Maplebear (CART) - 2025 Q1 - Quarterly Report

Part I Financial Statements (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 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 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 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 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] - 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] - 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][143] Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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] - GTV growth was driven by the increase in orders, partially offset by a lower average order value[155] Results of Operations 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] - Advertising and other revenue grew by $30 million (14%) in Q1 2025, due to increased advertising volume and activity from brand partners[189] - 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] - 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] Non-GAAP Financial Measures 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 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] - 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][230] - 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] Quantitative and Qualitative Disclosures About Market Risk 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] - 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] - 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][247] Controls and Procedures 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] - 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] Part II Legal Proceedings 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] - As of March 31, 2025, the company has accrued a legal reserve balance of $96 million related to these misclassification claims and proceedings[256] - 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][87] Risk Factors 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] - 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][378][390] - 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][333][429] Unregistered Sales of Equity Securities and Use of Proceeds 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 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] Exhibits 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]