Maplebear Inc. Q3 FY2024 earnings call

• Retailer Integration: Deep integrations with retailers are crucial, with 150 new features built with Sprouts over 1.5 years. AI investments and technology leadership are emphasized, including the addition of Anirban Kundu as Chief Technology Officer.
• Caper Deployments: Broaden deployments across over a dozen grocers, with piloting in different markets to refine best practices.
• Restaurants on Platform: Promising early results since June launch, with potential to build a flywheel between restaurants and groceries.
• Ad Diversification: Working to diversify ad demand and supply, with strength seen in emerging brands, and investments in ad formats and measurement capabilities.
• Omnichannel Focus: Caper and in-store technologies present a large opportunity, as 87% of the grocery industry is still offline.

In Q3 2024, Instacart saw GTV growth of 11% year-over-year, driven by 10% orders growth and 1% average order value growth. Advertising and other revenue grew 11% year-over-year. Adjusted EBITDA was $227 million, up 39% year-over-year, and operating cash flow was $185 million, up 67% year-over-year. For Q4, GTV is guided to be between $8.5 billion and $8.65 billion (8%-10% year-over-year growth), and adjusted EBITDA is guided to $230 million to $240 million. The company repurchased $357 million worth of shares in Q3, with cumulative repurchases over $1.4 billion for 47 million shares at a weighted average price of $30.27. As of September 30th, there was $68 million of buyback capacity, and a $250 million increase to the buyback program was authorized.

• Q4 GTV is expected to be between $8.5 billion and $8.65 billion, representing 8%-10% year-over-year growth.
• Q4 adjusted EBITDA is guided to $230 million to $240 million.
• Share buyback program has a $250 million increase authorized, with $68 million buyback capacity as of September 30th.
• SBC is expected to normalize after lapping the IPO quarter, with a step-up in SBC starting in every Q2 due to annual equity refresh grants.

• Market competition and integration challenges with retailers, as some integrations are operationally heavy and take time.
• Dependence on successful execution of new initiatives like Caper and restaurant integration to drive growth.

Q: Eric Sheridan from Goldman Sachs asked about how technology investments feed into supplier relationships and 2025 strategic priorities.

A: Fidji Simo mentioned that deep integration with retailers is key, investing in new services and a technology platform, with 2025 focus on efficiencies, restaurants, marketing, and in-store technologies.

Q: Ron Josey from Citi inquired about how affordability is driving order growth.

A: Fidji Simo discussed integrations with grocers into loyalty programs, EBT SNAP, Flyers, and the Super Saver option, contributing to a 18% year-over-year increase in savings per order.

Q: Sebastian Colin from Baird asked about the balance between Enterprise and Marketplace and retail media standards.

A: Fidji Simo stated both segments are strong, omnichannel is valuable, and Instacart is pioneering retail media standards with MRC accreditation and DoubleVerify work.

Q: Ross Sandler from Barclays questioned retailers not adding features and the impact of non-exclusive growth on transaction take rate.

A: Fidji Simo said retailers have a mix of integration paces, not pushback, and Emily Reuter discussed non-exclusive growth and the complexity of transaction revenue.

Q: Justin Post from Bank of America asked about headcount and 2025 investments.

A: Emily Reuter said headcount is managed, with re-adding in strategic areas like Caper and ad sales, focusing on technology stack, affordability, and the ad platform.

Q: Jason Helfstein from Oppenheimer asked about the reasoning behind the slower Q4 GTV guidance.

A: Fidji Simo noted strong consumer demand but Q4 comp affected by holiday season, incentive spend, and Ahold Delhaize outage.

Q: Brian Nowak from Morgan Stanley asked about shopper growth and ad innovations.

A: Fidji Simo talked about efficient shopper utilization and high tenure, with new ad formats like shoppable recipes driving growth; Emily Reuter discussed marketing fungibility.

Q: Doug Anmuth from JPMorgan asked about Q4 EBITDA margins and restaurant contribution.

A: Emily Reuter spoke about Q4 EBITDA dynamics, and Fidji Simo discussed how the restaurant use case drives stickiness and larger baskets.

Q: Nikhil Devnani from Bernstein asked about GTV growth durability and marketing lean-in.

A: Fidji Simo spoke about sustainable growth from efficiencies and investments, and Emily Reuter discussed marketing fungibility.

Q: Shweta Khajuria from Wolfe Research asked about retailer service adoption and price parity.

A: Fidji Simo talked about service variety matching retailer strategies, progress on EBT SNAP and pickup, and price parity through value services.

Q: Andrew Boone from JMP Securities asked about Caper carts and Instacart business for SMBs.

A: Fidji Simo discussed Caper scaling and operational heavy lifting, and Instacart business scaling to SMBs with technology.

Q: Ross Compton from Macquarie asked about Carrot Ads competition and the supply side.

A: Fidji Simo spoke about Carrot Ads' virtuous flywheel, competitive advantage with ad demand and technology, and growth in partners and retail banners