Instacart (Maplebear Inc.) Q2 FY2025 earnings call

• Instacart had a strong Q2 with performance reinforcing its central role in helping families with grocery needs. - Extended supply advantage through innovative technologies, deepened retail partnerships, and launched personalized services. - Interconnected ecosystem where improvements in marketplace fit into enterprise solutions. - Leadership position in share of sales among digital-first players, with share of sales more than 3x larger than next player. - Personalization efforts with AI-driven features like personalized shopping services and substitution models. - AI integration with over 80% of code in Q2 AI-assisted, improving efficiency across teams.

In Q2, Instacart delivered strong results. GTV grew 11% year-over-year, driven by 17% growth in orders. Transaction revenue grew 11% year-over-year, holding steady at 7.3% of GTV. Advertising and other revenue grew 12% year-over-year. GAAP net income was $116 million, up 92% year-over-year, and adjusted EBITDA was $262 million, up 26% year-over-year. Operating cash flow was $203 million, a decrease of $41 million year-over-year primarily due to working capital fluctuations.

• Q3 GTV is expected to range between $9 billion and $9.15 billion, reflecting year-over-year growth of 8% to 10%. - Q3 adjusted EBITDA is guided to $260 million to $270 million, reflecting advertising and other revenue growing in line with anticipated GTV growth and continued adjusted operating expense leverage.

• Macro conditions affecting large CPG ad spend, which could impact ad revenue. - Uncertainties in the retail and CPG landscape that may affect investment in advertising by large brands.

Q: Eric Sheridan from Goldman Sachs asked about improvement in conversion and frequency of behavior and LTV across the landscape.

A: Fidji Simo responded on supply onboarding, deepening with existing retailers, new categories like restaurants, and better retention with new cohorts.

Q: Nikhil Devnani from Bernstein asked about order growth composition between grocery and restaurants.

A: Emily Maher said orders growth was driven by addition of restaurants and lower minimum basket size, with moderation in Q3 due to lapping restaurant contribution from a year ago.

Q: Colin Sebastian from Baird asked about Instacart platform, cross-sell opportunity, and enterprise pipeline.

A: Fidji Simo talked about Storefront, Carrot Ads, and in-store technology like Caper and Carrot Tags.

Q: Lee Horowitz from Deutsche Bank asked about ad revenue, CPG ad environment, and online grocery industry.

A: Fidji Simo discussed CPG ad environment challenges and opportunities for emerging brands, and online grocery penetration driven by price stabilization and TAM size.

Q: Ross Sandler from Barclays asked about emerging brands and off-site retail media deals contributing to ad revenue.

A: Fidji Simo said diversification is working with strength in emerging and midsized brands, and off-platform partnerships are earlier in scale but expected to grow.

Q: Andrew Boone from Citizens asked about batching gains and AI efficiencies.

A: Emily Maher talked about batching gains and AI adoption with no immediate OpEx impact noted.

Q: Shweta Khajuria from Wolfe Research asked about on-platform vs non-Instacart placed ads.

A: Fidji Simo said Instacart aims to be a one-stop shop for CPG brands with universal campaigns and optimized bidding.

Q: Steven Fox from Fox Advisors asked about personalization KPIs and cash flow.

A: Fidji Simo discussed personalization KPIs and Emily Maher talked about cash flow fluctuations due to retailer payments and category launches.

Q: Jason Helfstein from Oppenheimer asked about advertising acceleration.

A: Fidji Simo said it's a combination of continued performance, diversification, and scale initiatives.

Q: Michael Morton from MoffettNathanson asked about affordability initiatives and small basket unit economics.

A: Fidji Simo discussed multipronged affordability efforts and Emily Maher talked about small basket unit economics focusing on customer needs and batch rates.

Q: Deepak Mathivanan from Cantor Fitzgerald asked about agentic world impact and delivery growth.

A: Fidji Simo talked about integrating with agents and delivery growth driven by underpenetrated grocery market and retailer investments.

Q: Miles Christopher Jakubiak on behalf of Justin Patterson asked about Instacart+ adoption and Costco partnership.

A: Fidji Simo discussed deep retailer integrations and Emily Maher talked about Instacart+ member growth and engagement.