Maplebear Inc.

Description of Business

Maplebear Inc., doing business as (“DBA”) Instacart (the “Company”), was incorporated in Delaware on August 3, 2012 and is headquartered in San Francisco, California. The Company is a diversified technology business that operates a technology platform that enables connections and transactions primarily among retailers, end users, advertisers, and shoppers largely throughout the United States and Canada. End users are provided the ability to transact with retailers for grocery and non-grocery items and with shoppers to pick and deliver the items on the end user’s behalf. Retailers contract with the Company to have their goods available for search, selection, and purchase, generally for a percentage of the total purchase value from the sale of goods, on a fee per transaction basis, or some combination thereof. Advertisers have the opportunity to purchase Sponsored Product ads, display ads, coupons, and a variety of other online advertising services. Shoppers, who are independent contractors, pick and deliver orders using the Company’s technology platform for fulfillment or delivery service opportunities primarily on a fee per batch basis. The Company also sells software-as-a-service offerings primarily targeted at retailers and charges fees for such offerings.

Initial Public Offering

On September 21, 2023, the Company completed its initial public offering (“IPO”) in which it issued and sold 14,100,000 shares of its common stock at an IPO price of $30.00 per share. The Company received net proceeds from the IPO of $392 million after deducting underwriting discounts and offering costs. Immediately subsequent to the closing of the IPO, the Company issued and sold 5,833,333 shares of its Series A redeemable convertible preferred stock in a private placement at $30.00 per share and received $175 million in proceeds.

In connection with the effectiveness of the Company’s registration statement on Form S-1 filed under the Securities Act of 1933, as amended (the “Securities Act”), in connection with the Company’s IPO, all outstanding exchangeable shares of the Company’s subsidiary, Aspen Merger Corp. (“Aspen”), were exchanged into 688,017 shares of non-voting common stock. Immediately prior to the closing of the IPO, all then-outstanding shares of redeemable convertible preferred stock were converted into 167,691,838 shares of voting common stock, and all outstanding shares of non-voting common stock and shares of non-voting common stock underlying outstanding equity awards and warrants, were converted into shares of voting common stock. In connection with the IPO, upon the filing and effectiveness of the Company’s Amended and Restated Certificate of Incorporation (the “Restated Certificate”), all outstanding shares of voting common stock and shares of voting common stock underlying outstanding equity awards were reclassified into an equivalent number of shares of common stock. In addition, the Restated Certificate authorized 2,030,000,000 shares of capital stock, consisting of 2,000,000,000 shares of common stock and 30,000,000 shares of preferred stock.

Basis of Presentation

The accompanying consolidated financial statements include those of the Company and its wholly-owned subsidiaries, after elimination of all intercompany accounts and transactions. The Company has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Segment Information

Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s chief executive officer is the Company’s CODM. The CODM reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company hasone operating and reportable segment. Geographic information is included in Note 3 — Revenue and Note 6 — Property and Equipment, Net. See further information in Note 17 — Segment Information.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting periods covered by the financial statements and accompanying notes. These judgments, estimates, and assumptions are used for, but not limited to, (i) revenue recognition, including revenue-related reserves, (ii) legal and other loss contingencies, and (iii) income taxes. The Company determines its estimates and judgments based on historical experience and on various other assumptions that it believes are reasonable under the circumstances. However, actual results could differ from these estimates, and these differences may be material to the consolidated financial statements.

The Company has considered the impacts of macroeconomic trends affecting the Company’s markets and industry and consumer shopping habits, such as inflation and interest rate fluctuations, the effects of supply chain challenges, the impact of trade policies enacted or proposed by the United States, such as tariffs or other trade restrictions, and uncertainty related thereto, geopolitical conflicts, regulatory changes, uncertainty regarding an economic recession and its impact on consumer behavior, and the effects of severe weather patterns on the assumptions and inputs supporting certain of the Company’s estimates, assumptions, and judgments. The level of uncertainties and volatility in the global financial markets and economies, as well as the uncertainties related to these macroeconomic factors, geopolitical environment, and their effects on the Company’s operations and financial performance, means that these estimates may change in future periods as new events occur and additional information is obtained.

Rounding

Amounts presented in the consolidated financial statements and accompanying footnotes have been rounded based on their actual values, including totals and subtotals. As a result, totals and subtotals may not equal the sum of individual line items shown. All underlying calculations, including percentages, are based on unrounded amounts.

Fair Value of Financial Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The accounting guidance describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value.

The three-level hierarchy for fair value measurements is defined as follows:

The Company’s financial instruments consist primarily of cash equivalents, marketable securities, accounts receivable, accounts payable, and accrued and other current liabilities. The carrying amounts of the Company’s cash equivalents, accounts receivable, accounts payable, and accrued and other current liabilities approximate fair value due to their short maturities. Refer to Note 4 — Fair Value Measurements for further information related to cash equivalents and marketable securities.

Foreign Currency

The Company’s reporting currency is the U.S. dollar. The Company determines the functional currency for each of its foreign subsidiaries by reviewing their operations and currencies used in their primary economic environments. The majority of the Company’s foreign subsidiaries’ functional currency is the local currency of their respective country. Transactions denominated in currencies other than the functional currency are remeasured to the functional currency at the exchange rate on the transaction date. Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured at period-end using the period-end exchange rate. Gains and losses resulting from remeasurement are recorded in the consolidated statements of operations. Subsidiaries’ assets and liabilities with non-U.S. dollar functional currencies are translated at the period-end rate. Accumulated deficit and other equity items are translated at historical rates, and revenue and expenses are translated at average exchange rates during the period. Gains and losses resulting from the translation of the consolidated balance sheets are recorded as a component of accumulated other comprehensive loss.

Net foreign exchange transaction and remeasurement gains and losses were immaterial for the years ended December 31, 2023, 2024, and 2025.

Business Combinations

Business combinations are accounted for under the acquisition method of accounting. This method requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Management’s estimates of fair value are based upon assumptions believed to be reasonable but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the consolidated statements of operations. Acquisition costs, consisting primarily of third-party legal and consulting costs, are expensed as incurred.

Cash and Cash Equivalents

Cash includes demand deposits with banks or financial institutions as well as cash in transit from payment processors. Cash in transit from payment processors was $108 million and $73 million as of December 31, 2024 and 2025, respectively. The Company considers all highly-liquid investments purchased with an original or remaining maturity of 90 days or less at the date of purchase to be cash equivalents. Cash equivalents consist of investments in money market funds, commercial paper, and U.S. government and government agency debt securities.

Restricted Cash and Cash Equivalents

The Company has certificates of deposit that collateralize unconditional, irrevocable letters of credit. The letters of credit are held as security for several of the Company’s operating leases and for corporate insurance and disability policies, certain of which are renegotiated on an annual basis. As of December 31, 2024 and 2025, these letters of credit vary in term and have expiration dates through June 2028. The Company has classified these certificates of deposit within restricted cash and cash equivalents, current or noncurrent, on the consolidated balance sheets based on the underlying maturity date of these letters of credit.

Beginning in November 2023, the Company was required to maintain funds in a depository account in favor of a payment card issuer. The withdrawal or general use of these funds is legally restricted. As of December 31, 2024 and 2025, the Company maintained $151 million and $168 million in the depository account, respectively. These amounts are included within restricted cash and cash equivalents, current, on the consolidated balance sheets.

Accounts Receivable and Allowance

The Company’s accounts receivable primarily consists of retailer and advertiser obligations due under normal trade terms and is reported net of allowance. The Company generally collects the gross transaction amount for each order and remits the purchase value of the related goods to the retailer at the retailers’ point-of-sale. In certain cases, the gross transaction amount is partially or completely collected by the retailer from the end user which the Company later recoups from the retailer. Such amounts are included within accounts receivable, net on the consolidated balance sheets and totaled $471 million and $440 million as of December 31, 2024 and 2025, respectively.

The Company maintains an allowance for credit losses for accounts receivable, which is recorded as an offset to accounts receivable, and changes in this allowance are recorded within general and administrative expense in the consolidated statements of operations. The Company assesses collectability by reviewing accounts receivable on a collective basis when similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. Accounts receivable write-offs were $23 million, $19 million, and $15 million during the years ended December 31, 2023, 2024, and 2025, respectively.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentration risk consist principally of cash and cash equivalents, restricted cash and cash equivalents, marketable securities, and accounts receivable. The Company’s cash is held with multiple financial institutions in the United States, for which the balances are regularly in excess of federally insured limits, and in foreign institutions outside of the United States, for which the balances are immaterial. The Company’s investments consist primarily of commercial paper, U.S. government and government agency debt securities, and corporate debt securities that management believes are of high credit quality.

Marketable Securities

Marketable securities consist primarily of commercial paper, corporate debt securities, and U.S. government and government agency debt securities. The Company invests in a diversified portfolio of marketable securities and limits the concentration of its investments in any particular security. Marketable securities with original maturities at the date of purchase of 90 days or less are included within cash and cash equivalents, and marketable securities with original maturities greater than 90 days, but less than or equal to one year, are included within short-term marketable securities on the consolidated balance sheets. Marketable securities with original maturities as of the balance sheet date greater than one year are included within long-term marketable securities on the consolidated balance sheets. The Company determines the appropriate classification of marketable securities at the time of purchase. Marketable securities are classified as available-for-sale securities and are carried at fair value on the consolidated balance sheets, with all unrealized gains and losses, net of tax except for credit-related impairment losses, recorded as a component of accumulated other comprehensive loss.

The Company evaluates its marketable securities with unrealized loss positions for impairment by assessing if they are related to deterioration in credit risk and whether the entire amortized cost basis of the security will be recovered, the intent to sell, and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their cost basis. Credit-related impairment losses, not to exceed the amount that fair value is less than the amortized cost basis, are recognized through an allowance for credit losses with changes in the allowance for credit losses recorded in the consolidated statements of operations.

No impairment losses related to marketable securities have been recognized during the years ended December 31, 2023, 2024, or 2025. Any unrealized losses on available-for-sale debt securities that are attributed to credit risk are recorded to earnings through an allowance for credit losses. Unrealized losses on available-for-sale debt securities were immaterial during the years ended December 31, 2023, 2024, and 2025 andno allowance for credit losses was recorded. For the purposes of computing realized and unrealized gains and losses, the cost of investments sold is based on the specific-identification method. Interest on marketable securities is included within interest income in the consolidated statements of operations.

Property and Equipment, Net

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the remaining lease term or the estimated useful life. Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation are removed from the consolidated balance sheets and the resulting gain or loss is reflected within operating expenses in the consolidated statements of operations.

Capitalized Internal-Use Software

Certain costs of platform and other software applications developed for internal use are capitalized and presented as a component of property and equipment, net on the consolidated balance sheets. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality and will expense costs incurred for maintenance and minor upgrades and enhancements. Capitalized costs are amortized using the straight-line method over the estimated useful life of the software once it is ready for its intended use. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.

Goodwill and Intangible Assets, Net

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets primarily consist of developed technology and customer relationships acquired in business combinations and patents purchased from third parties. Intangible assets resulting from the acquisition of entities are accounted for using the acquisition method of accounting based on management’s estimate of the fair value of assets received. Intangible assets are amortized over the estimated useful lives in a pattern that most closely matches the timing of their economic benefits. The Company reviews intangible assets for impairment under the long-lived asset model described below.

Goodwill is not subject to amortization but is tested for impairment on an annual basis, performed in the fourth quarter of each year, or whenever events or changes in circumstances indicate the carrying value of the reporting unit may be in excess of the reporting unit’s fair value. Goodwill is tested for impairment at the reporting unit level by first assessing the qualitative factors to determine whether it is more likely than not that the fair value of the Company’s single reporting unit is less than its carrying amount. Qualitative indicators assessed include consideration of macroeconomic, industry, and market conditions, the Company’s overall financial performance, and personnel or strategy changes. Based on the qualitative assessment, if the Company determines that it is more likely than not that the Company’s single reporting unit’s fair value is less than its carrying amount, a quantitative analysis is performed by comparing the fair value of the Company’s single reporting unit to its carrying value. Any excess of the carrying amount of goodwill over the fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. The Company may also elect to perform a quantitative analysis instead of starting with a qualitative approach.

No impairment losses have been recognized during the years ended December 31, 2023 or 2024. Impairment losses related to intangible assets during the year ended December 31, 2025 were immaterial.

Impairment of Long-Lived Assets

The Company evaluates intangible assets and long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets or asset group (collectively “asset group”) may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions, or other events that indicate an asset group’s carrying amount may not be recoverable. The Company measures the recoverability of the asset group by comparing the carrying amount of such asset groups to the future undiscounted cash flows it expects the asset group to generate. If the Company considers the asset group to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset group exceeds its fair value. The Company reviews the impairment of its operating lease right-of-use assets consistent with the approach applied for other long-lived assets. No material impairment losses related to long-lived assets have been recognized during the years ended December 31, 2023 or 2024. Impairment losses related to long-lived assets during the year ended December 31, 2025 was $21 million.

Advances from Payment Card Issuer

A payment card issuer may advance funds required to settle transactions for a short period, generally one business day, on an interest-free basis. Such advances from the payment card issuer are included within accrued and other current liabilities on the consolidated balance sheets.

Legal Contingencies

The outcomes of the Company’s legal proceedings are inherently unpredictable and subject to significant uncertainties. The Company records a liability for legal contingencies when the Company believes that it is both probable that a loss has been incurred and the amount can be estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in the consolidated financial statements. If the Company determines that a loss is either probable or reasonably possible, but the loss or range of loss cannot be estimated, the Company discloses that fact in the consolidated financial statements. Until the final resolution of legal matters, there may be an exposure to a material loss in excess of the amount recorded. Legal fees are expensed as incurred.

Insurance Reserves

The Company uses third-party insurance that include deductibles to insure against auto liability related to bodily injury, physical damage, and uninsured and underinsured motorists, and workers’ compensation. The insurance reserve reflects estimated liabilities arising from accidents that have occurred but have not been resolved, including reported claims (case reserves), incurred but not reported claims, expected development on reported claims, and claims that may have reopened. The determination of the insurance reserve is based on generally accepted actuarial reserving techniques applied to historical claim and loss experience and other available information. The Company utilizes assumptions based on actuarial judgments that relate to certain claim and loss development factors, which include, for example, the development time frame and expected loss rates and may also include assumptions regarding claim frequency and severity trends and changes in the external environment. Certain claims may take multiple years to settle, and it is reasonably possible that the Company’s estimate of the ultimate cost of these claims could change in the near term. The Company periodically reviews the insurance reserve and adjusts as experience develops or when new information becomes known. The adjustments are recorded within cost of revenue in the consolidated statements of operations. The insurance reserves are inherently complex and subjective, and as such, it is possible that the actual loss and loss adjustment expenses can be materially different than the amount recorded. The Company includes insurance reserves within accrued and other current liabilities on the consolidated balance sheets.

Revenue Recognition

The Company offers a technology platform that connects multiple parties to facilitate transactions. The Company’s revenue consists of transaction revenue and advertising and other revenue. The Company primarily identifies end users, retailers, and advertisers as the Company’s customers.

The Company primarily generates its revenue from fees received from end users and amounts paid by retailers for its transaction service and is net of any coupons, incentives, and refunds, as well as payments to shoppers. The Company enters into Terms of Service and Services Agreements with its end users and retailers, respectively. These agreements provide a framework for transactions between the Company’s end users and shoppers for fulfillment services. The Company separately enters into agreements with shoppers for their use of the technology platform through which shoppers offer fulfillment services to end users.

The Company’s primary performance obligation to the retailer is to connect retailers with end users for the provision of goods by the retailer to the end user. The Company’s transaction service may also include lead generation, facilitation of payments, and other activities to facilitate satisfaction of the performance obligation. The Company’s sole performance obligation to the end user is to arrange for a shopper to provide fulfillment services to the end user. Each performance obligation is satisfied at a point in time, upon the transfer of control of the services.

As multiple parties are involved in a transaction between end users, retailers, and shoppers, judgment is required in determining whether the Company is the principal or agent for the goods and services provided to the end user or retailer in a transaction. The Company presents revenue on a gross or net basis based on whether it controls the goods or services provided to the end user or retailer and is the principal (gross), or the Company arranges for other parties to provide the goods or service to the end user or retailer and is an agent (net):

•Goods. The Company acts as an agent of the retailer in the sale of goods to the end user as the Company does not control the goods at any time before they are transferred to the end user. The Company does not pre-purchase or otherwise obtain control of the goods and only benefits from its fee for arranging for the sale of goods by the retailer to the end user. The Company also does not take inventory risk and does not generally have discretion over pricing of the goods.

•Fulfillment services. The Company acts as an agent of the end user in the procurement of fulfillment services from shoppers who are independent contractors. The Company does not control the fulfillment services provided as the Company does not pre-purchase services or otherwise direct shoppers to perform fulfillment services on the Company’s behalf. The Company does not promise fulfillment services to end users at any time. In addition, the Company is not primarily responsible for and does not have inventory risk for the fulfillment services. Although the Company has discretion in establishing the fees paid for the services, this indicator does not alone provide persuasive evidence that the Company controls the fulfillment services.

As an agent, the Company recognizes as revenue the net amount it retains from both the retailer and the end user from a transaction after remitting the purchase value of the goods to the retailer and amounts owed to the shopper for their services.

In limited situations, through the third quarter of 2024, the Company utilized in-store shoppers to provide certain fulfillment activities for end users with the related costs of these employees recorded within cost of revenue in the consolidated statements of operations.

Taxes collected from end users on behalf of governmental authorities as part of the transaction are recorded on a net basis and excluded from revenue.

End Users

The Company generates revenue from end users through service and delivery fees in exchange for arranging fulfillment services using the Company’s technology platform. For each transaction, the Company processes the entire amount of the transaction (i.e., total purchase value of the goods, delivery fees, service fees, applicable sales taxes, and tips) received from the end user and recognizes revenue on a net basis after settling the purchase value of the goods to the retailer and the amounts owed to the shoppers for fulfillment services. Any tips received from the end user for the benefit of shoppers are passed through to the shoppers and are not reflected as revenue or expenses of the Company.

End users can also purchase monthly or annual Instacart+ memberships, which entitle the end user to unlimited $0 delivery fees on orders over a certain size, and other exclusive benefits. Membership fees are paid at commencement of the subscription term. Revenue from membership fees is recognized ratably over the monthly or annual subscription period.

Retailers

The Company generates revenue from retailers through service fees in exchange for connecting the retailer with end users using the Company’s technology platform. The services can be provided to retailers either through the Company’s mobile application or website or through dedicated websites created exclusively for the retailers. The Company recognizes revenue as either a per transaction fee, a percentage of the total purchase value from the sale of goods, the difference in price between amounts charged to end users for goods and the actual settlement price to the retailer for those goods, or a combination thereof. Payment for the Company’s services is generally due immediately to 45 days upon receipt of invoice.

Revenue Share

The Company generates revenue from partnerships with payment card issuers whereby shoppers use cards issued by the payment card issuers to pay for goods at the retailers’ point-of-sale. The Company earns a revenue share from the payment card issuers for transactions processed through these payment cards and records these amounts in the same period the underlying transaction takes place.

Coupons, Refunds, and Incentives

Coupons, refunds, and incentives offered to end users, shoppers, and retailers arise due to the Company’s business practices. Coupons and incentives provided to end users and shoppers, respectively, are recorded as a reduction of revenue if the Company does not receive a distinct good or service or cannot reasonably estimate the fair value of the good or service received in exchange for the coupon or incentive. In certain cases, refunds are provided to retailers and end users primarily in the form of price concessions.

The Company offers several types of coupons and incentives to encourage use of the Company’s services. These are offered in various forms that include:

•Appeasement credits. These coupons are offered to end-users to ensure the satisfaction of the Company’s end user. The Company reduces the revenue recognized in each period by the expected value of the related refunds and appeasement credits.

•Promotional coupons. These coupons are offered to end users to acquire, reengage, or generally increase an end user’s use of the service and are recognized as a reduction of revenue at the time they are redeemed by the end user.

•Referral bonus coupons. These coupons are earned when an existing end user or shopper (“the referrer”) refers a new end user or shopper (“the referred”) to the Company, and the referred places their first transaction through the Company’s technology platform. These referrals are typically paid in the form of a credit given to both the referrer and the referred. The Company records a liability for unused referrer coupons and the corresponding expense as sales and marketing expense at the time the referral is earned by the referrer because the coupon represents either consideration payable to a customer or a shopper in exchange for a distinct good or service (i.e., the referral). Coupons granted to the referred are recorded as incurred as a reduction in the transaction price when the referred places their first transaction.

Refunds are accounted for as variable consideration and are recorded as a reduction of revenue. There is limited uncertainty in estimation given the short duration. In certain cases, end user fees received may be less than the amount of refunds, coupons, incentives, and shopper payments applicable to a particular transaction. This shortfall is recorded within revenue in the consolidated statements of operations.

The Company generates revenue from the sale of advertising to companies that are interested in reaching end users. The advertising services include Sponsored Product ads, display ads, coupons, and a variety of other online advertising services. The Company’s performance obligation is to continually promote a brand over the duration of the contractual term, which is typically less than one year. The Company primarily recognizes revenue in the amount that it has the right to invoice as advertising services are rendered, which occurs upon delivery of clicks, upon delivery of impressions, over the contract term on a fixed fee basis, or upon redemptions of coupons. For advertising arrangements that involve third parties, the Company records advertising revenue on a gross or net basis based on whether it acts as a principal or agent in the transaction, which is assessed on a contract by contract basis. When the Company acts as the principal and controls the services provided to the brand partner, it records revenue on a gross basis, recognizing fees from the advertiser as revenue and related payments to the publisher as cost of revenue. When the Company acts as an agent and does not control the services, it records revenue on a net basis, representing only the net amount received from the brand partner after payments to the publisher. The Company records revenue on a gross or net basis based on whether it controls the services provided to the advertiser.

The Company also offers software subscription services to certain partners that enhance the omnichannel shopping experience and generates an amount of other revenue from software subscriptions and other goods and services that are not material. Revenue for the software subscription services is recognized over the subscription period as services are provided. Payment for the Company’s advertising and other services is generally due 30 to 90 days after receipt of invoice.

Practical Expedients

The Company has no significant financing components in its contracts with customers.

The Company applies a practical expedient to costs to obtain these contracts and expenses them as incurred as the amortization period would have been one year or less.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice when that amount corresponds directly with the value of services performed, and (iii) variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied distinct service that forms part of a single performance obligation.

Cost of Revenue

Cost of revenue primarily consists of third-party payment processing fees, depreciation expense and amortization expense of capitalized internal-use software and technology-related intangible assets, hosting fees, insurance costs attributed to fulfillment, payments to publishers, and expenses related to cancellations. Compensation costs for the Company include salaries, taxes, benefits, bonuses, and stock-based compensation expense.

Operations and Support Expense

Operations and support expense primarily consists of compensation costs for employees who support our operations, costs to attract and onboard new shoppers, expenses related to software and subscriptions, and depreciation and amortization expense. Compensation costs for the Company include salaries, taxes, benefits, bonuses, and stock-based compensation expense.

Research and development expense primarily consists of compensation costs for our engineering employees, costs related to subscriptions and software, hosting fees attributed to research and development, third-party consulting fees, and depreciation and amortization expense. Compensation costs for the Company include salaries, taxes, benefits, bonuses, and stock-based compensation expense.

Sales and marketing expense primarily consists of advertising expenses, such as paid marketing, compensation costs for sales and marketing employees, third-party consulting fees, amortization expense of customer relationship intangible assets, and depreciation expense. Compensation costs for the Company include salaries, taxes, benefits, bonuses, and stock-based compensation expense.

Advertising expenses primarily include marketing activities such as online advertising, which are expensed as incurred. The Company incurred advertising expenses of $388 million, $457 million, and $485 million for the years ended December 31, 2023, 2024, and 2025, respectively, which is included within sales and marketing expense in the consolidated statements of operations.

General and administrative expense primarily consists of compensation costs for administrative employees, including finance and accounting, human resources, policy, and legal; legal, regulatory, and policy expenses; third-party consulting fees; depreciation expense; amortization expense of patents and trademarks; and taxes.

Compensation costs for the Company include salaries, taxes, benefits, bonuses, and stock-based compensation expense.

Operating Leases

The Company determines if a contract is or contains a lease at inception of the arrangement based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset and whether it has the right to direct the use of an identified asset in exchange for consideration, which relates to an asset that the Company does not own. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. Right-of-use assets are recognized based on the lease liability, adjusted for lease incentives received. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate (“IBR”) because the interest rate implicit in most of the Company’s leases is not readily determinable. The IBR is a hypothetical rate based on information available at the lease commencement date, including the Company’s understanding of what interest rate the Company would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized loan, based on the Company’s credit rating and other factors. The Company’s leases typically contain rent escalations over the lease term. The Company recognizes expense for these leases on a straight-line basis over the lease term.

Lease payments may be fixed or variable; however, only fixed payments or in-substance fixed payments are included in the Company’s lease liability calculation. Variable lease payments may include costs such as common area maintenance, utilities, or other costs. Variable lease payments are recognized within operating expenses in the consolidated statements of operations in the period in which the obligation for those payments is incurred.

The Company does not recognize short-term leases (original expected term of one year or less) on the consolidated balance sheets, and related lease payments are recognized as an expense over the lease term on a straight-line basis. The Company’s lease agreements generally do not contain any residual value guarantees or restrictive covenants. The Company did not have any finance leases for the years ended December 31, 2023, 2024, or 2025.

Stock-Based Compensation

The Company measures compensation expense for all stock-based awards based on the estimated fair value of the awards on the date of grant. Stock-based compensation expense is recognized ratably over the period during which an employee is required to provide service.

Stock Option Awards

The Company estimates the fair value of stock options granted to employees using the Black-Scholes option-pricing model, which requires the input of subjective assumptions, including (1) the fair value of common stock, (2) the expected stock price volatility, (3) the expected term of the award, (4) the risk-free interest rate, and (5) expected dividends. The Company accounts for forfeitures when they occur. The Black-Scholes assumptions are summarized as follows:

•Fair value of common stock. After the Company’s IPO, the fair value is determined using the closing price of the Company’s common stock.

•Expected volatility. As a result of the lack of historical and implied volatility data of the Company’s common stock, the expected stock price volatility has been estimated based on the historical volatilities of a specified group of companies in its industry for a period equal to the expected life of the option. The Company selected companies with comparable characteristics to it, including enterprise value, risk profiles, and position within the industry and with historical share price information sufficient to meet the expected term of the stock options. The historical volatility data has been computed using the daily closing prices for the selected companies.

•Expected term. The expected term of stock options represents the weighted-average period the stock options are expected to remain outstanding and is based on the stock options’ vesting terms and contractual terms, estimated employee termination behavior, and potential future stock price outcomes.

•Risk-free rate. The expected risk-free rate assumption is based on the U.S. Treasury instruments whose term is consistent with the expected term of the stock options.

•Expected dividend yield. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid dividends and does not expect to do so in the foreseeable future, and as such, the dividend yield has been estimated to be zero.

The Company recognizes compensation expense for employee stock option awards with service-based vesting conditions on a straight-line basis over the requisite service period, which is generally four years, based on the fair value at grant date using the Black-Scholes option pricing model.

Restricted Stock Units and Unvested Restricted Stock

Compensation expense for restricted stock units (“RSUs”) granted with only service-based vesting conditions is recognized on a straight-line basis over the requisite service period, which is generallytwo orfour years, based on the closing price of the Company’s common stock on the date of grant.

The Company, at times, grants unvested restricted stock to employees of certain acquired companies in lieu of cash consideration. These awards are generally subject to continued post-acquisition employment. Therefore, the Company accounts for these awards as post-acquisition stock-based compensation expense. The Company recognizes stock-based compensation expense equal to the grant date fair value of the restricted stock on a straight-line basis over the requisite service period of the awards, which is generally three years.

Performance-Based Awards

The Company has granted RSUs and restricted stock that vest only upon satisfaction of both service-based and performance-based vesting conditions. The service-based vesting condition for the majority of RSUs and restricted stock is satisfied over a period ofthree tofour years. The performance-based vesting condition was satisfied upon a qualifying liquidity event defined as the earlier of (i) a combination or disposition transaction provided that such transaction (or series of transactions) qualifies as a change of control, and (ii) the effective date of a registration statement of the Company for an IPO (“liquidity event-based vesting condition”). The liquidity event-based vesting condition was satisfied upon the effective date of the registration statement on Form S-1 filed under the Securities Act in connection with the Company’s IPO. The Company has also granted RSUs with an additional performance-based vesting condition. The unvested restricted stock is subject to the Company’s right of repurchase. Refer to Note 12 — Stockholders’ Equity for further information.

The Company records stock-based compensation expense for performance-based RSUs and restricted stock on an accelerated attribution method over the requisite service period, which is generally three tofour years, and only if performance-based vesting conditions are considered probable to be satisfied.

Market-Based Awards

The Company has granted stock options and RSUs to certain executives to purchase shares of the Company’s voting common stock and non-voting common stock, as applicable, under its 2013 Equity Incentive Plan (the “2013 Plan”) and its 2018 Equity Incentive Plan (the “2018 Plan”), each of which vest only upon the satisfaction of market-based vesting conditions in addition to either service-based vesting conditions or both service-based and performance-based vesting conditions. The market-based vesting conditions are satisfied upon the Company’s achievement of specified future Company valuation amounts, as determined upon the volume-weighted average closing price of the Company’s common stock over a 30-day trading period, or certain stock price goals. The performance-based vesting condition was satisfied upon the effective date of the registration statement on Form S-1 filed under the Securities Act in connection with the Company’s IPO.

For market-based equity awards, the Company determines the grant date fair value utilizing a Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of a qualifying event, and expected Company valuation amounts.

The Company records stock-based compensation expense for market-based equity awards on an accelerated attribution method over the requisite service period, and for awards containing performance-based vesting conditions, only if performance-based vesting conditions are considered probable of being satisfied. The Company determines the requisite service period by comparing the derived service period to achieve the market-based vesting condition and the explicit time-based service period, using the longer of the two service periods as the requisite service period.

Share Repurchase

Share repurchases may be made through a variety of methods, including open market purchases, privately negotiated transactions, or accelerated share repurchases. Share repurchases are recorded on the trade date. When shares are retired, the value of repurchased shares is deducted from stockholders’ equity through common stock with the excess over par value recorded to accumulated deficit.

Income Taxes

The Company is subject to income taxes in the United States, Canada, and other foreign jurisdictions. The Company records a provision for income taxes using the asset and liability method. Under this method, the Company recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The Company records a valuation allowance to reduce its deferred tax assets to the net amount that it believes is more likely than not to be realized.

The Company recognizes tax benefits from uncertain tax positions only if the Company believes that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The Company continuously reviews issues raised in connection with ongoing examinations and open tax years to evaluate the adequacy of its tax liabilities. The Company’s policy is to adjust these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on its financial condition and results of operations. The provision for income taxes includes the effects of any reserves that management believes are appropriate, as well as the related interest and penalties.

Net Income (Loss) Per Share

The Company calculates basic and diluted net income (loss) per share attributable to common stockholders in conformity with the two-class method required for companies with participating securities, as applicable. The Company considered all series of the redeemable convertible preferred stock issued prior to December 31, 2022 to be participating securities as the holders were entitled to receive non-cumulative dividends on a pari passu basis in the event that a dividend was paid on common stock. The two-class method requires earnings available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all earnings for the period had been distributed. Under the two-class method, net loss attributable to common stockholders was not allocated to the redeemable convertible preferred stock as the holders of redeemable convertible preferred stock did not have a contractual obligation to share in losses. Immediately prior to the completion of the IPO, all of the Company’s outstanding shares of redeemable convertible preferred stock were automatically converted into 167,691,838 shares of voting common stock, all of which were subsequently reclassified into common stock. The Company’s Series A redeemable convertible preferred stock is not considered a participating security for purposes of calculating net income (loss) per share attributable to common stockholders as the holder is not entitled to participate in undistributed earnings with common stockholders.

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders, adjusted for accretion recognized, as applicable, by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share attributable to common stockholders, adjusted for accretion recognized, as applicable, is computed by giving effect to all potentially dilutive securities outstanding for the period. For periods in which the Company reports net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, because the effect of including potentially dilutive securities is not dilutive.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information on income taxes paid. The Company adopted the provisions of ASU No. 2023-09 on a prospective basis during the year ended December 31, 2025. Refer to Note 13 — Income Taxes for further information.

Recent Accounting Pronouncements Not Yet Adopted

With the exception of those discussed below, the Company reviewed all recently issued accounting pronouncements and concluded they were either not applicable or not expected to have a material impact to the Company’s consolidated financial statements or accompanying footnotes.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated information about certain income statement expense line items on an annual and interim basis. The standard is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, as clarified by ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). Early adoption is permitted and can be applied prospectively or retrospectively. The Company is currently evaluating the impact this standard will have on the consolidated financial statements and accompanying footnotes.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), which provides updated guidance on the capitalization of internal-use software costs. The standard is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual periods. Early adoption is permitted and can be applied prospectively or retrospectively. The Company is currently evaluating the impact this standard will have on the consolidated financial statements and accompanying footnotes.

Disaggregation of Revenue

The following table summarizes the disaggregation of revenue according to type of revenue and is consistent with how the Company evaluates financial performance. The Company believes this depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

Revenue by geographic areas based on bill-to location was as follows:

(1) No individual international country represented 10% or more of the Company’s total revenue for theyears ended December 31, 2023, 2024, or 2025.

The following customers accounted for 10% or more of the Company’s revenue:

• Customer did not represent 10% or more of revenue.

The following customers accounted for 10% or more of the Company’s accounts receivable balance:

Contract Assets and Liabilities

The Company records deferred revenue, which is a contract liability, when the Company receives customer payments in advance of the performance obligations being satisfied on the Company’s contracts. Deferred revenue primarily consists of balances related to Instacart+ memberships. Substantially all of the Company’s deferred revenue as of December 31, 2024 and 2025 is expected to be recognized within a year. During the years ended December 31, 2024 and 2025, the Company recognized revenue of $195 million and $199 million, respectively, from the deferred revenue balance as of December 31, 2023 and 2024.

There were no material contract assets as of December 31, 2024 or 2025.

The following tables summarize assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy:

The Company’s investments in commercial paper, U.S. government and government agency debt securities, and corporate debt securities are classified as Level 2 within the fair value hierarchy because they are valued using inputs other than quoted prices in active markets that are observable directly or indirectly, such as prices obtained from an independent pricing service which may use quoted prices for identical or comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data.

The Series A redeemable convertible preferred stock that was issued during theyear ended December 31, 2023 represented a non-recurring Level 3 financial measurement at issuance. Refer to Note 11 — Redeemable Convertible Preferred Stock for further information.

There were no transfers of financial instruments between Level 1, Level 2, and Level 3 during theyears ended December 31, 2024 or 2025.

For purposes of computing realized gains and losses, the cost of investments sold is based on the specific-identification method. The gross unrealized gains and losses related to the Company’s available-for-sale debt securitiesas of December 31, 2024 and 2025 were immaterial.

The following table summarizes the amortized cost and fair value of the Company’s available-for-sale debt securities with a stated maturity date:

Property and equipment, net of accumulated depreciation and amortization, consisted of the following:

Depreciation expense related to the Company’s property and equipment was $11 million, $8 million, and $6 million for the years ended December 31, 2023, 2024, and 2025, respectively. Amortization expense related to the Company’s internal-use software, which is primarily recorded within cost of revenue in the consolidated statements of operations, was$5 million,$22 million, and$60 million for theyears ended December 31, 2023, 2024, and 2025, respectively.

The Company capitalized $110 million, $91 million, and $98 million of internal-use software costs during theyears ended December 31, 2023, 2024, and 2025, respectively.

Geographic Information

The following table summarizes the Company’s long-lived assets, consisting of property and equipment and operating lease right-of-use assets, net of accumulated depreciation and amortization, by geographic area:

Long-lived assets attributed to the United States, Canada, and other international geographies are based on the country in which the asset is located.

Acquisition of Marlin9 Holdings, Inc.

On April 30, 2025, pursuant to a Stock Purchase Agreement, the Company acquired a 100% ownership interest in Marlin9 Holdings, Inc. which operates as Wynshop (“Wynshop”), a provider of e-commerce retail solutions for grocers and retailers. The acquisition builds upon the Company’s relationships with retail partners and reinforces the Company’s continued commitment to providing retailers with cutting-edge tools and technologies that help drive their business growth.

The purchase consideration was$106 million in cash. The Company has accounted for this acquisition as a business combination. The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition:

Acquisition related costs were immaterial and expensed as incurred and included within general and administrative expense in the consolidated statements of operations.

The preliminary fair value of identified intangible assets and their respective useful lives as at the time of acquisition were as follows:

The overall weighted-average useful life of the identified amortizable intangible assets at the time of acquisition wasten years.

Intangible assets are amortized over the estimated useful lives in a pattern that most closely matches the timing of their economic benefits. The excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the monetization opportunities from the Company’s current and future offerings and the value of the assembled workforce. Goodwill recognized from the acquisition is not deductible for tax purposes.

The estimated fair values of the customer relationships, developed technology, and trademark were determined based on the present value of cash flows to be generated by those existing intangible assets. Management applied significant judgment in determining the fair value of intangible assets, which involved the use of estimates and assumptions including revenue and cash flow forecasts, customer attrition, customer base and growth rates, and discount rates.

The purchase accounting for the acquisition is considered preliminary with respect to certain assets acquired and liabilities assumed. Additionally, deferred tax assets and liabilities and purchase consideration, may be adjusted as the Company continues to gather and evaluate information about circumstances that existed as of the acquisition date. The Company expects to complete the purchase price allocation as soon as practicable, but no later than one year from the acquisition date.

The results of operations of the business combination have been included in the Company’s consolidated financial statements from the date of acquisition. Wynshop’s results of operations for periods prior to the acquisition were immaterial to the Company’s consolidated statements of operations and, accordingly, historical and pro forma disclosures have not been presented.

Goodwill

The changes in the carrying amount of goodwill for the year ended December 31, 2024 were immaterial. The following table summarizes the changes in the carrying amount of goodwill for the year ended December 31, 2025:

Intangible Assets, Net

Intangible assets, net, resulting from business combinations and asset purchases consisted of the following:

Amortization expense totaled $27 million, $26 million, and $25 million for the years ended December 31, 2023, 2024, and 2025, respectively.

As of December 31, 2025, the remaining intangible asset amortization was as follows:

Accrued and other current liabilities were as follows:

(1) Accrued merchant liability primarily includes liabilities to certain retailers for payment of goods.

Leases

The Company’s leases primarily include corporate offices and warehouse space. The lease terms of operating leases vary fromone year tonine years, with expirations through May 2034. The Company has leases that include one or more options to extend the lease term for up tofive years as well as options to terminate the lease withinone year. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. Most of these options to extend or terminate the lease do not create a significant economic incentive and hence are not recognized as part of the Company’s operating lease liabilities and operating lease right-of-use assets. The Company did not modify, enter into, or acquire any material leasing arrangements during the year ended December 31, 2024. In June 2025, the Company amended the lease agreement for its corporate headquarters to terminate certain suites and extend the terms of other suites to 2034. The impact from terminating certain suites was immaterial.

The components of lease costs were as follows:

The weighted-average lease term and discount rate were as follows:

As of December 31, 2025, the future maturities of lease liabilities were as follows:

Sales and Indirect Taxes

The Company pays applicable state, franchise, and other taxes in state and local jurisdictions in which the Company conducts business. In the United States, the Company is under audit by various tax authorities with regard to sales and indirect tax matters. The subject matter of these audits primarily relates to the reporting of sales on behalf of the Company’s third-party sellers or tax treatment applied to the sale of the Company’s services in these jurisdictions. The Company believes it properly accrues and pays taxes according to its understanding of the tax requirements in each taxing jurisdiction; however it is possible that tax authorities may question the Company’s interpretation of taxability. As such, there is a high degree of complexity involved in the interpretation and application of state and local sales and indirect tax rules to the Company’s activities. As a result, the Company maintains a reserve related to potential tax, interest, or penalties that may become due. Significant judgments are made by the Company in estimating these reserves which includes assessing the taxability of goods or services transacted using the Company’s technology platform. The Company maintains such reserves until the respective statute of limitations has passed or upon conclusion of an audit examination with the relevant tax authorities, at which point the tax exposure and related interest and penalties are released. The reserve balance was $16 million and $13 million as of December 31, 2024 and 2025, respectively, and was included within other long-term liabilities on the consolidated balance sheets. The Company recognized a reserve release, net of audit payments, of $35 million, $14 million, and $3 million related to these reserves for the years ended December 31, 2023, 2024, and 2025, respectively. These amounts were recorded within general and administrative expense in the consolidated statements of operations.

Legal Matters

Independent Contractor Classification Matters

The Company operates in several jurisdictions where there have been regulations enacted with respect to methods companies should use to classify workers as either independent contractors or employees, such as California, which enacted California Assembly Bill 5 in 2019. The Company believes that it has properly classified its workers in all jurisdictions in which it operates.

Further, on December 16, 2020, the California state ballot initiative, Proposition 22, which provides a framework that offers legal certainty regarding the status of independent workers offering delivery services in California and protects worker flexibility, the quality of on-demand work, and access to benefits for those who qualify, among other things, became effective. The Company provides appropriate worker benefits and other protections in accordance with Proposition 22, including guaranteed minimum earnings, healthcare subsidies, insurance, and safety trainings. Although the constitutionality of Proposition 22 was subsequently challenged, on July 25, 2024, the California Supreme Court upheld Proposition 22 as constitutional. 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. Further, any future judgments, settlements, or orders issued by a court or governmental body or otherwise in connection with any judicial, administrative, or legal proceeding that results in the Company being prohibited from continuing to engage with independent-contractor shoppers in the manner it currently does would likely result in increases to its costs related to shoppers and decreases in the breadth of its offerings and geographic coverage. Further, if the Company changes its offerings or increases customer fees as a result of the increased costs, such changes may result in lower order volumes, which in turn would have an adverse effect on the Company’s business, financial condition, and results of operations.

The Company has other active legal matters in California and several other jurisdictions, including litigation, government audits, administrative claims, and inquiries, related to its classification of individuals who provide delivery and other fulfillment services as non-employee contractors. These matters involve allegations that certain individuals are misclassified and, as a result, may be due unpaid minimum statutory wages, overtime, expense reimbursement, and certain other payments and protections, among other issues. Courts and agencies handling these matters may rule that the Company cannot engage workers to perform certain tasks, including delivery and other fulfillment services, as independent contractors. In some of these cases, the Company has entered into settlement agreements to resolve the claims without any admission of liability and in others, there is active litigation or proceedings.

The Company has also been, is currently, and may in the future be involved in administrative audits with various state and local enforcement agencies, including audits related to shopper classification, state and local ordinance requirements, and unemployment insurance and workers’ compensation contributions. The Company is currently involved in such audits in several states. The Company believes that it complies with applicable legal requirements and that shoppers are properly classified as independent contractors; therefore, the Company disputes that it is obligated to provide such additional benefits under state law and plans to vigorously contest any adverse assessment or determination. The Company’s chances of success on the merits are still uncertain; however, the Company records a liability within accrued and other current liabilities when it believes that it is both probable that a loss has been incurred and the amount can be estimated. The results of these audits, assessments, or any negotiated agreements with these agencies, may result in additional payments, including settlement payments, penalties, and interest, and such additional amounts could have a material impact on the Company’s business, financial conditions, results of operations, and cash flows.

The Company is also currently involved in several putative class and collective actions, thousands of alleged individual claims, including those brought or threatened to be brought in arbitration or compelled to arbitrate pursuant to its independent contractor agreements, and matters brought, in whole or in part, as representative actions under California’s Private Attorney General Act, Labor Code Section 2698, et seq., alleging that the Company misclassified shoppers as independent contractors and related claims. None of the putative class or collective actions have progressed to or resulted in class certification. Those involving misclassification have either been compelled to individual arbitration or have motions to compel individual arbitration which have been granted and are now pending appeal.

Securities Litigation

On January 25, 2024, a purported stockholder filed suit against the Company and certain of the Company’s current and former officers and directors in the Northern District of California, on behalf of a putative class of purchasers of the

Company’s common stock in its IPO or between September 19, 2023 and October 1, 2023. The complaint alleges violations of Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended in connection with the Company’s IPO, and seeks damages and attorneys’ fees, among other things. An amended complaint also added the underwriters of the Company’s IPO as defendants. On October 29, 2024, the Company filed a motion to dismiss the amended complaint, which the court granted on May 9, 2025 with leave to amend. On May 30, 2025, plaintiffs agreed to dismiss the case with prejudice, without receiving any compensation.

FTC Investigation

In July 2025, staff of the Federal Trade Commission (“FTC”) asserted they had authority to enter into consent negotiations with the Company relating to certain of its marketing and Instacart+ membership program practices. Following extensive discussions with staff of the FTC, the Company agreed to enter into a consent order to conclude the FTC’s investigation, which became final on January 13, 2026. The consent order does not include any admission of liability. Pursuant to the consent order, the Company is required to pay $60 million to the FTC, which was included in accrued and other current liabilities on the consolidated balance sheet as of December 31, 2025, and subsequently paid in January 2026.

Other Litigation Matters

Besides the matters described above, the Company and its subsidiaries are regularly subject to claims, lawsuits, arbitration proceedings, administrative actions, government investigations, and other legal and regulatory proceedings involving unpaid wages, missed breaks, premium or overtime pay, hazard pay, inadequate notice under the Worker Adjustment and Retraining Notification Act or its state equivalent, retaliation, denial of or interference with leave of absence, improper application of our paid time off or other policies, discrimination or harassment based on a protected characteristic, wrongful termination, failure to accommodate a disability, unfair labor practices, personal injury, intellectual property, including patent infringement, property damage, securities and stockholder claims, commercial and contract disputes, unfair competition, marketing claims, consumer protection claims, including auto-renewal practices, pricing, and fees, data protection and privacy, environmental claims, health and safety, appropriate disclosures of worker and customer rights and entitlements, weights and measures, compliance with regulatory requirements, and other matters. In some of these proceedings, claims for substantial monetary damages are asserted against the Company and could result in fines, penalties, compensatory damages, or non-monetary relief. The Company does not believe that these matters will have a material adverse effect upon its operations, cash flows, or financial condition.

To the extent the Company has agreed to settle outstanding claims or where the Company has concluded it is probable that a resolution may be reached at an amount of loss that is estimable, the loss has been recognized within general and administrative expense in theconsolidated statements of operations. During periods where the settled amount is less than the loss reserved or if the Company estimates that an outstanding claim is less than that previously recorded, the Company will recognize a reserve release related to the claims within general and administrative expense in the consolidated statements of operations. During the year ended December 31, 2023, the Company recognized a reserve release related to these claims of$5 million. During the years ended December 31, 2024 and 2025, the Company recognized a loss related to these claimsof $7 million and$106 million, respectively. The actual losses incurred on claims that have not been resolved may differ from the initial estimates of loss, and such differences could be material.

The Company is also subject from time to time to audits by government agencies in the various jurisdictions in which it operates. To the extent the Company is obligated to make payments in these jurisdictions (other than income taxes), the Company has recorded the related expense within general and administrative expense in the consolidated statements of operations. The results of these audits may result in additional payments, penalties, and interest, and such additional amounts could be material.

Indemnifications

The Company has entered into indemnification agreements with certain of the Company’s officers, directors, and current and former employees, and the Company’s certificate of incorporation and bylaws contain certain indemnification obligations. It is not possible to determine the maximum potential loss under these indemnification provisions due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision. To date, no significant costs have been incurred, either individually or collectively, in connection with the Company’s indemnification provisions.

Series A Redeemable Convertible Preferred Stock

Immediately subsequent to the closing of the IPO in September 2023, the Company authorized and issued 5,833,333 shares of Series A redeemable convertible preferred stock at a price of $30.00 per share for proceeds of $175 million. The Company determined the fair value of the Series A redeemable convertible preferred stock at issuance was $175 million, using a Monte Carlo valuation model. The key assumptions used included the closing price of the Company’s common stock on the issuance date of$30.65, an expected term of approximately seven years, an expected volatility of 54%, and a discount for lack of marketability of 35%.

Pursuant to the securities purchase agreement related to the issuance, the Company adopted the Certificate of Designation of Series A redeemable convertible preferred stock, as filed with the Secretary of State of the State of Delaware, setting forth the rights, designations, preferences, limitations, and restrictions applicable to the Series A redeemable convertible preferred stock.

The rights, preferences, and privileges of the Series A redeemable convertible preferred stock are as follows:

Seniority; Liquidation Preference

The Series A redeemable convertible preferred stock, with respect to distribution rights upon the liquidation, winding-up or dissolution of the Company but excluding a change of control, (as described below) ranks (i) senior to the Company’s common stock, (ii) on parity with any class or series of the Company’s capital stock expressly designated as ranking on parity with the Series A redeemable convertible preferred stock, and (iii) junior to any class or series of the Company’s capital stock expressly designated as ranking senior to the Series A redeemable convertible preferred stock. The Series A redeemable convertible preferred stock has a liquidation preference equal to the greater of (i) the Stated Value (as defined below), and (ii) the amount that the holder would be entitled to receive on an as-converted to common stock basis based on the then-applicable Conversion Ratio (as defined below), on the date of such liquidation, winding-up or dissolution. Such liquidation, winding-up or dissolution amounts would be paid out of the Company’s assets legally available for distribution to its stockholders, after satisfaction of debt and other liabilities owed to its creditors and holders of shares of any senior securities and before any payment or distribution is made to holders of any junior securities, including, without limitation, the Company’s common stock.

The Stated Value for the Series A redeemable convertible preferred stock on a given date is defined as the sum of (i) the original issue price of the Series A redeemable convertible preferred stock, automatically increased at an annual rate of 5.0%, compounding on each anniversary of the issue date, through such date, and (ii) on an as-converted to common stock basis, the pro rata portion of any cash dividends or distributions that the Company pays on its common stock.

The Conversion Ratio for the Series A redeemable convertible preferred stock means (i) a number of shares of common stock equal to the quotient of the Stated Value divided by the conversion price, plus (ii) if the product of such number of shares of common stock times the 10-Day VWAP (as defined below) is less than the Stated Value on such date, an additional number of shares of common stock that, when multiplied by the 10-Day VWAP, equals the difference.

The 10-Day VWAP is defined as the average of the volume-weighted average price (“VWAP”) per share of common stock for each of the 10 consecutive trading days ending on, and including, the trading day immediately before the date of determination.

Conversion

From and after the seventh anniversary of the issue date of the Series A redeemable convertible preferred stock, at any time when the 10-Day VWAP exceeds the conversion price of the Series A redeemable convertible preferred stock, all outstanding shares of Series A redeemable convertible preferred stock will automatically convert into a number of shares of the Company’s common stock equal to the Conversion Ratio on such date.

In addition, on the third anniversary of the issue date of the Series A redeemable convertible preferred stock, if the 10-Day VWAP immediately prior to such date exceeds the conversion price of the Series A redeemable convertible preferred stock, the holder will have the option to convert all outstanding shares of Series A redeemable convertible preferred stock at the conversion price on such date. If there is a Conversion Shortfall (as defined below), the holder will receive an additional number of shares of common stock equal to the Conversion Shortfall divided by the 10-Day VWAP immediately prior to such date.

The conversion price for the Series A redeemable convertible preferred stock is not subject to adjustment, except for customary adjustments for stock splits, stock dividends, recapitalizations, reorganizations and similar corporate actions.

The Conversion Shortfall for the Series A redeemable convertible preferred stock on any conversion date is defined as the absolute dollar value by which the product of the Conversion Ratio and the 10-Day VWAP for an applicable conversion is less than the Stated Value plus the Minimum Return Amount on such date.

Redemption

At any time from and after the seventh anniversary of the issue date of the Series A redeemable convertible preferred stock, if the 10-Day VWAP does not exceed the conversion price, the Company has the right to redeem all, but not less than all, outstanding shares of Series A redeemable convertible preferred stock at the Stated Value on such redemption date.

On each of the third anniversary (only if the 10-Day VWAP immediately prior to such date does not exceed the conversion price), the seventh anniversary, the tenth anniversary and the thirteenth anniversary of the issue date, the holder has the right to require the Company to redeem all, but not less than all, outstanding shares of Series A redeemable convertible preferred stock at the Stated Value on such redemption date.

Upon a change of control of the Company, the Company will redeem all, but not less than all, outstanding shares of Series A redeemable convertible preferred stock for an amount equal to the greater of (i) the Stated Value on the date of the change of control and (ii) the amount that the holder would be entitled to receive on an as-converted to common stock basis based on the then-applicable conversion ratio (for which the 10-Day VWAP equals the purchase price or transaction consideration per share of common stock in the change of control transaction).

Under certain regulatory events or strategic actions by the Company or the holder the Company or the holder, as applicable, has the right to elect to redeem all outstanding shares of Series A redeemable convertible preferred stock at the Stated Value, if the 10-Day VWAP immediately prior to the date of such event does not exceed the conversion price, or convert all outstanding shares of Series A redeemable convertible preferred stock into a number of shares of the Company’s common stock equal to the then-applicable conversion ratio, in case the 10-Day VWAP immediately prior to the date of such event exceeds the conversion price.

The Company presents its Series A redeemable convertible preferred stock outside of stockholders’ equity as mezzanine equity because the shares contain redemption features that are not solely within the Company’s control. The Company is required to accrete the carrying value of the Series A redeemable preferred stock to its redemption value over the period from issuance through redemption date. The accretion was $2 million, $9 million, and $9 million during the years ended December 31, 2023, 2024, and 2025, respectively.

Voting

The Series A redeemable convertible preferred stock confers no voting rights on the holder, except as required by applicable law and with respect to matters that adversely change the powers, preferences, privileges, rights or restrictions of the Series A redeemable convertible preferred stock, including the authorization or issuance of equity securities that would rank senior to or pari passu with the Series A redeemable convertible preferred stock (other than, in certain cases, new shares of Series A redeemable convertible preferred stock or new series of preferred stock with substantially similar terms as the Series A redeemable convertible preferred stock) and the declaration or payment of cash dividends on shares other than the Series A redeemable convertible preferred stock in excess of a 5.0% annual dividend yield.

No dividends were declared or paid during the years ended December 31, 2023, 2024, or 2025.

Stock Repurchase Program

In November 2023, the Company’s board of directors authorized a $500 million share repurchase program, which was subsequently increased to $1 billion in February 2024. During the year ended December 31, 2024, the Company repurchased and immediately retired a total of 32,804,891 shares of its common stock for an aggregate amount, including broker commissions, fees, and excise taxes, of $965 million, which completed the repurchases under this share repurchase program originally authorized in November 2023. The amount of shares repurchased under this program during the year ended December 31, 2024 included 14,395,994 shares repurchased in privately negotiated transactions with three stockholders in February 2024 for an aggregate amount of $390 million.

In June 2024, the Company’s board of directors authorized a new $500 million share repurchase program, which was subsequently increased to $750 million, $1 billion, and later $2.5 billion in November 2024, May 2025, and November 2025, respectively. During the year ended December 31, 2024, the Company repurchased and immediately retired a total of 13,206,713 shares of its common stock, for an aggregate amount, including broker commissions, fees, and excise taxes, of $442 million under this share repurchase program. This amount included 3,700,000 shares repurchased in August 2024 in a privately negotiated transaction with one stockholder, a related party, for $117 million. During the year ended December 31, 2025, the Company repurchased and immediately retired a total of 32,832,183 shares of its common stock, for an aggregate amount, including broker commissions, fees, and excise taxes, of $1,349 million under this share repurchase program, which included shares repurchased under the ASR Agreement (as defined below). As of December 31, 2025, the Company had $671 million remaining available to repurchase shares pursuant to this new repurchase program.

On November 10, 2025, the Company entered into an ASR Agreement with a third-party financial institution to repurchase $250 million of the Company’s common stock. Pursuant to the terms of the ASR Agreement, the Company paid $250 million to the financial institution and received and immediately retired an initial delivery of 5,357,621 shares of common stock on November 12, 2025, representing 80% of the value of the $250 million payment. As of December 31, 2025, $50 million of the ASR is reflected as a forward contract within stockholders’ equity on the consolidated balance sheet. In January 2026, repurchases under the ASR Agreement were completed. The final number of shares of common stock repurchased was based on the VWAP of the Company’s common stock during the repurchase period, less a negotiated discount. The Company received and immediately retired an additional 553,349 shares in January 2026.

The Company’s share repurchases in excess of issuances are subject to a 1% excise tax enacted by the Inflation Reduction Act. The excise tax recognized as part of the cost basis of shares acquired during the years ended December 31, 2023, 2024, and 2025 waszero, $5 million, and $7 million, respectively.

Common Stock Reserved for Future Issuance

The following table summarizes the Company’s shares of common stock reserved for future issuance on an as-converted basis:

The holders of common stock are entitled to receive dividends out of funds that are legally available, when and if declared by the board of directors and subject to approval from the holders of the Series A redeemable convertible preferred stock. No dividends were declared or paid during the years ended December 31, 2023, 2024, or 2025.

Equity Incentive Plans

The Company hasthree equity incentive plans: the 2013 Equity Incentive Plan (the “2013 Plan), the 2018 Equity Incentive Plan (the “2018 Plan”), and the 2023 Equity Incentive Plan (the “2023 Plan”). Following the Company’s IPO in September 2023, the Company has only issued awards under the 2023 Plan, and no additional awards will be granted under the 2013 and 2018 Plans. The 2023 Plan provides for grants of incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, to the Company’s employees of any parent or subsidiary, and for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, RSUs, performance awards, and other forms of awards to the Company’s employees, directors, and consultants, including employees and consultants of the Company’s affiliates.

The number of shares of common stock reserved for issuance under the Company’s 2023 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2024 through January 1, 2033, in an amount equal to (1)5% of the total number of shares of common stock outstanding on December 31 of the year before the date of each automatic increase or (2) a lesser number of shares determined by the Company’s board of directors prior to the applicable January 1. Pursuant to the automatic increase feature of the 2023 Plan, an additional 13,048,201 shares were reserved for issuance under the 2023 Plan effective January 1, 2025.

Stock Options

The following table summarizes the activity related to the Company’s stock options for the year ended December 31, 2025:

The total intrinsic value of stock options exercised during the years ended December 31, 2023, 2024, and 2025 was $252 million, $301 million, and $35 million, respectively. The total fair value of stock options vested was $6 million and $3 million for the years ended December 31, 2023 and 2024, respectively. As of December 31, 2024, all outstanding stock options were fully vested. As such, no stock options vested during the year ended December 31, 2025.

Restricted Stock

The following table summarizes the activity related to the Company’s restricted stock for the year ended December 31, 2025:

For the year ended December 31, 2023, the weighted-average grant date fair value of restricted stock granted was $38.37 per share. The Company didnot grant any restricted stock during the years ended December 31, 2024 and 2025. The total fair value of restricted stock vested during the years ended December 31, 2023, 2024, and 2025 was $54 million, $17 million, and $3 million, respectively.

RSUs

The following table summarizes the activity related to the Company’s RSUs for the year ended December 31, 2025:

During the year ended December 31, 2023, the Company modified the terms of an aggregate of 702,066 RSUs granted to certain executives related to the acceleration of the service-based vesting conditions upon involuntary termination of employment in conjunction with a change in control event. The modification did not result in any incremental stock-based compensation expense given the fair value of the modified awards immediately after the modification was lower than the grant date fair value of the original awards.

In April 2024, the Company granted an aggregate of 586,920 RSUs to certain employees of the Company that vest upon satisfaction of certain performance-based and service-based vesting conditions. The performance-based vesting conditions will be satisfied based on the proportion of certain GTV targets achieved during applicable performance periods. The actual number of shares that may satisfy the performance-based vesting condition ranges from 0% to 100% of the maximum achievable shares for that performance period. Shares that satisfy the performance-based condition are subject to a service-based condition that vests quarterly over a period of one year following the applicable performance period. Each of the RSU awards granted is subject to potential vesting acceleration under certain circumstances. The weighted-average grant date fair value per share of such awards is $36.35, and the weighted-average requisite service period is satisfied over a period of 2.70 years.

In November 2024, the Company modified the terms of an RSU award representing the right to be issued up to 1,200,000 shares of the Company’s common stock that was previously granted to the Company’s chief executive officer at that time, of which,300,000 shares under the RSU award vested in connection with the Company’s IPO in September 2023. The modification changed the existing market capitalization goals to corresponding stock price goals ranging from $43.32 per share to $86.64 per share. Achievement of the stock price goals is measured using the VWAP of the Company’s common stock over the 30-trading day period preceding the applicable measurement date. The modification resulted in the remeasurement of these awards as of the modification date and the incremental stock-based compensation expense was immaterial.

Following the modification of the RSU award, and based on the VWAP as of November 12, 2024, the stock price goal of $43.32 was met, resulting in the vesting of an additional 180,000 shares of the Company’s common stock under the RSU award.

The weighted-average grant date fair value of RSUs granted was $32.80, $37.15, and $42.61 per share for the years ended December 31, 2023, 2024, and 2025, respectively. The total fair value of RSUs vested was $1,880 million, $752 million, and $620 million for the years ended December 31, 2023, 2024, and 2025, respectively.

2023 Employee Stock Purchase Plan

The Company’s board of directors adopted, and the Company’s stockholders approved, the 2023 Employee Stock Purchase Plan (“the ESPP”), which became effective immediately prior to the effectiveness of the registration statement on Form S-1 filed under the Securities Act in connection with the Company’s IPO. A total of 7,000,000 shares of common stock were initially reserved for sale under the ESPP. The number of shares of the Company’s common stock reserved for issuance will automatically increase on January 1 of each calendar year, beginning on January 1, 2024 through January 1, 2033, by the lesser of (1)1% of the total number of shares of common stock outstanding on the last day of the year before the date of the automatic increase and (2)7,000,000 shares; provided that before the date of any such increase, the Company’s board of directors may determine that such increase will be less than the amount set forth in clauses (1) and (2). Subject to any limitations contained therein, the ESPP allows eligible employees to contribute (in the form of payroll deductions or otherwise to the extent permitted by the administrator) an amount established by the administrator from time to time in its discretion to purchase common stock at a discounted price per share.

As of December 31, 2025, there had been no offering period or purchase period under the ESPP, and no such period will begin unless and until determined by the Company’s board of directors, or its compensation committee under its delegation, as the administrator of the ESPP. Pursuant to the automatic increase feature of the ESPP, an additional 2,609,640 shares were reserved for issuance under the ESPP effective January 1, 2025.

Stock-Based Compensation Expense Summary

The following table summarizes stock-based compensation expense by line item in the consolidated statements of operations related to stock options, restricted stock, and RSUs, as applicable:

(1) Stock-based compensation expense during the year ended December 31, 2023 included $2,581 million, net of $39 million capitalized related to the development of internal-use software, associated with vested RSUs and certain shares of vested restricted stock as a result of the satisfaction of the liquidity event-based vesting condition upon the effective date of the registration statement on Form S-1 filed under the Securities Act in connection with the Company’s IPO.

(2) Stock-based compensation expense during the year ended December 31, 2024 includes a benefit of $4 million, $79 million, $8 million, and $4 million for operations and support, research and development, sales and marketing, and general and administrative, respectively, related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures during the three months ended March 31, 2024 and for terminated employees in connection with the Company’s restructuring plan. Refer to Note 17 — Restructuring for further discussion.

As of December 31, 2025, there was $465 million of unrecognized stock-based compensation expense related to unvested awards, which are expected to vest and be recognized over a weighted-average period of 1.43 years.

The amount of stock-based compensation expense capitalized related to the development of internal-use software was $56 million, $35 million, and $42 million during the years ended December 31, 2023, 2024, and 2025, respectively.

The income tax benefit recognized in the consolidated statements of operations related to stock-based awards was $520 million, $42 million, and $77 million for the years ended December 31, 2023, 2024, and 2025, respectively.

The components of income (loss) before provision for (benefit from) income taxes were as follows:

The components of the provision for (benefit from) income taxes were as follows:

A reconciliation of the Company’s U.S. federal statutory income tax rate to the effective tax rate was as follows for the years ended December 31, 2023 and 2024:

The Company adopted ASU 2023-09 on a prospective basis during the year ended December 31, 2025. A reconciliation of the Company’s U.S. federal statutory income tax rate to the effective tax rate is as follows for the year ended December 31, 2025:

(1) The states that contribute to the majority (greater than 50 percent) of the tax effect in this category consists of California, New Jersey, and New York.

For the year ended December 31, 2023, the difference in the effective tax rate is primarily driven by the tax effects of stock-based compensation, including certain restructurings, recognized in connection with the Company’s IPO, as well as the generation of research and development tax credits. For the years ended December 31, 2024 and 2025, the difference in the effective tax rate is primarily attributable to the generation of research and development tax credits, partially offset by uncertain tax positions, the tax effects of stock-based compensation, as well as state income taxes, net of federal benefit.

Deferred income taxes arise from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes, as well as operating losses and tax credit carryforwards. Significant components of the Company’s deferred tax assets were as follows:

The Company regularly assesses the ability to realize deferred tax assets based on the weight of all available evidence, including such factors as the history of recent earnings and expected future taxable income on a jurisdiction-by-jurisdiction basis. Judgment is required in determining whether a valuation allowance should be recorded against deferred tax assets. During the years ended December 31, 2024 and 2025, after considering these factors, the Company determined that the positive evidence overcame any negative evidence and concluded that it was more likely than not that the U.S. federal and state deferred tax assets were realizable. During the year ended December 31, 2025, in connection with the acquisition of Marlin 9 Holdings, the Company acquired deferred tax assets, including certain U.S. net operating loss carryforwards and other tax attributes. The Company recorded a valuation allowance against these acquired tax attributes.

As of December 31, 2024 and 2025, the Company had federal net operating loss carryforwards of $19 million and $443 million, respectively. The Company generated $5 million of net operating loss carryforwards prior to 2018, which will begin to expire in 2037. The remaining $438 million will carryforward indefinitely. In addition, the Company had state net operating loss carryforwards of $536 million and $679 million as of December 31, 2024 and 2025, respectively, an immaterial amount of which, if unused, will begin to expire in 2026. The Company hadimmaterial foreign net operating and capital loss carryforwards as of December 31, 2024 and 2025.

As of December 31, 2024, the Company hadno federal Section 163(j) interest limitation carryforwards. As of December 31, 2025, the Company had $42 million in federal Section 163(j) interest limitation carryforwards, which can be carried forward indefinitely.

As of December 31, 2024 and 2025, the Company had federal research and development tax credit carryforwards of $143 million and $181 million, respectively, and state research and development tax credit carryforwards of $87 million and $102 million, respectively. The federal research and development tax credits will begin to expire in 2044 if not utilized. The state research and development tax credits have no expiration date.

Under Section 382 of the Code, the Company’s ability to utilize net operating loss carryforwards or other tax attributes, such as research tax credits (under Section 383 of the Code), in any taxable year may be limited if it experiences an ownership change. The Company has assessed whether it had an ownership change, as defined by Section 382 of the Code from its formation. Based upon this assessment, reductions were made to the Company’s net operating losses and tax credit carryforwards under these rules for the Marlin 9 Holdings acquisition. Additional ownership changes in the future could result in additional limitations on the Company’s net operating losses and tax credit carryforwards.

Under the Tax Cuts and Jobs Act of 2017, research and development costs are required to be capitalized and amortized for U.S. tax purposes, effective January 1, 2022. Under the One Big Beautiful Bill Act effective January 1, 2025, research and development costs are allowed to be immediately deducted, and prior capitalization can be accelerated. The Company has elected to accelerate prior capitalization overtwo years.

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits:

The Company’s policy is to recognize interest and penalties associated with uncertain tax benefits as part of the income tax provision and include accrued interest and penalties within the related income tax liability on the Company’s consolidated balance sheets. To date, the Company has recognized immaterial interest and penalties in the consolidated statements of operations and has not made payments for interest and penalties. As of December 31, 2025, $106 million of unrecognized tax benefits, if recognized, would impact the effective tax rate.

The Company files income tax returns primarily in the U.S. federal and state, Canada, and other foreign jurisdictions. The Company is subject to examination in U.S. federal, various state and local jurisdictions, for all prior years. The examination period for foreign jurisdictions remain open from 2018 onward. The Company is currently under examination in Canada and California, New York, and Utah state jurisdictions.

Cash paid for income taxes, net of refunds, consisted of the following:

Prior to the IPO, the rights, including the liquidation and dividend rights, of the holders of voting and non-voting common stock were identical, except with respect to voting. As the liquidation and dividend rights were identical, the undistributed earnings were allocated on a proportionate basis and the resulting net income (loss) per share attributable to common stockholders were, therefore, the same for both voting and non-voting common stock on an individual or combined basis.

Immediately prior to the completion of the IPO, all outstanding shares of the Company’s non-voting common stock were converted into shares of voting common stock, all of which were subsequently reclassified into common stock. The shares issued in the IPO and the shares of common stock issued upon conversion of the then-outstanding shares of redeemable convertible preferred stock in connection with the IPO, as well as vested RSUs, are included in the table below weighted for the period outstanding during the year ended December 31, 2023.

The computation of basic and diluted net income (loss) per share attributable to common stockholders was as follows:

The following potentially dilutive outstanding securities were excluded from the computation of diluted income (loss) per share attributable to common stockholders because their effect was not dilutive:

(1) Series A redeemable convertible preferred stock included in the table above considers the Conversion Shortfall, as applicable, as further described in Note 11 — Redeemable Convertible Preferred Stock.

The following potentially dilutive outstanding securities were excluded from the table above because they are subject to performance-based and / or market-based vesting conditions that were not achieved as of those dates:

The Company is party to agreements with a software vendor, whose former executive officer was a member of the Company’s board of directors, whereby the Company primarily pays the vendor usage-based subscription fees for the use of the software. Subsequent to the executive officer’s resignation on February 27, 2024, the software vendor is no longer a related party. During the year ended December 31, 2023, $15 million was paid in connection with this software subscription. No amounts were paid in connection with this software subscription during the three months ended March 31, 2024. During the year ended December 31, 2023, $25 million was included within operating expenses in the consolidated statements of operations. During the three months ended March 31, 2024, $8 million was included within operating expenses in the condensed consolidated statements of operations. As of March 31, 2024, $4 million was included within prepaid expenses and other current assets on the condensed consolidated balance sheets and no amounts were due to this vendor.

In August 2024, the Company entered into a privately negotiated transaction to repurchase 3,700,000 shares for $117 million from a stockholder that, together with its affiliated entities, is a holder of greater than 10% of the Company’s common stock and is affiliated with an entity indirectly controlled by a member of the Company’s board of directors. Refer to Note 12 — Stockholders’ Equity for further information.

The Company has a 401(k) plan under which U.S. employees may make voluntary pre-tax and post-tax contributions at their discretion, up to maximum annual contribution limits established by the U.S. Department of Treasury. The Company matched a portion of employee contributions totaling $17 million, $17 million, and $18 million for the years ended December 31, 2023, 2024, and 2025, respectively. Both employee contributions and the Company’s matching contributions are fully vested upon contribution.

On February 9, 2024, the Company initiated restructuring actions with respect to its workforce intended to improve operational efficiencies and better align the Company’s organizational structure with current business needs, top strategic priorities, and key growth initiatives. The plan included the reduction of approximately 250 employees, or 7% of the Company’s employees.

During the year ended December 31, 2024, the Company recognized $18 million in restructuring charges related to cash expenditures for severance payments and other termination benefits. The Company also recognized animmaterial amount of stock-based compensation expense related to the accelerated vesting of equity awards, which was offset by a $46 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. No amounts were recognized during the year ended December 31, 2025.

The following table summarizes the restructuring costs recognized by line item within the consolidated statements of operations for the year ended December 31, 2024:

As of December 31, 2024, the liabilities relating to the remaining restructuring charges were immaterial and included within accrued and other current liabilities on the consolidated balance sheet. As of December 31, 2025, there wereno liabilities relating to the remaining restructuring charges on the consolidated balance sheet.

The Company hasone operating and reportable segment. A description of how the Company derives revenues is included in Note 2 — Significant Accounting Policies. The Company’s chief executive officer is the Company’s CODM, who reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The CODM uses consolidated net income (loss) as the sole measure of segment profit or loss to make key operating decisions such as the allocation of the budget and monitoring budget versus actual results. The CODM does not evaluate operating segments using asset information.

Significant expenses within net income (loss) include cost of revenue, operations and support, research and development, sales and marketing, general and administrative, which are each separately presented on the Company’s consolidated statements of operations. Stock-based compensation expense is also a significant expense within net income (loss). Refer to Note 12 — Stockholders’ Equity for additional information about the Company’s stock-based compensation expense. Other segment items include interest income, other expense, net, and provision for (benefit from) income taxes on the consolidated statements of operations.

Geographic information is included in Note 3 — Revenue and Note 6 — Property and Equipment, Net.