Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Maplebear Inc (CART, Financial) posted strong Q2 results with 10% year-over-year growth in GTV.
- The company achieved its third consecutive quarter of positive GAAP net income.
- Adjusted EBITDA increased by 89% year-over-year, reaching $208 million.
- Operating cash flow grew by 42% year-over-year to $244 million.
- The company continues to deepen its selection advantage through multiple services like pickup, virtual convenience, and catering.
Negative Points
- Large brand partners are pulling back on advertising due to challenges in their business.
- The company faces ongoing noise in SBC following its IPO in September 2023.
- There is a competitive environment with new entrants in the market.
- The rollout of new technologies like Caper Carts is operationally heavy and requires significant integration with retailers' systems.
- The company does not provide specific guidance on AOV or the composition of GTV going forward.
Q & A Highlights
Q: Given the momentum we're seeing in your business, how are you dividing resources around customer acquisition and retention, and balancing that with traditional customer acquisition marketing spend? Also, any changes in the competitive environment?
A: We are heavily focused on new customer acquisition and creating habituated customers. We use a portfolio of marketing and incentive tactics to attract new customers and habituate them. Regarding the competitive environment, we maintain a leading category share and continue to excel in large baskets, which represent a significant portion of the industry and profit.
Q: Can you provide your perspective on the broader CPG landscape and its impact on your advertising opportunities? Also, what innovations are you pushing forward on advertising solutions?
A: We see some large brands pulling back on advertising due to business challenges, but growth from emerging brands has offset this. We continue to innovate with new ad formats like recipes, occasions, and bundles, and enhance our measurement capabilities. We are also expanding our retail media partnerships, which will include in-store ads on Caper Carts.
Q: Could you elaborate on the Uber Eats partnership and its impact on order growth and GTV? Also, how will the DoorDash partnership with Chase affect your growth?
A: The Uber Eats partnership is ramping restaurant adoption quickly, attracting new customers and increasing order frequency. Regarding Chase, we are shifting our focus to new customer acquisition with offers like 10% cashback, which we believe will tap into a new audience.
Q: What factors drove the positive AOV this quarter, and what is your outlook for AOVs over the next year?
A: The increase in AOV was driven by new customer cohorts reaching bigger baskets faster, existing customers making larger purchases, and a higher mix of club orders. We do not guide specifically to AOV but are pleased with the current trends.
Q: Can you discuss your supply with non-grocery merchants and plans to grow it? How has the consumer response been?
A: We are pleased with the performance of non-grocery retailers, which attract new customers and increase order frequency. This also strengthens Instacart+ as customers benefit from a broader range of retailers.
Q: Could you provide more color on cohort behavior and enterprise growth?
A: Our cohorts are healthy, with behaviors normalizing post-COVID. We focus on deepening engagement with existing and infrequent customers. For enterprise growth, we are onboarding more retailers faster, which contributes to both marketplace and enterprise growth.
Q: How are the 25 million annual customers growing compared to monthly active users? How are you evolving incentive programs to bring people down the funnel?
A: The 25 million annual customers are growing year-over-year. We use incentives, new use cases like restaurants, and affordability initiatives to habituate users and increase their frequency.
Q: Regarding the advertising business, do you see a larger opportunity in RPU or the number of advertisers on the platform?
A: Both are significant opportunities. We are onboarding more brand partners and expanding their spending on our platform. We also see potential in deepening relationships with large players through new formats and measurement capabilities.
Q: What are the benefits for CPG operators using one retail media network to access platforms like Facebook or YouTube?
A: The primary benefits are data for targeting and closed-loop measurement, and the ability to point ads to an Instacart brand page where customers can make immediate purchases.
Q: Can you provide more details on the sequential growth in AOV and the expected impact of the Uber relationship on next quarter's results?
A: The AOV growth was driven by new customer cohorts, existing customers making larger purchases, and a higher mix of club orders. We do not expect a significant impact from the Uber relationship in the next quarter but are optimistic about its long-term potential.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
