Josh Beck

Josh Beck inquired about whether the results from the lower shipping threshold in Brazil met expectations, particularly regarding the frequency lift. He also asked about the sustainability of the 11% unit cost decline in Brazil and the prospects for the parallel slow delivery network.

Answer

Ariel Szarfsztejn, President of Commerce, confirmed that the lower free shipping threshold in Brazil exceeded expectations, leading to accelerated growth, frequency, record conversion/retention rates, new buyers, peak NPS, and market share expansion. He cited items sold growth accelerating from 26% in Q2 to 45% in Q4. He attributed shipping cost improvements to volume dilution, idle capacity utilization via the slow shipping network, and technology/productivity, expecting these trends to continue.

Josh Beck inquired about whether the outcomes of MercadoLibre's lower shipping threshold in Brazil, particularly the frequency lift, aligned with business plan expectations. He also asked about the sustainability of the 11% decline in unit costs in Brazil and the prospects for the parallel slow delivery network.

Answer

President of Commerce Ariel Szarfsztejn confirmed that the results of the lower free shipping threshold in Brazil, including accelerated growth, frequency, record conversion, and retention rates, were very much aligned with plans. He attributed shipping cost improvements to increased volume dilution, utilization of idle capacity through the slow shipping network, and ongoing technology and productivity enhancements, expressing confidence in the sustainability of these trends.

Josh Beck inquired about the 8% Q1Q decrease in unit shipping costs in Brazil, the headroom for utilization improvements, and the extent of investment in robotics and automation for mid-to-long-term opportunities.

Answer

SVP, Finance Martín de los Santos clarified the 8% decrease was Q1Q in local currency, primarily due to extraordinary volume growth diluting fixed logistics costs and improved operational efficiency. Incoming CEO Ariel Szarfsztejn added that this decline impacts total cost per shipment and expects unit shipping costs to trend downwards with productivity gains and technology. He confirmed deployment of robotics and technology in warehouses, yielding positive productivity results.

Josh Beck inquired about the 8% year-over-year decrease in unit shipping costs, specifically asking about the headroom for further utilization optimization through slow shipping and the extent of MercadoLibre's investment in robotics and automation for mid to long-term opportunities.

Answer

MercadoLibre CFO Martin de los Santos clarified an 8% Q-on-Q decrease in Brazil's local currency shipping costs, primarily driven by extraordinary volume growth diluting fixed costs and improved operational efficiency. Incoming CEO Ariel Szarfsztejn added that while unit shipping costs should trend downwards over time, future gains will come from productivity and process improvements. He confirmed ongoing deployment of robotics and technology in warehouses, yielding positive results in productivity for put away, picking, and packing.

Josh Beck asked to quantify the short-term margin pressure from strategic shipping investments and inquired if higher ocean freight rates were impacting the business, given their sourcing of goods.

Answer

Ariel Szarfsztejn, EVP of Commerce, pointed to public disclosures showing that contribution margins in Brazil and Mexico compressed by approximately 5 percentage points year-over-year due to investments in credit and logistics. He clarified that the company's cross-border trade (CBT) business is relatively small, so it does not have notable exposure to changing ocean freight rates, though they plan to develop the CBT business further.

Josh Beck asked about the utilization levels of newly opened fulfillment centers during the holiday season and sought guidance on how to model the growth of credit loss provisions.

Answer

Ariel Szarfsztejn (Executive) confirmed satisfaction with the logistics network's Q4 performance, noting that new capacity was essential and helped improve productivity, though peak utilization takes a few years. Martin de Los Santos (CFO) explained that provisions are influenced by two opposing forces: improving performance of historical portfolios and the upfront provisioning required by high sequential portfolio growth.

Josh Beck asked about the fulfillment center ambitions, questioning if the current expansion represents a new multiyear investment cycle. He also inquired about the benefits of higher network density, such as lower cost-to-serve and shorter delivery windows.

Answer

Executive Ariel Szarfsztejn clarified that this is not a new investment cycle but a continuation of the long-standing strategy to build capacity to meet forecasted demand growth and increase fulfillment penetration. He noted that geographic expansion and regionalization of capacity will enable faster delivery promises. Martin de Los Santos added that from a cash flow perspective, these investments are 'business as usual,' with logistics CapEx remaining relatively stable as a percentage of revenue.

Josh Beck inquired about standout learnings from the Deliveroo acquisition, specifically regarding loyalty programs, fulfillment networks, or merchant terms, and updates on the platform modernization efforts, including expected efficiencies and potential acceleration of velocity or investment reallocation.

Answer

CEO Tony Xu described Deliveroo's start as 'great,' with faster growth at the same budget and many opportunities for improvement across the board, leveraging lessons from DoorDash and Wolt. He explained that the tech platform modernization addresses inefficiencies from operating three similar tech platforms, aiming to improve shipping velocity, global footprint efficiency, and customer benefits by moving to a single tech stack, with benefits already being seen.

Josh Beck asked about standout learnings from the Deliveroo acquisition, such as opportunities in loyalty programs, fulfillment networks, or merchant terms, and an update on platform modernization, including expected efficiencies and potential acceleration of velocity or freeing up investments.

Answer

Co-founder, Chairman, and CEO Tony Xu described Deliveroo's start as 'great,' with faster growth at the same budget, and identified numerous small opportunities for improvement across the board, already seeing benefits from applying DoorDash and Wolt lessons. Regarding the tech platform, he acknowledged the inefficiency of operating three similar tech platforms, stating the major investment aims to improve shipping velocity, increase global footprint efficiency, and expects the majority of the work to be completed this year, with benefits already being realized through feature sharing across geographies.

Josh Beck asked about the progress of price parity initiatives with grocers and the elasticity benefits observed, as well as the tailwinds from generative AI, specifically regarding on-platform large basket creation and the economics/opportunities of off-platform AI partnerships.

Answer

Chris Rogers, CEO of Instacart, stated that price parity retailers consistently outperform marked-up retailers on Instacart, showing better retention and positive ROI, citing Hy-Vee and Raley's as recent adopters. Regarding AI, he emphasized building seamless, additive agentic experiences directly on Instacart, leveraging unique first-party data for personalization in complex grocery shopping. He also noted off-platform partnerships with OpenAI, Google, and Microsoft to attract incremental demand.

Josh Beck with Raymond James asked about the progress of price parity initiatives with grocers and the elasticity benefits observed, as well as the tailwinds from Agentic AI experiences on-platform (large baskets) and off-platform (customer acquisition).

Answer

CEO Chris Rogers noted positive ROI and better retention for price parity retailers, citing recent adoptions by Hy-Vee and Raley's. He emphasized Instacart's unique data advantage for building the best agentic shopping experiences on-platform and its partnerships with OpenAI, Google, and Microsoft for off-platform customer acquisition.

Josh Beck asked about Reddit's progress with large advertisers, specifically regarding wallet share and headroom for growth. He also inquired about any specific factors to be mindful of in the broader environment when considering the Q1 outlook, referencing past conservative guidance due to tariff dynamics.

Answer

Jen Wong, COO, stated there's significant opportunity to deepen engagement with large advertisers, expanding globally, penetrating more brands within portfolios, and moving from upper to lower funnel. Drew Vollero, CFO, noted the Q1 guide (52%-54% YOY growth) is consistent with recent quarters, with strong momentum from Q4, but acknowledged that Q1 business often materializes later in the quarter, particularly in March.

Josh Beck asked about Reddit's wallet share and headroom with large advertisers, and if there are any broader environmental factors to consider for the Q1 2026 outlook.

Answer

Jen Wong, COO, indicated significant opportunity to deepen engagement with large advertisers, noting penetration across brands and lines of business is still in the minority, and there's room to move them from upper to lower funnel. Drew Vollero, CFO, stated the Q1 2026 revenue guide (52-54% YOY growth) is similar to recent quarters, with momentum from Q4 2025, but noted that Q1 business tends to come later in the quarter, particularly in March.

Josh Beck followed up on Lior's comments regarding Base44's gross margin, noting the implied Q4 guidance of 66% and the significant difference from core Wix's mid-80s. He asked if this 'drag' on margins would persist as long as Base44 remains in a hyper-growth phase (e.g., from $50 million to $100 million ARR) and sought guideposts for the duration of this impact. He also inquired about Base44's pricing construct, asking if it's still experimental or if current plans already offer attractive profitability over a customer's lifecycle.

Answer

CFO Lior Shemesh acknowledged that the margin drag is a 'drag that we really like' due to hyper-growth, making it difficult to predict its exact duration as it depends on the balance between growth effect and cost reduction capabilities. He believes margins will continue to improve from Q3-Q4 trends. President Nir Zohar stated that Base44's pricing is still very early and experimental, with ongoing testing to find the optimal balance between margins, financial results, and market share acquisition.

Josh Beck sought to clarify Base44's market positioning and target user—whether it's for prototyping or full app development, and for entrepreneurial or enterprise developers. He also asked about customer retention trends and their influence on future pricing strategy.

Answer

Co-Founder & CEO Avishai Abrahami positioned Base44 as a tool for non-developers or developers wanting to build applications and prototypes quickly, differentiating it from more developer-centric tools. President & COO Nir Zohar noted that retention dynamics have been stronger than expected this year, viewing it as a positive signal of the platform's value, but declined to comment on future pricing plans.

Josh Beck from Raymond James asked about the primary drivers needed to accelerate the self-creator business to a double-digit growth rate. He also requested clarification on the long-term potential for transaction take rates to increase beyond the expected near-term stabilization.

Answer

President Nir Zohar identified key drivers for self-creator growth as simplifying the editing environment and unblocking business functionality to make the user journey smoother. CFO Lior Shemesh confirmed a multi-year opportunity to increase the transaction take rate through initiatives like Wix POS, which moves offline volume online, and expanding Wix Payments to new countries, though future growth may be less pronounced than in the recent past.

An analyst on behalf of Josh Beck asked for a delineation of Wix Studio's momentum between its core editor and the broader workspace, and whether the editor is at its desired product state. He also asked if the rising GPV contribution from partners could continue to lift overall GPV.

Answer

CEO Avishai Abrahami stated that the Studio editor is not yet where he ultimately wants it to be, citing an exciting and long product roadmap, but expressed satisfaction with the current pace of innovation. President & COO Nir Zohar confirmed that the partner contribution to GPV has surpassed 60% and is expected to continue growing, which will help drive the company's total GPV higher. He also noted Studio's rapid adoption, with over 2 million accounts created.

Josh Beck of Raymond James asked for a forward look at the key indicators that will inform the 2026 market outlook and requested more detail on the specific initiatives driving the company's operational efficiency.

Answer

For the 2026 outlook, CEO George Chamoun and CFO Bill Zarella pointed to the recovery of off-lease vehicle supply, resolution of tariff uncertainty, and lower interest rates as key factors. On operational efficiency, they described it as a broad, continuous effort across the company, using data and AI to improve processes and customer satisfaction, rather than one or two specific, high-profile initiatives.

Josh Beck asked for the outlook on used vehicle inventory levels, which are below normal, and requested a scenario analysis on how potential new auto tariffs could impact the wholesale market and ACV's business.

Answer

CEO George Chamoun stated that absent tariff concerns, he would have expected a steady, gradual improvement in used vehicle inventory throughout the year. Regarding tariffs, he outlined a complex scenario: OEMs might absorb some costs to protect sales, but if prices rise for consumers, new retail could be impacted. This could lead dealers to keep more trades (a negative for wholesale supply), but it could also increase conversion rates on the ACV marketplace for the vehicles that are listed, creating more efficiency. Given the uncertainty, he reiterated the strategy of assuming a flat market and focusing on execution.

Josh Beck asked a high-level question about the impact of the 'Agentic web' on the website ecosystem's relevance and sought details on the pricing strategy learnings from Arrow All Access and Arrow Plus.

Answer

CEO Aman Bhutani expressed a bullish view on agentic AI, stating it will simplify the customer experience and internally transform roles to increase efficiency. He mentioned the 'Ask Arrow' conversational tool as a key development. Regarding pricing, Bhutani explained that Arrow Plus is still in the early stages of experimentation to determine the most effective customer paths and education, but emphasized Arrow's overall success in boosting order size and product attach.

Josh Beck inquired about the strategy for incorporating third-party products into pricing and bundling tests and asked for insights into the Applications & Commerce (A&C) bookings outlook, given tougher upcoming comparisons.

Answer

CEO Aman Bhutani explained that the company's platform allows for rapid testing of third-party product bundles across a broad range of customer cohorts, which increases the chances of finding successful new offerings. CFO Mark McCaffrey acknowledged the tough Q1 bookings comparison due to the successful launch of pricing and bundling last year. While not guiding to bookings, he reaffirmed the full-year A&C revenue growth forecast of mid-teens.

Josh Beck asked what prompted the earlier-than-planned monetization phase for Airo and Airo Plus, and questioned the long-term penetration opportunity for Gross Payment Volume (GPV).

Answer

CEO Aman Bhutani attributed the accelerated Airo monetization to strong 2024 discovery and engagement metrics, which bolstered confidence. Regarding GPV, both Bhutani and CFO Mark McCaffrey emphasized a long runway for growth, citing very low penetration of the existing customer base and contributions from new customers.

Josh Beck inquired if Airo 'discovery' is the key metric for increased marketing spend and asked about the P&L impact of improved 'containment rates' from generative AI care bots.

Answer

CEO Aman Bhutani clarified that while discovery is important, 'engagement' is the primary quality metric they are optimizing for, as it is a stronger predictor of monetization. Regarding the AI bots, he confirmed 'containment rate' is similar to deflection and is a key part of the strategy to deliver a better customer care experience at a lower cost, which is expected to drive continued leverage in the care P&L line.

Josh Beck asked if the strategic update would be largely complete by summer 2025, a year into the CEO's tenure, and whether the focus on cohort value means the absolute business formation number will become less important over time.

Answer

CEO Jeffrey Stibel expressed high confidence that by summer, the business will be more predictable and managed like a recurring revenue business, with a focus on factors within their control. This strategic shift inherently makes the business less dependent on volatile metrics like raw formation numbers and more focused on the long-term value of the customers they acquire, thus building a more stable and manageable company.

Josh Beck asked if the stabilization in macroeconomic indicators like the quits rate is the correct framework for the year's outlook. He also inquired about any notable hiring trends within the technology vertical.

Answer

President David Travers agreed that stabilization in metrics like the quits rate would be a significant improvement over the declines of the past two years, noting that over 90% of hiring is to backfill roles. Regarding the tech vertical, Travers stated that ZipRecruiter is not over-indexed to tech, but observed recent signs of stability in Q4 after a period of decline, though an 'AI hiring boom' has not yet broadly materialized across the sector.

Josh Beck of Raymond James questioned if the RepairPal acquisition signals a broader strategy of vertical-specific M&A in services and asked for early learnings from the Perplexity partnership regarding the generative search landscape.

Answer

CEO Jeremy Stoppelman described the RepairPal acquisition as an opportunistic tuck-in that fits Yelp's services strategy, leveraging Yelp's audience and SEM expertise for RepairPal's business. On generative search, he expressed excitement about new entrants creating opportunities, positioning Yelp's trusted local content as a valuable asset for LLMs.