Instacart Q1 2026 Earnings Call - AI-Powered Growth and Advertising Expansion Drive Record Revenue

Chris Rogers, Chief Executive Officer, Instacart1: Good day, and thank you for standing by. Welcome to the Instacart first quarter 2026 financial results conference call. I would now like to hand the conference over to our first speaker today, Rebecca Yoshiyama, Vice President, Head of Investor Relations. Please go ahead.

Chris Rogers, Chief Executive Officer, Instacart2: Thank you, operator, and welcome everyone to Instacart’s first quarter 2026 earnings call. On the call with me today are Chris Rogers, our Chief Executive Officer, and Emily Reuter, our Chief Financial Officer. During today’s call, we’ll make forward-looking statements related to our business plans and strategy, developments in the grocery industry, and our future performance and prospects, including our expectations regarding our financial results and share repurchases. These forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those anticipated. You can find more information about these risks and uncertainties in our SEC filings, including our last Form 10-K. We assume no obligation to update these statements after today’s call, except as required by law.

In addition, we will also discuss certain non-GAAP financial measures which have limitations and should not be considered in isolation from or as a substitute for our GAAP results. A reconciliation between these GAAP and non-GAAP financial measures is included in our press release, which can be found on our investor relations website. Now, I’ll turn the call over to Chris for his opening remarks.

Chris Rogers, Chief Executive Officer, Instacart: Thanks, Rebecca. Good morning, everybody, and thanks for joining us. Q1 was a strong start to the year. We grew GTV 13% and total revenue 14% year-over-year, surpassing $10 billion in GTV and over $1 billion in total revenue for the first time. We also expanded profitability and repurchased $349 million in shares, reflecting our continued confidence in the business. Stepping back, the headline is simple: Our strategy is working. We’re the leading grocery technology platform, delivering a best-in-class consumer experience, empowering retailers through our marketplace and enterprise capabilities, and operating a scaled advertising ecosystem for brands. Each part of our strategy is getting stronger on its own, and more importantly, they’re compounding together. When we improve the consumer experience and scale our marketplace, we drive growth for our retail partners.

We extend those capabilities into retailers’ owned and operated channels, which deepens our integrations and allows us to create better, more differentiated experiences for consumers. As our platform grows, it creates more opportunities for us to expand our ads and data capabilities while also unlocking efficiencies that we can reinvest back into the business. That combination is what’s driving our results and gives us confidence in our runway ahead. Now, let me walk you through what we’re seeing across each of our key growth engines. Starting with marketplace. Our fundamentals are strong, and we remain laser-focused on delivering the best end-to-end grocery experience. We center on what matters most to customers: selection, quality, affordability, and convenience, and we’re increasingly using AI to make our experience more personalized and intuitive.

You can see this in all the product improvements we’ve made, which may sound simple individually, but at our scale, they compound quickly. For example, we continue to enhance our search functionality, making it faster and more relevant while also guiding more new users towards search earlier in the journey. That matters because customers who use search are about five times more likely to place their first order. We’re also improving how consumers discover and access savings, making promotions more visible and easier to understand, including offers like free pasta sauce when you buy $10 more of meat. That’s helping customers save while also driving larger baskets. As we continue to raise the bar on quality, we’ve upgraded our AI-powered replacement flow to better reflect consumer preferences in real time.

A strong example of how data and technology have come together to improve outcomes for both shoppers and customers. On top of this strong foundation, we’re introducing new AI-powered capabilities. With over 1.6 billion lifetime orders, we have a unique and deep understanding of the grocery journey, and we’re using that to build the gold standard of agentic grocery AI. We recently began testing Cart Assistant, our AI-powered conversational shopping experience, now available to about 25% of U.S. customers. Early feedback is encouraging, with customers using it to discover recipes, build meal plans, quickly assemble baskets, and research products. These are some of the most time-consuming parts of grocery shopping, which highlights the meaningful role generative AI can play in enhancing the online grocery experience. These advancements are also why we’ve decided to integrate Instacart with AI platforms like ChatGPT and most recently with Claude.

We want customers to experience conversational grocery shopping combined with the power of Instacart selection, data, and fulfillment wherever and however they choose to shop. In addition to all of these product improvements, affordability remains a key growth lever. Consumers are very focused on value, and we’re continuing to give retailers better tools to deliver that. For example, over the past several quarters, we partnered closely with Sprouts to launch Sprouts Rewards across their online properties. In addition to enabling native sign-up, account linking, and digital coupons directly on our marketplace, at the same time, they rolled out the program in stores. We’re also seeing club retailers continue to outperform on the platform, driven in part by programs we helped launch, like Costco’s Executive Member Benefit. We’re also making progress on price parity.

Retailers who offer price parity, meaning no markup on item prices, continue to grow faster on our platform. We saw that with both Hy-Vee and Raley’s after they moved to price parity in Q1, and we’re building on that momentum with more recent launches of Fairway as well as several other local independent grocers. Our next growth engine is our enterprise platform. Retailers choose Instacart because of our purpose-built grocery technology across e-commerce, retail media, in-store, and AI Solutions. The breadth and depth of our platform is difficult to replicate, and it delivers clear results. At the center of our enterprise platform is our Storefront technology, which powers over 380 grocery e-com sites. Our flagship offering, Storefront Pro, supports partners like Costco, Publix, and Sprouts, and continues to gain traction because it drives meaningful outcomes.

On average, grocers who upgrade to Storefront Pro see an over 10 percentage point lift in online sales and a more than 5 percentage point lift in 90-day new user retention. A strong example of this is Aldi. In Q1, they launched a redesigned U.S. website and mobile app nationwide powered by Storefront Pro, another clear signal of how valuable our technology can be to large established retailers. We’ve partnered with Aldi for a long time, starting with our marketplace and expanding into services like alcohol, EBT SNAP, flyers, and a custom integration to bring their weekly finds online. Since 2019, we’ve also powered their online grocery delivery and their pickup experience through our fulfillment technology. Their decision to double down with Storefront Pro and launch Carrot Ads is a clear example of our enterprise strategy in action.

We’re now extending that approach with our newest enterprise offering, AI Solutions. As we build leading AI capabilities on our marketplace, we’re bringing those same tools to retailers’ owned and operated channels. We’re already seeing strong engagement here, particularly with Cart Assistant, where we’re working with partners like Kroger and Sprouts to bring these capabilities to life. We’ve also recently signed additional partners, including Food Bazaar, Heritage Grocers, Restaurant Depot, Save Mart, and Woodman’s. All of this growth across marketplace and enterprise strengthens our advertising and data capabilities. In Q1, we grew advertising and other revenue 16% year-over-year, our fastest growth rate since Q3 2023, driven by continued expansion and diversification across both sides of our ecosystem, where we’re accelerating both supply and demand. On the supply side, we’re expanding inventory and providing our best-in-class ads capabilities across more surfaces.

This is driven by our healthy, growing marketplace and our expanded network of over 310 Carrot Ad partners, where we recently launched new partners like Aldi, Dierbergs, Fairway, and Jerry’s Foods. On the demand side, we’re seeing broad-based strength across over 9,000 brands advertising on our platform. This is supported by our focus on making it easier for brands to get started and scale. New brands to our ecosystem can now launch high-performance campaigns in minutes with fully automated tools, and our AI-powered recommendation engine in our self-service platform, Ads Manager, continues to gain traction. We’re also using AI to enhance performance across our platform. For example, we recently launched a new generative recommendation system that can use real-time context to better understand a consumer’s intent. Previously, adding milk to your cart might result in a recommendation to add cookies or cereal or sliced cheese.

Now, based on additional items in your cart, like flour and eggs, we can better predict that you’re actually shopping for baking essentials. This leads to more valuable suggestions like vanilla extract and cinnamon, and early data shows that this is driving higher engagement and better results for advertisers. Beyond advertising, we’re also making progress on data monetization. Our off-platform partnerships, where we allow brands to leverage our first-party data to make their campaigns more effective on platforms like Meta, The Trade Desk, TikTok, and more, we’re continuing to scale as we attract incremental budgets from ad partners. Our Consumer Insights Portal, which aggregates real-time, high-quality insights into consumer behavior, continues to attract new subscribers, like Kraft Heinz, and drive deeper engagement with existing partners like Advantage Solutions.

When you step back, our growth engines are working the way we want them to, and we’re carrying that momentum into Q2. We’re also continuing to invest in longer-term growth opportunities. International is off to a strong start. As you’ll recall, we’re taking an enterprise-led approach, partnering with retailers and scaling technologies that have already proven to solve retailers’ needs. In Q1, we launched Storefront Pro with Costco in Spain and France. While it’s still early, consumer demand is encouraging and tracking ahead of our initial expectations. A few weeks ago, we acquired Instaleap, a strategic acquisition that aligns perfectly with our goal of bringing our grocery technology to a global audience. Instaleap has built a versatile fulfillment platform that can adapt to different market dynamics across regions. Just as importantly, they’ve built strong relationships with grocery retailers around the world, particularly in Europe and Latin America.

This is exactly how we want to expand internationally: focused, partner-led, and grounded in existing capabilities that we know work. We’re also seeing strong progress with our in-store technologies. Caper, our AI-powered smart cart, is now live in more than 100 cities, including recent expansions with Wakefern and Allegiance retailers. Customers are continuing to enjoy their Caper experience, which is driving higher baskets, new loyalty and omni-channel activations, and early traction with our real-time inventory and aisle-aware advertising experiences. Alongside Caper, solutions like FoodStorm and Carrot Tags are helping retailers modernize in-store operations and improve both efficiency and customer experience. When you put this all together with signals from our shopper network and deep retail integrations, we’re developing a truly complete view of the omni-channel grocery experience. That’s already starting to unlock new capabilities.

For example, we’ve begun piloting Store View with partners like Meijer, Sprouts Farmers Market, and more, who are leveraging real-time computer vision to improve shelf availability and accuracy. Over time, we expect this to translate into additional benefits across our ecosystem, including better availability, better recommendations, more efficient fulfillment, and more valuable advertising for retailers and brands. Before I hand it to Emily, let me close where I started. Our strategy is working. Our marketplace, enterprise platform, and advertising ecosystem are each getting stronger, and we’re gaining momentum on longer-term growth initiatives that are built on our critical advantages. Together, this creates an increasingly powerful platform that positions us very well for durable, profitable growth. We’re operating from a position of strength in a large under-penetrated category, and we’re focused on extending our lead by continuing to drive value for our partners while growing the pie across the ecosystem.

With that, I’ll turn it over to Emily to walk through the financials.

Emily Reuter, Chief Financial Officer, Instacart: Thank you, Chris, and hello, everyone. We entered 2026 with strong momentum, our Q1 results clearly demonstrate that our focus and investments across our key growth engines and new initiatives are working. Our performance continues to be supported by strong operating fundamentals with multiple levers in our P&L that allow us to balance growth and profitability in a disciplined way. Let me provide more color on our Q1 results. In Q1, GTV was $10.29 billion, up 13% year-over-year, primarily driven by orders of 91.2 million, up 10% year-over-year. As we expected, GTV growth outpaced order growth as we lacked the launch of our $10 minimum basket feature for Instacart+ members in Q1 2025.

Average order value of $113 was up 3% year-over-year, reflecting the ongoing deepening of customer engagement across our platform and strong performance from club retailers, which tend to have larger AOV. Transaction revenue was $733 million, up 13% year-over-year, representing 7.1% of GTV. Transaction revenue as a percent of GTV was flat on a year-over-year basis, driven by increased fulfillment efficiencies, largely offset by lower payment revenue. As a reminder, because we manage multiple levers across our P&L, we expect transaction revenue as a percent of GTV may fluctuate from quarter to quarter. Advertising and other revenue was $286 million, up 16% year-over-year.

As Chris noted, this was our strongest growth rate since Q3 2023, and helped drive our advertising and other investment rate to 2.8%, up from 2.7% in Q1 2025. This outperformance in Q1 was driven by broad-based strength. Large brands performed well, while mid-market and emerging brands leaned in particularly strongly to start the year. Total revenue was $1.02 billion, up 14% year-over-year, primarily driven by GTV growth. GAAP gross profit was $738 million, up 10% year-over-year, representing 7.2% of GTV compared to 7.4% in Q1 2025.

The year-over-year decrease in GAAP gross profit as a percent of GTV was primarily driven by an increase in cost of revenue as payments to publishers scale with the expansion of Carrot Ads and off-platform partnerships. As a reminder, we expect year-over-year growth in payments to publishers to moderate in 2026 compared to 2025. GAAP total operating expenses were $556 million, representing 5.4% of GTV compared to 6.1% of GTV in Q1 2025. Adjusted total operating expenses, which exclude the impact of stock-based compensation expense and certain other expenses, were $463 million and represented 4.5% of GTV compared to 4.9% of GTV in Q1 2025.

The year-over-year improvement in both GAAP and adjusted total operating expenses were primarily driven by increased operating leverage across all line items. In particular, G&A benefited in Q1 from the repeal of Canada DST late in the quarter, which is not a benefit we expect moving forward now that this matter is resolved. As a reminder, we continue to expect Q1 to be our lowest quarter of stock-based comp in a calendar year, followed by a sizable step-up in stock-based comp in Q2 due to the timing of our annual refresh grant. GAAP net income was $144 million, up 36% year-over-year. Adjusted EBITDA was $300 million, up 23% year-over-year.

We also generated operating cash flow of $268 million and free cash flow of $253 million, both down 10% year-over-year, primarily due to the collection of a large accounts receivable balance from a retailer that benefited cash flow in Q1 2025, and the payment of $60 million in regulatory settlements made in Q1 2026. In Q1, we repurchased $349 million of shares and ended the quarter with $323 million of remaining buyback capacity. We closed Q1 with approximately $880 million in cash and similar assets. While our balance sheet remains strong and we expect to generate meaningful cash flow in 2026, we recently established a $500 million unsecured revolving credit facility to provide additional operating liquidity.

Separately, today we announced a $1 billion increase to our buyback authorization. We are well on track to return the majority of free cash flow via repurchases this year, and this increase will enable us to remain opportunistic in our buyback approach in 2026 and beyond. Now on to our Q2 outlook. We anticipate GTV to range between $10.1 billion-$10.25 billion. This represents year-over-year growth between 11%-13%, with GTV expected to continue to outpace orders growth. We expect advertising and other revenues to grow 11%-14% year-over-year, reflecting the ongoing benefits of diversification across both supply and demand on our platform, even as brands continue to navigate a dynamic macro environment.

We are also guiding to Q2 adjusted EBITDA of $290 million-$300 million, representing year-over-year growth of 11%-15%. For the full year, we continue to expect adjusted EBITDA to grow faster than GTV while moderating in rate of expansion as we reinvest to accelerate across our multiple growth engines and lap some of the more significant operating expense efficiencies realized in 2024 and 2025. Overall, we delivered strong Q1 results and are building on the momentum as we enter Q2. Our operating fundamentals are strong, and we’re well-positioned to continue driving long-term profitable growth and shareholder value. With that, we’ll open up the call for live questions. Operator, you may begin.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. At this time, we will conduct the question-and-answer session. Our first question comes from the line of Colin Sebastian of Baird. Your line is now open.

Colin Sebastian, Analyst, Baird: Thanks, and good morning. I appreciate the question. Maybe just following up on the Q1 performance and the acceleration in overall revenue growth. If you look across the platform at the core products and the newer initiatives where you’re making investments, maybe it would be helpful to break down that growth a bit in terms of what’s driving the most incremental improvement in marketplace, enterprise and advertising, and how you see those factors playing out as we look ahead to Q2 and the balance of the year, you know, particularly given some of the shifts in the macro and competitive environments. Thanks.

Chris Rogers, Chief Executive Officer, Instacart: Yeah. Thanks, Colin, for the question. Look, we are happy with our growth results. As you heard, Q1 was another strong quarter of 13%. It was our ninth consecutive quarter of double-digit growth, and we surpassed 10 billion in quarterly GTV, which that was a milestone for us. We do think that the consistency of our growth is an important indicator, and that’s why I said our overall strategy is working. We’re continuing to attract and engage more monthly customers because we’re relentlessly focused on making our service better every quarter with constant improvements across the entire customer journey, from when a customer opens the app to when they’re building their basket to when they check out, right through to when they get the delivery, the exact thing that they ordered. That might sound simple, but again, at our scale, these improvements compound quickly.

At the same time, we’re extending that experience and all of our technology across more surfaces with our strong enterprise momentum. We’re now at over 380 storefront clients, and our recent launches like Restaurant Depot, as an example, and Cub from Q4, they’re performing well. In Q1, we’re very proud that Aldi returned to Storefront Pro. Across all of it, AI continues to meaningfully accelerate our progress. It’s allowing us to onboard retailers faster. It’s allowing us to customize for retailers faster. It’s allowing us to improve personalization for customers while also unlocking entirely new experiences. For example, with Cart Assistant, which as I mentioned upfront, we’re now testing with 25% of customers. Early feedback’s encouraging, and that’s only gonna get better over time.

When you put it together, there’s multiple engines driving our growth across the company. Our strategy is working. We’re strengthening our core experiences. We’re expanding our technology across more surfaces, AI is further accelerating our growth. We feel really good about the fundamentals and how we’re executing and our trajectory overall.

Colin Sebastian, Analyst, Baird: Thanks, Chris.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. Our next question comes from the line of Eric Sheridan of Goldman Sachs. Your line is now open.

Eric Sheridan, Analyst, Goldman Sachs: Thanks so much for taking the question. Maybe 2, if I can. 1, on the advertising side, what do you see as some of the most interesting growth opportunities that present in new mediums or new formats for advertising as you think over the next 12-18 months? Building on the answer on the enterprise side, we’d love to go a little bit deeper in the Instaleap acquisition and what you think that means for an international opportunity around enterprise in the years ahead. Thanks so much.

Chris Rogers, Chief Executive Officer, Instacart: Thanks for the question, Eric. I mean, there’s no question in our mind that the innovation around ads is gonna come from AI and everything related to how AI can advance advertising mediums and platforms. For us, AI is completely core to our advertising efforts at this point, and we’re using it in a few major ways. One is we’re using it behind the scenes with ranking and relevance and personalization. We’re making all of our sponsored ads more relevant with AI. We’re driving stronger engagement and more items added to the cart. With advertising tools and efficiencies, we’re making it easier for advertisers to manage and drive performance of campaigns, especially when it comes to emerging brands.

There have been multiple examples over the last few months, including our AI-powered recommendations for rep advertisers alongside a suite of bid and budget and category imagery recommendations. This is all fueled by AI. We also launched AI-powered landing pages for display campaigns. You know, the third pillar here, and I think this is gonna become increasingly relevant, is AI with conversational commerce and agentic experiences. We’re innovating here alongside the team that’s building our agentic consumer experiences, and our ads are gonna be informed by how consumers engage in agentic shopping. Our strategy is gonna be to build trust and utility with consumers and leverage all of the learning across everything we know from online, but also in store in our learnings from Caper Cart to incorporate that into the overall shopping experience there.

On Instaleap specifically, look, we view Instaleap as an extremely strategic acquisition for us, despite their relatively small size. It’s fantastic tech. It’s a really special team. This is a great example of our M&A philosophy in action. We look for technologies and capabilities that complement our existing platform and accelerate our growth in a disciplined way. Instaleap is just a great combination of that. Their grocery technology is resonating with retailers around the world, and they have deep retailer relationships in markets that we want to pursue. That put them squarely in a sweet spot for us as a grocery tech company with global ambitions and a land and expand strategy on the enterprise side where we can offer all of their current customers many more products with our existing services from our enterprise suite of products.

We’re thrilled to have them as part of our team.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. Our next question comes from the line of John Colantuoni of Jefferies. Your line is now open.

John Colantuoni, Analyst, Jefferies: Great. Thanks for taking my questions. Chris, last quarter you mentioned aspiring to faster growth. As you look back at what you’ve accomplished in the first four months of the year, what needs to happen for you to realize that goal? Second, could you just talk a little bit about what drove the broad-based strength in the advertising business? I’m curious if this was more of an industry dynamic or more of a unique dynamic to Instacart. Thanks.

Chris Rogers, Chief Executive Officer, Instacart: Thanks for the question. You’re right, we did say our ambition was to accelerate, we have been accelerating our growth. We’re very happy to provide another double-digit guide of 11%-13% for Q2. You know, although we don’t guide beyond our current quarter, I can talk a little bit about why I’m confident in our ability to drive long-term durable growth. Our strategy is unique and differentiated. No one else is doing what we’re doing, we’ve built a model with multiple paths for growth that all reinforce each other. Our core experience, that’s across marketplace and enterprise, that continues to improve. There’s more runway to go because we’re the category leader in a very large under-penetrated category.

Our enterprise platform in particular, which leverages all of our marketplace innovation, that continues to be a real strategic advantage with retailers. The model is simple. We help enable retailers to grow, and we grow with them. We’re now operating at considerable scale. I mentioned 380 storefronts, and we believe that there’s even more upside to land more retailers in North America and abroad, big and small, and to expand with more products and services with our existing partners. As we look forward, to get to your question about the newer initiatives, our foundation is allowing us to invest in many of these new initiatives. We’re taking our enterprise products to new international markets. That unlocks a much larger market opportunity for us.

We’re extending beyond e-commerce into omni-channel with in-store technologies like Caper Carts, like FoodStorm, Carrot Tags. Because we’re already deeply embedded with retailers because of our enterprise platform, we’re in a unique position to help power that shift. Then once again, AI is a real accelerant for us, helping us move faster across everything and power entirely new customer experiences, including AI Solutions for retailers, which is just starting to get off the ground. Look, when I step back and I look at the total picture here, we have strong execution in the core business, and we’re layering in new growth drivers that are gonna expand our platform over time. That’s what gives me a very high degree of confidence in our ability to drive sustained long-term durable growth.

On your second part on ads, look, we’re also really happy with the momentum on the ad side. As mentioned, Q1 was our strongest ads and other revenue growth since Q3 of 2023, and we feel great about the underlying fundamentals that are driving the business. First of all, the fact that we’re driving overall platform growth year-on-year does drive more advertising participation. We’re also seeing strength in our core on-platform offering, where we’re continuing to innovate. That includes with sponsored product, which continues to be the main growth driver from a format perspective. Again, this quarter, strength came from all brand cohorts, so large accounts, mid-market accounts, and emerging brands. Maybe backing up, what you’re seeing here is also a reflection of our plan in action.

Our ambition is to build one of the largest and most effective Ads ecosystem where brands come to us to drive performance across Instacart and multiple other surfaces. Our strategy to get there is working. We’re laser focused on building diversification across supply, meaning more surfaces where we place Ads, and demand, meaning more brands investing and current brands investing more. To break that down, on the supply side, we’re continuing to grow our Carrot Ads network, where this is where we extend our reach and our tech and our demand onto retailer websites. We’re now at 310 partners. We have a healthy pipeline. Remember that as we expand with Storefront Pro, those clients almost always enable Carrot Ads. Our enterprise expansions also helps build our Ads ecosystem.

We recently signed partners, as I mentioned up front, like Aldi and Dierbergs and Fairway and Jerry’s. On the demand side, we’re seeing broad-based strength from over 9,000 brands that are advertising with us. You know, large brands performed well in Q1, but also in particular, we saw strong engagement from mid-market and emerging brands. We’ve also been expanding off-platform through partnerships with Meta and Google and TikTok and Pinterest and The Trade Desk. This is where CPGs use their first-party data to target our high-intent audiences, and then we provide them with measurements and performance on Instacart. Importantly, with this initiative, we believe we’re gathering incremental budgets for these campaigns because we’re tapping into, you know, existing digital ad spend.

At the highest level on the ad side, our stated strategy of building one of the most powerful ads ecosystems is working, and you’re seeing that show up in our results.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. Our next question comes from the line of Ron Josey of Citi.

Chris Rogers, Chief Executive Officer, Instacart3: Great. Thanks for taking the question. Chris, I want to ask just a little bit more on price parity here, just given it drives greater adoption and sales. Specifically in your conversations with retailers and how they think about price parity, just talk to us about how they are approaching this as Instacart becomes more of a weekly and habit as opposed to just convenience overall. Then as you think about enterprise and Storefront Pro and the 10-point lift in online sales after launching Storefront, just talk to us about what’s driving specifically adoption here. Is it just greater penetration of these retailers on the platform or greater sales? Any insights there would be helpful. Price parity and adoption of Storefront Pro. Thank you. Yeah. Thanks for the question.

Chris Rogers, Chief Executive Officer, Instacart: On, on price parity, just to be very clear, retailers set item level prices on our marketplace and on their own, owned and operated sites, obviously. Some choose to mark up prices to help offset the fees that we charge the retailer, but many do offer price parity. That said, you know, if I come at this from a bit of a consumer lens, customers are seeking value, and the retailers on our platform who are delivering it, they’re growing faster, and they’re retaining customers better over time on our platform. The data is clear. Price parity retailers grow faster. They grow 10 percentage points faster. The data is clear. This gives the retailers an ability to drive incremental sales on Instacart, especially as they’re competing with each other for share.

That can be very critical to them in the long run. We’re a very large platform now, and you know, retailers are motivated to win share on Instacart. It’s also important because they don’t want to lose share to other large digital players who are increasingly trying to win share of the grocery market. That’s where the conversation with retailers centers with us. It’s, you know, it’s an incremental sales and share opportunity for them. The results in the that we’re seeing over time are very clear. We work with them. We work with them on this, and we work with them, obviously, on a bulk of other affordability strategies to allow them to, you know, perform well with consumers who are looking for value on the platform.

Your second question was around enterprise and the adoption of enterprise. What I’d say here is, like, is look, why do retailers use us? It’s because we’re able to extend all of the scale from our marketplace, where we’re doing hundreds of millions of orders, and we’re able to offer that to them in a way that allows them to compete with some of the largest digital players, with a very high quality experience. If you look at the fact that we’re offering end-to-end technology right through from e-commerce, including search and all of the relevancy and the personalization that we’re continuing to offer, combined with our efficient cart and checkout and order orchestration right through to when it gets delivered to the customer’s home, that’s a very complex experience. It’s difficult to get right.

That’s why when retailers are evaluating their options on how they want to perform and compete in the e-commerce sphere, they look to Instacart because we’re able to give them that scale to leverage those learnings. We are seeing a 10% lift in performance, and that’s because again, because of the experience that we’re driving on marketplace that we’re able to extend onto their sites. So, what I’ll say is, we think there’s quite a bit of runway here. Again, we’re at 380 retailers overall. We’re seeing performance on this side of the business for them and for us, and we’re going to continue to lean into this as a strategic growth driver.

Chris Rogers, Chief Executive Officer, Instacart3: Great. Thank you.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. Our next question comes from the line of Shweta Khajuria of Wolfe Research. Your line is now open.

Chris Rogers, Chief Executive Officer, Instacart4: Hi, can you hear me?

Chris Rogers, Chief Executive Officer, Instacart: Yes.

Chris Rogers, Chief Executive Officer, Instacart4: Okay. Thank you for taking my question. Can you please talk to the opportunity and/or risk with agentic? I mean, you addressed that a little bit. I guess one of the questions we get is around the development of AI platforms where a consumer can order for delivery a basket of items, and then the AI platform chooses whether it is Instacart or DoorDash or Uber Eats, which platform is the best use case, potentially risking organic traffic. Could you please talk to how you view this and what your pushback is? The second question is, could you please talk to the order growth versus AOV, anything in particular beyond the $10 minimum that we should think about? Thanks a lot.

Chris Rogers, Chief Executive Officer, Instacart: Yes. Thank you for the question. As it relates to third-party platforms and AI platforms and how we think about that, our strategy here is pretty simple. We want to be wherever customers are, while also maintaining control of the experience and maintaining control of our data. And at the same time, I should mention that we’re building the gold standard of agentic experiences using all of our proprietary data directly on Instacart and our retailer partner side. We want our direct agentic experiences to be the gold standard. In terms of traction with some of these other platforms that we’ve chosen to integrate on, like OpenAI and now Anthropic, it’s still very early in engagement. You know, we are viewing this as an incremental demand channel in a very large, again, under-penetrated category.

If we co-create the experience with these partners, these integrations will allow us to allow customers to engage with Instacart in new ways, we believe it’s going to help accelerate online grocery adoption over time. If that happens as a leader in the online grocery category, we think we’re going to win. Again, we’re very disciplined when it comes to things like data. We’re staying disciplined when it comes to how we’re surfacing that. So we’re doing that in a very controlled way to minimize any disintermediation risk and continue to have our proprietary data be a strength of ours as we build the experience on our first party. For the second part, I will turn it to Emily to talk about the orders growth.

Emily Reuter, Chief Financial Officer, Instacart: Sure. Let me first speak to orders growth, and then I’ll jump into AOV. Orders growth of 10%, as you noted, was a little bit of a step down from prior quarters, and this was largely in line with what we expected and communicated. In specifics, in Q1, the main dynamic, as you pointed out, was that we were lapping the full rollout on a year-over-year basis of the $10 minimum basket benefit that we had applied for Instacart+ members. Through the year in 2025, the $10 minimum really drove smaller incremental orders, and that was a meaningful driver of order frequency throughout 2025, in addition, obviously, to ongoing order growth. As a result of that, you’re seeing GTV at this point grow faster than orders.

As we look ahead, we expect that to continue. We expect user growth to be the primary driver of order growth. While frequency will continue to play a role, we do expect, as I said, user growth to be the primary driver. On AOV, similarly, this was again, largely in line with what we had expected and communicated in prior quarters. If you look back at 2025, we consistently said that AOV, if you excluded the impact of restaurants, which launched in 2024, and the $10 minimum basket benefit, was actually continuing to increase year-over-year. What you’re now seeing is that underlying strength coming through a bit more clearly as we lap the impact of $10 minimum and now 2 years into restaurants.

What I’d say on AOV is that there’s a couple of things driving that underlying strength. One is the ongoing deepening of customer engagement across the platform, and that’s because, of course, retained customers typically, you know, go on to shop more and spend more over time. We have continued strength in the weekly grocery shops. We have strong performance from club retailers who tend to have a bit higher AOVs. We’re also seeing high-value business customers shopping at some of our recent launches like Restaurant Depot. Really seeing some great trends in AOV across the board.

Chris Rogers, Chief Executive Officer, Instacart0: Okay. Thank you both.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. Our next question comes from the line of Josh Beck of Raymond James. Your line is now open.

Josh Beck, Analyst, Raymond James: Thank you for taking the question. I wanted to go back to the Cart Assistant. It sounds like 25% of your customers are starting to see the functionality. You know, what have been some of the early learnings, you know, has anything stood out with respect to conversion or basket size, ad monetization? You know, we’ve heard some comments from others in the industry, just kind of curious what you are seeing there. Also on the search functionality, it sounds like there’s a enhancement underway. Is it kind of moving from a more of a keyword index framework to maybe something a little more nuanced with LLM? Just kind of curious what’s going on under the covers there. Thank you.

Chris Rogers, Chief Executive Officer, Instacart: Yeah, thanks for the question, Josh. First of all, on Cart Assistant, again, we’ve been investing in this. It’s still early. We’re at 25% of our, of our U.S. consumers who are being exposed. The learnings were really what I described upfront, which was consumers are using it to save time and, you know, get additional value and get inspiration and drive discovery with things like recipes and meal planning. We’re seeing consumers do product research through our Cart Assistant. Remember, when we’re building these types of experiences, we’re really trying to, you know, understand how consumers are going to engage with this longer term. Of course, you can come to Instacart, and you can engage with Cart Assistant as a digital agent to help you build a basket faster from the onset.

We’re also looking at experiences throughout the customer journey where customers can interact with Cart Assistant, you know, a little bit more behind the scenes to help them with things like, you know, understanding if there’s any gluten in their cart, as an example. We’re still studying a lot of the engagement data, and we’re still learning. From an impact perspective, what I will say is that, I mean, we do think AI overall is gonna be a meaningful growth driver for the category over time. You know, at a high level, it’s because what it does is it makes grocery shopping simpler and more intuitive, and that should accelerate online adoption by driving better conversion and higher retention and larger baskets and more frequent ordering.

You know, we think we are in a very unique position to bring all of that to life because of our proprietary data from our 1.6 billion lifetime orders, and because we’re operating an at-scale fulfillment network with shoppers in physical stores, and because of our deep retailer integrations. For example, with inventory systems. No one else has this combination, and that’s what’s allowing us to move from more of a front-end AI experience to experience that will actually help you complete your order, and that’s gonna be very difficult to replicate. On your second question around search. Search, in particular, helps customers find what they want faster, and customers that search are 5 times more likely to place their first order.

Key to search is having rich data as well, right? We need to be able to access the catalog. You know, it’s not easy to do in grocery, and that’s another reason why we see so much traction on the enterprise side of the business because, you know, search is a very nuanced example of something that takes, you know, years of data and millions of orders to get right and that’s really what we’re seeing there. We’re gonna continue to innovate. We want search to be as relevant as possible for consumers. We do think search helps consumers complete their basket faster, and we know that it drives, you know, it drives that likelihood to place a first order. We’re gonna continue to invest there.

Josh Beck, Analyst, Raymond James: That’s super helpful. Thank you.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. Our next question comes from the line of Justin Patterson of KeyBank. Your line is now open.

Justin Patterson, Analyst, KeyBank: Great. Thank you very much. Could you talk about some of the guardrails you have around AI costs? We’ve seen a lot of companies taking different approaches to managing increased token consumption, so I’d love to hear about how you’re thinking about that. Separately, I’d also love to hear about how you’re thinking about just advances in recommendation and ranking models, benefiting both conversion rates over time and having applications for the ad side. Thank you.

Emily Reuter, Chief Financial Officer, Instacart: Sure. In terms of guardrails around AI costs, look, I think this is something that’s evolving real-time. You know, I think about 2025 as a point in time where we were, you know, more experimenting and seeing where we were seeing adoption and allowing people to try to adopt AI across, you know, across their workflows and then of course, across the consumer experience as well. I think, you know, we’re definitely monitoring this real time and to the extent we’re seeing either efficiencies in workflows, finding ways to offset those costs in other ways. As it relates to consumer experience, I’d say it’s still early, but we are looking for, you know, metrics around ways to again offset those costs through things like better customer engagement, better conversion, et cetera.

I think it’s still early, something we’re monitoring and adapting to, really quarter by quarter.

Chris Rogers, Chief Executive Officer, Instacart: Great. To your second question about recommendations, as I mentioned upfront, you know, we’re using data and demand signals to invest to make recommendations as relevant as possible. The major innovation here has again been around AI, and this is why I’ve talked about this as both as a consumer experience element, but also a brand and advertising element because now you’re able to do it across your cart content with semantic intelligence. Our view is that as we make recommendations more relevant, we’re just going to help consumers to find what they’re looking for and complete perfect orders. We think that that’s going to help us on both the advertising side and just with overall consumer experience.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. Our next question comes from the line of Nikhil Devnani of Bernstein. Your line is now open.

Chris Rogers, Chief Executive Officer, Instacart0: Hi. Thanks for taking the question. I wanted to ask about enterprise. You have several products now available to retailers. I guess when you step back at the aggregate level, how should we be thinking about the size of this business now in terms of contribution to revenue or GTV? Also the economics of these orders, as this product continues to grow and become a bigger portion of the mix of the business for Instacart, how do the economics stack up relative to your marketplace business? Thank you.

Chris Rogers, Chief Executive Officer, Instacart: Yes. Thanks, Nikhil, for the question. Why don’t I take a step back and talk about how we think about the enterprise business, and then Emily can dive a little bit deeper into the margin side of the question. Look, we do believe that enterprise is playing an overall highly strategic role with us, with retailers and our ability to deliver for them, but also deliver the best customer experience across both enterprise and marketplace. You know, to really emphasize why that is, first of all, enterprise enables these much deeper retailer relationships, and it gets us on the same side of the table where we’re innovating with them.

We’re now you know, we do short and long-term planning, and these relationships often lead to these technical integrations that really only exist to make the experience better, which they do across their owned and operated sites and our marketplace. Enterprise, of course, drives overall efficiency for us. We make very good use of our marketplace innovation by extending it to enterprise clients, and as a result, it lowers our cost to serve through shared infrastructure. It also allows us to reinvest even more in shared technology and capabilities that benefit everyone. It also increases order volume and density, which also helps us on the cost side.

As we’ve stated in the past, you know, both enterprise and marketplace are growing, but the way that we think about enterprise is less as a standalone line item and more of a core part of how the overall platform compounds over time. Emily, do you want to expand on that?

Emily Reuter, Chief Financial Officer, Instacart: Yeah, sure. From an economic standpoint, I mean, you know, first of all, you know, we don’t break out the specifics of economics, in part because as Chris spoke to, really all parts of our ecosystem work together. For example, the fact that we have marketplace and enterprise benefits our fulfillment costs as just one example of how we think about scaling the two sides of our ecosystem. We, you know, what I would say is that, you know, both marketplace and enterprise generate profit positive dollars. I’d say both are contributing to overall growth. You know, when we think about the specific economics, I’d also say that, you know, each retailer is really different. Our contracts, retailer by retailer, are bespoke.

That is because when we go to a retailer, we’re working with them to figure out the right construct or constellation of different products and services and how they work together. We’re really looking holistically at that partnership to say, does this make sense from an economic standpoint for us, for them? It makes it difficult to disentangle any one part of our ecosystem.

Chris Rogers, Chief Executive Officer, Instacart0: Thank you. If I could just add a quick follow-up. To what extent do you want to scale white label logistics for these partners internationally as you offer enterprise? If that is a big part of the roadmap, I guess, how do you think about the investment required to do that in a new country with less of an existing infrastructure already?

Chris Rogers, Chief Executive Officer, Instacart: Yeah, I can take that. Thanks, Nikhil. Like, look, we’re very excited about our plan to take our tech and our enterprise tech to new markets for the first time. We believe that that is a very promising future growth lever for us. We, of course, have ambitious plans. That said, we’re being very disciplined on how we approach it. That’s why our strategy is an enterprise-led strategy. We’re taking proven products like Storefront Pro and Caper Carts and Foodstorm to retailers who are facing the same challenges that we’ve already solved in North America. That’s what also gives us confidence in product market fit in other markets. Retailers are telling us that there’s a fit. We’re seeing encouraging signs. As I mentioned upfront, you know, Costco’s Storefront Pro expansion in France and Spain is performing ahead of our initial expectations.

We’re very excited about this. We’re excited about our Instaleap acquisition as an accelerant for what we’re trying to do internationally. Again, we’re going to be very disciplined. We’re taking our current products to new markets, which again, gives us cost leverage. Yeah, anything to add, Emily?

Emily Reuter, Chief Financial Officer, Instacart: I think the only thing I’d add is that our focus really is on the technology layer. If you think about Instaleap, it’s about fulfillment tech, the orchestration layer, the great retailer relationships they bring to Bear. As Chris mentioned, enterprise-led, really focused on existing tech like SFP, FoodStorm and Caper. You know, the question was asked, really, I think with a focus on logistics. I think that is something that we can do internationally. I wouldn’t say it’s our priority. We will obviously consider that on a case-by-case basis.

Chris Rogers, Chief Executive Officer, Instacart0: Thank you. Appreciate it.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. Our next question comes from the line of Jason Helfstein of Oppenheimer. Your line is now open.

Jason Helfstein, Analyst, Oppenheimer: Thanks, appreciate it. Maybe two quick ones. Can you give us your thoughts on the advertising outlook for the rest of the year? Obviously, this quarter was quite strong. I don’t think we heard anything on Instacart+, just any thoughts you want to share, you know, is this an increased focus this year? Any just concerns with, you know, lapping any of the credit card promotions around Instacart+. Thanks.

Chris Rogers, Chief Executive Officer, Instacart: Yeah, thanks for the question, Jason. I’ll start on the ads side. Look, looking ahead on ads, we just provided another strong guide for Q2, 11%-14% growth for ads and other. Although we don’t provide specific quarterly guidance beyond that, we are confident in our ability to deliver our long-term targets on ads of 4%-5% of GTV. That’s because at the highest level, we believe that we have the right strategy, we’re executing against it, and we’re successfully expanding our scale and reach towards our goal of being a leading ad ecosystem. When we break that down into some of our core building blocks and components, we do see headroom across the ecosystem. Starting in our core, we’re continuing to innovate on platform.

As mentioned in an earlier question, we’re using AI innovation more than ever to provide tooling like our new AI-powered recommendations. We’re using AI to drive more personalization and relevancy, which all translates to better performance for brands. We’re taking that innovation, and we’re extending it onto our Carrot Ad networks, where we’re at 310 partners and growing, and we have a healthy pipeline. We’re extending our ads innovation in store with Caper Carts, which is still very early, but I firmly believe is gonna be one of the most interesting advertising opportunities for brands in store. We’re monetizing our data in a couple of ways, off platform, which we touched on. But again, it’s we’ve built a strong foundation with all of the right partners. We’re excited to scale that further and tap into incremental budgets.

With our new data solutions, like our Consumer Insights Portal, where brands can access unique real-time data insights. Again, we’re confident in our ability to scale ads and other over time. Of course, there’s lots of puts and takes in the advertising business on a quarterly basis, but we firmly believe in our ability to hit our long-term targets.

Emily Reuter, Chief Financial Officer, Instacart: On IC Plus, I wouldn’t say, you know, it’s an increased focus specifically. I think it’s a continued focus for us. It has always been a key part of our overall strategy, and we are seeing paid IC Plus members continue to grow. They are continuing to represent the majority of GTV and orders on the platform, and they also continue to be more engaged and retain better than non-members. You know, effectively, how we think about this is that it is that strength is really reflected in our overall fundamentals. You’ll remember last year, we talked about the fact that, you know, our MAL, we’re seeing the best retention in a few years, right? You’re seeing that in MAL growth and just in overall user engagement.

We’re focused on continuing to drive overall, value for the program, right? It’s anchored in the zero dollar delivery minimum, which we lowered to $10 for grocery and $25 for restaurants. Obviously, things like access to New York Times Cooking and Peacock, and we’re always evaluating new ways to drive value for members. In terms of lapping the benefits, I wouldn’t say there’s anything I would call out as it relates to lapping to IC Plus. We’re, of course, continuing to look for ways to drive increased value for our members.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. Our next question comes from the line of Ken Gawrelski of Wells Fargo. Your line is now open.

Ken Gawrelski, Analyst, Wells Fargo: Thank you very much. Could you talk about the factors impacting incremental margins in the TQ guide? Obviously, some strong GTV growth, guided you at the high end, but maybe a bit softer incremental margins, if you could talk about the factors. That’s question one. Question two, please. Maybe can you talk about the success you are having with partners working towards price parity? What, you know, what are the continued challenges? What are the successes maybe you’ve had there, and how would you evaluate your progress? Thank you.

Chris Rogers, Chief Executive Officer, Instacart: Perfect. Okay, thank you for the question. On the first one, look, I’ll let Emily speak to some of the shorter-term kind of puts and takes between quarters. At the highest level, as it relates to profitability, nothing’s changed about our strategy. We’re confident in our ability to hit our long-term targets of 4%-5% of GTV. Let me share how we’re thinking about investing in our business overall. As a reminder, we are the category leader in a very early market with tons of upside. Yes, we’re investing, and we should be investing. We’re investing in our core, where our fundamentals are strong. Our product keeps getting better, which means that we can acquire and retain customers more efficiently.

In many ways, we’re still early in our journey when you think about some of our mid to long-term growth areas, like in-store technology, where the bulk of grocery transactions still happen, international markets where we’re just getting started, although again, being very disciplined there, and building leading-edge AI Solutions. On all of these, we have high conviction that these investments are gonna pay off over time because they’re proven models like land and expand with enterprise, which is our international play. We have a right to win in these areas. We are investing in a very intentional way and in a very disciplined way so that we can continue to deliver profitable growth. Again, we feel good about our ability to hit our long-term targets of 4% to 5%.

In the meantime, we’re gonna continue to invest because we see so much opportunity in front of us, and we see attractive investment opportunities to drive growth.

Emily Reuter, Chief Financial Officer, Instacart: Just to add a little bit of color, specifically on, you know, Q1 and Q2. You know, I don’t think there’s anything fundamental that’s changed in the business from Q1 to Q2. I think we’ve also been consistent with saying that we do expect the pace of margin expansion in 2026 to moderate versus 2025. Again, nothing new or different that we’re seeing in terms of what’s happening a layer deeper inside the business. A couple of things I might call out as it relates to Q1 and Q2. I did mention on the call earlier that Q1 benefited from the repeal of Canada’s Digital Services Tax. What happened there was it happened very late in the quarter.

Typically, we manage through surprises that come, whether they’re positive or negative, meaning we reinvest things that come to the upside or we manage around things to the downside. What happened here is it was something we expected in Q2, and it ended up happening in the last couple of days of the quarter. We just didn’t have time to reinvest at levels that we found attractive. That is something that doesn’t recur in Q2. In fact, as I mentioned earlier, it was something we expected to happen in Q2 and got pulled forward into Q1.

The other thing I might call out is that, you know, Q2 of 2025, we did see a step-up in transaction revenue as a percentage of GTV from 7.1 to 7.3%. Again, when you’re thinking about the year-over-year comparison, there’s just gonna be some differences in terms of how you look at Q1 versus Q2. Generally speaking, that’s why we really focus on, you know, overall annual improvement in EBITDA and EBITDA margin because, you know, in terms of operating the business, you may have just, you know, quarterly fluctuations. I wouldn’t think about anything, truly different in Q2 that we’re seeing relative to the last couple of quarters.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you.

Chris Rogers, Chief Executive Officer, Instacart: To your question on price parity, look, the success that we’ve seen is a steady drumbeat of retailers moving towards price parity since we’ve really outlined this as a priority and an opportunity for retailers last year. We saw Schnucks move to price parity last year, Heritage Grocers so far this year, Hy-Vee, Raley’s, Fareway, several independent retailers. We’re seeing that play out in their performance. The data is very clear that retailers at market price parity see a 10 percentage point acceleration. They retain better. The challenge, of course, being here that, you know, ultimately, retailers set pricing on the platform.

It’s up to them to make that investment and to, you know, to kind of evaluate the short and long-term return and the strategic nature of wanting to capture digital sales and share versus some of the retailers on our platform, but also some of the largest digital players that they’re ultimately competing with. The challenge is really it’s a retailer’s decision whether or not to go to eliminate a markup and price parity to stores.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. Our last question comes from the line of Andrew Boone of Citizens. Your line is now open.

Andrew Boone, Analyst, Citizens: Thanks so much for taking the question. I just wanted to ask about Caper Carts. Chris, you mentioned the opportunity with in-store. Can you just flesh that out, talk about where you guys are in terms of scaling that and then expectations we should have going forward? Thank you.

Chris Rogers, Chief Executive Officer, Instacart: Sure. Thanks for the question. First of all, at the highest level, we very much believe in the in-store opportunity for technology. E-commerce is at low double digits, so the vast majority of transactions will still happen in store for the foreseeable future. There is a massive opportunity to modernize and digitize that experience with seamless operations, advanced personalization, wayfinding, advertising to help customers in-store discover products, save money while they shop. On Caper specifically, we’re seeing, you know, great momentum with Caper. We’re now live in more than 100 cities with over 12 retail banners. From a scale perspective that we’re continuing to expand with Wakefern, where we’re now live at about 20% of stores. We’ve launched new pilots recently with Sprouts and Wegmans and Coles in Australia, where we’ve announced an upcoming pilot with Morrisons in the U.K.

I’m confident that Caper has a, you know, runway ahead. Strong pro-product market fit with consumers and retailers. This is one of my main learnings. Customers love the experience of using the card, and retailers love it for the operational benefits and the potential to turn their in-store customers into omnichannel customers. It’s also driving higher basket sizes for retailers. We’re making traction on Caper. We’re making traction with ads on Caper, and we think that it’s a great, you know, mid to long-term growth lever for us.

Andrew Boone, Analyst, Citizens: Thank you.

Chris Rogers, Chief Executive Officer, Instacart1: Thank you. This concludes the question and answer session. We’d like to thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.