Instacart (CART) 13 Feb 242023 Q4 Earnings call transcript

Company Profile

Participants

Rebecca Yoshiyama	executive
Fidji Simo	executive
Nick Giovanni	executive
Douglas Anmuth	analyst
Ronald Josey	analyst
Justin Post	analyst
Eric Sheridan	analyst
Nikhil Devnani	analyst
Ross Sandler	analyst
Colin Sebastian	analyst
Jason Helfstein	analyst
Michael Morton	analyst
Andrew Boone	analyst
Mark Kelley	analyst
Deepak Mathivanan	analyst
Steven Fox	analyst
Mark Zgutowicz	analyst

Call transcript

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Operator

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

Rebecca Yoshiyama

welcome, Instacart's and Earnings Quarter Valerie, Call. you, everyone, Fourth to XXXX Thank

with Fidji Officer. today Executive the for me On call are open the Nick our live questions. will Officer; Giovanni, Simo, Chief we Financial Shortly, up call and Chief our

strategy, we regarding and subject QX and year financial performance today's and business those call, related potential our including uncertainties, these which results and anticipated actual materially results These risks are make full to will During and forward-looking share statements prospects, forward-looking to cause plans by future expectations statements statements. differ repurchases. our XXXX could to from

update You as risks filed these and after can today's Form required these We XX-Q about with last more find uncertainties the by in to assume law. statements call, information as except our SEC. obligation no

also financial non-GAAP measures between considered a in we'll found shareholder A GAAP measures. addition, not measures our is isolation results. have discuss on substitute from be certain which financial be non-GAAP and letter, Relations financial or GAAP as website. and Investor should our in non-GAAP These our can included In for these limitations reconciliation

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

Fidji Simo

up had and our solid category highlights QX results a Thanks, hope an also why letter, on stronger color for innovator set I even provided and to I hi, in shareholder Rebecca, top why read our everyone. leader XXXX. chance the you which we're online we're groceries. and

speed. Our product with ever been leading selection, experience the quality and has is best it

expanded in America. Whole EBT largest Canada. Marketplace Foods some selection and recently and also For These partnerships launched North Costco, grocers advantage our in out the rolled with Kroger our with deepen of we example, new and SNAP on we

found even speed and our We also QX, the fill faster the our a sixth more quality. order fulfillment row. rates we in quarter to same for batched orders. time, got at and increased speed improve And as In continued on

our and in resurrection, ways overhauled we deeper stronger habituation. engagements. in and an we've incentive more even systems consumer and years, with allows formula believe highly past marketing also deliberate for incentives correlated activations invest the Over This to more established are that us

As the term. our over value industry more and to for adoption partners us grocery will the generate accelerate online this leader, allow long

short, These higher marketing critical better enhancements from fourth with product any for generate makes all GTV deliver. we enabled us growth strong every deliver orders scale growth leadership and year-over-year smarter, we we to outlook orders. quality AOVs. advantages, other expect the majority contribute the where consecutive our investments with coming complete, our this In experience and to to This rather in player with quarter. reinvest allows accelerating replicate our be getting a and continues for And QX to the to which industry and it incredibly position cycle we're order even combined more by virtuous than hard

of small our and platforms XX% That's baskets $XX of increased XX% over with of of in than baskets to we continue more $XX. data, under digital-first XXXX, more on share share third-party Based sales amongst why we share in competitors. deepen over our QX than and lead large

over players ago, the transform on X years inventing technologies other X the problems that grocery busy solved While we're the work can years. industry we next

all years. help also We're while and further to new omnichannel, doing Carts. and long-term modernize of over relentless vast technologies profitable We're on brands targets. is and operations like exploring data the sets our to focus maintaining coming know ways which more leverage For our our unique retailers this growth their financial incredibly our future Caper why investing grocery that example, we're is we of the in

lay on off of initiatives we Asha, can so execs, team need to most order also bets, and streamline initiatives. more the reshape need focus members. we Today, streamline and also Varouj the create the we of decision our JJ, and to levers on with company us talented execute XXX we efficiently made are operate. to ambitious our taking most to autonomous we X departure approximately organization. how opportunity to Separately, flatter execute our our all the teams my our a for allow to Instacart with In management to This promising the more take they team of on critical will tough

to CTO new expect the roles. We will Chief do but be and COO backfill looking for a not Architect

more leaders with to Over look teams, execute am our forward focus enable confident getting point. years, these even forward roles I a with that thank all for to directly. whose this few that talents of moving especially want those this to more the were developed and I past impacted to will and of us have range efficiency working today strong us

XXXX. leadership delivered strong for incredibly the I'm time. will we XXXX, we on I support and and with an with being for over Overall, for an up set performance journey position more when of combined accelerating better have growth, you in proud Thank how your generate excited believe value even us. we're that, shareholder I'm this

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

Nick Giovanni

expanded In and future we support GTV new in XXXX accelerated a operations all Fidji. across transformational growth our investing our financials. once Thanks, was year profitability product, while to QX, growth. initiatives and again

Let QX with color me more and orders. on outlook, and our GTV results our future a bit starting provide

This high billion, of X% driven largely and In around end orders above of especially $X.X growth, stronger-than-expected up QX, by holidays. delivered guidance year-over-year we range. our GTV outperformance was the the

to start momentum positive Our strong QX results XXXX. us generated for

GTV expect our to GTV and quarter consecutive In growth. year-over-year XX% be fourth to representing X% of QX, growth billion, of accelerating $X.X $X billion we to

growth and X% is we the XXXX. factors, in QX due for year an we of both even in of year, QX, to after our QX the business expect delivered our in these compared typically and this day While leap seasonality, while encouraging strongest growth we benefit full for have accounting anticipated to step-up

of revenue 'XX. Now on QX in QX, QX was X.X% to X.X% compared and 'XX transaction revenue. In GTV transaction

While revenue expense. spend, contra habituation. instead and we to fulfillment will in found Incentives drive believe hits lead marketing better allow and stronger QX, marketing to continue we consumer invest target to us these resurrection acquisition, more customer of efficiencies we hit in to opportunities that behaviors incentives, which

GTV In be advertising in time GTV growth that remember before and to this our are revenue. QX, and it advertising will year-over-year, many our important in while by of other was for QX, and It's line revenue brand other other with to excited ad lags growth, largely so Next, revenue with And other revenue. expectations. year-over-year acceleration of growth our and line growth, take ad up we ongoing reflected X% expect ad in is partners 'XX. QX in for

adjusted Turning million. announced plan, to to anticipated we operating operating year restructuring operating as expect QX of we adjusted a leverage a to adjusted and not GTV decreasing they of future cash or savings outlays. they which because nature, the This of to impact the adjusted QX, the $XX we expense QX in as change charge are operating ongoing onetime not materially strong but operating compared in onetime On expect reinvest expenses our expenses. cost will do will growth. with a basis, restructuring result charge to X.X% Today, in expenses plan to in also our to an balance we X.X% percent result in We generated $XX 'XX. in million

QX, growth. and together, to this million. we incentives all includes $XXX seasonally investments of consumer lower adjusted million This Putting and advertising revenue long-term and drive expect to EBITDA marketing continued in outlook $XXX other in

both not absolute are as we EBITDA XXXX, year but GTV. do providing full percent terms the dollar we and adjusted expect For year-over-year specific increase a in of guidance, to

We EBITDA to basis net profitable approach equity dilution. value even also an equity grant adjusted year. it to comes remain to after disciplined deducting when remain on of we We committed each being our the

share to And digits we low XXXX, be any dilution expect repurchases. in single net before

and also flow. generate expect GAAP profitability operating to cash We positive deliver

We are repurchase million, share bringing an February share ability to confident execute, program of increased as approximately by $XXX additional repurchase is our to we capacity which $XXX why our X. our have million in

Thursday, XX, on we when market expires plan and lockup to February repurchase opportunistically Our the shares. opens

we in of our consecutive business growth strong, fundamentals quarters, for has fourth are guiding growth our quarter X and are consecutive Overall, accelerating QX. GTV accelerated to

we are up share both have platforms baskets. focused increased we're more small And on partners, leader, time. and shareholders may value the for Operator, our our in compared begin. and driving live and the teams we'll generate for to to open digital-first over large that, category questions. We you growth profitable With call

Operator

of from comes line the Anmuth Douglas of [Operator first JPMorgan. Instructions] question Our

Douglas Anmuth

maturation, basically the cohorts just having wanted I and little color a -- Nick, about impact on Perhaps, their as the on 'XX to about among order dynamics. contribution cohort you and trends could ask And how you that think the see just you provide business. 'XX the that's to how first growth.

Fidji Simo

X our mentioned, in a but less cohorts XX% as mature the GTV. we to now decline we've represent cohorts, our And continue has than for quarter, decline quarters as XXXX the and last So of XXXX reported row. improved

So encouraging. all of is that

this return we're We encouraged growth flat nor would get they fact improvement in after a we're would seeing the to third when by quarter to closely. that continuous pinpoint monitoring quarter cohort for to able are that we're not potentially when but very quarter the And row.

by continuing cohorts that to perform very new also well. we're encouraged continue that We're add to the fact

that of than pre new In we cohorts higher in pandemic cohort terms in fact, the XXXX GTV was XXXX. attracted the

to continue from both contributions mature get also the from we the but in And growth so cohorts. new cohorts

Operator

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

Ronald Josey

of about for talked total. bit minutes AOVs in us a even Fidji, or think or think more about to that's possible. guess less. do to in these little I those little Talk are less, question ask as one. as delivered minutes so we wanted frequent accounting or a I customers? think accounting about XX% are orders And are XX% total why lower for more orders think I letter, now priority bit XX now of many delivered you in orders And you fair the XX about when priority growing to more

on XQ. and to about there as but working. And the lap growth is maybe EBT hear also more -- expected drivers Would to love incentives tougher insights SNAP might in good interesting on to really we be hear GTV comps that then just the Nick, accelerate

Fidji Simo

Thanks, Ron.

order people order, really that is them order convenience, get and priority the growth the their the think priority in that priority we on allows groceries just that Instacart reflects So #X faster. delivered to reason use fact

there's lot can think do with Now we that we that. that a

because competitors service of testing our are We we so fast. levels are still well fees priority think fees below to a is offer our different that

continue that So with. that we're going something testing to is

and But are on that value is priority have of one that to that price And people want to you also value we spectrum. of on by some end options all the spectrum, that delivery. mean ends convenience what develop reinvest of who I over the

end On can all of options they options like so we other the invest these every that value And consumer on rush people most. want want find price to over convenience continue we who no what the value for in the spectrum, based Instacart delivery. on value to of

I kind we're customers, what very thing of from from of terms selection, value we would you store. for lot In about that their their these is say fast, from of how even deliver the the that a very of still mentioned delivering on entire unique orders entire grocers are that's

orders orders the And in in produce of assortment, full to lot having priority and the of the actually so a meat the similar look rest having them. of very terms

have as we spectrum. from long thing continuing And for perspective, think them everyone option to that on that can the good is grow as we so a

Nick Giovanni

guide, the new And broad-based. growth drivers It your as customers. step-up starts to QX about the relates are acquiring the question with it of

the grocery of we're Just stages online to early adoption as recall, leader. in the still

customers. attract to new many We continue

our QX to cohorts QX cohorts resurrect We also year-over-year QX in as QX. And to to from that's to engage and in mature decline improving better the see them led improvement able them. the we're mature to

the EBT -- You also see is experienced out headwind cut the EBT with not last one, of main SNAP. EBT end that called expected QX. SNAP favorable of with, SNAP benefits. is at about were drivers happened year. QX to we that in That the We the comps asked of

as a And expect thing mentioned benefit you Fidji done Kroger, until lap we recently. just drives that that to and year. so SNAP see secondly, we've and the is Costco EBT this And partners, with launching wouldn't other that new

not of business -- of expect the the but do can QX our EBT we that's start driver growth EBT grow, So base to a key guidance. that

Fidji Simo

customers on with we we question retain behavior. time you meat club so formula just think that. To I was right last and we that become the one know from Ron, touch what when want a the what And that you year last to driving we the start your you really had at us can target incentive retailer on massively quickly, when you to like our produce system retentive basket, more so incentives longer. drives right that which and evolve know right overhauled the you in give to and the I -- examples, add is you buying you're with that some retentive habituation add going customer. When a Costco, incentive

GTV, of We back. incentives a these you're are to us We really meant drive the that groceries So discounting incentives seeing we're never on into that don't retentive that really where focus you're your to spend behavior, to that of habituation. are incentives lot meant come drive onetime not incentives incentives. and kinds are going drive do

Operator

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

Justin Post

of or high -- supply? talk guess traditional more categories? on thought just is you with Maybe for the still you pipeline questions kind it? company. grocers maybe a a in level, Foods how And as deal supply? headcount just ask demand how Or can talk kind there And I interesting, picture, a need where couple. I'll you, reorganization Do supply this but are Whole are of I would the on about, just Marketplace. the was big some growth? think your I about you then the describe and cuts a very growth new looks

Fidji Simo

terms Instacart. add which of to we you more about to category what we on XX% market on the banners. selection, represented in grocery by yet, being supply, continue it's is and with that leader And So far, the think selection mean important by know of are, retail I more

to of the We emerging expand as have X,XXX retail with as banners, both XX,XXX retailers some well mid-market continuing large locations, we're grocers. and and

on for was see why them, platform. lot are excited incremental platform. think had to And type of so selection already them the with really the holdouts. can excited Whole that Foods But we customers. back that's really we one we're the also value some And on a that of we we drive that we're come deepen to offer their retailers of

but services the you not available years they've like also but us selection for more if look been make many guys we Costco, with new a available service that Kroger, us roll them only to So big it people EBT to at with allow their still like SNAP. SNAP out make with like

question. that hope I your So answers supply

important In headcount, I down performance had say We to terms slowed realize already would attrition. of so that bar. terms years, the of disciplined slowed X is been raised we the backfill that's thing hiring, had the in very And we of we down last our headcount. over

certain company down But So really we that in had we growth. of this mind had particular in to streamline the for really headcount managed other thing tightly. pretty areas already the reshaping was double and areas change, refocus and in

and these of offsite new initiatives organization you retail media are want whether to hold at lot Carts, if fully, growing we that the be fund really so all promise growing And means like and reshaping that ads, things a streamlining areas. able and to whether upcoming that in big it's Caper certain look it's our initiative, of

so the layoff should interpreted into. by context And this that's which be

We us are down growth initiatives. up actually to We much our very doubling on sets for that better committed this think promising most growth. reorganization

Operator

Sheridan Eric Goldman of the of Our question comes from next line Sachs.

Eric Sheridan

you're if small of Maybe basket can. shoppers know an company some Fidji, quarter, want there. you're about larger the we shoppers investments get X, over aligning way convenience thinking utility and in basket more transition against potential time the I of last and into basket smaller in spoke behavior. how update we from about if I size evolution way the larger turning into the and to that and on focus regular shoppers of basket

same goals the in dilution, liquidity at balance how strike And then expiration to time, a you of a the balance the to of sort terms the returning How have think from of of Nick, shareholders? of between question lockup of the while we investors you your be and coming soon. policy do on offsetting wanting a shareholder return broader lot company, capital increase stock, that will across then the probably get about to struck the

Fidji Simo

small small baskets both leader small share XX% baskets in obviously share of So and XX% a and baskets, on category baskets, large baskets, Eric, large we baskets. are of large

Our profits. like know because you also fill-up your order core But not or are use important weekly where may market our of more the that's of particular is the addressing all case represents in also case that forgotten weekly X/X may something needs continue of to because you of grocery for incredibly the kind have even that's have shop, planned small a really and and the important in that grocery shop we of use baskets customers, meal. the

really And that's us we're the really small lot of seen of the offering to to And speed. retailers over as small deliver I of convenience through was address where out years, want all have so few faster able invest virtual in we baskets of use cases. particular, these selection, with a last the saying in why but stores earlier, baskets you

we demonstrate big has gains the been able And to in that small contributed that to share baskets. have

And both are incredibly so important.

that entrants very that new do customer. delivery basket but because serve also of sort a and it use like profitable allows small food market time very the that's to companies, strong most very is basket both, a convert weekly advantage strong us are a into competitive case. entrants over us the customers small to from new key and also differentiates entire shops that better We we basket and at think at I we Xx large thing customer converting than are

Nick Giovanni

February place, was wanting in still float repurchase announced million your around about was while the question lockup we share on in November. be the capital, we very low a still $XXX talked authorization Eric, the $XX of in IPO. to balanced call Through while on we the repurchased million. aftermath And X, And last returning the

Now XXth. lockup the the increase float comes should release when off on our

reduce million additional managing ahead volumes we in that market of authorization starts And we opportunistic increase an headcount, It with of how authorization, we $XXX our We've only received And program, out give us dilution. to a making part can exchange to amount increase. That's sure about the for that cash. and choice the in managing equity that, which equity more that employees. dilution by we as deeply be so time. last to the cash repurchase we care manage very of over allows reduce to we introduced year give we equity plan share

our manage share return It's is dilution. everything to so that dilution. about in about offsetting we program shares not repurchasing do addition opportunistically to just And else

Operator

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

Nikhil Devnani

Just please. a couple,

the So growth you the have given already, selection of it increasingly forward. to equation seems breadth that GTV user going important is

user of customers years top this and of the over kind growth what adjusted as And the the what influx QX think your contribution that COVID driving would GTV you costs follow-up, step of would guide, headcount characterize kind line that the down, some you is look after equation are how taken improving do given extent even new out when EBITDA we as as well? prior? to at I you've saw. And So then a to So today cause feasible medium well customers versus still in the which is term? new

Nick Giovanni

the question. Thanks for

is and XXXX the our to guide acquiring contributing customers who QX that for means important, throughout relates shopped those both seen and it to with as reengaging user continuing less things that we've XXXX. improving that customers And of growth, we new growth also think and user growth have are So frequently. definitely

in XXXX larger new So activated the that pre-pandemic we than was we customers about levels. cohort of the talked

customers that that very so And new be steady sign confirms that a us, online cohorts. that growth. our is interrupted the the our something early engaging of key behind We're from who groceries a And driver mature customer the grocery. It adoption very better belief of we're now is that's something also was will in by of pandemic at obviously the and encouraging getting -- online adoption pandemic.

lot shrank last And QX cohorts but getting that's QX size is the the better. improved of decline mature to so product from year, QX a And to QX. to because consistently our

more in better helps mentioned better that letter been her Fidji we've better. had product had but that, never speed, incentive never in revamped really and As had has selection, the never to our affordability systems. quality. And choices, It's had never in higher the it's it's comments, addition never

the forward reinvest down we're incentives. And marketing, choosing just It spending that are them bit. incentives We revenue, less better So we're reason year-over-year. convert expense up. choices returns transaction it was seen the in one transaction with continue at a down incentives It's consumer because marketing loyal And but revenue to are we rather because of on we're engage getting best evolve that's not don't sure break we're QX on them Instacart deciding as why the targeting we based becoming you've that paid also into make because all gaining and spend fees to customers. to customers sales market. retailer to of you'll go that to efficiencies in And the we're and in we're tick note habituated going down It's than it's components seeing and lower. marketing. can mean we'll where those doesn't

As year-over-year, elevated revenue it QX in that will million, of year. $XXX to you to relates $XXX the see transaction guide last for was million

over of the to there's how Quarter quarter, the tough quarters, consistent we happens to You That's strategy down. over ad in of every QX. our it because X seasonality. of back can QX comp course last reinvest with This see the dropped has want a business.

Operator

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

Ross Sandler

your advertising rates things Nick, growth expectations. in line a then the to in with digital One that Whole on question revenue different on quarter. we've The heard from advertising coming companies are advertising broadly question fourth the and different down cater and your one came Foods. CPG bit,

pretty for partnership that had many guys in all side? the the interesting, potentially why point? know that the heading area So to bringing was reason rationale both But some I there? guess, in from, Foods are then is Foods back we the what at break could years online in given them U.S. up and what I Whole thoughts Whole into the And seeing XQ? And you we back. Any guess, play out XQ

Fidji Simo

Thanks, Ross.

QX drivers that launch the advertising, and are, display we in which a on of big you're the in video year shoppable one, lapping shoppable revenue. seeing So was are advertising a ago, increase

thing make And you're advertising that usually I is second budget mean they advertisers growth. today is based The seeing that that decisions saw that revenue GTV in by lags what on quarters. the sales growth prior

the reacceleration seeing And saw X is And to if are we a seeing growth we're in that expect fully that and we to underwhelming of guiding is good reaccelerate. for advertising GTV the news, one. advertising the of will also so reaccelerate, quarters year. The fourth consecutive GTV that really a continues we slowdown result that growth GTV last though,

You advertisers. mentioned some weakness among some

because not their be when We don't are tend that we line know first we struggling are that our in and widespread. has to so high business not be it even very cut are seeing ROAS cut. they is is performant, highly first overall, pockets And that in the advertisers they the thing to but advertising

on Now your moving Whole Foods. second to question

as announce a they terms we Foods And in are. our and Canada both this them were ability them as excited experience with that all much opportunity We as to an to of of consumers possible deliver excited not did the quality, to our every Canada, And their the of to is for as we've partners. U.S., delivery this customer to goal given experience Whole great incremental and we very Foods on with scale, long-term the speed, developed, view are launch provide retail to partnership. In us are They but we very of back. one and value reach an partner customer. to we bring are offer about Nothing customers to Whole vice single versa. service focused at always take in do so

Operator

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

Colin Sebastian

based about machine talked use improvements And the in rates you data learning. found KPIs and like that and of Fidji, a on operating batch fill of platform I and is the lot think rates.

think talk maybe improvement still you you competitive If are initiatives. competitors you digital X platform with that? that I those some were embedded could related doing things how differentiator ago do trying of to is then a achieve about in think of of is much additional market. years in to you advantage your now And much the the that, how or indicated

Fidji Simo

Absolutely.

we already and rates. found rates So have very high fill

methods. we And find are constantly. our which to with go we items we and their tell that with to can so get literally so exact consecutive every have items shelf exactly already increase for in-store. we're you from One item make where the updated data an located be likelihood their allows been so aren't shoppers that find our of we a we some points really these our depth with sixth where details to us We store in that them. it's tags of quality. point the where through to improvement such high going the shoppers We shopper variety do are app inside the inside right they do with customers integration basis if the a improving app, delivering shelves, far now, get order replacement. And again, products that basis retailers. show go snacks they products going shopper electronic With to wanted catalog get the as of retailers, sweat Aldi, up on that of light of game can because matters, really or But we as data, the is satisfactory shelf the that replace the the with But integrating planogram you quarter. and like that highly a sure is

competitive integrations the Then deep And day. retailer the fact very are so advantage. you deep with are that very that grocery and our in shoppers that's every a combine like of that defensible aisles stores

positive idea, what's quarter know going us in going than not a And replacements retailers what really shelves versus often develop predictive than know in what's to million to it has to with to stock they themselves. satisfaction. So a on going an great understand generate the what's just you allowed be to better XX XX% algorithms what's more to replacement that's suitable experience. And make give stock, we a be

at at retailer that already collect to delivering the model And of we chip and but very of retailers think to our one their the room experience. customers data some case produce deep the the make delivering so that's business the game There's very their competitive with and predictive best really day, percent there are us few a grow, remaining deliver another. we and analytics experience meat sure that I their possible much are in are advantage. allows why and superior in us and we away significant continuing combination to trust every top still that And to creates integration,

Operator

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

Jason Helfstein

questions. Two

trailing for GTV you Just first, not about can quarter 'XX you about Nick, think rest GTV, comment the per mean elaborate growth on correlates current of just point. with advertising would how more of all up? point second, And the you the 'XX? broadly made or step just that can I clarify quarter? Did you through

Fidji Simo

the this is budgets in set quarter works the So saw the all that on budgeting performance on advertising, they sales that based way advertisers past.

in quarters growth sales based up the So more reaccelerates, allocating in end they growth muted, have going budget. then allocate they're growing GTV lower then that's to when seeing at fewer bit more that. been rate on if a upcoming But little we are a budget past, the

play trend past. We have actually in this out seen the

actually for soon accelerated will If back reaccelerated, several decrease off then growth. of advertising investment financials, 'XX, fairly you year-over-year at look that in of coming QX we as quarter. because example, GTV as had see in quarters in were GTV low rate our you a again the following we And of rate

And so that's by of what board. not It's I trailing the the uniform across aspect meant it.

more a emerging nimble in how have are allocate who a for more You brands, lot example, lot they budget. flexible,

for companies GTV time are see in minute double So reflect the are to increase advertising. the one that them a for they that in a increasing half sales another larger takes is a change their they budgets. little and on sometimes quarterly it their GTV that basis, increasing, down But digest even more and that planning advertising on way or their bit basis, and

Nick Giovanni

relates the GTV XX% of QX. to in are X% compares QX, of And And last QX, it step-up, through But QX, are X% all as growth X.X% in year. growth we to we and guiding for to QX. to to year, X.X% X.X% it growth only growth last quarters for in this X.X% the growth growth of QX guiding in was year-over-year. And

XX% is And in so for QX. to a what to we're X% calling step-up now

Operator

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

Michael Morton

wanted longer ask about to a just term maybe bit one little I industry structure.

going so the long-term it's the with model? economy this Do of any you believe and then incumbents does would like distribution scale. that bags store who first of front gig be actual and But kind aspect a with workers developing their physical pick picking industry building as the would along have then how Or Whole love the over the you I order You businesses in is in own know, the do it density the There's model. thoughts like Just of fulfillment some think competing Instacart also there to great. Instacart see larger a are picked, to there marketplaces do with picker Foods it merchant but just go increases? network up. can the -- the continue to year mover

Fidji Simo

Thanks for the question.

them, allows cost retailers So quality them which the to to do variety do that We relationship of in ways. and then partner and which customers. and us of delivery because that efficiently, with really creates save growth reason we high accuracy that that built respect on picking they is for to customers, the on can some a with cost and high with their do pass very to

our So with the order, the are delivery, model you're might already app describing and picking their some to be our pickup. retailers then for retailers some picking for like doing own of where the using stage example,

integrated the of again, support is role see help using are retailers own all industry. And really them developing to great technologies currently system inside and of that with picking store. one so that technology we And their their have our as

density but and of lot up the you we drive a the network And you that of much are warehouses you outside means in cost in large we Now big is we kind of found we of all of have about thinking you very what of being these models because that happens picking, to further much seen to these where picking need losing that have save the far bullish kind like also end closely, less delivery away are warehouses for model very of And of customer. because stores. have that that's customer a this that orders. end picking to tracking up having from away. the automated costs And models on work,

speed, are actually that know I have We much letter drives emphasized that's we my so it because value it know growth. speed why drives also We in conversions. customers and seeing

you're are we And XX,XXX very can speed deliver doing from not the far so with the if and away that able that customer, to you from stores.

say all believe responsive most that's most for of they that of the find here, continuing the that need all are technology that all in So in that ways the retailers develop to we suitable efficient, their would customer strongly to winning that business. I we all, we to model model the needs. have embrace model And

Operator

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

Andrew Boone

potential Fidji, about bigger of you product road business? and this you what mean advertising? off-platform Can HSA for are then more a Can Where can look broadly. about could and next little the bit question guys the talk over And for couple health years? the for like a on talk today the you picture map that what

Fidji Simo

Thanks, Andrew.

Carrot step part through making advertising and And the growing a business. Ads. available and advertising, their of to taking So on off-platform it infrastructure our operated one marketplace was entire properties retailers that's owned on

retailers technology literally We because are incremental media get this new them a and interested up be and line. network overnight more leveraging revenue in a finding more that to stand allows retail

Trade set of by about which we're but SNAP of that we launched taking on where you say We is say the good SNAP, in the same at that it's early, advertising to that's have both these do step and them past with they SNAP build of online that's that behavior customer and we So step the then the $XX have dollars efficient. of on with we would Carts. on X very can cart FSA/HSA platforms other the did plan very year some leveraging platforms Carts. we lot this that really efficient. develop with future much ads it's to recently incredibly we of that's very model Caper you SNAP want something it Google, data way and that more advertising success partnership that incredible still with use to on have with your knows early leverage a which we that that's product step in-store it aisle you're early. Roku, advertising we on we to an $X a the have can has use would that data HSA/FSA. the of their announced with And scale it. year. to other we store platforms question and the early And really make platform is our on those of advertising that allows store. right that was advertisers. And know. to reproduce a EBT is by as we SNAP driving something vast with we billion what SNAP, see data, expanding Caper actually health more $XXX it funds get Desk. still with you can just at roll remind on on, in all more of starting the the beyond towards. Then because We're online that to we The we And your every of cards. your It's think seize think wanted of we forfeited on lose we We advertising exactly can that and recently more if in if Again, we But billion, the continue reach And valuable loyalty see I one. I mental platform. data announced want platform FSA/HSA very really leveraging and are kind such partnership that to customers obviously, where but billion reproducing Americans why advertiser look platform to end And but because and advertising can make a what's seen Again, to QX or into be last where a an loaded into partnership is out now, if FSA/HSA. purchased

Operator

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

Mark Kelley

Nick, one a on rates. for take just quick you

what's you of you're full obviously, that As dynamics you your the think a the at towards you've had about kind big of And long-term QX where a one, a through RIF incentives think of just or then range. of year, you're good where just our taking end I quick got couple the end those high that last thinking lapping that, year high like for savings about take rates marketing about model? And the Fidji. us things guess and and starting then thinking and to and point for

-- up ads are brought think still likely Are budgets on you would retail Carts. budgets? those are able open out-of-home to that should are like up I opportunities if Caper curious last that those just from And we answer? I'm -- to mentioned media come -- You just outside like those what guess, capture? budgets about might how you the that? of just you be bigger in digital that think does

Nick Giovanni

the Thanks question. for

that And said to adjusted the year-over-year. And that we and marketing like of performance transaction in $X is good expense take we the other is be we make revenue contra not we do incentives. When or up to drive EBITDA But instead say of investments, not revenue most whether the but lower. specifically ad makes is to incentives we it to think it in in of for one to more our referring look because you're GTV as line OpEx What as especially a is terms our those in and overhauled percentage decide seen on did that guide sales revenue full we in just makes able efficiently, just like expect transaction marketing, $X spend year. lower. having it's results it also want to deploying rates, our revenue reasons So in to incentive do and line, a having GTV. only dollar percent the look of systems I be

did we so a continue grow invest the out decision have also it's that to to the call that we're driving to gain just efficiencies how different revenue. But that value we And transaction delivering, in continue P&L. just shopper to it's important that and remember business. in to hitting to we pay, places about the where invest net-net, benefits It's that and and also in efficiencies then

guidance. So the X% we of changing we year. not we're transaction reaching and not demonstrate GTV. other revenue X.X% of to providing believe overall X.X% throughout can targets long-term reaching or revenue GTV We're EBITDA that to our respect And with X% continue to ads leverage real to

Fidji Simo

which important then it's are that measurability, but an in-store a doing best again, of online the environment. early. on targetability, is to your on Caper because they combining ads are question on really And very And on in little that ads bit of different beast Caper, a advertising, realize

early, And any Again, seeing but are advertising, very we excited about from innovation of the new in to different start we're probably going is capabilities. budgets to see so advertisers very that are this. to advertisers like combination these take different what fund

cart remember already experience going that your and hand-in-hand and you have doing sandwich other you then can Dreyer's you but ice X your incredible cream we that direct this in You an really already it's you're still we're your the can cookies through store ice in cream a advertise you unlock, so found you with we the to the into dropping And can is can ice to that. cream the chocolate be know cookies we on cream imagine that retailers. cart. loyalty with It's aisle early. And and that based can like do important very thing can ice might data, to

on on Caper. We ads are revenue sharing

what to to on are to a stream they're new seeing. want create sure also making we'll for a that to revenue We way and partner incremental as budgets closely them, doing continue these advertising it them are with

Operator

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

Deepak Mathivanan

terms with Can Can drag now expect a provide on what I a in the of then and potentially maybe also sort of contribution can stabilization rate less in cohorts couple XXXX? the from can the decline At color the you're cohorts you trends? of earlier from the the the cohorts think we additional us 'XX to some pre-XXXX newer like and in 'XX secondly, level? cohorts? about on you so reach And seeing on point trends that growth COVID of we elaborate can COVID rate cohort ask be

Nick Giovanni

for Thanks Deepak. question, the

to with who relates to very to guided newer just were larger when out the grow that just not digits. half they new to any the improvement mentioned mentioned cohorts in that year lots give as pleased consistent year, called of of single double than something last half the digits then additional that want second the the So mature or we different return in to we're pre-COVID of we've folks you to are exactly trends. declining Typically, the context, in I'm activating and that compared and it's cohorts last when but growth, some cohorts the it sure XXXX, we know haven't year. And the that throughout second they'll last course We're first cohorts, that of we've the that they'll first, And flat declining demonstrated we on. back cohorts. get were year,

Operator

line the LLC. Advisors of comes Fox question Fox of next from Steven Our

Steven Fox

had I questions. X just

one. for I on on thoughts conversion, of curious lot competitors And gap or competitors that the cash was -- not Can flow about, advantaged why been a might technology -- versus you also I some close to aspect of electronic existing one up-and-coming more the the then and secondly, a EBITDA? just there's discussion year Any new free First, quickly? of sort simple -- rates. are lead and fill either AI found tied the how or on and to tags guess, talk you about

Nick Giovanni

quickly I'll free flow. first question answer the on cash

be SNAP been do we've income launching that to want same you don't time, things able cash growth, growth, So EBT in pleased Caper. or alcohol relates the trend we're to the flow EBITDA. EBITDA new flow is to as products, net it adjusted we conversion adjusted cash adjusted by percent touch free operating that It's that And free generate. they or cash as and cash flow We direction. proxy to over operating like on... impacted of guide EBITDA. a But a for flow whether Fidji, very good believe demonstrate we

Fidji Simo

Yes.

very grocery reason general, note you on the online look important So is that #X your if to in for question, at churn cost.

And we And points of a integration, right to produce, that of able churn rates, contributing millions to that core for to quality. a of what order weekly second really like on if The the collecting catalog preferred data, your is that's have And retain that and and deep right integration, reason prefer. get all retailers integration all the get so And over to critical rate you. you quality have with shops, continue -- found the ripeness ordering that data is important of this advantage. to be high why so like fill planogram quality why want. online. I've shareholder which we're be obsess the replacement, to meat, it's of things you on significant more whether order things order people with move what billions industry described of people critical able lot my I even in to that's is want of to like is wrote letter is in ripeness we previously exactly the order bananas, to deliver able

the stores, the You exactly of particular I of population. our that data market much now learning the really have machine coming They of all leading say that But replacement able this to the ask aspect. wouldn't powers for like preferred was models AI, data models is our importantly, the a if to an and of would wouldn't all have that XX,XXX of and experience. different of overnight, have differentiated we allows we us of XX whether into all the have inventory absolutely deliver advantage. they models competitor parts all completely accumulated patterns years on at more was particular, right all in on still a reproduce

again, integration edge. substantial predictive with great us it's gives So deep analytics of the really really data, retailers, a that combination lots model of

Operator

Our Mark The last the of Company. Zgutowicz question of Benchmark from comes line

Mark Zgutowicz

AOV. X other I questions, user on just had growth the one and on

of can inflationary customer and First, there maybe in mean acquisition just accelerate separately of only about there's in is at your the returns if some see you're here, are we'll deliberate rate curious and that if secular customer how this acquisition, understanding strategy you'll press evolving. point, seeing to much AOV, grocery so curious the I you're you seeing could on relative that the takes break exclusive out you the I'm just online think broader curious tailwinds headwinds, has suggests, GTV. And just improvement and growth investment you year, both inclusive the dollar puts then a environment. -- here if what or see been

Fidji Simo

so variety in it the to accelerate see them online, invest back Marketing So partnerships. move is we're XX%. one tactics. commerce that on are go of still online. our done are a many just idea categories as of underpenetrated while online is other the XX% of but penetration, there That of TAM other at that's is a growth, through we We market responsibility And vastly massive ones. category this user to the we this leader, XX%,

with what the saw clear the in-store-only customers Xx that that valuable also showing We retailers partner probably more can X is our very customer. market are there quarter. You their we so data this to omnichannel did because to with customer Peacock retailers than our

to retailers So to their the get an omnichannel. customers incentive have

market we are tactics So to really using move the these of online. all

acquire to more more of retain that deliver that investments incentives we the As marketing a that the them but marketing to try to unlocked we every did and time ability incentives it this our you're by tactics. unlock allows in specifically, what habituation. efficient really pertains we and year over to some shift quarter also behavior hearing get way incentivizing leads us marketing because new And to customers is both towards have with

guardrails that have XX X-year we marketing. in on so us but so return just the we marketing long-term of data quarter, goals, to that in in confidence we based core really continue a not within expecting the years can mind some LTV give leverage investing our And invest the of our with to return

Nick Giovanni

been at orders of as calling As that Last growth. from and why a as $XXX size mean we you that, we've then to context, in just XXXX, saw and been relatively XXXX, saw by out then by QX more the is It X%. in increase higher $XXX year $XXX sizes QX. couple AOV, But inflation QX in was decrease growth X% was XXXX, in to stable. for was It for we've X%, then the that $XXX as AOV QX QX, in And comparing GTV in a X%, it we that's delivering calls, year-over-year. QX, relates growth result, basket QX. last quality, basket was in and driven to 'XX increasing,

our growth is and be accelerating that things to some We AOV orders inflation. of continue we on growth. know so outside control are that like orders focused And by impacted

We basket row quarters sizes. have seen X a of witnessed stable moderate. We've relatively in inflation

hopefully, that for. So context the gives you're that you looking

Mark Zgutowicz

does. it Yes,

Operator

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

may You disconnect. now

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