potential sale of up to **90,000** common shares through May 29, 2026 - On February 27, 2025, CFO Emily Reuter adopted a Rule 10b5-1 trading plan for the potential sale of up to **90,000** shares of common stock through May 29, 2026[488](index=488&type=chunk) [Exhibits](index=111&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, CEO/CFO certifications, and XBRL interactive data files - Key exhibits filed include corporate governance documents, CEO/CFO certifications under Sarbanes-Oxley, and XBRL data files[490](index=490&type=chunk)

Core Viewpoint - Maplebear (CART) is experiencing solid improvement in earnings estimates, which is likely to positively impact its stock price in the near term [1][2]. Earnings Estimates - The upward trend in earnings estimate revisions reflects growing analyst optimism regarding Maplebear's earnings prospects, which correlates strongly with stock price movements [2]. - For the current quarter, Maplebear is expected to earn $0.37 per share, representing an 85% increase from the previous year's reported number [5]. - The Zacks Consensus Estimate for the current quarter has increased by 13.44% over the last 30 days, with eight estimates moving higher and one moving lower [5]. - For the full year, the company is expected to earn $1.70 per share, a 7.59% increase from the prior year [6]. - The consensus estimate for the current year has risen by 5.97% due to ten upward revisions compared to one negative revision [7]. Zacks Rank - Maplebear currently holds a Zacks Rank 2 (Buy), indicating promising estimate revisions and a favorable outlook for investors [8]. - The Zacks Rank system has a strong track record, with Zacks 1 Ranked stocks generating an average annual return of +25% since 2008 [3]. Stock Performance - Maplebear shares have increased by 22.9% over the past four weeks, suggesting strong investor confidence in its earnings growth prospects [9].

Core Insights - Instacart is launching a new app called Fizz, aimed at Generation Z consumers, focusing on group orders for drinks and party snacks [1] - The app allows multiple users to contribute to a single order, pay individually, and have items delivered for a flat fee of $5 [1] - Fizz is designed to complement Instacart's existing services, with the expectation that younger users will transition to Instacart as their needs evolve [2] Company Strategy - The development of Fizz began at the start of the year, with partnerships established with grocery and liquor stores that already work with Instacart [3] - The introduction of Fizz is expected to attract more retailers to the Instacart platform [3] - Instacart recently reduced the minimum spend for free delivery from $35 to $10 for paid subscribers, which has led to increased user engagement [2] Industry Trends - Competitors like DoorDash and Uber are expanding their alcohol delivery services, with DoorDash reporting a 96% increase in ready-to-drink cocktail orders [4] - The trend indicates a growing interest among younger consumers in purchasing alcoholic beverages through subscription services [5] - Research shows that 39% of millennial consumers have utilized scheduled and auto-fill product subscriptions for their regular purchases, a figure higher than the overall consumer average of 31% [6]

Core Insights - Maplebear (CART) reported revenue of $897 million for the quarter ended March 2025, reflecting a year-over-year increase of 9.4% [1] - The earnings per share (EPS) for the quarter was $0.37, down from $0.43 in the same quarter last year, indicating a decline [1] - The revenue exceeded the Zacks Consensus Estimate by 0.16%, while the EPS fell short by 2.63% [1] Financial Performance Metrics - Gross Transaction Value (GTV) reached $9.12 billion, slightly above the average estimate of $9.08 billion from nine analysts [4] - Total orders amounted to 83.2 million, surpassing the average estimate of 80.62 million from seven analysts [4] - Revenue from advertising and other sources was $247 million, exceeding the average estimate of $241.02 million from nine analysts [4] - Revenue from transactions was $650 million, which was below the average estimate of $654.67 million from eight analysts [4] Stock Performance - Over the past month, Maplebear's shares have returned -1.5%, compared to a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Maplebear (CART) reported quarterly earnings of $0.37 per share, missing the Zacks Consensus Estimate of $0.38 per share, and showing a decline from $0.43 per share a year ago, indicating an earnings surprise of -2.63% [1] Financial Performance - The company posted revenues of $897 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.16% and increasing from $820 million year-over-year [2] - Over the last four quarters, Maplebear has exceeded consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - Maplebear shares have declined approximately 3.7% since the beginning of the year, while the S&P 500 has decreased by 5.3% [3] - The current Zacks Rank for Maplebear is 4 (Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.32 on revenues of $892.43 million, and for the current fiscal year, it is $1.58 on revenues of $3.66 billion [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable, which may impact future stock performance [6] Industry Context - The Internet - Commerce industry, to which Maplebear belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - In Q1, the company delivered Gross Transaction Value (GTV) at the top end of guidance, growing 10% year over year, driven by a 14% increase in orders, marking the strongest order growth in ten quarters [11][12] - Average order value decreased by 4% year over year due to the addition of restaurant orders and a reduction in minimum basket size for Instacart Plus members [12][52] - GAAP net income was $106 million, a decrease of $24 million year over year, primarily due to the lapping of stock-based compensation reversals [12][13] - Adjusted EBITDA of $244 million exceeded guidance, growing 23% year over year [13] - Operating cash flow increased by $193 million year over year to $298 million, driven by strong operational performance [13] Business Line Data and Key Metrics Changes - Advertising and other revenue increased by 14% year over year, outpacing GTV growth, with strong contributions from both large and emerging brand partners [12][13] - The company reported a strong performance in its advertising segment, with over 7,000 brands onboarded and spending [21][22] Market Data and Key Metrics Changes - The company reached 98% of households in North America, with consistent customer engagement across geographies and income levels [6][11] - Demand remains robust across various use cases, including weekly grocery trips and higher frequency restaurant orders [6][11] Company Strategy and Development Direction - The company is focused on accelerating online grocery adoption and driving growth through deep retailer partnerships and innovative solutions [4][7] - The acquisition of Windshop is aimed at enhancing the company's enterprise strategy and powering storefronts for more retailers [7][49] - The company is leveraging AI to improve efficiency and customer experience, with 87% of code developed with AI assistance in Q1 [9] Management's Comments on Operating Environment and Future Outlook - Management noted that despite macroeconomic uncertainty, there have been no unexpected changes in consumer behavior [6][15] - The company expects Q2 GTV to be between $8.85 billion and $9 billion, representing year-over-year growth of 8% to 10% [15] - Management expressed confidence in the company's ability to navigate current macro conditions and continue to grow through uncertainty [15][16] Other Important Information - The company has approximately $1.8 billion in cash and similar assets on its balance sheet and has initiated a share buyback program [13][14] - The company continues to focus on affordability initiatives, including a $10 minimum basket for Instacart Plus members, which has led to increased order frequency and user engagement [40][41] Q&A Session Summary Question: Can you unpack what you're seeing from both core CPG advertisers and the contribution from the longer tail? - Management reported strong Q1 performance driven by both large and emerging brands, with over 7,000 brands onboarded [21][22] Question: What changes are needed on the shopper end to economically execute the $10 minimum basket? - Management indicated that high order density allows for economic execution of the $10 minimum basket, increasing batching opportunities [27][28] Question: How do you ensure your ad platform works well for the long tail of ad buyers? - Management highlighted the development of self-serve tools and inspiration ads to enhance discovery for emerging brands [36][37] Question: Are you seeing any common themes in the type of retailers benefiting from small basket orders? - Management noted widespread growth across various retailers, with no specific trends identified [57] Question: How do you think about investments if the economy were to slow down? - Management emphasized a strong balance sheet and the ability to adjust investments based on market conditions [89][90]

Financial Data and Key Metrics Changes - In Q1 2025, the company delivered Gross Transaction Value (GTV) at the top end of guidance, growing 10% year over year, driven by a 14% increase in orders, marking the strongest order growth in ten quarters [13][14] - Average order value decreased by 4% year over year due to the addition of restaurant orders and a reduction in minimum basket size for Instacart Plus members [14][57] - GAAP net income was $106 million, a decrease of $24 million year over year, primarily due to the lapping of stock-based compensation reversals [15] - Adjusted EBITDA reached $244 million, exceeding guidance and growing 23% year over year [16] - Operating cash flow increased by $193 million year over year to $298 million, driven by strong operational performance [16] Business Line Data and Key Metrics Changes - Advertising and other revenue increased by 14% year over year, outpacing GTV growth, with strong contributions from both large and emerging brand partners [14] - The company reported a consistent performance in its advertising trends, with over 7,000 brands onboarded and spending on the platform [25][81] Market Data and Key Metrics Changes - Customer engagement remains consistent across geographies and income levels, with the company reaching 98% of households in North America [8] - Demand is robust across various use cases, including weekly grocery trips and higher frequency restaurant orders [8] Company Strategy and Development Direction - The company is focused on accelerating online grocery adoption and has established itself as a category leader among digital-first players [5][6] - The acquisition of Windshop is aimed at enhancing the enterprise strategy and powering storefronts for more retailers [9][54] - The company is leveraging AI to improve operational efficiency, with 87% of code developed with AI assistance in Q1 [11] Management's Comments on Operating Environment and Future Outlook - Management noted that despite macroeconomic uncertainties, there have been no unexpected changes in consumer behavior through April [8] - The company expects Q2 GTV to be between $8.85 billion and $9 billion, representing year-over-year growth of 8% to 10% [17] - Management expressed confidence in the company's ability to navigate current macro conditions and continue to grow through uncertainty [18] Other Important Information - The company ended the quarter with approximately $1.8 billion in cash and similar assets, and recently used $105 million for the acquisition of Windshop [17] - The company has a remaining buyback capacity of $218 million after repurchasing $94 million worth of shares in Q1 [16] Q&A Session Summary Question: Can you unpack what you're seeing from both core CPG advertisers and the contribution from the longer tail? - Management reported strong Q1 performance driven by both large and emerging brands, with over 7,000 brands onboarded [25][26] Question: What changes are needed on the shopper end to economically execute the $10 minimum basket? - Management indicated that high order density allows for economic execution of the $10 minimum basket, increasing batching opportunities [31][32] Question: How do you ensure your ad platform works well for the long tail of ad buyers? - Management emphasized the development of self-serve tools for emerging brands and the launch of inspiration ads to enhance discovery [39][40] Question: Are you seeing any trade down or smaller basket sizes within the larger basket? - Management confirmed a 4% decline in average order value but noted that this was offset by continued strength in remaining basket sizes, indicating no trade down [57][58] Question: Can you provide more color on the type of volume growth you're seeing with restaurants? - Management stated that restaurant adoption is deepening, with customers using restaurant orders leading to more frequent grocery orders [64][70] Question: How do you think about investments if the economy were to slow down? - Management expressed confidence in the company's strong balance sheet and profitability, allowing for flexibility in investment decisions regardless of economic conditions [94][96]

[Letter to Shareholders](index=2&type=section&id=Letter%20to%20Shareholders) Instacart achieved strong Q1 2025 growth in orders and GTV, driven by strategic innovations and capital returns Q1 2025 Key Performance Indicators | Metric | Q1 2025 Value | Year-over-Year Growth | | :--- | :--- | :--- | | Orders | 83.2 million | 14% | | GTV | $9,122 million | 10% | | Net Income | $106 million | - | | Adjusted EBITDA | $244 million | - | - The company's strategy focuses on four consumer pillars: **convenience, affordability, quality, and selection**[4](index=4&type=chunk) - AI-driven innovations like **'Smart Shop'** and **'Store View'** are being implemented to enhance personalization and order quality[4](index=4&type=chunk)[6](index=6&type=chunk) - Instacart is expanding its enterprise solutions, highlighted by the recent acquisition of **Wynshop**, an e-commerce technology provider[7](index=7&type=chunk) - The advertising business is expanding through new tools like **'Universal Campaigns'** and partnerships, such as powering ads for **Uber Eats'** U.S. grocery marketplace[8](index=8&type=chunk)[9](index=9&type=chunk) - The company repurchased **$94 million** worth of shares in Q1 2025 and had **$218 million** remaining in its repurchase authorization as of March 31[10](index=10&type=chunk) [Business Updates](index=5&type=section&id=Business%20Updates) The company details operational progress across consumers, retailers, brands, and shoppers through AI, partnerships, and new tools [Consumers](index=5&type=section&id=Consumers) Instacart enhanced the consumer experience with AI-driven features, expanded partnerships, and new Instacart Business offerings - Launched **'Smart Shop'**, an AI technology that provides personalized recommendations based on shopping habits and preferences[12](index=12&type=chunk) - Piloted **'Second Store Check'** to fulfill out-of-stock items by sending a second shopper to a nearby store[12](index=12&type=chunk) - Partnered with **Chase** to offer benefits to various cardmembers, targeting customers who tend to have higher order frequency and basket sizes[12](index=12&type=chunk) - Expanded Instacart Business offerings with **'Will Call Delivery'** for same-day distributor orders and **'Pay-With-Invoice'** for streamlined payment management[12](index=12&type=chunk) [Retailers](index=6&type=section&id=Retailers) The company expanded its retailer network, strengthened enterprise offerings with the Wynshop acquisition, and deployed more in-store technology - New retailers joined the marketplace, including **Costco Business Centre (Canada)**, Dierbergs Markets, 1-800-Flowers, and soon, Pet Supplies Plus[13](index=13&type=chunk) - Acquired **Wynshop** to strengthen enterprise solutions and accelerate online growth for retail partners[13](index=13&type=chunk) - Deployed additional **Caper Carts** at Wakefern and Schnucks, and rolled out its **FoodStorm** catering solution in an additional 1,300 stores[13](index=13&type=chunk) [Brands](index=7&type=section&id=Brands) The advertising platform was upgraded with AI-powered campaigns and expanded its reach through a partnership with Uber Eats - Announced **'Universal Campaigns'**, an AI tool that allows brands to use a single budget that is automatically optimized across multiple ad formats[16](index=16&type=chunk) - Partnered with **Uber Eats** to power ads for its U.S. grocery and retail marketplace, expanding the reach of the Instacart Ads ecosystem[16](index=16&type=chunk) - Launched shoppable display ads on **Caper Carts**, enabling brands to access in-store advertising opportunities[16](index=16&type=chunk) [Shoppers](index=7&type=section&id=Shoppers) Instacart introduced a new quality score and is piloting new earnings opportunities to support its shopper community - Launched a new **shopping quality score**, a 90-day metric to give shoppers feedback and help them improve service[16](index=16&type=chunk) - Piloting new earning opportunities for shoppers, including **'Second Store Check'** tasks, **'Store View'** video tasks, and **'Will Call'** delivery tasks[16](index=16&type=chunk) [Product Pantry](index=8&type=section&id=Product%20Pantry) The company highlights two key AI-powered innovations: 'Smart Shop' for personalized shopping and 'Universal Campaigns' for optimized advertising - **Smart Shop** is an AI-powered technology that introduces features like customizable nutritional preferences and Health Tags to enhance personalization and simplify shopping[18](index=18&type=chunk) - **Universal Campaigns** is an AI-powered tool that helps brands create a single campaign with one budget, which is then automatically optimized across multiple ad formats in real-time[21](index=21&type=chunk) [Financial Performance and Outlook](index=9&type=section&id=Financial%20Performance%20and%20Outlook) The company reported strong Q1 2025 financial results with significant growth in GTV and Adjusted EBITDA, providing a positive outlook for Q2 [Q1 2025 Financial Highlights](index=9&type=section&id=Q1%2725%20Financial%20Highlights) In Q1 2025, GTV grew 10% and Adjusted EBITDA grew 23% year-over-year, though net income declined due to higher stock-based compensation Q1 2025 vs. Q1 2024 Financial Metrics | Metric | Q1 2025 | Q1 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | GTV | $9,122 M | $8,319 M | 10% | | Orders | 83.2 M | 72.8 M | 14% | | Total Revenue | $897 M | $820 M | 9% | | Transaction Revenue | $650 M | $603 M | 8% | | Advertising & Other Revenue | $247 M | $217 M | 14% | | GAAP Gross Profit | $671 M | $614 M | 9% | | GAAP Net Income | $106 M | $130 M | (18)% | | Adjusted EBITDA | $244 M | $198 M | 23% | - Average order value (AOV) **decreased by 4%** year-over-year to $110, primarily due to the inclusion of smaller restaurant orders and lower basket minimums[25](index=25&type=chunk) - Advertising & other revenue grew to **2.7% of GTV**, an increase of 10 basis points year-over-year, outpacing overall GTV growth[29](index=29&type=chunk) - The year-over-year increase in GAAP total operating expenses was primarily due to higher stock-based compensation (SBC), as Q1 2024 SBC was unusually low due to a **$95 million reversal**[34](index=34&type=chunk) [Q2 2025 Financial Outlook](index=12&type=section&id=Q2%2725%20Financial%20Outlook) The company forecasts continued GTV growth of 8% to 10% and strong Adjusted EBITDA between $240 million and $250 million for Q2 2025 Q2 2025 Guidance | Metric | Outlook | | :--- | :--- | | GTV | $8,850 - $9,000 million | | Adjusted EBITDA | $240 - $250 million | - The GTV outlook represents year-over-year growth of **8% to 10%**, with order growth expected to continue outpacing GTV growth[39](index=39&type=chunk) [Appendix: Definitions and Financial Statements](index=12&type=section&id=Appendix) This appendix provides forward-looking statements, definitions of key metrics, and detailed unaudited consolidated financial statements [Forward-Looking Statements](index=12&type=section&id=Forward-Looking%20Statements) This section cautions that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ [Key Business Metrics and Non-GAAP Financial Measures](index=13&type=section&id=Key%20Business%20Metrics%20and%20Non-GAAP%20Financial%20Measures) This section defines key operational metrics like GTV and non-GAAP financial measures like Adjusted EBITDA - **Gross Transaction Value (GTV)** is defined as the value of products sold through Instacart, including taxes, fees, and customer tips[44](index=44&type=chunk) - **Adjusted EBITDA** is defined as net income adjusted for items including taxes, interest, depreciation & amortization, stock-based compensation, and certain other charges[47](index=47&type=chunk) [Condensed Consolidated Financial Statements](index=17&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited balance sheets, statements of operations, cash flows, and GAAP to non-GAAP reconciliations [Condensed Consolidated Balance Sheets](index=17&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $4.3 billion, with cash and cash equivalents increasing to $1.6 billion [Condensed Consolidated Statements of Operations](index=18&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, the company generated $897 million in revenue and $106 million in net income, or $0.37 per diluted share [Condensed Consolidated Statements of Cash Flows](index=19&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was $298 million in Q1 2025, a significant increase from the prior year [Reconciliation of GAAP to Non-GAAP Results](index=20&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Results) This section reconciles Q1 2025 GAAP Net Income of $106 million to Adjusted EBITDA of $244 million

Group 1 - Instacart announced the acquisition of Wynshop, a cloud-based e-commerce solutions provider for grocers, to enhance its enterprise solutions and improve online experiences for retailers [1] - Wynshop, launched in 2020, offers online storefronts and AI-powered personalization tools, and will operate as a wholly owned subsidiary of Instacart [2] - This acquisition marks Instacart's sixth acquisition, following previous purchases including Caper AI and Eversight [3] Group 2 - The integration of Wynshop's technology is expected to strengthen Instacart's e-commerce, advertising, fulfillment, and in-store offerings over time [2] - Instacart is set to report its first-quarter 2025 financial results after the market close [3]