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What changed in Maplebear Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Maplebear Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+467 added−528 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-28)

Top changes in Maplebear Inc.'s 2025 10-K

467 paragraphs added · 528 removed · 406 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur technology and data insights drive efficiencies for retailers, customers, brands, and shoppers. Instacart Marketplace Through Instacart Marketplace we help customers find their favorite products, provide an innovative ad offering that inspires people to try new brands, connect customers to our dedicated shopper community, and help retailers and customers build deeper relationships.
Biggest changeWe help customers find their favorite products, provide an innovative ad offering that inspires people to try new brands, connect customers to our dedicated shopper community, and help retailers and customers build deeper relationships. ___________ (1) Based on shoppers who completed at least one order during the month ended December 31, 2025. 5 Table of Contents Instacart Enterprise Platform Instacart Enterprise platform is an end-to-end technology solution that powers retailers across all aspects of their business.
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 e-commerce, fulfillment, Connected Stores, ads and marketing, and insights.
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 e-commerce, fulfillment, Connected Stores, ads and marketing, and insights. • Customers .
The laws and regulations govern many issues related to our business practices, including those regarding privacy, data security, data protection, pay and fee transparency, health information privacy and security, consumer protection, marketing and advertising, health and safety, import and export, food and product safety, zoning, sustainability, tax, insurance, employment, shopper rights, weights and measures, alcohol and other age-restricted products, worker classification, collective bargaining rights, internet usage and access, e-commerce, and electronic payments.
The laws and regulations govern many issues related to our business practices, including those regarding privacy, data security, data protection, AI, pay and fee transparency, health information privacy and security, consumer protection, marketing and advertising, health and safety, food and product safety, import and export, zoning, sustainability, tax, insurance, employment, weights and measures, alcohol and other age-restricted products, worker classification, shopper rights, collective bargaining rights, internet usage and access, e-commerce, and electronic payments.
We believe that creating an inclusive environment not only drives performance but also fosters innovation, collaboration, and long-term success. To ensure Instacart remains a welcoming environment for all employees, while also intentionally focusing on inclusion for all talent, we are constantly investing in our culture and creating opportunities to build community for all of our employees.
We believe that creating an inclusive environment not only drives performance but also fosters innovation, collaboration, and long-term success. To ensure Instacart remains a welcoming environment for all employees, while also intentionally focusing on inclusion for all talent, we are constantly investing in our culture and 9 Table of Contents creating opportunities to build community for all of our employees.
In addition, in 2022, we adopted our Flex First workforce model, which provides our eligible employees with the option to work remotely, in one of our offices, or a combination of both. We believe this provides our employees with the flexibility to support their personal needs while maintaining our high-performing and collaborative culture.
In addition, we maintain a Flex First workforce model, which provides our eligible employees with the option to work remotely, in one of our offices, or a combination of both. We believe this provides our employees with the flexibility to support their personal needs while maintaining our high-performing and collaborative culture.
Therefore, it is crucial that we continue to attract and retain high-performing employees from all demographics by providing competitive compensation and benefits, fostering a diverse, inclusive, and safe workplace, while making opportunities available for all our employees to grow and develop in their careers.
Therefore, it is crucial that we continue to attract and retain high-performing employees from all demographics by providing competitive compensation and benefits, fostering a welcoming, collaborative, inclusive, and safe workplace, while making opportunities available for all our employees to grow and develop in their careers.
These changes may occur immediately or develop over time through judicial decisions or as new guidance or interpretations are provided by regulatory, legislative, 7 Table of Contents and governing bodies, such as federal, state, and local administrative agencies.
These changes may occur immediately or develop over time through judicial decisions or as new guidance or interpretations are provided by regulatory, legislative, and governing bodies, such as federal, state, and local administrative agencies.
Instacart is built for the entire grocery ecosystem, improving the experiences for each of our constituents and helping them succeed: • Retailers . We enable more than 1,800 retail banners as of December 31, 2024 to grow by providing technology that can accelerate the digital transformation of their entire business both online and in-store. • Customers .
Instacart is built for the entire grocery ecosystem, improving the experiences for each of our constituents and helping them succeed: • Retailers . We enable more than 2,200 retail banners as of December 31, 2025 to grow by providing technology that can accelerate the digital transformation of their entire business both online and in-store.
Members of our executive team personally sponsor ERGs and Instacart allocates funding to our ERGs every year for programming and initiatives that range from professional development sessions, employee networking opportunities, and volunteer events to belonging and engagement opportunities.
Members of our executive team personally sponsor Employee Resource Groups (“ERGs”) and Instacart allocates funding to our ERGs for programming and initiatives that range from professional development sessions, employee networking opportunities, and volunteer events to belonging and engagement opportunities.
To ensure equitable compensation for our employees, we consider external market data as well as internal parity for all compensation decisions. Periodically, under the direction of legal counsel, we conduct comprehensive reviews of employee compensation to help ensure equitable pay practices.
To ensure equitable compensation for our employees, we consider external market data as well as internal parity for all compensation decisions. Periodically, under the direction of legal counsel, we conduct comprehensive reviews of employee compensation to help ensure compliance with any applicable pay equity regulations.
See the section titled “Risk Factors—Risks Related to Our Intellectual Property” for a more comprehensive description of risks related to our intellectual property. HUMAN CAPITAL As of December 31, 2024, we had a total of 3,265 full-time employees worldwide. We also engage with contractors, vendors, and consultants.
See the section titled “Risk Factors—Risks Related to Our Intellectual Property” for a more comprehensive description of risks related to our intellectual property. HUMAN CAPITAL 8 Table of Contents As of December 31, 2025, we had approximately 3,600 full-time employees worldwide. We also engage with contractors, vendors, and consultants.
As of December 31, 2024, we had approximately 692 issued patents in the United States and approximately 650 patent applications (including active Patent Cooperation Treaty applications) pending in the United States and globally.
As of December 31, 2025, we had approximately 630 issued patents in the United States and approximately 720 patent applications (including active Patent Cooperation Treaty applications) pending in the United States and globally.
Today, 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.
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.
As of December 31, 2024, we also had approximately 162 copyright registrations. We also register domain names for certain websites that we use in our business, such as www.instacart.com, as well as similar variations to protect our brands and marks from cybersquatters.
As of December 31, 2025, we also had approximately 165 copyright registrations. We also register domain names for certain websites that we use in our business, such as www.instacart.com, as well as similar variations to protect our brands and marks from cybersquatters. We continually review our development efforts to assess the existence and registrability of new intellectual property.
We continually review our development efforts to assess the existence and registrability of new intellectual property. 8 Table of Contents We control access to and use of our proprietary technology and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, customers, and partners.
We control access to and use of our proprietary technology and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, customers, and partners.
Because we classify shoppers as independent contractors in the jurisdictions in which we operate, we are subject to a variety of local, municipal, state, federal, and international laws and regulations governing worker classification, compensation, pay and fee transparency, and payment and benefits rules.
Because of how we engage shoppers, we are subject to a variety of local, municipal, state, federal, and international laws and regulations governing worker classification, compensation, pay and fee transparency, payment and benefits rules, and shoppers access to our platform.
Insights gives retailers near real-time visibility into key metrics like item popularity, inventory levels and availability, order sizes, delivery times, delivery ratings, and sales, which enables retailers to optimize operations and provide better customer experiences.
Insights gives retailers near real-time visibility into key metrics like item popularity, inventory levels and availability, order sizes, delivery times, delivery ratings, and sales, which enables retailers to optimize operations and provide better customer experiences. We blend our world-class technology with deep integrations and AI platform partnerships to enable our retail partners to thrive and grow in an AI-powered world.
(3) Shoppers are deeply valued members of the Instacart community, and we strive to make the shopping experience as seamless as possible and protect shoppers while they work so they can continue to deliver superior customer service.
(1) 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. INSTACART TECHNOLOGY We built Instacart to serve the entire grocery ecosystem. The key pillars of our technology are Instacart Marketplace, Instacart Enterprise platform, and Instacart Ads.
Therefore, our compliance with Proposition 22 has increased our costs in California and we expect such costs to remain elevated. Several other states in which we operate have and may continue to adopt legislation that provides for compensation and benefits for independent contractors similar to Proposition 22 or may challenge the status of independent contractors altogether.
Several other states in which we operate have and may continue to adopt legislation that provides for compensation and benefits for independent contractors similar to Proposition 22, 7 Table of Contents establish other requirements to engage certain delivery workers such as shoppers’ access to our platform, or challenge the status of independent contractors altogether.
As of December 31, 2024, we reach 98% of households in North America, and 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. • Brands .
As of December 31, 2025, we reach over 98% of households in North America, and help our customers shop at their favorite retailers, order from their favorite restaurants, and enjoy selection, quality, affordability, and convenience.
Lastly, we provide training to recruiters, hiring managers, and interviewers on our recruiting practices, with the goal of ensuring that all candidates are seen and evaluated fairly. These efforts help ensure we have access to a diverse pool of talented candidates that strengthens our workforce’s overall capabilities. Ensuring Access to Opportunities while Minimizing Attrition .
These efforts help ensure we have access to a diverse pool of talented candidates that strengthens our workforce’s overall capabilities. Ensuring Access to Opportunities while Minimizing Attrition .
We help retailers serve their customers’ needs as to how and where they want to shop by supporting a wide array of fulfillment options, shopping occasions, and categories. Instacart Enterprise Platform Instacart Enterprise Platform is an end-to-end technology solution that powers retailers across all aspects of their business.
Our technology and data insights drive efficiencies for retailers, customers, brands, and shoppers. Instacart Marketplace Through Instacart Marketplace, we help retailers serve their customers’ needs as to how and where they want to shop by supporting a wide array of fulfillment options, shopping occasions, and categories.
For example, in November 2020, voters in California voted in favor of, and on December 11, 2020, the California Secretary of State certified Proposition 22, which required gig economy companies like Instacart to, among other things, provide independent contractors working in California with a minimum level of earnings as well as healthcare subsidy payments.
For example, Proposition 22 in California requires gig economy companies like Instacart to, among other things, provide independent contractors working in California with a minimum level of earnings as well as healthcare subsidy payments. Therefore, our compliance with Proposition 22 has increased our costs in California, and we expect such costs to remain elevated.
We have a wide breadth of advertising solutions, including Sponsored Product ads, display ads, coupons, and brand pages, to meet all of our brand partners’ needs.
We have a wide breadth of advertising solutions, including Sponsored Product ads, display ads, coupons, and brand pages, to meet all of our brand partners’ needs. Instacart Ads also enables brands to learn more about general consumer behavior from discovery to purchase, offering valuable insights about how to optimize their advertising spend.
The key pillars of our technology are Instacart Marketplace, Instacart Enterprise Platform, and Instacart Ads. Our solutions are underpinned by a shared foundation of technology, infrastructure, data insights, and fulfillment that leverages our scale and expertise specific to the grocery category. Our technology solutions are better together. Since our founding, Instacart has powered more than one billion orders.
Our solutions are underpinned by a shared foundation of technology, infrastructure, data insights, and fulfillment that leverages our scale and expertise specific to the grocery category. Supporting all of this is AI, which helps us build smarter products, better tools, and more accurate insights across our solutions. Our technology solutions are better together.
We represent one of the largest and fast growing e-commerce channels for brands. We provide discovery and attractive return on investment for over 7,000 active brands through our industry-leading advertising tools and insights purpose-built for the online grocery category (1) .
As of December 31, 2025, we provide discovery and attractive return on investment for over 9,000 active brands through our industry-leading advertising tools and insights purpose-built for the online grocery category. • Shoppers . As of December 31, 2025, we offer approximately 600,000 shoppers an immediate, flexible earnings opportunity that allows them to choose when and how much to work.
Our recruitment processes are intended to promote access to hiring opportunities for talented applicants from a variety of backgrounds. For example, we encourage hiring managers to consider a diverse group of qualified candidates at the panel interview stage. We have also implemented programs to attract qualified talent from all backgrounds.
Our recruitment processes are intended to promote access to hiring opportunities for talented applicants from a variety of industries and backgrounds. We provide training to recruiters, hiring managers, and interviewers on our recruiting practices, with the goal of ensuring that all candidates are seen and evaluated fairly.
As consumers and retailers move online, brands can use Instacart Ads as an effective way to reach customers at the point of purchase and within minutes of delivery and consumption. Instacart Ads offers brands a highly measurable ads offering that leverages first-party transaction data to move products off of store shelves more efficiently.
Our membership program, Instacart+, offers expanded customer benefits including unlimited $0 delivery fees on orders over a certain size, and other exclusive benefits. • Brands . Instacart Ads offers brands a highly measurable ads offering that leverages first-party transaction data to move products off store shelves more efficiently.
We power world class e-commerce storefronts for approximately 600 retail banners and services as of December 31, 2024, from product discovery tools, to merchandising, to different payment models, to loyalty-as-a-service. • Fulfillment . We help retailers fulfill grocery orders directly from their stores through a community of dedicated shoppers.
Our storefront technology powers more than 380 grocers’ e-commerce sites (2) — and it’s built to scale, as we expand into new categories and regions. • Fulfillment . We help retailers fulfill grocery orders directly from their stores through a community of dedicated shoppers.
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Item 1. Business OVERVIEW Instacart is powering the future of grocery through technology. We partner with retailers to help them successfully navigate the digital transformation of their businesses. Instacart was founded in 2012 to bring the grocery industry online and help make grocery shopping effortless.
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Item 1. Business 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. Since our founding, Instacart has powered more than 1.6 billion orders.
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We want to enable any retailer, large or small, to drive success both online and in-store and serve their customers better in all of the ways they choose to shop. We have demonstrated our ability to help our retail partners drive strong growth and stay competitive in a complex and increasingly digital industry.
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Beyond our platform, we are expanding these capabilities to include online, off-platform, and in-store channels, enabling brands to reach customers across multiple touchpoints. ___________ (2) Includes grocery e-commerce storefronts excluding catering storefronts. 6 Table of Contents COMPETITION The markets in which we operate are highly competitive.
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Instacart invented a new model for online grocery shopping by offering consumers on-demand delivery from the stores they know and trust.
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When shopping for groceries, consumers want selection, quality, affordability, and convenience, and they shop in many different ways. Instacart started as a way for households to conveniently manage their weekly grocery shopping, a recurring and high order value consumer use case.
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We estimate that on average, our ads deliver more than a 15% incremental sales lift, and in some cases twice that, for our brand partners. (2) • Shoppers . As of December 31, 2024, we offer approximately 600,000 shoppers an immediate, flexible earnings opportunity that allows them to choose when and how much to work.
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We offer shoppers a mobile application (iOS and Android) that powers the entire shopper experience seamlessly. ___________ (1) In the fourth quarter of 2024, we updated our active brands calculation to incorporate certain methodology improvements, and we estimate such updates contributed approximately 500 active brands to our reported active brands as of December 31, 2024.
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(2) Based on internal tests run across all brand partners during the year ended December 31, 2024 and individual tests run for select brands or types of brands. (3) Based on shoppers who completed at least one order during the month ended December 31, 2024. 5 Table of Contents INSTACART TECHNOLOGY We built Instacart to serve the entire grocery ecosystem.
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Instacart Ads also enables brands to learn more about general consumer behavior from discovery to purchase, offering valuable insights about how to optimize their advertising spend. 6 Table of Contents SALES AND MARKETING While our brand and leading market position enable us to benefit from organic, word-of-mouth growth, we use sales and marketing to attract retailers, customers, brands, and shoppers and grow the pie for all of our constituents.
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Our marketing strategy includes consumer marketing, retail partnerships, brand partnerships, and shopper marketing. Consumer marketing includes digital marketing campaigns across a variety of platforms and channels, referral coupons and incentives, and in-store marketing. We also collaborate to run co-marketing initiatives with retailers and brands to attract new customers.
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Shopper marketing attracts new shoppers and retains our existing shopper base by using referral coupons, promotional campaigns, and engagement programs. To date, the majority of customers have come to Instacart through organic channels.
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We believe we have a significant opportunity to build awareness to fuel new customer acquisition and increase engagement, and we plan to prudently invest in brand marketing and other awareness campaigns in the future. COMPETITION The markets in which we operate are highly competitive.
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For example, we offer prospective candidates conversations with members of our Employee 9 Table of Contents Resource Groups (“ERGs”), which are employee-led groups open to all employees that help create an inclusive culture, to all candidates so they can get a better understanding of our culture.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe are also subject to investigations and legal proceedings involving bodily injury and property damage, labor and employment, anti-discrimination claims, commercial and contract disputes, unfair competition, consumer protection regulations, including fees and pricing and related disclosures and automatic renewal laws, intellectual property, transactions involving our securities, privacy, data security, and data protection, environmental laws and regulations, health and safety, weights and measures, compliance with regulatory requirements, and other matters.
Biggest changeWe have in the past been, are currently, and may in the future become, involved in claims, lawsuits, arbitration proceedings, administrative actions, government investigations, and other legal and regulatory proceedings relating to various matters, including whether we fulfilled our contractual obligations to or improperly withheld pay or tips from shoppers, whether we adequately protected the public’s or shoppers’ health and safety, whether we properly provide protected leave, whether we properly paid taxes, whether we properly implemented and disclosed our fees, whether we improperly conduct background checks of shoppers, and whether we are responsible for injury resulting from alleged shopper actions or negligence, as well as those involving bodily injury and property damage, labor and employment, anti-discrimination claims, commercial and contract disputes, unfair competition, consumer protection regulations, including fees, pricing, and related disclosures, marketing practices, and automatic renewal laws, intellectual property, transactions involving our securities, privacy, data security, and data protection, environmental laws and regulations, health and safety, weights and measures, compliance with regulatory requirements, and other matters.
For example, an increase in Instacart+ orders, changes in product categories shopped, reduced spend on more premium or discretionary products, 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.
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.
Third parties may also gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveal competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. If we fail to cost-effectively engage shoppers on Instacart, or attract and retain shoppers, our business could be harmed.
Third parties may also gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveal competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. If we fail to cost-effectively engage, attract, or retain shoppers on Instacart, our business could be harmed.
If there are not enough shoppers on Instacart, customer orders may be late, may go unfulfilled, or may be incorrectly fulfilled, which would have a negative effect on those impacted customers and retailers and consequently on our business.
If there are not enough shoppers on Instacart, customer orders may be late, go unfulfilled, or be incorrectly fulfilled, which would have a negative effect on those impacted customers and retailers and consequently on our business.
If we are unable to attract shoppers on favorable terms or increase utilization of Instacart by existing shoppers, if we lose shoppers on Instacart, or if shoppers determine it is no longer economically worthwhile to provide services on Instacart due to factors that may be beyond our control, including the costs of gasoline, vehicles, or insurance, changes in consumer behaviors in grocery shopping, actual or perceived economic advantages of providing services with other companies that engage independent contractors, including our competitors, our growth objectives and our business and prospects could be seriously harmed.
If we are unable to attract shoppers on favorable terms or increase utilization of Instacart by existing shoppers, if we lose shoppers on Instacart, or if shoppers determine it is no longer economically worthwhile to provide services on Instacart due to factors that may be beyond our control, including the costs of gasoline, vehicles, or insurance, changes in consumer behaviors in grocery shopping, and actual or perceived economic advantages of providing services with other companies that engage independent contractors, including our competitors, our growth objectives and our business and prospects could be seriously harmed.
If any collaboration results in future material adverse effects to our business, financial condition, and results of operations, we may not be able to terminate such collaboration on a timely or cost-effective basis. In addition, we offer features or use cases to our customers, such as restaurants, through certain collaborations.
If any collaboration results in future material adverse effects to our business, financial condition, and results of operations, we may not be able to terminate such collaboration on a timely or cost-effective basis. In addition, we offer certain features or use cases to our customers, such as restaurants, through collaborations.
We have issued in the past, and may in the future issue, new equity or equity-linked securities to partners, which dilute our existing stockholders and may include affirmative or restrictive covenants as well as redemption or repurchase provisions.
We have issued in the past, and may in the future issue, new equity or equity-linked securities to partners, which may dilute our existing stockholders and include affirmative or restrictive covenants as well as redemption or repurchase provisions.
Furthermore, certain of our current directors were initially appointed by our principal stockholders. Our executive officers, directors, and greater than 5% stockholders, in the aggregate, beneficially own a significant portion of our outstanding common stock. Furthermore, certain of our current directors were initially appointed by our principal stockholders.
Our executive officers, directors, and greater than 5% stockholders, in the aggregate, beneficially own a significant portion of our outstanding common stock. Furthermore, certain of our current directors were initially appointed by our principal stockholders.
As a public company, we are subject to the reporting requirements of the Exchange Act, the listing standards of Nasdaq Global Select Market, and other applicable securities rules and regulations.
As a public company, we are subject to the reporting requirements of the Exchange Act, the listing standards of the Nasdaq Global Select Market, and other applicable securities rules and regulations.
We face evolving cybersecurity threats and threat actors including but not limited to state-sponsored and advanced persistent threat actors, malicious code and malware (such as viruses, worms and ransomware), social engineering (including deep fakes, which may be increasingly difficult to identify as fake, and phishing), denial-of-service attacks, credential harvesting, credential stuffing, supply-chain attacks, server malfunctions, software or hardware failures, security bugs, vulnerabilities or misconfigurations in the software or systems on which we rely, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
We face evolving cybersecurity threats and threat actors including but not limited to state-sponsored and advanced persistent threat actors, malicious code and malware (such as viruses, worms and ransomware), social engineering (including deep fakes, which may be increasingly difficult to identify as fake, phishing, and vishing), denial-of-service attacks, credential harvesting, credential stuffing, supply-chain attacks, server malfunctions, software or hardware failures, security bugs, vulnerabilities or misconfigurations in the software or systems on which we rely, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
The risks we face in connection with acquisitions, strategic partnerships, or collaborations include: • negative impacts to our financial results as a result of incurring charges or fees or assuming substantial debt or other liabilities, adverse tax consequences or unfavorable accounting treatment, exposure to claims and disputes by stockholders and third parties, including intellectual property claims and disputes, failing to generate sufficient financial return to offset additional costs and expenses related to the acquisition, partnership, or collaboration, or even significant negative impacts to our business, financial condition, and results of operations; • regulatory inquiries or actions, including changes to applicable regulatory frameworks and/or remedies imposed by antitrust authorities such as divestitures, ownership or operational restrictions, or other structural or behavioral remedies, either as a condition to or following the completion of a transaction; • difficulties or unforeseen expenditures in integrating the business, offerings, technologies, personnel, or operations of any company that we acquire or with which we collaborate, particularly if key personnel of an acquired company decide not to work for us, which may result in delays in integration or realization of anticipated synergies or other benefits and/or impede our ability to incorporate their results or contributions in our reported metrics; • disruptions to our ongoing business, diversion of resources, increases to our expenses, and distraction of our management; • potential delays or reductions of customer purchases for both us and the company we acquire or with which we collaborate due to customer uncertainty about continuity and effectiveness of service from either company or negative reputational impacts; • potential for strategic partners or collaborators to establish or strengthen relationships with current or future retailers and customers, or other parties with whom we have relationships, which could limit our ability to promote our offerings to those parties and reduce our number of customers; • difficulties in, or inability to, successfully sell any acquired products; • our use of cash to pay for an acquisition limiting other potential uses of our cash; • if we incur debt to fund an acquisition, such debt may subject us to material restrictions on our ability to conduct our business, as well as financial maintenance covenants; and 35 Table of Contents • if we issue a significant amount of equity or equity-linked securities in connection with future acquisitions, strategic partnerships, or collaborations, existing stockholders will be diluted and earnings per share may decrease, and we may face unfavorable tax treatment with respect to such securities.
The risks we face in connection with acquisitions, strategic partnerships, or collaborations include: • negative impacts to our financial results as a result of incurring charges or fees or assuming substantial debt or other liabilities, adverse tax consequences or unfavorable accounting treatment, exposure to claims and disputes by stockholders and third parties, including intellectual property claims and disputes, failing to generate sufficient financial return to offset additional costs and expenses related to the acquisition, partnership, or collaboration, or even significant negative impacts to our business, financial condition, and results of operations; • regulatory inquiries or actions, including changes to applicable regulatory frameworks and/or remedies imposed by antitrust authorities such as divestitures, ownership or operational restrictions, or other structural or behavioral remedies, either as a condition to or following the completion of a transaction; • difficulties or unforeseen expenditures in integrating the business, offerings, technologies, personnel, or operations of any company that we acquire or with which we collaborate, particularly if key personnel of an acquired company decide not to work for us, which may result in delays in integration or realization of anticipated synergies or other benefits and/or impede our ability to incorporate their results or contributions in our reported metrics; • disruptions to our ongoing business, diversion of resources, increases to our expenses, and distraction of our management; • potential delays or reductions of customer purchases for both us and the company we acquire or with which we collaborate due to customer uncertainty about continuity and effectiveness of service from either company or negative reputational impacts; • potential for strategic partners or collaborators to establish or strengthen relationships with current or future retailers and customers, or other parties with whom we have relationships, which could limit our ability to promote our offerings to those parties and reduce our number of customers; • difficulties in, or inability to, successfully sell any acquired products; • our use of cash to pay for an acquisition limiting other potential uses of our cash; • if we incur debt to fund an acquisition, such debt may subject us to material restrictions on our ability to conduct our business, as well as financial maintenance covenants; and • if we issue a significant amount of equity or equity-linked securities in connection with future acquisitions, strategic partnerships, or collaborations, existing stockholders will be diluted and earnings per share may decrease, and we may face unfavorable tax treatment with respect to such securities.
With respect to Instacart Marketplace, our current and potential competitors include, but are not limited to: (i) existing and well-established online grocery or shopping alternatives, including digital-first platforms, such as Amazon and Thrive Market, (ii) brick-and-mortar retailers that have their own digital and fulfillment offerings, such as Target and Walmart, some of which decide to partner with Instacart to complement their own offerings, (iii) companies that provide e-commerce and fulfillment services for third parties, including retailers, whether online or offline, such as DoorDash, Shipt (acquired by Target), and Uber Eats, (iv) digital-first platforms entering the grocery market by owning inventory, including DashMart (owned by DoorDash), Fresh Direct (owned by Getir), and Gopuff, which may include existing retailers on Instacart, which could eventually eliminate their need to partner with us or limit their use of Instacart Marketplace, (v) companies that provide e-commerce and fulfillment services that focus on discrete categories of products, such as alcohol or prescription delivery, including Alto Pharmacy, and (vi) companies that offer direct to consumer ingredient or meal offerings, such as Blue Apron (owned by Wonder Group) or Misfits Market, some of which may partner with Instacart to complement their own offerings.
With respect to Instacart Marketplace, our current and potential competitors include, but are not limited to: (i) existing and well-established online grocery or shopping alternatives, including digital-first platforms, such as Amazon and Thrive Market, (ii) brick-and-mortar retailers that have their own digital and fulfillment offerings, such as Target and Walmart, some of which decide to partner with Instacart to complement their own offerings, (iii) companies that provide e-commerce and fulfillment services for third parties, including retailers, whether online or offline, such as DoorDash, Shipt (acquired by Target), and Uber Eats, (iv) digital-first platforms entering the grocery market by owning inventory, including DashMart (owned by DoorDash), Fresh Direct (owned by Getir), and Gopuff, which may include existing retailers on Instacart, which could eventually eliminate their need to partner with us or limit their use of Instacart Marketplace, (v) companies that provide e-commerce and fulfillment services that focus on discrete categories of products, such as alcohol or prescription delivery, and (vi) companies that offer direct to consumer ingredient or meal offerings, such as Blue Apron (owned by Wonder Group) or Misfits Market, some of which may partner with Instacart to complement their own offerings.
We primarily recognize revenue in the amount that we have the right to invoice as advertising services are rendered, which occurs upon delivery of clicks, upon delivery of impressions, over the contract term on a fixed fee basis, or upon redemption of coupons. Payment for our advertising offerings is generally due 30 to 90 days upon receipt of invoice.
We primarily recognize revenue in the amount that we have the right to invoice as advertising services are rendered, which occurs upon delivery of clicks, upon delivery of impressions, over the contract term on a fixed fee basis, or upon redemption of coupons. Payment for our advertising offerings is generally due 30 to 90 days after receipt of invoice.
Governmental agencies in any of the countries in which we or our customers are located could block access to or require a license for Instacart, our mobile apps, website, or the internet generally for a number of reasons, including security, confidentiality, or regulatory concerns. In addition, companies may adopt policies that prohibit their employees from using Instacart.
Governmental agencies in any of the countries in which we or our customers are located could block access to or require a license for Instacart, our mobile apps, website, or the internet generally for a number of reasons, including security, confidentiality, regulatory concerns, or geopolitical reasons. In addition, companies may adopt policies that prohibit their employees from using Instacart.
We maintain a HIPAA compliance program, but it is not always possible to identify and deter misuse by our employees and other third parties, and the precautions we take to detect and prevent noncompliance may not be effective in preventing all misuse, breaches, or violations. Violations of HIPAA may result in significant administrative, civil, and criminal penalties.
We maintain a HIPAA compliance program, but it is not always possible to identify and deter misuse by our employees, contractors, and other third parties, and the precautions we take to detect and prevent noncompliance may not be effective in preventing all misuse, breaches, or violations. Violations of HIPAA may result in significant administrative, civil, and criminal penalties.
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; • 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, adjacent retail categories, and new 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.
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; 11 Table of Contents • 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; • 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.
In addition, we have granted RSUs and restricted stock to our employees and directors, which primarily vest upon the satisfaction of a service-based vesting condition. Stock-based compensation expense related to these RSUs and other outstanding equity awards will result in fluctuations in our expenses in future periods.
In addition, we have granted RSUs to our employees and directors, which primarily vest upon the satisfaction of a service-based vesting condition. Stock-based compensation expense related to these RSUs and other outstanding equity awards will result in fluctuations in our expenses in future periods.
If such mobile operating systems or app marketplaces limit or prohibit us from making our apps available to retailers, customers, brands, or shoppers, make changes that degrade the functionality of our apps, change the way we collect or use data, increase the cost of using our apps, impose terms of use unsatisfactory to us, alter 48 Table of Contents how we collect fees, increase our compliance costs, impair or inhibit our ability to enter into partnerships or effectively market partnerships, or modify their search or ratings algorithms in ways that are detrimental to us, or if our competitors’ placement in such mobile operating systems’ app marketplace is more prominent than the placement of our apps, our growth could slow.
If such mobile operating systems or app marketplaces limit or prohibit us from making our apps available to retailers, customers, brands, or shoppers, make changes that degrade the functionality of our apps, change the way we collect or use data, increase the cost of using our apps, impose terms of use unsatisfactory to us, alter how we collect fees, increase our compliance costs, impair or inhibit our ability to enter into partnerships or effectively market partnerships, or modify their search or ratings algorithms in ways that are detrimental to us, or if our competitors’ placement in such mobile operating systems’ app marketplace is more prominent than the placement of our apps, our 47 Table of Contents growth could slow.
If we cannot navigate such uncertainties or are unable to successfully develop new features or offerings or to enhance our existing offerings or otherwise overcome technological challenges and competing technologies to gain market acceptance, then our business and results of operations will be adversely affected.
If we cannot navigate such uncertainties or are unable to successfully develop new features or offerings or to enhance our existing offerings or otherwise overcome technological or regulatory challenges and competing technologies to gain market acceptance, then our business and results of operations will be adversely affected.
Similarly, our ability to continue providing certain features or use cases could be negatively impacted if any such collaborators experience a disruption in their operations, the quality of their services decline or are otherwise unable to offer their services as customers expect.
Similarly, our ability to continue providing certain features or use cases could be negatively impacted if any such collaborators experience a disruption in their operations, the quality of their services decline, or they are otherwise unable to offer their services as customers expect.
Further, applicable privacy, data security, and data protection obligations may require us to notify relevant stakeholders of certain security incidents, including affected individuals, customers, regulators, and investors, or to take other actions, such as providing credit monitoring and identity theft protection services.
Further, applicable privacy, data security, and data protection obligations require us to notify relevant stakeholders of certain security incidents, including affected individuals, customers, regulators, and investors, or to take other actions, such as providing credit monitoring and identity theft protection services.
As a result of the disclosure obligations required of a public company, our business and financial condition are more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties.
Additionally, as a result of the disclosure obligations required of a public company, our business and financial condition are more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties.
In addition, we have experienced, and may in the future experience, disruptions, outages, operational errors, and other performance problems due to a variety of other factors, including infrastructure changes, introductions of new functionality, defects in third-party software, human errors, capacity constraints due to an overwhelming number of customers accessing our offerings and technology capabilities simultaneously, website hosting disruptions, interruptions to business and operations due to malicious actors utilizing bots or other automated means to access Instacart, denial of service attacks, or other security-related incidents.
In addition, we have experienced, and may in the future experience, disruptions, outages, operational errors, and other performance problems due to a variety of other factors, including infrastructure changes, introductions of new functionality, defects in third-party software, human errors, capacity constraints due to an overwhelming number of customers accessing our offerings and technology capabilities simultaneously, website hosting disruptions, cloud provider disruptions, interruptions to business and operations due to malicious actors utilizing bots or other automated means to access Instacart, denial of service attacks, or other security-related incidents.
Such disruptions may create additional costs for us to maintain or resume operations and may also negatively affect the growth of our business. Our workforce and operations have grown substantially in recent years, and we expect to continue expanding the scale of our operations.
Such disruptions may create additional costs for us to maintain or resume operations and may also negatively affect the growth of our business. Our operations have grown substantially in recent years, and we expect to continue expanding the scale of our operations.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: 56 Table of Contents • any derivative action or proceeding brought on our behalf; • any action asserting a breach of fiduciary duty; • any action asserting a claim against us arising under the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; • any action seeking to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws; • any action as to which Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware; and • any action asserting a claim against us that is governed by the internal-affairs doctrine.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: • any derivative action or proceeding brought on our behalf; • any action asserting a breach of fiduciary duty; • any action asserting a claim against us arising under the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws; • any action seeking to interpret, apply, enforce, or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws; 55 Table of Contents • any action as to which Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware; and • any action asserting a claim against us that is governed by the internal-affairs doctrine.
While we employ practices designed to monitor our compliance with the licenses of third-party open-source software and to shield our valuable proprietary source code from these open-source 52 Table of Contents license requirements, we have not run a complete open-source license review and may inadvertently use third-party open-source software in a manner that exposes us to claims of non-compliance with the applicable terms of such license, that could require us to disclose source code of our proprietary software, prohibit us from charging fees for use of our proprietary software, or render our software temporarily unavailable.
While we employ practices designed to monitor our compliance with the licenses of third-party open-source software and to shield our valuable proprietary source code from these open-source license requirements, we have not run a complete open-source license review and may inadvertently use third-party open-source software in a manner that exposes us to claims of non-compliance with the applicable terms of such license, that could require us to disclose source code of our proprietary software, prohibit us from charging fees for use of our 51 Table of Contents proprietary software, or render our software temporarily unavailable.
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. • 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.
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. 10 Table of Contents • 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. • 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.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds.
In particular, severe ransomware and extortion attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds.
If we fail to comply with these contractual obligations or standards, we may lose access to technology platforms on which we rely and face substantial regulatory enforcement, liability, and fines. For example, Apple requires 42 Table of Contents mobile applications using its operating system, iOS, to affirmatively obtain an end user’s permission for cross-contextual advertising.
If we fail to comply with these contractual obligations or standards, we may lose access to technology platforms on which we rely and face substantial regulatory enforcement, liability, and fines. For example, Apple requires mobile applications using its operating system, iOS, to affirmatively obtain an end user’s permission for cross-contextual 41 Table of Contents advertising.
You should consider and read carefully all of the risks and uncertainties described below, as well as other information included in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K, before making an investment 10 Table of Contents decision.
You should consider and read carefully all of the risks and uncertainties described below, as well as other information included in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K, before making an investment decision.
U.S. generally accepted accounting principles (“GAAP”), are subject to interpretation by the Financial Accounting Standards Board (“FASB”), the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.
U.S. generally accepted accounting principles (“GAAP”), are subject to interpretation by the Financial Accounting Standards Board, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.
Regulators are increasingly focused on compliance with requirements in the online behavioral advertising ecosystem, and current national laws implementing the ePrivacy Directive are likely to be replaced in the European Union by a regulation known as the ePrivacy Regulation, which will significantly increase fines for non-compliance to GDPR-level fines. Other countries outside of Europe increasingly emulate European data protection laws.
Regulators are increasingly focused on compliance with requirements in the online behavioral advertising ecosystem, and current national laws implementing the ePrivacy Directive are likely to be replaced in the European Union by a regulation known as the ePrivacy Regulation, which will significantly increase fines for non-compliance. Other countries outside of Europe increasingly emulate European data protection laws.
In addition to other risk factors discussed in this section, factors that may contribute to the variability of our quarterly and annual results include: • our ability to accurately forecast revenue and appropriately plan our expenses; • macroeconomic uncertainty, including as a result of tariffs or other trade restrictions enacted by the United States and responses by foreign governments to such policies; • the impact of prior or future public health threats on our business; • revenue and fulfillment option mix shifts as we enhance Instacart with new offerings, use cases, and functionality, as well as changes in mix of revenue contribution from advertising contracts; • timing of the recognition of our deferred revenue; • timing of strategic investments and expenditures; • fluctuations in operating expenses, including cost of revenue, as we seek to improve efficiencies, comply with changing regulatory requirements, and expand our business, offerings, and technologies; • changes to financial accounting standards and the interpretation of those standards, which may affect the way we recognize and report our financial results; • the effectiveness of our internal controls; • the seasonality of our business, including as a result of inclement weather; and • our ability to collect payments from retailers and brands on a timely basis.
In addition to other risk factors discussed in this section, factors that may contribute to the variability of our quarterly and annual results include: • our ability to accurately forecast revenue and appropriately plan our expenses; • 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; • the impact of prior or future public health threats on our business; • revenue and fulfillment option mix shifts as we enhance Instacart with new offerings, use cases, and functionality, as well as changes in mix of revenue contribution from advertising contracts; • timing of the recognition of our deferred revenue; • timing of strategic investments and expenditures, including international expansion; • fluctuations in operating expenses, including cost of revenue, as we seek to improve efficiencies, comply with changing regulatory requirements, and expand our business, offerings, and technologies; • changes to financial accounting standards and the interpretation of those standards, which may affect the way we recognize and report our financial results; • the effectiveness of our internal controls; • the seasonality of our business, including as a result of inclement weather; and • our ability to collect payments from retailers and brands on a timely basis.
As a result of these and future potential acquisitions, current and future retailers may begin working more closely, or on an exclusive basis, with other competitors with whom they have combined or otherwise established new relationships. Disruptions in our business caused by these events could adversely affect our business and results of operations.
As a result of these and future potential acquisitions or strategic partnerships, current and future retailers may begin working more closely, or on an exclusive basis, with other competitors with whom they have combined or otherwise established new relationships. Disruptions in our business caused by these events could adversely affect our business and results of operations.
Grocery is a complex market, and improving upon the traditional consumer in-store experience through an online platform or with connected shopping experiences is difficult due to broad consumer demands on selection, quality, affordability, and convenience. Grocery shopping habits and related consumer preferences are complex and diverse across and within markets and across demographics and age groups.
Grocery is a complex market, and improving upon the traditional consumer in-store experience through an online platform or with connected shopping experiences is difficult due to broad consumer demands on selection, quality, affordability, and convenience. Grocery shopping habits and related consumer preferences are complex and diverse across and within geographies and across demographics and age groups.
We may encounter unforeseen operating expenses, difficulties, complications, delays, and other factors, including as we expand our business, execute on strategic initiatives, and navigate macroeconomic uncertainty and any future public health concerns or outbreaks, which may result in losses or a failure to generate or expand profitable growth in future periods.
We may encounter unforeseen operating expenses, difficulties, complications, delays, and other factors, including as we expand our business, execute on strategic initiatives, continue to expand internationally, and navigate macroeconomic uncertainty and any future public health concerns or outbreaks, which may result in losses or a failure to generate or expand profitable growth in future periods.
We are required, pursuant to Section 404 of the Sarbanes-Oxley Act (“Section 404”), to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting as of the end of each fiscal year. This assessment includes disclosure of any material weaknesses in our internal control over financial reporting identified by our management.
We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting as of the end of each fiscal year. This assessment includes disclosure of any material weaknesses in our internal control over financial reporting identified by our management.
Failure to retain existing customers or acquire new customers may also harm our relationships and commercial arrangements with retailers and brands as well as our ability to attract new retailer and brand partners. Past and future changes to the fees that we charge our customers may also reduce overall engagement by our customers or negatively impact new customer acquisition.
Failure to retain existing customers or acquire new customers may also harm our relationships and commercial arrangements with retailers and brands as well as our ability to attract new retail and brand partners. Past and future changes to the fees that we charge our customers may also reduce overall engagement by our customers or negatively impact new customer acquisition.
If the perceived value of our equity awards declines or experiences significant volatility (including as valuations of companies comparable to us decline due to overall market trends, inflation, and related market effects or otherwise), or increases such that prospective employees believe there is limited upside to the value of our equity awards, it may adversely affect our ability to recruit and retain key employees or result in us granting additional equity 33 Table of Contents awards, which would result in additional stock-based compensation expense and further dilution to our stockholders.
If the perceived value of our equity awards declines or experiences significant volatility (including as valuations of companies comparable to us decline due to overall market trends, inflation, and related market effects or otherwise), or increases such that prospective employees believe there is limited upside to the value of our equity awards, it may adversely affect our ability to recruit and retain key employees or result in us granting additional equity awards, which would result in additional stock-based compensation expense and further dilution to our stockholders.
If we are unable or choose not to expand our advertising markets, develop or pursue innovative advertising models and offerings, expand our relationships with more retailers, acquire new customers or increase the engagement of existing customers, or acquire new brand partners or increase the engagement of existing brand partners, we may not be able to successfully grow our advertising and other revenue.
If we are unable or choose not to expand our advertising markets, develop or pursue innovative advertising models and offerings, expand our relationships with more retailers, marketplaces, and platforms, acquire new customers or increase the engagement of existing customers, or acquire new brand partners or increase the engagement of existing brand partners, we may not be able to successfully grow our advertising and other revenue.
AIML also presents emerging ethical issues and if our use of AIML becomes controversial, we may experience brand or reputational harm. We are making substantial investments to expand our offerings and technologies to capitalize on new and unproven business opportunities and expect to increase such investments in the future.
AI also presents emerging ethical issues and if our use of AI becomes controversial, we may experience brand or reputational harm. We are making substantial investments to expand our offerings and technologies to capitalize on new and unproven business opportunities and expect to increase such investments in the future.
Some of these marketing efforts rely on our ability to utilize third-party systems or platforms, which are subject to their own operational and regulatory risks. To drive existing customer reengagement, we also utilize targeted promotions including time-limited free delivery offers and coupons.
Some of these marketing efforts rely on our ability to utilize third-party systems or platforms, which are subject to their own operational and regulatory risks. To drive existing customer reengagement, we also utilize targeted promotions including time-limited $0 delivery offers and coupons.
While an independent actuarial firm periodically reviews our reserves for appropriateness and provides claims reserve valuations, a number of external factors can affect the actual losses incurred for any given claim, including but not limited to the length of time the claim remains open, increases in healthcare costs, increases in automotive costs, legislative and regulatory developments, judicial developments and unexpected events such as natural or human-made catastrophic disasters.
While an independent actuarial firm periodically reviews our reserves for appropriateness and provides claims reserve valuations, a number of external factors can affect the actual losses incurred for any given claim, including but not limited to the length of time the claim remains open, increases in healthcare costs, increases in automotive costs, 48 Table of Contents legislative and regulatory developments, judicial developments and unexpected events such as natural or human-made catastrophic disasters.
If our assumptions regarding the risks and uncertainties that we consider in planning and operating our business are incorrect or 15 Table of Contents change, or if we do not address these risks and uncertainties successfully, including due to the lack of historical data from and experience in operating our business at its current scale, scope, and complexity, the continued evolution of our business and the online grocery industry, or other factors, our results of operations could differ materially from our expectations, and our business, financial condition, and results of operations could be adversely affected.
If our assumptions regarding the risks and uncertainties that we consider in planning and operating our business are incorrect or change, or if we do not address these risks and uncertainties successfully, including due to the lack of historical data from and experience in operating our business at its current scale, scope, and complexity, the continued evolution of our business and the online grocery industry, or other factors, our results of operations could differ materially from our expectations, and our business, financial condition, and results of operations could be adversely affected.
Producing and offering hardware products will also involve new or heightened risks to our business, such as manufacturing and inventory risks resulting from supply chain disruptions, user safety risks and additional expenses resulting from product defects, import and export expenses, in particular, if such expenses increase as a result of tariffs or other trade restrictions enacted by the United States and responses by foreign governments to such policies, and other hardware-related costs.
Producing and offering hardware products will also involve new or heightened risks to our business, such as manufacturing and inventory risks resulting from supply chain disruptions, user safety risks and additional expenses resulting from product defects, import and export expenses, in particular, if such expenses increase 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, and other hardware-related costs.
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 13 Table of Contents with existing customers.
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.
We also rely in part on support technologies, including self-service and AIML solutions. Those technologies have in the past and may in the future fail to perform as expected or fail to adequately address support issues resulting in customer and shopper dissatisfaction.
We also rely in part on support technologies, including self-service and AI solutions. Those technologies have in the past and may in the future fail to perform as expected or fail to adequately address support issues resulting in customer and shopper dissatisfaction.
To the extent that our offerings depend upon the successful operation of third-party software, any undetected errors or defects in, or disruptions to the functionality of, such third-party software have in the past and could in the future prevent the deployment or impair the functionality of our offerings, delay new offering introductions, result in a failure of our offerings, and injure our reputation, which in each case could harm our financial condition and results of operations.
To the extent that our offerings depend upon the successful 46 Table of Contents operation of third-party software, any undetected errors or defects in, or disruptions to the functionality of, such third-party software have in the past and could in the future prevent the deployment or impair the functionality of our offerings, delay new offering introductions, result in a failure of our offerings, and injure our reputation, which in each case could harm our financial condition and results of operations.
Effective patent, trademark, copyright, and trade secret protection may not be available to us or in every jurisdiction in which we offer or intend to offer our services and, in addition, the output of AIML tools we utilize may not be eligible for copyright protection.
Effective patent, trademark, copyright, and trade secret protection may not be available to us or in every jurisdiction in which we offer or intend to offer our services and, in addition, the output of AI tools we utilize may not be eligible for copyright protection.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 44 Table of Contents 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (“Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited.
To do this, we must expand the number of markets where we offer advertising, attract new retailers and expand our relationships with existing retailers, acquire new customers and increase the engagement of existing customers, and increase the breadth and functionality of our advertising products to create more value for our brand partners, including new advertising formats, new measurement tools, increased brand awareness, and other capabilities to deliver attractive return on investment to brand partners.
To do this, we must expand the number of markets and surfaces where we offer advertising, attract new retailers, marketplaces, and platforms and expand our relationships with existing retailers, marketplaces, and platforms, acquire new customers and increase the engagement of existing customers, and increase the breadth and functionality of our advertising products to create more value for our brand partners, including new advertising formats, new measurement tools, increased brand awareness, and other capabilities to deliver attractive return on investment to brand partners.
These new ventures are inherently risky, and we may never realize any expected benefits from them. We have made substantial investments to expand our offerings and technologies to capitalize on new and unproven business opportunities, including new fulfillment options and use cases, expansion into retail categories outside of grocery, the development of hardware products, and automated, AIML technologies.
These new ventures are inherently risky, and we may never realize any expected benefits from them. We have made substantial investments to expand our offerings and technologies to capitalize on new and unproven business opportunities, including new fulfillment options and use cases, international expansion, expansion into retail categories outside of grocery, the development of hardware products, and automated AI technologies.
We expect these seasonal trends to become more pronounced over time if our growth slows, although growth in new offerings, such as restaurants, and disruptive events such as future public health outbreaks may obscure future seasonality trends.
We expect these seasonal trends to become more pronounced over time if our growth slows, although growth in offerings, such as restaurants, acquisitions, and disruptive events, such as future public health outbreaks, may obscure future seasonality trends.
In addition, as a public company, we may be subject to stockholder activism, which can lead to additional substantial costs, distract management and impact the manner in which we operate our business in ways we cannot currently anticipate.
Furthermore, as a public company, we may be subject to stockholder activism, which can lead to additional substantial costs, distract management and impact the manner in which we operate our business in ways we cannot currently anticipate.
To grow our business and be competitive, we must develop offerings, features, and functionality that reflect the constantly evolving nature of technology and the needs of retailers, consumers, brands, and shoppers. The success of these and any other enhancements or developments depend on several factors, including their timely 26 Table of Contents introduction and completion, sufficient demand, and cost effectiveness.
To grow our business and be competitive, we must develop offerings, features, and functionality that reflect the constantly evolving nature of technology and the needs of retailers, consumers, brands, and shoppers. The success of these and any other enhancements or developments depend on several factors, including their timely introduction and completion, sufficient demand, and cost effectiveness.
In particular, our proposed or completed acquisitions or collaborations may be subject to investigations or enforcement actions by antitrust regulatory bodies in the countries in which we operate, such as 34 Table of Contents the Department of Justice and the Federal Trade Commission (“FTC”), which have recently increased their scrutiny of merger or collaboration activity, particularly in the technology sector.
In particular, our proposed or completed acquisitions or collaborations may be subject to investigations or enforcement actions by antitrust regulatory bodies in the countries in which we operate, such as the Department of Justice and the Federal Trade Commission (“FTC”), which have recently increased their scrutiny of merger or collaboration activity, particularly in the technology sector.
Further, Proposition 22 entitles shoppers in California to certain new pay standards and benefits, and imposes certain requirements, which increases costs for us in California, where a large number of shoppers who use Instacart are located.
For example, Proposition 22 entitles shoppers in California to certain new pay standards and benefits, and imposes certain requirements, which increases costs for us in California, where a large number of shoppers who use Instacart are located.
Some of these laws and regulations will, or may in the future, require us to change our business and operations or pricing, which may be costly and harm our customer retention and engagement as well as our results of operations.
Some of these laws and regulations will, or may in the future, require us to change our business and operations, pricing, or fee disclosures, which may be costly and harm our customer retention and engagement as well as our results of operations.
If any such collaborations are terminated or any of our collaborators refuse to renew their agreements with us on commercially reasonable terms, we may need to find other partners to continue offering such features or use cases, and may not be able to secure similar terms or replace such partners in an acceptable time frame.
If any such collaborations are terminated or any of our collaborators refuse to renew their agreements with us on commercially reasonable terms, we may need to find other partners to continue offering such 34 Table of Contents features or use cases, and may not be able to secure similar terms or replace such partners in an acceptable time frame.
Expansion of our offerings, such as to include new use cases, additional technologies, fulfillment options, additional geographic markets, or retail categories adjacent to grocery, may initially harm our profitability. We have also made and may continue to make concessions to retailers that are designed to maximize profitability in the long term but may decrease profitability in the short term.
Expansion of our offerings, such as to include new use cases, technologies, fulfillment options, geographic markets, or retail categories, may initially harm our profitability. We have also made and may continue to make concessions to retailers that are designed to maximize profitability in the long term but may decrease profitability in the short term.
Competitors may also offer fulfillment options from our retail partners, despite 20 Table of Contents having no formal engagement with such retailers. Further, some of our current or potential competitors have, and may in the future continue to have, greater resources and access to larger consumer and shopper bases in a particular geographic area.
Competitors may also offer fulfillment options from our retail partners, despite having no formal engagement with such retailers. Further, some of our current or potential competitors have, and may in the future continue to have, greater resources and access to larger consumer and shopper bases in a particular geographic area.
Cyberattacks and incidents may result in any or all of the following that could independently or in the aggregate cause a material adverse impact to our business, financial condition, and results of operations: loss of customer confidence in the security of Instacart and damage to our brand, reduced demand for our offerings, serious disruption of normal business operations, material diversion of resources to investigate and remediate incidents, exposure to legal liability, including through litigation (such as class actions), regulatory enforcement, and indemnity obligations.
Any or all of the following could independently or in the aggregate cause a material adverse impact to our business, financial condition, and results of operations: loss of customer confidence in the security of Instacart and damage to our brand, reduced demand for our offerings, serious disruption of normal business operations, material diversion of resources to investigate and remediate incidents, exposure to legal liability, including through litigation (such as class actions), regulatory enforcement, and indemnity obligations.
Further, consumers’ price sensitivity may vary by geographic location, and as we expand, our pricing methodologies may not enable us to compete effectively in these locations. In particular, if we were to continue expanding internationally, we may be required to change our pricing strategies and to adjust to different cultural norms, including with respect to consumer pricing and gratuities.
Further, consumers’ price sensitivity may vary by geographic location, and as we expand, our current pricing methodologies may not enable us to compete effectively in these locations. In particular, as we continue expanding internationally, we may be required to change our pricing strategies and to adjust to different cultural norms, including with respect to consumer pricing and gratuities.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition 38 Table of Contents of large deductible or co-insurance requirements, could have an adverse effect on our reputation, brand, business, financial condition, and results of operations.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our reputation, brand, business, financial condition, and results of operations.
Our Series A Preferred Stock ranks senior to our common stock. Accordingly, in the event of our liquidation or dissolution in bankruptcy or otherwise, the holders of our Series A Preferred Stock would receive their liquidation preference prior to any distribution being available to holders of our common stock.
Accordingly, in the event of our liquidation or dissolution in bankruptcy or otherwise, the holders of our Series A Preferred Stock would receive their liquidation preference prior to any distribution being available to holders of our common stock.
As a result, such persons or their appointees to our board of directors, acting together, will have the ability to control or significantly influence all matters submitted to our board of directors or stockholders for approval, including the appointment of our management, the election and removal of directors, and approval of any significant transaction, as well as our management and business affairs.
As a result, such persons or their appointees to our board of directors, acting together, will have the 53 Table of Contents ability to control or significantly influence all matters submitted to our board of directors or stockholders for approval, including the appointment of our management, the election and removal of directors, and approval of any significant transaction, as well as our management and business affairs.
We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy, 25 Table of Contents data security, and data protection practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy, data security, and data protection practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
Additionally, if we are unable to conclude that our internal control over financial reporting is effective, or if we or our independent registered public accounting firm determines we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.
If we are unable to conclude that our internal control over financial reporting is effective, or if we or our independent registered public accounting firm determines we have a material weakness in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the Nasdaq Global Select Market, the SEC, or other regulatory authorities.
We have expended and expect to continue to expend substantial financial and other resources to: • increase the engagement of retailers, customers, brands, and shoppers; • drive adoption of our offerings through marketing and incentives and increase awareness through brand campaigns; • enhance Instacart with new offerings, including through partnerships, use cases, features, including flyers and loyalty programs, fulfillment options, member benefits, such as unlimited $0 delivery fees on orders over a certain size, and other exclusive benefits for Instacart+ members, and functionality, including through strategic investments and expanded technologies, such as Connected Stores; and • invest in our operations to continue scaling our business to achieve and sustain long-term efficiencies.
We have expended and expect to continue to expend substantial financial and other resources to: • increase the engagement of retailers, customers, brands, and shoppers; • drive adoption of our offerings through marketing and incentives and increase awareness through brand campaigns; • enhance Instacart with new offerings, including through partnerships, use cases, features, including flyers and loyalty programs, fulfillment options, member benefits, such as unlimited $0 delivery fees on orders over a certain size, and other exclusive benefits for Instacart+ members, and functionality, including through strategic investments and expanded technologies, such as AI Solutions; and • invest in our operations to continue scaling our business and expanding internationally to achieve and sustain long-term efficiencies.
Our presence outside the United States and any future international expansion strategy will subject us to additional costs and risks, and our plans may not be successful. We have expanded our presence internationally. We have operations in Canada and have acquired companies that have immaterial operations in certain other countries.
Our presence outside the United States and any future international expansion strategy will subject us to additional costs and risks, and our plans may not be successful. We have expanded and expect to continue to expand our presence internationally. We have operations in Canada and have acquired companies that have immaterial operations in certain other countries.
Moreover, other seasonal trends may develop, including from new offerings, or these existing seasonal trends may become more extreme, and the existing seasonality and customer and shopper behavior that we experience may change or become more significant, which would contribute to fluctuations in our results of operations.
Moreover, other seasonal trends may develop, including from new offerings, or these existing seasonal trends may become more extreme, 23 Table of Contents and the existing seasonality and customer and shopper behavior that we experience may change or become more significant, which would contribute to fluctuations in our results of operations.
Demand for our offerings is also affected by a number 22 Table of Contents of factors beyond our control, including macroeconomic conditions, initiatives by retailers to influence shopping behavior, continued market acceptance of our offerings, the timing of development and release of new offerings and features by us, the timing or manner of the adoption of our offerings by retailers and our competitors, changing consumer dietary preferences, technological change, brand recognition, and growth or contraction in our markets.
Demand for our offerings is also affected by a number of factors beyond our control, including macroeconomic conditions, initiatives by retailers to influence shopping behavior, continued market acceptance of our offerings, the timing of development and release of new offerings and features by us, the timing or manner of the adoption of our offerings by retailers and our competitors, changing consumer preferences, technological change, brand recognition, and growth or contraction in our markets.
If any of these retailers were to suspend, limit, or cease their operations or otherwise terminate their relationships with us, the attractiveness of Instacart to consumers and brands could be materially and adversely affected. We are continuing to build our Instacart Ads offerings.
If 17 Table of Contents any of these retailers were to suspend, limit, or cease their operations or otherwise terminate their relationships with us, the attractiveness of Instacart to consumers and brands could be materially and adversely affected. We are continuing to build our Instacart Ads offerings.
Individuals are now more aware of options related to consent, “do not track” mechanisms (such as browser signals from the Global Privacy Control), and “ad-blocking” software to prevent the collection of their personal data for targeted advertising purposes. The long-term impact of these and other privacy and regulatory changes remains uncertain and may harm our growth, business, and profitability.
Individuals are now more aware of options related to consent, privacy preference mechanisms (such as browser signals from the Global Privacy Control), and “ad-blocking” software to prevent the collection of their personal data for targeted advertising purposes. The long-term impact of these and other privacy and regulatory changes remains uncertain and may harm our growth, business, and profitability.
As we expand our products and offerings, this insurance risk will grow. 31 Table of Contents The impact of macroeconomic and geopolitical conditions, public health incidents, weather events, and natural catastrophes, including the resulting effect on consumer spending, may harm our business and results of operations.
As we expand our products and offerings, this insurance risk will grow. The impact of macroeconomic and geopolitical conditions, public health incidents, weather events, and natural catastrophes, including the resulting effect on consumer spending, may harm our business and results of operations.
New laws and regulations have been and may continue to be adopted, implemented, or interpreted to apply to us, and existing laws and regulations that we currently comply with and operate under may be interpreted differently in the future, including as a result of changes to our business.
New laws and regulations have been and may continue to be adopted, implemented, or interpreted to apply to us, and existing laws and regulations that we currently comply with and operate 36 Table of Contents under may be interpreted differently in the future, including as a result of changes to our business.
Future expansion of our business, operations, or service offerings to the European Economic Area (“EEA”), will increase our exposure to data protection laws in the region, including the GDPR.
Further expansion of our business, operations, or service offerings to the European Economic Area (“EEA”), will increase our exposure to data protection laws in the region, including the GDPR.
Further, the laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. Moreover, policing unauthorized use of our technologies, 50 Table of Contents trade secrets, and intellectual property may be difficult, expensive, and time-consuming.
Further, the laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. Moreover, policing unauthorized use of our technologies, trade secrets, and intellectual property may be difficult, expensive, and time-consuming.
We are also devoting significant resources to bolster our capacity and information technology infrastructure, financial and accounting systems and controls, sales and marketing and engineering capabilities, and operations and support infrastructure, as well as to retain, manage, and train employees in geographically dispersed locations to service new and existing customers.
We are also devoting significant resources to retain, manage, and train employees in information technology infrastructure, financial and accounting systems and controls, sales and marketing and engineering capabilities, operations and support infrastructure, as well as employees in geographically dispersed locations to service new and existing customers.
It is difficult to accurately predict retailer, consumer, brand, or shopper adoption of new features or offerings, and related shifts in consumer shopping behavior, as well as our recent rapid growth and limited experience in operating our business at its current scale, scope, and complexity.
It is difficult to accurately predict retailer, consumer, brand, or shopper adoption of new features or offerings, and related shifts in consumer shopping behavior, as well as our limited experience in operating our business at its current scale, scope, and complexity.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CISO has significant global experience in managing and leading IT and cybersecurity teams, with over 20 years of experience in the cybersecurity industry in various positions. Our CISO is a Certified Information Systems Security Professional by the International Information System Security Certification Consortium.
Biggest changeOur CISO has significant global experience in managing and leading IT and cybersecurity teams, with nearly 20 years of experience in the cybersecurity industry in various positions and holds undergraduate and master’s degrees in computer science and engineering.
Item 1C. Cybersecurity Risk Management and Strategy We have implemented and maintain a cybersecurity risk management program that is designed to identify, assess, and manage material risks from cybersecurity threats to our critical systems and information.
Item 1C. Cybersecurity Risk Management and Strategy We have implemented and currently maintain a cybersecurity risk management program that is designed to identify, assess, and manage material risks from cybersecurity threats to our critical systems and information.
This team is principally responsible for directing (1) our cybersecurity risk assessment processes, (2) our security processes, and (3) our responses to cybersecurity incidents; • We use external cybersecurity service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security processes; • We conduct periodic cybersecurity awareness trainings for employees who have access to our IT systems; • We maintain a cybersecurity incident response plan and a security operations function so we can respond to cybersecurity incidents and comply with legal and disclosure obligations; and • We have implemented a third-party risk management process for key third-party service providers.
This team is principally responsible for directing (1) our cybersecurity risk assessment processes, (2) our security processes, (3) our red team and penetration testing assessments, and (4) our responses to cybersecurity incidents; • We use external cybersecurity service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security processes; • We conduct periodic cybersecurity awareness trainings for employees who have access to our IT systems; • We maintain a cybersecurity incident response plan and a security operations function so we can respond to cybersecurity incidents and comply with legal and disclosure obligations; and • We have implemented a third-party risk management process for key third-party service providers.
Our cybersecurity risk management program is integrated with our overall enterprise risk management program and includes the following key elements: • We perform risk assessments designed to help identify material cybersecurity risks to our critical systems and services, and where appropriate, we engage external experts and consultants to assist us in performing certain of these risk assessments; • Our cybersecurity team is composed of security and infrastructure engineers and compliance personnel.
Our cybersecurity risk management program is integrated with our overall enterprise risk management program and includes the following key elements: 57 Table of Contents • We perform risk assessments designed to help identify material cybersecurity risks to our critical systems and services, and where appropriate, we engage external experts and consultants to assist us in performing certain of these risk assessments; • Our cybersecurity team is composed of security and infrastructure engineers, compliance personnel, and offensive security experts.
For a description of these risks, see the section titled “Risk Factors – Risks Related to Our Business and Industry - If we or the third parties we rely on experience a compromise to the confidentiality, integrity or availability of systems, or data of our customers, shoppers, partners’, or Instacart, we may experience adverse consequences, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations; reputational harm, loss of revenue or profits, loss of customers or sales, and other adverse consequences.” 59 Table of Contents Governance Our board of directors delegates the cybersecurity risk oversight function to its audit committee.
For a description of these risks, see the section titled “Risk Factors—Risks Related to Our Business and Industry—If we or the third parties we rely on experience a compromise to the confidentiality, integrity, or availability of our or their systems, or to data of our customers, shoppers, partners, employees, or Instacart, we may experience adverse consequences, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, loss of customers or sales, and other adverse consequences.” Governance Our board of directors delegates the cybersecurity risk oversight function to its audit committee.
Our CISO reports to our Chief Technology Officer, who has over 25 years of software development experience and 15 years of experience in leading software engineering teams in the technology industry, including at Uber.
Our CISO reports to our Chief Technology Officer, who has over 25 years of software development experience and 15 years of experience in leading software engineering teams in the technology industry.
Our CISO relies on close collaboration with other internal infrastructure, product, engineering, and legal teams to implement our cybersecurity risk mitigation measures.
Our CISO relies on close collaboration with other internal infrastructure, product, engineering, and legal teams to implement our cybersecurity risk mitigation measures. 58 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also maintain other offices in North America, including in Chicago, Illinois; New York City, New York; Toronto, Ontario; and Washington, D.C., as well as offices in Shanghai, China and near Melbourne, Australia.
Biggest changeWe also maintain other offices in North America, including in New York City, New York, Fort Lauderdale, Florida, and Toronto, Ontario, as well as offices in Dublin, Ireland, near Melbourne, Australia, and Shanghai, China.
Item 2. Properties Our corporate headquarters is located in San Francisco, California, where we lease approximately 107,000 square feet of space under a lease that expires in October 2026.
Item 2. Properties Our corporate headquarters is located in San Francisco, California, where we lease approximately 57,000 square feet of space under a lease that expires in May 2034.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Removed
Legal Proceedings Independent Contractor Classification Matters We are regularly subject to claims, lawsuits, arbitration proceedings, administrative actions, government investigations and audits, and other legal and regulatory proceedings at the federal, state, and municipal levels in the United States and other jurisdictions in which we operate, challenging the classification of full-service shoppers as independent contractors, and claims that, by the alleged misclassification, we have violated various employment and other laws that would apply to employees.
Added
Legal Proceedings See discussion under the caption “Legal Matters” in Note 10 — Commitments and Contingencies to our consolidated financial statements contained in this Annual Report on Form 10-K 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.
Removed
Laws and regulations that govern the status and classification of independent contractors are subject to change and divergent interpretations by various authorities, which can create uncertainty and unpredictability for us.
Removed
For example, on September 13, 2019, the San Diego City Attorney filed a complaint in San Diego County Superior Court on behalf of the people of the State of California alleging unfair competition claims related to contractor misclassification.
Removed
In October 2022, we signed and filed a stipulated judgment with the city attorney for San Diego, California, which was entered by the court in January 2023 and settled the case for $46.5 million and the city, acting on behalf of the People of the State of California, released its claims from September 13, 2015 to the settlement’s effective date.
Removed
We are 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 arbitration pursuant to our 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 we misclassified shoppers as independent contractors and related claims.
Removed
None of the putative class or collective actions have progressed to or resulted in class certification.
Removed
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. 60 Table of Contents We dispute any allegations of wrongdoing and intend to continue to defend ourselves vigorously in these matters.
Removed
However, the results of litigation and arbitration are inherently unpredictable, including due to the timing and final amounts of settlements with adverse parties, and our chances of success on the merits for any proceeding remain uncertain.
Removed
In particular, an adverse ruling in connection with any misclassification class action may negatively impact our chances of success on the merits or settlement negotiation posture for our other outstanding misclassification claims and proceedings. As a result, such legal proceedings, individually or in the aggregate, could have a material impact on our business, financial condition, and results of operations.
Removed
While we have accrued a legal reserve balance of $57 million as of December 31, 2024 relating to these misclassification claims and proceedings, as further described in Note 9 — Commitments and Contingencies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, any actual losses incurred in connection with these claims against us may differ from the initial estimates of loss, including as a result of settlement negotiations, and such differences could be material.
Removed
Regardless of the outcome, litigation and arbitration of these matters could have an adverse impact on us because of defense and settlement costs, individually and in the aggregate, diversion of management resources, and other factors.
Removed
We also anticipate future claims, lawsuits, arbitration proceedings, administrative actions, and government investigations and audits in various jurisdictions challenging our classification of shoppers as independent contractors and not employees. In California, Proposition 22 provides more legal certainty regarding the status of independent workers offering delivery services in California from the time it became effective on December 16, 2020.
Removed
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.
Removed
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 us being prohibited from continuing to use independent-contractor shoppers in the manner we currently do would materially impair our business, growth, and results of operations due to a variety of factors including but not limited to, our adoption of one or more alternative fulfillment strategies and the associated costs that would be required, defense and settlement costs, individually and in the aggregate, diversion of management resources, and such proceedings may result in additional contingency reserves for purposes of our financial statements.
Removed
In addition, even though Proposition 22 was upheld, we may still face allegations that certain of our business practices do not satisfy all of the elements of Proposition 22. While we believe we properly provide all requisite pay standards and benefits under Proposition 22, we may nonetheless face various claims involving disputes over such pay standards and benefits.
Removed
For more information, see the section titled “Risk Factors—Risks Related to Our Legal and Regulatory Environment—If the contractor status of shoppers who use Instacart is successfully challenged, or if additional requirements are placed on our engagement of independent contractors, we may face adverse business, financial, tax, legal, and other consequences” and the section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations—Shopper Classification Developments.
Removed
We are also 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, in Alaska, Florida, New Jersey, New York, and Pennsylvania.
Removed
We believe that we comply with applicable legal requirements and that shoppers are properly classified as independent contractors; therefore, we dispute that we are obligated to provide such additional benefits under state law and plan to vigorously contest any adverse assessment or determination.
Removed
Our chances of success on the merits are still uncertain, such that any reasonably possible loss or range of loss cannot be estimated. However, the results of these audits may result in additional payments, including settlement payments, penalties, and interest, and such additional amounts could have a material impact on our business, financial conditions, results of operations, and cash flows.
Removed
Securities Litigation On January 25, 2024, a purported stockholder filed suit against us and certain of our current and former officers and directors in the Northern District of California, on behalf of a putative class of purchasers of our common stock in our IPO or between September 19, 2023 and October 1, 2023.
Removed
The complaint alleges violations of Sections 11 and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act in connection with the IPO, and seeks damages and attorneys’ fees, among other things. An amended complaint also added the underwriters of our IPO as defendants.
Removed
On October 29, 2024, we filed a motion to dismiss the amended complaint, which is pending the Court’s decision. 61 Table of Contents Other Litigation Matters In the ordinary course of our business, various parties have from time to time claimed, and may claim in the future, that we are liable for damages related to unpaid wages, missed breaks, premium or overtime pay, hazard pay, inadequate notice under the Worker Adjustment and Retraining Notification Act or its state equivalent, retaliation, denial of or interference with leave of absence, improper application of our paid time off or other policies, discrimination or harassment based on a protected characteristic, wrongful termination, or failure to accommodate a disability.
Removed
Various parties may also file a charge with the National Labor Relations Board alleging unfair labor practices.
Removed
Additionally, given the high degree of complexity involved in the interpretation and application of states’ sales and indirect tax rules to our activities, it is possible that tax authorities may question our interpretation of taxability of such activities, and various parties have from time to time filed, and may in the future file, complaints related to our current and historical approach to treatment of our sales tax obligations.
Removed
As a result, we maintain a reserve related to potential tax, interest, or penalties that may be due, as further described in Note 9 — Commitments and Contingencies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Removed
Although the results of these claims cannot be predicted with certainty, we believe that these claims, individually or in the aggregate, could have a material adverse impact on our business, financial condition, results of operations, and cash flows.
Removed
Besides the matters described above, we are regularly subject to claims, lawsuits, arbitration proceedings, administrative actions, government investigations, and other legal and regulatory proceedings involving personal injury, intellectual property, including patent infringement, property damage, securities and stockholder claims, commercial and contract disputes, unfair competition, and consumer protection claims, including auto-renewal practices, pricing and fees, data protection and privacy, environmental, health and safety, appropriate disclosures of worker and customer rights and entitlements, weights and measures, compliance with regulatory requirements, and other matters.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe returns shown are based on historical results and are not intended to suggest future performance. 63 Table of Contents Issuer Purchases of Equity Securities The following table summarizes information relating to repurchases of our equity securities during the three months ended December 31, 2024: Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (in thousands) (in thousands) (in millions) October 1, 2024 to October 31, 2024 138 $ 39.62 138 $ 62 November 1, 2024 to November 30, 2024 — $ — — $ 312 December 1, 2024 to December 31, 2024 — $ — — $ 312 Total 138 138 ___________ 1 In June 2024, our board of directors authorized a $500 million share repurchase program, which was subsequently increased to $750 million in November 2024.
Biggest changeThe returns shown are based on historical results and are not intended to suggest future performance. 60 Table of Contents Issuer Purchases of Equity Securities The following table sets forth information relating to repurchases of our equity securities during the three months ended December 31, 2025: Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (1)(3) (in thousands) (in thousands) (in millions) October 1, 2025 to October 31, 2025 2,983 $ 38.55 2,983 $ 175 November 1, 2025 to November 30, 2025 14,433 $ 39.37 14,433 $ 1,057 December 1, 2025 to December 31, 2025 8,728 $ 44.17 8,728 $ 671 Total 26,144 26,144 ___________ 1 In June 2024, our board of directors authorized a $500 million share repurchase program, which was subsequently increased to $750 million, $1 billion, and later $2.5 billion in November 2024, May 2025, and November 2025, respectively.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each index on September 19, 2023, the date our common stock began trading on Nasdaq Global Select Market, and its relative performance is tracked through December 31, 2024.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our common stock and in each index on September 19, 2023, the date our common stock began trading on Nasdaq Global Select Market, and its relative performance is tracked through December 31, 2025.
The share repurchase program has no expiration date. In determining the authorization of this share repurchase program, including the amount authorized, our board of directors considered the trading price levels of our common stock, including relative to that of comparable companies, our cash position, and other relevant business, tax, and legal factors.
The share repurchase program has no expiration date. In determining the authorization of each share repurchase program, including the amount authorized, our board of directors considered the trading price levels of our common stock, including relative to that of comparable companies, our cash position, and other relevant business, tax, and legal factors.
Holders of Record As of February 21, 2025, there were 126 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our common stock represented by these record holders.
Holders of Record As of February 20, 2026, there were 100 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our common stock represented by these record holders.
For more information regarding the risks associated with our share repurchase program, see the section titled “Risk Factors—Risks Related to Ownership of Our Common Stock—We may not realize the anticipated long-term stockholder value of our share repurchase program, and any failure to repurchase our common stock after we have announced our intention to do so may negatively impact our stock price.” 2 Excludes costs associated with the repurchases and the 1% excise tax accrued on the Company’s share repurchases as a result of the Inflation Reduction Act of 2022.
For more information regarding the risks associated with our share repurchase program, see the section titled “Risk Factors—Risks Related to Ownership of Our Common Stock—We may not realize the anticipated long-term stockholder value of our share repurchase program, and any failure to repurchase our common stock after we have announced our intention to do so may negatively impact our stock price.” 2 Excludes costs associated with the repurchases and the 1% excise tax accrued on our share repurchases as a result of the Inflation Reduction Act of 2022. 3 On November 10, 2025, we entered into an accelerated share repurchase agreement (the “ASR Agreement”) with a third-party financial institution to repurchase $250 million of our common stock.
Added
Pursuant to the terms of the ASR Agreement, we paid $250 million to the financial institution and received and 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.
Added
After giving effect to the ASR Agreement, we have remaining authorization to repurchase up to $671 million of our common stock as of December 31, 2025. Repurchases under the ASR Agreement were completed in January 2026. Item 6. [Reserved] 61 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following table summarizes our results of operations for the periods indicated: Year Ended December 31, 2022 2023 2024 (in millions) Revenue $ 2,551 $ 3,042 $ 3,378 Cost of revenue (1) (2) 720 764 836 Gross profit 1,831 2,278 2,542 Operating expenses: Operations and support (1) (2) 252 344 278 Research and development (1) (2) 518 2,312 604 Sales and marketing (1) (2) 660 961 808 General and administrative (1) (2) 339 803 363 Total operating expenses 1,769 4,420 2,053 Income (loss) from operations 62 (2,142) 489 Other expense, net (8) — (3) Interest income 17 81 66 Income (loss) before provision for (benefit from) income taxes 71 (2,061) 552 Provision for (benefit from) income taxes (357) (439) 95 Net income (loss) $ 428 $ (1,622) $ 457 ___________ (1) Amounts include depreciation and amortization expense as follows: 70 Table of Contents Year Ended December 31, 2022 2023 2024 (in millions) Cost of revenue $ 20 $ 25 $ 37 Operations and support 2 2 2 Research and development 4 4 5 Sales and marketing 5 8 8 General and administrative 3 4 4 Total depreciation and amortization expense $ 34 $ 43 $ 56 (2) Amounts include stock-based compensation expense as follows: Year Ended December 31, 2022 2023 2024 (in millions) Cost of revenue $ — $ 18 $ 8 Operations and support — 90 13 Research and development 18 1,800 144 Sales and marketing 4 316 62 General and administrative 11 532 73 Total stock-based compensation expense $ 33 $ 2,756 $ 300 The following table summarizes the components of our consolidated statements of operations data, for each of the periods presented, as a percent of revenue: Year Ended December 31, 2022 2023 2024 (as a percent of revenue) (1) Revenue 100 % 100 % 100 % Cost of revenue 28 25 25 Gross profit 72 75 75 Operating expenses: Operations and support 10 11 8 Research and development 20 76 18 Sales and marketing 26 32 24 General and administrative 13 26 11 Total operating expenses 69 145 61 Income (loss) from operations 2 (70) 14 Other expense, net — — — Interest income 1 3 2 Income (loss) before provision for (benefit from) income taxes 3 (68) 16 Provision for (benefit from) income taxes (14) (14) 3 Net income (loss) 17 % (53) % 14 % ___________ (1) Totals of percent of revenue may not foot due to rounding. 71 Table of Contents Comparison of the Years Ended December 31, 2023 and 2024 Revenue Year Ended December 31, 2022 to 2023 2023 to 2024 2022 2023 2024 $ Change % Change $ Change % Change (in millions, except percentages) Transaction $ 1,811 $ 2,171 $ 2,420 $ 360 20 % $ 249 11 % Advertising and other 740 871 958 131 18 % 87 10 % Total revenue $ 2,551 $ 3,042 $ 3,378 $ 491 19 % $ 336 11 % 2024 Compared to 2023 The increase in transaction revenue during fiscal year 2024, compared to fiscal year 2023, was primarily driven by growth in GTV, which grew 10%, and increased fulfillment efficiencies, partially offset by increased investments in affordability initiatives and consumer incentives in fiscal year 2024.
Biggest changeResults of Operations The following table summarizes our results of operations: Year Ended December 31, 2023 2024 2025 (in millions) Revenue $ 3,042 $ 3,378 $ 3,742 Cost of revenue (1) (2) 764 836 984 Gross profit 2,278 2,542 2,758 Operating expenses: Operations and support (1) (2) 344 278 274 Research and development (1) (2) 2,312 604 650 Sales and marketing (1) (2) 961 808 854 General and administrative (1) (2) 803 363 482 Total operating expenses 4,420 2,053 2,259 Income (loss) from operations (2,142) 489 498 Other income (expense), net — (3) 1 Interest income 81 66 57 Income (loss) before provision for (benefit from) income taxes (2,061) 552 556 Provision for (benefit from) income taxes (439) 95 109 Net income (loss) $ (1,622) $ 457 $ 447 ___________ (1) Amounts include depreciation and amortization expense as follows: Year Ended December 31, 2023 2024 2025 (in millions) Cost of revenue $ 25 $ 37 $ 69 Operations and support 2 2 2 Research and development 4 5 7 Sales and marketing 8 8 9 General and administrative 4 4 4 Total depreciation and amortization expense $ 43 $ 56 $ 91 (2) Amounts include stock-based compensation expense as follows: Year Ended December 31, 2023 2024 2025 (in millions) Cost of revenue $ 18 $ 8 $ 9 Operations and support 90 13 14 Research and development 1,800 144 204 Sales and marketing 316 62 59 General and administrative 532 73 66 Total stock-based compensation expense $ 2,756 $ 300 $ 352 68 Table of Contents The following table summarizes the components of our consolidated statements of operations as a percent of revenue: Year Ended December 31, 2023 2024 2025 (as a percent of revenue) (1) Revenue 100 % 100 % 100 % Cost of revenue 25 25 26 Gross profit 75 75 74 Operating expenses: Operations and support 11 8 7 Research and development 76 18 17 Sales and marketing 32 24 23 General and administrative 26 11 13 Total operating expenses 145 61 60 Income (loss) from operations (70) 14 13 Other income (expense), net — — — Interest income 3 2 2 Income (loss) before provision for (benefit from) income taxes (68) 16 15 Provision for (benefit from) income taxes (14) 3 3 Net income (loss) (53) % 14 % 12 % ___________ (1) Totals of percent of revenue may not foot due to rounding.
Our Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin can vary significantly as we continue to make substantial investments to fuel our growth and scale our business. Components of Results of Operations Revenue Our revenue consists of transaction revenue and advertising and other revenue.
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. Components of Results of Operations Revenue Our revenue consists of transaction revenue and advertising and other revenue.
Other Expense, Net Other 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.
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.
We exclude depreciation and amortization expense and stock-based compensation expense as these are non-cash in nature.
We exclude depreciation and amortization expense and stock-based compensation expense as these are non-cash in nature.
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 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.
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.
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, and hosting providers, and (4) macroeconomic factors as discussed above.
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.
Cash Flows from Financing Activities For the year ended December 31, 2024, net cash used in financing activities was $1,413 million, comprised primarily of repurchases of common stock of $1,402 million and taxes paid related to net share settlement of equity awards of $101 million, partially offset by proceeds from exercise of stock options of $80 million.
For the year ended December 31, 2024, net cash used in financing activities was $1,413 million, comprised primarily of repurchases of common stock of $1,402 million and taxes paid related to net share settlement of equity awards of $101 million, partially offset by proceeds from exercise of stock options of $80 million.
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, U.S. research and development credits generated, and the income taxes generated in U.S. states and foreign jurisdictions.
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.
Some of these limitations are that each of Adjusted EBITDA, Adjusted EBITDA as a percent of GTV, and Adjusted EBITDA margin: • excludes stock-based compensation expense; • excludes payroll taxes related to stock-based compensation expense; • 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 restructuring charges; • does not reflect the positive or adverse adjustments related to the reserve for sales and other indirect taxes or certain legal regulatory accruals and settlements; • does not reflect interest income which increases cash available to us; • does not reflect other income that may increase cash available to us; • does not reflect other income or expense that includes unrealized and realized gains and losses on foreign currency exchange; and • does not reflect provision for or benefit from income taxes that reduces or increases cash available to us.
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 • 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.
Our sole performance obligation to the retailer is to connect retailers with end users for the provision of goods by the retailer to the end user. Our sole performance obligation to the end user is to arrange for a shopper to provide fulfillment services to the end user.
Our primary performance obligation to the retailer is to connect retailers with end users for the provision of goods by the retailer to the end user. Our sole performance obligation to the end user is to arrange for a shopper to provide fulfillment services to the end user.
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 66 Table of Contents services that are part of the Instacart Enterprise Platform.
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.
While we generated positive cash flows from operating activities during the years ended December 31, 2023 and 2024, our future cash flows from operating activities may fluctuate as a result of investments we continue to make across our organization. As a result, we may require additional capital resources to execute strategic initiatives to grow our business.
While we generated positive cash flows from operating activities during the years ended December 31, 2024 and 2025, 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 historical results are not necessarily indicative of the results that may be expected for any period in the future. In addition, this section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Our historical results are not necessarily indicative of the results that may be expected for any period in the future. In addition, this section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
Cash Flows from Investing Activities For the year ended December 31, 2024, net cash used in investing activities was $107 million, comprised primarily of purchases of marketable securities of $110 million and purchases of property and equipment, including capitalized internal-use software, of $64 million, partially offset by maturities of marketable securities of $70 million.
For the year ended December 31, 2024, net cash used in investing activities was $107 million, comprised primarily of purchases of marketable securities of $110 million and purchases of property and equipment, including capitalized internal-use software, of $64 million, partially offset by maturities of marketable securities of $70 million.
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 constituents on Instacart and increase our brand awareness.
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.
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; 67 Table of Contents • retailers (i) through service fees in exchange for connecting retailers with customers to facilitate transactions on Instacart Marketplace and (ii) 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 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.
The year over year increase in net income from a net loss of $1,622 million to net income of $457 million was driven by a year over year decrease in stock-based compensation expense due to the vesting of RSUs and restricted stock as a result of the satisfaction of the liquidity event-based vesting condition upon the effective date of the registration statement on Form S-1 filed under the Securities Act in connection with our initial public offering in the prior year, in addition to the growth of our business and further optimization of expenses.
The year over year increase in net income from a net loss of $1,622 million to net income of $457 million was driven by a year over year decrease in stock-based compensation expense due to the vesting of RSUs and restricted stock as a result of the satisfaction of the liquidity event-based vesting condition upon the effective date of the registration statement on Form S-1 filed under the Securities Act in connection with our IPO in the prior year, in addition to the growth of our business and further optimization of expenses.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and the amount of revenue and expenses that are not readily apparent from other sources.
Our estimates are based on our historical experience and on various other 79 Table of Contents factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and the amount of revenue and expenses that are not readily apparent from other sources.
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, acquisition-related expenses, and restructuring charges.
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.
Item 7. 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 consolidated financial statements and related notes included elsewhere in this Annual Report on 64 Table of Contents Form 10-K.
Item 7. 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 consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
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 expense, net, (iv) depreciation and amortization expense, (v) stock-based compensation expense, (vi) payroll taxes related to stock-based compensation expense, (vii) certain legal and regulatory accruals and settlements, net, (viii) reserves for sales and other indirect taxes, (ix) acquisition-related expenses, (x) restructuring charges, and (xi) non-capitalizable expenses related to the public listing of our common stock and issuance costs related to the issuance of our Series A Preferred Stock.
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, (x) restructuring charges, and (xi) issuance costs related to our Series A Preferred Stock.
The preparation of these consolidated financial 82 Table of Contents statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses and related disclosures.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses and related disclosures.
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, allocations of various overhead and occupancy costs, depreciation expense, and amortization expense of customer relationship intangible assets. Compensation costs include salaries, taxes, benefits, bonuses, and stock-based compensation expense.
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.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Annual Report on Form 10-K and can be found in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 5, 2024.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Annual Report on Form 10-K and can be found in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 28, 2025.
As of December 31, 2024, we had non-cancellable purchase obligations of $278 million, with $106 million to be paid within 12 months and the remainder thereafter. Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP.
As of December 31, 2025, we had non-cancellable purchase obligations of $209 million, with $125 million to be paid within 12 months and the remainder thereafter. Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP.
For example, implementation of additional fulfillment options or shifts in our ability to use full-service 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.
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.
We believe that of our significant accounting policies, which are described in Note 2 — Significant Accounting Policies to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, the following accounting policies involve a greater degree of judgment and complexity.
We believe that of our significant accounting policies, which are described in Note 2 — Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, the following accounting policies involve a greater degree of judgment and complexity.
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 expense, net, (iv) depreciation and amortization expense, (v) stock-based compensation expense, (vi) payroll taxes related to stock-based compensation expense, (vii) certain legal and regulatory accruals and settlements, net, (viii) reserves for sales and other indirect taxes, (ix) acquisition-related expenses, (x) restructuring charges, and (xi) non-capitalizable expenses related to the public listing of our common stock and issuance costs related to the issuance of our Series A Preferred Stock.
Adjusted EBITDA, Adjusted EBITDA as a Percent of GTV, and Adjusted EBITDA Margin 71 Table of Contents 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, (x) restructuring charges, and (xi) issuance costs related to our Series A Preferred Stock.
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. 77 Table of Contents The following table provides a reconciliation of research and development expense to adjusted research and development expense: Year Ended December 31, 2022 2023 2024 (in millions, except percentages) Research and development expense $ 518 $ 2,312 $ 604 Adjusted to exclude the following: Depreciation and amortization expense (4) (4) (5) Stock-based compensation expense (1) (18) (1,800) (144) Payroll taxes related to stock-based compensation (2) — (14) (15) Acquisition-related expenses (1) — — Restructuring charges (3) — — (9) Adjusted research and development expense $ 495 $ 494 $ 431 Research and development expense as a percent of GTV 1.8 % 7.6 % 1.8 % Adjusted research and development expense as a percent of GTV 1.7 % 1.6 % 1.3 % ___________ (1) The year ended December 31, 2024 includes a $79 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024, and for terminated employees in connection with the restructuring plan.
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. 74 Table of Contents The following table provides a reconciliation of research and development expense to adjusted research and development expense: Year Ended December 31, 2023 2024 2025 (in millions, except percentages) Research and development expense $ 2,312 $ 604 $ 650 Adjusted to exclude the following: Depreciation and amortization expense (4) (5) (7) Stock-based compensation expense (1) (1,800) (144) (204) Payroll taxes related to stock-based compensation (2) (14) (15) (12) Restructuring charges (3) — (9) — Adjusted research and development expense $ 494 $ 431 $ 426 Research and development expense as a percent of GTV 7.6 % 1.8 % 1.7 % Adjusted research and development expense as a percent of GTV 1.6 % 1.3 % 1.1 % ___________ (1) The year ended December 31, 2024 includes a $79 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures and for terminated employees in connection with our restructuring plan during the first quarter of 2024.
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 retailers for use of our software-as-a-service solution through Instacart Enterprise Platform that enhances the omnichannel shopping experience, with revenue recognized ratably over the subscription period.
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 65 Table of Contents • 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.
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, acquisition-related expenses, restructuring charges, non-capitalizable expenses related to the public listing of our common stock, and issuance costs related to the issuance of our Series A Preferred Stock as these are not indicative of our operating performance.
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, restructuring charges, and issuance costs related to our Series A Preferred Stock as they are not indicative of our operating performance.
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; third-party consulting fees; allocations of various overhead and occupancy costs; 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 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.
In particular, recent volatility in the global financial markets, including due to heightened inflation and elevated interest rates and other macroeconomic conditions, geopolitical conflicts, and recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures could reduce our ability to access capital and negatively affect our liquidity in the future.
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.
Any successful challenges, changes in law, or other legal uncertainty with respect to independent contractor classification may adversely impact our financial condition, business, and results of operations.
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.
The following table provides a reconciliation of general and administrative expense to adjusted general and administrative expense: Year Ended December 31, 2022 2023 2024 (in millions, except percentages) General and administrative expense $ 339 $ 803 $ 363 Adjusted to exclude the following: Depreciation and amortization expense (3) (4) (4) Stock-based compensation expense (1) (11) (532) (73) Payroll taxes related to stock-based compensation (2) — (6) (3) Certain legal and regulatory accruals and settlements, net (3) (50) 4 (10) Reserves for sales and other indirect taxes (4) 1 35 14 Acquisition-related expenses (5) — (2) Restructuring charges (5) — — (4) Other (6) (5) (3) — Adjusted general and administrative expense $ 266 $ 297 $ 281 General and administrative expense as a percent of GTV 1.2 % 2.6 % 1.1 % Adjusted general and administrative expense as a percent of GTV 0.9 % 1.0 % 0.8 % ___________ (1) The year ended December 31, 2024 includes a $4 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring plan.
The following table provides a reconciliation of general and administrative expense to adjusted general and administrative expense: Year Ended December 31, 2023 2024 2025 (in millions, except percentages) General and administrative expense $ 803 $ 363 $ 482 Adjusted to exclude the following: Depreciation and amortization expense (4) (4) (4) Stock-based compensation expense (1) (532) (73) (66) Payroll taxes related to stock-based compensation (2) (6) (3) (4) Certain legal and regulatory accruals and settlements, net (3) 4 (10) (125) Reserves for sales and other indirect taxes, net (4) 35 14 3 Acquisition-related expenses — (2) (2) Restructuring charges (5) — (4) — Other (6) (3) — — Adjusted general and administrative expense $ 297 $ 281 $ 284 General and administrative expense as a percent of GTV 2.6 % 1.1 % 1.3 % Adjusted general and administrative expense as a percent of GTV 1.0 % 0.8 % 0.8 % ___________ (1) The year ended December 31, 2024 includes a $4 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with our restructuring plan during the first quarter of 2024.
The following table provides a reconciliation of sales and marketing expense to adjusted sales and marketing expense: Year Ended December 31, 2022 2023 2024 (in millions, except percentages) Sales and marketing expense $ 660 $ 961 $ 808 Adjusted to exclude the following: Depreciation and amortization expense (5) (8) (8) Stock-based compensation expense (1) (4) (316) (62) Payroll taxes related to stock-based compensation (2) — (2) (4) Acquisition-related expenses 2 4 — Restructuring charges (3) — — (3) Adjusted sales and marketing expense $ 653 $ 639 $ 731 Sales and marketing expense as a percent of GTV 2.3 % 3.2 % 2.4 % Adjusted sales and marketing expense as a percent of GTV 2.3 % 2.1 % 2.2 % ___________ (1) The year ended December 31, 2024 includes an $8 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring plan.
The following table provides a reconciliation of sales and marketing expense to adjusted sales and marketing expense: Year Ended December 31, 2023 2024 2025 (in millions, except percentages) Sales and marketing expense $ 961 $ 808 $ 854 Adjusted to exclude the following: Depreciation and amortization expense (8) (8) (9) Stock-based compensation expense (1) (316) (62) (59) Payroll taxes related to stock-based compensation (2) (2) (4) (3) Acquisition-related expenses 4 — — Restructuring charges (3) — (3) — Adjusted sales and marketing expense $ 639 $ 731 $ 783 Sales and marketing expense as a percent of GTV 3.2 % 2.4 % 2.3 % Adjusted sales and marketing expense as a percent of GTV 2.1 % 2.2 % 2.1 % ___________ (1) The year ended December 31, 2024 includes an $8 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with our restructuring plan during the first quarter of 2024.
We exclude depreciation and amortization expense and stock-based compensation expense as they are non-cash in nature. 76 Table of Contents The following table provides a reconciliation of cost of revenue to adjusted cost of revenue: Year Ended December 31, 2022 2023 2024 (in millions, except percentages) Cost of revenue $ 720 $ 764 $ 836 Adjusted to exclude the following: Depreciation and amortization expense (20) (25) (37) Stock-based compensation expense — (18) (8) Adjusted cost of revenue $ 700 $ 721 $ 791 Cost of revenue as a percent of GTV 2.5 % 2.5 % 2.5 % Adjusted cost of revenue as a percent of GTV 2.4 % 2.4 % 2.4 % 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. 73 Table of Contents The following table provides a reconciliation of cost of revenue to adjusted cost of revenue: Year Ended December 31, 2023 2024 2025 (in millions, except percentages) Cost of revenue $ 764 $ 836 $ 984 Adjusted to exclude the following: Depreciation and amortization expense (25) (37) (69) Stock-based compensation expense (18) (8) (9) Adjusted cost of revenue $ 721 $ 791 $ 905 Cost of revenue as a percent of GTV 2.5 % 2.5 % 2.6 % Adjusted cost of revenue as a percent of GTV 2.4 % 2.4 % 2.4 % 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 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, acquisition-related expenses, restructuring charges, non-capitalizable expenses related to the public listing of our common stock, and issuance costs related to the issuance of our Series A Preferred Stock as these are not indicative of our operating performance. 79 Table of Contents The following table provides a reconciliation of operating expenses to adjusted total operating expenses: Year Ended December 31, 2022 2023 2024 (in millions, except percentages) Total operating expenses $ 1,769 $ 4,420 $ 2,053 Adjusted to exclude to the following: Depreciation and amortization expense (14) (18) (19) Stock-based compensation expense (1) (33) (2,738) (292) Payroll taxes related to stock-based compensation (2) — (24) (24) Certain legal and regulatory accruals and settlements, net (3) (50) 4 (10) Reserves for sales and other indirect taxes (4) 1 35 14 Acquisition-related expenses (4) 4 (2) Restructuring charges (5) — — (18) Other (6) (5) (3) — Adjusted total operating expenses $ 1,664 $ 1,680 $ 1,702 Total operating expenses as a percent of GTV 6.1 % 14.6 % 6.1 % Adjusted total operating expenses as a percent of GTV 5.8 % 5.5 % 5.1 % ___________ (1) The year ended December 31, 2024 includes an aggregate $95 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024 and for terminated employees in connection with the restructuring plan.
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; restructuring charges; and issuance costs related to our Series A Preferred Stock as these are not indicative of our operating performance. 76 Table of Contents The following table provides a reconciliation of operating expenses to adjusted total operating expenses: Year Ended December 31, 2023 2024 2025 (in millions, except percentages) Total operating expenses $ 4,420 $ 2,053 $ 2,259 Adjusted to exclude to the following: Depreciation and amortization expense (18) (19) (22) Stock-based compensation expense (1) (2,738) (292) (343) Payroll taxes related to stock-based compensation (2) (24) (24) (20) Certain legal and regulatory accruals and settlements, net (3) 4 (10) (125) Reserves for sales and other indirect taxes, net (4) 35 14 3 Acquisition-related expenses 4 (2) (2) Restructuring charges (5) — (18) — Other (6) (3) — — Adjusted total operating expenses $ 1,680 $ 1,702 $ 1,750 Total operating expenses as a percent of GTV 14.6 % 6.1 % 6.1 % Adjusted total operating expenses as a percent of GTV 5.5 % 5.1 % 4.7 % ___________ (1) The year ended December 31, 2024 includes an aggregate $95 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures terminated employees in connection with our restructuring plan during the first quarter of 2024.
Due to uncertainties in any tax audit outcome, our estimates of the ultimate settlement of our unrecognized tax positions may change and the actual tax benefits may differ significantly from the estimates. Recent Accounting Pronouncements See Note 2 — Significant Accounting Policies to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Due to uncertainties in any tax audit outcome, our estimates of the ultimate settlement of our unrecognized tax positions may change and the actual tax benefits may differ significantly from the estimates. Recent Accounting Pronouncements See Note 2 — Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report.
The following table provides a reconciliation of operations and support expense to adjusted operations and support expense: Year Ended December 31, 2022 2023 2024 (in millions, except percentages) Operations and support expense $ 252 $ 344 $ 278 Adjusted to exclude the following: Depreciation and amortization expense (2) (2) (2) Stock-based compensation expense (1) — (90) (13) Payroll taxes related to stock-based compensation (2) — (2) (2) Restructuring charges (3) — — (2) Adjusted operations and support expense $ 250 $ 250 $ 259 Operations and support expense as a percent of GTV 0.9 % 1.1 % 0.8 % Adjusted operations and support expense as a percent of GTV 0.9 % 0.8 % 0.8 % ___________ (1) Stock-based compensation expense for the year ended December 31, 2024 was offset by a $4 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with the restructuring plan.
The following table provides a reconciliation of operations and support expense to adjusted operations and support expense: Year Ended December 31, 2023 2024 2025 (in millions, except percentages) Operations and support expense $ 344 $ 278 $ 274 Adjusted to exclude the following: Depreciation and amortization expense (2) (2) (2) Stock-based compensation expense (1) (90) (13) (14) Payroll taxes related to stock-based compensation (2) (2) (2) (1) Restructuring charges (3) — (2) — Adjusted operations and support expense $ 250 $ 259 $ 257 Operations and support expense as a percent of GTV 1.1 % 0.8 % 0.7 % Adjusted operations and support expense as a percent of GTV 0.8 % 0.8 % 0.7 % ___________ (1) Stock-based compensation expense for the year ended December 31, 2024 includes a $4 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for terminated employees in connection with our restructuring plan during the first quarter of 2024.
For additional discussion on our operating leases, see Note 9 — Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K. Non-Cancellable Purchases Our non-cancellable purchase commitments are primarily related to infrastructure service contracts for technology platforms.
For additional discussion on our operating leases, refer to Note 10 — Commitments and Contingencies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Non-Cancellable Purchases Our non-cancellable purchase commitments are primarily related to infrastructure service contracts for technology platforms.
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, allocations of various overhead and occupancy costs, and depreciation and amortization expense. Compensation costs include salaries, taxes, benefits, bonuses, and stock-based compensation expense.
Operations and Support Expense Operations and support expense primarily consists of compensation costs for employees who support our operations, costs 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.
Although we have generated profit in recent periods, including net income of $457 million for the year ended December 31, 2024, we have historically experienced significant net losses as reflected in our accumulated deficit of $3.6 billion as of December 31, 2024.
Although we have generated profit in recent periods, including net income of $447 million for the year ended December 31, 2025, we have historically experienced significant net losses as reflected in our accumulated deficit of $4.5 billion as of December 31, 2025.
The year over year decrease in net changes in operating assets and liabilities, which impacted cash provided by operating activities, from a net cash inflow of $124 million to a net cash outflow of $165 million was primarily driven by (i) the payment of certain worker classification settlements accrued in prior reporting periods and (ii) the release of sales tax reserves primarily due to the resolution of state examinations and expiration of statute of limitations, as well as general business impacts such as the timing of customer, vendor, and other third party payments, the timing of customer collections impacted by the mix of transaction types, such as those involving EBT SNAP and alcohol sales, which result in longer and uneven collection cycles, and the overall growth of our business.
The year over year decrease in net changes in operating assets and liabilities, which impacted cash provided by operating activities, from a net cash outflow of $165 million to $219 million was primarily driven by (i) general business impacts such as the timing of customer collections impacted by the mix of transaction types, such as those involving EBT SNAP and alcohol sales, which result in longer and uneven collection cycles; (ii) lower release of sales tax reserves due to resolutions of certain state examinations in the prior year; (iii) the overall growth of our business; and (iv) the timing of customer, vendor, and other third party payments.
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 2024, orders increased to 294.0 million, or 9% growth compared to 2023. The increase in orders was driven primarily by increased engagement from new and existing customers.
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 2025, orders increased to 338.8 million, or 15% growth, compared to 2024, driven primarily by new customers and increased engagement of existing customers.
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 2024 , gross profit increased to $2,542 million , or 12% growth compared to 2023 , primarily driven by increases in transaction 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. 64 Table of Contents In 2025 , gross profit increased to $2,758 million , or 8% growth compared to 2024 , primarily driven by increases in total revenue.
Contractual Obligations and Commitments Operating Leases Our operating lease commitments primarily include corporate offices and warehouse space. As of December 31, 2024, we had fixed lease payment obligations of $27 million, with $14 million to be paid within 12 months and the remainder thereafter.
Contractual Obligations and Commitments Operating Leases Our operating lease commitments are primarily related to corporate offices. As of December 31, 2025, we had fixed lease payment obligations of $42 million, with $3 million to be paid within 12 months and the remainder thereafter.
The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated in accordance with GAAP: Year Ended December 31, 2022 2023 2024 (in millions, except percentages) Net income (loss) $ 428 $ (1,622) $ 457 Add (deduct): Provision for (benefit from) income taxes (357) (439) 95 Interest income (17) (81) (66) Other expense, net 8 — 3 Depreciation and amortization expense 34 43 56 Stock-based compensation expense (1) 33 2,756 300 Payroll taxes related to stock-based compensation (2) — 24 24 Certain legal and regulatory accruals and settlements, net (3) 50 (4) 10 Reserves for sales and other indirect taxes (4) (1) (35) (14) Acquisition-related expenses 4 (4) 2 Restructuring charges (5) — — 18 Other (6) 5 3 — Adjusted EBITDA $ 187 $ 641 $ 885 GTV $ 28,826 $ 30,322 $ 33,461 Net income (loss) as a percent of GTV 1.5 % (5.3) % 1.4 % Adjusted EBITDA as a percent of GTV 0.6 % 2.1 % 2.6 % Revenue $ 2,551 $ 3,042 $ 3,378 Net income (loss) as a percent of revenue 17 % (53) % 14 % Adjusted EBITDA margin 7 % 21 % 26 % ___________ (1) The year ended December 31, 2024 includes an aggregate $95 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures in the first quarter of 2024 and for terminated employees in connection with the restructuring plan.
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. 72 Table of Contents The following table presents a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated in accordance with GAAP: Year Ended December 31, 2023 2024 2025 (in millions, except percentages) Net income (loss) $ (1,622) $ 457 $ 447 Add (deduct): Provision for (benefit from) income taxes (439) 95 109 Interest income (81) (66) (57) Other (income) expense, net — 3 (1) Depreciation and amortization expense 43 56 91 Stock-based compensation expense (1) 2,756 300 352 Payroll taxes related to stock-based compensation (2) 24 24 21 Certain legal and regulatory accruals and settlements, net (3) (4) 10 125 Reserves for sales and other indirect taxes, net (4) (35) (14) (3) Acquisition-related expenses (4) 2 2 Restructuring charges (5) — 18 — Other (6) 3 — — Adjusted EBITDA $ 641 $ 885 $ 1,087 GTV $ 30,322 $ 33,461 $ 37,224 Net income (loss) as a percent of GTV (5.3) % 1.4 % 1.2 % Adjusted EBITDA as a percent of GTV 2.1 % 2.6 % 2.9 % Revenue $ 3,042 $ 3,378 $ 3,742 Net income (loss) as a percent of revenue (53) % 14 % 12 % Adjusted EBITDA margin 21 % 26 % 29 % ___________ (1) The year ended December 31, 2024 includes an aggregate $95 million benefit related to the reversal of previously recognized stock-based compensation expense for unvested equity awards for executive departures and for terminated employees in connection with our restructuring plan during the first quarter of 2024.
We did not recognize certain tax benefits from uncertain tax positions within the provision for income taxes. We may recognize a tax benefit only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
We may recognize a tax benefit only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
During the year ended December 31, 2024, we repurchased and immediately retired 46 million shares of our common stock for an aggregate purchase price of $1.4 billion including broker commissions, fees, and excise taxes, under the share repurchase programs.
During the year ended December 31, 2025, we repurchased and immediately retired 33 million shares of our common stock for an aggregate purchase price of $1.3 billion including broker commissions, fees, and excise taxes, under this share repurchase program, which included shares repurchased under the ASR Agreement.
As of December 31, 2024, we had cash and cash equivalents of $1.3 billion and marketable securities of $91 million which were primarily held for working capital purposes.
As of December 31, 2025, we had cash and cash equivalents of $637 million and marketable securities of $130 million which were primarily held for working capital purposes.
In addition to California, we expect continuing challenges to the independent contractor classification of shoppers who use Instacart in other jurisdictions in which we operate, as well as the possibility of additional requirements on the use of contractors.
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.
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. (5) Represents severance payments and other related benefits for terminated employees in connection with the restructuring plan.
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.
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. (5) Represents severance payments and other related benefits for terminated employees in connection with the restructuring plan.
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.
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. (5) Represents severance payments and other related benefits for terminated employees in connection with the restructuring plan.
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.
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 2024, Adjusted EBITDA increased to $885 million, or 38% growth compared to 2023, primarily driven by revenue growth and efficiencies within adjusted total operating expenses.
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 2025, Adjusted EBITDA increased to $1,087 million, or 23% growth, compared to 2024, primarily driven by a combination of strong GTV growth and operating leverage.
Cost of Revenue Cost of revenue primarily consists of third-party payment processing fees, expenses related to payment chargebacks, hosting fees, insurance costs attributed to fulfillment, compensation costs of our employees primarily involved in fulfillment, depreciation expense, and amortization expense of technology-related intangible assets and capitalized internal-use software.
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.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, 2022 2023 2024 (in millions) Net cash provided by operating activities $ 277 $ 586 $ 687 Net cash provided by (used in) investing activities 117 135 (107) Net cash provided by (used in) financing activities 46 (30) (1,413) Cash Flows from Operating Activities For the year ended December 31, 2024, net cash provided by operating activities was $687 million, which consisted of net income of $457 million, adjusted by non-cash items of $449 million, primarily from stock-based compensation expense of $300 million, and by net cash outflows from changes in operating assets and liabilities of $219 million.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended December 31, 2023 2024 2025 (in millions) Net cash provided by operating activities $ 586 $ 687 $ 971 Net cash provided by (used in) investing activities 135 (107) (208) Net cash used in financing activities (30) (1,413) (1,391) Cash Flows from Operating Activities For the year ended December 31, 2025, net cash provided by operating activities was $971 million, which consisted of net income of $447 million and adjustments for certain non-cash items of $586 million, partially offset by net cash outflows from changes in operating assets and liabilities of $61 million.
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.
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. 66 Table of Contents 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.
See further information in Note 16 — Restructuring included in Part II, Item 8 of this Annual Report on Form 10-K. 65 Table of Contents 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.
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.
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. 69 Table of Contents In April 2023 and 2024, certain employees elected to receive cash in lieu of a portion of certain future equity awards to be granted by our board of directors, and as a result, cash compensation expense and stock-based compensation expense within operations and support, research and development, sales and marketing, and general and administrative expenses have fluctuated and are expected to continue to fluctuate over the near term.
In April 2023 and 2024, certain employees elected to receive cash in lieu of a portion of certain future equity awards to be granted by our board of directors, and as a result, cash compensation expense and stock-based compensation expense within operations and support, research and development, sales and marketing, and general and administrative expenses have fluctuated and are expected to continue to fluctuate over the near term.
Compensation costs include salaries, taxes, benefits, bonuses, and stock-based compensation expense. 68 Table of Contents 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.
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.
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 78 Table of Contents legal and regulatory accruals and settlements, net, reserves for sales and other indirect taxes, acquisition-related expenses, restructuring charges, non-capitalizable expenses related to the public listing of our common stock, and issuance costs related to the issuance of the Series A Preferred Stock.
Refer to Note 17 — Restructuring to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information. 75 Table of Contents 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; restructuring charges; and issuance costs related to our Series A Preferred Stock.
Immediately subsequent to the closing of the IPO, we issued and sold 5,833,333 shares of our Series A Preferred Stock in a private placement at $30.00 per share and received $175 million in proceeds. For additional information, see Note 1 — Business included in Part II, Item 8 of this Annual Report on Form 10-K.
Immediately subsequent to the closing of the IPO, we issued and sold 5,833,333 shares of our Series A Preferred Stock in a private placement at $30.00 per share and received $175 million in proceeds.
For the year ended December 31, 2023, net cash provided by investing activities was $135 million, comprised primarily of maturities of marketable securities of $301 million, partially offset by purchases of marketable securities of $110 million, and purchases of property and equipment, including capitalized internal-use software, of $54 million .
Cash Flows from Investing Activities For the year ended December 31, 2025, net cash used in investing activities was $208 million, comprised primarily of purchases of marketable securities of $280 million, acquisitions of businesses, net of cash acquired, of $106 million, and purchases of property and equipment, including capitalized internal-use software, of $61 million, partially offset by maturities of marketable securities of $243 million.
The increase in advertising and other revenue during fiscal year 2024, compared to fiscal year 2023, was primarily driven by interrelated factors including an increase in advertising volume and activity on our platform.
The increase in advertising and other revenue during 2025, compared to 2024,was primarily driven by interrelated factors including an increase in advertising volume, activity on our platform, and strength from emerging brand partners. Advertising and other investment rate of 2.9% during 2025 was effectively flat, compared to 2024.
Refer to Note 16 — Restructuring to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information. (6) Represents non-capitalizable expenses related to the public listing of our common stock and issuance costs related to the issuance of our Series A Preferred Stock.
(5) Represents severance payments and other related benefits for terminated employees in connection with our restructuring plan during the first quarter of 2024. Refer to Note 17 — Restructuring to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information. (6) Represents issuance costs related to the issuance of our Series A Preferred Stock.
Refer to Note 16 — Restructuring to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information. (6) Represents non-capitalizable expenses related to the public listing of our common stock and issuance costs related to the issuance of our Series A Preferred Stock.
(5) Represents severance payments and other related benefits for terminated employees in connection with our restructuring plan during the first quarter of 2024. Refer to Note 17 — Restructuring to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information. (6) Represents issuance costs related to the issuance of our Series A Preferred Stock.
Refer to Note 16 — Restructuring to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information. (6) Represents non-capitalizable expenses related to the public listing of our common stock and issuance costs related to the issuance of our Series A Preferred Stock.
(5) Represents severance payments and other related benefits for terminated employees in connection with our restructuring plan during the first quarter of 2024. Refer to Note 17 — Restructuring to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information. (6) Represents issuance costs related to the issuance of our Series A Preferred Stock.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain.
The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain. 84 Table of Contents Although we believe our assumptions, judgments, and estimates are reasonable, changes in tax laws or our interpretation of tax laws and the resolution of any tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements.
Although we believe our assumptions, judgments, and estimates are reasonable, changes in tax laws or our interpretation of tax laws and the resolution of any tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements. 81 Table of Contents We did not recognize certain tax benefits from uncertain tax positions within the provision for income taxes.
Prior period comparative amounts were not material and were not recast to conform to this new presentation. Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
Today, 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. Customers can select the fulfillment option and speed that best serve their needs.
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.
In June 2024, our board of directors authorized a new share repurchase program to purchase up to an aggregate of $500 million of our common stock, which was subsequently increased to $750 million in November 2024. At the time of authorization of the June 2024 program, no capacity remained under the previous share repurchase program.
In November 2023, our board of directors approved a share repurchase program with authorization to purchase up to an aggregate of $500 million of our common stock, which was subsequently increased to $1 billion in February 2024.
(2) Represents employer payroll taxes related to the vesting and settlement of certain equity awards. (3) Represents severance payments and other related benefits for terminated employees in connection with the restructuring plan. Refer to Note 16 — Restructuring to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information.
(2) Represents employer payroll taxes related to the vesting and settlement of certain equity awards. (3) Represents severance payments and other related benefits for terminated employees in connection with our restructuring plan during the first quarter of 2024.
(2) Represents employer payroll taxes related to the vesting and settlement of certain equity awards. (3) Represents severance payments and other related benefits for terminated employees in connection with the restructuring plan. Refer to Note 16 — Restructuring to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information.
(2) Represents employer payroll taxes related to the vesting and settlement of certain equity awards. (3) Represents severance payments and other related benefits for terminated employees in connection with our restructuring plan during the first quarter of 2024.
(2) Represents employer payroll taxes related to the vesting and settlement of certain equity awards. (3) Represents severance payments and other related benefits for terminated employees in connection with the restructuring plan. Refer to Note 16 — Restructuring to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information.
(2) Represents employer payroll taxes related to the vesting and settlement of certain equity awards. (3) Represents severance payments and other related benefits for terminated employees in connection with our restructuring plan during the first quarter of 2024.
(2) Represents employer payroll taxes related to the vesting and settlement of certain equity awards. (3) Represents certain legal, regulatory, and policy expenses related to worker classification matters. (4) Represents sales and other indirect tax reserves, net of abatements, for periods in which we were unable to collect such taxes from customers.
(4) Represents sales and other indirect tax reserves, net of abatements, for periods in which we were unable to collect such taxes from customers.
(2) Represents employer payroll taxes related to the vesting and settlement of certain equity awards. (3) Represents certain legal, regulatory, and policy expenses related to worker classification matters. (4) Represents sales and other indirect tax reserves, net of abatements, for periods in which we were unable to collect such taxes from customers.
(4) Represents sales and other indirect tax reserves, net of abatements, for periods in which we were unable to collect such taxes from customers.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk As of December 31, 2024, we had cash and cash equivalents of $1.3 billion and marketable securities of $91 million invested in a variety of securities, including money market funds and U.S. government and agency securities.
Biggest changeInterest Rate Risk As of December 31, 2025, we had cash and cash equivalents of $637 million and marketable securities of $130 million invested in a variety of securities, including money market funds, commercial paper, U.S. government and government agency debt securities, and corporate debt securities.
In addition, we had $171 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.
In addition, we had $190 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 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 consolidated financial statements as of December 31, 2024.
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 consolidated financial statements as of December 31, 2025.
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 discretionary spending by customers. Our inability or failure to address challenges relating to inflation could harm our business, financial condition, and results of operations. 86 Table of Contents
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. 83 Table of Contents
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, shipping and freight costs, elevated fuel prices that are borne by our partners, and customers purchasing fewer items on average per order.
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.
The effect of a hypothetical 20% change in foreign currency exchange rates applicable to our business would not have a material impact on our consolidated financial statements.
The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our consolidated financial statements.
Higher retailer prices, resulting in increased grocery costs and reduced consumer discretionary 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 85 Table of Contents lower order volumes, and impacted average order values.
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.
Increased fuel prices as a result of supply chain and other macroeconomic factors may also result in fewer shoppers or reduced shopper activity.
Increased fuel prices as a result of supply chain and other 82 Table of Contents macroeconomic factors may also result in fewer shoppers or reduced shopper activity.
We do not enter into investments for trading or speculative purposes. Due to the short-term durations and 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 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.
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 U.S. dollars and a small amount denominated in Canadian dollars, Australian dollars, and euros.
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.

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