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II

Ibotta, Inc. (IBTA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $84.6M (+3% YoY) and adjusted EBITDA was $14.7M (17% margin); both were above the prior guidance midpoint, with revenue +3% vs midpoint and adjusted EBITDA +22% vs midpoint .
  • Mix shifted further to third‑party publishers: redemption revenue rose 8% YoY to $73.4M, while direct‑to‑consumer revenue declined 23% YoY; total redeemers grew 37% YoY to 17.1M, driven by Instacart, Walmart audience growth, and Family Dollar .
  • Gross margin pressure and higher public company and platform costs weighed on profitability (non‑GAAP gross margin ~81% vs prior year down ~700 bps); net income was $0.6M (1% margin) and adjusted net income was $12.1M .
  • Q2 2025 guidance: revenue $86.5–$92.5M (+2% YoY midpoint), adjusted EBITDA $17–$22M (22% margin midpoint); management expects sequential offer supply improvement but remains “supply constrained” near‑term .
  • Catalysts: early CPID pilot success with two leading CPGs (one ~2x YoY redemption revenue, one ~8x YoY in 1H), rapid publisher expansion (Instacart live; DoorDash rolling out), and UX improvements at Walmart; however, tariffs and sales execution streamlining are near‑term headwinds .

What Went Well and What Went Wrong

  • What Went Well

    • “We delivered first quarter revenue and adjusted EBITDA above the guidance range” (beat vs prior guidance midpoint) .
    • CPID pilots with two leading CPGs showing attractive cost per incremental dollar and high incremental volumes; one client’s redemption revenue expected to ~double YoY in 1H, the other ~8x YoY .
    • Network demand strength: third‑party publisher redemption revenue +38% YoY to $48.2M; total redeemers +37% YoY to 17.1M .

  • What Went Wrong

    • Non‑GAAP gross margin down nearly 700 bps YoY to ~81% on Instacart‑related costs, revenue sharing, variable tech costs, and higher amortization; adjusted EBITDA fell to $14.7M (17% margin) from $22.7M (28%) .
    • Direct‑to‑consumer revenue and engagement softness: D2C redemption revenue −24% YoY to $25.2M; redemptions per redeemer fell to 4.8 (−15% YoY), reflecting mix shift to third‑party publishers .
    • Near‑term “supply constrained” environment as sales execution and go‑to‑market processes are being streamlined; management flagged potential short‑term disruptions .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$82.327 $98.380 $84.574
Redemption Revenue ($USD Millions)$67.989 $82.399 $73.399
Net Income ($USD Millions)$9.297 $76.172 $0.555
Diluted EPS (GAAP) ($)$0.33 $2.27 $0.02
Adjusted EBITDA ($USD Millions)$22.659 $27.768 $14.673
Adjusted EBITDA Margin (%)28% 28% 17%
Adjusted Net Income ($USD Millions)$15.398 $22.372 $12.109
Adjusted Diluted EPS ($)$0.54 $0.67 $0.36
Net Income Margin (%)11% 77% 1%
Cash from Operations ($USD Millions)$19.366 $21.987 $19.860
Free Cash Flow ($USD Millions)$16.899 $19.442 $14.892

Segment Revenue Breakdown

MetricQ1 2024Q4 2024Q1 2025
D2C Redemption Revenue ($USD Millions)$32.982 $30.132 $25.204
D2C Ad & Other Revenue ($USD Millions)$14.338 $15.981 $11.175
Total D2C Revenue ($USD Millions)$47.320 $46.113 $36.379
Third‑Party Redemption Revenue ($USD Millions)$35.007 $52.267 $48.195
Third‑Party Ad & Other Revenue ($USD Millions)— — —
Total Third‑Party Publishers Revenue ($USD Millions)$35.007 $52.267 $48.195
Total Revenue ($USD Millions)$82.327 $98.380 $84.574

KPIs

MetricQ1 2024Q4 2024Q1 2025
D2C Redemptions (000s)27,675 28,276 21,629
Third‑Party Redemptions (000s)43,791 66,276 61,211
Total Redemptions (000s)71,466 94,552 82,840
D2C Redeemers (000s)1,928 1,819 1,656
Third‑Party Redeemers (000s)10,559 15,396 15,433
Total Redeemers (000s)12,487 17,215 17,089
D2C Redemptions per Redeemer14.4 15.5 13.1
Third‑Party Redemptions per Redeemer4.1 4.3 4.0
Total Redemptions per Redeemer5.7 5.5 4.8
D2C Redemption Revenue per Redemption ($)$1.19 $1.07 $1.17
Third‑Party Redemption Revenue per Redemption ($)$0.80 $0.79 $0.79
Total Redemption Revenue per Redemption ($)$0.95 $0.87 $0.89

Additional P&L and Balance Sheet (selected)

  • Gross profit: $67.482M (Q1’25) vs $71.812M (Q1’24); cost of revenue $17.092M (Q1’25) vs $10.515M (Q1’24) .
  • Cash & cash equivalents: $297.125M at 3/31/25; accounts receivable $206.159M; total equity $401.276M .
  • Share repurchases: 1.8M shares for $72.7M in Q1 at $39.47 average; $96.1M authorization remaining post $100M increase in March (management corrected initial “8.1M” on the call) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q1 2025$80–$84M Actual $84.574M Beat; above midpoint by 3%
Adjusted EBITDA ($USD Millions)Q1 2025$10–$14M Actual $14.673M Beat; above high end; +22% vs midpoint
Revenue ($USD Millions)Q2 2025—$86.5–$92.5M Initiated
Adjusted EBITDA ($USD Millions)Q2 2025—$17–$22M (22% margin midpoint) Initiated
Adjusted Tax Rate (%)FY 2025—Low 20s Maintained; full‑year cash taxes broadly unchanged
Operating CostsFY 2025—Flattish sequential costs; margin uplift from revenue Maintained commentary

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
CPID performance marketing (incremental sales, measurement, scale)Focus on delivering incremental sales efficiently; strong growth in redeemers “Introducing major new innovations in measurement and targeting” Pilots with two leading CPGs; attractive CPID; expanding to three more clients Accelerating pilot validation; roadmap to automation
Publisher expansion (Instacart, DoorDash)Instacart partnership announced; testing begun Instacart live; DoorDash multi‑year partnership subsequent to year‑end Instacart ramp; DoorDash live to most customers, full rollout near‑term Broadening e‑commerce coverage
Walmart program UXWalmart expansion key to redeemers Walmart audience like‑for‑like growth Phone number checkout to earn Walmart cash improves friction vs app QR workflow UX improving; likely lift to redeemer growth
Supply & Sales executionNoted strong demand metrics IPO/public‑company costs; team investments “Supply constrained” near‑term; CRO driving process standardization; sequential offer supply improvement expected Near‑term headwind; medium‑term improvement
Alcohol & Beverage category——Instacart alc‑bev live in ~13 states via discounts; aim to expand to 41 via rewards/rebates; intend to roll out across network incl. Walmart New category expansion underway
Dollar channel partners—Family Dollar program launched in Q2; growth Dollar partners on “liftoff” trajectory; confidence for broader grocery partners Positive trajectory
Macro/tariffs——Tariffs creating uncertainty in general merchandise; emerging brands in wait‑and‑see Macro caution
MarginsAdjusted EBITDA margin 37% in Q3 28% in Q4 ~17% in Q1; non‑GAAP gross margin ~81%, down ~700 bps YoY Margin compression near‑term

Management Commentary

  • “We delivered first quarter revenue and adjusted EBITDA above the guidance range we provided on our fourth quarter earnings call.” — Bryan Leach, CEO .
  • “We’ve delivered incremental sales at an attractive cost per incremental dollar while delivering significant volumes of incremental sales… one client ~2x YoY and the other ~8x YoY in 1H.” — Bryan Leach on CPID pilots .
  • “Non‑GAAP gross margin was ~81%, down nearly 700 bps YoY… driven by Instacart‑related costs, revenue sharing, variable tech costs, higher amortization.” — Valarie Sheppard, Interim CFO .
  • “We expect to continue to be supply constrained in the short‑term, but expect to drive sequential improvement in offer supply over the course of this year.” — Valarie Sheppard, Interim CFO .
  • “We now have telephone number as a way to check out and earn your Walmart cash… a pretty big improvement in the experience.” — Bryan Leach on Walmart UX .

Q&A Highlights

  • Instacart & DoorDash: Attractive online redemption rates; Instacart alc‑bev live in ~13 states via discounts, pursuing reward/rebate model to reach ~41; DoorDash rollout progressing without legacy change‑management friction .
  • CPID adoption path: Pilots expanding brand coverage; manual analytics being automated and transitioned to machine learning; resource focus on standardization; early results fueling senior‑level advocacy at clients .
  • Supply dynamics: Near‑term “supply constrained”; sequential improvement expected from sales execution changes and seasonal factors; CPID penetration a wildcard that could accelerate offer supply .
  • Dollar channel outlook: Strong momentum; symbiotic with retail media; learnings transferable to Instacart/DoorDash and broader e‑commerce verticals .
  • Macro headwinds: Tariffs impacting general merchandise; emerging brands cautious; guidance incorporates these factors .

Estimates Context

How results compared to Wall Street consensus (S&P Global):

  • Q1 2025: Revenue $84.574M vs consensus $82.047M; Primary EPS $0.36 vs consensus $0.0137; EBITDA (S&P Global definition) −$0.074M vs consensus $12.563M — note S&P’s EBITDA measure differs from company’s adjusted EBITDA ($14.673M) . Values retrieved from S&P Global.*
MetricQ1 2025 ConsensusQ1 2025 ActualQ2 2025 ConsensusFY 2025 Consensus
Revenue ($USD)$82,046,790*$84,574,000 $90,485,480*$337,099,370*
Primary EPS ($)$0.0137*$0.36 $0.19262*$0.12832*
EBITDA ($USD)$12,562,980*−$74,000*$20,067,400*$59,935,580*
Target Price ($)$28.28571*—$28.28571*$28.28571*
# of Revenue Estimates9*—9*9*
# of EPS Estimates7*—7*6*

*Values retrieved from S&P Global.

Key implications:

  • Bold beat on revenue and EPS vs consensus in Q1. EBITDA comparability caveat: company’s adjusted EBITDA metric is the relevant profitability lens for IBTA’s model .

Key Takeaways for Investors

  • CPID pilots are a potential structural catalyst: attractive efficiency and volume metrics, senior client advocacy, and plans to automate analytics could unlock a broader, “always‑on” performance marketing budget shift over time .
  • Mix shift to third‑party publishers continues: redeemer growth and Instacart/DoorDash rollout support network scale; near‑term margin trade‑offs from platform costs likely abate as operating leverage improves .
  • Short‑term watch items: offer supply constraints and sales motion transitions; monitor Q2 sequential improvements and any CPID‑driven acceleration in supply .
  • Walmart UX upgrades (phone number checkout) and alc‑bev category expansion across publishers are tangible drivers of redemption conversion and audience monetization .
  • Balance sheet and buybacks provide flexibility: $297M cash, $96.1M remaining repurchase authorization; disciplined capital allocation amid margin normalization .
  • Estimate revisions: Expect upward adjustments to near‑term EPS and revenue following Q1 beats; model non‑GAAP gross margin recovery as Instacart revenue scales and cost curves flatten .
  • Macro sensitivity: tariff uncertainty in general merchandise and emerging brands warrants conservative supply assumptions near‑term; CPID could offset as it proves contribution‑positive growth .

Citations: Q1 2025 press release and 8‑K ; Q1 2025 earnings call transcript ; Q4 2024 and Q3 2024 8‑Ks .