Andrew Boone

Andrew Boone asked about the strategy for improving the free user experience and how it will evolve into a monetization strategy over time, specifically what lessons Duolingo expects to learn for future monetization efforts.

Answer

CEO Luis von Ahn explained that Duolingo is currently both under-monetized (only 10% of MAUs pay) and over-monetized (historically relying on friction to drive subscriptions). The current strategy focuses on finding non-friction-based monetization methods, such as adding more valuable features or selling customizations, which are slower to implement but more sustainable. He expressed confidence in increasing subscription rates through these new approaches.

Andrew Boone questioned how improving the free user experience will evolve into a monetization strategy over time, and what lessons Duolingo expects to learn during this transition to re-monetize users later. He also asked for clarification on how to account for multi-app users, specifically regarding the 7 million Chess DAUs in relation to the overall 53 million DAUs.

Answer

Luis von Ahn (Co-Founder and CEO) explained that Duolingo is both under-monetized (only 10% of MAUs pay) and over-monetized (by adding friction). The current strategy focuses on finding monetization methods that don't rely on friction, such as adding features or selling customizations, which will take longer but are expected to yield better long-term results. Regarding Chess DAUs, Luis clarified that the majority of the 7 million Chess DAUs are existing Duolingo users who now use both Languages and Chess, meaning Languages are still growing at a similar pace, and Chess is gradually attracting its own new user base.

Andrew Boone of Citizens JMP inquired about the incrementality of Duolingo Max and its ability to increase overall subscriber conversion, particularly among advanced learners. He also asked for a more detailed breakdown of ARPU drivers and the outlook for the second half of the year.

Answer

CEO Luis von Ahn explained that the company's goal is to optimize platform LTV by experimenting with which plan (Super, Max, Family) to offer to the right user at the right time. CFO Matt Skaruppa added that ARPU was up about 6% in the quarter, driven by plan mix shift and FX, and he expects this level to be sustained. He highlighted that the guidance for the back half of the year is significantly supported by a favorable FX tailwind.

Andrew Boone of Citizens JMP asked about the incrementality of Duolingo Max in driving overall subscriber conversion. He also requested a more detailed breakdown of the drivers behind the ARPU increase and the outlook for the second half of the year.

Answer

CFO Matthew Skaruppa attributed the ARPU increase of about 6% to plan mix shift and favorable FX, expecting low single-digit positive growth to continue. He highlighted that a 'vast majority' of the raised guidance for the back half is due to a strong FX tailwind. CEO Luis von Ahn added that the company is constantly experimenting with its various subscription tiers (Super, Max, Family) to optimize for overall platform LTV.

Andrew Boone of Citizens JMP asked about the incrementality of Duolingo Max on subscriber conversion rates and sought Luis von Ahn's view on the future of the AI software developer and its effect on OpEx efficiency.

Answer

CFO Matt Skaruppa stated that Max is platform LTV positive, driven by both new subscribers and upgrades, and that the company optimizes for overall LTV. CEO Luis von Ahn opined that AI will significantly boost engineer efficiency and enable non-engineers to prototype, but he does not believe it will replace the need for engineers in the foreseeable future.

Andrew Boone asked about the relationship between accelerated content creation and the velocity of A/B testing, particularly for promoting and converting users to Duolingo Max.

Answer

CEO Luis von Ahn clarified that the company's testing velocity is increasing, with more experiments run in 2024 than ever before and a plan to accelerate further in 2025. He explained that these A/B tests are focused on optimizing Max conversion by experimenting with factors like ad timing, target audience, and messaging, with ads for the 'Video Call' feature proving particularly effective.

Andrew Boone asked about the current pace and success rate of product testing and how the testing potential of new features like Adventures and Video Calls compares to established drivers like Streaks.

Answer

CEO Luis von Ahn Arellano confirmed that the number of A/B tests run per quarter is increasing, with a stable success rate around 50%. He explained that product teams are structured around improving monetization, engagement (e.g., Streaks), and teaching efficacy (e.g., Video Call), with roughly equal resources and continuous experimentation dedicated to all three areas.

Andrew Boone asked about Woodwork's role in Grindr's monetization playbook for 2026 and beyond. He also sought clarification on MAU growth trends, given two quarters of slowing growth and the company's shift to annual MAU disclosure.

Answer

George Arison (CEO, Grindr) clarified that Woodwork is not included in 2026 revenue guidance but represents a modest cost. He described it as a 10-month-old startup within Grindr, serving thousands of users with multiple products (starting with ED medications), and views it as a valuable long-term growth lever and anchor for broader health offerings, noting positive synergy with Grindr subscriptions. Regarding MAU, George Arison stated that quarterly MAU is not a primary management metric. He explained that unadjusted MAU grew 5.2% in 2025, but aggressive removal of unwanted accounts (350,000 more than 2024) impacted reported numbers. Adjusted MAU growth (excluding these removals) was 6.1%, similar to prior years. He expects continued aggressive account removal and sees international expansion and re-engagement of older cohorts (45+) as long-term MAU growth opportunities.

Andrew Boone asked about Woodwork's role in Grindr's 2026 monetization playbook and future years. He also inquired about MAU growth on a go-forward basis, given the shift to annual disclosure and recent slowing growth.

Answer

George Arison (CEO, Grindr) clarified that Woodwork is not included in Grindr's 2026 revenue guidance but is factored into modest costs, as it operates like a 10-month-old startup within Grindr, serving thousands of users and expanding beyond ED medications. He views it as a valuable long-term growth lever and an anchor for a broader health offering, creating synergy with Grindr subscriptions. Regarding MAU, Arison stated that quarterly MAU is not a primary management metric. He explained that unadjusted MAU grew 5.2% in 2025, but aggressive removal of 350,000 more unwanted accounts than in 2024 resulted in an adjusted MAU growth of 6.1%, similar to past years. He expects continued aggressive account removal and similar raw MAU growth in 2026, with long-term opportunities in international expansion and re-engagement of older cohorts (45+).

Andrew Boone asked how Ibotta plans to expand Live Lift to more clients, identifying key operational hurdles. He also inquired about the strategy and operational challenges in moving CPGs away from the annual planning cycle towards more always-on budgeting.

Answer

Bryan Leach, Founder and CEO, explained that expanding Live Lift involves building credibility with core capabilities, then demonstrating Live Lift's value for larger, longer campaigns. Operational hurdles include automating systems for scalable offer setup, measurement, and reporting. Shifting CPGs to always-on budgeting requires validating Ibotta's measurement and methodology to build conviction against century-old planning constructs.

Andrew Boone asked about Ibotta's strategy and key operational hurdles for expanding LiveLift to more clients. He also inquired about the process and operational challenges involved in shifting CPG clients from traditional annual planning cycles to more 'always-on' budgeting.

Answer

Bryan Leach, Founder and CEO, explained that expanding LiveLift involves first building credibility with core capabilities, then demonstrating LiveLift's value for clients willing to invest more in longer/larger campaigns to meet eligibility requirements. Operational hurdles include automating systems to reduce manual effort for readouts, projections, and reporting, making it scalable for Ibotta's 2,000+ brands. Regarding the annual planning cycle, Mr. Leach noted it's a century-old construct, requiring clients to first validate Ibotta's measurement and methodology before committing to 'always-on' spending, a shift that challenges traditional resource allocation.

Andrew Boone from JMP Securities asked for specifics on the steps and timeline required to automate third-party incrementality measurement and questioned if the 9-12 month client adoption cycle implies that growth will not reaccelerate until 2027.

Answer

Founder and CEO Brian Leach clarified that automating Ibotta's internal real-time measurement is a key goal for 2026, while third-party validation is a more periodic process that is already established. Regarding the growth timeline, he declined to speculate on a specific quarter for reacceleration but expressed strong conviction that the business transformation will eventually lead to a step-function change in client investment.

Andrew Boone asked if the company is in 'harvest mode' or still pursuing new CPG clients given the focus on CPID, and requested an explanation for the recent step-down in gross margin.

Answer

Bryan Leach, Founder and CEO, clarified that the company is not in 'harvest mode' but is 'voluntarily throttling' the CPID rollout to ensure a high-quality first impression with new clients. Valarie Sheppard, Interim CFO, addressed the margin question, attributing the step-down primarily to the inclusion of public company costs not present in the prior year's quarter. She expects operating costs to be flattish going forward, allowing for margin improvement as revenue grows.

Andrew Boone inquired about the targeting capabilities and incremental value from new partners like DoorDash and Instacart, and asked for details on cost savings.

Answer

CEO Bryan Leach confirmed that new publishers like DoorDash will support full targeting functionality, which is key to delivering incremental value. Regarding cost savings, he specified that reductions were focused on the less strategic D2C business and B2B marketing, while the company is increasing investment in strategic R&D, client analytics, and machine learning.

Andrew Boone inquired about the strategic balance between the D2C and third-party businesses given recent D2C softness, and asked for a breakdown of the drivers behind the significant step-up in operating expenses expected in Q4.

Answer

CFO Sunit Patel clarified that D2C revenue and redeemers have been stabilizing sequentially. He detailed three main drivers for the Q4 OpEx increase: 1) seasonal marketing spend for the popular Thanksgiving program, 2) increased R&D headcount for targeting and analytics, and 3) specific, fixed costs associated with launching and integrating the Instacart partnership.

Andrew Boone sought clarification on the specific changes within the ad funnel (e.g., higher CPMs, lower click-through rates, worse on-site conversion) and the impact of this channel's size on the company's ability to reallocate spend, given its diversified ad platform.

Answer

Oran Holtzman, Co-founder and CEO, Oddity Tech, noted that the global and cross-brand nature of the issue makes it harder to grow without overspending, leading to a 30% decrease in Q1 targeting. Lindsay Drucker Mann, Global CFO, Oddity Tech, added that pure platform orders from their largest ad partner, based on internal attribution, constitute just under a quarter of total revenue, highlighting the significant impact despite relationships with many ad partners.

Andrew Boone sought clarification on the specific changes within ODDITY's advertising funnel, such as higher CPMs, lower click-through rates, or worse on-site conversion, and questioned why this issue had such a large impact despite ODDITY's diversified ad platform.

Answer

Oran Holtzman, Co-founder and CEO, explained that the issue is global and affects all brands, making it difficult to grow without overspending, which led to a 30% decrease in Q1 revenue guidance. Lindsay Drucker Mann, Global CFO, noted that pure platform orders from their largest ad partner account for just under a quarter of revenue based on internal attribution, and the impact extends beyond pure acquisition to repeats and direct revenues. She added that while ODDITY has many ad partners, the ability to scale significantly with each individual partner is limited, contributing to the overall impact.

Andrew Boone asked about the financial profile of METHODIQ, specifically regarding potential differences in AOVs and margin profiles over the next three years. He also sought clarification on the expected contribution of ODDITY Labs' proprietary molecules, including the eight products planned for 2026, and the long-term path for these innovations.

Answer

Lindsay Drucker Mann, CFO of ODDITY, stated that METHODIQ is expected to align with Il Makiage and SpoiledChild's long-term financial profile, targeting 20% revenue growth and 20% adjusted EBITDA margins. She noted that prescription products within METHODIQ might initially have lower gross margins due to third-party costs but anticipate strong repeat business. Regarding ODDITY Labs, she explained the strategic pivot to higher-efficacy molecules, confirming eight products with Labs' molecules for 2026 (four for METHODIQ, four for other brands), with more in the pipeline. Oran Holtzman, Co-founder and CEO of ODDITY, emphasized the significant progress and strength of Labs' development.

Andrew Boone of Citizens JMP asked about the key drivers for international growth, specifically whether it's coming from new market entry or deeper penetration in existing ones. He also requested an update on customer repeat rates and cohort performance.

Answer

CFO Lindsay Drucker Mann reported that international sales grew over 40% in the first half, driven by both established markets like the UK and Australia, and promising new test markets like France. She stated that repeat rates remain very strong, continue to increase as a percentage of the business, and that 12-month repeat cohorts are performing well above 100% for both Il Makiage and Spoiled Child.

Andrew Boone of Citizens JMP asked for insight into the advertising component of SG&A, advertising efficiency metrics like LTV-to-CAC, and the potential future optionality of the new telehealth infrastructure platform.

Answer

Global CFO Lindsay Drucker Mann detailed that SG&A investments are focused on future growth, including new brand development (Brands 3 & 4), ODDITY LABS, and technology, rather than optimizing for margins above 20%. She clarified that the 3x LTV/CAC was a past observation, not a target. CEO Oran Holtzman explained that the telehealth infrastructure is a core capability that can be extended into new medical domains, creating massive future potential.

Andrew Boone of Citizens JMP asked about the key product and operational milestones required for the successful launch of Brand 3. He also sought to understand the scale of growth investments to better gauge the company's underlying profitability.

Answer

CEO Oran Holtzman described Brand 3 as a telehealth platform for medical-grade skin issues, set for a Q3 soft launch and Q4 official launch, backed by significant investments. Global CFO Lindsay Drucker Mann suggested that H1 2024 profitability reflects the core business's strength before the major investment ramp. Oran Holtzman quantified the 2025 investment in growth initiatives as 'tens of millions' of dollars.

Andrew Boone asked for an analysis of the 9% AOV increase, the implied unit growth for 2025, and how ODDITY is leveraging generative AI advancements from partners like Meta and Google.

Answer

Global CFO Lindsay Drucker Mann attributed the AOV growth to larger order sizes and a mix shift towards higher-priced products, noting this occurred despite a headwind from the growing repeat business, which has a lower AOV. She confirmed future growth will remain primarily order-driven. Co-Founder and CEO Oran Holtzman added that ODDITY is using its vast data with generative AI to enhance personalization, especially for Brand 3, but noted it is still in the early stages of testing.

Andrew Boone asked about the early results from Homes AI, its connection to CoStar Group's business model (retention, traffic), and how awareness will be driven within the context of marketing spend for a new product.

Answer

CoStar Group CEO Andy Florance stated that marketing spend is shifting from top-of-funnel brand awareness to specific product feature marketing, with some budget moving to lower-funnel activities like SEM to drive leads. He emphasized the dramatic increase in user engagement (4-7x) with Homes AI and its potential to shift search time from offline to online. CFO Chris Lown added that Homes AI will remember user preferences, leading to exponentially better results and higher quality leads for subscribers, with similar benefits expected for Apartments.com.

Andrew Boone asked about the early results and expected impact of Homes AI on CoStar Group's business model, specifically regarding retention, traffic generation, and the strategy for marketing spend to drive awareness for this new product.

Answer

CoStar Group CEO Andy Florance stated that marketing spend is shifting from top-of-funnel brand awareness to specific product feature marketing, focusing on compelling functionality. He highlighted significant engagement increases (four to seven times) with Homes AI, expecting it to become an indispensable tool for both agents and consumers, driving deeper online search experiences. CFO Chris Lown added that Homes AI's learning capabilities will personalize results, leading to better leads for subscribers and an improved experience across platforms.

Andrew Boone inquired about the implied deceleration in Xometry's Q1 2026 and full-year 2026 guidance despite strong Q4 2025 acceleration, asking if it reflects conservativism or macro concerns. He also asked for elaboration on expectations for international segment profitability improvement in 2026.

Answer

Randy Altschuler (CEO) stated that Q1 started strong, and the guidance reflects being mindful of the macro environment, with hopes to update as momentum continues. James Miln (CFO) added that Q4's 33% marketplace growth reflects progress in enterprise and product-led initiatives, and while mindful of macro, they are pleased with the increased outlook. For international, James Miln noted similar unit economics to the U.S. and strong long-term potential, balancing profitability and growth, with the U.S. leading in adjusted EBITDA margin.

Andrew Boone inquired about the implied deceleration in Q1 2026 and full-year 2026 guidance despite strong Q4 2025 acceleration, asking if it reflects conservatism or macro concerns. He also sought elaboration on the expected improvement and path to profitability for international investments in 2026.

Answer

Randy Altschuler, CEO, noted strong Q1 momentum and raised guidance for both Q1 and the full year, while remaining mindful of the macro environment. James Miln, CFO, reiterated Q4's strong marketplace growth and enterprise traction, attributing guidance to macro awareness. He expressed confidence in international's long-term potential to grow to 30-40% of the business with similar unit economics to the U.S. segment.

Andrew Boone asked about the drivers behind the sequential increase in sales and marketing expenses from Q1 to Q2 and the outlook for marketing efficiency. He also inquired about the acceleration in accounts spending over $500,000 and the sustainability of this upmarket success.

Answer

CFO James Miln explained the Q2 sales and marketing spend was a normalization from a more cautious Q1, while still showing significant year-over-year leverage. VP of IR Shawn Milne linked the normalized ad spend to faster growth in the $50k+ customer cohort. CEO Randy Altschuler added that technology like TeamSpace and ERP integrations is embedding Xometry in customer workflows, driving growth in both the $50k and $500k+ account tiers.

Andrew Boone asked about the deceleration in Q4 2025 units sold, seeking clarity on whether it was due to competitive pressure, market conditions, or macro factors. He also inquired about the roadmap for driving broader adoption of ACV MAX, given its positive impact on dealer volume.

Answer

George Chamoun (CEO, ACV Auctions) attributed the Q4 2025 unit deceleration to a tough comparison but noted solid revenue performance. He outlined growth strategies including increasing inspectors and territory managers, and leveraging ACV MAX's differentiation. He emphasized the ongoing shift from physical to digital auctions. For ACV MAX, he highlighted its scaling and integration with wholesale, including a guarantee offering, with plans for further expansion.

Andrew Boone inquired about the deceleration in Q4 2025 units sold, seeking clarification on whether it was due to competitive pressure, market conditions, or macro factors. He also asked about the roadmap for broader ACV MAX adoption given its positive impact on dealer volume.

Answer

CEO George Chamoun attributed the Q4 unit performance to a tougher comparison year-over-year, noting solid revenue execution and 12% unit growth for the full year. He highlighted investments in additional inspectors and territory managers, and the differentiation of products like ACV MAX, which is now scaling and connecting more to wholesale with guaranteed units.

Andrew Boone from Citizens inquired about Opendoor's progress in extending its services opportunity, specifically regarding the mortgage product testing with Lennar, and expectations for attaching more adjacent products to transactions in 2026.

Answer

CEO Kaz Nejatian confirmed the beta launch of their mortgage product this week, expressing bullishness. He acknowledged the well-understood unit economics of the mortgage space and hypothesized about potential attach rates for mortgage and adjacent products, also mentioning potential partnerships with home builders.

Andrew Boone from Citizens inquired about Opendoor's progress in extending its services opportunity, specifically regarding the mortgage product with Lennar, and expectations for attaching adjacent products to transactions in 2026.

Answer

CEO Kaz Nejatian announced the beta launch of Opendoor's mortgage product this week, expressing strong confidence. He indicated that unit economics would be detailed later and highlighted potential for increased attach rates and partnerships with home builders leveraging their new software stack.

Andrew Boone of Citizens JMP asked about the level of agent and consumer awareness for Opendoor's new platform in established markets and the strategy for driving this awareness. He also inquired about the expected trend for offer spreads in the second half of 2025.

Answer

CEO Carrie Wheeler explained that Opendoor already has strong agent relationships, with 25% of acquisitions coming from agents, and is seeing high inbound interest due to the quality of leads provided. The primary focus is converting existing seller leads through the new agent channel. CFO Selim Freiha stated that, in a normal seasonal environment, spreads typically peak in early summer and trend down through the second half of the year, which is the current expectation.

Andrew Boone asked about the proprietary information CarGurus possesses, particularly concerning independent dealers, that would be difficult for future agents or LLMs to scrape. He also sought clarification on how CarGurus' own AI products, like CG Discover, improve conversion or change consumer actions on the site to benefit financials or leads.

Answer

Jason Trevisan, Chief Executive Officer, highlighted CarGurus' deep relationships with dealers and consumers, built on trust and history, as a foundational competitive advantage. He cited proprietary infrastructure, including IMV and Deal Rating, collaborative filtering, and personalization, as a 'system of competitive advantages' that LLMs cannot fully replicate, emphasizing the need for trust in high-consideration purchases. For CG Discover, he explained it attracts higher-funnel customers, provides more conversational and personalized answers, and increases engagement, leading to growing adoption (3.5x traffic, 10x leads Q-o-Q) and more qualified leads for dealers.

Andrew Boone asked about the proprietary information CarGurus possesses, particularly concerning independent dealers, that cannot be easily scraped by future agents or LLMs. He also inquired how CarGurus' own AI products, like CG Discover, are improving conversion and changing consumer actions on the site to enhance financials or leads.

Answer

CEO Jason Trevisan emphasized CarGurus' deep relationships with dealers and consumers, built on trust and history, as a key differentiator. He highlighted a 'system of competitive advantages' including custom indices like IMV and deal ratings, personalization, and the totality of the workflow and context provided. For Discover, he noted it provides access to higher-funnel customers, helps them find better answers through conversational search, and increases engagement, leading to growing adoption, traffic, and leads, with close monitoring of lead conversion rates.

Andrew Boone from Citizens JMP asked about the observed impact of Google's transition to AI Overviews on site traffic and the company's strategic response. He also requested an update on dealer retention trends and the key factors driving recent improvements.

Answer

CEO Jason Trevisan stated that while adoption of AI search is growing from a low base, it hasn't impacted audience acquisition yet, as auto shopping typically requires a deeper, destination site experience. Both Trevisan and President and COO Sam Zales attributed improving dealer retention to deeper engagement. They explained that tools providing data-driven insights on pricing and merchandising have made CarGurus a consultative partner, creating sticky habits, driving app usage, and leading to longer-term contracts.

Andrew Boone questioned the intensity of investments, specifically regarding R&D and G&A as a percentage of GOV relative to the historical 2% target, and whether GOV growth would absorb these fixed costs. He also asked for details on grocery customer evolution, including graduation to 'Sunday shop' and capture of larger baskets.

Answer

CFO Ravi Inukonda stated that OpEx (including R&D and G&A) in Q4 included Deliveroo, and for 2026, it's expected to be around the 2% of GOV target, emphasizing disciplined investment for scale and profitability, with a goal to generate leverage. CEO Tony Xu confirmed the evolution of grocery customer behavior, now incorporating both mid-week quick runs and larger weekend stock-up orders, with successive cohorts adopting this faster and existing cohorts increasing spend and share of wallet.

Andrew Boone asked about the intensity of investments, specifically R&D and G&A as a percentage of GOV, and how DoorDash plans to manage fixed costs. He also inquired about the evolution of grocery customers, including their graduation into 'Sunday shop' behavior and the capture of larger baskets.

Answer

CFO Ravi Inukonda clarified that Q4 OpEx included Deliveroo and expects 2026 OpEx to be around 2% of GOV, emphasizing disciplined investment for scale and profitability, with a goal to generate leverage. Co-founder, Chairman, and CEO Tony Xu confirmed the evolution of grocery customer behavior, now incorporating both mid-week quick runs and larger weekend stock-up use cases. He noted this trend is accelerating with successive cohorts, and existing cohorts are increasing their spend and share of wallet in grocery.

Andrew Boone asked to unpack the improvements driving Wolt's strong performance and the specific factors contributing to record-high frequency in the U.S.

Answer

CFO Ravi Inukonda attributed the international segment's strong quarter to growth in both users and order frequency, with MAUs hitting an all-time high. This was driven by better selection, the growth of Wolt+, and improved quality and affordability, leading to share gains. CEO & Chair Tony Xu explained that rising frequency is not due to one single factor but is the result of solving many different customer problems across various use cases, categories, and product improvements, creating numerous ways to drive engagement.

Andrew Boone asked about the efficiency of demand generation, noting the simultaneous step-down in take rate and reduced leverage in sales and marketing. He also inquired about the long-term vision for DashPass and how it will evolve.

Answer

CFO Ravi Inukonda attributed the sales and marketing trend to seasonal investments in Dasher acquisition and expressed confidence in future leverage. CEO Tony Xu described DashPass as a 'membership program to the physical world,' with the goal of maximizing utility by connecting local businesses and consumers in more ways, starting with high-frequency categories.

Andrew Boone inquired about the drivers of the gross profit margin outperformance in the quarter, beyond the noted insurance benefit. He also asked about the M&A strategy, specifically regarding Wolt's acquisition of TAS in Europe.

Answer

CFO Ravi Inukonda attributed the gross margin improvement to strong execution, advertising growth, reduced regulatory costs, and logistics efficiencies, emphasizing a focus on maximizing long-term profit dollars. CEO Tony Xu outlined a strict M&A framework, stating that Wolt's strong performance earned them the right to expand, and the TAS acquisition in the attractive Romanian market was a compelling combination.

Andrew Boone from Citizens inquired about the advertising intensity observed with orders from the ChatGPT partnership, and the broader implications for the evolution of retail media as these new channels mature.

Answer

CEO Chris Rogers stated that the immediate priority for the ChatGPT partnership is discoverability and driving users to the platform, with monetization opportunities expected down the road. He emphasized the long-term benefit of AI in ads, including conversational commerce, agentic experiences, and improved ad technology for ranking, relevance, personalization, and advertiser tooling on Instacart.

Andrew Boone asked about the advertising intensity observed with orders originating from the ChatGPT partnership, now that instant checkout is live, and how this might influence the evolution of retail media as these new channels mature.

Answer

Chris Rogers, CEO of Instacart, explained that the immediate priority for the ChatGPT partnership and other AI platforms (Google, Microsoft) is to ensure high-quality discoverability and drive more users to Instacart, with monetization opportunities expected down the road. He expressed excitement about the intersection of AI and ads, noting that Instacart is building conversational commerce and agentic experiences on-platform, with ads directly informed by consumer engagement. He also mentioned using AI to improve ad technology, ranking, relevance, personalization, and advertiser tooling, including AI-powered recommendations for campaign optimization.

Andrew Boone with Citizens asked about Instacart's strategy to achieve 4-5% take rates for ads, specifically the roles of on-platform innovation versus Carrot Ads growth. He also requested an update on Instacart+, including new developments and plans to increase penetration.

Answer

CEO Chris Rogers reiterated confidence in reaching 4-5% take rates through a combination of on-platform innovation (new formats, AI tools), expansion of Carrot Ads (240 partners), Caper Carts ads, and off-platform partnerships (Pinterest, TikTok). CFO Emily Reuter highlighted that Instacart+ members are critical, growing, and highly engaged, with continued efforts to add value through new subscriptions and partnerships to drive penetration.

Andrew Boone asked about Instacart's path to achieving 4%-5% take rates for ads, specifically whether it relies more on on-platform growth or Carrot Ads, and for an update on Instacart+ penetration and growth plans.

Answer

CEO Chris Rogers expressed confidence in the 4-5% ad take rate target, driven by a combination of on-platform innovation (new formats, AI tools) and the expanding ad ecosystem (Carrot Ads, Caper Ads, off-platform partnerships). CFO Emily Reuter stated Instacart+ is critical, with members growing and deepening engagement, representing a majority of platform activity. Instacart continues to add value through subscriptions, free restaurant delivery, and partnerships.

Andrew Boone of Citizens JMP asked about the efficiency gains from order batching and how the resulting savings are being redeployed across the business. He also inquired about how the increasing use of AI is expected to impact headcount or operating expenses.

Answer

CFO Emily Reuter explained that efficiency gains from shopper pay and batching are reinvested broadly to drive growth and affordability, citing the reduction of the minimum basket size and making pickup free as key examples. Regarding AI, Reuter stated that while there are no immediate plans for it to directly reduce OpEx, the technology is enabling the company to grow in a highly disciplined manner. She noted that AI is being adopted company-wide, with over 80% of code now being AI-assisted.

Andrew Boone asked about the key drivers behind the momentum in signing new Carrot Ads partners and inquired about the efficiency of Instacart's demand generation spending compared to previous years.

Answer

CEO Fidji Simo attributed the Carrot Ads momentum to a virtuous cycle created by superior ad technology and a large, pre-existing demand base of over 7,000 brands. CFO Emily Maher described demand generation as an evolving portfolio, where they shift spend between brand awareness, targeted incentives, and pricing investments to maximize efficiency. She noted that the company is continually getting more effective at deploying its marketing dollars.

Andrew Boone asked about the key bottlenecks for the broader distribution of Caper Carts and the opportunity for the Instacart Business initiative to expand into SMBs.

Answer

CEO Fidji Simo reported that Caper is scaling rapidly, with the number of carts in stores quadrupling in six months. The primary bottleneck is not product-market fit but the operational time required for retailer pilots and system integrations. Regarding Instacart Business, she highlighted its scalability, having served one million business customers in the last year, and its potential to leverage the core ad platform for B2B opportunities with distributors like Cut+Dry.

Andrew Boone questioned the impact of new generative text-to-video models like Sora on MNTN's technology, competitive landscape, and internal capabilities, and sought clarification on the 2026 EBITDA guidance given sales and marketing investments.

Answer

CEO Mark Douglas explained MNTN's integration and orchestration of multiple generative AI models for professional video creation, emphasizing its focus on full 30-second commercials with workflows and approvals. CFO Chris Innes reiterated the strategy of strategic investments in sales, marketing, and technology to drive revenue growth, leveraging MNTN's strong financial model for continued gross margin expansion and profitability.

Andrew Boone from Citizens asked about the implications of new generative text-to-video models like Sora on MNTN's technology and competitive landscape, and for clarification on the 2026 EBITDA guidance regarding margin expansion amidst sales and marketing investments.

Answer

CEO Mark Douglas explained MNTN's integration with multiple generative AI models, orchestrating them for professional use cases like 30-second commercials, and highlighted MNTN's own use of these tools for advertising. CFO Chris Innes affirmed continued strategic investments in sales, marketing, and technology to fuel revenue growth, leveraging MNTN's strong financial model to achieve higher gross margins and sustained profitability.

Andrew Boone of Citizens JMP inquired about trends in net revenue retention rates for existing customers and asked for an update on the company's progress with Quick Frame AI and generative AI for content creation.

Answer

COO Chris Innes stated that while not disclosing a specific figure, net revenue retention is 'very, very strong,' particularly within the small business segment. CEO Mark Douglas added that the company has been developing generative AI tools for over two years, generating over 1,000 AI ads in a beta test in June, with more formal announcements to come.

Andrew Boone asked Jen Wong what tools or ad formats are needed to accelerate the growth of Reddit's shopping ads vertical. He then asked Steve Huffman to elaborate on the desired user experience for people coming to Reddit and using generative AI tools for search.

Answer

Jen Wong, COO, stated that Reddit's shopping ad product is competitive with tier-two peers, but further ML work on signals is needed to improve ROAS to compete with tier-one companies. She also highlighted the need for raw adoption work, including product feed integration and CAPI. Steve Huffman, Co-founder and CEO, explained that Gen AI search results are proving better for most queries, especially those seeking multiple perspectives, and Reddit aims to make these responses more media-rich, building on the significant growth in Reddit Answers WAU.

Andrew Boone asked what tools or ad formats Reddit needs to develop to accelerate the growth of its shopping ads vertical, and what experience Reddit aims to build for users seeking information via generative AI tools.

Answer

Jen Wong, COO, stated that Reddit's shopping ad product is competitive with tier-two peers, but needs more ML work to improve ROAS for tier-one competition, alongside continued adoption efforts for product feeds and CAPI. Steve Huffman, Co-founder and CEO, explained that Gen AI search results are proving better for most queries, especially those with multiple perspectives, and Reddit plans to make these responses more media-rich, seeing significant opportunity in search as a primary user case.

Andrew Boone of Citizens JMP inquired about the progress toward creating self-sustaining international markets and asked about the product roadmap to continue broadening the advertiser base.

Answer

CEO Steve Huffman detailed the international strategy, which involves using machine translation for immediate content scale while fostering local communities through moderator outreach and improved discovery tools. COO Jen Wong explained that broadening the advertiser base, particularly for SMBs, requires a focus on ease of use and end-to-end automation in the ad platform, which is a key area of development.

Andrew Boone of Citizens JMP asked about the progress toward creating self-sustaining international markets and the product roadmap for expanding the advertiser base.

Answer

CEO Steve Huffman outlined the international strategy, which involves combining core product improvements with machine translation and fostering local communities through moderator outreach. COO Jen Wong added that growing the advertiser base, particularly SMBs, requires enhanced ease-of-use and end-to-end automation on the ad platform, which is a key focus of the product roadmap.

Andrew Boone inquired about the drivers behind the recent increase in ad pricing and how it compares to other platforms. He also asked about the product evolution of 'Reddit Answers' and its integration into the core search experience.

Answer

COO Jen Wong explained that higher ad pricing is an outcome of delivering more value and outcomes (clicks, conversions), making each impression more valuable. CEO Steve Huffman detailed that 'Reddit Answers' will be integrated into the main search box to serve new users and those arriving from external search, unlocking new types of subjective queries.

Andrew Boone of JMP Securities asked about the data licensing business, seeking to understand the potential puts and takes for growth and the guardrails for where the category could go from here.

Answer

CEO Steve Huffman described the data licensing market as a 'barbell' with a few large training deals and more numerous smaller deals for real-time access. He characterized it as a 'nice to have' business, secondary in focus to the core ads business and on-platform initiatives, emphasizing that Reddit's data is extremely valuable and any deals must be fair to the business and users.

Andrew Boone asked for a five-year vision of Life360's advertising business, what they are building, and the multi-year opportunity with the Nativo acquisition.

Answer

Lauren Antonoff, Executive Director and CEO of Life360, envisioned an advertising business that leverages Life360's member insights to connect brands with a wide range of publishers across many platforms (both inside and outside the app), delivering better performance and measurable results through an end-to-end solution.

Andrew Boone asked for a five-year vision of Life360's advertising business, detailing what is being built and the multi-year opportunity with the Nativo acquisition.

Answer

Lauren Antonoff, Executive Director and CEO, envisioned an advertising business that leverages Life360's value and insights about its members to connect brands with a wide range of publishers across many platforms (both in-app and outside), delivering more compelling, relevant, and measurable ad experiences.

Andrew Boone of Citizens JMP asked for an update on Life360's international localization efforts, inquiring where the company stands in achieving product-market fit and what specific product gaps are being addressed in overseas markets.

Answer

CEO Lauren Antonoff explained that a key investment is ensuring location services work effectively in regions less reliant on cars. She also noted that the company is conducting newer research to understand and develop safety features tailored to the unique needs of families in different countries.

Andrew Boone asked about Shopify's marketing investments, seeking clarity on the guardrails and efficiency of spend, and how to think about these investments for the upcoming year, particularly in light of current complexities in MRR reporting.

Answer

Harley Finkelstein, President of Shopify, stated that marketing investments are working well, driving merchant adoption across verticals and geographies, especially in Europe. He affirmed that Shopify, as a growth company, will continue to lean into opportunities with tight guardrails to ensure appropriate returns and quick paybacks. Jeff Hoffmeister, CFO of Shopify, added that the merchant acquisition engine is performing well despite MRR comparability noise from paid trials. He noted sequential growth in standard MRR (up 4% in Q3 vs. Q2) and expects headwinds to subside after Q1 next year.

Andrew Boone asked about Shopify's marketing investments, the efficiency of that spend, and how to understand MRR given current complexities, particularly looking ahead to next year.

Answer

Harley Finkelstein, Shopify's President, stated that marketing investments are effectively driving merchant adoption across various segments, with tight guardrails ensuring appropriate returns and quick paybacks. Jeff Hoffmeister, Shopify's CFO, addressed MRR complexities, noting that standard MRR experienced 4% sequential growth in Q3 2025, the first such growth in several quarters, as the company completed its migration back to three-month trials. He indicated that year-over-year MRR comparability headwinds are expected until Q1 2026 due to trial timing.

Andrew Boone of JMP Securities asked for clarification on the guidance for maintaining 'similar free cash flow margins' going forward and the implications for investment priorities.

Answer

CFO Jeff Hoffmeister clarified that the company has reached a desirable free cash flow margin profile that balances profitability with reinvestment for top-line growth. He stated the intention is not to aggressively push margins higher but to invest incremental dollars back into the business to support durable growth drivers like point-of-sale, enterprise, and international expansion.

Andrew Boone asked about Carvana's biggest opportunities to increase automation with scale, identifying key variable costs that can still be driven down. He also inquired about the guardrails for expanding same-day delivery, ensuring a smooth rollout, and the profitability metrics involved.

Answer

Ernie Garcia, Chief Executive Officer, highlighted opportunities in deepening automation detail across all workflows (e.g., insurance document processing) to reduce costs and differentiate the offering through speed and confidence. He stated that same-day delivery is primarily a technology and process investment, with some incremental staffing, rather than a large cost investment. He noted significant progress in Phoenix (40% same/next-day delivery) and outlined a multi-faceted, multi-step rollout approach.

Andrew Boone asked about Carvana's biggest opportunities to increase automation as it gains scale and the key variable costs that can still be driven down. He also inquired about the guardrails for expanding same-day delivery, ensuring a smooth rollout, and the profitability metrics used to contain associated costs.

Answer

Ernie Garcia, Chief Executive Officer, highlighted opportunities in deepening automation across all workflows, such as instantaneous document processing, to reduce costs and differentiate the offering. He explained that same-day delivery expansion involves attacking constraints one by one, as demonstrated by Phoenix's rapid progress from 10% to 40% same/next-day delivery. He clarified that the investment is primarily in technology and process, with some incremental staffing, rather than a large cost investment, and the rollout will be a multifaceted, multi-step approach.

Andrew Boone from Citizens JMP asked for the drivers of the strong retail GPU beyond the one-time tariff-related benefit and inquired about the broader benefits of word-of-mouth marketing as Carvana's scale increases.

Answer

CFO Mark Jenkins attributed half of the GPU gain to fundamental improvements in reconditioning and transport costs, with the other half from a temporary margin benefit in April. CEO Ernie Garcia described word-of-mouth as paramount, driven by creating a superior customer experience with better selection, speed, and price.

Andrew Boone from Citizens JMP asked for more detail on the drivers of the strong retail GPU beyond the one-time tariff impact, and inquired about the benefits of word-of-mouth marketing as the company scales.

Answer

CFO Mark Jenkins attributed the strong retail GPU to both the tariff-related impact and fundamental gains in reconditioning and inbound transport costs. CEO Ernie Garcia described word-of-mouth as 'the name of the entire game,' stating that the foundation is building a better, simpler, and faster customer experience that creates compelling stories for customers to share.

Andrew Boone asked for details on the narrowing gap between revenue and GMV for 2026, potential advertising pressure, and how Magical Listing technology impacts GMV and the optimization of long-tail listings.

Answer

CEO Jamie Iannone explained that Magical Listing unlocks more inventory, saves sellers time, and drives velocity and customer satisfaction, with over 10 million sellers using the tool and 300 million items augmented by AI. He emphasized its role in bringing unique C2C items to the platform. CFO Peggy Alford clarified that the narrowing GMV-revenue gap for 2026 is due to healthy first-party advertising growth, partially offset by fewer cross-border trade imports impacting monetization and a higher mix of GMV from lower take-rate emerging businesses like vehicles and eBay Live.

Andrew Boone of Citizens JMP questioned if the Grow segment's guidance implied a slowdown in Unity ad network growth, and asked about customer conversations regarding data sharing under the new Developer Data Framework.

Answer

CFO Jarrod Yahes clarified that the guidance implies double-digit sequential growth for the Unity ad network, as the other half of the Grow business is expected to stabilize. CEO Matthew Bromberg explained that the Developer Data Framework puts data control entirely in customers' hands via automated toggles and menus, minimizing the need for direct conversations.

Andrew Boone of JMP Securities asked for details on the expected trajectory of improvements for the Unity Vector model throughout the remainder of 2025. He also posed a broader question about any observed or anticipated impacts from the macroeconomic environment on Unity's business.

Answer

CEO Matthew Bromberg stated that Unity is being prudent with guidance as Vector is a new system, but noted it is pacing ahead of expectations. He described the improvement process as iterative and that the company is just beginning to leverage its platform-wide data. Regarding the macro environment, Bromberg said no noticeable impact has been seen, attributing this resilience to gaming's historical insulation and the performance-based model of their advertisers.

Andrew Boone asked about the opportunity to integrate more of Unity's proprietary data sources into the new ad stack and the potential to expand advertising into non-gaming verticals like e-commerce.

Answer

CEO Matthew Bromberg confirmed that a key goal of Unity Vector is to leverage its vast, historically untapped first-party player data in a privacy-safe manner. While bullish on long-term expansion into other verticals, he stated the near-term focus remains on improving performance within the core gaming market.

Andrew Boone asked about the realization of recent price increases, particularly for enterprise accounts, and inquired about the go-to-market strategy for bundling Create and Grow solutions.

Answer

Interim CFO Mark Barrysmith clarified that price increases take effect January 1, 2025, and will roll out over a couple of years with renewals, supporting a double-digit subscription growth goal. CEO Matthew Bromberg added that the company is not focused on bundling incentives, as the best driver for the Grow business is strong product performance and ROI, not business model innovation.

Andrew Boone asked a high-level question about how AI is expanding Wix's product roadmap and what defines its strategic 'strike zone.' He also questioned if AI-driven website creation could lower switching costs and increase churn.

Answer

Co-Founder & CEO Avishai Abrahami responded that AI provides tremendous opportunities to expand market reach and value, with Vibe coding being one example. He argued that AI will actually increase switching costs and create a competitive moat, as fewer platforms will be able to offer the advanced, integrated AI capabilities that Wix is developing, making it harder for users to leave.

Andrew Boone asked about the company's visibility and timeline for achieving double-digit growth in the self-creator segment. He also posed a strategic question about how AI is enabling Wix to expand into new product categories and what this implies for the company's total addressable market over time.

Answer

CFO Lior Shemesh clarified that while self-creator growth accelerated in 2024, the company is not modeling double-digit growth for 2025 but believes it is an achievable goal for 2026, driven by new product launches. CEO Avishai Abrahami added that AI not only allows for expansion into adjacent services but presents a larger opportunity to fundamentally redefine what a website is over the next five years, positioning Wix to lead that evolution.

Andrew Boone of JMP Securities questioned the sustainability of marketing efficiencies observed in the quarter and asked for more detail on the success of new verticals and commerce products that are driving transaction revenue.

Answer

President & COO Nir Zohar explained that the marketing step-up was a direct result of increased top-of-funnel demand, allowing for more spending while maintaining strict TROI guardrails. He noted that the strength in commerce is broad-based across its horizontal offerings (stores, events, invoicing, scheduling) and that the growing Partner segment is a significant contributor to commerce growth.

Inquired about the drivers behind the improvement in the legacy Teads business and the strategic opportunity related to the company's large advertiser clients.

Answer

The improvement in Teads' performance is attributed to the removal of merger-related uncertainty, allowing the team to refocus and execute. The company highlighted its large clients to emphasize the significant opportunity to increase its share of their ad spend by offering a combined, outcome-driven platform.

Andrew Boone asked for PubMatic's near and medium-term roadmap for driving return on ad spend (ROAS) and requested a detailed bridge from the 21% underlying growth to the reported GAAP results, specifically quantifying the political and DSP headwinds.

Answer

CEO Rajeev Goel outlined a three-part strategy to boost ROAS: leveraging first-party data, increasing supply chain efficiency via Activate and SPO, and building performance-based optimization solutions. CFO Steven Pantelick provided the financial bridge, quantifying the DSP headwind at $15M-$20M in the first half of 2025, which will be lapped mid-year. He also specified the political ad spend headwind in the second half of 2024 was 6-7% of revenue, which the company expects to absorb while still delivering positive year-over-year growth.

Andrew Boone asked for an explanation of the 6x growth in the 'Activate' platform and its strategic importance for adding demand. He also inquired about the scale of cost savings from generative AI.

Answer

CEO Rajeev Goel explained that 'Activate' is growing rapidly because it simplifies the ad supply chain, driving performance and efficiency for agencies. He emphasized that every dollar spent via Activate is unique, incremental spend for PubMatic publishers, creating a powerful growth flywheel. CFO Steven Pantelick added that Gen AI is expected to drive ongoing productivity improvements of 5-15% annually, impacting both costs and revenue generation.

Andrew Boone asked about the industry trend of media curation by DSPs and SSPs and how DoubleVerify fits in, and also requested more detail on the weakness in international revenue and the strategy to re-accelerate growth.

Answer

CEO Mark Zagorski stated that DV is a data business and is partnering with Google, Microsoft, and others to ensure its data can be applied to curated packages, viewing it as another growth channel. Regarding international performance, he attributed the softness to lapping strong comps and the pullback of one large global customer, calling it a 'momentary blip' that will be offset by new global clients scaling up.

Andrew Boone asked how the needs of smaller, mid-market advertisers targeted via Rockerbox differ and how DV will address them. He also posed a philosophical question about the company's cost structure and investment capacity as revenue growth slows and margins contract in 2025.

Answer

CEO Mark Zagorski explained that Rockerbox opens up the untapped performance advertiser and mid-market, creating crossover opportunities with existing large clients that have DTC brands. He emphasized that 2025 is a transition year for investment in innovation across social, sell-side, and outcomes products. He noted the margin contraction is primarily due to absorbing the Rockerbox acquisition, and the core philosophy remains 'innovate or die' to position for future growth.

Andrew Boone asked two broader questions: what DoubleVerify still needs to execute on its transition to performance-based solutions, and how the market shift to video formats impacts the business.

Answer

CEO Mark Zagorski outlined a two-pronged performance strategy: investing in performance metrics like Authentic Attention and in optimization tools, primarily Scibids AI. Regarding video, he described it as a dual opportunity. The company is well-positioned for short-form video on social platforms, but he feels DV is still underpenetrated in CTV. He stated that unlocking the full revenue potential in CTV will require driving greater program-level transparency for advertisers.

Andrew Boone of Citizens JMP asked about the key inputs to achieving the guided double-digit subscription growth by year-end and the outlook for business formation market share.

Answer

CEO Jeff Stibel expressed high confidence in hitting the double-digit subscription growth target, citing the Q1 performance as evidence of the reoriented strategy. Regarding market share, he explained the company is intentionally ceding share in lower-quality, 'empty calorie' free formations to focus on high-value customers who are more likely to subscribe and grow. He believes this strategy is increasing share among quality formations and will eventually normalize, making the macro a better proxy for performance.

Andrew Boone asked about the drivers behind the strong subscription net unit additions in the second half of 2024 and the outlook for 2025. He also inquired about the long-term partnership strategy and what it unlocks for the company.

Answer

COO & CFO Noel Watson attributed the subscription adds to bundling products like forms, e-signature, and bookkeeping into premium packages and converting interest in BOIR filings into total compliance subscriptions. CEO Jeffrey Stibel detailed that the partnership strategy is key to their go-to-market diversification, allowing LegalZoom to focus on core legal/compliance offerings while partners like 1-800 Accountants provide ancillary services, driving value and new customer channels.

Andrew Boone asked about LegalZoom's pricing strategy, specifically where pricing could go in the future and how it relates to the industry's move toward 'free' offerings. He also inquired about the opportunity to use the MyLZ platform to sell subscriptions after the initial formation.

Answer

CEO Jeff Stibel explained that pricing is about matching the value provided, not just raising or lowering it, and noted that 'free' competitor offerings often have caveats. He described MyLZ as a key platform for lifecycle marketing to drive post-formation upsells. COO & CFO Noel Watson added that the Beneficial Ownership Information Report (BOIR) is a successful example of monetizing customers post-formation via the MyLZ platform.

Andrew Boone asked about the sustainability of the freelancer reinvestment rate into the platform (via services) and the potential for pushback. He also asked about the stabilization of active buyer trends and the drag from smaller customers on GMV.

Answer

CEO Micha Kaufman stated there is 'no pushback' from freelancers on reinvestment because the value-added services are ROI-positive, generating more money than they cost. CFO Ofer Katz addressed active buyers, confirming the strategy is to focus on acquiring fewer, larger customers with higher LTV, which is economically superior. He noted this dynamic (declining active buyers, rising spend per buyer) will continue until the macro environment for SMBs improves.

Andrew Boone asked about the potential ceiling for advertising as a percentage of GMV and questioned the pricing dynamics of Fiverr Go, including whether it could be deflationary and if Fiverr could capture more value as the AI improves.

Answer

CFO Ofer Katz stated there is significant runway for advertising to expand as many areas of the platform are not yet monetized. CEO Micha Kaufman addressed pricing, explaining that Fiverr Go is not designed to be deflationary because freelancers control the price, which includes their human effort and investment in their unique AI model, disincentivizing them from offering it cheaply.

Andrew Boone of JMP Securities LLC asked CEO Micha Kaufman to expand on his vision for Fiverr beyond a marketplace into a broader work platform with more tools. He also inquired about the performance trends of the large COVID-era buyer cohorts.

Answer

CEO Micha Kaufman declined to share more specifics on the long-term vision for competitive reasons but reiterated that it involves combining talented people with intelligent machines. Regarding cohorts, he confirmed that the COVID-era cohorts are large and now stable. He highlighted that the strategic focus on high-value buyers is working, as cohorts from the last two years are performing better than the COVID cohorts, which is also reflected in the rising spend per buyer.

Andrew Boone from Citizens asked for insights on the 'Business+' offering and what it is unlocking for larger enterprises. He also questioned the multiyear low in sales and marketing spend and the investment outlook for the remainder of 2025.

Answer

CEO Hayden Brown explained that Business+ is successfully expanding the funnel for larger customers, leading to higher conversion rates and spend. CFO Erica Gessert confirmed the low S&M spend was due to strategic optimization but reiterated that Q1 would be the margin peak for the year, with plans to reinvest in Enterprise and R&D to fuel growth.

Andrew Boone of Citizens JMP questioned the sequential decline in Marketplace take rate from Q3 to Q4 and its expected trajectory for 2025. He also asked how the AI tool, Uma, could unlock improved liquidity and matching on the platform.

Answer

CFO Erica Gessert explained the Q4 take rate dip was due to one-time testing and expects take rates to grow modestly in 2025, with more significant strategies launching in late 2025 and early 2026. CEO Hayden Brown detailed that Uma improves matching by enhancing job post quality and freelancer proposal rates, citing an 8% higher fill rate for high-value jobs from new clients. He noted the next phase will see Uma evolve into a more comprehensive AI agent.

Andrew Boone from JMP Securities asked for details on the company's increased business focus, specifically where engineering and product resources are being invested, and about the path of the cost structure towards the long-term 35% EBITDA margin target.

Answer

CEO Hayden Brown explained the focus is on five core growth levers, with notable investment in the AI roadmap, accelerated by the Objective acquisition, and the retooled Enterprise strategy featuring Business Plus. CFO Erica Gessert stated the recent $60 million in cost savings is a key step toward the 35% adjusted EBITDA margin goal, with most benefits expected in 2025, leading to a few points of margin improvement next year.

Andrew Boone of JMP Securities asked about the drivers for the fiscal 2025 cash flow guidance, the impact of economic volatility on consumer behavior, and how the current inventory investment represents a significant step-change from past strategies.

Answer

Siddharth Thacker (Executive) attributed the guided cash consumption to a near-doubling of inventory units and related CapEx of $70-$75 million, noting a lag between the investment and subscriber growth. He also emphasized renting's value proposition amid economic uncertainty. Jennifer Hyman (CEO) described the inventory increase as a 'tremendous step function change,' resulting in 75% more newness in customer shipments. She explained this directly addresses the top reason for churn and is designed to improve loyalty and restart organic growth, unlike the prior year's focus which was on depth rather than quantity.

Andrew Boone of JMP Securities asked about the reasons for the wider Q4 revenue guidance range, the primary levers for accelerating subscriber growth in 2025, and the expected timeline for optimizing the company's inventory position.

Answer

CFO Siddharth Thacker explained that the Q4 guidance range is a function of the narrowed full-year forecast and reflects uncertainty around how much inventory the company will choose to sell versus retain for its improving rental business. CEO Jennifer Hyman and CFO Siddharth Thacker detailed the 2025 growth strategy, emphasizing increased investment in inventory depth and breadth for top pillar brands, leveraging asset-light acquisition channels like revenue share, and improving the new subscriber onboarding experience to boost retention. They noted that significant inventory improvements can be made in a relatively short period.

Andrew Boone inquired about the specific product-side developments for the new Realize platform to attract more demand and questioned the drivers behind the lower Q1 2025 growth guidance.

Answer

CEO Adam Singolda detailed that Realize will offer access to all ad placements on publisher sites, allow advertisers to use existing display and social creative, and introduce new AI-driven targeting tools. CFO Steve Walker explained the guidance was "derisked" to allow the new Realize strategy time to gain traction, acknowledging that native advertising alone was not growing fast enough to meet their supply.

Andrew Boone of JMP Securities asked about the impact of automated tools like Abby on attracting smaller advertisers, the performance of the e-commerce business, the product roadmap for 2025, and plans for headcount investment next year.

Answer

CEO Adam Singolda explained that while it's early for Abby, the goal is to simplify onboarding, reduce churn, and increase advertiser count, particularly for mid-size businesses initially. He also highlighted the strong growth in the e-commerce segment, especially from the 'ShopYourLikes' creator platform. CFO Stephen Walker noted that the company is already increasing investment in sales and marketing teams to target direct-to-consumer and emerging enterprise advertisers, which are key growth areas.

Andrew Boone asked for more detail on the visibility into the stability of the consumer business and inquired about the strategies for driving customer engagement and frequency to improve retention.

Answer

Charles Cohn, Founder, Chairman and CEO, explained that while older, lower-frequency customer cohorts are churning, new cohorts on weekly tutoring plans are showing higher retention and ARPM. Cohn highlighted recent product enhancements, such as a new onboarding assistant and tutor match tracker, which are improving the first 30-day experience. These changes are driving higher engagement with both tutoring and non-tutoring products (like AI tutor and live classes), leading to the expectation of material year-over-year retention improvements as these new cohorts grow.

Andrew Boone asked about the learnings from reducing marketing spend, the path back to the target LTV to CAC ratio, and whether Connected Fitness gross margins have peaked.

Answer

Interim Co-CEO Chris Bruzzo emphasized a more disciplined marketing approach focused on audience targeting. CFO Liz Coddington detailed the path to a higher LTV/CAC through pricing changes, reduced promotions, and cost discipline. She confirmed there is still room for Connected Fitness gross margin improvement, partly driven by the growth of the higher-margin Precor business.

Asked about the sustainability of data sales to existing customers, the customer profile for data deals (hyperscalers vs. smaller companies), and the progress and potential of generative AI within the core content business.

Answer

The company is seeing sustainable demand from existing data customers, including both refresh data purchases and re-licensing of original data sets. While hyperscalers are key customers, they are also seeing traction with smaller, venture-backed companies building specific applications. Generative AI is proving to be an additive product, driving new subscriptions and incremental stock content usage from both new and existing customers.

Andrew Boone followed up on AI, asking about the sustainability of data resales to past customers, progress with smaller companies versus hyperscalers, and the potential for generative AI to become a tailwind for the core Content business.

Answer

CFO Jarrod Yahes confirmed that customers are purchasing refresh data and even re-licensing initial data corpuses, and noted that while hyperscalers are key, well-funded startups building vertical applications are an exciting new customer cohort. CEO Paul Hennessy described generative AI as additive to the Content business, with existing customers increasing stock usage alongside AI tools and new customers converting from AI to purchasing traditional stock.

Andrew Boone asked about the sustainability of data sales, specifically if customers are making incremental purchases or re-licensing data. He also asked if data deals are expanding beyond hyperscalers to smaller companies and inquired about the adoption of generative AI within the core content business.

Answer

CFO Jarrod Yahes confirmed that existing data customers are purchasing refresh data and, notably, have begun re-licensing initial data sets after their terms expire. He added that while hyperscalers are key clients, new, well-funded companies building vertical-specific applications are an exciting growth cohort. CEO Paul Hennessy described AI content as additive, noting that customers who license AI images are maintaining or increasing their traditional stock content purchases, with further opportunities ahead in generative video and 3D.

Andrew Boone asked about the expected second-half step-down in the Data, Distribution, and Services (DDS) business, the recurring nature of data deals, and the drivers behind the Q2 reduction in marketing spend.

Answer

CFO Jarrod Yahes clarified that the DDS revenue step-down in the second half will be minor (less than $10 million) and the business remains strong with a growing backlog and a focus on building sustainable revenue. He explained the Q2 sales and marketing decrease was due to a one-off branding campaign ending, not a pullback in performance marketing, and that spending will increase to support sales hiring in the high-growth DDS segment.

Andrew Boone asked about the expected second-half slowdown in the Data, Distribution, and Services (DDS) business, the recurring nature of data deals, and the Q2 reduction in marketing spend.

Answer

CFO Jarrod Yahes clarified the DDS revenue step-down in the second half will be minor (under $10 million) and the business remains strong with a growing backlog. He explained the Q2 sales and marketing dip was due to a one-off branding campaign ending, not a cut in performance marketing, and noted that spending will increase to support sales hiring in high-growth DDS areas.

Asked about GIPHY's current status and its role in the 2027 financial framework. He also asked for Shutterstock's perspective on data licensing pricing, referencing a recent reported deal involving Reddit.

Answer

GIPHY plays a large role in the 'data distribution and services' model and is expected to become a business worth hundreds of millions of dollars through advertising and API partnerships. Regarding data pricing, the reported $60M Reddit deal is not surprising and reflects a market realization that using scraped, unpaid data is not a sustainable long-term model for commercial use, which is a significant tailwind for Shutterstock's ethically sourced data business.