Maplebear (CART) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2024, the company delivered Gross Transaction Value (GTV) at the high end of guidance, growing 10% year-over-year, driven by an 11% increase in orders, partially offset by a 1% decline in average order value [21][22] - GAAP net income reached $148 million, an increase of$13 million year-over-year, while adjusted EBITDA was $252 million, up 27$153 million year-over-year due to fluctuations in working capital [23] Business Line Data and Key Metrics Changes - Transaction revenue grew by 10% year-over-year, supported by shopper efficiencies and affordability initiatives [22] - Advertising and other revenue also increased by 10% year-over-year, driven by strong performances from emerging brands and large brand partners [22] - The company saw deeper penetration of Instacart+ members, with strong engagement and order frequency growth among these members [25] Market Data and Key Metrics Changes - The company reported that grocery prices have increased over 25% since 2019, highlighting the need for innovation and savings for customers [11] - Instacart captured the most GTV from new customers placing their first grocery convenience and alcohol orders on a digital-first platform [17] - The company is leading in share of sales among digital-first platforms, particularly in large baskets with over 70% share in baskets of $75 and up [17] Company Strategy and Development Direction - The company is focused on innovation and growth, aiming to become indispensable for customers, retailers, and brands [7][8] - Key investment areas include enhancing core offerings in selection, affordability, and convenience, with a strong emphasis on enterprise solutions and advertising innovations [35][40] - The company is committed to maintaining a disciplined approach to stock-based compensation while targeting adjusted EBITDA expansion [30][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to extend its category leadership position and deliver profitable growth for stakeholders [18] - The company expects Q1 GTV to be between$9 billion and $9.15 billion, representing year-over-year growth of 8$1.2 billion through various affordability initiatives [62] - The rollout of Caper Carts is expected to drive double-digit increases in basket size at participating retailers [38][131] - The company is exploring international opportunities for its enterprise solutions, although it remains focused on the U.S. market for now [56] Q&A Session Summary Question: Key investment areas for 2025 - Management emphasized continued investment in core areas such as selection, affordability, and convenience, with a focus on enterprise solutions and advertising innovations [35][36][40] Question: Impact of marketing spend and Super Bowl ad - Marketing spend is viewed as part of the existing portfolio, with early positive feedback on the Super Bowl ad [66][67] Question: Supply and demand dynamics for shoppers - Shopper supply remains healthy, with a waitlist in most cities and high retention rates among shoppers [95][96] Question: Drivers behind transaction revenue and AOV - Transaction revenue is influenced by various factors, including retailer revenue and customer incentives, with AOV impacted by restaurant orders and the $10 minimum basket initiative [103][111] Question: Growth versus profitability framework for 2025 - The budgeting process involves evaluating returns on investments and maintaining flexibility to adjust spending based on performance [120][121] Question: Caper Carts implementation timeline - Early results from Caper Carts are positive, with plans for gradual rollout across retailers, emphasizing operational readiness [134] Question: Restaurant orders as a percentage of GTV - Restaurant adoption is still early, and the company does not break out restaurant GTV separately due to the integrated nature of the platform [125]