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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

OR

☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission File Number: 001-41805

MAPLEBEAR INC.

(Exact name of registrant as specified in its charter)

Delaware
46-0723335

(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)

50 Beale Street , Suite 600
San Francisco , California 94105
(Address of principal executive offices) (Zip code)
( 888 ) 246-7822
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered

Common Stock, par value $0.0001 per share
CART
Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer
☒
Accelerated filer
☐

Non-accelerated filer
☐
Smaller reporting company
☐

Emerging growth company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The registrant had outstanding 235,029,814 shares of common stock, par value $0.0001 per share, as of April 30, 2026.
1

Table of Contents

MAPLEBEAR INC. DBA INSTACART
TABLE OF CONTENTS

Page

Special Note Regarding Forward-Looking Statements
3

Part I
FINANCIAL INFORMATION
5

Item 1.
Financial Statements (unaudited):
5

Condensed Consolidated Balance Sheets
5

Condensed Consolidated Statements of Operations
6

Condensed Consolidated Statements of Comprehensive Income
7

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity
8

Condensed Consolidated Statements of Cash Flows
10

Notes to Condensed Consolidated Financial Statements
12

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
29

Item 3.
Quantitative and Qualitative Disclosures About Market Risk
45

Item 4.
Controls and Procedures
46

Part II
OTHER INFORMATION
47

Item 1.
Legal Proceedings
47

Item 1A.
Risk Factors
47

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
95

Item 3.
Defaults Upon Senior Securities
96

Item 4.
Mine Safety Disclosures
96

Item 5.
Other Information
96

Item 6.
Exhibits
97

Signatures
98

2

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy, and plans and objectives of management for future operations are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “toward,” “will,” or “would,” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

• our expectations regarding our financial performance, including revenue, cost of revenue, gross profit, operating expenses, net income, and key metrics such as gross transaction value (“GTV”) and orders, and our ability to maintain or increase future profitability and generate profitable growth over time;
• our ability to attract new customers and shoppers and maintain and/or increase engagement of existing customers and shoppers;
• our ability to effectively manage our growth and plan for and execute growth strategies and initiatives;
• anticipated trends, growth rates, and challenges in our financial performance, key metrics, and business and in the markets in which we operate;
• our ability to maintain and expand our relationships with retailers and brands and the effects of retailer consolidation;
• our ability to continue to grow across our current markets and expand into new markets;
• the effects of increased competition in our markets and our ability to successfully compete with companies that are currently in, or may in the future enter, the markets in which we operate;
• our estimated market opportunity;
• our ability to timely and effectively scale and adapt our offerings;
• our ability to maintain the safety, security, and availability of our platform;
• our ability to expand or enhance our existing offerings and develop new products, offerings, features, and use cases, bring them to market in a timely manner, and whether retailers, customers, brands, shoppers, or other partners launch or utilize such products, offerings, features, and use cases in the manner and timing that we expect;
• our ability to adapt to or utilize artificial intelligence (“AI”) and machine learning technologies as well as the use of such technologies by our competitors;
• our ability to maintain, protect, and enhance our brand and intellectual property;
• our ability to identify, complete, and achieve anticipated business and financial benefits from acquisitions, strategic investments, collaborations, commercial arrangements, alliances or partnerships that complement and expand the functionality of Instacart and our offerings;
• our prices and pricing methodologies and our expectations for the impact of pricing on our competitive position and our financial results;
• macroeconomic and industry trends, including the impact on our business of trade policies enacted or proposed by the United States, such as tariffs or other trade restrictions, uncertainty related thereto, and responses by foreign governments to such policies, inflation, elevated interest rates, the effects of supply chain challenges, cessation of, interruptions to, or changes to government aid programs, heightened recession risk, and geopolitical conflicts;
• our ability to successfully defend litigation and government proceedings brought against us;
• the implications from any legislative, regulatory, judicial, administrative, or legal proceeding that changes our current relationship with shoppers, and the potential impacts on our business operations, our business model, fulfillment strategies, and financial performance;
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• our ability to comply or remain in compliance with laws and regulations that currently apply or become applicable to our business in the United States and internationally;
• our reliance on key personnel, our ability to attract, maintain, and retain management and skilled personnel;
• our expectations concerning our relationships with third parties; and
• our expectations regarding our share repurchase program.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information, actual results, revised expectations or the occurrence of unanticipated events, except as required by law.
Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” “our company,” and “Instacart” refer to Maplebear Inc. and its consolidated subsidiaries.
WHERE YOU CAN FIND ADDITIONAL INFORMATION

We intend to announce material information to the public through filings with the Securities and Exchange Commission (“SEC”), the investor relations page on our website, which is located at investors.instacart.com, our blog, which is located at www.instacart.com/company/blog, press releases, public conference calls, and public webcasts. The information disclosed through the foregoing channels could be deemed to be material information. As such, we encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels.

The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website.
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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MAPLEBEAR INC. DBA INSTACART
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except share amounts, which are reflected in thousands, and per share amounts)
(unaudited)

As of
December 31,
As of
March 31,

2025
2026

ASSETS

Current assets:

Cash and cash equivalents
$
637  

$
631  

Short-term marketable securities
50  

59  

Accounts receivable, net of allowance of $ 3 and $ 2 , respectively
1,127  

1,095  

Restricted cash and cash equivalents, current
172  

110  

Prepaid expenses and other current assets
213  

197  

Total current assets
2,199  

2,091  

Long-term marketable securities
81  

63  

Restricted cash and cash equivalents, noncurrent
18  

18  

Property and equipment, net
218  

219  

Operating lease right-of-use assets
30  

28  

Intangible assets, net
71  

60  

Goodwill
393  

393  

Deferred tax assets, net
664  

626  

Other assets
14  

37  

Total assets
$
3,687  

$
3,535  

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable
$
70  

$
48  

Accrued and other current liabilities
634  

604  

Operating lease liabilities, current
3  

2  

Deferred revenue
211  

230  

Total current liabilities
917  

885  

Operating lease liabilities, noncurrent
33  

32  

Other long-term liabilities
24  

24  

Total liabilities
974  

941  

Commitments and contingencies (Note 10)

Series A redeemable convertible preferred stock; $ 0.0001 par value per share; 5,833 shares authorized, issued, and outstanding as of December 31, 2025 and March 31, 2026
196  

198  

Stockholders’ equity:

Preferred stock, $ 0.0001 par value per share; 24,167 shares authorized as of December 31, 2025 and March 31, 2026; zero shares issued and outstanding as of December 31, 2025 and March 31, 2026
—  

—  

Common stock, $ 0.0001 par value per share; 2,000,000 shares authorized as of December 31, 2025 and March 31, 2026; 242,867 and 236,710 shares issued and outstanding as of December 31, 2025 and March 31, 2026, respectively
—  

—  

Additional paid-in capital
7,005  

7,143  

Accumulated other comprehensive loss
( 1 )

( 4 )

Accumulated deficit
( 4,486 )

( 4,744 )

Total stockholders’ equity
2,518  

2,395  

Total liabilities, redeemable convertible preferred stock, and stockholders’ equity
$
3,687  

$
3,535  

The accompanying notes are an integral part of these condensed consolidated financial statements.
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MAPLEBEAR INC. DBA INSTACART
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share amounts, which are reflected in thousands, and per share amounts)
(unaudited)

Three Months Ended March 31,

2025
2026

Revenue
$
897  

$
1,019  

Cost of revenue
226  

281  

Gross profit
671  

738  

Operating expenses:

Operations and support
75  

74  

Research and development
144  

164  

Sales and marketing
216  

230  

General and administrative
126  

88  

Total operating expenses
561  

556  

Income from operations
110  

182  

Interest income
14  

6  

Income before provision for income taxes
124  

188  

Provision for income taxes
18  

44  

Net income
$
106  

$
144  

Accretion related to Series A redeemable convertible preferred stock
( 2 )

( 2 )

Net income attributable to common stockholders, basic
$
104  

$
142  

Accretion related to Series A redeemable convertible preferred stock
—  

2  

Net income attributable to common stockholders, diluted
$
104  

$
144  

Net income per share attributable to common stockholders:

Basic
$
0.40  

$
0.59  

Diluted
$
0.37  

$
0.57  

Weighted-average shares used in computing net income per share attributable to common stockholders:

Basic
262,432  

239,273  

Diluted
277,193  

253,597  

The accompanying notes are an integral part of these condensed consolidated financial statements.
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MAPLEBEAR INC. DBA INSTACART
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
(unaudited)

Three Months Ended March 31,

2025
2026

Net income
$
106  

$
144  

Other comprehensive loss:

Change in foreign currency translation adjustments
—  

( 3 )

Total other comprehensive loss
—  

( 3 )

Comprehensive income
$
106  

$
141  

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MAPLEBEAR INC. DBA INSTACART
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(in millions, except share amounts, which are reflected in thousands)
(unaudited)

Series A Redeemable Convertible Preferred Stock
Common Stock
Additional Paid-In Capital
Accumulated
Other Comprehensive Loss
Accumulated Deficit
Total

Shares
Amount
Shares
Amount

Balances at December 31, 2024
5,833  

$
186  

260,964  

$
—  

$
6,687  

$
( 9 )

$
( 3,585 )

$
3,093  

Accretion of Series A redeemable convertible preferred stock
— 

2  

— 

— 

( 2 )

— 

— 

( 2 )

Issuance of common stock upon settlement of restricted stock units
— 

— 

3,661  

— 

— 

— 

— 

— 

Exercise of common stock options
— 

— 

451  

— 

4  

— 

— 

4  

Common stock withheld or cancelled for tax obligation and net settlement
— 

— 

( 154 )

— 

( 8 )

— 

— 

( 8 )

Stock-based compensation
— 

— 

— 

— 

77  

— 

— 

77  

Repurchase and retirement of common stock
— 

— 

( 2,405 )

— 

— 

— 

( 94 )

( 94 )

Net income
— 

— 

— 

— 

— 

— 

106  

106  

Balances at March 31, 2025
5,833  

$
188  

262,517  

$
—  

$
6,758  

$
( 9 )

$
( 3,573 )

$
3,176  

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MAPLEBEAR INC. DBA INSTACART
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY, CONTINUED
(in millions, except share amounts, which are reflected in thousands)
(unaudited)

Series A Redeemable Convertible Preferred Stock
Common Stock
Additional Paid-In Capital
Accumulated
Other Comprehensive Loss
Accumulated Deficit
Total

Shares
Amount
Shares
Amount

Balances at December 31, 2025
5,833  

$
196  

242,867  

$
—  

$
7,005  

$
( 1 )

$
( 4,486 )

$
2,518  

Accretion of Series A redeemable convertible preferred stock
— 

2  

— 

— 

( 2 )

— 

— 

( 2 )

Issuance of common stock upon settlement of restricted stock units
— 

— 

2,975  

— 

— 

— 

— 

— 

Exercise of common stock options
— 

— 

347  

— 

3  

— 

— 

3  

Common stock withheld or cancelled for tax obligation and net settlement
— 

— 

( 104 )

— 

( 4 )

— 

— 

( 4 )

Stock-based compensation
— 

— 

— 

— 

91  

— 

— 

91  

Other comprehensive loss
— 

— 

— 

— 

— 

( 3 )

— 

( 3 )

Repurchase and retirement of common stock (1)
— 

— 

( 9,375 )

— 

50  

— 

( 402 )

( 352 )

Net income
— 

— 

— 

— 

— 

— 

144  

144  

Balances at March 31, 2026
5,833  

$
198  

236,710  

$
—  

$
7,143  

$
( 4 )

$
( 4,744 )

$
2,395  

___________________________________
(1) Includes the completion of the Company’s accelerated share repurchase agreement (the “ASR Agreement”). Refer to Note 12 — Stockholders’ Equity for further discussion.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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MAPLEBEAR INC. DBA INSTACART
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)

Three Months Ended March 31,

2025
2026

OPERATING ACTIVITIES

Net income
$
106  

$
144  

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense
19  

30  

Stock-based compensation expense
66  

80  

Impairments of long-lived assets and other assets
6  

6  

Provision for bad debts
4  

3  

Amortization of operating lease right-of-use assets
3  

1  

Deferred income taxes
( 2 )

38  

Other
—  

2  

Changes in operating assets and liabilities:

Accounts receivable
36  

28  

Prepaid expenses and other assets
28  

( 9 )

Accounts payable
( 3 )

( 22 )

Accrued and other current liabilities
22  

( 51 )

Deferred revenue
17  

19  

Operating lease liabilities
( 3 )

( 1 )

Other long-term liabilities
( 1 )

1  

Net cash provided by operating activities
298  

268  

INVESTING ACTIVITIES

Purchases of marketable securities
( 62 )

( 4 )

Maturities of marketable securities
81  

12  

Purchases of property and equipment, including capitalized internal-use software
( 18 )

( 16 )

Net cash provided by (used in) investing activities
1  

( 8 )

FINANCING ACTIVITIES

Taxes paid related to net share settlement of equity awards
( 8 )

( 4 )

Proceeds from exercise of stock options
4
3

Changes in advances from payment card issuer
47
31

Repurchases of common stock
( 89 )

( 359 )

Net cash used in financing activities
( 46 )

( 328 )

Effect of foreign exchange on cash, cash equivalents, and restricted cash and cash equivalents
1  

( 1 )

Net increase (decrease) in cash, cash equivalents, and restricted cash and cash equivalents
254  

( 68 )

Cash, cash equivalents, and restricted cash and cash equivalents - beginning of period
1,449  

827  

Cash, cash equivalents, and restricted cash and cash equivalents - end of period
$
1,703  

$
758  

The accompanying notes are an integral part of these condensed consolidated financial statements.
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MAPLEBEAR INC. DBA INSTACART
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
(in millions)
(unaudited)

Three Months Ended March 31,

2025
2026

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid (received) for income taxes, net
$
21  

$
( 6 )

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

Stock-based compensation capitalized as internal-use software
$
11  

$
11  

RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AND CASH EQUIVALENTS TO THE CONDENSED CONSOLIDATED BALANCE SHEETS

Cash and cash equivalents
$
1,558  

$
631  

Restricted cash and cash equivalents, current
130  

110  

Restricted cash and cash equivalents, noncurrent
15  

18  

Total cash, cash equivalents, and restricted cash and cash equivalents
$
1,703  

$
758  

The accompanying notes are an integral part of these condensed consolidated financial statements.
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MAPLEBEAR INC. DBA INSTACART
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1.
Business

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.

2.
Significant Accounting Policies

Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2025, which can be found in the Company’s Annual Report on Form 10-K. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the condensed consolidated financial statements. The condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after elimination of all intercompany accounts and transactions. The condensed consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. The results for the interim periods are not necessarily indicative of the results to be expected for the full year or any other future interim or annual period.

There have been no significant changes to the Company’s significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 that have had a material impact on the condensed consolidated financial statements and related notes.

Rounding
Amounts presented in the condensed 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.

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
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MAPLEBEAR INC. DBA INSTACART
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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 condensed 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.
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.

3.
Revenue

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.

Three Months Ended March 31,

2025
2026

(in millions)

Transaction
$
650  

$
733  

Advertising and other
247 286
Total revenue
$
897  

$
1,019  

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MAPLEBEAR INC. DBA INSTACART
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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

Three Months Ended March 31,

2025
2026

(in millions)

United States
$
862  

$
972  

International (1)
35 46
Total revenue
$
897  

$
1,019  

___________
(1) No individual international country represented 10% or more of the Company’s total revenue for the three months ended March 31, 2025 or 2026.
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, 2025 and March 31, 2026 is expected to be recognized within a year. For the three months ended March 31, 2025 and 2026, the Company recognized revenue of $ 89  million and $ 94  million, respectively, from the deferred revenue balance as of December 31, 2024 and 2025.

There were no material contract assets as of December 31, 2025 or March 31, 2026.
Concentrations of Credit Risk
The following customers accounted for 10% or more of the Company’s accounts receivable:

As of
December 31,
As of
March 31,

2025
2026

Customer A
11  
%
10  
%

Customer E
12  
%
12  
%

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MAPLEBEAR INC. DBA INSTACART
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

4.
Fair Value Measurements

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

As of December 31, 2025

Level 1
Level 2
Level 3
Total

(in millions)
Cash equivalents

Money market funds
$
293  

$
—  

$
—  

$
293  

Commercial paper
—  

13  

—  

13  

U.S. government and government agency debt securities
—  

10  

—  

10  

Total cash equivalents
293  

23  

—  

316  

Short-term marketable securities

Commercial paper
—  

7  

—  

7  

U.S. government and government agency debt securities
—  

41  

—  

41  

Corporate debt securities
—  

2  

—  

2  

Total short-term marketable securities
—  

50  

—  

50  

Long-term marketable securities

U.S. government and government agency debt securities
—  

81  

—  

81  

Total long-term marketable securities
—  

81  

—  

81  

Total
$
293  

$
153  

$
—  

$
446  

As of March 31, 2026

Level 1
Level 2
Level 3
Total

(in millions)
Cash equivalents

Money market funds
$
352  

$
—  

$
—  

$
352  

Total cash equivalents
352  

—  

—  

352  

Short-term marketable securities

U.S. government and government agency debt securities
—  

57  

—  

57  

Corporate debt securities
—  

2  

—  

2  

Total short-term marketable securities
—  

59  

—  

59  

Long-term marketable securities

U.S. government and government agency debt securities
—  

63  

—  

63  

Total long-term marketable securities
—  

63  

—  

63  

Total
$
352  

$
122  

$
—  

$
474  

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 the year 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 for the three months ended March 31, 2025 or 2026 .
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MAPLEBEAR INC. DBA INSTACART
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

5.
Investments

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 securities as of December 31, 2025 and March 31, 2026 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:

As of December 31,
As of March 31,

2025
2026

Amortized Cost
Fair Value
Amortized Cost
Fair Value

(in millions)
Within one year
$
366  

$
366  

$
411  

$
411  

One year through five years
81  

81  

63  

63  

Total
$
446  

$
446  

$
474  

$
474  

6.
Property and Equipment, Net

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

Estimated Useful Life
As of
December 31,
As of
March 31,

2025
2026

(in years)
(in millions)

Computer equipment
3
$
18  

$
18  

Furniture and fixtures
5
5  

5  

Leasehold improvements
2 - 8
15  

12  

Capitalized internal-use software
2 - 5
307  

329  

Total property and equipment

345  

364  

Less: Accumulated depreciation and amortization

( 127 )

( 146 )

Total property and equipment, net

$
218  

$
219  

Depreciation expense related to the Company’s property and equipment was $ 2 million and $ 1 million for the three months ended March 31, 2025 and 2026, respectively. Amortization expense related to the Company’s internal-use software, which is primarily recorded within cost of revenue in the condensed consolidated statements of operations, was $ 11 million and $ 22 million for the three months ended March 31, 2025 and 2026, respectively.

For the three months ended March 31, 2025 and 2026, the Company capitalized $ 26  million and $ 24 million of internal-use software costs, respectively.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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:

As of
December 31,
As of
March 31,

2025
2026

(in millions)

United States
$
215  

$
216  

Canada
32  

31  

Other
1  

—  

Total long-lived assets, net
$
248  

$
247  

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

7.
Business Combinations

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 ecommerce 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:

Fair Value

(in millions)

Current assets
$
4  

Goodwill
75  

Intangible assets
40  

Other assets
1

Total assets acquired
121

Total liabilities assumed
( 14 )

Net assets acquired
$
106  

Acquisition-related expenses were immaterial and expensed as incurred and included within general and administrative expense in the condensed consolidated statements of operations.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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

Amount
Weighted-Average Useful Life

(in millions)
(in years)

Customer relationships
$
39  

10

Developed technology
1
2

Trademark
1
2

Total intangible assets
$
40  

The overall weighted-average useful life of the identified amortizable intangible assets at the time of acquisition was ten 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 condensed 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 condensed consolidated statements of operations and, accordingly, historical and pro forma disclosures have not been presented.

8.
Goodwill and Intangible Assets, Net

Goodwill

The changes in the carrying amount of goodwill for the three months ended March 31, 2026 were immaterial .

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Intangible Assets, Net

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

As of December 31, 2025

Gross Carrying Value
Accumulated Amortization
Net Carrying Value
Weighted-Average Remaining Useful Life

(in millions)
(in years)

Developed technology
$
92  

$
( 73 )

$
19  

1.8

Customer relationships
66  

( 27 )

39  

8.7

Patents
17  

( 7 )

10  

4.9

Other
9  

( 6 )

3  

5.9

Total intangible assets, net
$
184  

$
( 113 )

$
71  

As of March 31, 2026

Gross Carrying Value
Accumulated Amortization
Net Carrying Value
Weighted-Average Remaining Useful Life

(in millions)
(in years)

Developed technology
$
82  

$
( 69 )

$
13  

1.7

Customer relationships
66  

( 29 )

37  

8.6

Patents
17  

( 8 )

9  

4.7

Other
5  

( 4 )

1  

4.9

Total intangible assets, net
$
170  

$
( 110 )

$
60  

Amortization expense was $ 6  million for each of the three months ended March 31, 2025 and 2026.

As of March 31, 2026, the remaining intangible asset amortization was as follows:

Amount

Year ending December 31,
(in millions)

Remainder of 2026
$
14  

2027
10  

2028
8  

2029
5  

2030
5  

Thereafter
18  

Total
$
60  

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

9.
Accrued and Other Current Liabilities

Accrued and other current liabilities were as follows:

As of
December 31,
As of
March 31,

2025
2026

(in millions)

Accrued legal and regulatory matters
$
158  

$
101  

Accrued shopper and merchant liability (1)
103  

93  

Accrued advertising
53  

59  

Accrued compensation and benefits
28  

27  

Accrued professional, legal, and contractor services
51  

47  

Sales and indirect tax liabilities
31  

30  

Insurance reserves
72  

79  

Advances from payment card issuer
22  

54  

Gift cards and rewards
47  

45  

Other
67  

70  

Total
$
634  

$
604  

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

10.
Commitments and Contingencies

Leases
The Company’s leases primarily include corporate offices and warehouse space. The lease terms of operating leases vary from one year to nine years , with expirations through May 2034. The Company has leases that include one or more options to extend the lease term for up to five years , as well as options to terminate the lease within one 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 for the three months ended March 31, 2025 or 2026.

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 $ 13 million as of December 31, 2025 and March 31, 2026, and was included within other long-term liabilities on the condensed consolidated balance sheets. For the three months ended March 31, 2025, the Company recognized an
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

immaterial reserve release, net of audit payments. For the three months ended March 31, 2026, the Company recognized immaterial expense related to these reserves. These amounts were recorded within general and administrative expense in the condensed 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.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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 the Company’s 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 the condensed consolidated 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 condensed consolidated statements of operations. For the three months ended March 31, 2025 and 2026 , the Company recognized a loss related to these claims of $ 40 million and $ 4 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 condensed 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

11.
Redeemable Convertible Preferred Stock

Series A Redeemable Convertible Preferred Stock
Immediately subsequent to the closing of the initial public offering (“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
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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 for each of the three months ended March 31, 2025 and 2026.

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 for the three months ended March 31, 2025 or 2026.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

12.
Stockholders’ Equity

Stock Repurchase Program

In June 2024, the Company’s board of directors authorized a $ 500 million share repurchase program, which was subsequently increased to $ 750  million, $ 1  billion, and $ 2.5  billion in November 2024, May 2025, and November 2025, respectively. In April 2026, the Company’s board of directors authorized an increase of $ 1.0  billion to the share repurchase program, bringing the total authorization under the program to $ 3.5  billion.

For the three months ended March 31, 2026, the Company repurchased and immediately retired a total of 9,374,847 shares of its common stock for an aggregate amount, including broker commissions, fees, and excise taxes, of $ 402 million under this share repurchase program, which included shares received and immediately retired upon the completion of the ASR Agreement (as defined below). As of March 31, 2026, the Company had $ 323 million remaining available to repurchase shares pursuant to the repurchase program.

On November 10, 2025, the Company entered into the 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 was 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 for the three months ended March 31, 2026 was immaterial.

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:

As of
December 31,
As of
March 31,

2025
2026

(in thousands)

Series A redeemable convertible preferred stock
5,833  

5,833  

Restricted stock units
15,959  

12,995  

Stock options outstanding
6,489  

6,141  

Shares available for issuance under the 2023 Equity Incentive Plan
54,419  

66,656  

Shares available for issuance under the 2023 Employee Stock Purchase Plan
12,400  

14,829  

Total
95,100  

106,454  

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 the approval from the holders of the Series A redeemable convertible preferred stock. No dividends were declared or paid for the three months ended March 31, 2025 or 2026.
Pursuant to the automatic increase feature of the 2023 Equity Incentive Plan, for the three months ended March 31, 2026, an additional 12,143,367 shares were reserved for issuance effective January 1, 2026.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Stock Options

The following table summarizes the activity related to the Company’s stock options for the three months ended March 31, 2026:

Number of Options
Weighted-Average Exercise
Price
Weighted-Average Remaining Contractual Life
Aggregate Intrinsic Value

(in thousands)
(in years)
(in millions)

As of January 1, 2026
6,489  

$
11.82  

2.29
$
216  

Options exercised
( 347 )

$
8.65  

As of March 31, 2026
6,141  

$
12.00  

2.08
$
160  

Options vested and exercisable as of March 31, 2026
6,141  

$
12.00  

2.08
$
160  

Restricted Stock Units
The following table summarizes the activity related to the Company’s restricted stock units (“RSUs”) for the three months ended March 31, 2026:

Number of Shares
Weighted-Average
Grant-Date Fair Value per Share

(in thousands)

Unvested and outstanding as of January 1, 2026
15,959  

$
41.72  

Granted
1,024  

$
37.70  

Vested
( 2,975 )

$
41.79  

Forfeited
( 1,014 )

$
40.85  

Unvested and outstanding as of March 31, 2026
12,995  

$
41.45  

Stock-Based Compensation Expense Summary

The following table summarizes stock-based compensation expense by line item in the condensed consolidated statements of operations:

Three Months Ended March 31,

2025
2026

(in millions)

Cost of revenue
$
2  

$
2  

Operations and support
3  

3  

Research and development
34  

46  

Sales and marketing
13  

10  

General and administrative
14  

19  

Total stock-based compensation expense
$
66  

$
80  

As of March 31, 2026, there was $ 378 million of unrecognized stock-based compensation expense related to unvested awards which are expected to vest and to be recognized over a weighted-average period of 1.31 years.

The amount of stock-based compensation expense capitalized related to the development of internal-use software was $ 11 million for each of the three months ended March 31, 2025 and 2026.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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.

As of March 31, 2026, 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, for the three months ended March 31, 2026, an additional 2,428,673 shares were reserved for issuance under the ESPP effective January 1, 2026.

13.
Income Taxes

The Company’s provision for income taxes for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in that quarter.

The Company’s effective tax rates for each period presented are the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company’s effective tax rate was 14.2 % and 23.2 % for the three months ended March 31, 2025 and 2026, respectively. The Company’s provision for income taxes varied from the tax computed at the U.S. federal statutory income tax rate primarily due to tax effects of stock-based compensation recognized, U.S. research and development credits generated, and the income taxes generated in U.S. states and foreign jurisdictions.

14.
Net Income per Share Attributable to Common Stockholders

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

Three Months Ended March 31,

2025
2026

(in millions, except share amounts, which are reflected in thousands, and per share amounts)

Numerator:

Net income
$
106  

$
144  

Less: Accretion related to Series A redeemable convertible preferred stock
( 2 )

( 2 )

Net income attributable to common stockholders, basic
$
104  

$
142  

Add: Accretion related to Series A redeemable convertible preferred stock
—  

2  

Net income attributable to common stockholders, diluted
$
104  

$
144  

Denominator:

Weighted-average shares used in computing basic net income per share attributable to common stockholders
262,432  

239,273  

Weighted-average effect of dilutive securities:

Series A redeemable convertible preferred stock
—  

5,833  

Stock options
5,433  

4,446  

Restricted stock units
9,289  

4,044  

Unvested restricted non-voting common stock
39  

—  

Weighted-average shares used in computing diluted net income per share attributable to common stockholders
277,193  

253,597  

Net income per share attributable to common stockholders:

Basic
$
0.40  

$
0.59  

Diluted
$
0.37  

$
0.57  

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MAPLEBEAR INC. DBA INSTACART
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

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

Three Months Ended March 31,

2025
2026

(in thousands)

Series A redeemable convertible preferred stock (1)
5,833
—

Stock options
384
384

Restricted stock units
258
7,136

Unvested restricted non-voting common stock
—
—

Total
6,475
7,520

___________
(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:

Three Months Ended March 31,

2025
2026

(in thousands)

Restricted stock units
1,055
168

Total
1,055
168

15.
Segment Information

The Company has one operating and reportable segment. A description of how the Company derives revenues can be found in Note 2 — Significant Accounting Policies of the audited consolidated financial statements for the year ended December 31, 2025, which can be found in the Company’s Annual Report on Form 10-K. 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 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 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 condensed consolidated statements of operations. Stock-based compensation expense is also a significant expense within net income. Refer to Note 12 — Stockholders’ Equity for additional information about the Company’s stock-based compensation expense. Other segment items include interest income, other income (expense), net, and income before provision for income taxes on the condensed consolidated statements of operations.

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

16.
Subsequent Events

In May 2026, the Company entered into a revolving credit agreement with certain lenders which provides for a $ 500  million unsecured revolving credit facility maturing in April 2031. As of the date of this filing, no amounts had been drawn under the credit facility.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. The following discussion contains forward-looking statements that are based on current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those identified below and those discussed in the section titled “Risk Factors” and other sections, including the “Special Note Regarding Forward-Looking Statements” of this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

For purposes of clarity and ease of presentation, numbers presented within this section may not sum precisely to the totals provided. The underlying data used in the calculations, including percentages, is not rounded.

Overview

Instacart is the leading technology and enablement partner for the grocery industry — helping consumers save time, retailers run their businesses online and in-store, and connect brands with customers.
We enable retail banners to grow by providing technology that can accelerate digital transformation of their business both online and in-store. Retailers reach customers through both Instacart Marketplace, where customers can shop from their favorite retailers through our app or website, and retailers’ owned and operated online storefronts that are powered by Instacart Enterprise platform, our end-to-end technology solution encompassing ecommerce, fulfillment, Connected Stores, ads and marketing, and insights.

When shopping for groceries, consumers want selection, quality, affordability, and convenience, and they shop in many different ways. Customers can place orders for delivery or pickup across a variety of use cases including the weekly shop, bulk stock-up, convenience, special occasions, from restaurants, and using our in-store technologies. We help our customers shop at their favorite retailers, order from their favorite restaurants, and enjoy selection, quality, affordability, and convenience. Our membership program, Instacart+, offers expanded customer benefits including unlimited $0 delivery fees on orders over a certain size, and other exclusive benefits.

Instacart Ads offers brands a highly measurable ads offering that leverages first-party transaction data to move products off store shelves more efficiently. We provide discovery and attractive return on investment through our industry-leading advertising tools and insights purpose-built for the online grocery category.

We offer shoppers an immediate, flexible earnings opportunity that allows them to choose when and how much to work. Shoppers are deeply valued members of the Instacart community, and we strive to make the shopping experience as seamless as possible so they can continue to deliver superior customer service.

Macroeconomic Impacts

Our business, financial condition, customer acquisition and retention, and key business metrics, including GTV and orders, may be impacted by macroeconomic trends affecting our 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.

Shopper Classification Developments

The state of the law regarding independent contractor status of Instacart shoppers varies from jurisdiction to jurisdiction and among governmental agencies and is subject to change based on court decisions, administrative or agency determinations, new or changing regulations, and other legal and regulatory proceedings.

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Some jurisdictions have adopted, and may adopt in the future, regulations that impact whether we can or should classify shoppers as independent contractors. For example, Proposition 22 in California provides a framework that offers more legal certainty regarding the status of independent workers offering delivery services and entitles shoppers in California to certain pay standards and benefits, which increases costs for us to operate in California. However, there may continue to be legal challenges, or legislative or other attempts to amend or otherwise invalidate the benefits, protections, or independent worker status provided by Proposition 22. To date, no such challenges have been successful. Additionally, we may face allegations that certain of our business practices do not satisfy all the elements of Proposition 22.

We also experience and expect to continue experiencing challenges to the independent contractor classification of shoppers who use Instacart in other jurisdictions in which we operate, as well as the imposition of additional requirements on the use of contractors. Any successful challenges, changes in law, or other legal uncertainty with respect to independent contractor classification, or requirements related to the use of contractors, may adversely impact our financial condition, business, and results of operations. For additional information about the risks to our business related to independent contractor classification, see the section titled “Risk Factors—Risks Related to Our Legal and Regulatory Environment—Our business is subject to various laws and regulations, which may change or increase over time and subject us to increased compliance costs and liabilities.”

Key Financial and Operational Highlights

We use the following financial and key business metrics to help us evaluate the health of our business, identify trends affecting our performance, formulate business plans, and make strategic decisions:

Three Months Ended March 31,

2025
2026
% Change

(in millions, except percentages)

GTV
$
9,122
$
10,288
13 
%

Orders
83.2
91.2
10 
%

Revenue
$
897
$
1,019
14 
%

Gross profit
$
671
$
738
10 
%

Gross margin
75 
%
72 
%

Gross profit as a percent of GTV
7.4 
%
7.2 
%

Net income
$
106
$
144
36 
%

Net income as a percent of revenue
12 
%
14 
%

Net income as a percent of GTV
1.2 
%
1.4 
%

Adjusted EBITDA (1)
$
244
$
300
23 
%

Adjusted EBITDA margin (1)
27 
%
29 
%

Adjusted EBITDA as a percent of GTV (1)
2.7 
%
2.9 
%

Net cash provided by operating activities
$
298
$
268
(10)
%

Free cash flow (1)
$
280
$
253
(10)
%

___________
(1) Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, Adjusted EBITDA margin, and free cash flow are non-GAAP financial measures. For more information regarding our use of these measures and reconciliation to the most directly comparable financial measures calculated in accordance with GAAP, see the section titled “—Non-GAAP Financial Measures.”

Orders

We define an order as a completed customer transaction to purchase goods for delivery or pickup primarily from a single retailer through Instacart during the period indicated, including those completed through Instacart Marketplace or services that are part of the Instacart Enterprise platform. We believe that orders are an indicator of the scale and growth of our business as well as the value we bring to our constituents.

In the first quarter of 2026, orders increased to 91.2 million, or 10% growth, compared to the same period of 2025, driven primarily by new customers and increased engagement of existing customers.

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Gross Transaction Value

We define GTV as the value of the products sold through Instacart, including applicable taxes, deposits and other local fees, customer tips, which go directly to shoppers, customer fees, which include flat subscription fees related to Instacart+ that are charged monthly or annually, and other fees. GTV consists of orders including those completed through Instacart Marketplace or services that are part of the Instacart Enterprise platform. We believe that GTV indicates the health of our business, including our ability to drive revenue and profits, and the value we provide to our constituents. We have experienced and expect to continue to experience fluctuations in GTV growth, including due to the macroeconomic conditions described above, changes in customer and retailer engagement, and the effects of our strategic initiatives.

In the first quarter of 2026, GTV increased to $10,288 million, or 13% growth, compared to the same period of 2025, primarily driven by the increase in orders and higher average order value.

Gross Profit, Gross Margin, and Gross Profit as a Percent of GTV

Gross profit is defined as revenue less cost of revenue, and gross margin is defined as gross profit as a percent of revenue. We believe that gross profit, gross margin, and gross profit as a percent of GTV are important indicators of the growth and efficiencies of our business.

In the first quarter of 2026, gross profit increase d to $738 million , or 10% growth, compared to the same period of 2025, primarily driven by the increase in total revenue. Gross margin decreased by 2% to 72% in the first quarter of 2026, compared to the same period of 2025, primarily due to cost of revenue growing faster than revenue.

Adjusted EBITDA, Adjusted EBITDA as a Percent of GTV, and Adjusted EBITDA Margin

We define Adjusted EBITDA as net income (loss), adjusted to exclude (i) provision for (benefit from) income taxes, (ii) interest income, (iii) other (income) expense, net, (iv) depreciation and amortization expense, (v) stock-based compensation expense, (vi) payroll taxes related to stock-based compensation, (vii) certain legal and regulatory accruals and settlements, net, (viii) reserves for sales and other indirect taxes, net, (ix) acquisition-related expenses, and (x) restructuring charges. We define Adjusted EBITDA margin as Adjusted EBITDA as a percent of revenue. For more information about how we use these non-GAAP financial measures in our business, the limitations of these measures, and reconciliations of these measures to the most directly comparable GAAP financial measures, see the section titled “—Non-GAAP Financial Measures.”

In the first quarter of 2026, Adjusted EBITDA increased to $300 million, or 23% growth, compared to the same period of 2025, primarily driven by a combination of strong GTV growth and operating leverage. Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin can vary significantly as we continue to make substantial investments to fuel our growth and scale our business.

Free Cash Flow

We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment, including capitalized internal-use software.

In the first quarter of 2026, free cash flow decreased to $253 million, or 10% , compared to the same period of 2025, primarily due to the collection of a large accounts receivable balance in the first quarter of 2025 from a retailer and the payment of $60 million in regulatory settlements in January 2026.

Components of Results of Operations

Revenue
Our revenue consists of transaction revenue and advertising and other revenue.
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Transaction Revenue
We generate transaction revenue primarily from:
• end users, whom we refer to as customers, (i) through service and delivery fees paid for arranging fulfillment services from shoppers and (ii) for monthly or annual Instacart+ memberships, our membership program, which offers unlimited $0 delivery fees on orders over a certain size, and other exclusive benefits;
• retailers (i) through service fees in exchange for connecting retailers with customers to facilitate transactions on Instacart Marketplace and (ii) fees related to fulfillment for orders placed through retailers’ owned and operated online storefronts powered by Instacart Enterprise platform; and
• revenue share agreements with third parties that supply payment cards to Instacart shoppers for in-store use.
Transaction revenue is recognized upon transfer of control of services, net of the purchase value of the goods remitted to retailers and payments to shoppers for their services (including any shopper incentives), coupons, consumer incentives, and refunds. We expect transaction revenue from customer and retailer fees to fluctuate from time to time as a result of customer and retailer fee optimizations and changes in the mix of customer use cases and fulfillment options. We also expect the amounts of payments to shoppers, coupons, consumer and shopper incentives, and refunds to fluctuate over time depending on a number of factors. For example, implementation of additional fulfillment options, shifts in our ability to use shoppers, or regulatory changes related to our engagement of shoppers, as well as fulfillment efficiencies, such as changes in our batch rate, average time spent per order, shopper tenure, and shopper pay optimization, could result in fluctuations in our transaction revenue. In addition, periods of elevated customer demand have resulted in and can in the future result in increased shopper incentives and degradation of order quality due to higher rates of out of stock items and other delays, which in turn generally lead to more appeasement credits and refunds. Furthermore, our overall marketing strategy will impact the spend mix between activities that are recorded as reductions of revenue, such as promotions and consumer incentives, and activities that are recorded as sales and marketing expense, such as paid marketing and referrer credits. In certain cases, reductions of revenue can be more than fees received from retailers and customers. As a result of these factors, transaction revenue as a percent of GTV may fluctuate over time.
Advertising and Other Revenue
We primarily generate advertising and other revenue from:
• the sale of advertising services to brands that are interested in reaching customers; and
• certain partners for use of our software-as-a-service solution through Instacart Enterprise platform that enhances the omnichannel shopping experience, with revenue recognized over the subscription period as services are provided.
Advertising revenue is recognized 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, we record advertising revenue on a gross or net basis based on whether we act as a principal or agent in the transaction, which is assessed on a contract by contract basis. When we act as the principal and control the services provided to the brand partner, we record revenue on a gross basis, recognizing fees from the brand partner as revenue and related payments to the publisher as cost of revenue. When we act as an agent and do not control the services, we record revenue on a net basis, representing only the net amount received from the brand partner after payments to the publisher.
Advertising and other revenue has historically been, and is expected to continue to be, seasonally high in the fourth quarter and seasonally low in the first quarter in a given year as a result of how advertisers deploy their budgets. In addition, we expect our advertising and other revenue growth rate and advertising and other investment rate (which we define as advertising and other revenue in a given period divided by GTV in such period) to continue to fluctuate, particularly during periods of acceleration or decreases in our GTV growth. We also expect advertising and other investment rate to fluctuate during periods in which we generate more GTV from sources where we do not provide advertising or where we have recently enabled advertising, such as from certain new offerings or use cases and from retailers’ owned and operated online storefronts including those utilizing Instacart API that do not partner with Carrot Ads. We also expect our advertising and other revenue growth to fluctuate in the near term due to changes in brand partner spend, including as a result of the macroeconomic factors described above and in response to our GTV growth trends, which may occur on a delayed basis, as well as changes in the mix of revenue contribution from advertising contracts in effect in a particular period and related recognition of advertising revenue on a gross or net basis.
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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 include salaries, taxes, benefits, bonuses, and stock-based compensation expense.
We expect cost of revenue, exclusive of stock-based compensation expense, will increase on an absolute dollar basis and vary from period to period as a percent of revenue as we continue to grow our operations.
Gross Profit and Gross Margin
Gross profit represents revenue less cost of revenue. Gross margin is gross profit expressed as a percent of total revenue. Our gross margin has varied and will continue to vary from period to period based on a number of factors, including (1) changes in revenue mix, changes in the mix of order type due to changes in mix of use cases and fulfillment options, consumer shopping behaviors, average order values, customer fee optimization, and levels of consumer incentives, (2) operational efficiencies, (3) negotiations with our retail partners, third-party payment processors, publishers, and hosting providers, and (4) macroeconomic factors as discussed above. As we continue to expand across fulfillment options and consumer use cases, we also expect to incur additional types of costs, such as certain labor costs, that can impact both our cost of revenue and profitability trends in the future. Additionally, we expect fluctuations in transaction revenue and advertising and other revenue as described above.
Operations and Support Expense
Operations and support expense primarily consists of compensation costs for employees who support our operations, costs of customer and shopper support, costs to attract and onboard new shoppers, expenses related to software and subscriptions, and depreciation and amortization expense. Compensation costs include salaries, taxes, benefits, bonuses, and stock-based compensation expense.
Operations and support expense, exclusive of stock-based compensation expense, may increase on an absolute dollar basis and vary from period to period as a percent of revenue and as a percent of GTV as we continue to invest in our operations and may hire additional employees, third-party consultants, and contractors to support our operations.
Research and Development 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 include salaries, taxes, benefits, bonuses, and stock-based compensation expense.
Research and development expense, exclusive of stock-based compensation expense, may increase on an absolute dollar basis and vary from period to period as a percent of revenue and as a percent of GTV as we continue to invest in research and development activities relating to ongoing improvements to, and maintenance of, our offerings, including the hiring of engineering, product development, and design employees to support these efforts.
Sales and Marketing 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 include salaries, taxes, benefits, bonuses, and stock-based compensation expense.
Sales and marketing expense, exclusive of stock-based compensation expense, may increase on an absolute dollar basis and vary as a percent of revenue, and as a percent of GTV as we continue to invest in sales and marketing to attract and increase the engagement of customers on Instacart and increase our brand awareness. While we expect sales and marketing expense to be one of our largest operating expenses for the foreseeable future, the trend and timing of our sales and marketing expense will depend in large part on the timing and magnitude of our marketing campaigns.
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General and Administrative Expense
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 include salaries, taxes, benefits, bonuses, and stock-based compensation expense.
General and administrative expense, exclusive of stock-based compensation expense, may increase on an absolute dollar basis and vary from period to period as a percent of revenue and as a percent of GTV as we continue to invest in processes, systems, and controls to enable our internal support functions to scale with the growth of our business.
Other Income (Expense), Net
Other income (expense), net primarily consists of gains and losses from transactions denominated in a currency other than the functional currency.
Interest Income
Interest income consists primarily of interest earned on our cash and cash equivalents, restricted cash and cash equivalents, and marketable securities.
Provision for (Benefit from) Income Taxes
The provision for (benefit from) income taxes consists primarily of income taxes in certain federal, state, local, and foreign jurisdictions in which we conduct business. Our provision for (benefit from) income taxes differs from the U.S. federal statutory income tax rate primarily due to the tax effects of stock-based compensation recognized, federal and California research and development credits generated, and the income taxes generated in U.S. states and foreign jurisdictions. Our future effective income tax rate depends on various factors, such as changes in tax laws, regulations, accounting principles, or interpretations thereof, and the geographic composition of our pre-tax income.

Results of Operations
The following table summarizes our results of operations for the periods indicated:

Three Months Ended March 31,

2025
2026

(in millions)

Revenue
$
897 

$
1,019 

Cost of revenue (1)(2)
226 

281 

Gross profit
671 

738 

Operating expenses:

Operations and support (1)(2)
75 

74 

Research and development (1)(2)
144 

164 

Sales and marketing (1)(2)
216 

230 

General and administrative (1)(2)
126 

88 

Total operating expenses
561 

556 

Income from operations
110 

182 

Interest income
14 

6 

Income before provision for income taxes
124 

188 

Provision for income taxes
18 

44 

Net income
$
106 

$
144 

___________
(1) Amounts include depreciation and amortization expense as follows:
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Three Months Ended March 31,

2025
2026

(in millions)

Cost of revenue
$
14 

$
24 

Operations and support
— 

1 

Research and development
2 

2 

Sales and marketing
2 

2 

General and administrative
1 

1 

Total depreciation and amortization expense
$
19 

$
30 

(2) Amounts include stock-based compensation expense as follows:

Three Months Ended March 31,

2025
2026

(in millions)

Cost of revenue
$
2 

$
2 

Operations and support
3 

3 

Research and development
34 

46 

Sales and marketing
13 

10 

General and administrative
14 

19 

Total stock-based compensation expense
$
66 

$
80 

The following table summarizes the components of our condensed consolidated statements of operations data, for each of the periods presented, as a percent of revenue.

Three Months Ended March 31,

2025
2026

(as a percent of revenue)

Revenue
100 
%
100 
%

Cost of revenue
25 

28 

Gross profit
75 

72 

Operating expenses:

Operations and support
8 

7 

Research and development
16 

16 

Sales and marketing
24 

23 

General and administrative
14 

9 

Total operating expenses
63 

55 

Income from operations
12 

18 

Interest income
2 

1 

Income before provision for income taxes
14 

18 

Provision for income taxes
2 

4 

Net income
12 
%
14 
%

Comparison of the Three Months Ended March 31, 2025 and 2026

Revenue

Three Months Ended March 31,

2025
2026
$ Change
% Change

(in millions)

Transaction
$
650 

$
733 

$
82 

13 
%

Advertising and other
247 

286 

40 

16 
%

Total revenue
$
897 

$
1,019 

$
122 

14 
%

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The increase in transaction revenue during the first quarter of 2026, compared to the same period of 2025, was primarily driven by growth in GTV, which grew 13%, and increased fulfillment efficiencies , partially offset by lower payment revenue.

The increase in advertising and other revenue during the first quarter of 2026, compared to the same period of 2025, was primarily driven by interrelated factors including an increase in advertising volume, activity on our platform, and strength from emerging and mid-size brand partners. Advertising and other investment rate increased by 8 basis points to 2.8% during the first quarter of 2026, compared to the same period of 2025, as advertising and other revenue grew faster than GTV.

Cost of Revenue, Gross Profit, and Gross Margin

Three Months Ended March 31,

2025
2026
$ Change
% Change

(in millions, except percentages)

Cost of revenue
$
226 

$
281 

$
55 

24 
%

Gross profit
$
671 

$
738 

$
66 

10 
%

Gross margin
75 
%
72 
%

The increase in cost of revenue during the first quarter of 2026, compared to the same period of 2025, was primarily due to an increase of $16 million in credit card processing fees, an increase of $12 million in payments to publishers, and an increase of $10 million in depreciation and amortization expense, primarily related to capitalized internal-use software.

The increase in gross profit during the first quarter of 2026, compared to the same period of 2025, was primarily driven by the increase in total revenue due to the factors described above. The decrease in gross margin during the first quarter of 2026, compared to the same period of 2025, was primarily due to cost of revenue growing faster than revenue .

Operations and Support Expense

Three Months Ended March 31,

2025
2026
$ Change
% Change

(in millions, except percentages)

Operations and support
$
75 

$
74 

$
(1)

(1)
%

Percent of revenue
8 
%
7 
%

The decrease in operations and support expense during the first quarter of 2026, compared to the same period in 2025, was immaterial.

Research and Development Expense

Three Months Ended March 31,

2025
2026
$ Change
% Change

(in millions, except percentages)

Research and development
$
144 

$
164 

$
20 

14 
%

Percent of revenue
16 
%
16 
%

The increase in research and development expense during the first quarter of 2026, compared to the same period in 2025, was primarily due to a net increase of $13 million in total compensation costs.
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Sales and Marketing Expense

Three Months Ended March 31,

2025
2026
$ Change
% Change

(in millions, except percentages)

Sales and marketing
$
216 

$
230 

$
14 

6 
%

Percent of revenue
24 
%
23 
%

The increase in sales and marketing expense during the first quarter of 2026, compared to the same period in 2025, was primarily due to an increase of $10 million in marketing costs, primarily from increased paid marketing.

General and Administrative Expense

Three Months Ended March 31,

2025
2026
$ Change
% Change

(in millions, except percentages)

General and administrative
$
126 

$
88 

$
(38)

(30)
%

Percent of revenue
14 
%
9 
%

The decrease in general and administrative expense during the first quarter of 2026, compared to the same period of 2025, was primarily due to a decrease of $46 million in accruals for legal matters and sales and indirect taxes.

Interest Income

Three Months Ended March 31,

2025
2026
$ Change
% Change

(in millions)

Interest income
$
14 

$
6 

$
(8)

(58)
%

The decrease in interest income during the first quarter of 2026, compared to the same period of 2025, was primarily due to lower interest rates and a reduction in the average balance of our cash, cash equivalents, and marketable securities.

Provision for Income Taxes

Three Months Ended March 31,

2025
2026
$ Change
% Change

(in millions)

Provision for income taxes
$
18 

$
44 

$
26 

148 
%

The increase in the provision for income taxes during the first quarter of 2026, compared to the same period of 2025, was due to the tax effects of stock-based compensation recognized, U.S. research and development credits generated, and the income taxes generated in U.S. states and foreign jurisdictions.

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes.

We use Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, Adjusted EBITDA margin, adjusted cost of revenue, adjusted cost of revenue as a percent of GTV, adjusted operations and support expense, adjusted operations and support expense as a percent of GTV, adjusted research and development expense, adjusted research and development
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expense as a percent of GTV, adjusted sales and marketing expense, adjusted sales and marketing expense as a percent of GTV, adjusted general and administrative expense, adjusted general and administrative expense as a percent of GTV, adjusted total operating expenses, adjusted total operating expenses as a percent of GTV, and free cash flow (collectively “Non-GAAP Measures”) in conjunction with GAAP measures to assess performance, to inform the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to discuss our business and financial performance with our board of directors. We believe that these Non-GAAP Measures provide useful information to investors about our business and financial performance, enhance their overall understanding of our past performance and future prospects, and allow for greater transparency with respect to metrics used by our management in their financial and operational decision making. We are presenting these Non-GAAP Measures to assist investors in seeing our business and financial performance through the eyes of management, and because we believe that these Non-GAAP Measures provide an additional tool for investors to use in comparing results of operations of our business over multiple periods with other companies in our industry.

Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our condensed consolidated statements of operations prepared in accordance with GAAP. Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies, which reduce their usefulness as comparative measures. In addition, other companies may not publish these or similar measures. Further, these measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our condensed consolidated statements of operations.

We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business.

Adjusted EBITDA, Adjusted EBITDA as a Percent of GTV, and Adjusted EBITDA Margin

We define Adjusted EBITDA as net income (loss), adjusted to exclude (i) provision for (benefit from) income taxes, (ii) interest income, (iii) other (income) expense, net, (iv) depreciation and amortization expense, (v) stock-based compensation expense, (vi) payroll taxes related to stock-based compensation, (vii) certain legal and regulatory accruals and settlements, net, (viii) reserves for sales and other indirect taxes, net, (ix) acquisition-related expenses, and (x) restructuring charges. We define Adjusted EBITDA margin as Adjusted EBITDA as a percent of revenue.

We include Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin in this Quarterly Report on Form 10-Q because they are important measures upon which our management assesses our operating performance and the operating leverage in our business. Because Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin facilitate internal comparisons of our historical operating performance, including as an indication of our revenue growth and operating efficiencies when compared to GTV and revenue over time, we use them to evaluate the effectiveness of our strategic initiatives and for business planning purposes. We also believe that Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin, when taken collectively, may be useful to investors because they provide consistency and comparability with past financial performance, so that investors can evaluate our operating efficiencies by excluding certain items that may not be indicative of our business, results of operations, or outlook. In addition, we believe Adjusted EBITDA is widely used by investors, securities analysts, rating agencies, and other parties in evaluating companies in our industry as a measure of operational performance.

Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin should not be considered as alternatives to net income (loss), net income (loss) as a percent of GTV, net income (loss) as a percent of revenue, or any other measure of financial performance calculated and presented in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin rather than net income (loss), net income (loss) as a percent of GTV, and net income (loss) as a percent of revenue, which are the most directly comparable GAAP measures. Some of these limitations are that each of Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin:

• does not reflect provision for or benefit from income taxes that reduces or increases cash available to us.
• does not reflect interest income which increases cash available to us;
• does not reflect other income or expense that includes unrealized and realized gains and losses on foreign currency exchange; and
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• excludes depreciation and amortization expense, and although these are non-cash expenses, the assets being depreciated may have to be replaced in the future, increasing our cash requirements;
• excludes stock-based compensation expense;
• excludes payroll taxes related to stock-based compensation;
• does not reflect the positive or adverse adjustments related to the reserve for sales and other indirect taxes or certain legal and regulatory accruals and settlements, net;
• excludes acquisition-related expenses; and
• excludes restructuring charges.
Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure. Because of these limitations, we consider, and you should consider, Adjusted EBITDA together with other operating and financial performance measures presented in accordance with GAAP.

The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated in accordance with GAAP:

Three Months Ended March 31,

2025
2026

(in millions, except percentages)

Net income
$
106
$
144

Add (deduct):

Provision for income taxes
18
44

Interest income
(14)
(6)

Depreciation and amortization expense
19
30

Stock-based compensation expense
66
80

Payroll taxes related to stock-based compensation (1)
10
7

Certain legal and regulatory accruals and settlements, net (2)
40
1

Reserves for sales and other indirect taxes, net (3)
(1)
—

Acquisition-related expenses
—
1

Adjusted EBITDA
$
244
$
300

GTV
$
9,122
$
10,288

Net income as a percent of GTV
1.2 
%
1.4 
%

Adjusted EBITDA as a percent of GTV
2.7 
%
2.9 
%

Revenue
$
897
$
1,019

Net income as a percent of revenue
12 
%
14 
%

Adjusted EBITDA margin
27 
%
29 
%

___________
(1) Represents employer payroll taxes related to the vesting and settlement of certain equity awards.
(2) Represents certain legal, regulatory, and policy expenses, including those related to worker classification, as well as non-recurring intellectual property matters and regulatory settlements.
(3) Represents sales and other indirect tax reserves, net of abatements, for periods in which we were unable to collect such taxes from customers. We believe this adjustment is useful for investors in understanding our underlying operating performance because in these cases, the taxes were not intended to be a cost to us but rather are to be borne by the customers.

Adjusted Cost of Revenue and Adjusted Cost of Revenue as a Percent of GTV

We define adjusted cost of revenue as cost of revenue excluding depreciation and amortization expense and stock-based compensation expense. We exclude depreciation and amortization expense and stock-based compensation expense as they are non-cash in nature.

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The following table provides a reconciliation of cost of revenue to adjusted cost of revenue:

Three Months Ended March 31,

2025
2026

(in millions, except percentages)

Cost of revenue
$
226 

$
281 

Adjusted to exclude the following:

Depreciation and amortization expense
(14)

(24)

Stock-based compensation expense
(2)

(2)

Adjusted cost of revenue
$
210 

$
255 

Cost of revenue as a percent of GTV
2.5 
%
2.7 
%

Adjusted cost of revenue as a percent of GTV
2.3 
%
2.5 
%

Adjusted Operations and Support Expense and Adjusted Operations and Support Expense as a Percent of GTV

We define adjusted operations and support expense as operations and support expense excluding depreciation and amortization expense, stock-based compensation expense, payroll taxes related to stock-based compensation, and restructuring charges. We exclude depreciation and amortization expense and stock-based compensation expense as they are non-cash in nature. We exclude payroll taxes related to the vesting and settlement of certain equity awards and restructuring charges as they are not indicative of our operating performance.

The following table provides a reconciliation of operations and support expense to adjusted operations and support expense:

Three Months Ended March 31,

2025
2026

(in millions, except percentages)

Operations and support expense
$
75 

$
74 

Adjusted to exclude the following:

Depreciation and amortization expense
— 

(1)

Stock-based compensation expense
(3)

(3)

Payroll taxes related to stock-based compensation (1)
(1)

— 

Adjusted operations and support expense
$
71 

$
70 

Operations and support expense as a percent of GTV
0.8 
%
0.7 
%

Adjusted operations and support expense as a percent of GTV
0.8 
%
0.7 
%

___________
(1) Represents employer payroll taxes related to the vesting and settlement of certain equity awards.

Adjusted Research and Development Expense and Adjusted Research and Development Expense as a Percent of GTV

We define adjusted research and development expense as research and development expense excluding depreciation and amortization expense, stock-based compensation expense, payroll taxes related to stock-based compensation, and restructuring charges. We exclude depreciation and amortization expense and stock-based compensation expense as they are non-cash in nature and we exclude payroll taxes related to the vesting and settlement of certain equity awards and restructuring charges as they are not indicative of our operating performance.

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The following table provides a reconciliation of research and development expense to adjusted research and development expense:

Three Months Ended March 31,

2025
2026

(in millions, except percentages)

Research and development expense
$
144 

$
164 

Adjusted to exclude the following:

Depreciation and amortization expense
(2)

(2)

Stock-based compensation expense
(34)

(46)

Payroll taxes related to stock-based compensation (1)
(6)

(4)

Adjusted research and development expense
$
102 

$
111 

Research and development expense as a percent of GTV
1.6 
%
1.6 
%

Adjusted research and development expense as a percent of GTV
1.1 
%
1.1 
%

___________
(1) Represents employer payroll taxes related to the vesting and settlement of certain equity awards.

Adjusted Sales and Marketing Expense and Adjusted Sales and Marketing Expense as a Percent of GTV

We define adjusted sales and marketing expense as sales and marketing expense excluding depreciation and amortization expense, stock-based compensation expense, payroll taxes related to stock-based compensation, acquisition-related expenses, and restructuring charges. We exclude depreciation and amortization expense and stock-based compensation expense as they are non-cash in nature and we exclude payroll taxes related to the vesting and settlement of certain equity awards, acquisition-related expenses, and restructuring charges as they are not indicative of our operating performance.

The following table provides a reconciliation of sales and marketing expense to adjusted sales and marketing expense:

Three Months Ended March 31,

2025
2026

(in millions, except percentages)

Sales and marketing expense
$
216 

$
230 

Adjusted to exclude the following:

Depreciation and amortization expense
(2)

(2)

Stock-based compensation expense
(13)

(10)

Payroll taxes related to stock-based compensation (1)
(1)

(1)

Adjusted sales and marketing expense
$
200 

$
217 

Sales and marketing expense as a percent of GTV
2.4 
%
2.2 
%

Adjusted sales and marketing expense as a percent of GTV
2.2 
%
2.1 
%

___________
(1) Represents employer payroll taxes related to the vesting and settlement of certain equity awards.

Adjusted General and Administrative Expense and Adjusted General and Administrative Expense as a Percent of GTV

We define adjusted general and administrative expense as general and administrative expense excluding depreciation and amortization expense; stock-based compensation expense; payroll taxes related to stock-based compensation; certain legal and regulatory accruals and settlements, net; reserves for sales and other indirect taxes, net; acquisition-related expenses; and restructuring charges. We exclude depreciation and amortization expense and stock-based compensation expense as these are non-cash in nature. We exclude payroll taxes related to the vesting and settlement of certain equity awards; certain legal and regulatory accruals and settlements, net; reserves for sales and other indirect taxes, net; acquisition-related expenses; and restructuring charges as they are not indicative of our operating performance.

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The following table provides a reconciliation of general and administrative expense to adjusted general and administrative expense:

Three Months Ended March 31,

2025
2026

(in millions, except percentages)

General and administrative expense
$
126 

$
88 

Adjusted to exclude the following:

Depreciation and amortization expense
(1)

(1)

Stock-based compensation expense
(14)

(19)

Payroll taxes related to stock-based compensation (1)
(2)

(1)

Certain legal and regulatory accruals and settlements, net (2)
(40)

(1)

Reserves for sales and other indirect taxes, net (3)
1 

— 

Acquisition-related expenses
— 

(1)

Adjusted general and administrative expense
$
70 

$
65 

General and administrative expense as a percent of GTV
1.4 
%
0.9 
%

Adjusted general and administrative expense as a percent of GTV
0.8 
%
0.6 
%

___________
(1) Represents employer payroll taxes related to the vesting and settlement of certain equity awards.
(2) Represents certain legal, regulatory, and policy expenses, including those related to worker classification, as well as non-recurring intellectual property matters and regulatory settlements.
(3) Represents sales and other indirect tax reserves, net of abatements, for periods in which we were unable to collect such taxes from customers. We believe this adjustment is useful for investors in understanding our underlying operating performance because in these cases, the taxes were not intended to be a cost to us but rather are to be borne by the customers.

Adjusted Total Operating Expenses and Adjusted Total Operating Expenses as a Percent of GTV

We define adjusted total operating expenses as the sum of adjusted operations and support expense, adjusted research and development expense, adjusted sales and marketing expense, and adjusted general and administrative expense. We exclude depreciation and amortization expense and stock-based compensation expense as these are non-cash in nature. We exclude payroll taxes related to the vesting and settlement of certain equity awards; certain legal and regulatory accruals and settlements, net; reserves for sales and other indirect taxes, net; acquisition-related expenses; and restructuring charges as these are not indicative of our operating performance.

The following table provides a reconciliation of operating expenses to adjusted total operating expenses:

Three Months Ended March 31,

2025
2026

(in millions, except percentages)

Total operating expenses
$
561 

$
556 

Adjusted to exclude the following:

Depreciation and amortization expense
(5)

(6)

Stock-based compensation expense
(64)

(78)

Payroll taxes related to stock-based compensation (1)
(10)

(6)

Certain legal and regulatory accruals and settlements, net (2)
(40)

(1)

Reserves for sales and other indirect taxes, net (3)
1 

— 

Acquisition-related expenses
— 

(1)

Adjusted total operating expenses
$
443 

$
463 

Total operating expenses as a percent of GTV
6.1 
%
5.4 
%

Adjusted total operating expenses as a percent of GTV
4.9 
%
4.5 
%

___________
(1) Represents employer payroll taxes related to the vesting and settlement of certain equity awards.
(2) Represents certain legal, regulatory, and policy expenses, including those related to worker classification, as well as non-recurring intellectual property matters and regulatory settlements.
(3) Represents sales and other indirect tax reserves, net of abatements, for periods in which we were unable to collect such taxes from customers. We believe this adjustment is useful for investors in understanding our underlying operating performance because in these cases, the taxes were not intended to be a cost to us but rather are to be borne by the customers.

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Free Cash Flow

We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment, including capitalized internal-use software.

The following table provides a reconciliation of net cash provided by operating activities to free cash flow:

Three Months Ended March 31,

2025
2026

(in millions)

Net cash provided by operating activities
$
298  

$
268  

Purchases of property and equipment, including capitalized internal-use-software
(18)

( 16 )

Free cash flow
$
280 

$
253 

Liquidity and Capital Resources

We finance our operations primarily through fees received from retailers, customers, and brands. As of March 31, 2026, we had cash and cash equivalents of $631 million and marketable securities of $122 million, which were primarily held for working capital purposes.

Although we have generated profit in recent periods, including net income of $144 million for the three months ended March 31, 2026, we have historically experienced significant net losses as reflected in our accumulated deficit of $4.7 billion as of March 31, 2026. While we generated positive cash flows from operating activities for the years ended December 31, 2024 and 2025 and for the three months ended March 31, 2026, our future cash flows from operating activities may fluctuate as a result of investments we continue to make across our organization. As a result, we may require additional capital resources to execute strategic initiatives to grow our business.

Our working capital and operating cash flows fluctuated and continue to fluctuate significantly from period to period as a result of new initiatives, the timing of payments made to and/or received from retailers, shoppers, and vendors, and certain transaction types, such as those involving EBT SNAP and alcohol sales, which have a more significant impact on our working capital and operating cash flow due to the variability, magnitude, and timing of retailer reimbursements. Additionally, we make substantial weekly payments to shoppers on Tuesdays and Sundays for services delivered on Instacart and, therefore, we expect our reported cash and cash flows from operating activities to be impacted based on the day of the week of each reporting period. Furthermore, due to the timing of funding to a certain payment card issuer, we may experience an increase in short-term liabilities based on the day of the week of the last day of each reporting period.

We believe that our existing cash, cash equivalents, and marketable securities will be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at least the next 12 months and beyond. However, our future cash requirements will depend on many factors, including our growth rate, the timing and the amount of cash received from retailers, customers, and brands, the timing and extent of spending to support our research and development efforts as well as sales and marketing activities, the introduction of enhancements, the continuing market adoption of Instacart, and the volume and timing of our share repurchases. In addition, we may enter into additional or expanded retailer, customer, brand, or other relationships, as well as agreements to acquire or invest in complementary businesses, products, teams, and technologies, including intellectual property rights, which could increase our cash requirements. As a result of these and other factors, we may be required to seek additional financing sooner than we currently anticipate. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. In particular, recent volatility in the global financial markets, including due to the impact of tariffs or other trade restrictions, elevated interest rates and other macroeconomic conditions, geopolitical conflicts, and potential disruptions in access to bank deposits or lending commitments due to bank failures could reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.

In May 2026, we entered into a revolving credit agreement with certain lenders which provides for a $500 million unsecured revolving credit facility maturing on April 2031. As of the date of this filing, no amounts had been drawn under the credit facility.

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Share Repurchases

In June 2024, our board of directors authorized a $500 million share repurchase program, which was subsequently increased to $750 million, $1 billion, and $2.5 billion in November 2024, May 2025, and November 2025, respectively. In April 2026, our board of directors authorized an increase of $1.0 billion to the share repurchase program, bringing the total authorization under the program to $3.5 billion.

For the three months ended March 31, 2026, we repurchased and immediately retired 9 million shares of our common stock for an aggregate purchase price of $402 million, including broker commissions, fees, and excise taxes, under this share repurchase program, which included shares repurchased under the ASR Agreement as described below.

On November 10, 2025, we entered into the ASR Agreement with a third-party financial institution to repurchase $250 million of our common stock. Pursuant to the terms of the ASR Agreement, we paid $250 million to the financial institution and received and immediately retired an initial delivery of 5.4 million shares of common stock on November 12, 2025, representing 80% of the value of the $250 million payment. Repurchases under the ASR Agreement were completed in January 2026, and we received and immediately retired an additional 0.6 million shares. Refer to Note 12 — Stockholders’ Equity for further discussion.

Cash Flows

The following table summarizes our cash flows for the periods presented:

Three Months Ended March 31,

2025
2026

(in millions)

Net cash provided by operating activities
$
298
$
268

Net cash provided by (used in) investing activities
1
(8)

Net cash used in financing activities
(46)
(328)

Cash Flows from Operating Activities

For the three months ended March 31, 2026, net cash provided by operating activities was $268 million, which consisted of net income of $144 million, adjustments for certain non-cash items of $159 million, partially offset by net cash outflows from changes in operating assets and liabilities of $35 million. Adjustments for certain non-cash items were primarily driven by stock-based compensation expense of $80 million and a decrease in deferred income taxes of $38 million. The year-over-year decrease in cash provided by operating activities was primarily driven by fluctuations in working capital from general business impacts including (i) the timing of customer, vendor, and other third-party payments and accruals including legal and regulatory matters and sales and indirect taxes; (ii) the timing of spend and usage of software subscriptions for hosting arrangements; and (iii) the overall growth of our business. Regulatory settlements of $60 million, previously accrued as of December 31, 2025, were paid with cash on hand in January 2026 and is reflected in the operating asset and liability changes noted above.

For the three months ended March 31, 2025, net cash provided by operating activities was $298 million, which consisted of net income of $106 million, adjusted for certain non-cash items of $96 million, primarily driven by stock-based compensation expense of $66 million and by net cash inflows from changes in operating assets and liabilities of $96 million. The year-over-year increase in net changes in operating assets and liabilities, which impacted cash provided by operating activities, from a net cash inflow of $105 million to $298 million was primarily driven by fluctuations in working capital from general business impacts such as the timing of customer collections primarily due to the collection of a large accounts receivable balance from a retailer; the timing of customer, vendor, and other third-party payments and accruals; and the overall growth of our business.

Cash Flows from Investing Activities

For the three months ended March 31, 2026, net cash used in investing activities was $8 million, comprised primarily of purchases of property and equipment, including capitalized internal-use software, of $16 million and purchases of marketable securities of $4 million, partially offset by maturities of marketable securities of $12 million.

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For the three months ended March 31, 2025, net cash provided by investing activities was $1 million, comprised primarily of maturities of marketable securities of $81 million, partially offset by purchases of marketable securities of $62 million and purchases of property and equipment, including capitalized internal-use software, of $18 million.

Cash Flows from Financing Activities

For the three months ended March 31, 2026, net cash used in financing activities was $328 million, comprised primarily of repurchases of common stock of $359 million and taxes paid related to net share settlement of equity awards of $4 million, partially offset by changes in advances from a payment card issuer of $31 million and proceeds from the exercise of stock options of $3 million.

For the three months ended March 31, 2025, net cash used in financing activities was $46 million, comprised primarily of repurchases of common stock of $89 million and taxes paid related to net share settlement of equity awards of $8 million, partially offset by changes in advances from a payment card issuer of $47 million and proceeds from the exercise of stock options of $4 million.

Contractual Obligations and Commitments
As of March 31, 2026, there have been no material changes from the contractual obligations and commitments as described in our Annual Report on Form 10-K for the year ended December 31, 2025.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements in accordance with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the financial statements, as well as the reported amounts of revenue and expenses during the period presented. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows could be affected.
There have been no material changes to our critical accounting policies and estimates as described in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements
See Note 2 — Significant Accounting Policies in the notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in the ordinary course of our business. These risks primarily include foreign currency and exchange risk, interest rate risk, and inflation risk as follows:

Foreign Currency and Exchange Risk
We transact business globally in multiple currencies, with the vast majority of our cash generated from revenue denominated in the U.S. dollar and a small amount denominated in other foreign currencies. Our international revenue, as well as costs and expenses denominated in foreign currencies, expose us to the risk of fluctuations in foreign currency exchange rates against the U.S. dollar.

We have experienced and will continue to experience fluctuations in our net income as a result of transaction gains or losses related to remeasurement of certain asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our condensed consolidated financial statements. As the impact of foreign currency exchange rates has not been material to our historical results of operations, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant.
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Interest Rate Risk

As of March 31, 2026, we had cash and cash equivalents of $631 million and marketable securities of $122 million invested in a variety of securities, including money market funds, U.S. government and government agency debt securities, and corporate debt securities. In addition, we had $128 million of restricted cash and cash equivalents primarily due to legally restricted funds maintained in a bank account pursuant to an agreement with a payment card issuer and outstanding letters of credit established in connection with lease agreements for our facilities. Our cash, cash equivalents, and marketable securities are held for working capital purposes. We do not enter into investments for trading or speculative purposes. Due to the nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. We may be exposed to further interest rate risk if we revise our strategy to invest in longer term securities in the future. A hypothetical 10% increase or decrease in interest rates would not have had a material impact on our condensed consolidated financial statements as of March 31, 2026.

Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition, or results of operations, other than as a result of its impact on the general economy. However, we are operating in a more volatile inflationary environment due to macroeconomic conditions and have limited data and experience doing so in our history, particularly at our scale. The principal inflationary factors affecting our business are higher prices of products offered by retail partners through Instacart, including due to higher raw material costs, tariffs and trade restrictions, shipping and freight costs, elevated fuel prices that are borne by our partners, and customers purchasing fewer items on average per order. Higher retailer prices, resulting in increased grocery costs and reduced consumer spending have negatively impacted consumer demand for online grocery as consumers return to in-store shopping to save on service and delivery fees and also have reduced order frequency, driven lower order volumes, and impacted average order values. Customers have and may continue to reduce spending on more premium products, and our brand partners have and may continue to reduce their overall advertising budgets, either of which could harm our revenue and margin. We may also not be able to fully offset higher costs through operational efficiencies or price increases. Increased fuel prices as a result of supply chain and other macroeconomic factors may also result in fewer shoppers or reduced shopper activity. While we have previously implemented certain shopper incentives in response to these factors, persistent or increased shopper shortages may require us to reintroduce or further increase shopper incentives to ensure sufficient shoppers are available to meet demand or provide additional consumer incentives or refunds due to shopper delays or incorrect orders, which have historically occurred and reduced our revenue and profitability. As a result of these factors, we may experience fluctuations in GTV and orders, which could negatively impact our revenue and margin.

Certain of our offerings focused on affordability, such as the addition of discount grocers to Instacart, continued customer promotions, no rush delivery, Instacart+ members-only discounts, and acceptance of other payment options may improve customer accessibility to online grocery and help offset pricing challenges faced by customers due to inflationary pressures and customer fees. However, we cannot predict whether such offerings will offset or mitigate the negative impacts of inflationary pressures to our business, such as general reductions in spending by customers. Our inability or failure to address challenges relating to inflation could harm our business, financial condition, and results of operations.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures were effective and provided reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the first quarter of 2026 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

A control system, no matter how well designed and operated, can provide only reasonable, not absolute assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

See discussion under the caption “Legal Matters” in Note 10 — Commitments and Contingencies to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for information regarding legal proceedings that constitute material contingencies for financial reporting purposes that could have a material adverse effect on our consolidated financial position, liquidity, or results of operations if they were resolved in a manner that is adverse to us.

Although the results of these claims, lawsuits, government investigations, and other legal proceedings in which we are involved cannot be predicted with certainty, we believe that none of these matters is likely to have a material impact on our business, financial condition, results of operations, or cash flows. However, management’s views and estimates related to these matters may change in the future, as new events and circumstances arise and the matters continue to develop. Further, regardless of final outcomes, any such legal proceedings, claims, and government investigations may nonetheless impose a significant burden on management and employees and may come with costly defense costs or unfavorable preliminary and interim rulings.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk because our business is subject to numerous risks and uncertainties, as further described below. You should consider and read carefully all of the risks and uncertainties described below, as well as other information included in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q, before making an investment decision. The risks described below are not the only ones we face. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition, results of operations, or prospects. In such case, the trading price of our common stock could decline, and you may lose some or all of your original investment. You should not interpret our disclosure of any of the following risks to imply that such risks have not already materialized.

Risk Factors Summary

Our business is subject to numerous risks and uncertainties, including those outside of our control, that could cause our actual results to be harmed. These risks include the following:
• Historical trends relating to our growth and financial performance may not be indicative of future performance.
• If we fail to cost-effectively acquire new customers or increase the engagement of our existing customers, including through effective marketing strategies, our business would be harmed.
• We have a limited history operating our business at its current scale, scope, and complexity in an evolving market and economic environment, which makes it difficult to plan for future operations and strategic initiatives, predict future results, and evaluate our future prospects and the risks and challenges we may encounter.
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• We have a history of losses, and we may be unable to sustain or increase profitability or generate profitable growth in the future.
• The success of our business is dependent on our relationships with retailers. The loss of one or more of our retail partners or reduction in their engagement with Instacart could harm our business.
• We are continuing to build our Instacart Ads offerings. If we fail to grow our advertising revenue, our business, financial condition, and results of operations would be negatively impacted.
• Our business is subject to various laws and regulations, including those related to the contractor status of shoppers and requirements to engage shoppers, which may change or increase over time and subject us to increased compliance costs and liabilities.
• The markets in which we participate are highly and increasingly competitive, with well-capitalized and better-known competitors, some of which are also partners. If we are unable to compete effectively, our business and financial prospects would be adversely impacted.
• Artificial intelligence and machine learning technologies, including our use of such technologies and use of such technologies by our competitors, could result in reputational harm, competitive harm, or legal liability, and could adversely affect our results of operations.
• If we fail to cost-effectively engage, attract, or retain shoppers on Instacart, our business could be harmed.
• The failure to achieve increased market acceptance of online grocery shopping and our offerings could seriously harm our business.
• Mergers or other strategic transactions by competitors or retailers could weaken our competitive position and adversely affect our business.
• We expect a number of factors to cause our results of operations and operating cash flows to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.
• The trading price of our common stock may be volatile and could decline significantly and rapidly. You may be unable to sell your shares of common stock at or above the price at which you purchased them.

Risks Related to Our Business and Industry
Historical trends relating to our growth and financial performance may not be indicative of future performance.
We have experienced rapid growth in prior periods, which was driven substantially by the COVID-19 pandemic, which led to significant demand for our offerings, and the rapid evolution of the online grocery shopping industry, as well as the other retail categories in which we operate. However, our growth rates have decreased from what we historically experienced and may continue to decrease or fluctuate as a result of macroeconomic and geopolitical conflicts, including as a result of trade policies enacted or proposed by the United States, such as tariffs or other trade restrictions, uncertainty related thereto, and responses by foreign governments to such policies, inflation risk, actual or perceived risk of an economic recession, cessation of, interruptions to, or changes to government aid programs, the effects of severe weather patterns, increasing competition, strategic initiatives, and the maturation of our business, among others. We also cannot be certain whether we will drive greater engagement from new or existing retailers, customers, or brands or maintain or increase the level of demand for our offerings over the long term. As a result of the foregoing, our prior growth rates and financial performance should not necessarily be considered indicative of our future performance and results of operations.
Overall growth of our GTV, revenue, margin, and profitability depends on a number of factors, including our ability to:
• attract new retailers, customers, brands, and shoppers, including through effective pricing of our offerings, and sustain and expand our relationships with existing retailers, customers, brands, and shoppers;
• accurately forecast our revenue and plan our operating expenses and investments for future growth;
• successfully compete with other companies that are currently in, or may in the future enter, the markets in which we compete, and respond to developments from these competitors such as pricing changes and the introduction of new services;
• hire, integrate, and retain talented sales, customer service, engineering, and other personnel;
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• comply with existing and new laws, regulations, and judgments or settlements applicable to our business;
• successfully expand in existing markets and enter new markets, including new geographies, retail categories, and fulfillment methods;
• increase the adoption of our Instacart+ membership program to drive increased customer engagement;
• successfully launch new offerings and enhance Instacart and its features and use cases, including in response to new trends or competitive dynamics or the needs of retailers, customers, brands, and shoppers;
• increase the revenue generated by our Instacart Ads offerings;
• successfully identify, acquire and integrate, or invest in businesses, products, or technologies that we believe could complement or expand our offerings;
• enter into and maintain strategic partnerships, including our partnership with Uber to offer their restaurant delivery services on our platform;
• avoid interruptions or disruptions in our services;
• provide retailers, customers, brands, and shoppers with high-quality support that meets their needs;
• effectively manage growth of our infrastructure, personnel, and operations, particularly due to our Flex First workforce model that permits employees to elect to work remotely;
• effectively manage our costs related to our fulfillment methods; and
• maintain and enhance our reputation and the value of our brand.
As a result, you should not rely on our GTV, revenue growth rate, or other key business metrics for any prior quarterly or annual period as an indication of our future performance.
In addition, our ability to forecast, and to provide guidance to investors regarding future operating results and key financial metrics is inherently uncertain. Our business is complex, relatively young and subject to significant impacts from events or evolving regulations beyond our control. All forecasts should be viewed as our good faith expectation at the time originally made, but not accorded undue weight.
We also expect to continue to expend substantial financial and other resources to grow our business, which may not result in sufficient growth or increased profitability to offset the cost of such investments. We may also fail to allocate our resources in a manner that results in increased GTV or revenue growth or improved margin. If our GTV or revenue growth rates decline or our margin is negatively impacted, investors’ perceptions of our business and the trading price of our common stock could be adversely affected.
If we fail to cost-effectively acquire new customers or increase the engagement of our existing customers, including through effective marketing strategies, our business would be harmed.
The growth of our business is dependent upon our ability to continue to grow our offerings by cost-effectively increasing our engagement with existing customers and acquiring new customers. If we fail to do so, the value of our offerings will be diminished, and we may have difficulty attracting and engaging retailers and brands. The number of customers and their level of engagement on Instacart may decline materially or fluctuate as a result of many factors, including, among other things:
• dissatisfaction with the operation of, or pricing on, Instacart, including our customer support services, or the quality and performance of the offerings, services, and technology of our partners;
• the actual or perceived quality of service provided by shoppers, such as picking the wrong item, making a poor substitution for out of stock items, failing to deliver items on a timely basis or at all, failing to complete requested tasks or otherwise follow customer instructions, or customers having negative experiences in their interactions with shoppers, particularly during demand surges;
• cost of using Instacart compared to in-store shopping or other alternatives, including as a result of customer fees and differences between online and in-store prices and promotions;
• the actual or perceived value or quality of our membership offering and membership benefits;
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• the actual or perceived value or quality of service, or the quality, pricing, and availability of products provided by retailers, including as a result of disruptions in the global supply chain;
• the breadth and variety of retailers that are available to customers on Instacart, including retailers with whom we have a limited or informal arrangement for availability on Instacart;
• macroeconomic uncertainty, including as a result of trade policies enacted or proposed by the United States, such as tariffs or other trade restrictions, uncertainty related thereto, and responses by foreign governments to such policies, as well as related price increases, inflation risk, and actual or perceived risk of an economic recession;
• future public health outbreaks, or a future outbreak of disease or similar public health concern;
• market acceptance of online grocery shopping and our in-store technology offerings;
• negative publicity related to our brand, including as a result of safety incidents, dissatisfaction with our offerings, and other events;
• actual or perceived public policy positions;
• failure to maintain good relationships with shoppers resulting in fewer shoppers available for customers, particularly during peak demand; or
• dissatisfaction with the user experience on our platform, new and current offerings, or changes we make to our offerings.
Although we believe that many customers originate from word-of-mouth customer acquisition and other non-paid referrals, we expect to continue to expend resources for customer acquisition and engagement, including through offering discounts and running promotions, all of which could impact our overall profitability. We have in the past experienced and may continue to experience decreases in new customer acquisition rates and customer retention, which have negatively impacted and may continue to negatively impact GTV and orders. As a result, we have increased and may continue to increase our customer acquisition spend, including incentives, paid marketing, and brand marketing campaigns to acquire new customers and increase the engagement of our existing customers, which may harm our margin and profitability and our efforts to drive efficiencies in our operating expenses. If we are not successful in, or reduce, our marketing investments, we may not be able to retain our existing customers or convert first-time customers, including those using consumer incentives such as discount promotions, into customers who regularly use and engage with our offerings. Further, we may not be able to accurately assess the effectiveness of our marketing campaigns and strategies in acquiring new customers or increasing existing customer engagement for several periods. The effectiveness of our marketing campaigns and strategies may also be obfuscated due to temporary or periodic external factors, such as future public health outbreaks, macroeconomic factors, and changes in the regulatory landscape. Failure to effectively design and conduct such campaigns and strategies may negatively impact our ability to acquire new customers and increase engagement with existing customers, which would harm our revenue growth and business. Consumers also have different grocery needs and preferences depending on demographics, and these priorities may shift as they age. We face heavy competition for consumers in certain demographics, including those in younger age groups who prioritize use cases, features, and fulfillment options that are different from customers in older age groups, such as convenience and specific product categories, as well as those in different income groups who may prioritize affordability over convenience or selection. If we do not successfully address the current and future needs of consumers in different demographics, primarily certain age and income groups, including through brand marketing campaigns and introduction and promotion of relevant use cases, features, fulfillment options, and other functionalities, we may be unable to attract new customers or increase engagement with existing customers. In addition, we may also experience increased customer churn, including to competitors, which would harm our business.
Many customers initially access Instacart to take advantage of certain promotions, such as discounts and other reduced fees. We strive to demonstrate the value of our offerings to such customers, thereby encouraging them to access Instacart regularly or subscribe to Instacart+, through prompts, notifications, and reduced fees or time-limited trials of Instacart+ and other offerings. However, these customers or other customers we acquire inorganically may be lower intent users of Instacart with reduced engagement compared to customers that we acquire organically, may never convert to paying Instacart+ members, or may discontinue using Instacart after they take advantage of our promotions. Further, our initiatives to retain customers, such as encouraging them to subscribe to Instacart+ or providing additional use cases and fulfillment options, may result in negative impacts to other metrics. For example, an increase in Instacart+ orders, changes in product categories shopped, reduced spend on more premium or discretionary products, or a shift toward convenience or priority, may result in a decrease in average order value. Such shifts may also negatively impact certain retailers’ and brands’ actual or perceived benefit from engaging with Instacart.
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