Instacart (Maplebear Inc.) (CART) Earnings

Management highlights

- **Marketplace Customer Experience & Innovation** * 16 consecutive quarters of YoY improvement in found rate and perfect order fill rate, boosting customer retention * Launched tests of personalized health tags, nutrition scores, and dietary preference-aligned replacement recommendations to improve personalization * Acquired Arpalus in July 2026 for its computer vision shelf inventory technology, which will combine with Instacart's 600,000-shopper network to improve fulfillment efficiency and inventory intelligence * AI-powered agentic grocery shopping assistant is in pilot, with planned full North American launch in the coming weeks; pilot orders have larger average baskets than the already industry-leading $115 AOV * Leads North American third-party marketplaces in number of retailers offering no item price markups, with new partners including Grocery Outlet, Ace Hardware, Tractor Supply Company launching with no markups, driving faster growth and higher customer retention - **Enterprise Technology Platform Growth** * Launched Storefront Pro (e-commerce storefront solution) with new partners including Calgary Co-op and Dierbergs, with early performance exceeding expectations; existing Storefront Pro launches from Q1 2026 are also performing ahead of plan * Caper AI-powered smart carts continue to scale with U.S. partners Weis Markets and Wegmans, and new U.K. partner Morrisons * FoodStorm (order management system for catering, prepared foods, and perimeter departments) launched nationwide at Costco for custom cake and party platter ordering, with a chain-wide rollout signed at Big Y and a California rollout planned at Sprouts * Signed new AI enterprise partners including Stew Leonard's, The Save Mart Companies, and Woodman's for Agentic Analytics and white-label AI assistant * Expanded internationally: launched Storefront Pro with Costco in France and Spain (performance ahead of expectations), acquired Instaleap in Q2 2026 to expand global reach, and signed a new picking technology partnership with U.K. retailer Morrisons through Instaleap - **Advertising Ecosystem Expansion** * Rolled out AI-powered campaign and creative recommendations to all advertisers in the ad manager * Began testing the new "Grow Objective" to increase customer lifetime value via repeat purchases, and expanded the "Acquire Objective" to display ads to reach more new customers * Launched new shoppable vertical video Immersive Feed ad format for product discovery * Made self-service Instacart advertising on Pinterest available to all CPG partners, allowing advertisers to use Instacart first-party data and closed-loop measurement off-platform - **Financial & Capital Allocation Updates** * Grew adjusted EBITDA and operating cash flow YoY, reflecting a focus on profitable growth while reinvesting in the business * Generated $493 million in operating cash flow (up 143% YoY) and $480 million in free cash flow (up 156% YoY), driven by collection of large outstanding accounts receivable * Repurchased $325 million of shares in Q2, ending the quarter with $998 million of remaining buyback capacity, and remains on track to return the majority of 2026 free cash flow via share repurchases

Guidance

- For Q3 2026, Instacart expects GTV of $10.3 billion to $10.55 billion, with 14% YoY growth at the midpoint. GTV growth is expected to continue outpacing orders growth. - Q3 2026 adjusted EBITDA is expected to be $320 million to $340 billion, with 19% YoY growth at the midpoint. - Q3 2026 advertising and other revenue is expected to grow 15% to 18% YoY, outpacing projected GTV growth, reflecting broad-based strength across the ads ecosystem. - For full-year 2026, Instacart maintains its prior expectation that adjusted EBITDA will grow faster than GTV YoY, though the rate of expansion will moderate as the company reinvests in multiple growth engines and laps significant operating expense efficiencies realized in 2024 and 2025. - Starting with Q3 2026 guidance, Instacart widened its GTV and adjusted EBITDA guidance ranges to reflect its increased operating scale since IPO; going forward, the company expects to land within the provided guidance ranges, with the midpoint as management's best estimate of final results.

Segment performance

Instacart reports three core revenue streams, with total Q2 2026 revenue of $1.04 billion, up 14% year-over-year (YoY): 1. **Transaction Revenue**: $746 million, up 13% YoY. This segment accounts for 71.7% of total revenue, representing 7.2% of Gross Transaction Value (GTV), down slightly from 7.3% in Q2 2025 due to lower payment revenue, partially offset by higher fulfillment efficiency. 2. **Advertising and Other Revenue**: $297 million, up 16% YoY. This segment accounts for 28.3% of total revenue, representing 2.9% of GTV, up from 2.8% in Q2 2025. Growth outpaced GTV growth, driven by broad-based strength across large, mid-market, and emerging brands, with particularly strong performance late in the quarter tied to the World Cup. Key segment-level operating metrics: Total Q2 GTV was $10.35 billion, up 14% YoY, driven by 90.3 million orders (up 9% YoY) and an average order value (AOV) of $115 (up 4% YoY). GAAP gross profit totaled $751 million (up 11% YoY), GAAP operating expenses totaled $608 million, GAAP net income was $111 million (down 4% YoY), and adjusted EBITDA was $313 million (up 19% YoY).

Risks & headwinds

Forward-looking statements around business performance, growth plans, and strategic initiatives are subject to inherent risks and uncertainties that could cause actual results to differ materially from expectations, as detailed in Instacart's most recent SEC filings (including Form 10-K and Form 10-Q). No additional material risks or operational failures were discussed on the call.

Analyst Q&A

• Q: What is driving the recent 14% GTV growth acceleration, and how durable is this strength over the medium term? /

  A: Growth is driven by strong performance across both marketplace and enterprise segments. Instacart has achieved its fastest net new customer activation growth rate since 2022, while also deepening customer engagement. Ongoing product improvements to order accuracy, personalization, affordability, and AI experiences are driving marketplace momentum, while growing enterprise adoption from retailers for AI solutions, Storefront Pro, and other tools is also adding growth. Management is confident in the durability of this momentum. (294 characters)

• Q: How is the enterprise offering changing industry relationships, and how will it drive long-term monetization? /

  A: Enterprise enables deeper, long-term collaborative partnerships with retailers that improve customer experiences on both retailers' owned channels and Instacart's marketplace. Shared infrastructure lowers cost to serve for the entire platform, and increased order density improves operating efficiency. As enterprise and marketplace grow together, advertising monetization scales across both segments: more retail supply attracts more brand advertisers, and new services like AI solutions and FoodStorm add incremental monetization opportunities over time. (372 characters)

• Q: What are the early results from the AI shopping assistant, and how will ad monetization work within the AI experience? /

  A: The pilot has already shown that AI-placed orders have larger average baskets than the platform's already industry-leading $115 AOV. Management expects AI will drive higher conversion, customer retention, and ordering frequency over time, as it reduces friction for meal planning and reordering. AI is core to advertising innovation: AI-powered tools already improve campaign performance for advertisers, with features like automated performance recommendations, context-aware product suggestions, and new objectives to grow customer lifetime value. Management expects AI to continue driving advertising innovation. (412 characters)

• Q: Why did Instacart widen its guidance ranges, and does the change reflect added conservatism? /

  A: The change is not a sign of conservatism or higher expected variability. Instacart's operating scale has grown meaningfully since its IPO, and the original guidance ranges it adopted at IPO were no longer appropriate for its current size. The update simply resizes the guidance range to match current scale, and clarifies management's new guidance philosophy: after repeatedly beating the high end of prior ranges, going forward the company expects to land within the stated range, with the midpoint as its best estimate. (348 characters)

• Q: What is the strategic benefit of the Arpalus acquisition, and how does it improve Instacart's in-store inventory intelligence? /

  A: Arpalus's computer vision technology complements Instacart's existing inventory data advantage by giving shoppers tools to quickly and accurately capture what products are actually on store shelves. This will improve fulfillment accuracy, drive greater fulfillment efficiency, enable more relevant AI-powered shopping experiences, and further strengthen the proprietary inventory intelligence that is a core structural competitive advantage for Instacart's platform. (276 characters)