Maplebear (US:CART)2025-11-10 21:21Financial Performance - In Q3 2025, Instacart reported 83.4 million orders, a 14% increase compared to Q3 2024, driven by new customer acquisition and increased engagement [177]. - Gross Transaction Value (GTV) reached $9,170 million in Q3 2025, reflecting a 10% growth from Q3 2024, primarily due to the increase in orders [182]. - Revenue for Q3 2025 was $939 million, marking a 10% increase compared to the same quarter in 2024 [175]. - Gross profit increased to $692 million in Q3 2025, an 8% growth year-over-year, with a gross margin of 74% [184]. - Net income for Q3 2025 was $144 million, representing a 22% increase from Q3 2024, with net income as a percentage of revenue rising to 15% [175]. - Adjusted EBITDA for Q3 2025 was $278 million, a 22% increase compared to the same quarter in 2024, with an Adjusted EBITDA margin of 30% [185]. - Revenue for Q3 2025 was $939 million, a 10% increase from $852 million in Q3 2024, driven by a 10% growth in GTV [213]. - Gross profit for Q3 2025 was $692 million, up 8% from $641 million in Q3 2024, with a gross margin of 74% [218]. - Net income for Q3 2024 was $118 million, representing 1.4% of GTV, while Q3 2025 net income increased to $144 million, or 1.6% of GTV [243]. - Adjusted EBITDA for Q3 2024 was $227 million, with a margin of 27%, and for Q3 2025, it rose to $278 million, achieving a margin of 30% [243]. - Revenue for the nine months ended September 30, 2024 was $2,495 million, increasing to $2,750 million in the same period of 2025 [243]. - The company reported a net income of $309 million for the nine months ended September 30, 2024, increasing to $366 million in the same period of 2025 [243]. - The adjusted EBITDA for the nine months ended September 30, 2024 was $633 million, with an increase to $784 million in the same period of 2025 [243]. Operating Expenses - Operating expenses for Q3 2025 totaled $525 million, compared to $503 million in Q3 2024, with significant increases in research and development and sales and marketing expenses [210]. - Cost of revenue increased by 17% to $247 million in Q3 2025, primarily due to higher payments to publishers and credit card processing fees [218]. - Research and development expenses for Q3 2025 were $169 million, up from $149 million in Q3 2024, reflecting continued investment in product development [210]. - Sales and marketing expenses for Q3 2025 were $206 million, slightly down from $213 million in Q3 2024, indicating a strategic focus on efficiency [210]. - Operations and support expenses decreased by $2 million (3%) in Q3 2025 compared to Q3 2024, and by $4 million (2%) in the first nine months of 2025 compared to the same period in 2024 [221]. - Research and development expenses increased by $21 million (14%) in Q3 2025 compared to Q3 2024, and by $30 million (7%) in the first nine months of 2025 compared to the same period in 2024 [222][225]. - Sales and marketing expenses decreased by $6 million (3%) in Q3 2025 compared to Q3 2024, but increased by $41 million (7%) in the first nine months of 2025 compared to the same period in 2024 [226][227]. - General and administrative expenses increased by $10 million (14%) in Q3 2025 compared to Q3 2024, and by $30 million (10%) in the first nine months of 2025 compared to the same period in 2024 [228][229]. - General and administrative expense for Q3 2024 was $77 million, increasing to $87 million in Q3 2025, while the nine-month total rose from $289 million to $319 million [259]. - Adjusted general and administrative expense as a percentage of GTV remained stable at 0.8% for both Q3 2024 and Q3 2025, with a nine-month average of 0.9% in 2024 and 0.8% in 2025 [259]. - Total operating expenses for the nine months ended September 30 increased from $1,544 million in 2024 to $1,641 million in 2025 [262]. Cash Flow and Financing - Net cash provided by operating activities was $788 million for the nine months ended September 30, 2025, compared to $534 million in the same period in 2024 [270]. - Cash and cash equivalents stood at $1.7 billion with marketable securities of $101 million as of September 30, 2025 [263]. - The company repurchased 7 million shares for a total of $272 million during the nine months ended September 30, 2025, as part of a $1 billion share repurchase program [266]. - Net cash used in investing activities was $163 million for the nine months ended September 30, 2025, compared to $26 million in 2024 [272]. - The accumulated deficit as of September 30, 2025, was $3.5 billion, despite recent profitability [264]. - The company anticipates that existing cash and marketable securities will be sufficient for at least the next 12 months, but may require additional financing depending on growth and strategic initiatives [268]. - As of September 30, 2025, the company had cash and cash equivalents of $1.7 billion and marketable securities of $101 million [284]. Market and Economic Factors - Instacart's business is influenced by macroeconomic factors such as inflation, interest rates, and supply chain challenges, which may affect customer shopping habits and key business metrics [170]. - The company experienced fluctuations in consumer demand for online grocery due to higher retail prices and reduced discretionary spending, negatively impacting revenue and margins [285]. - Inflationary pressures have led to increased grocery costs and reduced order frequency, affecting average order values and overall revenue [285]. - Higher fuel prices and supply chain issues may lead to fewer shoppers or reduced shopper activity, impacting revenue and profitability [285]. - The company may need to reintroduce shopper incentives to ensure sufficient availability to meet demand due to persistent shopper shortages [285]. Strategic Initiatives - The company expects continued growth in GTV and revenue, supported by ongoing investments in operations and marketing initiatives [214]. - Instacart's advertising and other revenue is expected to fluctuate seasonally, with higher revenue typically in Q4 and lower in Q1 [192]. - The company has implemented affordability-focused offerings, such as discount grocers and customer promotions, to improve accessibility to online grocery [286]. Leadership and Governance - Leadership transition occurred with Chris Rogers appointed as CEO effective August 15, 2025, following Fidji Simo's resignation [174]. - The effective income tax rate is expected to be influenced by changes in tax laws and the geographic composition of pre-tax income [208]. Financial Reporting and Measures - The company uses Non-GAAP financial measures, including Adjusted EBITDA, to assess performance and facilitate analysis of financial trends [233][239]. - Adjusted EBITDA is defined as net income adjusted for various expenses, providing a measure of operational performance [237][240]. - Adjusted cost of revenue for Q3 2024 was $199 million, or 2.4% of GTV, while for Q3 2025, it was $225 million, or 2.5% of GTV [246]. - Research and development expense for Q3 2024 was $149 million, with adjusted R&D expense at $100 million, while Q3 2025 R&D expense increased to $169 million, with adjusted R&D at $109 million [252]. - Sales and marketing expense for Q3 2024 was $213 million, with adjusted sales and marketing expense at $196 million, while Q3 2025 saw a decrease to $206 million, with adjusted expense at $191 million [256]. - A hypothetical 10% change in foreign currency exchange rates would not have a material impact on the company's financial statements [283]. - The company does not anticipate material risks from interest rate changes, with a hypothetical 10% increase or decrease in rates having no significant impact [284]. - The company has not entered into derivative or hedging transactions for foreign currency exposure but may consider it if exposure increases [283]. - The increase in research and development expenses was primarily due to a net increase of $16 million in total compensation costs in Q3 2025 [224]. - The increase in general and administrative expenses during the first nine months of 2025 was primarily due to a net increase of $39 million in accruals for legal matters and sales and indirect taxes [229].