Q2 2024 Maplebear Inc dba Instacart Earnings Call
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Rebecca Yoshiyama: Shareholder Letter, which can be found on our Investor Relations website. Now I'll turn over the call to Fidji for her opening remarks. Thanks, Rebecca. And hi, everyone.
Speaker Change: Now I will turn over the call to <unk> for her opening remarks.
Fidji Simo: I hope you had a chance to read our latest shareholder letter. We've posted strong Q2 results, including 10% year-over-year growth in GTV, our third consecutive quarter of positive gap net income, and impressive gains in adjusted EBITDA and operating cash. Our performance reinforces our leading position as the largest online grocery marketplace in North America and highlights our best-in-class customer experience underpinned by industry-leading delivery speed and order quality. Across all dimensions, our deep integrations with retailers built over the last 12 years are an enduring strategic advantage that continues to pay off.
Speaker Change: Thanks, Rebecca and hi, everyone. I Hope you had the chance to read our latest shareholder letter, we posted strong Q2 results, including 10% year over year growth in CTG, our self consecutive quarter of positive GAAP net income and impressive gains in adjusted EBITDA and operating cash flow.
Speaker Change: Our performance reinforces our leading position as the largest online grocery marketplace in North America and highlights our best in class customer experience underpinned by industry, leading delivery speed and all the quality.
Across all dimensions, our deep integrations with retailers built over the last 12 years.
Ensuring strategic advantage that continues to pay off we continue to deepen our collection advantage by offering multiple services like pick up just for convenience EBIT snap catering and more that all require deep integrations with leading retailers systems. Our quality is unmatched because we understand we tell us.
Fidji Simo: We continue to deepen our selection advantage by offering multiple services like pick-up, virtual convenience, eBT SNAP, catering, and more, that all require deep integration within retailers' systems. Our quality is unmatched because we understand retailers' inventory dynamics better than anyone through billions of data points that help us figure out what's on the shelf or what the perfect replacement is.
Speaker Change: Inventory dynamics better than anyone to billions of data points that help us figure out what's on the shelf or what's the perfect replacement needs and.
Fidji Simo: And by linking with retailers' loyalty programs, digitizing their circulars, integrating their complex offers, and powering their price optimization algorithms, we can also make our service more affordable to consumers in ways that are incredibly hard to replicate. These advantages don't just apply to our marketplace but also extend to our enterprise platform, which is one of the most underappreciated parts of our growth strategy. So I thought I'd spend some time today explaining this in more depth to show how the scale of our retailer integration, the foundations of our marketplace, and white label storefront work together in a virtuous cycle and position as well for the. In 2023, we completely rebuilt our white label e-commerce storefront solution from the ground up.
Fidji Simo: By creating a shared architecture with our marketplace, our enterprise forefront partners can now immediately benefit from the latest features and technology that we add to Instacart on their own and operated apps and websites. Most retailers can't match our pace of innovation on their own.
Fidji Simo: So by integrating with us, they get continuous improvement that drives growth with minimal cost and effort. These investments are showing up in our results as we rapidly onboard more storefront retailers who are eager to turn in-store customers into omni-channel customers. About 1 in 5 Instacart orders are placed on our enterprise platform, and as we continue to expand our white-label volume, this also benefits our whole ecosystem.
Fidji Simo: By increasing the density of orders that we serve in every store, we can best position shoppers to offer faster on-demand delivery windows. We can also batch more orders together, which is a key to unlocking our best in class unit economics during growth. We are constantly looking for more ways to pass on this cost savings to customers and retailers while reinvesting in new initiatives to make our technology and service better so the virtuous cycle can continue.
Fidji Simo: There is a lot more runway to grow our marketplace and enterprise platform online, for sure, but even if we double or triple online grocery penetration, more than two-thirds of grocery shopping will still be in-store, and that's why our enterprise technologies now go beyond e-commerce with a suite of in-store technologies. Just today, we announced our first-ever international launch of our AI-powered Keeper Cart in partnership with Algi in Austria, as well as Algi US launching Caratags and an in-store mode inside our app.
Fidji Simo: We're also expanding our FoodStorm ordering kiosk pilot with Sprouts, and Schnucks will be our first retail partner to roll out Caratags in electronic shelf-labeled software chain-wide. The beauty of all of our in-store technologies is that they connect directly with storefronts and with each other. So it's really a seamless experience for customers to buy from retailers online and in-store. For example, customers can reorder online what they bought with their Kaper Karts in one tap, or bring their online shopping list to the screen of their Kaper Karts to avoid forgetting ingredients in the store.
Fidji Simo: This is increasingly important to retailers who are moving away from complex and fragmented point solutions and towards technology partners that can offer a simple and seamless customer experience across all of their channels. Scaling our marketplace and enterprise offerings, both online and in-store, is also critical to our strategy because it's laying the foundation for a massive, one-stop-shop, omni-channel retail media network. Well, it may seem like new retail media networks are popping up left and right right now.
Fidji Simo: We know that brands have limited time and resources, and they will ultimately want to work with platforms that have scale across all channels. And this is exactly where Instacart ads will shine because of our leading scale, performance, measurement, data, and product capability. With us, CPGs can reach audiences across our marketplace, retailers, owned and operated sites through Carat Ads, as well as other destinations like Google Shopping Ads, Meta, the Trade Desk, and YouTube, where they can place ads pointing to Instacart and leveraging Instacart data.
Speaker Change: Well, if we can place odds pointing to into golf and leveraging <unk> data.
Fidji Simo: And in the future, this will also include in-store ads on KaperCard screens, which can take the very best of online advertising and bring it to the store for people who are already in the aisle. Overall, as you can tell, I'm incredibly excited by the momentum we're building across our marketplace, enterprise, and advertising platform. We're placing really ambitious bets that will enable us to extend our lead as a leading online grocery marketplace and cement our position as one of the largest omni-channel retail media networks.
Speaker Change: And in the future. This will also include install ads on keep off called screens, which can take the very best stuff online advertising and bring it to the store to people who are already in the aisles.
Speaker Change: Overall as you can tell I'm incredibly excited by the momentum we're building across our marketplace enterprise and advertising platforms.
Speaker Change: We're placing really ambitious bets that will enable us to extend our lead as the leading online grocery marketplace and cement our position as one of the largest omnichannel retailing you've got networks.
Fidji Simo: As we execute on these growth strategies, I'm confident in our ability to generate more shareholder value over time and further our vision of building the technologies that can power every single grocery transaction. Now, I'll pass the call over to Emily for an update on our financials. Thank you, Fidji.
As we execute on these growth strategies I'm confident in our ability to generate more shareholder value over time and further our vision of building. The technologies that can power every single grocery transaction now I'll pass the call over to Emily for an update on our financials.
Emily Reuter: It's great to see the momentum we're having across so many areas of the business, growing our core service and investing in our longer-term bets, all while staying disciplined on our financial performance. Now, let me provide a bit more color on our financial results and outlook. Q2 was a really strong quarter for us, with both GTV and Adjusted EBITDA beating the high end of our guidance ranges. We delivered GTV growth of 10% year over year, comprising orders growth of 7% and average order value growth of 3%.
Thank you C. G. It's great to see the momentum we're having across so many areas of the business growing our core service and investing against our longer term bets all while staying disciplined on our financial performance now.
Emily: Now, let me provide a bit more color on our financial results and outlook.
Speaker Change: Q2 was a really strong quarter for us with both P. T V and adjusted EBITDA, beating the high end of our guidance ranges, we deliver G. T D growth of 10% year over year, comprising orders growth of 7% and average order value growth of 3%.
Emily Reuter: Order growth was in line with our expectations, while basket size was the key driver of our outperformance. There were a few different factors that drove our basket size higher in the quarter, including new customer cohorts reaching bigger basket sizes faster, existing customers making larger purchases over time, and a higher mix of club orders.
Speaker Change: Order growth was in line with our expectations. Our basket size was the key driver of our outperformance.
Emily Reuter: Q2 advertising and other revenue growth of 11% year-over-year also outperformed our expectations. This was primarily driven by growth from emerging brands on our platform, as we steadily grew the number of active brands to more than 6,000. This growth more than offset the pullback in spend we continue to see from certain large brand partners experiencing challenges in their business. We also delivered strong profitability results across the board, which continues to reflect our strong operating fundamentals and our ability to manage multiple levers across our P&L to drive leverage.
Emily Reuter: This includes our third consecutive quarter of positive GAAP net income of $61 million, which was down quarter for quarter, primarily due to ongoing noise in FBC following our IPO in September 2023 and the $95 million of restructuring and executive-related reversals we experienced in Q1 2024. After we lap our IPO quarter, we anticipate SBC will begin to normalize, while continuing to expect higher levels of SBC in Q2 due to seasonality. In the quarter, we also generated a Justity Bida'a of $208 million, up 89% year-over-year, and operating cash flow of $244 million, up 42% year-over-year.
Emily Reuter: Looking ahead, we are guiding to Q3 GTV of $8.1 to $8.25 billion, representing year-over-year growth of 8% to 10%. Our guidance expects the composition of GTV growth to continue to be driven more by orders than basket size. It also reflects ongoing strength in our core service and a modest growth contribution from restaurant orders. We are also guiding to Q3 Adjusted EBITDA of $205 to $215 million.
Emily Reuter: The primary driver of our anticipated year-over-year growth in Adjusted EBITDA as a percentage of GTD is ongoing adjusted operating expense leverage. Similar to prior quarters, we expect to continue driving shopper efficiencies in transaction revenue while reinvesting in opportunities like more affordable service options and consumer incentives. We also expect advertising and other revenue to grow year over year, largely in line with our GTV guidance. Overall, our business is performing well. Our operating scale and critical advantages continue to position us well positioned to strengthen our lead as the largest online grocery marketplace in North America and generate more shareholder value over time.
Emily Reuter: This is why, in Q2, we completed our initial $1 billion of share repurchases and authorized a new $500 million buyback program. As of June 30th, we had cumulatively repurchased 36.5 million shares, representing more than 10% of our fully diluted shares outstanding at the end of 2023, and had $425 million of remaining repurchase capacity.
Operator: We have a lot of momentum to build on across all aspects of our business and remain focused on driving more profitable growth. With that, we will open up the call for live questions. Operator, you may begin. Thank you. As a reminder, to ask a question, you will need to press Star 1-1 on your telephone. Please limit yourself to one question and one follow-up.
Operator: Please stand by while we compile the Q&A, Ross. Our first question comes from the line of Colin Sebastian from Bayer. I guess, first off... James Callahan, Thanks, Colleen. I'll take both of those.
Fidji Simo: On the first one, we continue to be extremely focused on accelerating online grocery adoption. And that does mean that we have a heavy focus on new customer acquisition and are pleased by what we're seeing there. At the same time, we also want to create habituated customers, because we know that when we habituate a customer, we end up getting their entire grocery budget for the month, which is incredibly valuable.
Fidji Simo: And so we have a portfolio of, you know, marketing tactics, and incentive tactics that really allow us to do both, both attract new customers, as well as habituate them. We released the stuff, as you may have seen in the letter, that we have 25 million annual customers. And that's a really great opportunity for us to turn these infrequent customers who purchase on average 11 orders a year with us into much more habitual customers that look more like our typical monthly active orders.
Fidji Simo: And we're doing that, not just through incentives, but also through promotion plus, connecting these users to all of our affordability options so that they can build a habit, as well as introducing new use cases like restaurants, which we are seeing drive both new users, new customer acquisition, as well as habituation of existing users. We do all of that based on a five-year NPV, and we continue to invest as long as we see those returns. Now, on your second question about the competitive environment, we are not seeing much change in the environment.
Operator: As a reminder, we have the leading category share with 50% plus share of small baskets, and 70% plus share of large baskets, about $75, which is incredibly important because large baskets represent 75% of the industry and even more of the profits. We continue to see that we are approximately 5x better than new entrants at activating large baskets, and that means that we bring multiples of GTV into the industry compared to these players.
Speaker Change: Could you into the industry comes out to these players and we also see that well about five banks that are turning a small basket customers into a large basket customers than just new entrants. So you know we continue to see extreme strength with all leading selection or you didn't sell this and that's translating into this category.
Operator: And we also see that we're about 5x better at turning a small basket customer into a large basket customer than this new entrant. So, you know, we continue to see extreme strength with our leading selection, our leading service, and that's translating into this category share and this ability to really excel in large baskets. Thank you.
Speaker Change: Sure and just the ability to really excel in large basket.
Speaker Change: Thank you one moment for our next question.
Operator: One moment for our next question. Our next question comes from the line of Eric Sheridan from Goldman Sachs. Thank you.
Speaker Change: Our next question comes from the line of Eric Sheridan from Goldman Sachs.
Fidji Simo: Maybe I can ask a two-parter if it's okay in the broader advertising environment. There have been a lot of mixed data points on the health of CPG advertisers and the way they're sort of processing budgets in a post-inflation or lapping inflation world. We'd love to get your perspective on the broader CPG landscape and how it impacts your views about your advertising opportunities in the second half of the year. And the second part of the question would be whether you continue to push forward on a lot of innovation in advertising solutions. Maybe talk a little bit about the product roadmap as we think about, again, the end of this year, but more broadly over the medium-term horizon. Thanks so much.
Eric Sheridan: Thank you maybe I can ask a two parter if it's okay on the broader advertising environment. There's been a lot of mixed data points on the health of a CPG advertisers in the way they're.
Eric Sheridan: Sort of processing budgets in a post inflation are lapping inflation world, we'd love to get your perspective on the broader CPG landscape and how it impacts you.
Speaker Change: Your views about your advertising opportunities in the back part of the year. The second part of the question would be you continue to push forward on a lot of innovation on advertisement solutions, maybe talk a little bit about the product roadmap as we think about again at the end of this year, but more broadly over the medium term horizon. Thanks, so much.
Fidji Simo: Thanks, Eric. So what we're seeing on the CPG side is quite consistent with what I talked about last quarter, where we are seeing some large brands struggle in their business broadly and therefore pull back on advertising. In general, we're not the first advertising platform that they pull back from because we're so measurable and highly performant. We're not the first one to be cut, and it tends to be a lot more widespread.
Speaker Change: Thanks, Eric So what we're seeing on the CPG side is quite consistent with what I talked about last quarter, where we are seeing some large brands a struggle email business broadly and therefore pull back on advertising in general well not the first advertising platform that they pull back from.
Eric Sheridan: Because we saw a measurable and highly performing well.
Eric Sheridan: Well not the first one to be cut then it tends to be a lot more widespread.
Eric Sheridan: However, the things that are really exciting for us is that the growth that we're seeing in emerging brands on our platform now at 6000 emerging brands has more than offset the pullback that's working with our brand and that's very in line with the strategy I talked about last quarter of really diversifying the business and continue.
Fidji Simo: However, the thing that, you know, is really exciting for us is that the growth that we're seeing in emerging brands on our platform, now at 6,000 emerging brands, has more than offset the pullback that we're seeing with large brands. And that's very in line with the strategy I talked about last quarter of really diversifying the business and continuing to lean into the strengths of emerging brands while also continuing to deliver great results for large brands as well.
Fidji Simo: In terms of innovation on our platform, we continue to innovate on our marketplace with new ad formats. This quarter, we just announced recipes, occasions, and bundles, which are a great example of innovation where CPGs themselves have told us that they would love to do merchandising online, but they really cannot do it in the aisles of a store. Like, for example, if someone is searching for spinach, having an advertiser be able to promote a recipe for spinach lasagna. Therefore, if they're a pasta advertiser, they can earn their way into this particular query and advertise that, or if you're a soda brand, advertising next to hot dogs, so that you have the perfect summer pairing for barbecue.
Going to lean into the strengths of the emerging brand while also continuing to deliver great results fallout fans as well.
Eric Sheridan: In terms of innovation on our platform we.
Eric Sheridan: We continue to innovate on our marketplace with new AD formats with each quarter, we just announced recipes occasions in bundles, which are a great example of innovation, where she teaches themselves have told us that they would love to do merchandising online that they really cannot do.
Eric Sheridan: So like for example, if someone is searching for spinach are adding an advertiser would be able to promote a recipe for spinach lasagna and they'll probably settle past advertising and that'll weigh into this box you get a query.
Eric Sheridan: And advertise that they show us saw that brand advertising.
Eric Sheridan: Advertising next to our dogs that you have.
Speaker Change: Effects some pairing for barbecues and so this is a great example of Oh, Yeah format innovation, we continue to drive that all excited about we also continue to push our measurement capabilities. We think that we have incredible performance and the more we can demonstrate that was that its football enough shippers have come out with.
Fidji Simo: And so this is a great example of the ad format innovation we continue to drive and are excited about. We also continue to push on measurement capabilities. We think that we have incredible performance, and the more we can demonstrate that, whether it's a partnership with Cercana or with others, the better it's going to be for, you know, our ability to show that to our advertisers. And then, to your point, we're also, in the medium term, innovating on what we're doing outside of our marketplace.
Speaker Change: Others.
Speaker Change: The better it is gonna be for you know audiology to show that for advertisers and then we're also a medium term to your point innovating on what we're doing outside of our marketplace. We power ads on 100, plus we get out of or on an operated websites, we launched a new retail.
Fidji Simo: We power ads on 100 plus retailers on an operated website. We launched new retail power media partnerships with Meta and YouTube. In the future, we're going to add advertising on Keeper Cards that will allow us to have ads inside the store and, therefore, have a real portfolio of different advertising tools, both on our platform and outside of our platform, that can make us a real one-stop shop for CPG.
Speaker Change: Well meet our partnerships with meta and Youtube is the future of work on advertising on keep a culture that will allow us to have ads inside the store and therefore on a real portfolio of different advertising tools, both on our platform and outside of a platform that can make us a real one.
Speaker Change: Topshop for CTG. So that's really laying the foundation for building a you know a really great to be talking about network end up gives us enormous confidence in a long time out and not a revenue target of 45% of GDP.
Operator: So that's really laying the foundation for being, you know, a really great retail media network. And that gives us enormous confidence in the long term to add another revenue target of 4% to 5%. Thank you. Please take a moment for our next question. Our next question comes from the line of Nikhil Devnani from Burnett.
Speaker Change: Yeah.
Speaker Change: Thank you one moment for our next question.
Nikhil <unk>: Our next question comes from the line of Nikhil <unk> from Bernstein.
Operator: Hi, thanks for taking my question. I wanted to ask about a couple of your recent partnerships. First, the Uber Eats commentary is encouraging. Could you please elaborate on what you're seeing and how we should think about the ramp in order growth and GTV there? Seems like there's an explicit contribution embedded in your Q3 outlook.
Nikhil: Alright, Thanks for taking my question I wanted to ask about a couple of your recent partnerships do first on Uber eats commentary is encouraging could you. Please elaborate on what you're seeing and how we should think about the ramp in order growth N. G. T V. There seems like there's an explicit contribution embedded in your in your Q3 out.
Speaker Change: Look.
Fidji Simo: And then, with respect to your Chase partnership, it also looks like DoorDash is now the exclusive grocery partner here for those cardholders. So how much of a headwind is this going to be to your growth going forward? And how do you aim to counteract this challenge?
Speaker Change: And then with respect to your Chase partnership. It also looks like door Dash is nowadays exclusive grocery partner here for those cardholders. So how much of a headwind is this going to be to your growth going forward and how do you aim to counteract this challenge. Thank you.
Fidji Simo: Thanks, Nikhil. I'll start with Uber Eats. We're extremely pleased with the partnership with Uber and the early results. For context, we fully rolled out restaurants nationwide in mid-June, and we see our strategy paying off. By partnering with Uber, we're ramping restaurant adoption at a much faster pace than we've seen any new entrant be able to accomplish in grocery after years and billions of dollars in investment.
Speaker Change: Things you kill all I'll start with Uber eats we're extremely pleased with the partnership with your burden early results.
Speaker Change: Context, we fully rolled out restaurants nationwide in mid June and we see our strategy paying off by partnering with you where we're ramping restaurant adoption at a much faster pace than we seen any new entrants be able to accomplish in order to be after.
Speaker Change: After years and billions of dollars of investment so what we're really excited about the ramp we're seeing an adoption we're seeing early.
Operator: So we're really excited about the ramp we're seeing and the adoption we're seeing. This early data also confirms our belief that restaurants can help our entire ecosystem by attracting new customers to Instacart, by increasing order frequency for existing customers, and by driving adoption of Instacart Plus. All of that has been confirmed by early data, and that's why, longer term, we really believe that restaurants can create a flywheel that helps grow our entire business, including grocery.
Speaker Change: Early data also confirms our belief that restaurants can help our entire ecosystem by attracting new customers to into caused by increasing order frequency for existing customers by driving adoption of heat plus all of that is as you can tell by Yodlee data and that's why longer term, we really believe that restaurants can create.
Speaker Change: To a flywheel that helps grow our entire business, including groceries.
Operator: Now, on the Chase partnership, I would encourage you to fact-check what you heard because as you may see online, we published a blog post yesterday that shows the depth of our existing partnership with Chase, so clearly, we have a deep rosary partnership with them. The thing that has changed, just to explain to you the changing strategy, is that we had an embedded benefit partnership on some part of their core portfolio, but what we saw is that actually two-thirds of the redemption happened in year one, so you tend to really get a lot of the value of these partnerships in year one, and then we saw that because we have such a superior service, these people converted into being Instacart Plus customers and retained with us because they see the value of Instacart, so there isn't much point in continuing to pay for ongoing benefits when you have highly retained users, and instead, what we want to focus on is actually directing this energy towards new users, new customer acquisition, because as a category leader, that's really the number one priority for us, and that's why you'll see what we announced with Chase yesterday, we are directing our investment towards offers for a much broader part of their portfolio, and especially their co-branded cards that we hadn't previously touched, and putting an offer in front of their customers of 10% cashback, which we think is going to allow us to tap into a fundamental new audience, so we're very pleased with the results of the Chase partnership to date, and we're very excited about this next phase of the partnership that should really allow us to focus on new customers. Thank you.
Speaker Change: Now on to Chase piling up share, but I would encourage you to fact check what you held because as you may see online we published a blog post yesterday, our that shows that that's the four distinct partnership with chase. So clearly are we we are we have a deep partnership with them. So the thing that has changed.
Speaker Change: Just to explain to us the change in strategy is that we had an embedded benefit pall enough. She put in some parts of the portfolio, but what we saw is that actually to sell the redemption hop engineered wanting so you tend to really get the value a lot of the value of these partnerships in year one.
Speaker Change: And then we saw that because we have such a superior service. These people converted into being in CCAR, plus customers and we change with us because he's a value since occult. So is there isn't much point in continuing to pay for ongoing benefits. When you have highly with end users and instead, what we want to focus on is actually the <unk>.
Speaker Change: Racking and LG towards and you yourself, new customer acquisition, because I was like I think of.
Speaker Change: That's really.
Speaker Change: The number one priority for us and that's why.
Speaker Change: You'll see what we announced these changes yesterday, we are directing our investments towards offers for a much broader part of the portfolio and especially the co branded cards that we hadn't previously touch and putting enough her in front of the customers of 10% Cashback, which we.
Speaker Change: He is going to allow us to tap into a fundamentally New York and so we're very pleased as a result of the chase partnership to date and we're all very excited about this next phase of the partnership that should really allow us to focus on new customers.
Speaker Change: Thank you one moment for our next question.
Operator: One moment for our next question. Our next question comes from the line of Justin Post from Bank of America. Great, thanks for my question. I want to ask about AOVs.
Speaker Change: Our next question comes from the line of Justin Post from Bank of America.
Justin Post: Great. Thanks for taking my question I wanted to ask about L. A is it looks like it slipped a positive quite positive this quarter and youre looking for growth next quarter, how much of that is just market versus you're able to drive it with suggestions and product offers with actually it could be helping your grocers and kind of what's your outlook for for Ao vs over there.
Emily Reuter: It looks like the flip side, quite positive this quarter, and you're looking for growth next quarter. How much of that is just the market versus you're able to drive it with suggestions and product offers, which actually could be helping your grocers, and kind of what's your outlook for AOVs. Thanks, thanks, Justin, for the question. This is Emily. I'll take that one.
Speaker Change: Next year. Thank you.
Emily Reuter: And so in terms of Q2, specifically, you know, in terms of what's driving AOV, there were a couple of different factors. It is more of an outcome of what's happening in the market versus something that we try specifically to influence. So, what happened in Q2, we do have new customer cohorts that are reaching bigger baskets faster than prior cohorts. So that does influence the overall AOV.
Speaker Change: Thanks. Thanks, that's it for the question. This is Emily I'll I'll take that one and so in terms of Q2, specifically are you now in terms of what's driving a O V. There was a couple of different factors and it is more of an outcome of what's happening in the market versus something that we try specifically to influence. So so what happened in Q2.
Speaker Change: We do have new customer cohorts that are reaching bigger baskets faster than prior cohorts. So that does influence. The overall LTV. In addition, as has always happened existing customers continue to make larger purchases over time, so that weights. The overall picture and then lastly, we did have a higher mix of club orders in the period.
Emily Reuter: In addition, as has always happened, existing customers continue to make larger purchases over time, so that weights the overall AOV picture. And then lastly, we did have a higher mix of club orders in the period. We don't guide specifically to AOV or the composition of GTV on a go forward basis, but that gives you a bit of color as to what happened in Q2.
Speaker Change: We don't guide specifically to O V or the composition of GTA V. On a go forward basis.
Speaker Change: But that gives you a bit of color as to what happened in Q2.
Emily Reuter: And just saying, I will add that the mix of club orders increasing is an intentional thing. As we've mentioned in the past, we definitely want to direct some of our incentives towards customers adopting clubs, because we see that when you adopt a club, you're more likely to retain it over time. And as a result, that has been a big part of our incentive strategy. I will highlight that clubs are doing exceptionally well on Instacart right now.
Speaker Change: And Justin I will add to that.
Speaker Change: The mix of club orders, increasing ease a car unintentional thing is as we've mentioned in the past we are definitely if he wanted to direct some of our incentives towards customers adopting clubs because we see that when you adopt club you're more likely to retain over time and as a result.
Speaker Change: That has been a big part of our incentive strategy I will highlight that clubs all doing exceptionally well and in the courts right now in particular with Costco, We recently launched the EBT and snap with them, we are upgrading them to our new store phone through our websites, which is working incredibly well so you sell into called platinum.
Emily Reuter: In particular, with Costco, we recently launched EBT Snap with them, and we upgraded them to our new Storefront Pro website, which is working incredibly well. They sell Instacart Plus membership on their site; we sell Costco membership on ours.
Speaker Change: Ship on that side, we sell Costco membership on ours, so really the depth of the problem that ship is showing up in the high uptime adoption.
Operator: So really, the depth of the partnership is showing up in higher club adoption. Thank you. One moment for our next question. Our next question comes from the line of Andrew Boone from JMP Secure. Thanks so much for taking my questions.
Speaker Change: Thank you one moment for next question.
Speaker Change: Our next question comes from the line of Andrew Boone from JMP Securities.
Operator: You added Home Depot and Sally Beauty in the quarter. Can you talk about your supply with non-grocery merchants? How do you feel about that? And what are your plans to grow it as well as what's the consumer response as you guys continue to add selection there? Thanks so much.
Andrew Boone: Thanks, So much for taking my questions you've added home depot and Sally beauty in the quarter can you talk about your supply with non groceries merchants, how do you feel about that and what are your plans to grow it as well is what's the consumer response as you guys continue down its function there. Thanks so much.
Fidji Simo: Thanks, Andrew. We continue to be pleased with what we're seeing here, both with existing non-grocery retailers as well as new ones that have joined onboarding. What we find very often is that because people are used to placing large baskets in grocery stores, they are primed to place large baskets with these other retailers as well. And so that has been a very big benefit for them and for us as well. And it is an incremental use case that allows us, once again, to take some of the more infrequent customers and either have them discover Instacart through these retailers, especially during seasonal events like Valentine's Day and things like that, where you come to Instacart for last-minute purchases that are not necessarily in the grocery category.
Speaker Change: Thanks, Andrew we continue to be pleased with what we're seeing here, both with existing nonrecourse with retailers as well as new ones that we're onboarding.
Speaker Change: What we find very often is that because people are used to placing larger baskets in grocery.
Speaker Change: All prime to play slot baskets with these although retailers as well and so that's that has been a very big benefit for them and for us as well and it is an incremental use case that allows us once again to take some of the more infrequent customers and each other than just to cover off the call with <unk>.
Speaker Change: These retailers, especially during seasonal events like you know Valentine's day, and it seems like that's where you're coming to into golf for last minute purchases that are not necessarily in the grocery category and that allows us to attract new customers to the to 12 ecosystem in length and brought them into grocery customers.
Fidji Simo: And that allows us to attract new customers to our ecosystem and then convert them into grocery customers or take grocery customers and increase their frequency with this new use case. This is also adding to the strength of Instacart Plus because when you buy Instacart Plus now, you're not just getting groceries, you're getting restaurants, you're getting a lot of other verticals in beauty, in home improvement, etc. And so, you know, when you look at this whole picture, on average, customers on Instacart shop from five or more retailers on our marketplace, and Instacart Plus members shop at twice as many retailers, and non-grocery categories are a contributor to that.
Speaker Change: Grocery customers and increase their frequency with these new use cases. This is also adding to the strength of any pickup plus because when you buy into the Gulf Coast now Youre not just getting butchery, you're all getting restaurant, you're getting a lot of talk about your calls in beauty and home improvement etcetera, and so you know when you look at this whole picture on that.
Speaker Change: Average customer on in sickle shop from five plus retailers on all market place and I, It's a golf club members shop at twice as many retailers and non unfortunately categories all contribute to that.
Fidji Simo: Thank you. One moment for our next question. Our next question comes from Shweta Khajuria from Wolf Research. Talk about cohort. Event Presenter, that generally speaking, enterprise grows along with the rest of the platform. What would you need to do...?
Speaker Change: Thank you one moment for next question.
Schwindt: Our next question comes from the line of Schwindt, a kind of jewelry from Wolfe research.
Speaker Change: Thank you for taking my questions could you. Please talk about cohort behavior, you mentioned that in your letter could you provide a little bit more color on how the magnitude of improvement you are seeing them in the cohorts and how should we think about it in the back half of this year and then the second question is.
Speaker Change: On enterprise growth in the past you've mentioned that generally speaking enterprise schools in light has grown in line with the rest of the platform what would you need to do or see for it to accelerate at a clip faster than the overall platform. Thank you.
Operator: for more information. Sure, I can start with the cohort question. So thanks for the question. And in terms of, you know, first of all, just want to take a step back, and this relates, obviously, to the performance of the cohorts, but you know, the business is performing really well. And that obviously is an indication of the health of the underlying cohorts that delivered 10% year over year growth in Q2, and we're excited about the Q3 guide.
Speaker Change: Sure I can start with the the cohort question. So thanks for the question and in terms of you know first of all I just want to take a step back and it relates obviously the performance of the cohorts, but yeah. The business is performing really well and that obviously is an indication of the health of the underlying cohorts that delivered 10% year over year growth in Q2, and we're excited about the Q3.
Speaker Change: God now if we look backwards to 2023 we talked a lot about specific cohort trends because they were a significant headwind to 2023 growth really the and do their COVID-19 cohorts in particular the decline as folks that came to the popcorn for very specific COVID-19 related use cases.
Operator: Now, if we look, you know, backwards to 2023, we talked a lot about specific cohort trends because they were a significant headwind to 2023 growth, really, the COVID cohorts, in particular, the decline as folks that came to the platform for very specific COVID-related use cases churned off the platform. Now, at this point, all of our cohorts, we're really pleased to see both mature and new, are healthy, and their behaviors have really normalized. And so, for that reason, the specifics of any individual cohort really aren't as important.
Speaker Change: Churned off the platform now at this point all of our cohorts were really pleased to see both mature and new are healthy they're behaviors have really normalized and so for that reason the specifics of any individual cohort really arent as important and as I said before.
Speaker Change: A company, we think about cohorts as an output not really as an input and what I mean by that is we don't have any strategy around 2019 cohort or 2022 cohort. What we are focused on is deepening engagement with our existing and infrequent customers. So we talked about her feed you talked about earlier, the 25 million people.
Emily Reuter: And as I said before, as a company, we think about cohorts as an output, not really as an input. And what I mean by that is, we don't have any strategy around the 2019 cohort or the 2022 cohort; what we are focused on is deepening engagement with our existing and infrequent customers. So we talked about, or Fiji talked about earlier, the 25 million people that have used Instacart in the last year. We're really excited about the strategies we're seeing start to work on deepening engagement with the full spectrum of different customers we see in that 25 million.
Speaker Change: That used <unk> in the last year, we're really excited about the strategies, we're seeing start to work on deepening engagement with the full spectrum of different customers. We see in that 25 million that means we obviously have high single digit millions that you know are used people using CCAR. It monthly, but we also had people that were trying.
Emily Reuter: That means we obviously have high single-digit millions that people use Instacart monthly. But we also have people that we're trying to get from five times a year to monthly, from one time a year to six times a year.
Speaker Change: To get from five times, a year or two monthly from one time, a year or two six times a year. So there's a lot of work we're doing around engagement with those cohorts.
Fidji Simo: So there's a lot of work we're doing around engagement with those cohorts. In addition, as Fidji mentioned earlier, we are continuing to attract new users. We're still bringing in GTV from new cohorts that are higher than pre-pandemic. So overall, just really pleased with the picture. Now I'll take the question on enterprise.
Speaker Change: In addition, as P. J mentioned earlier, we are continuing to attract new users were still bringing in a G. T V from new cohorts that are higher than pre pandemic. So overall, just really pleased with the with the picture.
Fidji Simo: You are correct, we are seeing strong growth in both marketplace and enterprise. We are seeing overall momentum with enterprise, as I mentioned, and really what I'm looking at is our ability to onboard more retailers to our enterprise products faster. And so, for example, we onboarded 30 retailers in each one to our storefront products, and that's faster and more retailers than what we've been able to do in the past because we have revamped our system.
P. J: And I'll take the question on Enterprise I Oh, you are correct, we are seeing strong growth in both marketplace and enterprise.
Speaker Change: We are seeing overall momentum with enterprise as I mentioned and really what I'm looking at is our ability to onboard more tailored to our enterprise products faster.
Speaker Change: And so for example are we on boarded Saudi retailers in H, one tool sulfone products, and that's faster and more retailers than what we've been able to do in the past because we have with Amdocs system and therefore like when we do that then you get to a retailer to shift from that particular solution to any so called.
Fidji Simo: And therefore, like when we do that, and you get a retailer to shift from their particular solution to an Instacart solution, this is straight up incremental GTV, which is definitely contributing to growth. The other thing I will call out is that these businesses are not separate. That's what I was mentioning in my introduction.
Speaker Change: Solution. He sees trade up incremental GTD, which is definitely contributing to growth. The other thing I will call out is that these businesses are not separate that's what I was mentioning in my introduction I'll hand off price business helps all marketplace business grows in many ways because you show a retailer.
Fidji Simo: Our enterprise business helps our marketplace business grow in many ways, because if you're a retailer, and you really want an integration on your enterprise website, like integrating with Snap, like integrating with catering, like integrating, like doing pickup, it becomes incredibly easy to apply all of these integrations seamlessly to marketplace, and that contributes to the growth of marketplace. So we have really seen a virtuous cycle between these two things. And we don't think of it as like one needs to grow faster than the other.
Speaker Change: And you really want a non integration on your enterprise website like integrating we snap like integrating with catering like integrating a lot like doing pick up it becomes quite easy to apply all of these integrations are seamlessly to marketplace and that's been introduced.
Speaker Change: A market place. So we have really seen a gesture of cycles between these two things and we don't think of it as like one to both ourselves and killed up instead, we think of it as like let's integrate more and more muted with retailers so that both our marketplace and our enterprise business grow faster.
Operator: Instead, we think of it as, let's integrate more and more deeply with retailers so that both our marketplace and our enterprise business grow faster. Thank you. One moment for our next question, which comes from the line of Ross Sandler from Barker. Hey, just following up on that $25 million comment, the top of funnel, how is that $25 million growing compared to the monthly active, meaning, like, is the top of funnel growing faster, slower? How did that look a year ago?
Speaker Change: Thank you.
Speaker Change: One moment for next question.
Speaker Change: Our next question comes from the line of Ross Sandler from Barclays.
Ross Sandler: Alright, just following up on that 25 million common.
Speaker Change: The top of funnel, how the 25 million.
Ross Sandler: Growing compared to the monthly active meaning like as the top of funnel growing faster slower how does that look a year ago.
Operator: And, you know, I guess, how are you guys evolving the incentive program to bring people down that funnel? And then the second question is just on the... Off Instacart ads opportunity, the retail media, you mentioned a bunch of social media sites that you're deeper integrating with. How big is that opportunity in front of you for off-site ads? Yeah, so let me start with the 25 million.
Speaker Change: No.
Speaker Change: I guess, how are you guys evolving incentive program to bring people down that funnel and then the second question was just on the.
Speaker Change: Off the court.
Speaker Change: This opportunity the retail media.
Speaker Change: And a bunch of social media sites that you're deeper integrating with.
Speaker Change: How big is that opportunity in front of view for Offsite ads.
Fidji Simo: We don't report on specific numbers here, but the number is certainly growing year over year. And we like what we're seeing here in our ability to continue habituating these users, as Emily mentioned, and as I mentioned earlier, I think what it's going to take to really habituate these users is not just the incentives that we mentioned, but also introducing new use cases like restaurants, which are high-frequency, and that we are seeing these users, as well as power users, really adopt.
Speaker Change: Yeah. So let me start with a $25 million, we don't report on specific numbers, yet, but it is is yourself and growing year over year and we like what we're seeing here in our ability to continue habituated users I didn't really mention that as I mentioned earlier.
Speaker Change: What it's going to take to really arbitrate uses not just incentives that we mentioned, but also introducing new use cases like restaurants, which are high frequency and that we are seeing users as well as power users are really adopt also connecting to use those to all of us.
Fidji Simo: Also, connecting these users to all of our affordability initiatives so that these users start realizing that they can actually get their entire grocery habit moved to Instacart at a very competitive price. And you know, we're doing that through loyalty integration, digitizing circulars, optimizing pricing with retailers, all of that compounds to really have a service that people realize they can use weekly and really adopt the weekly shop, which is fundamentally the end state for us. On your question about retail-powered media, it is still nascent for us. So it would have a fairly negligible impact on current advertising revenue.
Speaker Change: Affordability initiatives. So that you use a salt realizing that you can actually get your entire grocery habits moved to install at a very competitive price and you know while doing that through loyalty integration digitizing circulars optimizing pricing with retailers all of that compounds to really adding a <unk>.
Operator: However, it is a fairly significant piece of our path to getting to our target of 4 to 5% of GTV. These things take time to ramp because, usually, you have to connect to different stakeholders at the CPGs that are different between the one that plays ads on, you know, Google and Meta than the one that plays ads on Instacart. So it's a new sales motion; it's a sales motion that we need to put in place with partners. Thanks. One moment for our next question. Our next question comes from the line of Tom Champion from Piper Sandler. Hi, thanks. This is Jim on behalf of Tom.
Speaker Change: Service that people realize they couldn't use wiki and really adopt so we can shop, which is a fundamental again states for us on your question on a retail power media. It is still nascent for us so it would be a fairly negligible impact on current advertising revenue.
Speaker Change: However, it is a fairly significant piece of our path to getting to our target of 45% of GTT. These things take time to ramp because usually you have to connect to different stakeholders.
Speaker Change: TPG is the difference between the one that plays the odds on you know Google and met our than the ones that place ads on pick up so it's a new sales motion. It yourselves motions that we need to put in place with partners. So it takes a little bit of time to ramp up towards the results and expand but we are very pleased with what we're hearing in D. L D.
Speaker Change: Days in terms of performance and that's keeping us extreme confidence in continuing to expenses continuing to prioritize that and if you look at the last year. We have added popping up she basketball nutshell from you know Google Youtube met our 20 <unk> because the trade desk really because we see a potential that you signed up.
Speaker Change: That's good for us long term.
Speaker Change: Thank you one moment far next question.
Speaker Change: Our next question comes from the line of Tom Champion from Piper Sandler.
Operator: Thanks for taking the question. So just to follow up on ads, we've seen the active brand partners move to 6,000 from call it 5,500. I guess we think about that four to 5% goal. Do we see the larger opportunity being ARPU or the number of advertisers on the platform? Thanks. It's going to be a mix of both.
Tim: Hi, Thanks. This is Tim on for Tom Thanks for taking the question. So just a follow up on ads. We've seen the active brand partners move to 6000 from call. It 5500, I guess, when we think about that 4% to 5% goal do we see the larger opportunity being <unk> or the number of advertisers.
Speaker Change: On the platform. Thanks.
Fidji Simo: What we are seeing is that there's still quite a large opportunity to onboard more brand partners. In fact, what we did in the last quarter was increase our emerging brand team, both on the sales side with really great ROI, as well as on the product side to make the product much easier to onboard onto. And that's why you're seeing this increase in the number of partners advertising, and we think we're very far from having tapped the full market there.
Speaker Change: It's gonna be a mix of both what we are seeing is that there's still quite a large opportunity in on boarding more brand partners. In fact, what we did in the last quarter increase of emerging brands team. Both on the sell side was really great of Hawaii as well.
Speaker Change: On the product side to make the product much you have to onboard on to and that's why you're seeing some increase in number of false advertising and wishing we're very far from having topped.
Fidji Simo: But we are also seeing that when these partners come onto the platform, they start to spend, see the results, and then expand their spend and really discover the value of Instacart across the entire funnel. Many of them might start with sponsored products and realize that we also have shoppable displays.
Speaker Change: Full market that but we are also seeing that our you know when you spun off come onto the platform. He like salt to spend she's a result, and then expand that spend in and really just cover the value of some cycle across the entire funnel many of them might salt with.
Speaker Change: Once those products and realize that we also have shippable displays and so over time, we really wanted to make sure that they use all of our capabilities and expand our top cruise so definitely see lots of opportunities that always with emerging brands I will call out as well that you know there is still lots of opportunity to deepen and expand with.
Fidji Simo: And so, over time, we really want to make sure that they use all of our capabilities and expand our pool. So, definitely, lots of opportunities there with emerging brands. I will call out as well that, you know, there is still lots of opportunity to deepen and expand with large players as well. We have called out the fact that some large players are pulling back given the challenges in their business, but that shouldn't mask the fact that some large players are really doubling down with us, investing a lot more, and seeing results.
Speaker Change: Large players as well we have called out the fact that some large players all pulling back given the challenges in the business, but that shouldn't mask. The fact that some large players are really doubling down with us investing a lot more and are seeing the results and what we're seeing you know wheel wheel.
Fidji Simo: And we're seeing, you know, real performance driving increasing investment. And that's why you're seeing us focus not just on new formats and new partnerships but also continuing to develop our measurement capabilities, because we have the best proof points to put in front of advertisers to demonstrate that they should be investing more and that it's a good ROI to do so. Thank you.
Speaker Change: Performance driving increasing investment and that's why you're seeing us focus not just on new formats, and you're calling up sure but also continuing to develop our measurement capabilities because we have like the best proof points to put in front of advertisers to demonstrate that they should be investing more in that it's a good ally to do so.
Speaker Change: Thank you.
Operator: One moment for our next question. Our next question comes from the line of Bernie McTernan from Neata. Good.
Speaker Change: One moment for next question.
Speaker Change: Our next question comes from the line of Bernie Mcternan from need him.
Operator: Thanks for taking questions. Maybe just to follow up on the conversation around advertising. The Notary Public Loan Signing System, the different CPG companies, if we're thinking about, you know, providing, what's the benefit for the CPG operator for using one retail media network to access all these? The Data that You Provide is Better, just trying to think about what's from there. Yes, that's exactly right.
Bernie Mcternan: Great. Thanks for taking the questions, maybe just a follow up to the conversation around advertising and offering a portfolio of advertising solutions to two different CPG companies, if we're thinking about providing Facebook or Youtube, what's the benefit from for the CPG operator to do using one retail media networks.
Speaker Change: Access all of these other platforms is it that the data that you provided is better just trying to think about what.
Speaker Change: From their point of view. Thank you, yes, that's exactly right I would say those two very critical benefit one is all data and that goes both for targeting because you can go on one of those platforms.
Fidji Simo: I would say there's two very critical benefits. One is our data. And that goes both for targeting, because you can go on one of those platforms, and target customers based on their activity on Instacart, but also use that data for closed loop measurement, meaning that, you know, as you know, a lot of performance data has kind of disappeared and has left these platforms with less sophisticated measurement capabilities, whereas by partnering with us, they are able to prove that the ads that are being shown on this platform actually leads to a purchase, in many cases, within, you know, an hour of seeing the ad.
Speaker Change: And target customers based on the activity on in the call, but also use that data for closed loop measurement, meaning that you.
Speaker Change: You know as you know a lot of first party data.
Speaker Change: Kind of disappear and as left these platforms.
Fidji Simo: And so we think this is incredibly powerful to have this data, both on the targeting side and the measurement side, and a primary reason why advertisers choose to use this solution. In addition to that, the other thing that we offer is pointing these ads toward an Instacart brand page. So if you look at CPG ads regularly, like sometimes they don't really have a clear destination, or they point to a website where you cannot buy the product.
Speaker Change: Less sophisticated measurement capabilities, whereas by partnering with us they are able to prove that the ads that are being shown on this it's got formed actually leads to a pulse chase in many cases, we didn't you know and know about him.
Walt: And so we we think this is incredibly powerful towards these data both on the targeting side into the Muslim insider and a primary reason why advertisers choose to use your solution. In addition to that the other thing that we offer is pointing his odds to Walt and his team.
Fidji Simo: Whereas, if you point your CPG ad to an Instacart page, it means that the customer can go from looking at the ad on Facebook to landing on Instacart, buy the product right there, and have the product in their hands in an hour.
Speaker Change: All brand page if you look at CPG ads.
Speaker Change: Regularly like sometimes they don't really have a tail destination or they point to a website you cannot buys our products, whereas as you point a shipyard to a new cycle page. It means that the customer can go from looking at the AD on Facebook like lending and instead of buying the product right, there and I think the production there.
Fidji Simo: That's a really, really magical customer experience and loop that you can create as an advertiser. And so we act both as a great destination, as well as a data and measurement partner to increase the performance of the ads by measuring them and optimizing them. Thanks.
Speaker Change: Our hands in an hour, that's a really really magical customer experience and loop. So that you can create doesn't matter appetizer and so we are both the aussie great destination as well as a data and measurement pulse map to increase the performance of the odd by measuring them and optimizing them.
Speaker Change: Thank you.
Operator: One moment for our next question. Our next question comes from the line of Jason Helfstein from Oppenheimer and Company. Thanks for watching.
Speaker Change: One moment for next question.
Speaker Change: Our next question comes from the line of Jason Health Stein from Oppenheimer and company.
Speaker Change: Thanks to so year to date G. T V is up 11% year over year I think most of US are still at like 6% G. T V and our models for the next two years I mean, barring any change in economic conditions, which obviously is a big if I mean is there any reason why growth should slow given what sounds like pretty pretty.
Operator: Models for the next two years, barring any change in economic conditions. Is there any reason why growth should slow given the pretty impressive commentary around cohorts? And just a second follow-up. Any additional color you can provide on Instacart Plus activity in the second quarter or perhaps contribution to GTV or... I'll take Instacart Plus, and Emily can take the first question.
Speaker Change: That's a commentary around cohorts and just a second follow up any additional color you can provide on in CCAR plus activity in second quarter or perhaps contribution to G. T V or just any other color. Thank you.
Fidji Simo: On Instacart Plus, we are very pleased with what we're seeing. We are seeing growth in Instacart Plus members, but we're also seeing faster growth in Instacart Plus members than all regular monthly active orders, which translates into deeper penetration of Instacart Plus within our customer base. So we're really excited about that. We think that it's because the value of Instacart Plus continues to grow and increase over time with the addition of restaurants, with the partnerships that are striking, with Peacock, with the New York Times, and more, and that's really translated into the growth that we're seeing. We don't report on specific numbers, but we can confirm that Instacart Plus is still the majority of our GTVs, and that's something that continues to grow. Thank you. One moment. Oh, excuse me.
Speaker Change: I'm, taking cigar plus and really can take the first question on uninstalled plus are we are very pleased with what we're seeing we are seeing growth in the golf members, but we're also seeing faster growth in instant golf plus members and Vicki del Monte I keep all the oil.
Speaker Change: Which translates into deeper penetration of a integral tests with you know our customer base. So we're really excited about that we think that it's because the value of some pickup trucks continues to grow and increase over time with the addition of restaurants with our partnerships while striking with peak.
Speaker Change: Cook with M, New York time, and more and all that's really translated into a support that we're seeing we don't we bought in specific numbers, but we can confirm that and pick ups us skills. The majority of all <unk> and that's something that continues to grow.
Speaker Change: Thank you one moment for them there.
Speaker Change: Oh, sorry, there was another part of that question.
Speaker Change: Go ahead, sorry, I Didnt hear it.
Operator: Sorry, there was another part of that question. I'll jump in. Sorry, thanks, Jason, for the question. So as it relates to GTV, as you mentioned, GTV is up really strongly this year. What I would, you know, we're really pleased with the momentum that we've had in the first half of 2024. I would, you know, remind everyone that in Q1, we did have a number of one-time benefits, the combination of the benefit of Leap Day in February, as well as some one-time seasonal benefits from bad weather. So that, you know, does affect the overall picture.
Speaker Change: Alright, Thanks, Jason for the question so as it relates to GTA V and as he mentioned GDP up really strongly this year, what I would you know we're really pleased with the momentum that we've had in the first half of 2024 I would remind everyone that in Q1, we did have a number of onetime benefits the combination of the benefit.
Speaker Change: Of leap day in February as well as some some one time seasonal benefits from from bad weather. So so that.
Speaker Change: Does that factor into the overall picture.
Emily Reuter: As we look forward, or, you know, we're very pleased with our Q3 guidance. As you mentioned, two quarters of double-digit growth. As we look into Q3, we're pleased to have double-digit growth at the high end of the range. But But, as we've said in the past, you know, when we think about our guidance ranges, really, what we're doing is looking at the data that we're seeing on the ground day to day. We obviously, as any business does, look at, you know, the upsides and downsides of and try to give, you know, our best view of the range of outcomes. And that's, you know, the philosophy that you're seeing play out here again.
Speaker Change: As we look forward, we're very pleased with our Q3 guidance.
Speaker Change: You mentioned two quarters of double digit growth as we look into Q3, we're pleased to have double digit growth in the high end of the range, but as we've said in the past when we think about our guidance range is really what we're doing is looking at the data that we're seeing on the ground day to day are we obviously as any business does look at you know the upsides and downsides.
Speaker Change: And try to give our best view of the range of outcomes.
Emily Reuter: So, you know, we feel good about the guidance range that we've given based on what we're seeing in the data today. Longer term, you know, we don't comment beyond next quarter. But what we have said is, we really want to see that continued momentum in all of the data, whether that's the cohort dynamics that you mentioned, the acquisition dynamics that we've talked about already, the continued engagement of existing customers.
Speaker Change: And that's the philosophy that you're seeing play out here again, so yeah, we feel good about the guidance range that we've given based on what we're seeing in the data today.
Speaker Change: Longer term we do.
Speaker Change: Comment beyond next quarter.
Speaker Change: But what we have said is we really want to see that continued momentum are in.
Speaker Change: And in all of the data whether that's the cohort dynamics that you mentioned are the acquisition dynamics, we've talked about already.
Speaker Change: Engagement of the existing customers, so I'm not going to comment on on the longer term view at this point in time.
Emily Reuter: So I'm not going to comment on the longer term view at this point in time. Thank you. One moment for our next question. Our next question comes from the line of Mark Kelley from Steve. Great, thanks very much. Good afternoon. I want to go back to the advertising business really quickly.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from the line of Mark Kelly from Stifel.
Mark Kelly: Great. Thanks, very much good afternoon, I wanted to go back to the advertising business really quickly.
Operator: You know, you've got to shut down their retail media business. I'm just curious if that's kind of a near-term opportunity that you think you might be able to go after. And then the second one, as you focus more on growth or establishing a footprint outside of the U.S., can you remind us if there are any... Geographic, uh, specific investments that you think you need to make, uh, or if you think the product that you have right now is something that will resonate with markets outside the US. Thanks.
Speaker Change: You know you've got Microsoft just.
Mark Kelly: Shut down their retail media business I'm, just curious if that's a kind of a near term opportunity that you think they might be able to go after.
Speaker Change: And then the second one.
Speaker Change: You focus more on growth or establishing a footprint outside of the U S. Can you remind us if there are any.
Speaker Change: Efik specific investments that you think you need to make.
Speaker Change: Or if you think you know this is a product that you have right now is something that will resonate with with markets outside the U S. Thank you.
Fidji Simo: So on the advertising question, you know, I'm not commenting on Microsoft specifically, but I would say that we have a product that is really designed to take our entire advertising stack and make it available to other parties, whether that's retailers or other players in the market that want to set up a retail media business. This uses, you know, also very clear signals that setting up these businesses and doing that at scale is really hard. We have done that successfully.
Speaker Change: Thanks, So on Saturdays in question, you know I'm I'm, not commenting on Microsoft specifically, but I would say that we have a product that is really designed to take our entire advertising stock and make it available to all the parties with all that as retailers of all the players in the market.
Speaker Change: That's that's one of the standup of retail media business.
Speaker Change: You can use as you know so very clear signals that sending up these businesses and doing that at scale is really hard that we have done that successfully we have made the investments over the course of many years and now we're incredibly excited about the fact that we can take these investments and add scale by offering to all retailers.
Fidji Simo: We have made these investments over the course of many years, and now we're incredibly excited about the fact that we can take these investments and add scale by offering them to our retailers and to other sites and allowing them to create an immediate new line of business while also expanding our scale and really becoming a one-stop shop. So I would say, you know, the fragmentation of these markets does help us because CPGs are going to want to deal with fewer platforms that are really at scale.
Speaker Change: And two other sites and allow them to create immediate new lines of business, while also expanding our scale and really becoming a one stop shop. So I would say you know the fragmentation of these market does help us because cpg's aren't going to want to deal with fewer.
Speaker Change: Platforms at all really at scale and I think what we're gonna see more and more you know retailers and smaller retail media networks want to benefit from the scale, we bring to the table and want to partner with us on both technology and human So we're excited about that.
Fidji Simo: And I think we're going to see more and more retailers and smaller retail media networks want to benefit from the scale we bring to the table and want to partner with us on both technology and demand. So we're excited about that. On international growth, we are very focused on the North American market because there's a massive opportunity there. The North American market is still only 13 percent penetrated online, while Amazon is the clear category leader.
Speaker Change: On international growth that we are very focused on the north American market, because there was a massive opportunity that the market is still only 17% penetrated online wealth a clear category leader. So we really wanted to focus on driving deeper penetration there.
Fidji Simo: So we really want to focus on driving deeper penetration there. However, in the same way that paper costs are generating a lot of excitement among U.S. grocers, we are starting to see international grocers like Aldi in Austria be excited about the capabilities that paper costs can bring and, in general, our overall suite of in-store products. And so, opportunistically, we are definitely looking at retailers that might be interested in deploying these technologies inside their stores because we think that these technologies could very easily expand from the U.S. to international markets, especially as all retailers are dealing with a digital transformation, not just online, but in their stores as well. Thank you.
Speaker Change: However, in the same way that keep off calls all generating a lot of excitement with U S forces. We are starting to heat international grocers like argued industrial AR be excited about the capabilities of that to keep our costs can bring and in general our overall suite of install.
Speaker Change: Products and so Opportunistically, we are definitely looking at you know retailers that might be interested in deploying these technologies inside that store, because we think that.
Speaker Change: These technologies could very easily expand from the U S to international markets, especially as all retailers all dealing with the digital transformation, not just online, but industrial as well.
Speaker Change: Thank you one moment for next question.
Operator: One moment for our next question. Our next question comes from the line of Ron Josey from Citi. Thanks for taking the question. Fidji, I wanted to go back, and I think you might have gotten part of this question in the past earlier, so I'll try a different way of asking it.
Speaker Change: Our next question comes from the line of Ron Josey from Citi.
Ron Josey: Alright, Thanks for taking the question I wanted to go back and I think he might have gotten a part of this question earlier, so I'll try a different way of asking it I wanted to go back to the comment on the 25 million customers have used them to court in the past year, we'd love to hear your thoughts on how the behaviors of these users have evolved over the past year, because I know many of them come back.
Operator: I want to go back to the comment on the 25 million customers who have used Instacart in the past year. We'd love to hear your thoughts on how the behaviors of these users have evolved over the past year, because I know, you know, many have come back, and whether the tools the team has launched at Instacart, like the incentives platform, have led to improving repeat rates based on the data that you're seeing. That's one question on the 25 million, and Emily, I wanted to get you to take rates.
Speaker Change: And what are the tools. The team has launched at instant card you know like they are in like the incentives platform has led to improving repeat rates based on the data that you're seeing so that that's the one question on the $25 million in Emily I wanted to get to him take rates expanded sequentially for the third consecutive quarter, we'd love to hear about the drivers here in terms of driving these improvements.
Fidji Simo: They've expanded sequentially for the third consecutive quarter. We'd love to hear about the drivers here in terms of driving these improvements. Is it the delivery process changes that the team has made? Is it the incentive updates? Once again, we talked about that, or maybe store relationships. Any details on take rates would be helpful.
Speaker Change: The delivery process changes that the team has made it the incentive updates once again, we talked there or maybe store relationships any any details on take rates would be helpful. Thank you.
Emily Reuter: Thank you. So, Ron, we're definitely seeing good trends in this growing 25 million number. And as you know, we have been very focused on habituation. I mentioned in previous quarters about our new incentive platform, which really has made it much easier for us to deploy incentives toward the habituation formula that we know works, whether it's adoption of Instacart Plus, whether that's adoption of clubs, whether that's putting new retailers and new verticals in front of these customers, whether that's launching restaurants with great success. All of this is giving us a lot of confidence in our ability to get these users to improve their frequency over time. As a reminder, we mentioned that
Ron Josey: So Ron that well definitely seeing good trends in is growing 25 million a number and as you know we have been very focused on that deterioration I mentioned in the.
Ron Josey: Past quarters about our new incentive platform, which is really.
Ron Josey: It's much easier for us to deploy incentives towards the high deterioration formula that we know works whether its adoption of him stick off plus whether that's adoption of clubs, whether that's pitching new retailers and new verticals in front of customers, whether that's launching restaurants with great success all of these.
Ron Josey: Giving us a lot of confidence in our ability to get users to improve their frequency over time.
Ron Josey: As a reminder, we mentioned that but you know these yearly active others are already pacing 11, all delta here with us. So it really is a matter of getting them to.
Fidji Simo: But these yearly active orderers are already placing 11 orders a year with us. So it really is a matter of getting them to realize that the weekly shop is something that they can afford every week, connecting them to all of the ways in which they can afford that, and then also making them discover the higher frequency use cases like restaurants so that we can see this kind of compounding frequency for them.
Ron Josey: To realize that we can shop is something that they can afford every week connecting them to all of the ways in which they can afford that and then also making them discover us.
Ron Josey: The more you know the high frequency use cases like restaurants. So that we can keep this kind of compounding a frequency for them. So it's a massive opportunity because I think in the past, we primarily talks about our power users software you know kind of monthly active orders, but we have a much bigger top of the funnel that's weak.
Fidji Simo: It's a massive opportunity because, in the past, we primarily talked about our power users that were kind of monthly active orderers. But we have a much bigger top of the funnel that we can habituate, and that represents a big opportunity now that we have the tools in place to do so. Great, and I'll jump in on the second question about take rates.
Ron Josey: Habituate the industry presents a big opportunity now that we have the tools in place to do so.
Emily Reuter: So you're right, we have expanded take rates for the last couple quarters, though I would note that the last quarter was a pretty modest expansion, the rounding makes it look a bit sharper than it actually was. And that continues to be a lot of the same trends we've been seeing for the last couple quarters. So first, on the positive side, really continuing to see shopper efficiencies in terms of the payments that we make to shoppers to make deliveries.
Speaker Change: Great and I'll jump in on the second question about take rate, so and so you're right. We have a we have extended take rates for the last couple of quarters, though I would note that last quarter. It was a pretty modest expansion at the rounding makes it look look a bit sharper than it actually was and that continues to be a lot of the same trends we've been seeing for the last.
Ron Josey: Couple of quarter. So first on the positive side are really continuing to see.
Ron Josey: Shopper efficiencies and in terms of the payments that we make to shoppers to make deliveries and that's driven by.
Emily Reuter: And that's driven by our order density at the end of the day, being able to drive batch rates, which really only results from multiple large batches happening at the same store at the same time. And this kind of goes back to Fiji's point earlier; this is sort of our marketplace being reinforced by the white label storefronts that drive this level of order density. So we continue to see benefits there, and we, you know, expect that to continue.
Ron Josey: Our order density at the end of the day being able to drive that rates, which really only results from multiple large batches happening at the same store at the same time and this kind of goes back to Peters point earlier. This is sort of our marketplace being reinforced by the white label storefronts that drive. This this level of order density so continuing to see benefits.
Ron Josey: There and we expect that to continue and at the same time, we have decided to take.
Ron Josey: Much of that efficiency and reinvest it in in other parts of the business, we have talked about incentives in the past and we continue to invest in targeted incentives, but we're also investing in our product portfolio. So we mentioned some of the range of different affordability options that we're that we're leaning into like a favor options that allow.
Emily Reuter: At the same time, we have decided to take much of that efficiency and reinvest it in other parts of the business. We have talked about incentives in the past, and we continue to invest in targeted incentives. But we're also investing in our product portfolio. So we mentioned some of the range of different affordability options that we're leaning into, like, you know, saver options that allow folks to schedule delivery later in the day or pickup options being free.
Ron Josey: Our folks too.
Ron Josey: Schedule delivery later in the day or pickup options being free.
Ron Josey: And so that shows up also in take rates now the last thing I'll say is I've said this previously where we're really pleased with where we are from a transaction revenue standpoint, we are in the top half of our long term range already and so for that reason it really don't expect transaction revenue to.
Emily Reuter: And so that shows up also in intake rates. Now, the last thing I'll say is, you know, I've said this previously, we're really pleased with where we are from a transaction revenue standpoint; we are in the top half of our long-term range already. And so for that reason, you really don't expect transaction revenue to be, you know, purely up in the right; we expect this could move around over time.
Ron Josey: Purely be up into the right. We expect it could move around over time, and that's really driven by the fact that there are a number of decisions that we're making you know day to day month to month in terms of how we're running the business, meaning we may lean more heavily into incentives in one quarter, because we're seeing about a return that's going to show up in transaction revenue versus leaning more heavily into something.
Emily Reuter: And that's really driven by the fact that there are a number of decisions that we make, you know, day to day, month to month in terms of how we're running the business, meaning we may lean more heavily into incentives in one quarter because we're seeing a better return, that's going to show up in transaction revenue versus leaning more heavily into something like paid marketing, which shows up in sales and marketing. As I mentioned earlier, leaning into certain price options shows up in transaction revenue; these are choices that we're making across the portfolio.
Ron Josey: Like paid marketing, which shows up in in in sales and marketing as I mentioned earlier leaning into certain price options and it shows up in transaction revenue. These are choices that we're making across the portfolio and so that's why at the end of the day you may see transaction revenue move around over time.
Speaker Change: Thank you one moment for next question.
Emily Reuter: And so that's why, you know, at the end of the day, you may see transaction revenue move around over time. Thank you. One moment for our next question. The next question comes from Michael Morton from Moffitt Nathan. Thank you for the question. One follow-up to Nikhil's question earlier, but I appreciate the call out for the Chase cashback blog post yesterday, but would love to know if you could maybe contextualize or side for us for Instacart Plus members. How many of those are self-paying, or then how many are? Plus Members as part of a partnership. That would maybe be some helpful commentary.
Speaker Change: Our next question comes from the line of Michael Morton from Moffett Nathan Sin.
Speaker Change: Thank you for the question.
Michael Morton: Two if I could.
Michael Morton: Following up on that question earlier, but.
Michael Morton: To call out for the two kind of cashback blog posts yesterday, but would love to know if you could maybe contextualize the size for us.
Speaker Change: For plus members how many of those are self pain.
Ron Josey: Or then how many are <unk>.
Ron Josey: The car park members as part of a partnership that would maybe be some helpful commentary and then big picture on the paper cards.
Operator: And then the big picture on the Kaper card. It sounds like the holy grail of closed-loop advertising, right? You show someone an impression, then you can see they put it in their cart, and they pay for it. What are some of the restricting factors to rolling these out as fast as possible? In theory, you'd want to have them in every grocery store in the country tomorrow, so I would love to learn some more about that. Thank you. Thanks, Michael.
Ron Josey: Sounds like the Holy Grail of closed loop advertising right you show some on an impression.
Speaker Change: And then you can see they put it in their cart and they pay for it what are some of the restricting factors to rolling these out as fast as possible in theory, you would want to have them in every grocery store in the country Tomorrow, So would love to learn some more about that thank you.
Fidji Simo: On Chase, just want to make sure I understand the question, but I would say partnerships in general are a lever for us to drive Instacart Plus adoption, but that's by no means the biggest driver. As I mentioned earlier, we're seeing very strong adoption of paid IEC Plus memberships. And that's really across the board, across all of our tactics.
Chase: Thanks, Michael Hum on Chase Ah just want to make sure I understand the question, but I would say partnerships in general is a lever for us to drive into gold plus adoption, but that's by no means.
Speaker Change: Biggest driver as I mentioned earlier, we're seeing very strong adoption of paid IC plus a member of ships and that's really across the board across all of our tactics and partnership is just one of the levers, but but not a big one and so I just wanted to clarify that in terms of your question.
Fidji Simo: And, you know, partnership is just one of the levers, but not a big one. And so I just wanted to clarify that. In terms of your question on paper cuts and ads, we completely agree with you that it really represents the Holy Grail of advertising and being able to take the best of online ads and really bring them to the store and have full closed-book measurement. Advertisers are very excited about it, and we want to roll that out as fast as possible. We see a lot of retailer excitement, as well as consumer excitement. When these are rolled out, we see higher average basket sizes. We see a high NPS score of about 70.
Speaker Change: On keep off cotton and <unk>. So we are we completely agree with you that it really what you said is the Holy Grail, if advertising and being able to fix up bad stuff online ads and really bring them into the store and have full closed loop measurement.
Ron Josey: Advertise all very excited about it and we want to roll that out as fast as possible, we see a lot of retailer excitement as well as consumer excitement when he's all rolled out we see a higher.
Fidji Simo: So we're really excited by what we're seeing. But at the same time, you know, it's operationally heavy to roll out a lot of cards in a retail store. You have to partner with them to integrate with our point of sale system, integrate with all of your loyalty systems. The good news is that we have a massive head start for having done that for our marketplace, for having done that when we power their own and operated sites.
Ron Josey: Average basket sizes are we see high NPS score of above 70.
Ron Josey: So what we're really excited by what we're seeing at the same time you know it's operationally you have to.
Speaker Change: <unk> rolled out a lot of costs in a weekend of store you have to partner with them to integrate with our point of sale system integrated with all of your loyalty system. So the good news is that we have a massive head start so having done that for all market players for having done that when we power their owned and operated sites. So it's.
Fidji Simo: So it accelerates our ability to deploy these cards into their IT systems and therefore into their stores way faster than if we had, we hadn't done all of these enterprise integrations, but it still requires new incremental integration that you have to do with our physical stores, as well as, you know, training of their sales team and all of these things. So to give you a sense, this year, we're going to go from, you know, hundreds of cards in deployment to thousands of cards deployed, and we expect to continue scaling that fast next year.
Speaker Change: So our ability to.
Ron Josey: To deploy these calls into the ITC stand, though that fall into the whole way faster than if we were we hadn't done all of these enterprise integrations, but it still requires new incremental integration that you have to do with our physical stores as well as you know training up the sales team and and all of you.
Ron Josey: So to give you a sense of Zetia and we're gonna go from hundreds of calls from deployment to thousands of calls deployed.
Ron Josey: And expect to you know continue Scalings out fast next year, and we think that you know.
Ron Josey: We will rapidly getting to the scale that we need for that to be a very interesting for advertisers to advertise on so we're really excited about that we're seeing high demand from retailers, both large and small I mentioned a couple of things until later.
Fidji Simo: And we think that, you know, we will rapidly gain the scale that we need for that to be, you know, very interesting for advertisers to advertise on. So we're really excited about that. We're seeing high demand from retailers, both large and small. I mentioned a couple in the letter.
Ron Josey: And it's really just a matter now of really doing these rollouts, making show about.
Ron Josey: The Rollouts go well in a couple of soft to start with and then expand our wishes retailers a parcel of that at all.
Operator: And it's really just a matter now of really doing these rollouts, making sure that the rollouts go well in a couple of stores to start with, and then expanding with these retailers across all of their stores. Thank you. One moment for our next question, which comes from the line of Walter Piecyk from the Light Shed Partners. Thanks. I apologize if you addressed this earlier, but the first question is just about the AOV.
Speaker Change: Thank you.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from the line of Walter Piecyk from the light shed partners.
Operator: If you could just drill down and talk about what the impact of the sequential growth there was. Was there any type of..., you know, price increases on the groceries themselves? And if there were decreases, what was more than offsetting that? Maybe higher tips? I mean, just anything you can give in terms of greater color excuse me on AOV.
Walter Piecyk: Thanks apologize if you addressed this earlier, but with the first question is just on the L. B.
Walter Piecyk: If you could just drill down and talk about what was the impact of the sequential growth. There was there any type of.
Speaker Change: You know price increases on our groceries himself and if there were decreases what was more than offsetting that.
Speaker Change: Maybe higher tips I mean, just anything you can give in terms of.
Speaker Change: Greater color color excuse me on a O V.
Ryan: Then just a second question Ryan Ubers kind of early.
Emily Reuter: And then, second question, I know Uber is kind of early, but do you expect there to be a noticeable impact on next quarter's results from the Uber relationship? Great, I can jump in.
Ryan: Do you expect there to be noticeable impact in next quarter's results from the from the Uber relationship.
Emily Reuter: Thanks for the question on AOV. So a couple of things that we highlighted on AOV as it relates to Q2 specifically were a couple of different factors. So some of them are just really broad and not necessarily specific to what's going on on an individual item basis, but I'll get to that in a moment. So first, you know, our new customer cohorts are actually reaching bigger basket sizes faster. So as they blend in, that is, is resulting in higher AOVs overall.
Speaker Change: Great I can jump in thanks for the question on <unk>. So a couple of things that we highlighted on AAV as it relates to Q2, specifically, where a couple of different factors. So some of them are just really broad based and not necessarily specific to what's going on in the individual item basis, but I'll get to that in a moment. So first.
Ryan: It's just that our new customer cohorts are actually reaching bigger basket size is faster so as they blend in that is that is resulting in higher <unk> overall, our existing customers are also continuing to make larger purchases over time, which is a trend that we've always seen and that blends in and then lastly, we do have a higher mix of <unk>.
Emily Reuter: Our existing customers are also continuing to make larger purchases over time, which is a trend that we've always seen, and that blends in. And then lastly, we do have a higher mix of club orders, and club AOV is higher overall. So that will blend in.
Ryan: Job orders and club O V is higher overall, so that will blend in.
Ryan: In terms of sort of the broader picture, though we are continuing to see a price per item on an individual basis, peaking a number of items traffic, meaning that we don't believe that this is really an inflation or individual price item price specific phenomenon as I mentioned earlier club items club.
Emily Reuter: In terms of sort of the broader picture, though, we are continuing to see price per item on an individual basis peaking and number of items troughing, meaning that we don't believe that this is really an inflation or individual price, item price, specific phenomenon. As I mentioned earlier, club items, and club AOVs are higher, and that's largely because club item prices are higher, not because they're more expensive, but because, you know, the scale of the items you might be getting is a bit bigger.
Ryan: Oh these are higher and that's largely because club item prices are higher and not because they are more expensive because the scale of the items you might be getting a bit bigger. So overall, that's really what we're seeing.
Speaker Change: And for that reason you know going forward you know, we're not commenting on the specifics of what we expect to see that the composition of GTA V and in Q3.
Ryan: Yeah.
Emily Reuter: So overall, that's really what we're seeing. And for that reason, you know, going forward, you know, we're not commenting on the specifics of what we expect to see the composition of GTV in Q3. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect, https://www.youtube.com.uk https://www.youtube.com.uk, Thanks for watching! A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A, ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? You can find these coils, shapes & designs in our ETSY store!
Speaker Change: Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
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Operator: https://www.etsy.com&shop!dai Thank you for watching! Please subscribe and like! You can find these coils, shapes, & designs in our ETSY store!
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Rebecca Yoshiyama: https://www.etsy.com&shop!dai, Good day and thank you for standing by. Welcome to Instacart's second quarter 2024 Financial Results Conference call. At this time, all participants are in a listen-only mode.
Ryan: Yeah.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. Please limit yourself to one question and one follow-up so that we will have enough time to address everyone's questions. 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, Capital Markets, and Treasury. Please go ahead.
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Rebecca Yoshiyama: Thank you, Gigi, and welcome, everyone, to Instacart's second quarter 2024 earnings call. On the call with me today are Fidji Simo, our Chief Executive Officer, and Emily Reuter, our Chief Financial Officer. During today's call, we will make forward-looking statements related to our business plans and strategy, developments in the grocery industry, and our future performance and prospects, including our expectations regarding financial results and partnerships. These forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated.
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Rebecca Yoshiyama: You can find more information about these risks and uncertainties in our last Form 10-Q filed with the SEC. We assume no obligation to update these statements after today's call, except as required by law. In addition, we will also discuss certain non-GAAP financial measures that have limitations and should not be considered in isolation from, or as a substitute for, our GAAP results.
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Fidji Simo: A reconciliation between these GAAP and non-GAAP financial measures is included in our shareholder letter, which can be found on our Investor Relations website. Now, I'll turn over the call to Fidji for her opening remarks. Thanks, Rebecca. And hi, everyone.
Ryan: Okay.
Fidji Simo: I hope you had a chance to read our latest shareholder letter. We've posted strong Q2 results, including 10% year-over-year growth in GTV, our third consecutive quarter of positive gap net income, and impressive gains in adjusted EBITDA and operating cash. Our performance reinforces our leading position as the largest online grocery marketplace in North America and highlights our best-in-class customer experience underpinned by industry-leading delivery speed and order quality. Across all dimensions, our deep integrations with retailers built over the last 12 years are an enduring strategic advantage that continues to pay off.
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Fidji Simo: We continue to deepen our selection advantage by offering multiple services like pick-up, virtual convenience, eBT snap, catering, and more that all require deep integrations within retailers. Our quality is unmatched because we understand retailers' inventory dynamics better than anyone through billions of data points that help us figure out what's on the shelf or what the perfect replacement is.
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Fidji Simo: And by linking with retailers' loyalty programs, digitizing their circulars, integrating their complex offers, and powering their price optimization algorithms, we can also make our service more affordable to consumers in ways that are incredibly hard to replicate. These advantages don't just apply to our marketplace but also extend to our enterprise platform, which is one of the most underappreciated parts of our growth strategy. So I thought I'd spend some time today explaining this in more depth to show how the scale of our retailer integration, the foundations of our marketplace, and white label storefront work together in a virtuous cycle and position as well for the. In 2023, we completely rebuilt our white label e-commerce storefront solution from the ground up.
Speaker Change: Good day and thank you for standing by welcome to <unk> second quarter 2024 financial results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question answer session.
Speaker Change: To ask a question during the session you will need to press star one one on your telephone please limit yourself to one question and one follow up so that we will have enough time to address everyone's questions. Please.
Speaker Change: Please be advised that today's conference is being recorded.
Fidji Simo: By creating a shared architecture with our marketplace, our enterprise forefront partners can now immediately benefit from the latest features and technologies that we add to Instacart on their own and operated apps and websites. Most retailers can't match our pace of innovation on their own.
Speaker Change: I would now like to hand, the conference over to Rebecca Yoshiaki <unk> VP of Investor Relations capital markets and Treasury. Please go ahead.
Fidji Simo: So by integrating with us, they get continuous improvement that drives growth with minimal cost and effort. These investments are showing up in our results as we rapidly onboard more storefront retailers who are eager to turn in-store customers into omni-channel customers. About one in five Instacart orders are placed on our enterprise platform, and as we continue to expand our white label volume, this also benefits our whole ecosystem.
Rebecca Yoshiaki: Thank you Gigi and welcome everyone to <unk> second quarter 2024 earnings call on the call with me today are <unk>, our Chief Executive Officer, and Emily Reuter, Our Chief Financial Officer.
Speaker Change: During today's call, we will make forward looking statements related to our business plans and strategy development in the grocery industry, and our future performance and prospects, including our expectations regarding financial results and partnerships.
Speaker Change: These forward looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated.
Speaker Change: Can find more information about these risks and uncertainties and our last Form 10-Q filed with the SEC, we assume no obligation to update these statements after today's call except as required by law.
Speaker Change: In addition, we will also discuss certain non-GAAP financial measures, which have limitations and should not be considered in isolation from or as a substitute for our GAAP results. A reconciliation between GAAP and non-GAAP financial measures is included in our shareholder letter, which can be found on our investor Relations website.
Fidji Simo: By increasing the density of orders that we serve in every store, we can best position shoppers to offer faster on-demand delivery windows. We can also batch more orders together, which is the key to unlocking our best in class unit economics during growth. We are constantly looking for more ways to pass on this cost savings to customers and retailers while reinvesting in new initiatives to make our technology and services better so the virtuous cycle can continue.
Speaker Change: Now I'll turn it over the call to <unk> for her opening remarks.
Fidji Simo: There is a lot more runway to grow our marketplace and enterprise platform online, for sure. But even if we double or triple online grocery penetration, more than two-thirds of grocery shopping will still be in-store. And that's why our enterprise technologies now go beyond e-commerce with a suite of in-store technologies. Just today, we announced our first-ever international launch of our AI-powered Keeper card in partnership with Algi in Austria, as well as Algi US launching Caratags and an in-store mode inside our app.
Speaker Change: Thanks, Rebecca and hi, everyone. I Hope you had a chance to read our latest shareholder letter, we posted strong Q2 results, including 10% year over year growth in CTG, our self consecutive quarter of positive GAAP net income and impressive gains in adjusted EBITDA and operating cash flow.
Speaker Change: Our performance reinforces our leading position as the largest online grocery marketplace in North America and highlights our best in class customer experience underpinned by industry, leading delivery speed and all the quality.
Across all dimensions, our deep integrations with retailers built over the last 12 years.
Speaker Change: During strategic advantage that continues to pay off we continue to deepen our collection advantage by offering multiple services like pickup just for convenience EBIT snap catering and more that all require deep integrations with leading retailers since then.
Speaker Change: Our quality is unmatched because we understand retailers' inventory dynamics better than anyone to billions of data points that help us figure out what's on the shelf or whats the prospect replacement needs and.
Speaker Change: And by linking with retailers loyalty program digitizing the circulars integrating complex offers and powering the price optimization algorithms. We can also make ourselves more affordable to consumers in ways that are incredibly hard to replicate.
Speaker Change: These advantages don't just supply to our marketplace, but also extend to our enterprise platform, which is one of the most underappreciated part of our growth strategy.
Speaker Change: I thought that's been sometime today, explaining this in more depth to show how the scale of a retailer of integrations the foundations of our marketplace and white label storefront work together in a virtuous cycle and position us well for the future.
Speaker Change: In 2023, we completely rebuilt off white label E Commerce storefront solution from the ground up by creating a shared architecture with our marketplace. Our handheld <unk> Com partners cannot immediately benefit from the latest features and technology that we add to in the call on their owned and operated apps and websites.
Speaker Change: Most retailers can't match, our pace of innovation on their own so by integrating with us they get continuous improvements that drive growth with minimal cost and effort.
Speaker Change: These investments are showing up in our results as we rapidly onboard more storefront retailers, who are eager to tell them in store customers into omni channel customers.
Speaker Change: About one in five <unk> orders are placed on Rins are priced platform and as we continue to expand our white label volume. He's also benefits our whole ecosystem.
By increasing the density of orders that we sell in every store, we can best position shoppers to offer faster on demand delivery windows.
Speaker Change: We can also batch more together, which is a key to unlocking our best in class unit economics in grocery we are.
Speaker Change: We're constantly looking for more ways to pass on these cost savings to customers and retailers, while reinvesting in new initiatives to make our technology and service better. So the virtuous cycle can go on.
So there is a lot more runway to grow our marketplace, an enterprise platform online for sure, but even if we double or triple online grocery penetration more than two subs of grocery shopping will still be installed and that's why our enterprise technologies now go beyond E Commerce with a suite of in store technology.
Speaker Change: Just today, we announced our first ever international launch of our AI powered to keep our costs in partnership with Aldi in Austria, as well as all U S launching carat tags and install a modem inside our ops. We're also expanding our foot storm ordering kiosk pilots with sprouts and snacks will.
Fidji Simo: We're also expanding our FoodStorm ordering kiosk pilot with Sprouts, and Schnapps will be our first retail partner to roll out Caratags in electronic shelf label software chain-wide. The beauty of all of our in-store technologies is that they connect directly with storefronts and with each other. So it's really a seamless experience for customers to buy from retailers online and in-store. For example, customers can reorder online what they bought with their Kapor Karts in one tap, or bring their online shopping list to the screen of their Kapor Karts to avoid forgetting ingredients in the store.
Speaker Change: Our first retail partner to rollout caritas in electronic shelf labels software chain wide.
Speaker Change: The beauty of falloff of installed technology, you've got to connect directly with stock comp and with each other so it's really a seamless experience for customers to buy from retailers online and in stores. For example, customers can reorder online and what's the Barclays that keep our cost in the one top of bringing the online shopping.
Speaker Change: These two the screen escape all costs to avoid for getting ingredient.
Fidji Simo: This is increasingly important to retailers who are moving away from complex and fragmented point solutions and towards technology partners that can offer a simple and seamless customer experience across all of their channels. Scaling our marketplace and enterprise offerings, both online and in-store, is also critical to our strategy because it's laying the foundation for a massive, one-stop-shop, omni-channel retail media network. While it may seem like new retail media networks are popping up left and right now, we know that brands have limited time and resources, and they will ultimately want to work with platforms that have scale across all channels.
Speaker Change: This is increasingly important to retailers, while moving away from complex and fragmented point solutions and <unk> technology partners that can offer a simple and seamless customer experience across all of the channels.
Speaker Change: Scaling our marketplace and enterprise offerings, both online and in store is also critical to our strategy because it's laying the foundation for a massive one stop shop Omnichannel retail media network, while it may seem like new retail media networks are putting up left and right right now we know that brands have.
Limited time and resources and they will ultimately you want to work with platforms that have scale across all channels.
Fidji Simo: And this is exactly where Instacart ads will shine because of our leading scale, performance, measurement, data, and product capability. With us, CPGs can reach audiences across our marketplace, retailers, owned and operated sites through Carat Ads, as well as other destinations like Google Shopping Ads, Meta, the Trade Desk, and YouTube, where they can place ads pointing to Instacart and leveraging Instacart data.
Speaker Change: And this is exactly where in so called ads will shine because of all leading scale.
Speaker Change: <unk> measurement data and product capabilities.
With us CPG scan, which audiences across our marketplace retailers owned and operated sites through care with ads as well as other destinations like Google shopping ads matter the trade desk, Youtube where else we can place ads.
Speaker Change: Hunting to intercourse and leveraging into called data.
Fidji Simo: And in the future, this will also include in-store ads on KaperCard screens, which can take the very best of online advertising and bring it to the store for people who are already in the aisle. Overall, as you can tell, I'm incredibly excited by the momentum we're building across our marketplace, enterprise, and advertising platform. We're placing really ambitious bets that will enable us to extend our lead as the leading online grocery marketplace and cement our position as one of the largest omni-channel retail media networks.
Speaker Change: And in the future. This will also include install ads on keep off called screens, which can take the very best of online advertising and bring it to the store to people who are already in the aisles.
Speaker Change: Overall as you can tell I'm incredibly excited by the momentum we're building across our marketplace enterprise and advertising platforms.
Speaker Change: We're placing really ambitious bets that will enable us to extend our lead as the leading online grocery marketplace and cement our position as one of the largest omnichannel retail networks.
Fidji Simo: As we execute on these growth strategies, I'm confident in our ability to generate more shareholder value over time and further our vision of building the technologies that can power every single grocery transaction. Now, I'll pass the call over to Emily for an update on our financials. Thank you, Fidji.
Speaker Change: As we execute on these growth strategies I'm confident in our ability to generate more shareholder value over time and further our vision of building the technologies that can power every single grocery transaction.
Speaker Change: Now I'll pass the call over to Emma Li for an update on our financials.
Emily Reuter: It's great to see the momentum we're having across so many areas of the business, growing our core service and investing in our longer-term bets, all while staying disciplined on our financial performance. Now, let me provide a bit more color on our financial results and outlook. Q2 was a really strong quarter for us, with both GTV and Adjusted EBITDA beating the high end of our guidance ranges. We delivered GTV growth of 10% year over year, comprising orders growth of 7% and average order value growth of 3%.
Emma Li: Thank you <unk>, it's great to see the momentum we're having across so many areas of the business growing our core service and investing against our longer term bets all while staying disciplined on our financial performance now.
Emma Li: Now, let me provide a bit more color on our financial results and outlook.
Emma Li: Q2 was a really strong quarter for us with both <unk> and adjusted EBITDA, beating the high end of our guidance ranges, we delivered <unk> growth of 10% year over year, comprising orders growth of 7% and average order value growth of 3%.
Emily Reuter: Order growth was in line with our expectations, while basket size was the key driver of our outperformance. There were a few different factors that drove our basket size higher in the quarter, including new customer cohorts reaching bigger basket sizes faster, existing customers making larger purchases over time, and a higher mix of club orders.
Emma Li: Order growth was in line with our expectations. Our basket size was the key driver of our outperformance.
Emma Li: There were a few different factors that drove our basket size higher in the quarter, including new customer cohorts, reaching bigger basket sizes faster existing customers, making larger purchases over time and a higher mix of club order.
Emily Reuter: Q2 advertising and other revenue growth of 11% year-over-year also outperformed our expectations. This was primarily driven by growth from emerging brands on our platform as we've steadily grown the number of active brands to more than 6,000. This growth more than offset the pullback in spend we continue to see from certain large brand partners experiencing challenges in their business. We also delivered strong profitability results across the board, which continues to reflect our strong operating fundamentals and our ability to manage multiple levers across our P&L to drive leverage.
Emma Li: Q2 advertising and other revenue growth of 11% year over year also outperformed our expectations.
Emma Li: This was primarily driven by growth from emerging brands on our platform as we steadily grown the number of active brands to more than 6000.
Emma Li: This growth more than offset the pullback in spend we continue to see from certain large brand partners experiencing challenges in their business.
Emma Li: We also delivered strong profitability results across the board, which continues to reflect our strong operating fundamentals and our ability to manage multiple levers across our P&L to drive leverage.
Emily Reuter: This includes our third consecutive quarter of positive GAF net income of $61 million, which was down quarter for quarter, primarily due to ongoing noise in SBC following our IPO in September 2023 and the $95 million of restructuring and executive-related reversals we experienced in Q1 2024. After we lap our IPO quarter, we anticipate SBC will begin to normalize, while continuing to expect higher levels of SBC in Q2 due to seasonality. In the quarter, we also generated adjusted EBITDA of $208 million, up 89% year over year, and operating cash flow of $244 million, up 42% year over year.
Emma Li: This includes our third consecutive quarter of positive GAAP net income of $61 million, which was down quarter over quarter, primarily due to ongoing noise in SBC. Following our IPO in September 2023, and the $95 million of restructuring and executive related reversals, we experienced in Q1 2024.
Emma Li: After we lap our IPO quarter, we anticipate FCC will begin to normalize while continuing to expect higher levels of SBC in Q2 due to seasonality.
Emma Li: In the quarter, we also generated adjusted EBITDA of $208 million up 89% year over year, and operating cash flow of $244 million up 42% year over year.
Emily Reuter: Looking ahead, we are guiding to Q3 GTV of $8.1 to $8.25 billion, representing year-over-year growth of 8% to 10%. Our guidance expects the composition of GTV growth to continue to be driven more by orders than basket size. It also reflects ongoing strength in our core service and a modest growth contribution from restaurant orders. We are also guiding to Q3 Adjusted EBITDA of $205 to $215 million.
Emma Li: Okay.
Speaker Change: Looking ahead, we are guiding to Q3 G television of eight one to 825 billion representing year over year growth of 8% to 10% our guidance expects the composition of GTD growth to continue to be driven more by orders and basket size and it also reflects ongoing strength in our core service and a modest growth contribution from restaurant orders.
Speaker Change: We are also guiding to Q3, adjusted EBITDA of $205 million to $215 million. The primary driver of our anticipated year over year growth in adjusted EBITDA as a percentage of GTD is ongoing adjusted operating expense leverage.
Emily Reuter: The primary driver of our anticipated year-over-year growth in Adjusted EBITDA as a percentage of GTV is ongoing adjusted operating expense leverage. Similar to prior quarters, we expect to continue driving shopper efficiencies in transaction revenue while reinvesting in opportunities like more affordable service options and consumer incentives. We also expect advertising and other revenue to grow year over year, largely in line with our GTV guidance. Overall, our business is performing well. Our operating scale and critical advantages continue to position us well positioned to strengthen our lead as the largest online grocery marketplace in North America and generate more shareholder value over time.
Speaker Change: Similar to prior quarters, we expect to continue driving shopper efficiencies in transaction revenue, while reinvesting in opportunities like more affordable service options and consumer incentives.
Speaker Change: We also expect advertising and other revenue to grow year over year largely in line with our GTP guidance.
Speaker Change: Overall, our business is performing well our operating scale and critical advantages continue to have us well positioned to strengthen our lead as the largest online grocery marketplace in North America and generate more shareholder value overtime.
Emily Reuter: This is why, in Q2, we completed our initial $1 billion of share repurchases and authorized a new $500 million buyback program. As of June 30th, we had cumulatively repurchased 36.5 million shares, representing more than 10% of our fully diluted shares outstanding at the end of 2023, and had $425 million of remaining repurchase capacity.
Speaker Change: This is why in Q2, we completed our initial $1 billion of share repurchases and authorized a new $500 million buyback program.
Speaker Change: As of June 30, we cumulatively repurchased 36 5 million shares representing more than 10% of our fully diluted shares outstanding at the end of 2023 and had $425 million of remaining repurchase capacity.
Operator: We have a lot of momentum to build on across all aspects of our business and remain focused on driving more profitable growth. With that, we will open up the call for live questions. Operator, you may begin. Thank you. As a reminder, to ask a question, you will need to press star 1 1 on your telephone.
Speaker Change: We have a lot of momentum to build on across all aspects of our business and remain focused on driving more profitable growth.
Speaker Change: With that we will open up the call for live questions. Operator, you may begin.
Speaker Change: Thank you.
Speaker Change: A reminder to ask a question you will need to press star one one on your telephone please limit yourself to one question and one follow up.
Speaker Change: Please stand by while we compile the Q&A roster.
Operator: Please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A, Ross. Our first question comes from the line of Colin Sebastian from Bayer. Good afternoon. Thank you all for joining us.
Speaker Change: Our first question comes from the line of Colin Sebastian from Baird.
Speaker Change: Thanks, Good afternoon I appreciate the questions I guess I guess first off given the momentum we're seeing in your business. The last the last couple of quarters really.
Operator: I guess, first off, and secondly, just on the competitive environment. Thanks, Colleen. I'll take both of those.
Colin Sebastian: I'm curious in terms of how you are dividing resources around customer acquisition and retention the use of some of the incentives for consumers and balancing that with some of the more traditional customer acquisition marketing spend if you could comment maybe on how you were thinking about those resources and then secondly, just.
Colin Sebastian: On the competitive environment, given a lot of the attention on on that as that evolves, if youre seeing any change in the competitive environment that.
Speaker Change: That would be helpful as well thank you.
Colin Sebastian: Yeah.
Fidji Simo: On the first one, we continue to be extremely focused on accelerating online grocery adoption. And that does mean that we have a heavy focus on new customer acquisition and are pleased by what we're seeing there. At the same time, we also want to create habituated customers because we know that when we habituate a customer, we end up getting their entire grocery budget for the month, which is incredibly valuable.
Colleen: Thanks Colleen.
Speaker Change: Ill take both of those on the first one.
Speaker Change: We continue to be extremely focused on accelerating online grocery adoption and that does mean that we have have you focus on new customer acquisition and continued to be pleased.
Speaker Change: By what we're seeing there at the same time, we also want to create habituated customers because we know that.
Speaker Change: Then we have Detroit the customer we ended up getting their entire grocery spend 12 months, which is incredibly valuable until we have a portfolio of.
Fidji Simo: And so we have a portfolio of, you know, marketing tactics, and incentive tactics that really allow us to do both, both attract new customers as well as habituate them. We released the stuff, as you may have seen in the letter, that we have 25 million annual customers. And that's a really great opportunity for us to turn these infrequent customers who purchase on average 11 orders a year with us into much more habitual customers that look more like our typical monthly active orders.
Speaker Change: Marketing tactic.
Speaker Change: Tactics incentive tactics, so that really allow us to do both both attract new customers as well as habituate them. We released the southeast that you've laid out here in the letter that we have $25 million annual customers and that's a really great opportunity for us too.
Speaker Change: <unk> terms these infrequent customers.
Fidji Simo: And we're doing that not just through incentives, but also through promoting Instacart Plus, connecting these users to all of our affordability options so that they can build a habit, as well as introducing new use cases like restaurants, which we are seeing drive both new users, new customer acquisition, as well as habituation of existing users. We do all of that based on a five-year NPV, and we continue to invest as long as we see those returns. Now, on your second question about the competitive environment, we are not seeing much change in the environment.
Speaker Change: Chase on average 11, all delta year with us into much more habituated customers that look more like a typical monthly active order and while doing that not just through incentives, but also through promoting adult plus two connecting users to all of our affordability options that you can build it.
Speaker Change: Habits as well as introducing new use cases, like restaurants, which we're seeing drive both new user new customer acquisition as well as <unk>.
Speaker Change: A deterioration of existing users we do all of that based on the five year NPV and we continue to invest as long as we see those become.
Speaker Change: Now on your second question on the competitive environment, we are not seeing much change to the environment. As a reminder, we are.
Fidji Simo: As a reminder, we are the leading category share with 50 percent plus share of small baskets, and 70 plus percent share of large baskets of about $75, which is incredibly important because as we present 70 large baskets, we present 75 percent of the industry and even more of the profit. We continue to see that we are approximately 5x better than new entrants at activating large baskets. And that means that we bring more GTV into the industry compared to these players.
Speaker Change: The leading category share with 50% plus share of small baskets 70 plus percent share of.
Speaker Change: Large basket of about $75, which is incredibly important because as we presented seven she loves baskets, we spent 75% of the industry and even more of the profit.
Speaker Change: We continue to see that we are approximately <unk> five X better than new entrants at activating lousy baskets and that means that we bring multiples of <unk> into the industry can belt players and we also see that we're about five vacs, but.
Speaker Change: Turning a small basket customers into a large basket customers than just new entrants. So you know we continue to see extreme strength with all leading selection or you didn't sell this and that's translating into this category share and just ability to really excelled in those baskets.
Fidji Simo: And we also see that we're about 5x better at turning a small basket customer into a large basket customer than this new entrant. So, you know, we continue to see extreme strength with our leading selection, our leading service, and that's translating into this category share and this ability to really excel in large baskets. Thank you.
Speaker Change: Thank you one moment for our next question.
Operator: One moment for our next question. Our next question comes from the line of Eric Sheridan from Goldman Sachs. Thank you.
Speaker Change: Our next question comes from the line of Eric Sheridan from Goldman Sachs.
Operator: Maybe I can ask a two-parter, if it's okay, on the broader advertising environment. There are a lot of mixed data points on the health of CPG advertisers and the way they're sort of processing budgets in a post-inflation or lapping inflation world. We'd love to get your perspective on the broader CPG landscape and how it impacts your views about your advertising opportunities in the second half of the year. And the second part of the question would be: you continue to push forward with a lot of innovation in advertising solutions. Maybe talk a little bit about the product roadmap as we think about, again, the end of this year, but more broadly over the medium-term horizon. Thanks so much.
Eric Sheridan: Thank you maybe I can ask a two parter if it's okay on the broader advertising environment. There's been a lot of mixed data points on the health of CPG advertisers in the way they're.
Eric Sheridan: Sort of processing budgets in a post inflation are lapping inflation world, we'd love to get your perspective on the broader CPG landscape and how it impacts your views about your advertising opportunities in the back part of the year and the second part of the question would be you continue to push forward on a lot of innovation on advertising solutions, maybe talk a little bit about the prada.
Speaker Change: Roadmap as we think about again at the end of this year, but more broadly over the medium term horizon. Thanks, so much.
Fidji Simo: Thanks, Eric. So what we're seeing on the CPG side is quite consistent with what I talked about last quarter, where we are seeing some large brands struggle in their business broadly and therefore pull back on advertising. In general, we're not the first advertising platform that they pull back from because we're so measurable and highly performant. We're not the first one to be cut, and it tends to be a lot more widespread.
Speaker Change: Thanks, Eric So what we're seeing on the CPG side is quite consistent with what I talked about last quarter, where we are seeing some large brands struggle Intel business broadly and therefore pull back on advertising in general while not the first advertising platform that they pull back from.
Speaker Change: Because it works so metro bought in highly performing that well.
Speaker Change: Well not the first one to be cut and it tends to be a lot more widespread. However, the things that is really exciting for us is that the growth that we're seeing in emerging brands on our platform now of T cells and emerging brands is more than offset the pullback that's working with our brand and that's very in line with <unk>.
Fidji Simo: However, the thing that, you know, is really exciting for us is that the growth that we're seeing in emerging brands on our platform, now at 6,000 emerging brands, has more than offset the pullback that we're seeing with large brands. And that's very in line with the strategy I talked about last quarter of really diversifying the business and continuing to lean into the strengths of emerging brands while also continuing to deliver great results for large brands as well.
Speaker Change: Did you I talked about last quarter of really diversifying the business and continuing to lean into the strengths of emerging brands. While also continuing to deliver great results fallout fans as well.
Fidji Simo: In terms of innovation on our platform, we continue to innovate on our marketplace with new ad formats. This quarter, we just announced recipes, occasions, and bundles, which are a great example of innovation where CPGs themselves have told us that they would love to do merchandising online that they really cannot do in the aisles of a store. Like, for example, if someone is searching for spinach, having an advertiser be able to promote a recipe for spinach lasagna, and therefore, if they're a pasta advertiser, they can make their way into this particular query and advertise that. Or if you're a soda brand, advertising next to hot dogs so that you have the perfect summer pairing for barbecues.
In terms of innovation on our on our platform.
Speaker Change: We continue to innovate on our marketplace with new AD formats with each quarter, we just announced recipes occasions in bundles, which are a great example of innovation, where ctg's themselves have told us that they would love to do merchandising online that they really cannot do all the store like for example, if someone is.
Speaker Change: Searching for spinach are adding an advertiser will be able to promote a recipe for spinach lasagna and therefore is a past advertisers the cabin that'll weigh into this box query.
Fidji Simo: And so this is a great example of the ad format innovation we continue to drive and are excited about. We also continue to push on measurement capabilities. We think that we have incredible performance, and the more we can demonstrate that, whether it's through partnership with Cercana or others, the better it's going to be for our ability to show that to our advertisers. So that's really laying the foundation for being a really great retail media network, and that gives us enormous confidence in our long-term ad and other revenue targets of 4% to 5%. Thank you. Please take a moment for our next question. Our next question comes from the line of Nikhil Devnani from Burns.
Speaker Change: And advertise that already show a soda brand.
Advertising next to our dogs, so that you have the perfect.
Pairing for barbecues and so this is a great example of the PR format innovation, we continue to drive that all excited about we also continue to push our measurement capabilities. We think that we have incredible performance and the more we can demonstrate that was of its partnership with Susquehanna with others.
Speaker Change: The better it's going to be for audiology to show that for advertisers and then we're also a medium term to your point innovating on what we're doing outside of our marketplace.
Speaker Change: <unk> power add on a 100 plus retailer on an operated websites we launch a new retail power media partnerships with meta and Youtube is the future of work on AD advertising on keep our call to all of that will allow us to have ads inside the store and therefore have a real portfolio of different.
Speaker Change: Advertising tools, both on our platform and outside of a platform that can make us a real one stop shop for CTG. So that's really laying the foundation for being a really great to be talking about network ends up gives us enormous confidence in our long term add another revenue target of 45%.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Thank you one moment for our next question.
Nikhil <unk>: Our next question comes from the line of Nikhil <unk> from Bernstein.
Operator: Hi, thanks for taking my question. I wanted to ask about a couple of your recent partnerships. First, the Uber Eats commentary is encouraging. Could you please elaborate on what you're seeing and how we should think about the ramp in order growth and GTV there? Seems like there's an explicit contribution embedded in your Q3 outlook.
Nikhil <unk>: Alright, Thanks for taking my question I wanted to ask about a couple of your recent partnerships.
Nikhil <unk>: On the Uber eats commentary is encouraging could you. Please elaborate on what youre seeing and how we should think about the ramp in order growth N. G. T V. There seems like there is an explicit contribution embedded in your in your Q3 outlook.
Operator: And then, with respect to your Chase partnership, it also looks like DoorDash is now the exclusive grocery partner here for those cardholders. So how much of a headwind is this going to be to your growth going forward? And how do you aim to counteract this challenge?
Speaker Change #100: And then with respect to your Chase partnership. It also looks like door Dash is now the exclusive grocery partner here for those cardholders. So how much of a headwind is this going to be to your growth going forward and how do you aim to counteract this challenge. Thank you.
Fidji Simo: Thanks, Nikhil. I'll start with Uber Eats. We're extremely pleased with the partnership with Uber and the early results. For context, we fully rolled out restaurants nationwide in mid-June, and we see our strategy paying off. By partnering with Uber, we're ramping restaurant adoption at a much faster pace than we've seen any new entrants be able to accomplish in grocery after years and billions of dollars in investment. So we're really excited about the pace we're seeing.
Speaker Change #101: Thanks, Nikhil I'll I'll start with Uber eats we're extremely pleased with the partnership with your Burbank L. D results for.
Speaker Change #102: For context, we fully rolled out restaurants nationwide in mid June and we see our strategy paying off by partnering with Zubair, who aren't ramping restaurant adoption at a much faster pace than we've seen any new entrants be able to accomplish in north sea after years and billions of dollars of investment so well.
Speaker Change #102: Really excited about the ramp we're seeing any adoption we're seeing these early.
Fidji Simo: And the adoption we're seeing. This early data also confirms our belief that restaurants can help our entire ecosystem by attracting new customers to Instacart, by increasing order frequency for existing customers, and by driving adoption of Instacart Plus. All of that has been confirmed by early data.
Speaker Change #102: Early data also confirms our belief that restaurants can help our entire ecosystem by attracting new customers to end the call by increasing order frequency for existing customers by driving adoption of heat cycle plus all of that is as you can tell by all the data and that's why longer term, we really believe that restaurants can creep.
Fidji Simo: And that's why, longer term, we really believe that restaurants can create a flywheel that helps grow our entire business, including grocery. Now, on the Chase partnership, I would encourage you to fact-check what you heard, because as you may see online, we published a blog post yesterday that shows the depth of our existing partnership with Chase. So, clearly, we have a deep, rosary partnership with them.
Speaker Change #102: To a flywheel that helps grow our entire business, including groceries.
Speaker Change #103: Now on on the Chase partnership I would encourage you to fact check what you held because as you may see online we publish a blog post yesterday that shows the depth of our existing partnership with chase So clearly.
We all have we have a deep partnership with them.
Fidji Simo: The thing that has changed, just to explain to you the changing strategy, is that we had an embedded benefit partnership on some part of their portfolio, but what we saw is that actually two-thirds of the redemption happened in year one. So, you tend to really get a lot of the value of these partnerships in year one. And then we saw that because we have such a superior service, these people converted into being Instacart Plus customers and remained with us because they see the value of Instacart.
Speaker Change #104: So the thing that has changed just to explain to US a change in strategy is that we had an embedded benefit pall and actually put in some parts of the portfolio, but what we saw is that actually to sell the redemption hop engineered what and so you tend to really get the value a lot of the value of these problems.
Speaker Change #104: In year, one and then we saw that because we have such a superior service. These people converted into being into gold plus customers and we came in with US because he has a value of future calls so as there isn't much point in continuing to pay for ongoing benefits. When you have highly retained users and instead, what we want to focus.
Fidji Simo: So, there isn't much point in continuing to pay for ongoing benefits when you have highly retained users. Instead, what we want to focus on is actually directing this energy towards new users, new customer acquisition, because, as a category leader, that's really the number one priority for us. And that's why you'll see what we announced with Chase yesterday.
On is actually directing his NRG towards when you use the new customer acquisition, because I was like I think all you know that's really.
Speaker Change #104: The number one priority for us and that's why.
Fidji Simo: We are directing our investments towards offers for a much broader part of their portfolio, and especially their co-branded cards that we hadn't previously touched, and putting an offer in front of their customers of 10% cashback, which we think is going to allow us to tap into a fundamentally new audience. So, we're very pleased with the results of the Chase partnership to date, and we're very excited about this next phase of the partnership, which should really allow us to focus on new customers. Thank you.
Speaker Change #104: You'll see what we announced these changes yesterday, we are directing our investments towards the offers for a much broader part of the portfolio and especially the co branded cards that we hadn't previously touch and putting an offer in front of the customers of 10% Cashback, which we.
Speaker Change #105: He is going to allow us to tap into a fundamental yorgen. So we're very pleased with the result of the chase partnership to date and we're very excited about this next phase of the partnership that should really allow us to focus on new customers.
Speaker Change #106: Thank you one moment for our next question.
Operator: One moment for our next question. Our next question comes from the line of Justin Post from Bank of America. Great, thanks for taking my question. I want to ask about AOVs. It looks like it's flipped to positive.
Speaker Change #105: Yeah.
Speaker Change #107: Our next question comes from the line of Justin Post from Bank of America.
Justin Post: Great. Thanks, taking my question I wanted to ask about <unk>. It looks like it slipped a positive quite positive this quarter and youre looking for growth next quarter. How much of that is this market versus you are able to drive it with suggestions and product offers which was actually it could be helping your grocers and kind of what's your outlook for for Ao vs over.
Operator: Okay, which actually could be helping your grocers and kind of what your outlook for AOVs is. Thanks. Thanks, Jessica, for the question. This is Emily. I'll take that one.
Speaker Change #108: The next year. Thank you.
Emily Reuter: So in terms of Q2, specifically, you know, in terms of what's driving AOV, there were a couple of different factors. It is more of an outcome of what's happening in the market versus something that we try specifically to influence. So what happened in Q2, we did have new customer cohorts that are reaching bigger baskets faster than prior cohorts. So that does influence the overall AOV.
Speaker Change #108: Thanks. Thanks for the question. This is Emily I'll take that one and so in terms of Q2 specifically.
Speaker Change #109: Terms of what's driving <unk>, there was a couple of different factors, but it is more of an outcome of what's happening in the market versus something that we try specifically to influence.
Speaker Change #109: So what happened in Q2, we do have new customer cohorts that are reaching bigger baskets faster than prior cohorts. So that does influence. The overall <unk>. In addition, as has always happened existing customers continue to make larger purchases over time, so that weights. The overall <unk> picture and then lastly, we did have a higher mix of club orders in the.
Emily Reuter: In addition, as has always happened, existing customers continue to make larger purchases over time, so that weights the overall AOV picture. And then lastly, we did have a higher mix of club orders in the period. We don't guide specifically to AOV or the composition of GTV on a go-forward basis, but that gives you a bit of color as to what happened in Q2.
Speaker Change #109: Period, we don't guide specifically to <unk> or the composition of GTA V. On a go forward basis.
Speaker Change #109: But that gives you a bit of color as to what happened in Q2.
Emily Reuter: And just saying, I will add that the mix of club orders increasing is an intentional thing. As we've mentioned in the past, we definitely want to direct some of our incentives towards customers adopting clubs, because we see that when you adopt a club, you're more likely to retain it over time. And as a result, that has been a big part of our incentive strategy. I will highlight that clubs are doing exceptionally well on Instacart right now.
Speaker Change #110: And Justin I will add to that.
Justin Post: The mix of club orders increasing ease.
Speaker Change #111: The intentional thing is as we've mentioned in the past, we definitely wanted to direct some of our incentives towards customers adopting clubs because we see that when you adopt club you're more likely to retain over time.
Speaker Change #111: As a result that has been a big part of our incentive strategy I will highlight that clubs are doing exceptionally well and in the courts right now in particular with Costco. We recently launched EBIT snap with them, we are upgrading them to our new store phone through our websites, which is working incredibly well.
Emily Reuter: In particular, with Costco, we recently launched EBT Snap with them. We upgraded them to our new Storefront Pro website, which is working incredibly well. They sell Instacart Plus membership on their site; we sell Costco membership on ours.
Speaker Change #111: <unk> plus membership on that side, we sell Costco membership on ours, so really the depths of the partnership is showing up in the high uptime adoption.
Emily Reuter: So really, the depth of the partnership is showing up in higher club adoption. Thank you. One moment for our next question. Our next question comes from the line of Andrew Boone from JMP Secure. Thanks so much for taking my questions.
Speaker Change #112: Thank you one moment for our next question.
Speaker Change #112: Our next question comes from the line of Andrew Boone from JMP Securities.
Operator: You added Home Depot and Sally Beauty in the quarter. Can you talk about your supply with non-grocery merchants? How do you feel about that? And what are your plans to grow it as well as what's the consumer response as you guys continue to add selection there? Thanks so much.
Andrew Boone: Thanks, so much for taking my questions.
Andrew Boone: With home depot, and Sally beauty in the quarter can you talk about your supply with non groceries merchants, how do you feel about that and what are your plans to grow it as well is what's the consumer response as you guys continue to add selection there. Thanks so much.
Operator: Thanks, Andrew. We continue to be pleased with what we're seeing here, both with existing non-grocery retailers as well as new ones that have joined onboarding. What we find very often is that because people are used to placing large baskets in grocery stores, they are primed to place large baskets with these other retailers as well. And so that has been a very big benefit for them and for us as well. And it is an incremental use case that allows us, once again, to take some of the more infrequent customers and either have them discover Instacart through these retailers, especially during seasonal events like Valentine's Day and things like that, where you come to Instacart for last-minute purchases that are not necessarily in the grocery category.
Speaker Change #113: Thanks, Andrew we continue to be pleased with what we're seeing here, both with existing non-pros retailers as well as new ones that we're onboarding.
Speaker Change #114: What we find very often is that because people are used to placing larger baskets in grocery.
Speaker Change #114: They all prime to place large baskets with other retailers as well.
Speaker Change #115: And so that's that has been a very big benefit for them and us as well and it is an incremental use case that allows us once again to take some of the more infrequent customers and each of them just to cover off the call with cruises retailers, especially during seasonal events like Valentine's day, and it seems like.
Speaker Change #115: That's where you're coming to the Gulf for last minute purchases that are not necessarily in the grocery category and does that allows us to attract new customers to use the 12 ecosystem in length and brought them into grocery customers offtake grocery customers and increase their frequency with these new use cases. This is also adding to the strength.
Operator: And that allows us to attract new customers to our ecosystem and then convert them into grocery customers or take grocery customers and increase their frequency with this new use case. This is also adding to the strength of Instacart Plus, because when you buy Instacart Plus now, you're not just getting groceries, you're getting restaurants, you're getting a lot of other verticals in beauty, in home improvement, etc. And so, you know, when you look at this whole picture, on average, customers on Instacart shop from five or more retailers on our marketplace, and Instacart Plus members shop at twice as many retailers, and non-grocery categories are a contributor to that. Thank you. One moment for our next question. Our next question comes from the line of Shweta Khajuria from Wolf Research.
Speaker Change #115: Awesome pickup plus because when you're buying Sculpsure is now youre not just getting grocery you're getting restaurant, you're getting a lot of articles in beauty and home improvement et cetera, and so when you look at this whole picture on the average customer of the audience I called shop from five plus retailers on our marketplace and.
Speaker Change #115: It's about plus members shop at twice as many retailers and non unfortunately categories all contribute to that.
Speaker Change #116: Thank you one moment for our next question.
Speaker Change #117: Our next question comes from the line of Schweitzer kind of jewelry from Wolfe research.
Speaker Change #118: Thank you for taking my questions could you. Please talk about cohort behavior, you mentioned that in your letter could you provide a little bit more color on how the magnitude of improvement you are seeing them in the cohorts and how should we think about it in the back half of this year and then the second question is on <unk>.
Operator: Talk about cohort behavior, you mentioned in your letter and transcripts at mygenkeyutai.com that, generally speaking, Enterprise has grown in line with the rest of the platform. What would you need to do or for? Sure, I can start with the cohort question.
Speaker Change #119: Enterprise growth in the past you've mentioned that generally speaking enterprise grows in line has grown in line with the rest of the platform what would you need to do or see for it to accelerate at a clip faster than the overall platform. Thank you.
Emily Reuter: So, thanks for the question. And in terms of, you know, first of all, just want to take a step back, and this relates, obviously, to the performance of the cohorts, but you know, the business is performing really well. And that obviously is an indication of the health of the underlying cohorts that delivered 10% year over year growth in Q2, and we're excited about the Q3 guide. Now, if we look, you know, backwards to 2023, we talked a lot about specific cohort trends because they were a significant headwind to 2023 growth. Really, the COVID cohorts, in particular, the decline as folks that came to the platform for very specific COVID-related use cases churned off the platform.
Speaker Change #120: Sure I can start with the cohort question. So thanks for the question.
Speaker Change #121: In terms of first of all I, just want to take a step back and it relates obviously the performance of the cohorts, but yeah. The business is performing really well and that obviously is an indication of the health of the underlying cohorts have delivered 10% year over year growth in Q2, and we're excited about the Q3 guide now if we look.
Speaker Change #121: Backwards to 2023, we talked a lot about specific cohort trends because they were a significant headwind to 2023 growth really the and.
Emily Reuter: Now, at this point, all of our cohorts, we're really pleased to see both mature and new, are healthy, and their behaviors have really normalized. And so for that reason, the specifics of any individual cohort really aren't as important.
Speaker Change #121: The COVID-19 cohorts in particular, the decline as folks that came to the platform for very specific COVID-19 related use cases.
Churned off the platform now at this point all of our cohorts were really pleased to see both mature and new are healthy they're behaviors have really normalized and so for that reason the specifics of any individual cohort really arent as important and as I said before.
Speaker Change #122: Company, we think about cohorts as an output not really as an input and what I mean by that is we don't have any strategy around 2019 cohort or 2022 cohort. What we are focused on is deepening engagement with our existing and infrequent customers. So we talked about our feed you talked about earlier, the 25 million people.
Emily Reuter: And as I said before, as a company, we think about cohorts as an output, not really as an input. And what I mean by that is, we don't have any strategy around the 2019 cohort or the 2022 cohort. What we are focused on is deepening engagement with our existing and infrequent customers. So we talked about, or Fiji talked about earlier, the 25 million people that used Instacart in the last year. We're really excited about the strategies we're seeing start to work on deepening engagement with the full spectrum of different customers we see in that 25 million.
Speaker Change #122: That used <unk> in the last year, we're really excited about the strategies, we're seeing start to work on deepening.
Speaker Change #122: Deepening engagement with the first spectrum of different customers, we see in that $25 million that means we obviously have high single digit millions that you know use people use instant card monthly, but we also have people that we're trying to get from five times, a year or two monthly from one time, a year or two six times a year. So there is.
Emily Reuter: That means we obviously have high single-digit millions that people use Instacart monthly. But we also have people that we're trying to get from five times a year to monthly, from one time a year to six times a year.
Speaker Change #122: A lot of work, we're doing around engagement with those cohorts.
Fidji Simo: So there's a lot of work we're doing around engagement with those cohorts. In addition, as Fidji mentioned earlier, we are continuing to attract new users. We're still bringing in GTV from new cohorts that are higher than pre-pandemic. So overall, just really pleased with the picture. Now, take the question on enterprise.
Speaker Change #122: In addition, as TJ mentioned earlier, we are continuing to attract new users were still bringing in GTA V from new cohorts that are higher than pre pandemic. So overall, just really pleased with the picture.
Fidji Simo: You are correct, we are seeing strong growth in both marketplace and enterprise. We are seeing overall momentum with enterprise, as I mentioned, and really what I'm looking at is our ability to onboard more retailers to our enterprise products faster. And so, for example, we onboarded 30 retailers in H1 for our storefront products, and that's faster and more retailers than what we've been able to do in the past because we have revamped our system.
TJ: No I'll take the question on enterprise.
Speaker Change #123: <unk> you.
Speaker Change #125: You are correct, we are seeing strong growth in both marketplace and enterprise.
Speaker Change #126: We are seeing overall momentum with enterprise as I mentioned and really what I'm looking at is our ability to onboard more tailored to our enterprise products faster and so for example, we on boarded Saudi retailers in H, one tool for some products and thats faster and more retailers.
Speaker Change #125: And what we've been able to do in the past because we have with Amdocs system and therefore like when we do that then you get a retailer to shift from therefore kick it off solution to an installed solution is trade up incremental GTD, which is definitely contributing to growth. The other thing I'll call out is that.
Fidji Simo: And therefore, like when we do that, and you get a retailer to shift from their particular solution to an Instacart solution, this is straight up incremental GTV, which is definitely contributing to growth. The other thing I will call out is that these businesses are not separate. That's what I was mentioning in my introduction.
Speaker Change #127: These businesses are not separate that's what I was mentioning in my introduction I'll hand off price business helps all marketplace business growth in many ways because you should have a retailer and you really want a non integration on your enterprise website like integrating we snap like integrating with catering like.
Fidji Simo: Our enterprise business helps our marketplace business grow in many ways because if you're a retailer and you really want an integration on your enterprise website, like integrating with Snap, like integrating with catering, like integrating, like doing pickup, it becomes incredibly easy to apply all of these integrations seamlessly to marketplace, and that contributes to the growth of marketplace. So we have really seen a virtuous cycle between these two things, and we don't think of it as like one needs to grow faster than the other. Instead, we think of it as, let's integrate more and more deeply with retailers so that both our marketplace and our enterprise business grow fast. Thank you.
Speaker Change #125: Integrating that.
Speaker Change #125: Like doing pickup it becomes quite easy.
Speaker Change #125: To apply all of these integrations seem.
Speaker Change #125: Seamlessly to marketplace and that contributes to the growth of marketplace. So we have really seen a gesture sipos between these two things and we don't think of it as like 1% to both ourselves.
Speaker Change #125: Instead, we think of it as like let's integrate more and more muted with retailers so that both our marketplace and our enterprise does that grow fast.
Speaker Change #128: Thank you one.
Operator: One moment for our next question. Our next question comes from the line of Ross Sandler from Barking. Hey, just following up on that $25 million comment, the top of funnel. How is that $25 million growing compared to the monthly active? Meaning, like, is the top of funnel growing faster, slower? How did that look a year ago?
Speaker Change #129: One moment for our next question.
Speaker Change #129: Our next question comes from the line of Ross Sandler from Barclays.
Ross Sandler: Alright, just following up on that 25 million comment.
Ross Sandler: So the top of funnel, how the 25 million growing compared to the monthly active.
Ross Sandler: Meaning.
Speaker Change #130: The top of funnel growing faster slower how does that work.
Operator: And, you know, I guess, how are you guys evolving the incentive program to bring people down that funnel? And then the second question is just on the... Off Instacart ads opportunity, the retail media, you mentioned a bunch of social media sites that you're deeper integrating with. How big is that opportunity in front of you for off-site ads? Yeah, so let me start with the 25 million.
Speaker Change #131: A year ago.
Speaker Change #132: I guess, how are you guys evolving incentive program.
Speaker Change #133: To bring people down that funnel and then the second question was just on the.
Speaker Change #133: Off the court.
Speaker Change #133: Opportunity the retail media as I mentioned, a bunch of social media sites that you're deeper integrating with.
How big is that opportunity in front of you.
Offsite ads.
Fidji Simo: We don't report on specific numbers here, but the number is certainly growing year over year. And we like what we're seeing here in our ability to continue habituating these users, as Emily mentioned, and as I mentioned earlier, I think what it's going to take to really habituate these users is not just the incentives that we mentioned, but also introducing new use cases like restaurants, which are high-frequency and that we are seeing these users, as well as power users, really adopt.
Speaker Change #134: Yes, let me start with a $25 million.
Speaker Change #135: We don't report on specific numbers there, but it is is itself and growing year over year and we like what we're seeing here in our ability to continue habituated users I didn't really mention and as I mentioned earlier I think what it's going to take to really arbitrate uses not just incentives.
Speaker Change #135: We mentioned, but also introducing new use cases like restaurants, which are high frequency and that we are seeing users as well as power users.
Fidji Simo: Also, connecting these users to all of our affordability initiatives so that these users start realizing that they can actually get their entire grocery habit moved to Instacart at a very competitive price. And you know, we're doing that through loyalty integration, digitizing circulars, optimizing pricing with retailers, all of that compounds to really have a service that people realize they can use weekly and really adopt the weekly shop, which is fundamentally the end state for us. On your question about retail-powered media, it is still nascent for us. So it would have a fairly negligible impact on current advertising revenue.
Speaker Change #135: Really adopt also connected users to all of our affordability initiatives. So that users start realizing that you can actually get your entire grocery habits moved to install at a very competitive price and while doing that through loyalty integration digitizing circulars ops.
Speaker Change #136: <unk> pricing with retailers all of that compounded to really adding a service that people realize they can use wiki and really adopt so we can shop, which is a fundamental the yen stays for us on your question on a retail power media. It is still nascent for us so.
Speaker Change #137: It would be a fairly negligible impact on current advertising revenue. However, it is a fairly significant piece of our path to getting to our target of 45% of GTT. These things take time to ramp because usually you have to connect to different stakeholder.
Operator: However, it is a fairly significant piece of our path to getting to our target of 4 to 5% of GTV. These things take time to ramp because, usually, you have to connect to different stakeholders at the CPGs that are different between the one that plays ads on, you know, Google and Meta than the one that plays ads on Instacart. So it's a new sales motion; it's a sales motion that we need to put in place with partners.
Speaker Change #138: Those are the CTG is the different between so one that plays out.
<unk> met all of the ones up place ads on pick up so it's a new sales motion it yourselves motion that we need to put in place with partners.
Speaker Change #138: So it takes a little bit of time to ramp up through the results and expand but we are very pleased with what we're hearing in early days in terms of performance and that's giving us extreme confidence in continuing to expenses continuing to prioritize that and if you look at the last year. We have added Portland up she does her partnership from Google to Youtube to meta.
Operator: So it takes a little bit of time to ramp up, prove the results, and expand, but we are very pleased with what we're seeing in the early days in terms of performance. And that gives us extreme confidence in continuing to expand and prioritize that. And if you look at the last year, we have added partnership after partnership from, you know, Google to YouTube, to Meta, to NBCU, to the Trade Desk, really because we see the potential that this line of business could have for us long term. Thanks. One moment for our next question. Our next question comes from the line of Tom Champion from Piper Sandler. Hi, thanks. This is Jim on behalf of Tom.
Speaker Change #138: 20, <unk>, because the trade desk really because we see the potential of that.
Speaker Change #138: That's good for us long term.
Speaker Change #139: Thank you one moment for our next question.
Speaker Change #139: Our next question comes from the line of Tom Champion from Piper Sandler.
Operator: Thanks for taking the question. So just to follow up on ads, we've seen the active brand partners move to 6,000 from call it 5,500. I guess we think about that four to 5% goal. Do we see the larger opportunity being ARPU or the number of advertisers on the platform? Thanks. It's going to be a mix of both.
Speaker Change #139: Hi, Thanks. This is Jim on for Tom Thanks for taking the question. So just a follow up on ads. We've seen the active brand partners move to 6000 from call. It 5500, I guess, when we think about that 4% to 5% goal.
Speaker Change #139: See the larger opportunity being <unk> or the number of advertisers on the platform. Thanks.
Fidji Simo: What we are seeing is that there's still quite a large opportunity to onboard more brand partners. In fact, what we did in the last quarter was increase our emerging brand team, both on the sales side with really great ROI, as well as on the product side to make the product much easier to onboard onto. And that's why you're seeing this increase in the number of partners advertising, and we think we're very far from having tapped the full market there.
Speaker Change #140: It's going to be a mix of both.
Speaker Change #141: What we are seeing is that there's still quite a large opportunity in on boarding more brand partners. In fact, what we did in <unk>.
Speaker Change #142: Last quarter increase of emerging brands team both on the sell side with really great ROI as well as on the product side to make the product much easier to onboard on to.
Speaker Change #142: And that's why you're seeing this increase in number of partners advertising and wishing we're very far from having topped.
Fidji Simo: But we are also seeing that when these partners come onto the platform, they start to spend, see the results, and then expand their spend and really discover the value of Instacart across the entire funnel. Many of them might start with sponsored products and realize that we also have shoppable displays.
Speaker Change #143: For market that but we are also seeing that our you know when he smiled and I'll come onto the platform.
Speaker Change #144: Salt to spend she's a result, and then expand our spending and are really discovered the value of some cycle across the entire funnel many of them might start with.
Speaker Change #144: Sponsored products and realize that we also have shippable displays and so over time, we really wanted to make sure that they use all of our capabilities and expand our top cruise so.
Speaker Change #145: You see lots of opportunities that always with emerging brands I will call out as well that you know there is still lots of opportunity to deepen and expand with large players as well we have called out. The fact that some large players all pulling back even to challenge the email business, but that shouldn't mask. The fact that some large players are really double.
Speaker Change #145: Being down with us investing a lot more and seeing the results and what we're seeing you know wheel.
Fidji Simo: And so over time, we really want to make sure that they use all of our capabilities. And we're seeing, you know, real performance driving increasing investment. And that's why you're seeing us focus not just on new formats and new partnerships but also continuing to develop our measurement capabilities because we have the best proof points to put in front of advertisers to demonstrate that they should be investing more and that it's a good ROI to do so. Thank you. One moment for our next question. Our next question comes from the line of Bernie McTernan from Needham. Great
Speaker Change #145: Real performance driving increasing investment and that's why you're seeing us focus not just on new formats, and new partnership, but also continuing to develop our measurement capabilities because we have like the best proof point to put in front of advertisers to demonstrate that this should be investing more in that it's a it's good alloy to do.
Speaker Change #145: So.
Speaker Change #146: Thank you.
Speaker Change #147: One moment for our next question.
Speaker Change #147: Our next question comes from the line of Bernie Mcternan from need him.
Operator: Thanks for taking questions. Maybe just to follow up on the conversation around advertising. Not Offering a Portfolio, the different CPG companies, if we're thinking about, you know, providing. What's the benefit for the CPG operator to using one retail media network to access all these services? Transcripts provided by Transcription Outsourcing, LLC.
Bernie Mcternan: Great. Thanks for taking questions, maybe just a follow up to the conversation around advertising and offering a portfolio of advertising solutions to two different CPG companies, if we're thinking about providing Facebook or Youtube, what's the benefit from for the CPG operator to do using one retail media.
Speaker Change #148: Or to access all of these other platforms is it that the data that you provide us better or just trying to think about what.
Speaker Change #149: From their point of view.
Fidji Simo: Yes, that's exactly right. I would say there's two very critical benefits. One is our data. And that goes both for targeting, because you can go on one of those platforms and target customers based on their activity on Instacart, but also use that data for closed loop measurement, meaning that, you know, as you know, a lot of per-party data has kind of disappeared and has left these platforms with less sophisticated measurement capabilities, whereas by partnering with us, they are able to prove that the ads that are being shown on these platforms actually lead to a purchase, in many cases within, you know, an hour of seeing the ad.
Speaker Change #150: Yes, that's exactly right I would say those two very critical benefit one is all data.
Speaker Change #150: And that goes both for targeting because you can go on one of those platform.
Fidji Simo: And so we think this is incredibly powerful to have this data both on the targeting side and the measurement side, and a primary reason why advertisers choose to use this solution. In addition to that, the other thing that we offer is pointing these ads to an Instacart brand page. So if you look at CPG ads regularly, like sometimes they don't really have a clear destination, or they point to a website where you cannot buy the product, whereas if you point your CPG ad to an Instacart page, it means that the customer can go from looking at the ad on Facebook, landing on Instacart, buying the product right there, and having the product in their hands in an hour.
Speaker Change #150: And target customers based on their activity on in the call, but also use that data for closed loop measurement, meaning that you know.
Speaker Change #150: As you know a lot of first party data.
Speaker Change #150: Kind of disappear and as left these platforms.
Speaker Change #150: Less sophisticated measurement capability, whereas by partnering with us they are able to prove that the.
Speaker Change #150: That all being shown on who's got formed actually leads to approach chase in many cases, we didn't you know and know about him.
Speaker Change #150: And so are we we think this is incredibly powerful towards these data both on the targeting side into the measurement side and a primary reason why advertisers choose to use your solution. In addition to that the other thing that we offer is pointing these ads to Walt.
Speaker Change #150: Uninstalled brand page, if you look at CPG ads.
Speaker Change #150: Regularly like sometimes they don't really have a tail destination already point to a website, while you cannot buy the product, whereas as you point, a CPG out to a new cycle page. It means that the customer can go from looking at the other.
Speaker Change #150: Okay.
Speaker Change #151: <unk> gone into golf buying the product right, there and I think the products in their hands in an hour. That's a really really magical customer experience and loop. So that you can create doesn't advertiser and so we are both as a great destination as well as our data and measurement pop map two <unk>.
Fidji Simo: That's a really, really magical customer experience and loop that you can create as an advertiser. And so we act both as a great destination, as well as a data and measurement partner to increase the performance of the ads by measuring them and optimizing them. Thanks.
Speaker Change #151: The performance of the AD by measuring them and optimizing them.
Speaker Change #152: Thank you.
Operator: One moment for our next question. Our next question comes from the line of Jason Helfstein from Oppenheimer and Company. Thanks, Jason. Thanks for so year-to-date GTV is up 11% year-over-year. I think most of us are still, Models for the next two years, barring any change in economic conditions. Is there any reason why growth should slow given, pretty impressive commentary around cohorts.
Speaker Change #153: One moment for our next question.
Speaker Change #153: Our next question comes from the line of Jason <unk> from Oppenheimer and company.
Speaker Change #154: Thanks to so year to date G. T V is up 11% year over year I think most of US are still at like 6% G. T V.
Speaker Change #155: Model for the next two years I mean.
Speaker Change #156: Barring any change in economic conditions, which obviously is a big if I mean is there any reason why growth should slow given what sounds like pretty pretty impressive commentary around cohorts and just a second follow up any additional color you can provide on in CCAR plus activity in second quarter, or perhaps contribution to GTA V or just any other.
Operator: And just a second follow-up. Any additional color you can provide on Instacart Plus activity in the second quarter, or perhaps contribution to GTV or... I'll take Instacart Plus, and Emily can take the first question.
Speaker Change #156: Color. Thank you.
Fidji Simo: On Instacart Plus, we are very pleased with what we're seeing. We are seeing growth in Instacart Plus members, but we're also seeing faster growth in Instacart Plus members than our regular monthly active orders, which translates into deeper penetration of Instacart Plus within our customer base. So we're really excited about that. We think that it's because the value of Instacart Plus continues to grow and increase over time with the addition of restaurants, with the partnerships that are striking, with Peacock, with the New York Times, and more, and that's really translated into the growth that we're seeing. We don't report on specific numbers, but we can confirm that Instacart Plus is still the majority of our GTVs, and that's something that continues to grow. Thank you. One moment. Oh, excuse me.
Speaker Change #158: I'm, taking the gold plus and really can take the first question on the call plus.
Speaker Change #159: We are very pleased with what we're seeing we are seeing growth in the golf members, but we're also seeing faster growth in instant golf plus members on a regular monthly I keep older oils, which translates into deeper penetration of a integral plus with you now.
Our customer base. So we're really excited about that we think that it's because the value of pickup trucks continues to grow and increase over time with the addition of restaurants with a partnership to a striking with Peacock with M. New York time, and more and all that's really translated.
Speaker Change #159: Into so of course, that's working well.
We don't we bought in specific numbers, but we can confirm that and pick ups us skills. A majority of all <unk> and that's something that continues to grow.
Speaker Change #160: Thank you one moment, Florida.
Speaker Change #160: Sorry, there was another part of that question.
Emily Reuter: Sorry, there was another part of that question. I'll jump in. Sorry, thanks, Jason, for the question. So as it relates to GTV, as you mentioned, GTV is up really strongly this year. What I would, you know, we're really pleased with the momentum that we've had in the first half of 2024. I would, you know, remind everyone that in Q1, we did have a number of one-time benefits, the combination of the benefit of Leap Day in February, as well as some one-time seasonal benefits from bad weather.
Speaker Change #161: Go ahead sorry.
Speaker Change #161: Alright, Thanks, Jason for the question so as it relates to GTA V and as you mentioned GDP up really strongly this year.
Speaker Change #161: We're really pleased with the momentum that we've had in the first half of 2024.
Speaker Change #161: Remind everyone that in Q1, we did have a number of onetime benefits. The combination of the benefit of leap day in February as well as some some one time seasonal benefits from from bad weather.
Speaker Change #161: So that does.
Emily Reuter: So that, you know, factors into the overall picture. As we look forward, you know, we're very pleased with our Q3 guidance. As you mentioned, we had two quarters of double-digit growth. As we look into Q3, we're pleased to have double-digit growth at the high end of the range. But But, as we've said in the past, you know, when we think about our guidance ranges, really, what we're doing is looking at the data that we're seeing on the ground day to day. We obviously, as any business does, look at, you know, the upsides and downsides of and try to give, you know, our best view of the range of outcomes. And that's, you know, the philosophy that you're seeing play out here again.
Speaker Change #161: Factor into the overall picture.
Speaker Change #161: As we look forward, we're very pleased with our Q3 guidance.
Speaker Change #161: As you mentioned two quarters of double digit growth as we look into Q3, we're pleased to have double digit growth in the high end of the range, but as we've said in the past when we think about our guidance range is really what we're doing is looking at the data that we're seeing on the ground day to day, we obviously as any business does look at the upsides and downsides.
Speaker Change #161: And try to give our best view of the range of outcomes.
Operator: So, you know, we feel good about the guidance range that we've given based on what we're seeing in the data today. Longer term, you know, we don't comment beyond next quarter. But But what we have said is that we really want to see that continued momentum in all of the data, whether that's the cohort dynamics that you mentioned, the acquisition dynamics we've talked about already, the continued engagement of existing customers. So not going to comment on the longer term view at this point in time. Thank you.
Speaker Change #161: And that's the philosophy that you're seeing play out here again, so we feel good about the guidance range that we've given based on what we're seeing in the data today.
Speaker Change #161: Longer term, we don't comment beyond next quarter, but what we have said is we really want to see that continued momentum.
Speaker Change #162: In in all of the data whether that's the cohort dynamics that you mentioned the acquisition dynamics, we've talked about already the continued engagement of the existing customers. So I'm not going to comment on the longer term view at this point in time.
Operator: One moment for our next question. The next question comes from the line of Mark Kelley from Steve: Great, thanks very much. Good afternoon. I want to go back to the advertising business really quickly.
Speaker Change #163: Thank you one moment for our next question.
Speaker Change #163: Our next question comes from the line of Mark Kelly from Stifel.
Mark Kelly: Great. Thanks, very much good afternoon, I wanted to go back to the advertising business really quickly.
Operator: You know, you've got micro. Unknown Attendee, Ross Compton, Fidji Simo, Nick Giovanni, Robert Sanderson, Robert Santana, Geographic specific investments that you think you need to make, or if you think the product that you have right now is something that will resonate with markets outside the U.S. Thanks. So on the advertising question, you know, I'm not commenting on Microsoft specifically, but I would say that we have a product that is really designed to take our entire advertising stack and make it available to other parties, whether that's retailers or other players in the market that want to set up a retail media business. This news is, you know, also a very clear signal that setting up these businesses and doing that at scale is really hard. But we have done that successfully.
Speaker Change #164: You've got Microsoft just.
Mark Kelly: Shut down their retail media business I'm, just curious if that's a kind of a near term opportunity that you think you might be able to go after.
Speaker Change #165: And then the second one.
Speaker Change #166: You focus more on growth or establishing a footprint outside of the U S. Can you remind us if there are any.
Speaker Change #166: Geographic specific investments that you think you need to make.
Speaker Change #167: Or if you think.
Speaker Change #167: Product that you have right now is it.
Speaker Change #167: That will resonate with our with markets outside the U S. Thank you.
Speaker Change #168: Thanks, So on theater sizing question, you know I'm I'm not.
Speaker Change #169: Commenting on Microsoft specifically, but I would say that we have a product that is really designed to take our entire advertising stock and make it available to other parties with all the retailers.
Speaker Change #170: The payoffs in the markets that we want to stand up a retail media business use as you know so very clear signals that sending up these businesses and doing that at scale is really hard we have done that successfully we have made the investments over the course of many years and now we're incredibly excited about the fact that we can take.
Fidji Simo: We have made these investments over the course of many years, and now we're incredibly excited about the fact that we can take these investments and add scale by offering them to our retailers and to other sites and allowing them to create an immediate new line of business while also expanding our scale and really becoming a one-stop shop. And so, opportunistically, we are definitely looking at, you know, retailers that might be interested in deploying these technologies inside their store because we think that these technologies could very easily expand from the U.S. to international markets, especially as all retailers are dealing with a digital transformation, not just online, but in their stores as well. Thank you.
Speaker Change #170: These investments and add scale by offering views to all retailers and towards upsides and allow them to create a media its new line of business, while also expanding our scale and really becoming a one stop shop. So I would say, it's a fragmentation of these market does help us.
Speaker Change #170: Cpg's are going to want to deal with fewer platforms at all really at scale and I think what we're gonna see more and more you know retailers and smaller retail media networks want to benefit from the scale, we bring to the table and want to partner with us on both technology and human.
Speaker Change #170: And so we're excited about that.
Speaker Change #171: On international growth that we are very focused on the north American market because that is a massive opportunity that the market is still only 17% penetrated online was a clear category leader. So we really wanted to focus on driving deeper penetration. There. However in the same way that keep our call to <unk>.
Speaker Change #171: Generating a lot of excitement with U S forces, we are starting to see international grocers like all the industrial.
Speaker Change #171: I'll be excited about the capabilities of that to keep our costs can bring and in general our overall suite of installed products and so opportunistically, we are definitely looking at.
Speaker Change #171: Retailers that might be interested in deploying these technologies inside desktop because we think that.
Speaker Change #171: These technologies could very easily expand from the U S to international markets, especially as all retailers are dealing with digital transformation, not just online, but industrial as well.
Operator: One moment for our next question. Our next question comes from the line of Ron Josey from Citi. Thanks for taking the question. Fidji, I wanted to go back, and I think you might've gotten a part of this question earlier, so I'll try a different way of asking it.
Speaker Change #172: Thank you one moment for our next question.
Speaker Change #172: Our next question comes from the line of Ron Josey from Citi.
Ron Josey: Alright, Thanks for taking the question I wanted to go back and I think he might have gotten part of this question earlier, so I'll try a different way of asking it. So let me go back to the comment on the 25 million customers, who have used them to court in the past year, we'd love to hear your thoughts on how the behaviors of these users have evolved over the past year, because I know many have come back.
Fidji Simo: I want to go back to the comment on the 25 million customers who have used Instacart in the past year. We'd love to hear your thoughts on how the behaviors of these users have evolved over the past year because I know, you know, many have come back. And what are the tools the team has launched at Instacart, like the incentives platform, which has led to improving repeat rates based on the data that you're seeing? So that's one question on the 25 million. And then Emily, I wanted to get to take rates.
Speaker Change #173: And what are the tools. The team has launched at <unk> like they were in like the incentives platform has led to improving repeat rates based on the data that you're seeing so that's one question on the $25 million in Emily I wanted to get to him take rates expanded sequentially for the third consecutive quarter, we'd love to hear about the drivers here in terms of driving these improvements.
Emily Reuter: They've expanded sequentially for the third consecutive quarter. We'd love to hear about the drivers here in terms of driving these improvements. Is it the delivery process changes that the team has made? Is it the incentive updates? Once again, we talked about that, or maybe store relationships. Any details on take rates would be helpful.
Speaker Change #174: Delivery process changes that the team has made us the incentive updates once again, we talked there or maybe store relationships any any details on take rates would be helpful. Thank you.
Emily Reuter: Thank you. So, Ron, we're definitely seeing good trends in this growing 25 million number. And as you know, we have been very focused on habituation. I mentioned in previous quarters about our new incentive platform, which has made it much easier for us to deploy incentives toward the habituation formula that we know works, whether it's adoption of Instacart+, whether that's adoption of clubs, whether that's putting new retailers and new verticals in front of these customers, whether that's launching restaurants with great success.
Speaker Change #174: So Ron that well definitely seeing good trends in is growing 25 million a number and as you know we have been very focused on that deterioration I mentioned in the past.
Ron Josey: Past quarters about our new incentive platform, which is really.
Ron Josey: It's much easier for us to deploy incentives to reward the hard deterioration formula that we know works whether its adoption of himself plus whether that's adoption of clubs, whether that's pitching new retailers and new verticals in front of customers, whether that's launching restaurants with great success all of these.
Emily Reuter: All of this is giving us a lot of confidence in our ability to get these users to improve their frequency over time. As a reminder, we mentioned that, but, you know, these yearly active orderers are already placing 11 orders a year with us. So it really is a matter of getting them to realize that the weekly shop is something that they can afford every week, connecting them to all of the ways in which they can afford that, and then also making them discover the more frequent, you know, higher-frequency use cases like restaurants so that we can see this kind of compounding frequency for them.
Ron Josey: Giving us a lot of confidence in our ability to get users to improve.
Ron Josey: Their frequency over time.
Speaker Change #175: As a reminder, we mentioned that but you know these yearly active others are already pacing 11 orders a year with us. So it really is a matter of getting them to realize that we can shop is something that he cannot hold every week connecting them to all of the ways in which they can afford.
Speaker Change #175: That and then also making them discover us more.
Speaker Change #175: Higher frequency use cases like restaurants is that we can see just kind of compounding a frequency for them. So it's a massive opportunity because I think in the past, we primarily talks about our power users software you know kind of monthly active orders, but we have a much bigger off the top of the funnel that we can hum.
Emily Reuter: So it's a massive opportunity because, in the past, we primarily talked about our power users that were, you know, kind of monthly active orderers. But we have a much bigger top of the funnel that we can habituate, and that represents a big opportunity now that we have the tools in place to do so. Great, and I'll jump in on the second question about take rates.
Speaker Change #175: And that's what presents a big opportunity now that we have the tools in place to do so.
Emily Reuter: So, you're right, we have expanded take rates for the last couple quarters, though, I would note that, you know, the last quarter was a pretty modest expansion, the rounding makes it look a bit sharper than it actually was. And that that continues to be a lot of the same trends we've been seeing for the last couple quarters. So first, on the positive side, really continuing to see shopper efficiencies in terms of the payments that we make to shoppers to make deliveries.
Speaker Change #176: Great and I'll jump in on the second question about take rate, so and so you're right. We have a we have extended take rates for the last couple of quarters that I would note that last quarter was a pretty modest expansion at the rounding makes it look look a bit sharper than it actually was.
Speaker Change #176: And that continues to be a lot of the same trends we've been seeing for the last couple of quarters. So first on the positive side really continuing to see.
Speaker Change #176: Shopper efficiencies and in terms of the payments that we make to shoppers to make deliveries and that's driven by.
Emily Reuter: And that's driven by our order density at the end of the day, being able to drive batch rates, which really only results from multiple large batches happening at the same store at the same time. And this kind of goes back to Fiji's point earlier; this is sort of our marketplace being reinforced by the white label storefronts that drive this level of order density. So we continue to see benefits there, and we, you know, expect that to continue.
Speaker Change #177: Our order density at the end of the day being able to drive that rates, which really only results from multiple large batches happening at the same store at the same time and this kind of goes back to <unk> point earlier. This is sort of our marketplace being reinforced by the white label storefronts that drive. This this level of order density so continuing to see benefits.
Speaker Change #177: There and we expect that to continue and at the same time, we have decided to take.
Speaker Change #177: Much of that efficiency and reinvest it in in other parts of the business, we have talked about incentives in the past and we continue to invest in targeted incentives, but we're also investing in our product portfolio. So we mentioned some of the range of different affordability options that we're that we're leaning into like a favor options that allow.
Emily Reuter: At the same time, we have decided to take much of that efficiency and reinvest it in other parts of the business. We have talked about incentives in the past, and we continue to invest in targeted incentives. But we're also investing in our product portfolio.
Speaker Change #177: Folks too.
Speaker Change #177: Schedule delivery later in the day or pickup options being free.
Speaker Change #177: And so that shows up also in take rates now the last thing I'll say is I've said this previously where we're really pleased with where we are from a transaction revenue standpoint, we are in the top half of our long term range already and so for that reason it really don't expect transaction revenue to.
Emily Reuter: So we mentioned some of the range of different affordability options that we're leaning into, like, you know, saver options that allow folks to schedule delivery later in the day or pickup options being free. And so that shows up also in intake rates. Now, the last thing I'll say is, you know, I've said this previously, we're really pleased with where we are from a transaction revenue standpoint; we are in the top half of our long-term range already. And so for that reason, you really don't expect transaction revenue to be, you know, purely up in the right; we expect this could move around over time.
Speaker Change #177: Purely be up into the right. We expect this could move around over time, and that's really driven by the fact that there are a number of decisions that we're making you know day to day month to month in terms of how we're running the business, meaning we may lean more heavily into incentives in one quarter, because we're seeing about a return that's going to show up in transaction revenue versus leaning more heavily into something.
Operator: And that's really driven by the fact that there are a number of decisions that we make, you know, day to day, month to month in terms of how we're running the business, meaning we may lean more heavily into incentives in one quarter because we're seeing a better return, that's going to show up in transaction revenue versus leaning more heavily into something like paid marketing, which shows up in sales and marketing. As I mentioned earlier, leaning into certain price options shows up in transaction revenue; these are choices that we're making across the portfolio.
Speaker Change #177: Like paid marketing, which shows up in in in sales and marketing as I mentioned earlier leaning into certain price options shows up in transaction revenue. These are choices that we're making across the portfolio and so that's why at the end of the day you may see transaction revenue move around over time.
Speaker Change #178: Thank you.
Operator: And so that's why, you know, at the end of the day, you may see transaction revenue move around over time. Thank you. One moment for our next question. The next question comes from Michael Morton from Moffitt Nathan. Thank you for the question. One following up on Nikhil's question earlier, but I appreciate the call out for the Chase cashback blog post yesterday, but would love to know if you could maybe contextualize or size for us, for Instacart Plus members, how many of those are self-paying, or then how many are Plus Members as part of a partnership. That would maybe be some helpful commentary. And then the big picture on the Caper card.
Speaker Change #179: One moment for our next question.
Speaker Change #180: Our next question comes from the line of Michael Morton from Moffett, Nathan and.
Alright, Thank you for the question.
Two if I could.
Speaker Change #181: Following up on a question earlier, but.
I appreciate the call out for the two kind of Cashback Board post yesterday, but would love to know if you could maybe contextualize the size for us.
Speaker Change #182: Plus members how many of those are self pain.
Speaker Change #182: Or then how many are.
Speaker Change #183: Mister car Park members as part of a partnership that would maybe be some helpful commentary and then big picture on the paper carts.
Operator: It sounds like the holy grail of closed loop advertising, right? You show someone an impression, then you can see they put it in their cart, and they pay for it. What are some of the restricting factors to rolling these out as fast as possible? In theory, you'd want to have them in every grocery store in the country tomorrow. So I would love to learn some more about that. Thank you.
Speaker Change #184: Sounds like the Holy Grail of closed loop advertising right you show some on an impression.
Speaker Change #184: And then you can see they put it in their cart and they pay for it what are some of the restricting factors to rolling these out as fast as possible in theory you would.
Speaker Change #185: We want to have them in every grocery store in the country Tomorrow, So would love to learn some more about that thank you.
Fidji Simo: On Chase, just want to make sure I understand the question, but I would say partnerships in general are a lever for us to drive Instacart Plus adoption, but that's by no means the biggest driver. As I mentioned earlier, we're seeing very strong adoption of paid IEC Plus memberships. And that's really across the board, across all of our tactics.
Michael: Thanks, Michael Hum unsafe.
Speaker Change #187: Just wanted to make sure I understand question, but I would say partnerships in general is a lever for us to drive and pick out plus adoption, but that's by no means.
Speaker Change #188: The biggest driver as I mentioned earlier, we're seeing very strong adoption of paid IC plus a member of ships and that's really across the board across all of our tactics and partnership is just one of the levers, but but not a big one until just wanted to clarify that.
Fidji Simo: And, you know, partnership is just one of the levers, but not a big one. And so I just wanted to clarify that. In terms of your question on paper cuts and ads, we completely agree with you that it really represents the Holy Grail of advertising and being able to take the best of online ads and really bring them to the store and have full closed loop measurement. Advertisers are very excited about it, and we want to roll that out as fast as possible. We see a lot of retailer excitement as well as consumer excitement. When these are rolled out, we see higher average basket sizes. We see a high NPS score of about 70.
Speaker Change #189: In terms of your question on keep our cotton and ads. So we are we completely agree with you that it's really what she said is the Holy Grail, if advertising and being able to take the bad stuff online ads and really bring them into the store.
Speaker Change #189: <unk> closed loop measurement.
Speaker Change #189: Advertise all very excited about it and we want to roll that out as fast as possible, we see a lot of retailer excitement as well as consumer excitement when it is all rolled out we see a higher.
Fidji Simo: So we're really excited by what we're seeing. At the same time, you know, it's operationally heavy to roll out a lot of carts in a retail store. You have to partner with them to integrate with our point of sale system, and integrate with all of your loyalty systems.
Speaker Change #191: Average basket sizes are we see high NPS score of above 70.
Speaker Change #191: So what we're really excited by what we're seeing at the same time you know, it's operationally you have to roll out a lot of costs.
Speaker Change #191: We cannot store you have to partner with them to integrate with our point of sale system integrates with all of your loyalty system. So the good news is that we have a massive head start for having done that for a marketplace for having done that when we power. They are owned and operated sites. So it accelerates our ability to.
Fidji Simo: The good news is that we have a massive head start for having done that for our marketplace, for having done that when we power their own and operated sites. So it accelerates our ability to deploy these carts into their IT systems and therefore into their stores way faster than if we hadn't done all of these enterprise integrations. But it still requires new incremental integration that you have to do with our physical stores, as well as, you know, training of their sales team and all of these things.
<unk> deployed this call into the ITT stand, though that for instance, desktop way faster than if we were we hadn't done all of these enterprise integration, but it still requires new incremental integration that you have to do with our physical stores as well as training up the sales team and all of this.
Fidji Simo: So to give you a sense, this year we're going to go from, you know, hundreds of carts in deployment to, you know, thousands of carts deployed, and we expect to, you know, continue scaling that fast next year. And we think that, you know, we will rapidly gain the scale that we need for that to be, you know, very interesting for advertisers to advertise on. So we're really excited about that. We're seeing high demand from retailers, both large and small. I mentioned a couple in the letter.
Speaker Change #191: So to give you a sense of Zetia. We're gonna go from hundreds of calls from deployment to thousands of calls deployed.
Speaker Change #191: And expect to continue scaling up our fast next year, and we think that you know.
Speaker Change #191: We will rapidly getting to the scale that we need for that to be a very interesting for advertisers to advertise on so we're really excited about that we're seeing high demand from retailers, both large and small I mentioned a couple of things intellect.
Fidji Simo: And it's really just a matter now of really doing these rollouts, making sure that the rollouts go well in a couple of stores to start with, and then expanding with these retailers across all of their stores. Thank you. One moment for our next question. Our next question comes from the line of Walter Piecyk from Light Shed Partners. Thanks.
And it's really just a matter now of really doing these rollouts, making show that the Rollouts go well in a couple of thoughts to start with and then expand our we just retailers a parcel of desktop.
Speaker Change #192: Thank you.
Speaker Change #192: One moment for our next question.
Speaker Change #192: Our next question comes from the line of Walter Piecyk from the light shed partners.
Operator: I apologize if you addressed this earlier, but the first question is just on the AOV. If you could just drill down and talk about what the impact of the sequential growth there was. Was there any type of..., you know, price increases on the groceries themselves? And if there were decreases, what was more than offsetting that?
Walter Piecyk: Thanks, I apologize if you addressed this earlier, but the first question is just on the L. B.
Walter Piecyk: If you could just drill down and talk about what was the impact of the sequential growth. There was there any type of.
Speaker Change #193: Price increases on our groceries themselves and if there were decreases what was more than offsetting that.
Operator: Maybe higher tips? I mean, just anything you can give in terms of Greater Color, excuse me, on AOV, and then. Second question, I know Uber is kind of early. Do you expect there to be a noticeable impact on next quarter's results from the Uber relationship? Great, I can jump in.
Speaker Change #194: Maybe higher tips I mean, just anything you can give in terms of.
Speaker Change #195: Greater color color excuse me on <unk>.
Speaker Change #195: Then just.
Speaker Change #195: Just a second question Ryan Ubers kind of early.
Ryan Ubers: Do you expect there to be noticeable impact in next quarter's results from from Uber relationship.
Emily Reuter: Thanks for the question on AOV. So a couple of things that we highlighted on AOV as it relates to Q2 specifically were a couple of different factors. Some of them are just really broad and not necessarily specific to what's going on on an individual item basis, but I'll get to that in a moment. So first, is just that our new customer cohorts are actually reaching bigger basket sizes faster.
Speaker Change #198: Great I can jump in thanks for the question on <unk>. So a couple of things that we highlighted on AAV as it relates to Q2, specifically, where a couple of different factors that some of them are just really broad based and not necessarily specific to.
Speaker Change #198: Whats going on in the individual item basis, but I'll get to that in a moment. So first is just that our new customer cohorts are actually reaching bigger basket sizes faster. So as they blend in that is that is resulting in higher <unk> overall, our existing customers are also continuing to make larger purchases over time, which is a trend that we've always seen.
Emily Reuter: So as they blend in, that is, is resulting in higher AOVs overall. Our existing customers are also continuing to make larger purchases over time, which is a trend that we've always seen, and that blends in. And then lastly, that we do have a higher mix of club orders, and club AOV is higher overall. So that will blend in. In terms of sort of the broader picture, though, we are continuing to see price per item on an individual basis peaking and number of items troughing, meaning that we don't believe that this is really an inflation or individual price, item price, specific phenomenon.
Speaker Change #198: And that plans and and then lastly, we do have a higher mix of club orders and club O V is higher overall, so that will blend in.
Speaker Change #198: In terms of sort of the broader picture, though we are continuing to see price per item on an individual basis, peaking a number of items traffic, meaning that we don't believe that this is really an inflation or individual price.
Speaker Change #198: Item price specific phenomenon as I mentioned earlier club items club Ao vs are higher and Thats, largely because club item prices are higher and not because they are more expensive because the scale of the items you might be getting a bit bigger. So overall, that's really what we're seeing.
Emily Reuter: As I mentioned earlier, club items, and club AOVs are higher, and that's largely because club item prices are higher, not because they're more expensive, but because, you know, the scale of the items you might be getting is a bit bigger.
And for that reason you know going forward, we're not commenting on the specifics of what we expect to see that the composition of GTA V and in Q3.
Speaker Change #198: Yeah.
Emily Reuter: So overall, that's really what we're seeing. And for that reason, going forward, we're not commenting on the specifics of what we expect to see, the composition of GTV in Q3. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change #199: Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.