Maplebear Inc
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
CART$58.12+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0001579091-24-000064
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001579091-24-000087
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 176 previous paragraphs and 184 current paragraphs.
131 unchanged; 40 reworded; 8 added; 5 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 21 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
In the second quarter of 2024, gross profit increased to$623 million, or 18% growth, compared to the same quarter of 2023, and gross margin increased from 74% in second quarter of 2023 to 76% in the second quarter of 2024, primarily due totransaction revenue increasing at a faster pace than cost of revenue.
Current report
Other Income (Expense), Net
Current report
The increase in transaction revenue during the second quarter of 2024, compared to the same quarter of 2023, was primarily driven by growth in GTV, which grew 10%, increased fulfillment efficiencies, and the lapping of one-time retailer credits and concessions in the prior year, partially offset by increased investments in consumer incentives in the second quarter of 2024.
Current report
Advertising and other investment rate of 2.7% remained flat during the first six months of 2024, compared to the same period of 2023.
Current report
The increase in operations and support expense during the first six months of 2024, compared to the same period of 2023, was primarily due to an increase of $6 million in costs for subscriptions and software and $5 million in compensation costs, primarily driven by an increase in stock-based compensation expense and restructuring charges including severance and other benefits.
Current report
The increase in research and development expense during the second quarter of 2024, compared to the same quarter in 2023, was primarily due to a net increase of $61 million in total compensation costs, partially offset by an increase of $6 million in capitalized software development costs. The net increase in total compensation cost was primarily driven by an increase of stock-based compensation expense, partially offset by a decrease in cash compensation expense related to changes in the mix of our employee cash and equity compensation and reduced headcount following our restructuring plan.
Current report
The increase in general and administrative expense during the second quarter of 2024, compared to the same quarter of 2023, was primarily due to an increase of $31 million in accruals for sales and indirect taxes and legal matters and settlements and a net increase of $23 million in total compensation costs, primarily driven by an increase in stock-based compensation expense, partially offset by a decrease in cash compensation expense related to the mix of our employee cash and equity compensation and reduced headcount following our restructuring plan.
Current report
The decrease in interest income during the second quarter of 2024, compared to the same quarter of 2023, was immaterial.
Removed paragraphs (5)
Previous report
If the appellate court ruling is reversed by the California Supreme Court, we will face legal uncertainty over whether we can properly classify shoppers in California as independent contractors as we currently do. A judgment, settlement, or order issued by a court or governmental body or otherwise in connection with any judicial, administrative, or legal proceeding that results in Instacart being prohibited from continuing to use independent-contractor shoppers in the manner we currently do in California would materially impair our business, growth, and results of operations due to our adoption of one or more alternative fulfillment strategies and the associated costs that would be required. Such change would impair our ability to innovate upon and expand our offerings, which could also have a material adverse effect on our results of operations and future growth. Further, if we increase customer fees or charges as a result of increased costs resulting from shoppers being classified as employees or alternative fulfillment strategies we may implement, we may experience customer dissatisfaction with such increased fees, which could result in significant decreases in orders, GTV, and revenue. We also may not be able to maintain adequate shopper supply as shoppers may choose not to engage with Instacart given the loss of flexibility under an employment model, and a majority of the shoppers currently on Instacart may not want to work as employees, which could impact orders, GTV, and revenue. Additionally, if we are unable to fully offset any additional costs incurred in connection with compliance efforts, our results of operations may be adversely affected. We may take additional actions that we determine are in the best interests of our business, customers, partners, and growth strategy, including potential cessation of operations in certain service areas in California if we determine that operating in such service areas is ultimately too costly or burdensome. The full impact of any reversal of the appellate court ruling by the California Supreme Court and the subsequent enforcement actions by courts, and resulting actions that we may take in response or preemptively, remain highly uncertain and cannot be accurately predicted.
Previous report
In addition, if we are prohibited from continuing to use independent-contractor shoppers in the manner we currently do in California, this may impact our current financial statement presentation including revenue and cost of revenue as further described in Note 2 — Significant Accounting Policies in the notes to the consolidated financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous report
In the first quarter of 2024, gross profit increased to $614 million, or 5% growth, compared to the same quarter of 2023, primarily driven by the increase in transaction revenue. Gross margin decreased from 77% in the first quarter of 2023 to 75% in the first quarter of 2024, primarily driven by a decrease in transaction revenue as a percent of GTV as transaction revenue in the first quarter of 2023 benefited from significant fulfillment efficiencies and lower customer incentives.
Previous report
Other Expense, Net
Previous report
On January 31, 2024, the 2024 Tax Extenders Bill (the “Extenders”) legislation was passed by the U.S. House of Representatives and advanced to the U.S. Senate. The Extenders could retroactively reinstate Section 174 expensing for certain research and experimental expenditures, and extend 100% bonus depreciation, among other changes. We are monitoring these developments and evaluating the potential impact on our results of operations.
Reworded paragraphs (40)
Previous wording
Our business, financial condition, and key business metrics have been, and are expected to continue to be impacted by recent macroeconomic trends affecting our markets and industry such as higher inflation, rising interest rates, the effects of supply chain challenges, cessation of government aid programs, geopolitical conflicts, uncertainty regarding an economic recession and associated decreases in consumer discretionary income, and the effects of severe weather patterns. For example, decreases in consumer discretionary income due to inflationary or recessionary economic pressures and rising interest rates, as well as cessation of government aid, have adversely impacted and continue to adversely impact order volumes, customer acquisition and retention, changing consumer preferences, and demand for premium or discretionary grocery purchases.
Current wording
Our business, financial condition, and key business metrics have been, and are expected to continue to be impacted by recent macroeconomic trends affecting our markets and industry such as higher inflation, rising interest rates, the effects of supply chain challenges, cessation of government aid programs, geopolitical conflicts, uncertainty regarding an economic recession and associated decreases in consumer discretionary income, changing consumer preferences, and the effects of severe weather patterns. For example, decreases in consumer discretionary income due to inflationary or recessionary economic pressures and rising interest rates, as well as cessation of government aid, have adversely impacted and continue to adversely impact order volumes, customer acquisition and retention, and demand for premium or discretionary grocery purchases.
Previous wording
Some jurisdictions have adopted, and may adopt in the future, regulations that impact whether we can or should classify shoppers as independent contractors. For example, in California, the state ballot initiative Proposition 22, which became effective on December 16, 2020, provides a framework that offers legal certainty regarding the status of independent workers offering delivery services and protects worker flexibility, the quality of on-demand work, and access to benefits for those who qualify. However, on August 20, 2021, a judge in Alameda County Superior Court granted a writ that, if upheld, would order the State of California not to enforce Proposition 22 on the ground that it is unconstitutional. The California Attorney General filed an appeal, and on March 13, 2023, the appellate court largely reversed the superior court and effectively upheld Proposition 22. Plaintiffs have appealed the decision to the California Supreme Court and a hearing has been scheduled for May 21, 2024.
Current wording
Some jurisdictions have adopted, and may adopt in the future, regulations that impact whether we can or should classify shoppers as independent contractors. For example, in California, the state ballot initiative, Proposition 22, which became effective on December 16, 2020, provides a framework that offers legal certainty regarding the status of independent workers offering delivery services and protects worker flexibility, the quality of on-demand work, and access to benefits for those who qualify. Although the constitutionality of Proposition 22 was subsequently challenged, on July 25, 2024, the California Supreme Court upheld Proposition 22 as constitutional. As a result, we expect Proposition 22 to provide more legal certainty over the status of independent workers offering delivery services in California. However, there may continue to be legal challenges, or legislative or other attempts to amend or otherwise invalidate the benefits, protections or the independent worker status provided by Proposition 22.
Previous wording
We expect continuing challenges to the independent contractor classification of shoppers who use Instacart, or the imposition of additional requirements on the use of contractors, in California and in other jurisdictions. See the section titled “Risk Factors—Risks Related to Our Legal and Regulatory Environment—If the contractor status of shoppers who use Instacart is successfully challenged, or if additional requirements are placed on our engagement of independent contractors, we may face adverse business, financial, tax, legal, and other consequences.”
Current wording
In addition to California, we expect continuing challenges to the independent contractor classification of shoppers who use Instacart in other jurisdictions in which we operate, as well as the possibility of additional requirements on the use of contractors. Any successful challenges, changes in law, or other legal uncertainty with respect to independent contractor classification may adversely impact our financial condition, business, and results of operations. For additional information about the risks to our business related to independent contractor classification, see the section titled “Risk Factors—Risks Related to Our Legal and Regulatory Environment—If the contractor status of shoppers who use Instacart is successfully challenged, or if additional requirements are placed on our engagement of independent contractors, we may face adverse business, financial, tax, legal, and other consequences.”
Previous wording
We define an order as a completed customer transaction to purchase goods for delivery or pickup from a single retailer on Instacart during the period indicated, including those completed through Instacart Marketplace or retailers’ owned and operated online storefronts that are powered by Instacart Enterprise Platform. We believe that orders are an indicator of the scale and growth of our business as well as the value we bring to our constituents.
Current wording
We define an order as a completed customer transaction to purchase goods for delivery or pickup primarily from a single retailer on Instacart during the period indicated, including those completed through Instacart Marketplace or retailers’ owned and operated online storefronts that are powered by Instacart Enterprise Platform. We believe that orders are an indicator of the scale and growth of our business as well as the value we bring to our constituents.
Previous wording
In the first quarter of 2024, orders increased to 72.8 million, or 9% growth compared to the same quarter in 2023. The increase in orders was driven primarily by increased engagement from new and existing customers.
Current wording
In the second quarter of 2024, orders increased to 70.8 million, or 7% growth, compared to the same quarter of 2023, which was driven primarily by new customers and increased engagement of existing customers.
Previous wording
We define GTV as the value of the products sold based on prices shown on Instacart, in addition to applicable taxes, deposits and other local fees, customer tips, which go directly to shoppers, customer fees, which include flat subscription fees related to Instacart+ that are charged monthly or annually, and other fees. GTV consists of orders completed through Instacart Marketplace or services that are part of the Instacart Enterprise Platform. We believe that GTV indicates the health of our business, including our ability to drive revenue and profits, and the value we provide to our constituents. We have experienced and expect to continue to experience fluctuations in GTV growth over the near term.
Current wording
We define GTV as the value of the products sold based on prices shown on Instacart, in addition to applicable taxes, deposits and other local fees, customer tips, which go directly to shoppers, customer fees, which include flat subscription fees related to Instacart+ that are charged monthly or annually, and other fees. GTV consists of orders primarily completed through Instacart Marketplace or services that are part of the Instacart Enterprise Platform. We believe that GTV indicates the health of our business, including our ability to drive revenue and profits, and the value we provide to our constituents. We have experienced and expect to continue to experience fluctuations in GTV growth over the near term.
Previous wording
In the first quarter of 2024, GTV increased to $8,319, or 11% growth compared to the same quarter of 2023, driven primarily by the increase in orders and, to a lesser extent, higher average order value. GTV growth was driven by seasonality, including increased demand for our offerings in times of inclement weather, and an extra day in the first quarter of 2024 due to leap day.
Current wording
In the second quarter of 2024, GTV increased to $8,194 million, or 10% growth compared to the same quarter of 2023, driven primarily by the increase in orders and, to a lesser extent, higher average order value.
Previous wording
We define Adjusted EBITDA as net income, adjusted to exclude (i) provision for income taxes, (ii) interest income, (iii) other expense, net, (iv) depreciation and amortization expense, (v) stock-based compensation expense, (vi) payroll taxes related to stock-based compensation expense, (vii) certain legal and regulatory accruals and settlements, net, (viii) reserves for sales and other indirect taxes, (ix) acquisition-related expenses, and (x) restructuring charges. We define Adjusted EBITDA margin as Adjusted EBITDA as a percent of revenue. For more information about how we use these non-GAAP financial measures in our business, the limitations of these measures, and reconciliations of these measures to the most directly comparable GAAP financial measures, see the section titled “—Non-GAAP Financial Measures.”
Current wording
We define Adjusted EBITDA as net income, adjusted to exclude (i) provision for income taxes, (ii) interest income, (iii) other income (expense), net, (iv) depreciation and amortization expense, (v) stock-based compensation expense, (vi) payroll taxes related to stock-based compensation expense, (vii) certain legal and regulatory accruals and settlements, net, (viii) reserves for sales and other indirect taxes, (ix) acquisition-related expenses, and (x) restructuring charges. We define Adjusted EBITDA margin as Adjusted EBITDA as a percent of revenue. For more information about how we use these non-GAAP financial measures in our business, the limitations of these measures, and reconciliations of these measures to the most directly comparable GAAP financial measures, see the section titled “—Non-GAAP Financial Measures.”
Previous wording
In the first quarter of 2024, Adjusted EBITDA increased to$198 million, or 17% growth compared to the same quarter of 2023, primarily driven by revenue growth and efficiencies within adjusted total operating expenses. Our Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin can vary significantly as we continue to make substantial investments to fuel our growth and scale our business.
Current wording
In the second quarter of 2024, Adjusted EBITDA increased to$208 million, or 89% growth compared to the same quarter of 2023, primarily driven by revenue growth and efficiencies within adjusted total operating expenses. Our Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin can vary significantly as we continue to make substantial investments to fuel our growth and scale our business.
Previous wording
Advertising revenue is recognized upon delivery of clicks for Sponsored Product ads, upon delivery of impressions or over the contract term on a fixed fee basis for display ads, or upon redemptions of coupons. Advertising and other revenue has historically been, and is expected to continue to be, seasonally high in the fourth quarter and seasonally low in the first quarter in a given year as a result of how advertisers deploy their budgets. In addition, we expect our advertising and other revenue growth rate and advertising and other investment rate(which we define as advertising and other revenue in a given period divided by GTV in such period) to continue to fluctuate, particularly during periods of acceleration or decreases in our GTV growth or periods in which we may generate more GTV growth from sources where we historically do not provide advertising. We expect our advertising and other revenue growth to fluctuate in the near term due to the macroeconomic factors described above and changes in brand partner spend in response to our GTV growth trends, which may occur on a delayed basis.
Current wording
Advertising revenue is recognized upon delivery of clicks for Sponsored Product ads, upon delivery of impressions or over the contract term on a fixed fee basis for display ads, or upon redemptions of coupons. Advertising and other revenue has historically been, and is expected to continue to be, seasonally high in the fourth quarter and seasonally low in the first quarter in a given year as a result of how advertisers deploy their budgets. In addition, we expect our advertising and other revenue growth rate and advertising and other investment rate(which we define as advertising and other revenue in a given period divided by GTV in such period) to continue to fluctuate, particularly during periods of acceleration or decreases in our GTV growth or periods in which we may generate more GTV growth from sources where we historically do not provide advertising. We expect our advertising and other revenue growth to fluctuate in the near term due to changes in brand partner spend, including as a result of the macroeconomic factors described above and in response to our GTV growth trends, which may occur on a delayed basis.
Previous wording
In April 2023 and 2024, certain employees elected to receive cash in lieu of a portion of certain future equity awards to be granted by our board of directors, and as a result, we expect cash compensation expense and stock-based compensation expense within operations and support, research and development, sales and marketing, and general and administrative expense to fluctuate through the second quarter of 2024 and 2025, respectively.
Current wording
In April 2023 and 2024, certain employees elected to receive cash in lieu of a portion of certain future equity awards to be granted by our board of directors, and as a result, cash compensation expense and stock-based compensation expense within operations and support, research and development, sales and marketing, and general and administrative expense fluctuated through the second quarter of 2024 and are expected to continue to fluctuate over the near term.
Previous wording
Other expense, net primarily consists of gains and losses from transactions denominated in a currency other than the functional currency.
Current wording
Other income (expense), net primarily consists of gains and losses from transactions denominated in a currency other than the functional currency.
Previous wording
Comparison of the Three Months Ended March 31, 2023 and 2024
Current wording
Comparison of the Three and Six Months Ended June 30, 2023 and 2024
Previous wording
The increase in transaction revenue in the first quarter of 2024, compared to the same period of 2023, was primarily driven by growth in GTV, which grew 11%, partially offset by increased investments in consumer incentives in the first quarter of 2024
Current wording
The increase in transaction revenue during the first six months of 2024, compared to the same period of 2023 was primarily driven by growth in GTV, which grew 11%, increased fulfillment efficiencies, and the lapping of one-time retailer credits and concessions in the prior year, partially offset by increased investments in consumer incentives in the first six months of 2024.
Previous wording
The increase in advertising and other revenue during the first quarter of 2024, compared to the same period of 2023, was primarily driven by an increase in advertising volume, partially offset by changes in spend by certain of our brand partners in response to macroeconomic uncertainty and changes in our brand partners’ businesses and performance. Advertising and other investment rate decreased by 7 basis points to 2.6% during the first quarter of 2024, compared to the same period of 2023, as GTV grew faster than advertising and other revenue.
Current wording
The increase in advertising and other revenue during the second quarter of 2024, compared to the same quarter of 2023, was primarily driven by an increase in advertising volume, partially offset by changes in spend by certain of our brand partners in response to macroeconomic uncertainty and changes in our brand partners’ businesses and performance. Advertising and other investment rate of 2.8% during the second quarter of 2024 remained flat compared to the same period of 2023.
Previous wording
The increase in cost of revenue in the first quarter of 2024, compared to the same period of 2023, was primarily due to an increase of $13 million in credit card processing fees, $8 million in delivery-related insurance costs, and $8 million in customer success and professional services costs.
Current wording
The increase in cost of revenue during the first six months of 2024, compared to the same period of 2023, was primarily due to an increase of $21 million in credit card processing fees and $14 million in customer success and professional services costs.
Previous wording
The increase in gross profit during the first quarter of 2024, compared to the same period of 2023, was primarily driven by the increase in transaction revenue due to the factors described above. The decrease in gross margin during the first quarter of 2024, compared to the same period of 2023, was primarily driven by a decrease in transaction revenue as a percent of GTV as the first quarter of 2023 benefited from significant fulfillment efficiencies and lower customer incentives.
Current wording
The increase in gross profit during the second quarter of 2024, compared to the same quarter of 2023, was primarily driven by the increase in transaction revenue due to the factors described above. The increase in gross margin during the second quarter of 2024, compared to the same period of 2023, was primarily primarily due totransaction revenue increasing at a faster pace than cost of revenue.
Previous wording
The increase in operations and support expense in the first quarter of 2024, compared to the same period in 2023, was not material.
Current wording
The increase in operations and support expense during the second quarter of 2024, compared to the same quarter in 2023, was not material.
Previous wording
The decrease in research and development expense in the first quarter of 2024, compared to the same period in 2023, was primarily due to a decrease of $4 million in compensation costs, primarily driven by an increase in stock-based compensation expense and restructuring charges including severance and other benefits, which was more than offset by a benefit of $79 million related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024 and for terminated employees in connection with the restructuring plan, and an increase of $14 million in capitalized software development costs.
Current wording
The increase in research and development expense during the first six months of 2024, compared to the same period of 2023, was primarily due to a net increase of $57 million in total compensation costs partially offset by an increase of $20 million in capitalized software development costs. The net increase in total compensation cost was primarily driven by an increase in stock-based compensation expense, inclusive of an offsetting benefit of $79 million related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024 and for terminated employees in connection with the restructuring plan, and was partially offset by a decrease in cash compensation expense related to reduced headcount following our restructuring plan and changes in the mix of our employee cash and equity compensation.
Previous wording
The increase in sales and marketing expense in the first quarter of 2024, compared to the same period in 2023, was primarily due to an increase of $16 million in compensation costs, primarily driven by an increase in stock-based compensation expense and restructuring charges including severance and other benefits, partially offset by a benefit of $8 million related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring, and an increase of $7 million in marketing costs.
Current wording
The increase in sales and marketing expense during the first six months of 2024, compared to the same period of 2023, was primarily due to an increase of $37 million in compensation costs, primarily driven by an increase in stock-based compensation expense, inclusive of an offsetting benefit of $8 million related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring, and an increase of $14 million in marketing costs.
Previous wording
The increase in general and administrative expense in the first quarter of 2024, compared to the same period of 2023, was primarily due to an increase of $19 million in compensation costs, primarily driven by an increase in stock-based compensation expense and restructuring charges including severance and other benefits, partially offset by a benefit of $4 million related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring.
Current wording
The increase in general and administrative expense during the first six months of 2024, compared to the same period of 2023, was primarily due to a net increase of $42 million in total compensation costs and increase of $27 million in accruals for sales and indirect taxes and legal matters and settlements. The net increase in total compensation costs was primarily driven by an increase in stock-based compensation expense, inclusive of an offsetting benefit of $4 million related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring, partially offset by a decrease in cash compensation expense related to changes in the mix of our employee cash and equity compensation and reduced headcount following our restructuring plan.
Previous wording
The increase in interest income in the first quarter of 2024, compared to the same period of 2023, was primarily due to higher average interest rates earned on our cash and cash equivalents, restricted cash and cash equivalents, and short-term investments.
Current wording
The increase in interest income during the first six months of 2024, compared to the same period of 2023, was primarily due to higher average interest rates earned on our cash and cash equivalents, restricted cash and cash equivalents, and short-term investments.
Previous wording
The decrease in the provision for income taxes during the first quarter of 2024, compared to the same period of 2023 was not material.
Current wording
The decrease in the provision for income taxes during the second quarter of 2024 and the first six months of 2024, compared to the same periods of 2023, was primarily due to a decrease in income before provision for income taxes due to the factors described above, an increase in the tax benefit recognized on stock-based compensation, and an increase in research and development credits generated.
Previous wording
We define Adjusted EBITDA as net income, adjusted to exclude (i) provision for income taxes, (ii) interest income, (iii) other expense, net, (iv) depreciation and amortization expense, (v) stock-based compensation expense, (vi) payroll taxes related to stock-based compensation expense, (vii) certain legal and regulatory accruals and settlements, net, (viii) reserves for sales and other indirect taxes, (ix) acquisition-related expenses, and (x) restructuring charges. We define Adjusted EBITDA margin as Adjusted EBITDA as a percent of revenue.
Current wording
We define Adjusted EBITDA as net income, adjusted to exclude (i) provision for income taxes, (ii) interest income, (iii) other income (expense), net, (iv) depreciation and amortization expense, (v) stock-based compensation expense, (vi) payroll taxes related to stock-based compensation expense, (vii) certain legal and regulatory accruals and settlements, net, (viii) reserves for sales and other indirect taxes, (ix) acquisition-related expenses, and (x) restructuring charges. We define Adjusted EBITDA margin as Adjusted EBITDA as a percent of revenue.
Previous wording
We include Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin in this Quarterly Report on Form 10-Q because they are important measures upon which our management assesses our operating performance and the operating leverage in our business. Because Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin facilitate internal comparisons of our historical operating performance, including as an indication of our revenue growth and operating efficiencies when compared to GTV and revenue over time, we use them to evaluate the effectiveness of our strategic initiatives and for business planning purposes. We also believe that Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin, when taken collectively, may be useful to investors because they provide consistency and comparability with past financial performance, so that investors can evaluate our operating efficiencies by excluding certain items that may not be indicative of our business, results of operations, or outlook. In addition, we believe Adjusted EBITDA is widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of operational performance.
Current wording
We include Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin in this Quarterly Report on Form 10-Q because they are important measures upon which our management assesses our operating performance and the operating leverage in our business. Because Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin facilitate internal comparisons of our historical operating performance, including as an indication of our revenue growth and operating efficiencies when compared to GTV and revenue over time, we use them to evaluate the effectiveness of our strategic initiatives and for business planning purposes. We also believe that Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin, when taken collectively, may be useful to investors because they provide consistency and comparability with past financial performance, so that investors can evaluate our operating efficiencies by excluding certain items that may not be indicative of our business, results of operations, or outlook. In addition, we believe Adjusted EBITDA is widely used by investors, securities analysts, rating agencies, and other parties in evaluating companies in our industry as a measure of operational performance.
Previous wording
(1) The first quarter of 2024 includes an aggregate $95 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024 and for terminated employees in connection with the restructuring plan.
Current wording
(1) The six months ended June 30, 2024 includes an aggregate $95 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024 and for terminated employees in connection with the restructuring plan.
Previous wording
(1) Stock-based compensation expense for the first quarter of 2024 was offset by a $4 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring plan.
Current wording
(1) Stock-based compensation expense for the six months ended June 30, 2024 was offset by a $4 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring plan.
Previous wording
(1) The first quarter of 2024 includes a $79 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024, and for terminated employees in connection with the restructuring plan.
Current wording
(1) The six months ended June 30, 2024 includes a $79 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024, and for terminated employees in connection with the restructuring plan.
Previous wording
(1) The first quarter of 2024 includes an $8 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring plan.
Current wording
(1) The six months ended June 30, 2024 includes an $8 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring plan.
Previous wording
(1) The first quarter of 2024 includes a $4 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring plan.
Current wording
(1) The six months ended June 30, 2024 includes a $4 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring plan.
Previous wording
(1) The first quarter of 2024 includes an aggregate $95 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024 and for terminated employees in connection with the restructuring plan.
Current wording
(1) The six months ended June 30, 2024 includes an aggregate $95 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024 and for terminated employees in connection with the restructuring plan.
Previous wording
Since our founding, we have financed our operations primarily through the net proceeds we have received from the issuance of equity securities and through fees received from retailers, customers, and brands. As of March 31, 2024, we had cash and cash equivalents of $1.5 billion and marketable securities of $20 million which were primarily held for working capital purposes.
Current wording
Since our founding, we have financed our operations primarily through the net proceeds we have received from the issuance of equity securities and through fees received from retailers, customers, and brands. As of June 30, 2024, we had cash and cash equivalents of $1.4 billion and marketable securities of $9 million which were primarily held for working capital purposes.
Previous wording
Since our founding, we have primarily generated losses from our operations as reflected in our accumulated deficit of $3.2 billion as of March 31, 2024. While we generated positive cash flows from operating activities during the year ended December 31, 2022 and 2023 and during the three months ended March 31, 2024, our future cash flows from operating activities may fluctuate as a result of investments we continue to make across our organization. As a result, we may require additional capital resources to execute strategic initiatives to grow our business.
Current wording
Since our founding, we have primarily generated losses from our operations as reflected in our accumulated deficit of $3.5 billion as of June 30, 2024. While we generated positive cash flows from operating activities during the year ended December 31, 2022 and 2023 and during the six months ended June 30, 2024, our future cash flows from operating activities may fluctuate as a result of investments we continue to make across our organization. As a result, we may require additional capital resources to execute strategic initiatives to grow our business.
Previous wording
In November 2023, our board of directors authorized a share repurchase program to purchase up to an aggregate of $500 million of our common stock and in February 2024, our board of directors authorized the repurchase of an additional $500 million of our common stock. During the three months ended March 31, 2024, we repurchased and subsequently retired 25 million shares of our common stock for an aggregate purchase price of $715 million under the share repurchase program. The amount of shares repurchased and retired included 14 million shares repurchased in privately negotiated transactions with three shareholders in February 2024 for an aggregate amount of $390 million.
Current wording
In November 2023, our board of directors authorized a share repurchase program to purchase up to an aggregate of $500 million of our common stock, which was subsequently increased to $1 billion in February 2024. In June 2024, our board of directors authorized a new share repurchase program to purchase up to an aggregate of $500 million of our common stock. At the time of authorization, no capacity remained under the previous share repurchase program. During the six months ended June 30, 2024, we repurchased and subsequently retired 35 million shares of our common stock for an aggregate purchase price of $1,040 million under the share repurchase programs. The amount of shares repurchased and retired included 14 million shares repurchased in privately negotiated transactions with three shareholders in February 2024 for an aggregate amount of $390 million, with the remaining shares purchased in the open market.
Previous wording
We believe that our existing cash, cash equivalents, and marketable securities will be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at least the next 12 months and beyond. However, our future cash requirements will depend on many factors, including our growth rate, the timing and the amount of cash received from retailers, customers, and brands, the timing and extent of spending to support our research and development efforts as well as sales and marketing activities, the introduction of enhancements, the continuing market adoption of Instacart, and the volume and timing of our share repurchases. In addition, we may enter into additional or expanded retailer, customer, brand, or other relationships, as well as agreements to acquire or invest in complementary businesses, products, teams, and technologies, including intellectual property rights, which could increase our cash requirements. As a result of these and other factors, we may be required to seek additional financing sooner than we currently anticipate. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. In particular, recent volatility in the global financial markets, including due to heightened inflation and rising interest rates and other macroeconomic conditions, geopolitical conflicts, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures could reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.
Current wording
We believe that our existing cash, cash equivalents, and marketable securities will be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at least the next 12 months and beyond. However, our future cash requirements will depend on many factors, including our growth rate, the timing and the amount of cash received from retailers, customers, brands, and other partners, the timing and extent of spending to support our research and development efforts as well as sales and marketing activities, the introduction of enhancements, the continuing market adoption of Instacart, and the volume and timing of our share repurchases. In addition, we may enter into additional or expanded retailer, customer, brand, or other relationships, as well as agreements to acquire or invest in complementary businesses, products, teams, and technologies, including intellectual property rights, which could increase our cash requirements. As a result of these and other factors, we may be required to seek additional financing sooner than we currently anticipate. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. In particular, recent volatility in the global financial markets, including due to heightened inflation and rising interest rates and other macroeconomic conditions, geopolitical conflicts, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures could reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.
Previous wording
For the three months ended March 31, 2024, net cash provided by operating activities was $105 million, which consisted ofnet income of $130 million, adjusted for certain non-cash items of $74 million, and net cash outflows from changes in operating assets and liabilities of $99 million. The non-cash items primarily consisted of deferred income taxes of $41 million, depreciation and amortization expense of $12 million, stock-based compensation expense of $9 million, and bad debt expense of $8 million. The net cash outflows from changes in our operating assets and liabilities were primarily due to a $73 million increase in accounts receivable, a $25 million decrease in accounts payable, and a $9 million decrease in accrued and other current liabilities, partially offset by an increase of $16 million in deferred revenue. These cash outflows were primarily due to timing of customer and vendor payments.
Current wording
For the six months ended June 30, 2024, net cash provided by operating activities was $349 million, which consisted ofnet income of $191 million, adjusted for certain non-cash items of $216 million, and net cash outflows from changes in operating assets and liabilities of $58 million. The non-cash items primarily consisted of stock-based compensation expense of $145 million, deferred income taxes of $27 million, depreciation and amortization expense of $24 million, and provision for bad debt of $12 million. The net cash outflows from changes in our operating assets and liabilities were primarily due to a $49 million increase in accounts receivable, a $22 million increase in prepaid expenses and other assets, a $16 million decrease in accounts payable, partially offset by a $20 million increase in accrued and other liabilities andan $18 million increase in deferred revenue. The changes in working capital were primarily due to growth of our business, which resulted in an increase in revenue and accounts receivable and increased spend related to the usage of software subscriptions for hosting arrangements.
Previous wording
For the three months ended March 31, 2023, net cash provided by operating activities was $70 million, which consisted ofnet income of$128 million, adjusted for certain non-cash items of$31 million, and net cash outflows from changes in operating assets and liabilities of$89 million. The non-cash items primarily consisted of depreciation and amortization expense of$11 million, deferred income taxes of $6 million, and stock-based compensation expense of$5 million. The net cash outflows from changes in our operating assets and liabilities were primarily due to a$54 million decrease in accounts payable, a$50 million decrease in accrued and other current liabilities, and an$11 million increase in accounts receivable, partially offset by a$18 million increase in deferred revenue and an$11 million decrease in prepaid expenses and other assets. These cash outflows were primarily due to timing of customer and vendor payments.
Current wording
For the six months ended June 30, 2023, net cash provided by operating activities was $242 million, which consisted ofnet income of$242 million, adjusted for certain non-cash items of$58 million, and net cash outflows from changes in operating assets and liabilities of$58 million. The non-cash items primarily consisted of depreciation and amortization expense of$22 million, deferred income taxes of $18 million, stock-based compensation expense of$9 million, provision for bad debt of $9 million, and amortization of operating lease right-of-use assets of $7 million. The net cash outflows from changes in our operating assets and liabilities were primarily due to$97 million decrease in accrued and other current liabilities,$41 million decrease in accounts payable, and a$13 million decrease in other long-term liabilities, partially offset by a$69 million decrease in accounts receivable, a $20 million increase in deferred revenue, and an$11 million decrease in prepaid expenses and other assets. These cash outflows were primarily due to growth in our business partially offset by timing of vendor payments.
Previous wording
For the three months ended March 31, 2023, net cash provided by investing activities was $42 million, comprised primarily of maturities of marketable securities of $51 million, partially offset by purchases of property and equipment, including capitalized internal-use software of$9 million.
Current wording
For the six months ended June 30, 2024, net cash provided by investing activities was flat, comprised primarily of purchases of marketable securities of $44 million, offset by purchases of property and equipment, including capitalized internal-use software of $38 million and purchases of marketable securities of $5 million.
Previous wording
For the three months ended March 31, 2024, net cash provided by investing activities was $13 million, comprised primarily of maturities of marketable securities of $28 million, partially offset by purchases of property and equipment, including capitalized internal-use software, of $14 million.
Current wording
For the six months ended June 30, 2023, net cash provided by investing activities was $89 million, comprised of maturities of marketable securities of $191 million, partially offset by purchases of marketable securities of $80 million and purchases of property and equipment, including capitalized internal-use software of$22 million.
Previous wording
For the three months ended March 31, 2024, net cash used in financing activities was $750 million, comprised primarily of repurchases of common stock of $715 million and taxes paid related to net share settlement of equity awards of $83 million, partially offset by proceeds from exercise of stock options of $49 million.
Current wording
For the six months ended June 30, 2024, net cash used in financing activities was $1,055 million, comprised of repurchases of common stock of $1,040 million and taxes paid related to net share settlement of equity awards of $89 million, partially offset by proceeds from the exercise of stock options of $74 million.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The increase in advertising and other revenue during the first six months of 2024, compared to the same period of 2023, was primarily driven by an increase in advertising volume, partially offset by changes in spend by certain of our brand partners in response to macroeconomic uncertainty and changes in our brand partners’ businesses and performance.
Current report — wording carried from elsewhere
The increase in cost of revenue during the second quarter of 2024, compared to the same quarter of 2023, was primarily due to an increase of $8 million in credit card processing fees and $6 million in customer success and professional services costs, partially offset by a decrease of $5 million in payment chargebacks.
Current report — wording carried from elsewhere
The increase in gross profit during the first six months of 2024, compared to the same period of 2023, was primarily driven by the increase in transaction revenue due to the factors described above. Gross margin during the first six months of 2024, compared to the same period of 2023, remained flat.
Current report — wording carried from elsewhere
The increase in sales and marketing expense during the second quarter of 2024, compared to the same quarter in 2023, was primarily due to an increase of $21 million in compensation costs, primarily driven by an increase in stock-based compensation expense, and an increase of $7 million in marketing costs.
Current report — wording carried from elsewhere
For thesix months ended June 30, 2023, net cash used in financing activities was not material.