Q1 2025 Maplebear Inc Earnings Call

May 1, 2025

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 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 be advised that today's conference is being recorded I would now like to hand, the conference over to Rebecca Yoshi Gama V.

Speaker Change: P of Investor Relations capital markets and Treasury. Please go ahead.

Speaker Change: Thank you operator, and welcome everyone to <unk> first quarter 2025 earnings call on the call with me today are you Simo, our Chief Executive Officer, and Emily Reuter, Our Chief Financial Officer during.

Speaker Change: During today's call, we will make forward looking statements related to our business plans and strategy impacts from macroeconomic conditions, and our future performance and prospects, including our expectations regarding our financial results. These forward looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated you can find more information about these risks and uncertain.

Speaker Change: Fees in our SEC filings, including our last Form 10-K.

Speaker Change: We assume no obligation to update these statements after today's call except as required by law.

Operator: All participants are in a listen-only mode.

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 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 be advised that today's conference is being recorded I would now like to hand, the conference over to Rebecca Yoshi Gamma VP of Investor Relations capital markets.

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 these GAAP and non-GAAP financial measures is included in our shareholder letter, which can be found on our Investor Relations website.

Operator: To ask a question during the session, you will need to press star 11 on your Please limit yourself to one question and one follow up so that we will have enough time to address everyone's questions.

Operator: Please be advised that today's conference is being recorded.

Rebecca Yoshiyama: I would now like to hand the conference over to Rebecca Yoshiyama, VP of Investor Relations, Capital Markets, and Treasury.

Speaker Change: Now I'll turn over the call to <unk> for her opening remarks.

Speaker Change: And Treasury. Please go ahead.

Speaker Change: Thank you Rebecca and good afternoon, everyone I hope you've had a chance to review my shareholder letter.

Rebecca Yoshiyama: Please go ahead. Thank you, operator, and welcome, everyone, to Instacart's first quarter 2025 earnings call.

Speaker Change: What I highlighted how we've had a good start to the year and how we are innovating to accelerate online grocery adoption. Our operating fundamentals are strong and we're well positioned to drive growth for both our business and our partners.

Rebecca Yoshiyama: 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, impacts from macroeconomic conditions, and our future performance and prospects, including our expectations regarding our financial results. These forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated.

Speaker Change: Groceries are essential and we operate in a massive markets that still significant at the end of penetrated online consumers today, <unk> GP about convenience affordability quality and selection and Thats exactly what we deliver whether it's seeding suddenly time, helping them to a budget offerings the largest selection of.

Rebecca Yoshiyama: You can find more information about these risks and uncertainties in our SEC filings, including our last Form 10-K. We assume no obligation to update these statements after today's call, except as required by law.

Speaker Change: And our SEC filings, including our last Form 10-K.

Speaker Change: We assume no obligation to update these statements after today's call except as required by law.

Retailers, while making life simpler for millions of households, every week that focus as establishing took off as a clear category leader amongst digital first players in both small and large baskets and by doubling down on what we do best was consistently driving user growth order frequency and into golf plus adopt.

Speaker Change: In addition, we will also discuss certain non-GAAP financial measures, which have limitations that should not be considered in isolation from or as a substitute for our GAAP results. 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 will turn over the call to <unk> for her opening remarks.

Rebecca Yoshiyama: In addition, we'll 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 these GAAP and non-GAAP financial measures is included in our shareholder letter, which can be found on our investor relations website.

Fidji Simo: Now I'll turn over the call to Fidji for her opening remarks. Thank you, Rebecca, and good afternoon, everyone. I hope you've had a chance to review my shareholder letter, where I highlighted how we've had a good start to the year and how we're innovating to accelerate online grocery adoption. Our operating fundamentals are strong and we're well positioned to drive growth for both our business and our partners. Groceries are essential, and we operate in a massive market that's still significantly underpenetrated online. Consumers today care deeply about convenience, affordability, quality, and selection, and that's exactly what we deliver.

Speaker Change: <unk>.

Speaker Change: Thank you Rebecca and good afternoon, everyone I hope you've had the chance to redo my shareholder letter.

Speaker Change: In terms of recent trends, we look at a lot of data across all business and even though Maxwell in southern she remains we have not seen any unexpected changes in consumer behavior through April.

Speaker Change: I highlighted how we've added good start to the year and how we are innovating to accelerate online grocery adoption. Our operating fundamentals are strong and we're well positioned to drive growth for both our business and our partners.

We reached 98% of households in North America, and customer engagement remains consistent across geographies and income levels.

Speaker Change: Groceries are essential and we operate in a massive markets that still significantly underpenetrated online consumers today, <unk> GP about convenience affordability quality and selection and thats exactly what we deliver with or exceeding suddenly time, helping them to a budget offerings the largest selection of.

Speaker Change: Those are continuing to shop at premium and discount retailers, although price parity retailers are collectively growing faster on our marketplace a trend we've highlighted before.

Speaker Change: Demand is robust across all many use cases from weekly grocery trips and stock up holders to higher frequency restaurant and Chilean grocery orders.

Fidji Simo: Whether it's saving families time, helping them stick to a budget, or offering the largest selection of retailers, we're making life simpler for millions of households every week. That focus has established Instacart as a clear category leader among digital first players in both small and large baskets. And by doubling down on what we do best, we're consistently driving user growth, order frequency, and Instacart Plus adoption. In terms of recent trends, we look at a lot of data across our business, and even though macro uncertainty remains, we have not seen any unexpected changes in consumer behavior through April.

Speaker Change: Retailers, while making life simpler for millions of households, every week that focus as establishing took off as a clear category leader amongst digital first players in both small and large baskets and by doubling down on what we do best was consistently driving user growth order frequency and into golf plus adoption.

Speaker Change: Average item prices on our platform continued to track in line with inflation and basket sizes remained resilient as customers generally shop with a budget.

Speaker Change: A key reason our business can be so resilient is that we have deep retailer partnerships that go beyond surface level integrations for more than a decade, we have built deep technical bone up ships. So that's enabled everything from loyalty and promotions to inventory accuracy and fulfillment.

Speaker Change: <unk>.

Speaker Change: Whether it's through our marketplace White label store fronts of in store innovation like keep our costs. Our solutions are helping retailers modernize faster operate more efficiently and better serve their customers.

Speaker Change: We reached 98% of households in North America, and customer engagement remains consistent across geographies and income levels customers are continuing to shop at premium and discount retailers, although price parity retailers are collectively growing faster on our marketplace a trend we've highlighted before demand.

Fidji Simo: We reach 98% of households in North America, and customer engagement remains consistent across geographies and income levels. Customers are continuing to shop at premium and discount retailers, although price parity retailers are collectively growing faster on our marketplace, a trend we've highlighted before. Demand is robust across our many use cases, from weekly grocery trips and stock-up orders to higher-frequency restaurant and fill-in grocery orders. Average item prices on our platform continue to track in line with inflation and basket sizes remain resilient as customers generally shop with a budget. A key reason our business can be so resilient is that we have deep retailer partnerships that go beyond surface level integration.

Speaker Change: His phone up shifts also strengthen our platform by expanding value for customers through better prices and selection improving efficiency across our operations and giving us access to growing parts of the markets that no one else as tapped into like we have.

Speaker Change: Is robust across all many use cases from weekly grocery trips and stock up hold of two higher frequency restaurant and Chilean grocery orders.

Speaker Change: Today, we announced the acquisition of wind shop, which will allow us to power store fronts for even more retailers and double down on our enterprise strategy.

Speaker Change: Item prices on our platform continued to track in line with inflation and basket sizes remain resilient as customers generally sharp is a budget.

Speaker Change: Our retail media offering is another area, where we're uniquely positioned we provide a one stop shop for brands looking for highly measurable highly performing campaigns such reach customers at the point of purchase with precision and scale.

Speaker Change: A key reason our business can be so resilient is that we have deep retail our phone off ships that go beyond surface level integrations for more than a decade, we have built deep technical ball enough ships, that's enabled everything from loyalty and promotions to inventory accuracy and fulfillment, whether it's through our marketplace.

Fidji Simo: For more than a decade, we have built deep technical partnerships that enable everything from loyalty and promotions to inventory accuracy and fulfillment. Whether it's through our marketplace, white-label storefronts, or in-store innovation like Kipper Cards, our solutions are helping retailers modernize faster, operate more efficiently, and better serve their customers.

Speaker Change: Value is reflected in our strong Q1 advertising performance as well as the Fox, that's more and more large partners like Uber eats and hygiene are choosing care with ads to monetize their own properties with our platform.

Speaker Change: <unk> White label store fronts of in store innovation like keep our costs, our solutions are helping retailers modernize faster operate more efficiently and better serve their customers.

Speaker Change: While we continue to see strength in our advertising trends to date, we unsurprisingly have started to your concerns from brands about uncertainty around trade policies and although originations crude the impacts of ability to spend on marketing and even though no ads platform will be immune to macroeconomic risks our stuff.

Speaker Change: His phone up ships also strengthen our platform by expanding value for customers through better prices and selection improving efficiency across our operations and giving us access to growing parts of the market that no one else as tapped into like we have and today, we announced the acquisition of wind shop, which will allow us to.

Fidji Simo: These partnerships also strengthen our platform by expanding value for customers through better prices and selection, improving efficiency across our operations, and giving us access to growing parts of the market that no one else has tapped into like we have.

Speaker Change: Performance fees on that model and the work we've done to diversify our advertising base over the past year helps make our platform more resilient and very well positioned to remain a leader in this space.

Fidji Simo: And today, we announced the acquisition of WinShop, which will allow us to power storefronts for even more retailers and double down on our enterprise strategy. Our retail media offering is another area where we're uniquely positioned. We provide a one-stop shop for brands looking for highly measurable, highly performing campaigns that reach customers at the point of purchase with precision and scale. This value was reflected in our strong Q1 advertising performance, as well as the fact that more and more large partners like Uber Eats and Hy-Vee are choosing Carat Ads to monetize their own properties with our ad platform.

Speaker Change: Our store fronts for even more retailers and double down on our enterprise strategy.

Speaker Change: Finally across every part of our business, we're continuing to leverage AI to work smarter move faster and further establishes to golf as a leader in AIG then development in Q1 alone 87% of our code was developed with AI assistance unlocking a level of speed.

Speaker Change: This value was reflected in our strong Q1 advertising performance as well as the fact that more and more of a large partners like Uber eats and hygiene are choosing care with ads to monetize their own properties with our platform.

Speaker Change: <unk> and efficiencies that wasn't possible before.

Whether it's small shop, which deliver a more personalised and seamless customer experience all new tools that benefits retailers, both on our marketplace on their own and operated storefronts or would you need vessel campaigns, which gives brands a simplified and scalable way to connect customers across our ads ecosystem AI is a dry.

Speaker Change: While we continue to see strength in our advertising trends to date, we unsurprisingly have started to your concerns from brands about uncertainty around trade policies and other regulations crude the impacts of ability to spend on marketing and even though no ads platform will be immune to macroeconomic risks our performer.

Fidji Simo: While we continue to see strength in our advertising trends to date, we unsurprisingly have started to hear concerns from brands about how uncertainty around trade policies and other regulations could impact their ability to spend on marketing. And even though no ad platform will be immune to macroeconomic risks, our performance-driven ad model and the work we've done to diversify our advertising base over the past year helps make our platform more resilient and very well-positioned to remain a leader in this space.

Speaker Change: Giving false behind it all.

Speaker Change: Ultimately our filters as cliff solve real needs for our customers drive growth for our partners and execute towards our long term vision.

Speaker Change: We then add model and the work we've done to diversify our advertising base over the past year helps make our platform more resilient and very well positioned to remain a leader in this space.

Speaker Change: Continuing to lean into what makes us successful and making disciplined but aggressive investments.

Speaker Change: Finally across every part of our business, we're continuing to leverage AI to work smarter move faster and further establishes to golf as a leader in AIG then developments in Q1 alone 87% of our code was developed with AI assistance unlocking a level of speed creative.

Speaker Change: Confidence in our ability to not only extend our lead but help accelerate the future of grocery shopping in a way that benefits everyone.

Fidji Simo: Finally, across every part of our business, we're continuing to leverage AI to work smarter, move faster, and further establish Instacart as a leader in AI-driven development. In Q1 alone, 87% of our code was developed with AI. Unlocking a level of speed, creativity, and efficiency that wasn't possible before. Whether it's Smart Shop, which delivers a more personalized and seamless customer experience, or new tools that benefit retailers both on our marketplace and their own and operated storefronts, or Universal Campaigns, which gives brands a simplified and scalable way to connect customers across our ad ecosystem, AI is the driving force behind it all.

Speaker Change: Now I'll turn it over to Andy to talk about our financials.

Thank you P G Q.

Speaker Change: Q1 was a strong quarter for <unk> and our solid operating fundamentals and growth strategies have us well positioned for continued progress in 2025 and beyond.

Speaker Change: <unk> and efficiencies that wasn't possible before whether it's small shop, we reached the levels in most of my life and seamless customer experience all new tools that benefits retailers, both on our marketplace on their own and operated storefronts or would you need vessel campaigns, which gives brands a simplified and scalable way to connect customers.

Speaker Change: Now, let me provide a bit more color on our most recent financial results and outlook.

Speaker Change: In Q1, we delivered GTA V at the top end of our guidance range growing 10% year over year. This performance was driven by a 14% increase in orders the strongest year over year order growth. We've delivered in 10 quarters driven by increases in both order frequency and users.

Speaker Change: Across our ecosystem.

Speaker Change: It is a driving force behind it all ultra.

Speaker Change: Ultimately our filters as cliff solve real needs for our customers drive growth for our partners and execute towards our long term vision.

Speaker Change: As anticipated. We also saw average order value decreased by 4% year over year due to the addition of restaurant orders in reducing our minimum basket size to $10 per <unk> plus members, though this was partially offset by growth in basket size as elsewhere.

Fidji Simo: Ultimately, our purpose is clear, solve real needs for our customers, drive growth for our partners, and execute towards our long-term vision. By continuing to lean into what makes us successful and making disciplined but aggressive investments, I'm confident in our ability to not only extend our lead, but help accelerate the future of grocery shopping in a way that benefits everyone.

Continuing to lean into what makes us successful and making disciplined but aggressive investments.

Speaker Change: Confidence in our ability to not only extend our lead but help accelerate the future of grocery shopping in a way that benefits everyone.

Speaker Change: Transaction revenue grew 8% year over year and held steady at seven 1% of GTD quarter over quarter.

Speaker Change: Advertising and other revenue increased by 14% year over year, outpacing GDP growth and exceeding our expectations with strong contributions from both large and emerging brand partners.

Speaker Change: Now I'll turn it over to Andy to talk about our financials.

Emily Reuter: Now, I'll turn it over to Emily to talk about our finance. Thank you, Fiji. Q1 was a strong quarter for Instacart, and our solid operating fundamentals and growth strategies have us well positioned for continued progress in 2025 and beyond. Now, let me provide a bit more color on our most recent financial results and outlooks. In Q1, we delivered GTV at the top end of our guidance range, growing 10% year-over-year. This performance was driven by a 14% increase in orders, the strongest year-over-year order growth we've delivered in 10 quarters, driven by increases in both order frequency and users.

Andy: Thank you P G Q.

Andy: Q1 was a strong quarter for <unk> and our solid operating fundamentals and growth strategies have us well positioned for continued progress in 2025 and beyond.

Speaker Change: Profitability remained a highlight reflecting our solid operating fundamentals and financial discipline as we continue to effectively manage multiple levers across our P&L to drive efficiencies.

Andy: Now, let me provide a bit more color on our most recent financial results and outlook.

Andy: In Q1, we delivered G television at the top end of our guidance range growing 10% year over year. This performance was driven by a 14% increase in orders the strongest year over year order growth. We've delivered in 10 quarters driven by increases in both order frequency and users.

Speaker Change: GAAP net income of $106 million decreased by $24 million year over year, primarily due to the lapping of $95 million of stock based comp reversals in Q1 of 2024.

Speaker Change: Q1 stock based comp of 66 million was slightly lower than we expected and as a reminder, we continue to expect Q1 to be our lowest quarter of stock based comp in the calendar year.

Andy: As anticipated. We also saw average order value decreased by 4% year over year due to the addition of restaurant orders in reducing our minimum basket size to $10 per <unk> plus members, though this was partially offset by growth in basket sizes elsewhere.

Emily Reuter: As anticipated, we also saw average order value decrease by 4% year-over-year due to the addition of restaurant orders and reducing our minimum basket size to $10 per Instacart Plus members, though this was partially offset by growth in basket sizes elsewhere. Transaction revenue grew 8% year-over-year and held steady at 7.1% of GTV quarter-over-quarter. Advertising and other revenue increased by 14% year-over-year, outpacing GTV growth and exceeding our expectations with strong contributions from both large and emerging brand partners. Profitability remained a highlight, reflecting our solid operating fundamentals and financial discipline as we continue to effectively manage multiple levers across our P&L to drive efficiency.

Speaker Change: <unk> by a sizable step up in stock based comp in Q2 due to the timing of our annual refresh grants.

Speaker Change: Adjusted EBITDA of $244 million exceeded the high end of our guidance range growing 23% year over year.

Andy: Transaction revenue grew 8% year over year and held steady at seven 1% of GTD quarter over quarter.

Speaker Change: Operating cash flow of $298 million increased $193 million year over year, primarily driven by the collection of a large accounts receivable balance from a retailer in addition to our strong operational performance and.

Andy: Advertising and other revenue increased by 14% year over year, outpacing GDP growth and exceeding our expectations with strong contributions from both large and emerging brand partners.

Speaker Change: In Q1, we also bought back $94 million worth of shares and finished the quarter with $218 million of remaining buyback capacity.

Andy: Profitability remained a highlight reflecting our solid operating fundamentals and financial discipline as we continue to effectively manage multiple levers across our P&L to drive efficiencies.

Speaker Change: We ended the quarter with approximately $1 8 billion in cash and similar assets on our balance sheet and recently used approximately $105 million in cash for our acquisition of <unk>.

Andy: GAAP net income of $106 million decreased by $24 million year over year, primarily due to the lapping of $95 million of stock based comp reversals in Q1 of 2024.

Emily Reuter: Gap net income of $106 million decreased by $24 million year over year, primarily due to the lapping of $95 million of stock paced comp reversals in Q1 of 2024. Q1's stock-based comp of $66 million was slightly lower than we expected, and as a reminder, we continue to expect Q1 to be our lowest quarter of stock-based comp in a calendar year, followed by a sizable step-up in stock-based comp in Q2 due to the timing of our annual refresh grant. Adjusted EBITDA of $244 million exceeded the high end of our guidance range, growing 23% year-over-year. Operating cash flow of $298 million increased $193 million year-over-year, primarily driven by the collection of a large accounts receivable balance from a retailer, in addition to our strong operational performance.

Speaker Change: Now for our Q2 outlook.

Speaker Change: Similar to prior quarters, our guidance is based on our closest to the pin estimates based on what we've seen in our business through today.

Andy: Q1 stock based comp of $66 million was slightly lower than we expected and as a reminder, we continue to expect Q1 to be our lowest quarter of stock based comp in a calendar year, followed by a sizable step up in stock based comp in Q2 due to the timing of our annual refresh grants.

Speaker Change: However, we are operating in a period with lots of macro uncertainty and in particular, we know this could lead to more volatility amongst our brand partners and their advertising budgets.

Speaker Change: Based on current course and speed, we expect Q2 <unk> to be between $8 $85 9 billion reps.

Andy: Adjusted EBITDA of $244 million exceeded the high end of our guidance range growing 23% year over year.

Speaker Change: Representing year over year growth between 8% to 10%.

Speaker Change: We also continue to anticipate that orders growth will outpace <unk> growth in the period.

Operating cash flow of $298 million increased $193 million year over year, primarily driven by the collection of a large accounts receivable balance from a retailer in addition to our strong operational performance.

Speaker Change: We're also guiding to Q2, adjusted EBITDA of $240 million to $250 million, we expect the year over year growth in adjusted EBITDA as a percentage of <unk> to be primarily driven by ongoing adjusted operating expense leverage.

Andy: In Q1, we also bought back $94 million worth of shares and finished the quarter with $218 million of remaining buyback capacity.

Emily Reuter: In Q1, we also bought back $94 million worth of shares and finished the quarter with $218 million of remaining buyback capacity. We ended the quarter with approximately $1.8 billion in cash and similar assets on our balance sheet and recently used approximately $105 million in cash for our acquisition of Winshop.

Speaker Change: And we expect advertising and other revenue growth to modestly outpaced our anticipated GDP growth in the period.

Andy: We ended the quarter with approximately $1 8 billion in cash and similar assets on our balance sheet and recently used approximately $105 million in cash for our acquisition of <unk>.

Speaker Change: Overall, we're pleased with our strong start to the year and we're well positioned to navigate current macro conditions.

Speaker Change: <unk> has proven that we can grow through uncertainty and we are laser focused on helping our partners succeed no matter. What lies ahead.

Andy: Now for our Q2 outlook.

Emily Reuter: Now for our Q2 Outlook. Similar to prior quarters, our guidance is based on our closest-to-the-pin estimates based on what we've seen in our business through today. However, we are operating in a period with lots of macro uncertainty, and in particular, we know this could lead to more volatility amongst our brand partners and their advertising budgets.

Andy: Similar to prior quarters, our guidance is based on our closest to the pin estimates based on what we've seen in our business through today.

Speaker Change: Our operating fundamentals and balance sheet are strong, which gives us the ability to reinvest in growth initiatives, while executing on our commitment to deliver annual adjusted EBITDA expansion, both in absolute terms and as a percentage of <unk> in 2025.

Andy: However, we are operating in a period with lots of macro uncertainty and in particular, we know this could lead to more volatility amongst our brand partners and their advertising budgets.

Speaker Change: With that we will open up the call for live questions. Operator, you may begin.

Andy: Based on current course and speed, we expect Q2 <unk> to be between $8 $85 9 billion.

Emily Reuter: Based on current course and speed, we expect Q2 GTV to be between $8.85 and $9 billion, representing year-over-year growth between 8 to 10 percent. We also continue to anticipate that orders growth will outpace GTV growth in the period. We are also guiding to Q2 adjusted EBITDA of $240 to $250 million. We expect the year-over-year growth in adjusted EBITDA as a percentage of GTV to be primarily driven by ongoing adjusted operating expense leverage, and we expect advertising and other revenue growth to modestly outpace our anticipated GTV growth in the period.

Speaker Change: Thirdly, as a reminder to ask a question you will need to press star one on your telephone please limit yourself to one question and one follow up please standby, while we compile the Q&A roster in one moment for our first question, which will be coming from Colin Sebastian of Baird. Your line is open.

Andy: Representing year over year growth between 8% to 10% we.

Andy: We also continue to anticipate that orders growth will outpace <unk> growth in the period.

Andy: We are also guide into Q2, adjusted EBITDA of $240 million to $250 million, we expect the year over year growth in adjusted EBITDA as a percentage of <unk> to be primarily driven by ongoing adjusted operating expense leverage.

Colin Sebastian: Good afternoon can you guys hear me okay.

Speaker Change: We can.

Andy: And we expect advertising and other revenue growth to modestly outpaced our anticipated GDP growth in the period.

Colin Sebastian: Great.

Speaker Change: So first question I have I guess is on the ads business, hoping given some of the progress there you could unpack what youll see from from both the core CPG advertisers and then maybe the contribution from the longer tail that you've been working to unlock here for some time.

Andy: Overall, we're pleased with our strong start to the year and we're well positioned to navigate current macro conditions.

Emily Reuter: Overall, we're pleased with our strong start to the year, and we're well-positioned to navigate current macro conditions. Instacart has proven that we can grow through uncertainty, and we're laser-focused on helping our partners succeed, no matter what lies ahead.

Andy: With regard has proven that we can grow through uncertainty and we are laser focused on helping our partners succeed no matter. What lies ahead.

Andy: Our operating fundamentals and balance sheet are strong, which gives us the ability to reinvest in growth initiatives, while executing on our commitment to deliver annual adjusted EBITDA expansion, both in absolute terms and as a percentage of GB in 2025.

Speaker Change: And then Fuji I mean, given some of the early shifts that we're seeing kind of broadly towards agenda commerce.

Emily Reuter: Our operating fundamentals and balance sheet are strong, which gives us the ability to reinvest in growth initiatives, while executing on our commitment to deliver annual adjusted EBITDA expansion, both in absolute terms and as a percentage UTV in 2025.

Speaker Change: And the investments you guys are putting towards that I wonder if you could expanded then your vision for out in the curve fits in that paradigm of agents, placing orders on behalf of consumers. Maybe some details you have on shopping behavior, you mentioned retention in the letter, but behavior changes that may be influenced by things like the recipe driven ordering and others.

Andy: With that we will open up the call for live questions. Operator, you may begin.

Operator: With that, we will open up the call for live questions. Operator, you may begin. Certainly.

Speaker Change: Thirdly, as a reminder to ask a question you will need to press star one on your telephone please limit yourself to one question and one follow up please standby, while we compile our Q&A roster in one moment for our first question, which will be coming from Colin Sebastian of Baird. Your line is open.

Operator: As a reminder, to ask a question, you will need to press star 11 on your. Please limit yourself to one question and one follow-up. Please stand by while we compile our Q&A roster.

Speaker Change: Things on that would be helpful. Thank you.

Speaker Change: Great things coming out I'll start with with ads.

Colin Sebastian: And one moment for our first question, which will be coming from Colin Sebastian of Baird, your line is. Yep, good afternoon. Can you guys hear me? Okay, we can. Great.

Speaker Change: So we had a very strong Q1 as you saw in as a result.

Speaker Change: And it was driven by both large and emerging brands, which is really encouraging and.

Colin Sebastian: Good afternoon can you guys hear me okay.

Speaker Change: We can.

Speaker Change: Great.

Speaker Change: So first question I have I guess is on the ads business, hoping given some of the progress there you could unpack what you see from for both the core CPG advertisers and then maybe the contribution from the longer tail that you've been working to unlock here for some time.

Speaker Change: Mentioned in past calls we have been very focused on diversifying all base of advertisers and we now have 7000 brands more than 7000 brands that are on boarded and spending with us and so that diversification really he's walking if you look at Q1 really.

Colin Sebastian: So first question I have, I guess, is on the ads business, hoping, you know, given some of the progress there, you could unpack what you're seeing from, from both the core CPG advertisers, and then maybe the contribution from the longer tail that you've been working to unlock here for some time. And then, Fidji, I mean, given some of the early shifts that we're seeing kind of broadly, towards the ginseng commerce, and the investments you guys are putting towards that, I wonder if you could expand a bit on your vision for how Instacart fits in that paradigm of agents, placing orders on behalf of consumers, maybe some details you have on shopping behavior, you mentioned retention in the letter, but, you know, behavior changes that may be influenced by things like the recipe driven ordering, and other things on that would be helpful.

Speaker Change: And then <unk> I mean, given some of the early shifts that we're seeing kind of broadly towards agenda commerce.

Speaker Change: So proves that the entire strategy is coming together because it has been really been driven by our high performance. We continue to be best in class in both rollout.

Speaker Change: Adjustments you guys are putting towards that I wonder if you could expand on your vision throw it into the cart fits in that paradigm of agents, placing orders on behalf of consumers. Maybe some details you have on shopping behavior, you mentioned retention in the letter, but behavior changes that may be influenced by things like the recipe driven ordering and other things.

Speaker Change: As well as CTO among large multi retailer platforms, we continue to our product innovation with new AD formats, as well as continuing to increase of supply with some of the wins we've had in.

Speaker Change: In extending care with ads, which are very meaningful and contribute to really a virtuous cycle of getting more supply, which drives more performance of trucks more demand and as a result.

Speaker Change: On that would be helpful. Thank you.

Speaker Change: Great things coming in I'll start with with ads.

Fidji Simo: Great. Thanks, Colleen.

Speaker Change: So we had a very strong Q1 as you saw and as a result.

Fidji Simo: I'll start with ads. So we had a very strong Q1, as you saw in the result. And it was driven by both large and emerging brands, which is really encouraging. And as I've mentioned in past calls, we have been very focused on diversifying our base of advertisers. And we now have 7,000 brands, more than 7,000 brands that are onboarded and spending with us. And so that diversification really is working. If you look at Q1, really to prove that the entire strategy is coming together, because it has been really been driven by our high performance. We continue to be best in class in both ROAS, as well as CTR among large multi-retailer platforms. We continue to have product innovation with new ad formats, as well as continuing to increase our supply with some of the wins we've had in expanding our carrot ads, which are very meaningful and contribute to really a virtuous cycle of getting more supply, which drives more performance, attracts more demand, and as a result, gets more retailers interested in working with us.

Speaker Change: It was driven by both large and emerging brands, which is really encouraging and.

Speaker Change: It gets more retailers interested in working with us. So it's really a beautiful virtuous cycle, that's happening with care with ads and really working now so that's really what we saw I would say in Q1 and I'm, just saying like the strategy is working and we continue to see strengths.

Speaker Change: In terms of the shift towards a gen. Two comments I would say, it's still very early but our strategy is to really embrace new technologies when they happen and be really the first to bring these technologies to people because fundamentally we believe that if we make it super easy for people to all the growth.

Speaker Change: So proves that the entire strategy is coming together because it has been really been driven by our high performance. We continue to be best in class in both rollout.

Speaker Change: As well as CTO among large multi retailer platforms.

Speaker Change: Through an online that's going to accelerate market adoption and as a category leader, we can get more than a fair share of that.

Speaker Change: Continue to our product innovation with new AD formats, as well as continuing to increase of supply with some of the wins we've had.

Speaker Change: As people move online because we obviously superior experience of superior selection and so you've seen US work for example, with open AI on that operate our products wherever we integrate with them pulled out we have our own efforts of.

Speaker Change: In expanding care with ads, which are very meaningful and contribute to really a virtuous cycle of getting more supply, which drives more performance of trucks more demand and as a result.

She going out how we can include agent experiences directly inside into the golf, especially for things like planning and really helping you with kind of all of your family needs. When it comes to putting food on the table and again very early but we think this is something that has a lot of potential.

Fidji Simo: So it's really a beautiful virtuous cycle that's happening with carrot ads and really working now. So that's really what we saw, I would say, in Q1, and just saying the strategy is working and we continue to grow.

Speaker Change: And we want to lean into.

Fidji Simo: In terms of the shift towards agentic commerce, I would say, you know, it's still very early, but our strategy is to really embrace new technologies when they happen and be really the first to bring these technologies to people. Because fundamentally, we believe that if we make it super easy for people to order groceries online, that's going to accelerate market adoption. And as a category leader, we can get more than a fair share of that as people move online because we have the superior experience, the superior selection. And so you have seen us work, for example, with OpenAI on their operator products where we integrate with them for that.

Speaker Change: We need to make sure that we extend our lead in this market.

Speaker Change: Great. Thanks, Julie.

Speaker Change: Hum.

Speaker Change: And our next question will be coming from Doug Anmuth of Jpmorgan. Your line is open.

Speaker Change: Oh, Hi, this is Neil on for Doug just wanted to understand.

Speaker Change: Sure.

Speaker Change: Online, that's going to accelerate market adoption and as a category leader, we can get more than offset share of that as.

Speaker Change: What are the changes you guys indeed.

Speaker Change: As people move online because we obviously superior experience of superior selection and so you have seen US work for example, with open AI on that operate our products wherever we integrate with them pulled out we have our own efforts of.

Speaker Change: Those shop and do economically with you do $10 minimum basket as well as those two.

Speaker Change: Do you need to incentivize the shoppers will create a different order flow I just wanted to understand like how much of batching is required to.

Speaker Change: Do these orders economically.

Fidji Simo: We have our own efforts of figuring out how we can include agentic experiences directly inside Instacart, especially for things like meal planning and really helping you with all of your family needs when it comes to putting food on the table. And again, very early, but we think this is something that has a lot of potential and we want to lean into very early to make sure that we extend our lead in this market.

Speaker Change: Going out to how we can include agentic experiences directly inside into the call, especially for things like planning and really helping you with kind of all of your family needs. When it comes to putting food on the table and again very early but we think this is something that has a lot of potential and.

Speaker Change: Yes. Thanks for the question. So the reason we're able to do is as old as economics, we like it because we have a very high density of all those in every store and in fact by launching $10 minimum baskets were increasing that all the other entities, giving us more orders so that we can potentially batch.

Speaker Change: We want to lean into very early to make sure that we extend our lead in this market.

Speaker Change: And so we like the economics, we have today and then once we launch we continue to optimize those economics and we can increase batching too.

Judy: Great. Thank you Judy.

Speaker Change: To date more is the vast majority of all doesn't always your Dutch but we can go even higher with the density of $10 Basket for example, batching Aldo like.

Colin Sebastian: Great. Thanks, Fidji.

Speaker Change: Okay.

Speaker Change: And our next question will be coming from Doug Anmuth of Jpmorgan. Your line is open.

Doug Anmuth: And our next question will be coming from Doug Anmuth of J.P. Morgan. Your line is open.

Speaker Change: Oh, Hi, this is Neil on for Doug.

Speaker Change: Full at the time instead of three at the time that Ching priority all of those into the future.

Neeraj: Hi, this is Neeraj on for Doug. Just wanted to understand, what are the changes you guys need on the shop and to economically execute the $10 minimum basket as well as the store check? Do you need to incentivize the shoppers or create a different order flow? I just want to understand like how much batching is required to do these orders economically. Yeah, thanks for the question. So the reason we're able to do these orders at Economics We Like is because we have a very high density of orders in every store. And in fact, by launching $10 minimum basket, we're increasing that order density, it's giving us more orders that we can potentially batch.

Speaker Change: Just wanted to understand.

Speaker Change: What are the changes you guys.

Speaker Change: So these are all things that that can continue to improve the economics of all of our growth continues. It is also worth mentioning that these orders that had all of them are mean basketball adelphia small basket all those tends to skew toward snacks and beverages and therefore categories. That's also good for advertising.

Speaker Change: On those shop and do economically because if you do $10 minimum basket as well as those two Jay.

Speaker Change: Do you need to incentivize the shoppers are created different order flow.

Speaker Change: I wanted to understand like how much of batching is required to.

Speaker Change: Do these orders economically.

Yes. Thanks for the question. So the reason we're able to do is as old as that economics, we like it because we have a very high density of all those in every store and in fact by launching $10 minimum baskets were increasing that all the other entities, it's giving us more orders so that we can potentially batch.

Speaker Change: And given our strengths in ads, it's also an advantage to get.

Speaker Change: The economics are to be in a good place.

Speaker Change: You mentioned install view and second full check on second soft check it's very much a similar thing we have shoppers who visit large format stores on average 14 times a day and so that means that we are shoppers inside the stores very frequently and therefore for Prada.

Speaker Change: And so we like the economics, we have today and then once we launch we continue to optimize those economics and we can increase batching too.

Fidji Simo: And so we like the economics we have today. And then once we launch, we continue to optimize those economics. And we can increase batching to today, you know, more, more, the vast majority of orders are already batched. But we can go even higher with the density of $10 minimum basket, for example, batching orders, like four at a time, instead of three at a time, batching priority orders in the future. And so these are all things that can continue to improve the economics as order growth continues. It's also worth mentioning that these orders, the $10 minimum basket orders, the small basket orders tend to skew towards snacks and beverages and therefore categories that are also good for advertising.

Speaker Change: To date more.

Speaker Change: <unk> is not available at the store, it's very easy for us to check if it's available at a store nearby because in all likelihood we already have a sharper.

Speaker Change: The vast majority of all does always your Dutch but we can go even higher with the density of Central government Basket for example, batching Aldo.

Speaker Change: That can go check that out and then same thing for all of you which is scanning.

Speaker Change: Four at a time instead of three at the time that Ching priority all of those into the future.

Speaker Change: Sales with.

Speaker Change: So we are all things that that can continue to improve the economics of all of our growth continues. It is also worth mentioning that.

Speaker Change: Shot a phone to capture videos of inventory. It's a similar thing we have a lot of shoppers that are already installed waiting or Hudson. So waiting for in order to come in so that's really an incremental earning opportunity for them to be able to just scanned and gives us access to just incredibly rich data that allows us to improve.

Speaker Change: These orders that tend alone Oh mean baskets, all Delphi small basket, all those tends to skew toward snacks and beverages and therefore categories. That's also good for advertising and given our strengths in ads. It's also an advantage to get.

Speaker Change: Overall inventory accuracy, while also giving shoppers more earnings opportunities. So it's really leveraging our scale or wholesale density and the density of shop builds we have at any given store same store scale.

Fidji Simo: And given our strength in ads, it's also an advantage to get the economics there to be in a good place.

Speaker Change: So the economics are to be in a good place.

Fidji Simo: You mentioned store view and second store check. On second store check, it's very much a similar thing. We have shoppers who visit large format stores on average 14 times a day. And so that means that we have shoppers inside these stores very frequently. And therefore, if a product is not available at a store, it's very easy for us to check if it's available at a store nearby, because in all likelihood, we already have a shopper that's nearby that can go check that out. And then same thing for store view, which is scanning aisles with shopper phone to videos of inventory.

Speaker Change: Got it.

Speaker Change: And just on this one it was the same great to see the.

Speaker Change: Exploration, but how.

Speaker Change: How would you is there any upside that was driven by the launch of ads on keep accounts.

Speaker Change: <unk> is not available at the store, it's very easy for us to check if it's available at a store nearby because in all likelihood we already have a sharper.

Speaker Change: I would say the launch besides of scope of course is extremely minimal right now in terms of impact to our revenue. This thing that we're excited about when it comes to ads on keeper.

Speaker Change: That can go check that out and then same thing for all of you which is scanning.

Ah is a fox that we are seeing a level of engagement with those up so that is equivalent to online engagement, which gives us a lot of confidence.

With shops.

Speaker Change: Shot a phone to capture videos of inventory. It's a similar thing we have a lot of shoppers that are already nielsen's saw waiting or Hudson store waiting for in order to come in and so that's really an incremental earning opportunity for them to be able to just scanned and gives us access to just incredibly rich data that allows us to improve.

Fidji Simo: It's a similar thing. We have a lot of shoppers that are already near the store waiting or at the store waiting for an order to come in. So that's really an incremental earning opportunity for them to be able to just scan the aisle and give us access to this incredibly rich data that allows us to improve our inventory accuracy while also giving shoppers more earnings opportunities. So it's really leveraging our order density and the density of shoppers we have at any given store, thanks to our scale.

Speaker Change: In our ability to monetize calls well into the future but.

Speaker Change: But I would say you know given.

Speaker Change: The scale of keep out right now, it's still fairly minimal tool overall ad revenue.

Speaker Change: Got it thanks, so much.

Speaker Change: Our inventory accuracy, while also giving shoppers more earnings opportunities. So it's really leveraging our scale or wholesale density and the density of shutdowns, we have at any given store sensor scale.

Speaker Change: Thank you.

Speaker Change: And our next question will be coming from Nikhil <unk> of Bernstein. Your line is open.

Nikhil <unk>: Alright. Thank you for taking my question I wanted to ask a longer term one on advertising how do you ensure that your AD platform continues to work very well for the long tail of AD buyers that maybe don't have as much organic brand recognition and search are their needs very different to that if you're a big CPG partners.

Speaker Change: Got it.

Speaker Change: And just on <unk>.

Speaker Change: This morning, I want the same great to see the.

Fidji Simo: And just on ads, I just wanted to understand, you know, great to see the ad acceleration, but how much, is there any upside that was driven by the launch of ads on Capacart? I would say the launch of Ads on Kapor, of course, is extremely minimal right now in terms of impact towards revenue. The thing that we're excited about when it comes to Ads on Kapor is the fact that we are seeing a level of engagement with those ads that is equivalent to online engagement, which gives us a lot of confidence in our ability to monetize Korps well in the future.

Speaker Change: Acceleration, but.

Speaker Change: How would you is there any upside that was driven by the launch of ads on keep accounts.

Speaker Change: I would say the launches sides of slip off course is extremely minimal right now in terms of impact to our revenue. This thing that we're excited about when it comes to our doesn't keep up.

Nikhil <unk>: So how do you kind of solve and optimized for that.

Speaker Change: This is such an excellent question and something we spend a lot of time thinking about and in fact, you do build a fairly different ads product for emerging brands and you do fallouts guys are full the reason you mentioned, but also.

Speaker Change: Ah is a fox that we are seeing a level of engagement with those apps that is equivalent to online engagement, which gives us a lot of confidence in.

Speaker Change: Oems much more towards self service tools. So we've done a lot of work to make of tools a lot more self serve they are they have much less time and much fewer resources to analyze inside so we have made it so that with AI, we can deliver insights to them and tell them what to do next to optimize a campaign in a much easier way. So all of you.

Speaker Change: In our ability to monetize calls well into the future.

Speaker Change: But I would say given.

Fidji Simo: But I would say, you know, given the scale of Kapor right now, it's still fairly minimal to our overall ads revenue. Got it.

Speaker Change: The scale of keep out right now, it's still fairly minimal tool overall ad revenue.

Speaker Change: Got it thanks, so much.

Speaker Change: Thank you.

Fidji Simo: Thanks so much, Fidji. Thank you.

Speaker Change: And our next question will be coming from Nikhil <unk> of Bernstein. Your line is open.

Speaker Change: These things are things that we definitely if you do build very differently, but on your specific point on like how do we create discovery for them.

Nikhil Devnani: And our next question will be coming from Nikhil Devnani of Bernstein, your line is Hi, thank you for taking my question. I wanted to ask a longer term one on advertising. How do you ensure that your ad platform continues to work very well for the long tail of ad buyers that maybe don't have as much organic brand recognition and search? Are their needs very different to that of your big CPG partners? How do you kind of solve an...

Nikhil: Alright. Thank you for taking my question I wanted to ask a longer term one on advertising how do you ensure that your AD platform continues to work very well for the long tail of AD buyers that maybe don't have as much organic brand recognition and search are their needs very different to that if you're a big CPG partners.

Speaker Change: This is exactly why we are launching things like infill.

Speaker Change: Inspiration ads, which are all about being discovered the outside of the aisle that you usually all hands. So to give a concrete example, we sponsored recipes that's a good opportunity shall buying one particular ingredient. If we show you Oh look at the sponsored recipes to make you discuss.

Speaker Change: So how do you kind of solve and optimized for that.

Speaker Change: A lot of other products.

Speaker Change: Part of that and we just released a case study with nature on Nate's, honey, which generated 36% sorry, 7% new to brand sales.

Speaker Change: Oems much more towards self service tools. So we've done a lot of work to make of tools a lot more sell selves. They are they have much less time and much fewer resources to analyze inside so we have made it so that with AI, we can deliver insights to them and tell them what to do next to optimize a campaign and a much easier way so all of them.

Speaker Change: Two to four X rollout throughout the campaign and then when we looked at several campaigns from Swan Salt recipe, we saw that 70% of AD impressions came.

Speaker Change: As of the aisle of the initial thing that the customer was looking out which is really good for discovery same thing when it comes to you know all the AD formats like bundles and occasions, which are all about upselling you two different.

Speaker Change: These things are things that we definitely if you do build very differently, but on your specific point on like how do we create discovery for them.

Speaker Change: This is exactly why we are launching things like of inspiration ads, which are all about being discovered the outside of the aisle that you usually all hands. So to give a concrete example, we sponsored recipes that good opportunity national buying one particular ingredient.

Speaker Change: Products that you might be interested in.

Speaker Change: Based on what you just put in your call. So that's that's working really well and then the last thing I'll add is we launched this quarter and you need a full campaigns and universal campaigns is basically a way to make sure that if you set up one campaign, we can really automatically through a distributor.

Speaker Change: If we show you Oh look at this fund sold recipes to make you discover a lot of other products as part of that and we just released a case study with nature, Nate's, honey, which generated 36%, 37% new to brand sales.

Speaker Change: Uh huh.

Speaker Change: Bunch of different places and that helps a lot when it comes to emerging brands because sometimes it's easy just do sponsored products in mind not to your point.

Speaker Change: Get all of the traffic that they would want so we would want to actually redirect those budgets towards display ads wherever they're going to be discovered in other places and not necessarily and so and so that allows us to dynamically move budgets to make sure that we can maximize the advertisers' goals maximize discovery.

Speaker Change: Two to four X rollout throughout the campaign and then when we looked at several campaign from the Swan Salt recipe, we saw that 70% of AD impressions came.

Speaker Change: Out of the aisle of the initial thing that to the customer was looking out which is really good for discovery same thing when it comes to you know all the AD formats like bundles and occasions, which are all about upselling you two different.

Speaker Change: And does that dynamic without the brand having to do a lot of work to seek all that out for themselves. So we are seeing all of that work and that's reflected in the strengths that we continue to a hub on MLP.

Speaker Change: Products that you might be interested in.

Speaker Change: Emerging brands budgets at all really coming strong into the system.

Speaker Change: Thanks, Vijay and if I could just follow up on the small basket orders now that you've had a bit more time for that program to ramp are you. So confident that these are predominantly incremental orders and any signs of better in Stuttgart, plus retention or conversion rates because of these changed delivery thresholds. Thank you.

Speaker Change: A bunch of different pieces and that helps a lot when it comes to emerging brands because sometimes usually just do sponsored products in mind not to your point.

Speaker Change: Yes, it's a strong yes on both.

Speaker Change: Seeing Ah Hi, LG TV increased hold a frequency stronger into gold plus adoption.

Speaker Change: Get all of the traffic that they would want so we would want to actually redirect those budgets towards display ads wherever they're going to be discovered in other places and not necessarily in search and so that allows us to dynamically move budgets to make sure that we can maximize the advertisers' goals maximize discovery.

Speaker Change: So these are things that as you can imagine that we track very closely and we have not seen cannibalization of large baskets, we have some very clear incremental GTE and that's coming both from existing users, but also from new users and resurrected users. So it's really adding a lot of benefits across.

Speaker Change: And does that dynamic without a brand having to do a lot of work to figure all that out for themselves. So we are seeing all of that work and that's reflected in the strengths that we continue to a hub on emerging brands budgets at all really coming strong into the system.

The board, which is why we feel very good about it.

Speaker Change: And when I mentioned that it increases all the frequency that we only means that it's really increasing order frequency at every stage. So while moving yearly active older Ars to be quarterly active more frequently quarterly active monthly active and then months reacting to weekly active.

Speaker Change: Thanks, Vijay and if I could just follow up on the small basket orders now that you've had a bit more time for that program to ramp are you still confident that these are predominantly incremental orders and any signs of better in Stuttgart, plus retention or conversion rates because of these changed delivery thresholds. Thank you.

Nikhil Devnani: Thanks, Fidji. And if I could just follow up on the small basket orders, now that you've had a bit more time for that program to ramp, are you still confident that these are predominantly incremental orders and any signs of better Instacart plus retention or conversion rates because of these changed delivery thresholds? Thanks.

Speaker Change: All increasing and going into the right direction. So we're really excited about what we're seeing we're also seeing in terms of qualitative use case that it's driving more midweek fill in grocery orders and we're seeing that being particularly strong in dense urban areas, where customers are more likely to not have a vehicle and so it's really.

Speaker Change: Yes, it's a strong yes on both.

Fidji Simo: Yes, it's a strong yes on both. We are seeing higher GTV, increased order frequency, stronger Instacart plus adoption. And so these are things, as you can imagine, that we track very closely. And we have not seen cannibalization of large baskets. We have seen very clear incremental GTV, and that's coming both from existing users, but also from new users and resurrected users. So it's really having a lot of benefits across the board, which is why we feel very good about it. And when I mentioned that it increases order frequency, that really means that it's really increasing order frequency at every stage.

Speaker Change: We are seeing a high LG TV increased although frequency stronger into golf plus adoption.

Speaker Change: Fulfilling the promise of that and then see hypothesis that we had when we launched and that's why.

Speaker Change: And so these are things that as you can imagine that we track very closely and we have not seen cannibalization of large baskets, we have some very clear incremental GTE and that's coming both from existing users, but also from new users and resurrected users. So it's really adding a lot of benefits.

Speaker Change: We're really committed to it.

Speaker Change: Thanks, a lot C G.

Speaker Change: Thank you and our next question will be coming from Bernie Mcternan.

Bernie Mcternan: Of Needham <unk> Company. Your line is open.

Bernie Mcternan: Great. Thanks for taking the question just given the acquisition of wind shop I was hoping you can just take a step back and if you could just remind us of your enterprise strategy and if these are discrete revenue opportunities or more so indirect where you have the opportunity to get more data and integration with your with your grocery partners and what holds.

Ross: Ross The board, which is why we feel very good about it.

Ross: And when I mentioned that it increases all their frequency that really means that it's really increasing order frequency at every stage. So while moving yearly active older Ars to be quarterly active more frequently quarterly active monthly active and then months reacting to weekly active are all.

Fidji Simo: So we're moving yearly active orderers to be quarterly active more frequently, quarterly active to monthly active, and then monthly active to weekly active, all increasing and going in the right direction. So we're really excited about what we're seeing. We're also seeing in terms of qualitative use case that it's driving more midweek filling grocery orders. And we're seeing that being particularly strong in dense urban areas where customers are more likely to not have a vehicle. And so it's really fulfilling the promise that and the hypothesis that we had when we launched, and that's why we're really committed to it.

Bernie Mcternan: <unk> is when shop filling for you guys.

Bernie Mcternan: Absolutely so to take a step back of enterprise strategy is both.

Ross: All increasing and going into the right direction. So we're really excited about what we're seeing we're also seeing in terms of qualitative use case that it's driving more midweek fill in grocery orders and we're seeing that being particularly strong in dense urban areas, where customers are more likely to not have a vehicle and so it's really.

Bernie Mcternan: Big driver of GTA V and revenue because it allows us to tap into a part of the market that no. One else is able to tap into and so that makes us really be able to tap into the bulk of the markets that retailers own and that means that when retailers want to lean into online usually decide to.

Ross: Selling the promise of that and then see hypothesis that we had when we launched and that's why.

Ross: We're really committed to it.

Bernie Mcternan: <unk> marketing budgets behind that own properties and because we found out that benefits us a great deal. We have approximately 600 storefronts. So that's imagine 600 retail banners really putting their weight behind that part of the market. So that's a that's a big source of GSV and revenue for us, but it is also a.

CG: Thanks, a lot C G.

Nikhil Devnani: Thanks a lot.

Speaker Change: Thank you and our next question will be coming from Bernie Mcternan.

Bernard McTernan: Thank you, and our next question would be coming from Bernie McTernan. of Needham and Company, your line is open. Great, thanks for taking the question.

Bernie Mcternan: Of Needham <unk> Company. Your line is open.

Bernie Mcternan: Great. Thanks for taking the question just given the acquisition of wind shop I was hoping we can just take a step back and see if you could just remind us of your enterprise strategy and if these are discrete revenue opportunities or more so indirect where you have the opportunity to get more data and integration with your with your grocery partners and what holds.

Fidji Simo: Just given the acquisition of WinShop, I was hoping we just take a step back and Fidji, if you could just remind us of your enterprise strategy, and if these are discrete revenue opportunities or more so indirect, where you have the opportunity to get more data and integration with your with your grocery partners and what hole specifically is WinShop filling? That's great.

Strategic assets to your point that is all about creating deeper integration with retailers being a strategic partner and not just one of the many marketplaces.

Bernie Mcternan: Seats on.

Bernie Mcternan: <unk> is when shop filling for you guys.

Bernie Mcternan: And that allows us to be first to market with a lot of capabilities. So to give you. An example, when we went to retailers and told them Hey, it would be really great to implement snapped together a lot of retailers want to start by implementing snap on the owned and operated properties, obviously and so we do that for them and auto magically gets.

Bernie Mcternan: Absolutely so to take a step back of enterprise strategy is both.

Big driver of GTA V and revenue because it allows us to tap into a part of the market that no. One else is able to tap into and so that makes us really be able to tap into the bulk of the markets that retailers own and that means that when retailers want to lean into online usually decide to.

Bernie Mcternan: For our marketplace.

Bernie Mcternan: Similarly, with loyalty integration when we build loyalty integration for that for France, we get that for a marketplace and so it really allows us to other strategic relationship be integrated into <unk>.

Bernie Mcternan:

Bernie Mcternan: <unk> marketing budgets behind that own properties, and because we power that benefits us a great deal. We have approximately 600 storefronts. So that's imagine 600 retail banners really putting their weight behind that part of the market. So that's a that's a big source of GSV and revenue for us, but it is also a.

Bernie Mcternan: Roadmaps and really cold gives SUNS is limited it resources that retailers have.

Bernie Mcternan: And take all of the innovation that we have in enterprise and bring it to marketplace and vice versa take all of the innovation of marketplace and bring it to enterprise. So we feel.

Bernie Mcternan: Strategic assets to your point that is all about creating deeper integration with retailers being a strategic partner and not just one.

Very strongly about that strategy and so that's why you know it becomes easy then to make acquisitions like wind shop and also if you look at our track record of acquisition a lot of them have been into enterprise space was all of that to keep a good storm.

Bernie Mcternan: One of the many marketplaces.

Bernie Mcternan: It's on.

Bernie Mcternan: E <unk> sites, because these acquisition directly build on top of a really strong product suite and she directly into our strategy. So it's win shop for example that is allowing us to.

Power because the store fronts for more retailers go.

Bernie Mcternan: A full marketplace.

Bernie Mcternan: Go deeper with the ones that we had relationship with workflow and he is a good example, we have a very strong relationship with them, we already power cheaper in 10% of their stores, but now is when shop, we're going to be able to power that for front as well as well as develop relationship with new retailers Patterson is a great example, where.

Bernie Mcternan: Integrated into <unk>.

Bernie Mcternan: Good maps and really Couldnt give SUNS is limited it resources that retailers have.

Bernie Mcternan: Chop is powering the forefront and that's allowing us to tap into that relationship and then in terms of monetization opportunities. Obviously knows the SaaS revenues that win win shop charges to date, but really the ultimate goal is to upsell to more revenue generating opportunities whether all of that our fulfillment.

Bernie Mcternan: Strongly about that strategy and so that's why you know it becomes easy then to make acquisitions like when shop and also if you look at our track record of acquisition a lot of them have been enterprise space was all of that to keep a good storm.

Technologies that retailers are asking for and what onto available in wind shop or carrots adds a lot of wind shop retailers wanted a retail media solution and with Caris ads, we're going to be able to do that K 12 is another example that can integrate directly with a storefront to provide an omnichannel experience. So we have a lot of opportunities.

Bernie Mcternan: E <unk> sites, because these acquisition directly build on top of a really strong product suite and she directly into our strategy. So its wind shop for example that is allowing us to.

Bernie Mcternan: Power because of store fronts for more retailers go deeper with the ones that we had relationship with <unk> is a good example, we have a very strong relationship with them, we already power cheaper in 10% of their stores, but now is when shop, we're going to be able to power that forefront as well as well as develop relationship with new retailers.

Bernie Mcternan: To upsell now and that means that there's a lot of upcoming synergies that make this acquisition.

Bernie Mcternan: Oh, great now.

Bernie Mcternan: Great. Thank.

Bernie Mcternan: Thank you very much for that answer and just one follow up I know that the shareholder letter it talks about <unk> declines primarily driven by the lower mainland.

Bernie Mcternan: Artisan is a great example, where.

Bernie Mcternan: Delivery thresholds in restaurant, but I guess I just wanted to ask directly if youre seeing any trade down or smaller basket sizes within the larger basket.

Bernie Mcternan: When shop is powering the forefront and that's allowing us to tap into that relationship and then in terms of monetization opportunities. Obviously, the SaaS revenues that win win shop charges to date, but really the ultimate goal is to upsell to more revenue generating opportunities whether all of that our fulfillment.

Bernie Mcternan: Evidence of that in the platform or not.

Yes, so as we talked about we saw the 4% on a year over year basis decline in <unk> and that was driven by restaurants first and then by the $10.

Bernie Mcternan: Technologies that retailers are asking for and what onto available in wind shop or caret adds a lot of wind shop retailers wanted a retail media solution and with Caris ads, we're going to be able to do that <unk> is another example that can integrate directly with our storefronts to provide an omnichannel experience. So we have a lot of opportunity.

Bernie Mcternan: The reduction in the minimum basket for IC, plus what we're actually seeing as that's been slightly offset by a continued increase in sort of the remaining basket. So we're seeing continued strength and that is a result of sort of exactly what you pointed out which is we're not seeing trade down we're seeing this as sort of truly incremental.

Bernie Mcternan: Bend as feed you talked about we see that in terms of the types of orders that we're seeing on the platform. So hence why we continue to feel quite good about this update very helpful. Thank you both.

Bernie Mcternan: As to upsell now and that means that there's a lot of upcoming synergies that makes these acquisition be a no brainer.

Bernie Mcternan: That's great.

One moment for our next.

Bernie Mcternan: Thank you very much of that answer and just one follow up.

Bernie Mcternan: <unk>.

Fidji Simo: Thank you very much for that answer.

Bernie Mcternan: Our next question will come from Deepak Mantovani Cantor Fitzgerald Your line is open.

Emily Reuter: And just one follow up. You know, I know that the shareholder layer talks about AOV declines primarily driven by the lower minimum delivery thresholds in restaurant, but I guess just wanted to ask directly if you're seeing any trade down or smaller basket sizes within the larger basket. Any evidence of that on the platform? Yeah. So as we talked about, we saw the 4% on a year-over-year basis decline in AOV, and that was driven by restaurants first, and then by the $10 reduction in the minimum basket for IC+. What we're actually seeing is that's been slightly offset by a continued increase in sort of the remaining basket.

Bernie Mcternan: The shareholder letter it talks about.

Bernie Mcternan: Declines primarily driven by the lower minimum delivery thresholds in restaurant, but I guess I just wanted to ask directly if youre seeing any trade down or smaller basket sizes within the larger basket.

Speaker Change: Great. Thanks for taking the question. So first on the small basket orders you talked about the instrumentality of these orders are you seeing any common theme on maybe the type of retailers Youre seeing these orders go towards and perhaps that's helping you gain more scale with some of the retailers with fewer skus or so is there any theme in terms of diversity.

Bernie Mcternan: Evidence of that in the platform or not.

Bernie Mcternan: Yes, so as we talked about we saw the 4% on a year over year basis decline in Iot and that was driven by restaurants first and then by the $10.

It brings us.

Speaker Change: Retailers say that you're observing and then on Uber reach now that you've had it for over six months can you update on kind of the attach rates penetration gains youre seeing and how is that also a phone call.

Bernie Mcternan: The reduction in the minimum basket for IC, plus what we're actually seeing is thats been slightly offset by a continued increase in sort of the remaining basket. So we're seeing continued strength and that is a result of sort of exactly what you pointed out which is we're not seeing trade down we're seeing this as sort of truly incremental.

Core grocery business in terms of increasing frequency or perhaps new users coming in primarily through the restaurant autos.

Emily Reuter: So we're seeing continued strength. And that is a result of sort of exactly what you pointed out, which is we're not seeing trade down. We're seeing this as sort of truly incremental spend. And as Fidji talked about, we see that in terms of the types of orders that we're seeing on the platform. So hence why we continue to feel quite good about this update.

Speaker Change: Yes. Thanks for the question so on on small baskets.

Bernie Mcternan: Spend as feed you talked about we see that in terms of the types of orders that we're seeing on the platform. So hence why we continue to feel quite good about this.

Speaker Change: We haven't seen really.

Really a big difference between retailers that runs the most form 10 below minimum baskets, we shouldn't that be a I would say pretty widespread so nothing really specific to call out here.

Speaker Change: This update very helpful. Thank you both.

Emily Reuter: Very helpful.

Emily Reuter: Thank you both.

Bernie Mcternan: One moment for our next question.

Deepak Mathivanan: One moment for our next question. Our next question will come from Deepak Mathivanan of Cantor Fitzgerald. Your line is open. Great, thanks for taking the question. So first on the small basket orders, you talked about the incrementality of these orders. Are you seeing any common theme on maybe the type of retailers you're seeing these orders go towards and perhaps that's helping you gain more scale with some of the retailers with fewer SKUs or so? Is there any theme in terms of diversifying the retailer side that you're observing? And then on Uber Eats, now that you've had it for over six months, can you update on kind of the attach rates, penetration gains you're seeing?

Speaker Change: Our next question will come from Deepak Mantovani Cantor Fitzgerald Your line is open.

Speaker Change: We are seeing that the types of items purchase of more snacks and beverages.

Speaker Change: Vegetables frozen desserts alcohol dairy so widespread but still what you would expect from kind of mid week shown in all those so.

Speaker Change: Feeling really good about the fact that this change created a kind of a use case that we were expecting it to create on your second question on Uber and restaurants adoption, we continue to see restaurants adoption deeper and industrial lots and lots of runway to go.

Speaker Change: Some of the retailers with fewer skus or so is there any theme in terms of diversifying.

Speaker Change: Retailers are saying that you are observing and then on Uber reach now that you've had it for over six months can you update on kind of the attach rates of penetration gains youre seeing how does that also have hoped cards core grocery business in terms of increasing frequency or perhaps new users coming in primarily through the restaurant autos.

On average customers using restaurants, all the worst for us more frequently and spend more on the grocery. Although then digit prior and this effect is particularly strong with less frequent and lapse customers, where we obviously have even more room to grow.

Fidji Simo: How has that also helped Codd's core grocery business in terms of increasing frequency or perhaps new users coming in, primarily through the restaurant orders? Thanks for the question. So on small baskets, we haven't seen really a big difference between retailers that have run the most from $10 minimum baskets. We've seen that be, I would say, pretty widespread. So nothing really specific to call out. Here, we are seeing that the types of items purchased are more snacks and beverages, fresh vegetables, frozen desserts, alcohol, dairy. So widespread, but still, you know, what you can get. What you would expect from kind of mid-week fill-in orders.

Speaker Change: Yes. Thanks for the question so on small baskets.

Speaker Change: We haven't seen.

Speaker Change: Really.

Speaker Change: We're seeing high customer engagement, especially with the Gulf plus members, while really liking the restaurant offering.

Speaker Change: Big difference between the retailers that runs the most form 10 below minimum baskets, we shouldn't that be.

Speaker Change: I would say pretty widespread so nothing specific to call out.

Speaker Change: And as we've mentioned in the past, we're seeing larger order values on restaurants on average than on other restaurant platforms, which really reflects the families.

Speaker Change: We are seeing that the types of items purchase of more snacks and beverages first.

Speaker Change: Fresh vegetables frozen desserts alcohol dairy so widespread but still you know what you would expect from kind of mid week shown in all those so.

And the strengths we have these technologies on the platform. So we're feeling very good about restaurant and and as a reminder, core hypothesis with restaurants was really.

Speaker Change: And that he would reinforce groceries and creates a virtuous cycle and we are certainly seeing that with a very very strong positive impact on grocery.

Fidji Simo: So, you know, feeling really good about the fact that this change created the kind of use case that we were expecting it to create. On your second question on Uber and restaurant adoption, we continue to see restaurant adoption deepen, and there's still lots and lots of runway to go. So we're feeling very good about restaurants. And as a reminder, the core hypothesis with restaurants was really that it would reinforce groceries and create a virtuous cycle. And we are certainly seeing that with a very, very strong positive impact on groceries.

Speaker Change: Great. Thank you P J.

Speaker Change: Okay.

One moment for our next question.

Speaker Change: On average customers using restaurants, all the worst for us more frequently and spend more on the grocery. Although then digit prior and this effect is particularly strong with less frequent and lapse customers, where we obviously have even more room to grow.

Speaker Change: Our next question will be coming from sure cause urea.

Speaker Change: Wolfe Research your line is open.

Speaker Change: And excuse me sweater your line.

Speaker Change: Moving forward to.

Speaker Change: We're seeing high customer engagement, especially with <unk> plus members, while really liking the restaurant offering.

Speaker Change: Your next question.

Speaker Change: And our next question will come from Mark that's the way it's been.

Speaker Change: And as we've mentioned in the past, we're seeing larger order values on restaurants on average than on other restaurant platforms, which really reflects the families.

Benchmark your line is open Mark.

Speaker Change: Yeah.

Speaker Change: Thank you.

I appreciate the questions maybe just a follow up on that last one in terms of restaurants I'm. Just curious if you can provide.

Speaker Change: And the strengths we have these technologies on the platform. So we're feeling very good about restaurant and and as a reminder, core hypothesis with restaurants was really.

Any more color on the type of volume.

Speaker Change: Both youre seeing there and what that trajectory looks like through the balance of the year.

Speaker Change: That includes reinforced groceries and creates a virtuous cycle and we are certainly seeing that with a very very strong positive impact on grocery.

Speaker Change: And then I just had one follow up please.

Speaker Change: So it's mark we don't break out our restaurants from the rest of the trends in particular because of what I explained just now which is that.

Speaker Change: Great. Thank you P J.

Deepak Mathivanan: Great.

Speaker Change: Okay.

Deepak Mathivanan: Thank you, P.E. .

Speaker Change: One moment for our next question.

Speaker Change: A big part of the reason why we enter this market and this is Paul enough shape is because we assumed that it was gonna also increase.

Speaker Change: Our next question will be coming from sure cause urea.

Shweta Khajuria: Our next question will be coming from Shweta Khajuria of Wolf Research. Your line is and excuse me, Shweta, your line is moving forward to our next question.

Speaker Change: Wolfe Research your line is open.

Speaker Change: Consumption of grocery and that's certainly what we're seeing with increased order frequency and grocery increased usage and coming from grocery.

Speaker Change: And excuse me your line.

Speaker Change: Moving forward to.

And so the two are really deeply end of twine and for that reason, we don't plan on communicating about them separately, because we really run it as one business and that's the way we look at the business internally.

Speaker Change: Your next question.

Speaker Change: And our next question will come from Mark graduates.

Mark Zgutowicz: And our next question will come from Mark Zgutowicz of Benchmark. Your line is open, Mark. Thank you. Appreciate the questions. Maybe just a follow up on that last one in terms of restaurants. I'm just curious if you can provide. Any more color on the type of volume growth you're seeing there and what that trajectory looks like through the balance of the year?

Speaker Change: Benchmark your line is open Mark.

Speaker Change: Okay.

Speaker Change: Yeah.

Okay fair enough.

Speaker Change: Thank you.

Speaker Change: I appreciate the questions maybe just a follow up on that last one in terms of restaurants I'm. Just curious if you can provide.

Speaker Change: Alright, I could just add one comment which is just as a reminder, I did launch in June of last year. So we think there is continued runway for growth, but in terms of contribution to overall growth I would think sort of moderates in the back half of the year.

Speaker Change: Any more color on the type of volume.

Growth Youre seeing there and what that trajectory looks like through the balance of the year.

Speaker Change: That's helpful. Thank you and then just in terms of the I guess indirect impacts from the affordability initiatives that youre putting in place.

Speaker Change: And then I just had one follow up thanks.

Mark Zgutowicz: And then I just had one follow-up.

Speaker Change: So mark we don't break out our restaurants from the rest of the trends in particular because of what I explained just now which is that.

Mark Zgutowicz: Thanks, Mark. We don't break out restaurants from the rest of the trends in particular because of what I explained just now, which is that a big part of the reason why we entered this market and this partnership is because we assumed that it was going to also increase consumption of grocery. And that's certainly what we're seeing with increased order frequency in grocery, increased GQG coming from grocery. And so the two are really deeply intertwined. And for that reason, we don't plan on communicating about them separately because we really run it as one business. And that's the way we look at the business internally.

Obviously this is more of an optics question.

Speaker Change: Given the higher order density.

Speaker Change: A big part of the reason why we entered this market and this is Paul enough shape is because we assumed that it was going to also increase consumption of grocery and that's certainly what we're seeing with increased frequency and grocery increased usage in coming from grocery.

Speaker Change: Is coming about but in terms of the declines in <unk> that you saw in the quarter as well as transaction revenue.

Speaker Change: Is that trajectory should that should we expect the trajectories of both of those.

Speaker Change: Items to continue to decline a bit here through the year.

Speaker Change: So the two are really deeply end of twine and for that reason, we don't plan on communicating about them separately, because we really run it as one business and that's the way we look at the business internally.

Speaker Change: Is that sort of filters through your model or are.

Speaker Change: Or are we kind of looking at.

Speaker Change: A new baseline maybe just looking at <unk> today is that a new baseline.

Speaker Change: Sort of look at maybe Flatlining here for a little while.

Speaker Change: Okay fair enough.

Speaker Change: I could just add one comment which is just as a reminder, I did launch in June of last year. So we think there is continued runway for growth, but in terms of contribution to overall growth I would think sort of moderates in the back half of the year.

Mark Zgutowicz: Okay, fair enough.

Speaker Change: Sure. So so we can talk about AAV to start so as we talked about we did have the impact in terms of euro year over year, sorry from both a combination of restaurants as well as the $10 $10 minimum and I think that's important to think about just in terms of the launch of restaurants really rolled out in the in the latter part of Q2.

Mark Zgutowicz: I could just add one comment here, which is just as a reminder, I did launch in June of last year. So we think there's continued runway for growth. But in terms of contribution to overall growth, I would think it sort of moderates in the back of the year.

Speaker Change: Yeah.

Speaker Change: That's helpful. Thank you and then just in terms of the I guess indirect impacts from the affordability initiatives that you're putting in place.

Mark Zgutowicz: That's helpful.

Mark Zgutowicz: Thank you.

Emily Reuter: And then just in terms of the, I guess, indirect impacts from the affordability initiatives that you're putting in place, obviously, this is more of an optics question, given the higher order density that is coming about. But in terms of the declines in AOV that you saw in the quarter, as well as transaction revenue, is that trajectory, should that, should we expect the trajectories of both those items to continue to decline a bit here through the year as that sort of filters through your model? Or are we kind of looking at a new baseline, maybe just looking at AOV today?

Speaker Change: Of last year, and so I think the impact there.

Speaker Change: Obviously this is more of an optics question.

Speaker Change: Back to have a slightly more dampened impact as we as we move through the remainder of the year $10 minimum obviously launched somewhat more recently, though that said we have seen strong uptake from our existing customers, where I think the impact is more pronounced. So overall I think I do expect on a year over year basis, you probably have some similar.

Speaker Change: Given the higher order density.

Speaker Change: Is coming about but in terms of the declines that you saw in the quarter as well as transaction revenue.

Speaker Change: Is that trajectory should that should we expect the trajectory of both of those.

Speaker Change: Items to continue to decline a bit here through the year.

Speaker Change: Impact as we go into into Q2 and not commenting much more as we think about the rest of the year from a transaction revenue standpoint.

Speaker Change: Is that sort of filters through your model or are.

Speaker Change: Or are we kind of looking at.

Speaker Change: A new baseline maybe just looking at <unk> today is that a new baseline.

Speaker Change: We've been sort of steady at about seven one on a quarter over quarter basis, though if you go back over the last couple of quarters I think we've been pretty consistent in terms of saying that we do expect to see fluctuations in transaction revenue.

Emily Reuter: Is that a new baseline to, you know, sort of look at maybe flatlining here for a little while?

Speaker Change: Sort of look at maybe Flatlining here for a little while.

Emily Reuter: Thanks. Sure. So we can talk about AOV to start. So as we talked about, we did have the impact in terms of year-over-year from both a combination of restaurants, as well as the $10 minimum. And I think that's important to think about just in terms of the launch of restaurants really rolled out in the latter part of Q2 of last year. And so I think the impact there, I expect to have a slightly more dampened impact as we move through the remainder of the year. $10 minimum obviously launched somewhat more recently, though that said, we have seen strong uptake from our existing customers where I think the impact is more pronounced.

Speaker Change: We are very much within our long term range of where we expect transaction revenue to be and there's a number of things that go on within transaction revenue that can land us up or down.

10, or 20 basis points, and so you've seen that a bit throughout the last year.

Speaker Change: Some of those things are on the on the on the downward pressure side things like investing in the $10 minimum.

Speaker Change: Of last year, and so I think the impact there.

Speaker Change: And vesting and affordability, so things like value meals and things like.

Speaker Change: Free pickup last year, and then on the positive side, you've seen us drive greater out of leverage from as an example, our shopper efficiencies becoming much more efficient in terms of our batch rates and our ability to get the shopper through the store and so theres a number of different offsets there, but again I think we've been happy with where we are we have been.

Emily Reuter: So overall, I think I do expect on a year-over-year basis, you probably have some similar impact as we go into Q2, and not commenting much more as we think about the rest of the year. From a transaction revenue standpoint, we've been steady at about 7.1 on a quarter-over-quarter basis. So if you go back over the last couple quarters, I think we've been pretty consistent in terms of saying that we do expect to see fluctuations in transaction revenue. We're very much within our long-term range of where we expect transaction revenue to be. And there's a number of things that go on within transaction revenue that can land us up or down 10 or 20 basis points.

Speaker Change: Impact as we go into into Q2 and not commenting much more as we think about the rest of the year from a transaction revenue standpoint.

Speaker Change: Pretty consistently in the low sevens and we do expect some continued variability there on an ongoing basis.

Speaker Change: Super helpful. Thank you.

Speaker Change: Okay.

Speaker Change: And our next question will be coming from Andrew Boone of citizens. Your line is open.

Speaker Change: We are very much within our long term range of where we expect transaction revenue to be and there is a number of things that go on within transaction revenue that can land us up or down.

Andrew Boone: Thanks, So much for taking the question I would love to ask about partners for care at ads and your guys with momentum there was clearly a big funding can you guys. Just talk about what is causing that momentum in the business, which you guys are seeing and maybe how do you think about the positioning against kind of the competitive set that's out there.

Speaker Change: 10, or 20 basis points, and so you've seen that a bit throughout the last year.

Emily Reuter: And so you've seen that a bit throughout the last year. Some of those things are on the downward pressure side, things like investing in the $10 minimum, investing in affordability. So things like value meals and things like free pickup last year. And then on the positive side, you've seen us drive a great amount of leverage from, as an example, our shopper efficiencies becoming much more efficient in terms of our batch rates and our ability to get the shopper through the store. And so there's a number of different offsets there. But again, I think we've been happy with where we are.

Speaker Change: Some of those things are on the on the on the downward pressure side things like investing in the $10 minimum investing and affordability, so things like value meals and things like.

Andrew Boone: And then Emily this may be a more difficult question, but if I think about the demand generation that you guys are doing through promotions through sales and marketing can you, maybe just compare that versus last year or two years ago and talked to the efficiency of what you guys are seeing on demand.

Speaker Change: <unk> pick up last year, and then on the positive side, you've seen us drive greater out of leverage from as an example, our shopper efficiencies becoming much more efficient in terms of our batch rates and our ability to get the shopper through the store and so theres a number of different offsets there, but again I think we've been happy with where we are we've been pretty can.

Do you think your position is improving deteriorating like how do you think about that thanks so much.

Andrew Boone: I'll take the <unk> question first.

Andrew Boone: We're very pleased with the momentum obviously.

Speaker Change: <unk> in the low Sevens and we do expect some continued variability there on an ongoing basis.

Emily Reuter: We've been pretty consistently in the low sevens. And we do expect some continued variability there on an ongoing basis.

Andrew Boone: Kicking us it was a very exciting and that's really builds on the momentum we've had with thrive hygiene sprouts snacks.

Speaker Change: Super helpful. Thank you.

Speaker Change: Okay.

Andrew Boone: And our next question will be coming from Andrew Boone of citizens. Your line is open.

Andrew Boone: And at this point 200 more than 220 partners are signing up for care of the ads. It's really a combination of two things. One is that we have superior technology and that's indeed pulse because we've had to deal just uptick knowledge and for own marketplace. So we've had to optimize it.

Andrew Boone: And our next question will be coming from Andrew Boone of Citizens, your line is open. Thanks so much for taking the question. I would love to ask about partners for Carat Ads and your guys' momentum there. Uber Eats was clearly a big sign-in. Can you guys just talk about what is causing that momentum in the business, what you guys are seeing? And maybe how do you think about the positioning against kind of the competitive sets that's out there? And then, Emily, this may be a more difficult question, but if I think about the demand generation that you guys are doing through promotions, through sales and marketing, can you maybe just compare that versus last year or two years ago?

Andrew Boone: Thanks, So much for taking the question I would love to ask about partners for care at ads and you guys with momentum there was clearly a big funding can you guys. Just talk about what is causing that momentum in the business. What you guys are seeing and maybe how do you think about the positioning against kind of the competitive set that's out there.

Andrew Boone: Prove it on our own marketplace and therefore, what we bring to our Carthage retailers is the odd tax that we have built for ourselves and that is really works for ourselves and that's really important because you saw building at technology without a consumer product licensing and took all the up to validate it on yogurt Delphi technologies.

Emily This may be a more difficult question, but if I think about the demand generation that you've gotta doing through promotions through sales and marketing can you, maybe just compare that versus last year or two years ago and talked to the efficiency of what you guys are seeing on demand.

Andrew Boone: And talk to the efficiency of what you guys are seeing on demand. Do you think your position is improving, deteriorating? How do you think about that? Thanks so much.

Andrew Boone: Do you think your position is improving deteriorating like how do you think about that thanks so much.

Andrew Boone: You know less strong and that's really what we're seeing in the market and then the second thing. We're seeing is that we have demand from 7000 brands.

Speaker Change: I'll take the <unk> question first.

Andrew Boone: I'll take the Carat Ads question first. So we're very pleased with the momentum. Obviously, Uber Eats Picking Us was very exciting. And that really builds on the momentum we've had with Thrive, Hy-Vee, Sprout, Schnucks, and at this point, more than 220 partners signing up for Carat Ads. It's really a combination of two things. One is that we have superior ad technology. And that's in big part because we've had to build this ad technology for our own marketplace. So we've had to optimize it and prove it on our own marketplace. And therefore, what we bring to our Carat Ads retailers is the ad tech that we have built for ourselves and that has really worked for ourselves.

Speaker Change: We're very pleased with the momentum obviously, although it's kicking us it was a very exciting and that really builds on the momentum we've had with thrive housing sprouts snacks.

Andrew Boone: So that means that when we go to retailers and offer.

Andrew Boone: <unk> enjoyed the carrier network, we arrived with very meaningful demand that we can bring to them from day one.

Speaker Change: And at this point 200 more than 220 partners are signing up for care of the ads. It's really a combination of two things. One is that we have superior technology and that's a big box because we've had two deals is up technology for our own marketplace. So.

Andrew Boone: To that.

Andrew Boone: As our profitability really overnight and that is creating a virtuous cycle as I was saying with some more scale you have.

Andrew Boone: More retailers joining us more demand you have from brands in the multi menu out from brands. So more retailers wanted to work with you and so we're really in kind of near term as part of the cycle, where we're seeing that accelerate and.

Speaker Change: We've had to optimize it and improve it on our own marketplace and therefore, what we bring to our caridad retailers is the odd tax that we have built for ourselves and that has really worked for ourselves and that's really important because we saw building at technology without the consumer products utilizing took all the up to validate it on.

Andrew Boone: Very excited about what we're seeing and then when you think about position versus competitors. It's really the same thing it's like <unk> superior demand is superior and therefore, who are just signing on more retailers.

Speaker Change: I'm going to Delphi technologies.

Speaker Change: Less strong and that's really what we're seeing in the market and then the second thing. We're seeing is that we have demand from 7000 brands.

Andrew Boone: Great and I can jump in on the question on demand generation I think the way that I think about it you talked about two years ago, a year ago. I think there has been an evolution in terms of how we think about our portfolio spend you highlighted I think.

Speaker Change: Seven so that means that when we go to retailers and offer.

<unk> enjoyed the Caridad network, we arrived with very meaningful demand that we can bring to them from day one.

Andrew Boone: Incentives as an example, but we really think about not just incentives, but the overall portfolio of where can we spend to drive and everything from top of funnel brand awareness and you saw that with us leaning into new channels like the Super Bowl. This year and we were very pleased with the the impact that that had on brand awareness down through the <unk>.

Speaker Change: To that.

Speaker Change: Profitability really overnight and that is creating.

Fidji Simo: And that is creating, at the end, a virtuous cycle, as I was saying, where the more scale you have with more retailers joining you, the more demand you have from brands and the more demand you have from brands, the more retailers want to work with you. And so we're really in that kind of virtuous part of the cycle where we're seeing that accelerate and we're very excited about what we're seeing.

Speaker Change: Yes, sure cycle as I was saying with some more scale you have.

Speaker Change: More retailers joining us a more demand you have from brands and the more demand you have from brands. So more retailers wanted to work with you and so we're really in kind of the archer as part of the cycle, where we're seeing that accelerate and.

Andrew Boone: Through the funnel all the way to incentives and that was an example of something you saw us really talk about and lean into last year as we got a lot more efficient and effective at deploying much more targeted incentives to be able to drive specific behaviors that we knew were then when we're going to drive our tenant behaviour overtime.

Speaker Change: Very excited about what we're seeing and then when you think about position versus competitors. It's really the same thing it's like <unk> superior demand is superior and therefore, who are just signing on more retailers.

That continues to evolve and so as we talked about a couple of things earlier on the call like lowering our minimum basket size. Some of the investments in pricing I think about these as all parts of the same portfolio of do we think that investing in $10 minimum basket is more or less efficient than the last dollar of paid marketing spend that we think the answer is yes, then we ship.

Fidji Simo: And then when you think about position versus competitors, it's really the same thing. It's like the ad tech is superior, the demand is superior, and therefore we're just signing on more retailers.

Speaker Change: Great and I can jump in on the question on demand generation I think the way that I think about it you talked about two years ago, a year ago. I think there has been an evolution in terms of how we think about our portfolio spend you highlighted I think.

Fidji Simo: Great, and I can jump in on the on the question on, you know, demand generation. I think, you know, the way that I think about it, you know, you talked about two years ago, a year ago, I think there has been an evolution in terms of how we think about our portfolio of spend. You highlighted, I think, you know, incentives as an example. But, you know, we really think about not just incentives, but the overall portfolio of where can we spend to drive everything from top of funnel brand awareness. And you saw that with us leaning into new channels, like the Super Bowl this year, and we were very pleased with the impact that that had on brand awareness, down through the funnel all the way to incentives.

Andrew Boone: Those dollars and so I think that we are continually getting more effective and efficient at doing that in terms of our sort of regular way marketing spend I think as we continue to drive increases in LTV of our customers that has allowed us to continue to deploy more dollars, we definitely see greater efficiencies.

Speaker Change: Incentives as an example, but we really think about not just incentives, but the overall portfolio of where can we spend to drive and everything from top of funnel brand awareness and you saw that with us leaning into new channels like the Super Bowl. This year and we were very pleased with the impact that that had on brand awareness down through the <unk>.

Andrew Boone: Or sort of what we call evergreen marketing, but that said we are also constantly experimenting with new types of spend to see what works and if we see something working those are the types of things that we went into we spend more if something doesn't work, we'll cut it pretty quickly, but youll see us continue to experiment and try to get better every day.

Speaker Change: Through the funnel all the way to incentives and that was an example of something you saw us really talk about lean into last year as we got a lot more efficient and effective at deploying much more targeted incentives to be able to drive specific behaviors that we knew where and when we're going to drive our tenant behaviour overtime.

Emily Reuter: And that was an example of something you saw us really talk about and lean into last year as we got a lot more efficient and effective at deploying, you know, much more targeted incentives to be able to drive specific behaviors that we knew were going to drive retentive behavior over time. That continues to evolve. And so, you know, as we talked about a couple of things earlier on the call, like lowering our minimum basket size, some of the investments in pricing, you know, I think about these as all parts of the same portfolio of, you know, do we think that investing in $10 minimum basket is more or less efficient than the last dollar of paid marketing spend?

Andrew Boone: Great. Thank you.

Speaker Change: And that continues to evolve and so as we talked about a couple of things earlier on the call like lowering our minimum basket size. Some of the investments in pricing I think about these as all parts of the same portfolio of do we think that investing in $10 minimum basket is more or less efficient than the last dollar of paid marketing spend that we think the answer is yes, then we ship.

Speaker Change: Thank you. Our next question will be coming from Eric Sheridan of golf.

Speaker Change: MS sacks, Eric your line is.

Eric Sheridan: Thanks, so much for taking the questions maybe two if I can one of the questions. We continue to get from investors is elements of either household income SKU or frequency SKU, among your existing customer base, and how cyclical or not that customer base might be on the commerce side. If there was a slowdown in the economy.

Speaker Change: Those dollars and so I think that we are continually getting more effective and efficient at doing that in terms of our sort of regular way of marketing spend I think as we continue to drive increases in LTV of our customers that has allowed us to continue to deploy more dollars, we definitely see a greater efficiencies.

Emily Reuter: If we think the answer is yes, then we shift those dollars. And so I think that we are, you know, continually getting more effective and efficient at doing that. In terms of our sort of regular way marketing spend, I think as we continue to drive increases in, you know, LTV of our customers, that's allowed us to continue to deploy more dollars. We definitely see greater efficiencies at our sort of, you know, what we call evergreen marketing. But that said, we are also constantly experimenting with new types of spend to see what works. And, you know, if we see something working, those are the types of things that we lean into.

Speaker Change: Love to get any views you have philosophically on <unk>.

Speaker Change: Stress testing the existing behavior on the platform and how it might or could change in different consumer behaviors and then for Emily.

Speaker Change: A question if the economy were to slow down how do you guys. As a company you think about what investments you might want to make that are more fixed in nature. Because you don't want to miss out on a broader long term growth opportunity relative to where there might be some flexibility.

Speaker Change: Sort of what we call evergreen marketing, but that said we are also constantly experimenting with new types of spend to see what works and if we see something working those are the types of things that we went into we spend more if something doesn't work, we'll cut it pretty quickly, but youll see us continue to experiment and try to get better every day.

Emily Reuter: We spend more. If something doesn't work, we'll cut it pretty quickly. But you'll see us continue to experiment and try to get better every day.

Speaker Change: Dustin priorities looking out over the next six to nine months. Thank you.

Eric Sheridan: Thanks, Eric.

Speaker Change: We obviously look very closely.

Speaker Change: Great. Thank you.

Emily Reuter: All right, thank you. Thank you.

Speaker Change: Thank you. Our next question will be coming from Eric Sheridan.

Speaker Change: Also composition and when we look at.

Eric Sheridan: Our next question will be coming from Eric Sheridan of Goldman Sachs. Eric, your line is open. Thanks so much for taking the questions, maybe two if I could.

MS sacks, Eric your line is.

Speaker Change: The U S market versus all demographic split we actually very much mirror the U S market in terms of household income and in terms of Albany City.

Eric Sheridan: Thank you so much for taking the questions maybe two if I can one of the questions. We continue to get from investors is elements of either household income SKU or frequency SKU, among your existing customer base, and how cyclical or not that customer base might be on the commerce side. If there was a slowdown in the economy.

Eric Sheridan: Fidji, you know, one of the questions we continue to get from investors is elements of either household income skew or frequency skew among your existing customer base and how cyclical or not that customer base might be on the commerce side if there was a slowdown in the We'd love to get any views you have philosophically on stress testing the existing behavior on the platform and how it might arc or change in different consumer behaviors.

Speaker Change: Isn't it the case many years ago, obviously many years ago.

Speaker Change: Of course, we are delivery was more of a luxury service and execute more higher income, but given all of the things that we've put in place whether that's you know obviously.

Speaker Change: Love to get any views you have philosophically on <unk>.

Speaker Change: Rolling out snap everything we've done on this whole the ability we have actually gotten to the point, where we're treating closely match. The U S market at this point and we are seeing that the product market shifts even with lower income audience is very strong.

Speaker Change: Stress testing the existing behavior on the platform and how it might or could change in different consumer behaviors and then for Emily.

Fidji Simo: And then for Emily, you know, a similar question, if the economy were to slow down, how do you guys as a company think about what investments you might want to make that are more fixed in nature because you don't want to miss out on the broader long-term growth opportunity relative to where there might be some flexibility in your investment priorities looking out over the next six to nine months. Thank you. Great. And thanks for the question, Eric. And so, you know, to answer the question on, you know, if the economy were to slow down, I think a couple thoughts here.

Speaker Change: Your question if the economy were to slow down how do you guys. As a company you think about what investments you might want to make that are more fixed in nature, because you don't want to miss out on the broader long term growth opportunity relative to where there might be some flexibility.

Speaker Change: In focus groups.

Speaker Change: With lowering commodity into what we see is that these people sometimes are trying to pack two jobs in one day. So they are very time install then grocery delivery as a huge benefit a lot of these people, sometimes don't haven't vehicle and again, that's a huge benefit to 12 access for grocery delivery and Thats why we see that.

Speaker Change: <unk> priorities looking out over the next six to nine months. Thank you.

Eric Sheridan: Thanks, Eric.

Speaker Change: So are we.

Eric Sheridan: We obviously look very closely.

Eric Sheridan: Our salt composition and when we look at.

Eric Sheridan: The U S market versus all demographic split we actually very much mirror the U S market in terms of household income and in terms of Albany City.

Speaker Change: Are you all using snap dollars to buy an instant cult also use their own dollars to buy on in cycles, which is a strong proof that.

Eric Sheridan: Isn't it the case many years ago, obviously many years ago.

Speaker Change: As there is product markets beyond just.

Eric Sheridan: Of course, we are delivery was more of a luxury service and it's skewed more higher income, but given all of the things that we've put in place whether that's you know obviously.

Speaker Change: So spending the money that they get from the program.

Speaker Change: When we look at the macro and how resilient can be I'll touch on that in my introduction, but I think groceries on essential saying, it's not discretionary.

Eric Sheridan: Rolling out snap everything we've done on this whole the ability we have actually gotten to the point, where we're treating closely match. The U S market at this point and we are seeing that the product market shifts even with lower income audience is very strong when I attend focus groups.

Speaker Change: Sang and grocery delivery is fundamentally all about convenience and we don't see in convenience is going away.

Speaker Change: Looking back at you know end of 'twenty two early 'twenty three went in grocery inflation was very high or business was resilient we so.

Eric Sheridan: With lower commodity into what we see is that these people sometimes are trying to pack two jobs in one day. So they are very time install then groceries deliveries a huge benefit a lot of these people, sometimes autonomous vehicle and again, that's a huge benefit to 12 access to grocery delivery and Thats why we see that.

Speaker Change: Prices in.

Speaker Change: Kris on the platform as much as inflation, but <unk>.

Speaker Change: Increased not as much as inflation because people tend to shop on a budget and so that means that when prices go up they might remove an item from the cotton by maybe one fewer items, but they still try to kind of maximize our budgets and so what we're seeing is that that's giving us a lot of resilience when when people.

Speaker Change: Oh, you are using snap dollars to buy an instant golf also use their own dollars to buy on in cycles, which is a strong proof that.

Speaker Change: That's kind of one budgets in mind that there are always looking to spend now I'll acknowledge though that to accelerate grocery adoption at even lower prices is always better and thats why we continue to lean into affordability no doubt about that.

Eric Sheridan: As there is product markets beyond just.

Eric Sheridan: So spending the money that they get from the program.

Eric Sheridan: When we look at the macro and how resilient can be I'll touch on that in my introduction, but I think grocery is an essential saying it's not discretionary.

Speaker Change: But we feel very well equipped to navigate the macro no matter what comes.

Eric Sheridan: Sang and grocery delivery is fundamentally all about convenience and we don't think convenience is going away.

Eric Sheridan: Great and thanks for the question, Eric and so.

Eric Sheridan: Answer the question on if the economy were to slow down I think a couple of thoughts here I think first of all.

Eric Sheridan: Looking back at you know end of 'twenty two early 'twenty three went in grocery inflation was very high or business was resilience we so.

Eric Sheridan: Very happy that we're starting from a very strong position, we have an incredibly strong balance sheet and so we feel like we're in a very good position to be able to weather all scenarios I think the other thing that I'd point out is that obviously, we operate profitably today and so that gives us a lot of flexibility regardless of outcomes to be able to manage the business. So.

Eric Sheridan: Prices.

Eric Sheridan: Increase on the platform as much as inflation, but Ah <unk>.

Eric Sheridan: Increased not as much as inflation because people tend to shop on their budgets and so that means that when prices go up they might remove an item from the cotton by maybe one fewer items, but theres still you know try to kind of maximize our budgets and so what we're seeing is that's not giving us a lot of resilience when when people.

Eric Sheridan: Growing a quick deeper there I think the first thing I would point to is that the good news is that we do have a lot of what I'll call like fast Twitch levers that we control and on a short term basis. So we can adjust depending on the market scenarios.

Eric Sheridan: Kind of one budgets in mind.

Eric Sheridan: Obviously, what we tried to do really to your point on competition and sort of where do you want to invest for the long term. When we tried to do is really look at our ability to drive long term profitable growth and to the extent, we see those opportunities is to continue to invest against them, but we have that discretion to be able to pull back on a short term basis. Obviously, if there were a more dramatic turn.

Eric Sheridan: Always looking to spend now I'll acknowledge though that to accelerate grocery adoption, adding lower prices is always better and that's why we continue to lean into affordability no doubt about that but.

Eric Sheridan: But we feel very well equipped to navigate the macro no matter what comes.

Eric Sheridan: Great and thanks for the question, Eric and so.

Eric Sheridan: We have other levers at our disposal that a bit more sort of medium term in nature and I think the last thing I'll say is that we obviously continue to drive a lot of efficiencies across the business, regardless of the macroeconomic environment and.

Eric Sheridan: Answer the question on if the economy were to slow down I think a couple of thoughts here I think first of all.

Emily Reuter: I think, first of all, you know, very happy that we're starting from a very strong position. We have an incredibly strong balance sheet. And so, you know, we feel like we're in a very good position to be able to weather all scenarios. I think the other thing that I'd point out is that, you know, obviously, we operate profitably today. And so that gives us a lot of flexibility, regardless of outcomes to be able to manage the business. So, you know, going a click deeper there, I think, you know, the first thing I'd point to is that the good news is that we do have a lot of what I'll call like fast twitch levers that we control.

Eric Sheridan: Luckily to date, we actually haven't seen any signs of a weaker consumer and so we feel quite good about how we've been able to operate and think we have quite a bit of flexibility.

Eric Sheridan: Types of environments.

Eric Sheridan: Okay.

Eric Sheridan: Thank you.

Eric Sheridan: Our next question will be coming from Lee Horowitz.

Eric Sheridan: I think the first thing I'd point to is that the good news is that we do have a lot of what I'll call like fast Twitch levers that we control.

Speaker Change: Of Deutsche Bank Lee Your line is open.

Lee Horowitz: Great. Thanks for taking the questions a couple of I'll, just pricing price of gas in place priority on my relative sense or I guess do you have any uncertainty or some maybe some high level numbers about sort of where that stands across your network and maybe relatedly are you seeing any softness amongst those stores that don't have price.

Eric Sheridan: On a short term basis, so we can adjust depending on the market scenarios.

Emily Reuter: And on a short term basis, we can adjust depending on the market scenarios. Obviously, what we try to do really, you know, to your point on competition, and sort of where do you want to invest for the long term, what we try to do is really look at our ability to drive long term profitable growth. And to the extent we see those opportunities is to continue to invest against them. But we have that discretion to be able to pull back on a short term basis. Obviously, you know, if there were a more dramatic turn, we have other levers at our disposal that are a bit more sort of medium term in nature.

Lee Horowitz: Alrighty more recently, perhaps indication within those stores consumers are looking for any affordability and then maybe just through the cycle can you envision a world where you are to the extent the economy slows news for traffic into grocery stores has closed a little bit you guys become more and more strategic partner it could perhaps.

Eric Sheridan: There were a more dramatic turn we have other levers at our disposal that a bit more sort of medium term in nature.

Eric Sheridan: The last thing I'll say is that we obviously continue to drive a lot of efficiencies across the business, regardless of the macroeconomic environment and.

Emily Reuter: I think the last thing I'll say is that we obviously continue to drive a lot of efficiencies across the business, regardless of the macroeconomic environment. And, you know, luckily, to date, we actually haven't seen any signs of a weaker consumer. And so we feel quite good about how we've been able to operate and think we have quite a bit of flexibility in all types of environments.

Eric Sheridan: <unk> to date, we actually haven't seen any signs of a weaker consumer and so we feel quite good about how we've been able to operate and think we have quite a bit of flexibility.

Lee Horowitz: Have a greater adoption of price parity online in order to sort of drive those volumes as they need again sort of a fixed cost base.

Lee Horowitz: It helps of course, those two behalf okay, great. Thanks, so much.

Eric Sheridan: All types of environments.

Lee Horowitz: Yes. Thank you. So we continue to see price parity retailers grow faster than the retailers will not that price value that has been a trend for a while and it's something that continues.

Eric Sheridan: Okay.

Speaker Change: Thank you and our next question will be coming from Lee Horowitz.

Lee Horowitz: And our next question will be coming from Lee Horowitz of Dochi Bank. Lee, your line is open. Great, thanks for your questions. A couple of just price and price and gas and price parity online relative to in-store. I guess, you know, do you have any sense or can you give us maybe some high level numbers about sort of where that stands across your network? And maybe relatedly, you know, are you seeing any softness amongst the stores that don't have price parity more recently, perhaps indication within those stores consumers are looking for any affordability?

Lee Horowitz: Deutsche Bank Lee Your line is now.

Lee Horowitz: Great. Thanks for taking the questions a couple of I'll, just price and price of gas in place priority on my relative sense or I guess do you have any sense or do you have some maybe some high level numbers about sort of where that stands across your network and maybe relatedly are you seeing any softness amongst those stores that don't have price.

Lee Horowitz: And in terms of adoption of price parity, we continue to make progress.

Lee Horowitz: We've talked about snacks, and then retail grocers last quarter, we went to price parity with knows this quarter. So we continue to make progress, but it's not black and white, meaning that in the past we were really thinking about cross sell being totally at price parity of totally marking up and really right now what we're seeing more.

Lee Horowitz: Alrighty more recently, perhaps indication within those stores consumers are looking for any affordability and then maybe just through the cycle can you envision a world where you are to the extent the economy slows maybe for traffic into grocery stores has slowed a little bit you guys become more more strategic partner it could perhaps.

Lee Horowitz: He is a much more nuance and running a strategy, where some retailers go to price parity only on the products and the Flyers some versus go to price parity on the products that are really daily essentials for customers that really set price perception.

Fidji Simo: And then, you know, maybe just through the cycle, can you envision a world where, you know, to the extent that the economy slows, maybe foot traffic into grocery stores and slows a little bit, you guys become more strategic partner and could perhaps drive a greater adoption of price parity online in order to sort of drive those volumes that they need against sort of a fixed Any help across those three would be great. Yeah, thank you. So we continue to see price parity retailers grow faster than the retailers who are not at price parity. That has been a trend for a while and certainly continues.

Lee Horowitz: Have a greater adoption of price parity online in order to sort of drive those volumes as they need again sort of a fixed cost base.

Lee Horowitz: Grocers go to price parity on for.

Lee Horowitz: Customers that are part of the loyalty program. So it's really a multipronged affordability strategy and grocers are really modulate that based on the market environment based on their profitability goals.

Lee Horowitz: Any help across those two behalf it would be great. Thanks, so much.

Lee Horowitz: Yes. Thank you. So we continue to see price parity retailers grow faster than the retailers will not that price value that has been a trend for a while and it certainly continues.

Lee Horowitz: Based on what they're seeing amongst the consumer and they all have a very different strategy. So we see our role as giving them the tools like our hydroxide software to make the best possible pricing decision for that particular objective and also showing them very clearly likes the type of market share that they could gain E Z.

Lee Horowitz: And in terms of adoption of price parity, we continue to make progress.

Fidji Simo: And in terms of adoption of price parity, we continue to make progress. You know, we talked about snacks and heritage grocers last quarter. We went to price parity with Lowe's this quarter. So we continue to make progress, but it's not black and white, meaning that in the past, we were really thinking about, you know, either a grocer being totally at price parity or totally marking up. And really, right now, what we're seeing more is a much more nuanced and granular strategy where some retailers go to price parity only on the products in their flyers. Some grocers go to price parity on the products that are really dearly essential for customers that really set price perception.

Lee Horowitz: We talked about snacks, and then retail grocers last quarter, we went to price parity with Lowe's each quarter. So we continue to make progress, but it's not black and white, meaning that in the past we were really thinking about cross sell being totally at price parity of totally marking up and really right now what we're seeing more.

Lee Horowitz: Made some pricing changes so to your point on adding a fixed cost base.

Lee Horowitz: He is a much more nuance.

Lee Horowitz: Versus win or lose one point of market share into the future because of the move to online second half of a disproportionate impact on the earnings and so one job is to really put that in context and show them that yes price going to price parity might impact earnings negatively short term, but he might actually impact to earnings.

Lee Horowitz: And running our strategy with some retailers go to price parity only on the products and the Flyers some versus go to price parity on the products that are really daily essentials for customers that really set price perception.

Lee Horowitz: Grocers go to price parity on for.

Fidji Simo: Some grocers go to price parity for customers that are part of their loyalty program. So it's really a multi-pronged affordability strategy, and grocers really modulate that based on the market environment, based on their profitability goals, based on what they're seeing among the consumer. And they all have a very different strategy. So we see our role as giving them the tools, like our EverSight software, to make the best possible pricing decisions for their particular objectives, and also showing them very clearly, like, the type of, you know, market share that they could gain if they made some pricing changes.

Lee Horowitz: Very positive long term.

Customers that are part of the whole loyalty program. So it's really a multipronged affordability strategy and grocers really modulate that based on the market environment based on their profitability goals.

Lee Horowitz: That allows us to capture market share that would have otherwise gone to a competitor and so that's a that's a complex strategic decision that they have to make it.

Lee Horowitz: With them every step of the way to help them make the right one.

Lee Horowitz: Helpful. Thank you.

Lee Horowitz: Based on what they are seeing amongst the consumer and they all have a very different strategy. So we see our role as giving them the tools like our hydroxide software to make the best possible pricing decision for that particular objective and also showing them very clearly likes the type of market share that they could gain E Z.

Lee Horowitz: Okay.

Speaker Change: And our next question will be coming from Jason Health team.

Speaker Change: Of Oppenheimer. Your line is open.

Jason Health: Thank you for taking the question. So can you first of all can you talk about storefront pro adoption levels.

Jason Health: What youre doing to drive higher adoption, you, obviously alluded to it.

Lee Horowitz: Made some pricing changes so to your point on adding a fixed cost base.

Jason Health: Retailers that use that and get more yield out of it and then Peter I just want to confirm when you were answering the prior question about and it was Andrew's question about advertising.

Fidji Simo: So to your point on, you know, having a fixed cost base, if grocers win or lose one point of market share in the future because of the move to online, that can have a really disproportionate impact on their earnings. And so our job is to really put that in context and show them that, yes, going to price parity might impact their earnings negatively short term, but it might actually impact their earnings very positively long term if that allows them to capture a market share that would have otherwise gone to a competitor. And so that's a complex strategic decision that they have to make, and we're there with them every step of the way to help them make the right decision.

Jason Health: Was that you were basically referring to what drove the kind of the upside in advertising in the quarter and you're referring to.

Jason Health: Thank both.

Jason Health:

Jason Health: More spend and more the flywheel of more advertising more spend for advertisers, but if that wasn't the answer to that question.

Lee Horowitz: Very positive long term.

Lee Horowitz: That allows us to capture market share that would have otherwise gone to a competitor and so that's a that's a complex strategic decision that they have to make it.

Jason Health: Just trying to draw to try to understand what drove kind of the strength in the advertising in the quarter, but don't repeat if that was the answer thank you.

Lee Horowitz: With them every step of the way through our hopes that makes the right one.

Jason Health: Thank you.

Lee Horowitz: Helpful. Thank you.

Jason Health: So on store fronts in terms of adoption.

Fidji Simo: Hopeful. Thank you.

Lee Horowitz: Okay.

Jason Health: We have more than 600 retail banners not using storefronts.

Speaker Change: And our next question will be coming from Jason <unk>.

Jason Helfstein: And our next question will be coming from Jason Helfstein. Oppenheimer. Your line is open. Thanks for taking the question.

Jason: Of Oppenheimer. Your line is open.

Jason Health: And as I mentioned, we're really excited about that because what we're seeing is that as retailers lean more and more into online adoption and making all of the customer omni channels. They are naturally leaning into promoting that are owned and operated properties more than they would lead into promoting our marketplace and we benefit from.

Jason: Thanks for taking the question. So can you first of all can you talk about storefront pro adoption levels and what Youre doing to drive higher adoption, you obviously alluded to it.

Fidji Simo: First one, can you talk about storefront pro adoption levels? you're doing to drive, hire a doc.

Speaker Change: Retailers that use that and get more yield out of it and then Peter I just want to confirm when you were answering the prior question about it was Andrew's question about advertising.

Fidji Simo: And then, PJ, I just want to confirm, when you were answering the prior question about Same with Andrew's question. Advertising was that you were basically referring to what drove the kind of the upside in advertising the quarter and you Booth. Thank you. more spend and more the flywheel of more advertising, more spend for advertising. That wasn't the answer to that question, just try to understand what drove kind of the strength in the advertising in the quarter. So on storefront, in terms of adoption, we have more than 600 retail banners now using storefronts. And as I mentioned, we're really excited about that because what we're seeing is that as retailers lean more and more into online adoption and making all of their customers omnichannel, they are naturally leaning into promoting their own and operating properties more than they would lean into promoting a marketplace.

Jason Health: That investments by powering their own properties that allows us to capture.

Speaker Change: Was that you were basically referring to what drove the kind of the upside in advertising in the quarter and you're referring to.

Jason Health: Large and growing part of the mask at and also strengthen our marketplace in the process. So we're.

Speaker Change: Both.

Jason Health: We're excited about that we continue to.

Speaker Change:

Speaker Change: More spend and more the flywheel of more advertising and more spend for advertisers, but if that wasn't the answer to that question Jeff.

Jason Health: Power Costco's on an operated side kurgan for fulfillment.

Jason Health: And lots of photos.

Speaker Change: Just drive to try to understand what drove kind of the strength in the advertising in the quarter, but don't repeat if that was the answer thank you.

Jason Health: <unk> products et cetera, So we feel very good about our enterprise solutions.

Jason Health: I don't know exactly which questions you are referring to but I'll just answer your question on what drove some strength in Q1 I would say, it's really the combination of the entire strategy working.

Speaker Change: Good thank you.

Speaker Change: So on store front in terms of adoption.

Speaker Change: We have more than 600 retail banners not using storefronts.

Seeing the high performance of our hubs, we are leading in performance both in terms of fraud in ctr amongst multi retailer and platforms and that's attracting more budget both across large brands and emerging brands, we're seeing strengths in both segments.

Speaker Change: And as I mentioned, we're really excited about that because what we're seeing is that as retailers lean more and more into online adoption and making all of the customer omni channels. They are naturally leaning into promoting that owned and operated properties more than they would lead into promoting our marketplace and we benefit from.

Jason Health: In Q1, and as a result of that additional demand thats, allowing us to attract more supply because more retailers want to work with us on care with ads and because we have more supply we ended up getting.

Speaker Change: And that investments by powering their own properties that allows us to capture a large and growing part of the mask at and also strengthen our marketplace in the process so well.

Fidji Simo: And we benefit from their investments by powering their own properties. So that allows us to capture a large and growing part of the market and also strengthen our marketplace in the process. So we're excited about that. We continue to power Costco's on an operated side, Kroger for fulfillment, and lots of other stocks, products, etc. So we feel very good about our enterprise solutions.

Jason Health: Our performance in more demand so that CVR show cycle I was referring to that that we're really seeing us work.

Speaker Change: We're excited about that we continue to.

Speaker Change: Power Costco's on an operated side kurgan for fulfillment.

Jason Health: And particularly strong in Q1.

Speaker Change: And lots of photos.

Jason Health: Thank you.

Speaker Change: <unk> products et cetera, So we feel very good about our enterprise solutions.

Speaker Change: And our next question is a follow up from <unk> of Wolfe Research. Your line is open.

Speaker Change: I don't know exactly which questions you are referring to but I'll just answer your question on what drove some strengths in Q1 I would say, it's really the combination of the entire strategy working.

Fidji Simo: On ads, I don't know exactly which questions you are referring to, but I'll just answer your question on what drove strength in Q1. I would say it's really the combination of the entire strategy working. We are seeing very high performance of our ads. We are leading in performance, both in terms of ROAS and CTR among multi-retailer ad platforms, and that's attracting more budget, both across large brands and emerging brands. We're seeing strength in both segments in Q1. And as a result of that additional demand, that's allowing us to attract more supply because more retailers want to work with us on care of the ads.

Jason Health: Can you hear me.

Speaker Change: Yes.

Speaker Change: Oh I apologize about the prior technical issue.

Speaker Change: My question is on advertising revenue said, it's a follow up on one of the prior questions already but.

Speaker Change: Seeing the high performance of our hubs, we are leading in performance both in terms of fraud in ctr amongst multi retailer and platforms and that's attracting more budget both across large brands and emerging brands, we're seeing strengths in both segments.

Speaker Change: When you speak with advertisers.

Speaker Change: And about.

Speaker Change: Four expand our commitment or they view and assuming they're viewing you as bottom of the funnel sort of spend buckets.

Speaker Change: In Q1, and as a result of that additional demand thats, allowing us to attract more supply because more retailers want to work with us on care with ads and because we have more supply we ended up getting.

Speaker Change: And so what is top of mind for them ahead of what's going on and do.

Speaker Change: Do you fall under performance spend for them and is that does that give you some level of confidence as we think about.

Fidji Simo: And because we have more supply, we end up getting better performance and more demand. So that's the virtuous cycle I was referring to that we're really seeing at work and particularly strong in Q1.

Speaker Change: Our performance in more demand so that CVR show cycle I was referring to that that we're really seeing us work.

Speaker Change: Perhaps the next few months ahead. Thank you.

Speaker Change: Yes, thanks for the question.

Speaker Change: And particularly strong in Q1.

Speaker Change: So we feel very good about our ability to attract more than offset share of AD dollars in any macroeconomic conditions and that's exactly for the reason. We mentioned you mentioned we are a very performance driven platform. We are very high performance as I mentioned.

Speaker Change: Thank you.

Shweta Khajuria: Thank you. And our next question is a follow-up from Shweta Khajuria of Wolf Research. Your line is open. Can you hear me? Oh, I apologize about the prior technical issue. My question is on advertising revenue. So it's a follow up on one of the prior questions already.

Speaker Change: And our next question is a follow up from <unk> of Wolfe Research. Your line is open.

Speaker Change: Can you hear me.

Speaker Change: Yes.

Speaker Change: And that for that reason you know even when in the context of our advertisers might be a little bit more uncertain about the macro in general the usual and decided to focus our dollars.

Speaker Change: Oh I apologize about the prior technical issue.

My question is on advertising revenue said, it's a follow up on one of the prior questions already but.

Platform that can drive that performance and you can do that that scale and thats why the fact that we offer one stop shops that we operate across not just <unk>, but also more than 220 other retailer websites and really act as an aggregator for retail media gives us a lot of advantages.

Speaker Change: When you speak with advertisers.

Fidji Simo: But when you speak with advertisers, and about Forward Spend or Commitment, are they viewing, I'm assuming they're viewing you as bottom of the funnel sort of spend bucket, and so what is top of mind for them ahead of what's going on, and do you fall under performance spend for them, and is that, does that give you some level of confidence as we think about perhaps the next few months ahead? Thank you. Yes, thanks for the question. So we feel very good about our ability to attract more than our fair share of dollars under any macroeconomic conditions.

Speaker Change: And about.

Speaker Change: Four expand our commitment or they view and assuming they are viewing you as bottom of the funnel sort of spend buckets.

Speaker Change: So what is top of mind for them ahead of what's going on and do.

Speaker Change: Do you fall under performance spend for them and is that does that give you some level of confidence as we think about.

Speaker Change: In this market while brands are going to look for a few upscale high performing pulp now so that's really what we're hearing.

Speaker Change: Perhaps the next few months ahead. Thank you.

In terms of the feedback on the Mac for I want to detail that we have unsurprisingly held course caution, but it is not drastic no widespread it's really in pockets and it's brand staring us not just tariffs, but also other potential regulations, whether that could be changes to snap eligibility.

Speaker Change: Yes, thanks for the question.

So we feel very good about our ability to attract more than offset share of AD dollars and any macroeconomic conditions and that's exactly for the reason. We mentioned you mentioned we are a very performance driven platform. We are very high performance as I mentioned.

Fidji Simo: And that's exactly for the reason we mentioned, you mentioned, we are a very performance driven platform, we have very high performance, as I mentioned. And that for that reason, you know, even when in a context where advertisers might be a little bit more uncertain about the macro in general, they usually decide to focus their dollars on a platform that can drive that performance and can do that at scale. And that's why the fact that we are a one stop shop that we operate across not just our property, but also more than 220 other retailer websites and really act as an aggregator for retail media gives us a lot of, you know, advantages in this market, where brands are going to look for a few at scale, high performing partners.

Speaker Change: Changes to regulations around reaching regions in food dies off.

Speaker Change: Aloud and more broadly changes to consumer behavior and in general we are seeing for example, a move from sugary cereals to a high protein yoga health, we're seeing moves from alcohol to nonalcoholic beverages from younger audiences and so across all of these changes are creating a more calm.

Speaker Change: Platform that can drive that performance and you can do that that scale and thats why the fact that we offer a one stop shops that we operate across not just <unk>, but also more than 220 other retailer websites and really act as an aggregator for retail media gives us a lot of advantages.

Speaker Change: Plex environment from brands to navigate but within that there are always looking for the same thing performance and scale and to the extent that we deliver both of which we have proven that we can we think that we're incredibly well positioned.

Speaker Change: In these markets while brands are going to look for a few upscale high performing pulp now so that's really what we're hearing.

Speaker Change: <unk> to navigate the next year.

Fidji Simo: So that's really what we're hearing.

Speaker Change: In terms of the feedback on the Mac for I want to detail that we have unsurprisingly health course caution, but it is not drastic no widespread it's really in pockets and it's brand staring us not just tariffs, but also other potential regulations, whether that could be changes to snap eligibility.

Speaker Change: Okay. Thank you. Thank you that was very helpful.

Fidji Simo: In terms of, you know, the feedback on the macro, I want to be clear that we have unsurprisingly heard caution, but it is not drastic, nor widespread. It's really in pockets, and it's brands staring at not just tariffs, but also other potential regulations, whether that could be changes to snap eligibility, changes to regulations around which ingredients and food dyes are, you know, allowed, and more broadly changes to consumer behavior in general, we are seeing, for example, a move from, you know, sugary cereals to high protein yogurt, we're seeing moves from alcohol to non alcoholic beverages from younger audiences.

Speaker Change: Thank you.

Speaker Change: And one moment for our next question.

Speaker Change: And our next question will be coming from Justin Patterson of Keybanc and that will be our last question. Your line is open.

Myles: Great. Thanks for taking the question. This is myles on for Justin.

Speaker Change: Changes to our regulations around reaching regions in food dies off.

Speaker Change: Just a couple quick ones first for universal campaigns.

Speaker Change: I know, it's still early but just curious if there's any early learnings you can share with that product.

Speaker Change: And maybe any characteristics.

Speaker Change: All of the brands that are adopting that product.

Speaker Change: And then similar question on Smart shop, just curious since you launched the suite of tools, if you've seen any changes in consumer behavior, whether it's with basket sizes purchase conversion.

Fidji Simo: And so across, you know, all of these changes, that's creating a more complex environment for brands to navigate. But within that, they are always looking for the same thing, performance and scale. And to the extent that we deliver both, which we have proven that we can, we think that we're incredibly well positioned to navigate Okay, thank you, Fidji, that was very...

Speaker Change: Plex environment for brands to navigate but within that there are always looking for the same thing performance and scale and to the extent that we deliver both of which we have proven that we can we.

Or anything around that would be helpful. Thanks.

Speaker Change: Of course.

Speaker Change: We think that we're incredibly well positioned to navigate the next year.

So we recently announced.

Speaker Change: AI powered universal campaigns and the goal is really 12 brands of all sizes create one campaign with a single budget, it's not automatically optimizes across multiple AD formats in real time, it's still really early so I don't have.

Speaker Change: Okay. Thank you. Thank you that was very helpful.

Speaker Change: Thank you.

Speaker Change: Enrollment for our next question.

Justin Patterson: And one moment for our next question. And our next question will be coming from Justin Patterson of KeyBank.

Speaker Change: And our next question will be coming from Justin Patterson of Keybanc and that will be our last question. Your line is open.

Speaker Change: Specific results to shell, but I will echo what I said earlier, which is that.

Miles Jakubiak: And that will be our last question. Your line is open. Great, thanks for taking the question.

Speaker Change: Great. Thanks for taking the question. This is myles on for Justin.

Emerging brands in particular are very likely to benefit disproportionately for something like that from something like that because it really gives them the ability to set up one campaign and led to us optimize across AD formats and AD placement based on that goal and really optimized for the right budget allocation for them.

Miles Jakubiak: This is Miles Jakubiak on for Justin. Just a couple quick ones. First, follow up on Universal Campaigns. I know it's still early, but just curious if there's any early learnings you can share with that product, and maybe any characteristics of the brands that are adopting that product.

Speaker Change: A couple of quick ones first of all on Universal campaigns.

Speaker Change: No. It's still early but just curious if there's any early learnings you can share with that product.

Speaker Change: And maybe any characteristics.

Speaker Change: All of the brands that are adopting that product.

Speaker Change: Whereas long brand, sometimes prefer having a little bit more control of all that.

Speaker Change: And then similar question on Smart shop, just curious since you launched the suite of tools, if you've seen any changes in consumer behavior on this whether it's with basket sizes.

Miles Jakubiak: And then a similar question on Smart Shop. Just curious, you know, since you lost If you've seen any changes in consumer behavior around this, whether it's with basket sizes or purchase conversion or anything around that, it would be helpful.

When pilots and union gas all campaigns.

So a brand like rescue dog wines, so a big increase in new to brand sales.

Speaker Change: <unk> conversion.

Speaker Change: Or anything around that would be helpful. Thanks.

So a brand like first form which is nutrition supplement so very significant sales and he said really good ROE as so we feel very good about you know how this is working on small shop.

Speaker Change: Of course.

Speaker Change: So we recently announced.

Speaker Change: To make sure everyone understands this was launched that was really about personalizing the experience. Even further so that we would understand youre in Pcs preferences like for example, your family hitting low call, but all.

Speaker Change: Specific results to shell, but I will echo what I said earlier, which is that Ah and.

Speaker Change: Emerging brands in particular are very likely to benefit.

Speaker Change: If you have.

Speaker Change: Any sort of preference and in fact, 70% of customers have at least one dietary preference in response shop, we are better able to understand that and then not shoe to fall.

Speaker Change: Proportionately for something like that from something like that because it really gives them the ability to setup, one campaign and led to us optimize across AD formats and AD placement based on that goal and really optimized falls the right budget allocation for them, whereas long brand, sometimes prefer having a little bit more control over.

Speaker Change: <unk> match that preference, we sell the new house types that we are applying to about half a million products, that's allowing us to create an experience that is stickier and more relevant.

Speaker Change: When pilots and union gas all campaigns.

Speaker Change: And we're seeing that's just more broadly whenever we do most of realization changes and I think that's still a long ways to go because we still hear that are people, who prefer going to the grocery store instead of shopping online often do that because they discover new things as opposed to install but I think that online we should be so much.

Speaker Change: So a brand like rescue dog wines, so a big increase in new to brand sales.

Speaker Change: We saw a brand like soft form which is nutrition supplement so very significant himself and he said really good ROE as so we feel very good about.

Speaker Change: <unk> is working on small shop to make sure everyone. Understands. This was launched that was really about personalizing. The experience. Even further so that we would understand your implicit preference seems like for example in your family eating low call, but all.

Speaker Change: That opposition to personalize the experience and makes them discover new products that they wouldn't have just covered before and we're seeing that not just with small shop, but also with AI pairings, while we passed an item with a complementary items. This is something that.

Speaker Change: If you have.

Speaker Change: Any sort of preference and in fact, 70% of customers have at least one dietary preference in response shop, we are better able to understand that and then match you too.

Speaker Change: The first few times, so really bullish on personalization in general and Thats, one more way in which we're going to convince more people to move their shopping online because it's going to be such a much better experience.

Speaker Change: And we're seeing that's just more broadly whenever we do most of realization changes and I think thats still a long ways to go because we still hear that are people, who prefer going to the grocery store instead of shopping online often do that because they discover new things as a grocery store, but I think that online we should be so much.

Speaker Change: Great. Thank you.

Speaker Change: Yeah. Thank you.

Speaker Change: And this concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change: We also around 75% of marketplace orders and that is driving higher retention, especially among new users will benefit most from just support when they'll buildings that call for the first few times, so really bullish on personalization in general and Thats, one more way in which we're going to convince more people.

Speaker Change: <unk> to move their shopping online because it's going to be such a much better experience.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: And this concludes today's conference call. Thank you for participating you may now disconnect.

Operator: And this concludes today's conference call. Thank you for participating.

Speaker Change: Okay.

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Speaker Change: Hum.

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change:

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change: Okay.

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