Yahoo Finance Maplebear Inc (CART) (Q1 2024) Earnings Call Transcript Highlights: Strategic Growth and Robust ...
GTV (Gross Transaction Value): Exceeded guidance, driven by improved cohort dynamics and EBT SNAP launches with Kroger and Costco.
Adjusted EBITDA: Q1 performance strong, Q2 guidance set at $180 million to $190 million, reflecting continued operational leverage.
Revenue Growth: Q2 GTV guidance of $8 billion to $8.15 billion, indicating 7% to 9% year-over-year growth.
Share Repurchases: 27 million shares repurchased for $751 million by end of Q1, with $249 million remaining capacity.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Maplebear Inc (NASDAQ:CART) reported a strong start to 2024 with both GTV and adjusted EBITDA exceeding guidance.
The company has expanded its offerings by partnering with Uber, adding hundreds of thousands of restaurants to its platform, enhancing the value of its Instacart+ membership.
Maplebear Inc (NASDAQ:CART) continues to lead in online grocery delivery, reaching 98% of North American families and representing over 85% of U.S. grocery sales.
Shopper tenure on the platform is at an all-time high, improving order accuracy and speed, which enhances customer satisfaction.
The company has a disciplined approach to equity management and has repurchased approximately 27 million shares for $751 million by the end of Q1.
Negative Points
The company faces significant competition, particularly from Amazon, which continues to experiment with pricing structures and could potentially impact Maplebear Inc (NASDAQ:CART)'s market share.
Despite strong financial performance, the reliance on a few large brands for advertising revenue poses a risk if these brands reduce their spending due to their own business challenges.
Maplebear Inc (NASDAQ:CART) is still working on improving affordability to expand their total addressable market, indicating ongoing challenges in pricing strategies.
The transition of CFO roles could lead to uncertainties in financial strategies and operations.
While partnerships like the one with Uber are promising, they are yet to show material financial impact and require significant investment to drive adoption.
Q & A Highlights
Q: In terms of the building blocks of GTV growth as you think medium to longer term, can you unpack how you're thinking about the broader consumer demand on the platform, the input of continued supply growth more broadly and how to think about simulating rising utility amongst your user base as we think about longer-term objectives around GTV against broader industry growth? A: Fidji Simo, CEO of Maplebear Inc., highlighted the company's excitement about long-term growth in a market that is still transitioning online and remains deeply underpenetrated. Key growth drivers include an unmatched selection of groceries and restaurants, high-quality service, and fast delivery due to a significant percentage of shoppers being near stores. Additionally, affordability is a focus, with ongoing efforts to optimize pricing and offer various savings. The company also sees mature cohort improvements and larger new cohorts compared to pre-pandemic as significant growth drivers.
Q: I wanted to ask about reinvestment, please. It looks like your transaction revenue stepped up a bit sequentially, and sales and marketing was sort of flattish as a percent of GTV sequentially as well. Given you beat the guidance pretty comfortably on EBITDA, did you look at the possibility of reinvesting some of that excess profit to support growth for the rest of the year? A: Fidji Simo explained that the company did reinvest to support growth, which may not always be visible in the sales and marketing line but could appear in the incentive line, which is contra-revenue. The company has overhauled its incentive system to target the right incentives to the right customers at the right time, driving long-term value and more engaged customers.
Q: Fidji, just a couple of questions on these partnerships. So I guess, first, maybe we can clear the air on the Amazon elephant in the room. You guys work with Whole Foods in Canada. Sounds like Amazon is going to go another push here with their new pricing mechanism for Prime in the U.S. I guess what's your view on that? And is there any reason why, at some point in the future, not exclusive or whatever, you couldn't go back to working with Whole Foods? A: Fidji Simo addressed the competition with Amazon, noting that despite Amazon's pricing experiments, Instacart maintains a strong customer value proposition with unmatched selection, speed, and value. She expressed openness to expanding their work with Whole Foods in the U.S., contingent on Amazon's decision.
Q: Just 2 questions. So you had some comments about expanding to pickup. Just how do you think about like what are the savings that a customer gets when they do pickup? And do you think this better positions you to compete with Walmart for online grocery? A: Fidji Simo discussed the role of pickup in Instacart's strategy, emphasizing its appeal to customers who prioritize price over convenience. She noted that pickup is a growing but smaller part of the business, with significant potential for expansion.
Q: Emily, can you provide any more color on what you're seeing across cohorts and if you see a time frame for mature cohorts, those declines to flatten out? A: Emily Reuter, CFO of Maplebear Inc., explained that mature cohort declines continued to improve, and new cohorts are bigger than pre-pandemic, indicating positive trends. She noted that strong Q1 performance benefited all cohorts, with some acceleration expected to not repeat in Q2 due to one-time impacts.
Q: The NBCUniversal partnership is very interesting. Can you talk about the potential of off-platform advertising and what you need to do to unlock more budget as well as more partners? A: Fidji Simo discussed the strategic use of Instacart's unique customer data in partnerships with platforms like NBCUniversal, enabling advertisers to identify specific audiences and improve ad performance on other platforms. She highlighted the need to build new relationships and tools to access optimization capabilities, expecting results to materialize in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
