CART - Earnings call 3 2023 | Instacart (Maplebear Inc.)

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Operator

Good day, and thank you for standing by. Welcome to Instacart's Third Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Rebecca Yoshiyama, VP of Investor Relations. Please go ahead.

Rebecca Yoshiyama

welcome Instacart's and Earnings Quarter Gigi, Call. you, everyone, Third to XXXX Thank

with Fidji Officer. today Executive the me On call are Nick our Officer; Giovanni, Simo, Chief Financial and Chief our

for Shortly, open we up call will live the questions.

opportunities and today's industry XXXX to business potential related future financial and and including results plans forward-looking QX trends, regarding financial performance our our future and call, expectations we operating strategy, and repurchases. During and make prospects, statements market targets, will business and full share profitability, year

These are cause statements. statements anticipated materially subject forward-looking uncertainties, to these which actual from risks could by differ and results to those

XXXX, You can XX-Q for in quarter our public in our the our ended find uncertainties the initial that XXXX, September with information XX, more offering file filed risks SEC we and and perspectives SEC. the will for these Form financial with XX, about September on

except the assume obligation today's to update these after statements by as call, We required no law.

also financial substitute for be results. discuss from a considered as In not addition, or certain in should non-GAAP we measures. financial our have and non-GAAP will isolation limitations measures These GAAP

can a Relations found As these non-GAAP which and measures on located between in letter, shareholder our GAAP is Investor website. our financial reconciliation be

and This in our Investor for a will conference Relations few being call audio is webcasted website available be replay on hours.

Now I'll turn for over to remarks. the call opening Fidji

Fidji Simo

call. you hi, of quarter welcome hope shareholder our very to earnings lots which our and public people to includes our and information Rebecca, everyone, our you, third had I letter, a read results. Thank first about all chance for

challenges technologies array that we have years, wide investing in can complex grocery. a solve than purpose-built in of more XX For been

of and platforms clear winning leader grocery quality, among convenience. value We selection, online a in are the digital-first with combination

size customers time, our the retailer Our mention strengths our not from the our our increased healthy and of orders, of business: experience and and over unit are breadth quality accuracy our order integrations, frequency of baskets, spend economics. the across our depth the the of evident to

better massive significant our every XX,XXX a with have getting A of the across with X,XXX we grocery than unmatched collectively day locations more are retail XX% deep partners. is represent that with single We selection more market. banners and more retail integration every U.S. head order. start partner We than than and advantage

putting For us, than entire across it's their strategic catalog It's transformation. about their more about partners just becoming online. our digital partner

businesses. and For brick-and-mortar build more. pickup power We many our storefronts we example, operations so retail stores and at e-commerce and much support

has an our cases. Another use advantage us people is Instacart become and shop the base. of customers' important lives weekly part point our where for other to highly many customer engaged on their grocery count

and $XXX which element On month. advantage, a massive a more from active our with in scale our unlocking and which looking monthly When year in this And average, to means $XXX orders XXXX, cohort spend by profitable a economics to spent next at month our a key per along XXXX annual is start on $XXX unit order, groceries. spent X.Xx is Instacart customers X.Xx X. month year they X, our order using month by data average, a than

unique once the you way fulfillment and you much Over experience unlock that minimizing data the needed algorithms more we gives This that than to that us shopper and our efficiencies only improve unlock the XX replacement XXX to finding and can million last orders. months, are to more. store allow batching while engine search best-in-class to our customer satisfaction grocery completed reach to inside scale, costs. in us turn, This, our technologies and and our from

advertising. Finally,

run at operates $XXX nearly a rate revenue million other today. and advertising Our

to new and connect to to with better our existing for brands drive working ads results of for out generating stakeholders effective continue for their As all and scale our locations. we're also consumers more creating sales we ways our retailers business, more

to in and fees half we're much helps are orders profitably, more our lower charged maintain generally To fulfill delivery. customer this perspective, put the because retailer as us fees percentage in as fees And about advertising able restaurant of as GTV. a

All advantages vastly experience explain superior. of these Instacart why the remains

baskets leader on than Based to over $XX. and than be the continue share we data, third-party online of more digital-first more large XX% of baskets share grocery XX% clear platforms in among with $XX small under

to basket than large-basket onboarded leads closely new to $XX large a the these approximately When our new These we Once Xx our we in because more than are is platform, track customer well. multiples is all grocery, other customers players Xx customers X more grocery conversion likely than sits look new distinctions more of and to as of higher rate online quarters than online entrants higher. customer of and baskets at and critical profits small-basket activations in even large the higher activation activations above. of which a our are being GTV rate

While delivering operating several in We're business our macro on us up to this profitable flow. and things disciplined staying and our are much position ensure competitive period put can be advantages stronger. to to by strong headwinds, navigate come remain We growth. continues control managing earnings better focused impacted we cash the and we continue a relentlessly

allow buy competitive future in category and million believe to ingredients we approximately to largest transforming the further our repurchase similar but confident established will new grocery a I'm assets all teams on partners, our category on we to shareholders. expand and that Overall, And long-term shares. share will Today, of my $XXX cash time take have for growth our of online $X.X and I'm strategy, adoption. value long-term view world's the billion we we leadership. profitable have generate are back retail focused us executing advantages opportunistically program the of our recently unwavering

support your this being for with journey you on us. Thank and

turn over more of Nick Now financials. on an call the our I'll to provide to update

Nick Giovanni

and business quarter, a we Thank fundamentals solid continue delivered improve. our you, Fidji. to In QX,

results outlook. future provide our and color me our Now let a bit on QX more

of orders. improved compared and cohorts from GTV GTV year-over-year GTV growth QX. to improve with rate the declined, decline mature continued start a QX, In QX consecutive for but second quarter. I'll and collectively to our

largest remain and cohorts we've majority expect XXXX. growth the wanes impact COVID represent X% on and inflation customers GTV we to as of as be layered this the XXXX our the growth in to In AOV X% Our new QX, more growth to longer range orders continue XXXX and year-over-year no GTV total growth in of the year-over-year. XXXX of to by composition driven than

QX, with based quarters. the GTV seeing far are that trends past are is on to what on guidance in philosophy which we consistent the X will business we so happen in expect Our share the

not are that exceed. to We we guidance providing expect

Now on to transaction revenue.

X.X% QX. As transaction X.X% revenue as we a of in expect, we percent from QX saw to in rebound GTV

we QX, to a as of expect In GTV flat remain revenue percent transaction quarter-over-quarter.

a GTV. As of our to reminder, long-term X.X% for target revenue is transaction X.X%

Advertising for Other revenue. Now &

driven was expected, than higher in primarily and performance stronger spending QX Our back-to-school campaigns. much football by fall advertiser

In QX, we expect seasonality. grow Advertising with & to Other sequentially revenue

million advertising million We growth QX expect QX million revenue from $X to to roughly other $XX compared and sequential QX. $XX from of to QX and

aim an than a by on has basis other quarters, and ad much XX we the and higher basis XX XX for year-over-year annualized that approximately our As the basis. for points, points few to expanded investment that's rate reminder, past

in is XX due for result, And the & it rate less investment as against second expectation video periods. year-over-year points expand these largely of of the we shoppable our a few was as will half that This than display other ramp-up to still quarters, XXXX. the next and launches Ad comp shoppable basis

GTV. our XX.X% total profit XX.X% Ads of expansion long-term steady time, transaction towards continue is and our which Achieving GAAP Other bring revenue, to and GTV. target to for target long-term X% XX% to Other GTV our X% we of of to expect to to & Over for Ad & revenue, revenue revenue gross target would targets for X%

trends expect we as operating in would expenses, to GTV, in call following. percent to the saw persist generally a Turning QX we I QX adjusted but same of out the

QX if First, prepared the we will to And ops on onboarding. growth support second, long-term opportunities shopper see more adjusted spend typically sales right sequentially the in to adjusted seasonality in quarter. due marketing and throughout we and be to drive increases

is long-term X.X% for to operating X% adjusted Our expenses target of GTV.

EBITDA together, million. to $XXX range the This XXXX of expand XXXX. and $XXX $XXX million adjusted generated compared increase in we we million the year-over-year an million all QX to and is to in expect $XXX to a Putting the QX QX this we quarter-over-quarter generated

dilution It to and finally, also expect full demonstrates GTV. ongoing share return of adjusted remain year EBITDA target progress long-term towards of X% to our in on we XXXX. disciplined the profitability GAAP will X% to And

accelerated the already given method. awards steps lower several We stock-based related comp they but expense quarters dilution, for stock-based pre-IPO the and it take normalize compensation to expect expensed taken are manage using to have will to attribution

value We year, deducting are to even this to remain of grant equity on EBITDA year we and achieve each we which profitable being adjusted net is committed basis after this track position improving an on levels delivered the profitability. framework, Overall, to the growth return at to throughout fundamentals we in have believe GAAP to of expected XXXX. full we for year solid, profitability are us and year higher the our

the shareholders. to With the may Together grocery excited up to support with questions. like continue We're appreciate transformation you as about industry. our live partners, Operator, we that, can future it lead the digital believe we for and open of your begin. we'd

Operator

Goldman comes question Eric Sachs. from from Our first of Instructions] [Operator line the Sheridan

Eric Sheridan

be would big Maybe back question. go a asking that picture something if I can to

continue I'd the small positioning thoughts elements the large We of think to between to set asked grocery your investors love basket and about revisit you about opportunity broader competitive landscape. basket and your competitive how broader and by get online there. landscape broader size the

Fidji Simo

three Eric, even incredibly that more as and important the industry it's large I of the mentioned, profit. understand is of baskets I in to think quarter

in market small more more XX% leader than the XX% in of the basket, than share and We baskets. basket XX% are both large small large share category share in baskets, and

which their course by allowed that seeing years, use of with more built weekly an case we're $XX which has having are integration entire defensible what it available highest at this accuracy to quality, But people grocers basket incredibly making is over a uploading deep online business that very of the core highest to XX we by us and than the capture defensible. really really the selection shop, is have

is are grocery so is the we entrants. that, new for attractive obviously, And market what industry seeing an

what delivery do more focused are enter Xx to and we've to much have they to competition baskets. on new when than into customers a also from the baskets is that We ability greater ability ability large try and customers greater But market. we times we expect enter to seen more attract entrants that coming to large-basket X really market, small-basket that greater side, small convert especially continue restaurant

seeing are you means you basket strength we unit fulfillment really the you market. efficiencies. able because also more part It of more that's our large advertising in have have shine that that and have share strong are such that the economic And opportunities, to where of means a

Operator

line Our Colin next Baird. of from question Sebastian from the comes

Colin Sebastian

bigger stores picture good balance right to one I supply the the guess, balanced If there question with demand for side do focus? consumers also advertisers. your need how mean, me. that or sites think a those curious areas marketplace, more I'm and now? is and X area given I you from well shoppers are pretty Or side are multiple there's versus that in

Fidji Simo

you. Thank question. Great

will by one. I kind So go one of

healthy. On supply extremely the shopper is side,

on to cities, to list of recommend good seeing of of XX% that others our earning and have shoppers. to continue have and in opportunities. Instacart shoppers shoppers satisfaction We we our high paying, shop are saying would that offers many a Instacart we wait

side, that good. on we very So feel

the side, On we stores on XX,XXX the have retailer platform.

the selection tail of the We the still have very grow here. market, more on to room a advantage the We attracting market. long of rest have big

already. But lot of we have certainly a supply

We have on XX% of the Instacart. market represented

like perspective, And offering stores. so our more of seen pick roll and number up, that like everything convenience, years expanding integration deepening is rather everything's out than growth to services like with going just SNAP, us of have virtual I from in from last you grocers come think more couple

there what we're with On have X,XXX the number on to that is That that grow. Instacart. continues already isn't that the the brands seeing sells we really And on any ad-scale advertiser isn't advertisers platform. platform side, advertising

them emerging brands, So of more advertisers rate by to from in show a platform. part, the of deepening here continuing value also is attract again, the the lot game our the but big to continuing investment

This XX% for last only most the actually is that think for we penetrated where side growth. have left consumer industry is online. because that the I an I room is still

adoption. are so customer what accelerating incentives And lot in our some really a terms of and marketing of in you're and sales and of towards focus geared online investment seeing

clear consumer a we leader, of that handle the was we to that. responsibility to as If be all would marketplace. with see of category demand demand our more to And able come, do more sides it -- our other as

the most thing so really on. focused And we're that's

Operator

Our Devnani next question comes from from the line of Bernstein. Nikhil

Nikhil Devnani

mean the scale, potentially partners step even think their and just on bring Congrats of the I about positioning also for in-house even them the process? you Instacart large ambition other of When over do about minimize sure your grocery risk you to solution have time. partners, use in that more some largest that? back IPO. partners to the how to you're some both yourself or of integral the do how think And economics and these you of retaining positive make

Fidji Simo

even total And sales. teens. sales with we larger of a represent when partners, in think the partners represent large the can X% that we our very our for the So number. of be That's low about that you percentage

strategic And with integrated already business. our deeply so we a partner are

idea this out to mentioned to us million partners scale do unit their economics. of orders positive able will that the XXX it were that I You own. took having to get before on we call

So only but not and business profitably matters enormously deliver efficiently. order scale at this scale to in also

to which offering a P&L, their drive as service we is of And they is both efficient, but the large after as to are affordable allows us also them we growth. year know you're and keep for partnering most their choosing partners us them the with are own possible with customers, our seeing so our the all because relationship service year, for reason that continue efficient does

strong and And that, so focus why advantage and the us you for very that's we competitive because to see fulfillment efficiencies our feel good are know we about very is this come service. continuing reason to on that partners us a

Operator

from next JPMorgan. from the Doug question of Anmuth comes Our line

Douglas Anmuth

see if to more You you indicated that spend sales growth. be to right the marketing on long-term prepared you'd opportunities drive and

change XQ, growth any Just thinking in recent returns those your and offset and talk you'll could curious ad how impacts? to then about if to perhaps as XQ the that represents about some bit think any secondly, you shoppable shift kind dynamics just of the or And the of threshold. slower then in there of you're how more you work lapping a little kind launches

Nick Giovanni

the for Doug. Thanks questions,

sales and no philosophy. change on First, marketing, to our

new that high and we have see we so lifetime opportunity ability to to attract as [ continue MTV . do the customers We the the acquire where invest as customers see and value, a we'll ] grow long to

wanted has consistent opportunities, out there we those so call And to lead been in no change. and We will remain more us spending with philosophy QX. just that might to we see that as that

call that our relates in QX. And expectations of to is the we wanted for QX there's out in business, generate as ads revenue to ad what no change we'll the level it and in of But sequential exceptionally strong expect we be the that wanted that to to QX to outperformance QX was as the point because we QX. didn't QX increase out strong and from

we'll I'll to to ads it business to track], talk long-term turn get the what in to growth relates about over back the on it advertising [ business. the As Fidji do

Fidji Simo

Yes.

current long-term getting One In to of spend levers. out from format. and essentially roll to there terms is advertisers growth, innovations that are in X comes of terms more, continuing our

out rolling So to and Stock to and continue that. Save Continue video, that. and We've rolled innovate we And lift to expand capabilities. up more shoppable and display sales Plan also out in out rolled to addition measurement

to in offer. lever which more percentage what to on Instacart. emerging spend measurable general of get is very emerging as want a We because we more second that brands see is The GTV solutions, to brands they advertise tend

give have even care, tend further. of examples, rest I'll personal that third is categories pets higher of investment have The a than much the couple selection. alcohol, to high a investment penetrating you rate lever rate the

available we Carrot in this but Ads, that the actually properties ads of retail some and raise through make on owned And a can with media so will own Roku. off-site entire fourth where Trade and our well launches take that investment rate. retailers continuing to we lever as Desk And recent they their on the as deepen operated penetration our online our in then create or business naturally investment platform, announced we've smaller category so a is it

Operator

comes the from question Sandler next Ross of line from Our Barclays.

Ross Sandler

housekeeping. big more and just picture a Great. Fidji, one of question, Nick then

picture on So the of big is the advertising. topic

that market, moving One of while heard the exists it's there's tension from is that that your you the nice great, more we questions your larger vendor during dollars in IPO natural are the retail the ad grocery guys was differentiator partners. get, away the business and a a

on that the the this X.X% last to versus topic? a address then, take quarter-on-quarter. little And improvement nice you is that would transaction primary uptick were Nick, of -- how What quarter? So rate, drivers

Fidji Simo

Thanks, Ross.

to as So two just ad we of it have you are parts their from and what mentioned grocers that with example, available that they built is sales others. for benefit done media and on business a everything retail -- to owned property, Carrot can technology, all we've so we Sprouts, address operated mentioned. of One how ads, on. I We've create and making with ads taken on our

partners. business completely growth which that's our a win retail so the And of we ad align with

having return, dollars seeing because our that spend in to these room this and with really go ad of starting to second finite there demonstrate we of question budget. is actually that But online, what are grow performance actually they dollars is that A seeing there budget. than we're advertising your trade are is channel trade to to unlock implies media that retail CPGs With are that, part because to able that general. more off to because are that

measurable of the media in are industry, If that case certainly platforms as and at e-comm e-commerce, now advertising. look retail been making you advertising advertising as the that's the rest

in advertising, is to trends CPG We see similar really which are starting promising.

Nick Giovanni

your XX about Year-over-year, Yes, question, that in fulfillment that we improvement on reinvested XX then into pleased really basis the point we efficiencies were QX we quarter. saw transaction because not onetime And points retailer items basis customer in that improvement occurred of incentives. in we a basis points QX. did the about saw with second recur quarter-over-quarter, in And revenue were in Ross. by XX about revenue offset

Operator

MoffettNathanson. of next question from from line comes Morton Michael Our the

Michael Morton

I'm lot of advertising questions. sure you're going get to a

a your about at bit see what up learn follow had the to sorry you about the would large cards incrementality. a of talking Also So for perfect system that. I incrementality. That enterprise? seems for with in-store presentation be to But big and guys measure you product question kind closed-loop great ability the grocery the shop the love more shopping your inning in CPG transactions right, on little to for and advertising brands, to

ad would I So kind to unlimited future from unlocking on your to budgets And fixed of the of going just kind it more that becomes thoughts allows to forward as into makes hear in if you measurement, sense. that. ROAS love that ad budgets theory, go if

Fidji Simo

Yes.

sales also XX% is Toms, look list but showing really has average like sales As were quarter, we that And lift, a gives the more I at strong a advertising released on rolling of Sauce out optimization for measurement where Instacart journey Bitchin brands. measuring if see case rolled very specifically. And strong. you fact, been we or during studies, mentioned, on studies capabilities, focused meaningful is last more initially, And you which really on two measurement you just more really capabilities. in years the which self-lift ROAS, our ROAS, for we out

and that continue measurement to they formats brands, be And look the you're more continuing to to out the trend increased lift should ultimate at more measurement so of invest investment and that more because more seeing. sales decide and that should to roll we're

strength We longer-term Carts of can about this Caper the you really bring longer-term for and deploying store have You personalized, about and mentioned blend solution. very partners to vision, excited opportunity best very the us, in-store. believe on the online advertising and off-line. Obviously, of that future well. best advertising Carts which over screen debt And it but that especially something because is brand dynamic we of of in-store the online Caper a our and think all take as part provides very a are to we're of do really a it excited the great of very measurable, as

Operator

of question next Our Josey line Ron from from comes the Citi.

Ronald Josey

quite about And the partners. about I I technology think a continues letter, to with your two. the found, talked bit have fill improve. spoke Fidji, you in you rates integration

the integration those us improvement. wanted Instacart. And but to better efficiencies partners, a driving that's within the more. Nick, your understand integration found, and fill little more talk about then, just Just a Maybe little rates not bit to what's with I more bit

investment you mentioned sequential a sequentially. I XX in customer think incentives bps

the going talk perhaps just forward. on us results incentives incentive to about Just those seeing spend you're on and

Fidji Simo

Ron.

beginning that on that So, learning the fill pandemic. partners with to deep at improve of found to as quality. result very and rates and the a That well machine rates found the and highest of of AI fill rate since we've both are level of rates, deployed integration as continue we now a lot very excited is

much sometimes or So on couple their which XXX,XXX in the hand whether products allows with to in data just loop. shoppers and understand improve greatest a capturing shopper, we better on that their some in some do be data have which what's partners have operations, is partners inventory predict balance helps give thanks better store are our that train really partners data data on on shelf operations of retailers virtuous to store their can our a us a and the going integrations fact, improve is brand them to our that on because wonderful the our this use we you themselves. And shelf. basically know passing we what's XX,XXX better some to on shelf compliment we And to this algorithms so basis of retailers and stores what examples, the daily, to is grocery the addition that, like include shelves. But hourly of not, their us to

And mention XX% speaks have is that scale last alone really on includes satisfaction rates so we we that QX again, million our replacements the is we replacement the not a and that, one feedback learning that improve best from quality industry have just the then replacements. good good fuel like with machine find time. And data what that in a XX versus much replacements. thing to all based we and users over means we constantly fact in made that of about the I'll have And that can so the on have accumulated those through

So to still, of we want are improve. We we points but proud we the to continue there, very every still provide. of basis quality go after level

Nick Giovanni

to for framework we're that the use because where framework our use basis of points which for incentives them the some service more referrals pass to can in as target were our incentives, And part can that gains to generate users And on transaction have into to we time. suggested is customer XX we your those second roughly just affordable, incentives and clarify, I question, year-over-year, saw been or points not efficiency XX resurrect incentives, that Ron, invest for new based savings about like types, We then reinvested to X-year flat. where specific consumer looking we to we paid that revenue, is of active plan about guardrails. around basis of example, behavior coupons we LTV we what on incentives marketing was in make similar we back on customers. Quarter-over-quarter, to activations the

Operator

from of the comes next Our Jason from Helfstein Oppenheimer. question line

Jason Helfstein

leaning or of Instacart And color about the on from based growth as any kind Plus, customer you've or ask into in not been been kind quarter? that's I gone that how more into seeing you conversion? Can rates what have then to of that

a I mean that scaled? fits integration. just us stack? it your could into understand follow-up ad And then kind Just Trade the advertising, once secondly, meaningful where of Desk how be that on help

Fidji Simo

I'll maybe Nick Plus. and will in take Trade take Desk the then

combination term, we programmatic larger about we're advertising have Desk. in data don't way using around short been it first-party driver how on that something is expect buy see the integration about. is Instacart partnership. a It be it the our the partners the is series with -- of that a to material everyone, to for in the have scaling off-site on vision Trade So to to Desk -- time It see Trade a brand revenue. We Desk, another points the would context Trade of lot for excited we asking This continue say use partnership plan building through that a to and advertising. But to goes. off-site of to over want I are a

Nick Giovanni

activity continue in in [ platform. do on mail strength see to Plus, did with of penetration, we Instacart Plus growth ongoing And orders and disclose now metrics growth June per trending we Instacart paid subscribers. which million and as X.X had the represent related Plus ] million to Instacart X.X of that I'll a not We line continues but S-X, to our basis, more comment these than on quarterly half

Operator

the from question Post Our of America. Bank next line Justin of from comes

Justin Post

questions. Two Great.

And you're drivers existing term. First, transaction could the long both in and Could kind deepening the talk on X.X% out partners. grocery mentioned more you maybe take importantly, or of upper the you take for you feel talk both the XX as at that you a the range little rates then maybe the months, half next year? rates? positive for pipeline, Nick, you relationships next about the about maybe negative new about bit of the look partners do over How with

Fidji Simo

Yes.

out. we ones including of Giant of Eagle to roll this very we relationship, So have lines new as business on in partners, And excited the several quarter, to grocery saw that continue about. probably large of letter, shareholder continue you the we're onboard like deepening which we pipeline, in terms

virtual with websites operated to about continuing out starting for and with and also for saw, we're Hy-Vee. our partners partners, You to businesses example, continuing out the convenience power the in example, own which Kroger, roll Wakefern, like, roll delivery [ us ] to of like quarter pickup for excited and powering

partners over continue expect And for and SNAP next are have as the out our just come BJ's. doing SNAP. kind of out. I which SNAP, we roll that work and the about being on new we And continuing in to flavor mention that that future of we very us a of do we and businesses fundamentally expect of these the lines to us back to recently to announced is good a forgot for type compelling roll partners being feeling quarters tailwind so with this few continue to to

that more business year a with for to As headwind tailwind know, been we partners. of benefits we onboard back being as new the by XX%, has cut you but it a SNAP expect this being go to

Nick Giovanni

relates it transaction because revenue, related our is revenue number efficiencies per order us the we time. to increase means it less to orders GTV shopping as driver for shopper has been percent in same cost the increase a of which that have at the ability largest batching, historically of And a the as to can the transaction of

that customers. a to product we the other they We into to but to efficiencies like No new give to see increase incentives, just window that deliver we but Rush and X-hour We a flow it delivery we've on orders offerings offering that through groceries, allows And our to customer into consumer their and expect it a and save new an for fee rate new to in we for and the invest turned cost, service have discussed. us as opportunity ]. no reinvest is service batching, us we of No if a money batch those reduce continue all Rush it, don't times, sometimes line. into bottom reinvest [

product through our to we'll along is range X.X%, incentives efficiencies. new offerings at We're So long-term and balance with continue X.X%. growth to X.X% and

Operator

JMP question line Securities. from of Andrew the next Our from Boone comes

Andrew Boone

ask in-store on are grocers grocery How there? you about there progress delivery then discussions And can elasticity. grocers? those to thoughts you wanted that any I is as that Is guys making going share with offering have fees? you

Nick Giovanni

Could The line you question? a cut repeat bit. the second out

Andrew Boone

Yes.

component? that do about guys guys I see the think how moving that about What delivery are how you that. you then about grocers on you Sorry do is, ask level? question wanted really that? seeing And from in-store elasticity. And fees, right? grocery on guys towards to are What consumers

Fidji Simo

answer then by may and Okay. clarify the fees. in-store you first to you I'll want mean I what to question, ask

ever basically, inflation the what of all is much last On more pretty the the of year, since delivery middle price segments become we've customers of rise sensitive. seen of kind elasticity, grocery that have in

price some there who convenience for $X delivery, called are prioritize those, price. priority minutes. for which value have value end that people like within we who you we just where have However, deliveries than And other spectrum, over Nick delivered them, the over people like charge extra convenience. them, still over we -- are an offering on No of covered. who for in And options have Meanwhile, Rush less price the XX delivery

in if that really, that have total lot terms put align And so market. And of fees addressable entire income, programs mostly couple more we've offerings loyalty we're ago closely trying our our brought a all to in what U.S. that deals with platform by price table. being onto brands grocers, with of the whether of place coming high-income it's customers do have is a population scale from on affordability of years of convenience affordability, really you now demographics for because at from needs to to look integration they the to or the the everything the pretty of went mirroring kind

curious mean as.. to I'm you do same grocers by Now Are by that, price like -- field? you what moving in-store meant you

Andrew Boone

dispatched Yes, I mean in-store.

that. Sorry about

Fidji Simo

it makes lot Yes, of a sense.

that are therefore embrace in because omnichannel and therefore, grocers the embrace online we value grocers out we an we of omnichannel are to that gain same of giving largest customer And the coming the price years. And poised the what think parity spend banners than is in-store-only X,XXX X offline that price of of do Xx the as X rest to they with that the parity on So that our are XXX grocers growing an an story is of as grocers strategy our for retail much as do. will customer encourage something faster highly are this seeing at And platform, to share platform. with at store. the them are the

a they continue them match tools prices Instacart, to acquired pricing which last give store. don't is and price Eversight a the to we to but Now same we control encourage like on year company do, as optimize we certainly them

Operator

Bernie line McTernan Company. of Our next from from the & comes question Needham

Bernard McTernan

inventory well? percentage smaller first the you ones? to start, customers basket to the to that exclusive? purchasing just data Or time previous baskets it from come Maybe customers. on generally AOV Is question, to with broader? as a think then larger follow-up What could that on And integrations is Instacart larger smaller time conversion is Or with retailers. access follow-up versus competitors of have the access just talk for the data enterprise baskets your over where question just And partners? do to another it you of the have

Fidji Simo

would I as inventory as to retailers of depth lot don't really partners with That to that said, have possible. of have many So these like the we on sophistication a try the being say integration. integrations data, have

more point-of-sale fill them, CRM it's with us who would goes or really our really with our into in varies geared checkout. on competitors and like things. competitive retailer just lead that we a you with so gives strong combination the rate tends time. And system a system can with also shelves more to that data to reiterate I integrated from data found do towards access say, system, said a earlier, real have say in lot like integration to much lot our much advantage. with would mentioned system similar comes with to than retailer bypass get it and it retailers deeper fact retailer I time. So combining our OMS inventory that enterprise. But be shopper the of and access what's one rate -- have just of it What I the

take resources, of And retailers and focused enormous the so have just for these all grocery who especially deep very of IT XX having a integrations on years. we last limited time, with for advantage such have amounts why that's

or to you of of do We or XX that? Nick, data points these ML, millions all to of second orders want On contribute superior over experience. AI through an also years â€“ hundreds and your have us take having question, a such

Nick Giovanni

Sure.

comes Just North you of to baskets. a in grocery framework, give large from spend XX% America

it's that we're the that grocery we and online critical of serve that an service best case, we think And can that. believe use so

our If online you their baskets fill-in are of market but are players large a were the important, as weekly with a baskets that shares also at to use shop, doing as greater to too, customers way activate service. share look small but than case first XX% and for those

our activations X don't the down but share of point And We those tiers, that XX% those of on we do we mix our break large than than based basket have data, small than entrants. greater in baskets. third-party out activation convert basket as is higher activations new are our higher and more more new entrants compared to well to than a other Xx ability Xx

Operator

the from comes question Piper next from Benjamin Our Sandler. Johnson of line

Benjamin Johnson

wondering just was you about over during on you progress talk made run? to the long shopper quality the order increased matching if increased with efficiency I could balance quarter plan and the you how

Nick Giovanni

making quality that as we So and higher quality than while and able order our certainly continue the And introductory since been consistently. mega highest it's reached our scale. it's so is that we've improve prepandemic since remarks, high, the we've we to see been that rate, Fidji that in remains we've mentioned order sure done been do batch to

the our about make make to X that keep our and to We consumers balancing for sure sure For of that fees we we grocers. all low great earn sides shoppers us, want opportunities it's for provide our for to and marketplace. also

we is scale. to able for And so It's very truly differentiator key that significant unlock reach once us. were a something we batching

incredibly batching to we As of at And that's have, a have result replicate. basket in is time. same the difficult same the the number not of we of orders it's result the density of big that the the reminder, store shoppers that's something

see will -- service offerings and incentives some consumer And create basis. into balance those we'll of ongoing we to and continue batching new we'll Rush. we efficiencies, reinvest do an on No like As

Operator

from Deepak Research. from Our Mathivanan Wolfe question comes next the line of

Deepak Mathivanan

big One on question picture exclusives. and another one

into acceleration? digits. initiatives of So at level, growth any it as that a notable on could sort kind ahead would look Or help beyond mid-single you can potential about XXXX, a more Is macro currently you factors XQ high that can rate are talk factors? from drive say we that there of the few GTV dependent

one, talk exclusives exclusive you of second investment lots the can a retail There you exclusives. of the then agreements update in you And us in concern that with community of have partners. is could the prop about some some these give in what the on term. lost Could line value your the and near hurt an time when you past happened maybe the

Fidji Simo

that to is some accelerate convenience. us to One on we're QX. continue going affordability, to off, the well, from continuing continue GTV, to selection, So up. of recipe is reaccelerating provide we of leader to into is are see QX to has forth. the twofold. of quality, to of on to QX made some easing This going first pleased QX, reacceleration so is also What to This that category push factors growth what but do macro

stabilize. two continuing there our so And to can help mature cohorts things one is that

are versus in pleased QX HX. single in XXXX we double mentioned, Nick decreased see As digits to that digits the XXXX, cohort

that would us. And certainly of help stabilization some so seeing

fact year the this is XX%. were The by second cut that thing of that headwind big is the part benefits SNAP

in business being to back That SNAP to the we pioneer as certainly a online. were as this a more we continue a been year, bringing our because to year grocers tailwind to has expect We saw headwind but tailwind go a on SNAP SNAP SNAP. next program we onboard to

that So to will help. continue

terms Exclusive, we competitive service of most exclusivity the at and best Growth our offer I with Now the your strategy. is best clear because want with has in be prices question partnered to the that not quality. on us

very is that something our is to strategy. fundamental this so And

relationship exclusive continue with drive we on them. us grow leave can on us. gone with most has because retailers is, for decide that us our they their growth They sit this multiple But when to the first, these to also just the deepen and happens growth are what don't business. marketplaces, and Now partner diversify

nonexclusive, then interesting one they're that it electing And us. elect to that with finally, is get when higher to be means that's fees to thing retailers

partner revenue grow our and So going from nonexclusive. profitability this to actually can continue

Operator

of Stifel. Kelley from the Our Mark comes line next question from

Mark Kelley

quick ones. two Great. had just I

know what I partners incremental that time. add When outside there announcements really the at Desk Trade with over Trade partners some off-site, DSP allocation capital like Does priorities you the the an business? sense your can that side. advertising remind are? and in the to Desk other see the is back have third-party companies. for the And aimed a going just like verification more And the one just please to API like make buyback demand us the Trade of but of APIs, second, is is place, you Desk just maybe with first opportunity the already I larger-scale quick, The

Fidji Simo

scale Trade really makes space. maintains out how a the privately partnership of extremely on of safe is Mark, our also that ad value Desk beginning just with data. we us really in figure trying what to Instacart the side, to special the the of opportunity terms way now, off-site this I and entering that we're for ad as think see in

that value to to Nick, partners we explore more more data opportunities So to at beyond to take you announce our brand want use business the the owned properties. something do want significant very to definitely of and believe grow nothing but we buyback? our to time, continuing are that as continue is this

Nick Giovanni

On on allocation. capital question your

innovate than business R&D and partners to of marketing to as grow our cash our reminder, have partners. the business more invest to $X.X our we we billion in currently. continues The and of to sales produce business in cash Just and and a continue support significantly

it's and opportunistically sure look capital. an those not it's make stewards -- shares it's to of not so or, are great things we also and. do an repurchase And We can to that shareholder and

Operator

call. conference participating. Thank Thank today's you. This for you concludes

You may now disconnect.

Instacart (CART) 8 Nov 232023 Q3 Earnings call transcript