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II

Ibotta, Inc. (IBTA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $86.0M (-2% YoY) and adjusted EBITDA was $17.9M (21% margin); adjusted diluted EPS was $0.49. Management acknowledged results below prior Q1 guidance and underperformance in redemption revenue, citing pilot pauses and sales reorg disruptions .
  • Against S&P Global consensus, IBTA produced a significant EPS beat ($0.49 vs $0.19*) but missed revenue ($86.0M vs $90.5M*); management guided Q3 2025 revenue down to $79–$84M and adjusted EBITDA to $9.5–$13.5M (14% margin midpoint) .
  • Strategic pivot to a “performance marketing” model is receiving strong client interest; third-party validation showed campaign lift above Ibotta’s conservative internal measures, though scaling timelines are uncertain (9–12 months typical) .
  • Operational catalysts include CFO appointment (Matt Puckett, starts Aug 25), broader DoorDash rollout, continued Walmart in-store integrations, and $67.5M buybacks (1.4M shares at $46.59) .

What Went Well and What Went Wrong

What Went Well

  • Third-party validation: “Their study shows that our campaign results are better than the data we reported using our own more conservative methodology,” bolstering CPID credibility with large CPGs .
  • Publisher traction: Offers rolled out to a majority of DoorDash customers; Walmart enhanced in-store awareness via phone-number ID at checkout and self-checkout callouts, improving adoption .
  • Engagement and pilots: ~20 top-to-top meetings resulting in six signed pilots and 11 moving toward pilots in 2H; emerging client progress similar .

What Went Wrong

  • Pilots paused: Two initial pilot partners did not run expected Q2 H2 campaigns; neither reactivated in Q3 as of the call, driving results below guidance and a conservative Q3 outlook .
  • Sales reorg disruption: Transition to vertical sales model and account handoffs led to continuity issues; accounts with rep changes saw ~16% lower revenue vs no-change accounts over past year .
  • Macro headwinds: Some large clients paused back-half promotional spend amid economic, tariff, and regulatory uncertainty, elevating rigor requirements and slowing budget unlocks .

Financial Results

Core Financials vs Prior Periods

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$98.4 $84.6 $86.0
GAAP Net Income ($USD Millions)$76.2 $0.6 $2.5
Net Income Margin (%)77% 1% 3%
Adjusted EBITDA ($USD Millions)$27.8 $14.7 $17.9
Adjusted EBITDA Margin (%)28% 17% 21%
Adjusted Diluted EPS ($USD)$0.67 $0.36 $0.49
Diluted EPS ($USD)$2.27 $0.02 $0.08

Notes:

  • Q2 non-GAAP gross margin was 80% (down ~660 bps YoY) .
  • Adjusted net income excludes $13.6M stock-based comp and $0.6M restructuring; includes $1.8M tax adjustment .

Estimates Comparison (S&P Global)

MetricConsensus (Q2 2025)Actual (Q2 2025)Surprise
Revenue ($USD)$90.485M*$86.029M Miss
Primary EPS ($USD)$0.193*$0.49 Beat
EPS – # of Estimates7*——
Revenue – # of Estimates9*——

Values retrieved from S&P Global.*

Segment and Mix

Segment Metric ($USD Millions)Q4 2024Q1 2025Q2 2025
DTC Redemption Revenue$30.1 $25.2 $24.6
DTC Ad & Other Revenue$16.0 $11.2 $12.8
Total DTC Revenue$46.1 $36.4 $37.4
Third-Party Redemption Revenue$52.3 $48.2 $48.6
Third-Party Ad & Other— — —
Total Third-Party Revenue$52.3 $48.2 $48.6
Total Redemption Revenue$82.4 $73.4 $73.2
Total Ad & Other Revenue$16.0 $11.2 $12.8
Total Revenue$98.4 $84.6 $86.0

KPIs

KPIQ4 2024Q1 2025Q2 2025
Total Redeemers (000s)17,215 17,089 17,336
Total Redemptions (000s)94,552 82,840 80,484
DTC Redemptions (000s)28,276 21,629 21,933
Third-Party Redemptions (000s)66,276 61,211 58,551
Redemptions per Redeemer (Total)5.5 4.8 4.6
Redemption Revenue per Redemption (Total, $USD)$0.87 $0.89 $0.91

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)Q3 2025Not previously provided$79.0–$84.0 Initiated; below prior expectations
Adjusted EBITDA ($USD)Q3 2025Not previously provided$9.5–$13.5 Initiated; lower margin profile
Adjusted EBITDA Margin (%)Q3 2025Not previously provided~14% midpoint Initiated
Operating ExpensesQ4 2025Not previously providedIncrease sequentially by several million Raised
Cash TaxesFY 2025Not previously providedDe minimis expected Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Performance Marketing (CPID)First CPID-based campaigns launched; positioning as performance platform . Publishers expanded (Instacart live Q4, Family Dollar, AppCard) .Third-party validation shows stronger lift vs internal; six signed pilots and 11 advancing; timelines ~9–12 months to scale .Positive strategic momentum; near-term scaling delays
Sales Execution & OrgDoorDash partnership announced; CRO hire (Chris Riedy) .Reorg to verticals; account handoffs causing continuity issues; new senior hires in enterprise, marketing, ops .Transitional disruption near term
Publisher/ChannelInstacart live; Walmart audience growth .DoorDash majority rollout; Walmart in-store ID and self-checkout prompts boosting awareness .Improving distribution and adoption
Macro/Tariffs/RegulatoryNot highlighted in 8-Ks .Larger clients pausing H2 promotions amid macro, tariffs, regulatory uncertainty .Headwind
Cash Capital AllocationIPO and buybacks in 2024 .Q2 buybacks: 1.4M shares for $67.5M; $128.6M authorization remaining .Supportive

Management Commentary

  • “We reported revenue below the guidance range…We’re also guiding to third quarter results that are significantly below our prior expectations…we committed ourselves to a broader business transformation” .
  • “We’ve received third party validation from a leading media measurement company…their study shows that our campaign results are better than the data we reported using our own more conservative methodology” .
  • “We shifted from a territory based model to [industry] subvertical…meaningfully reduced the account load…new leaders…raise the bar across the board” .
  • “We rolled out our offers to a majority of DoorDash customers…Walmart [enabled] self-ID via phone number at checkout…and stronger call out…on all self checkout screens” .

Q&A Highlights

  • Measurement and validation: Third-party lift studies using independent panels confirm statistically significant incremental sales; results are more favorable than Ibotta’s internal measures, increasing client trust and potentially accelerating adoption .
  • Scaling timelines: Inside-control items include sales training, GTM productionization, and tooling automation; scaling across clients typically takes 9–12 months and may align with budget cycles .
  • Macro and budget behavior: Some CPGs parked discretionary spend; budgets are lumpy with occasional heavy spikes (e.g., “chicken wars” last Q3), underscoring desire for predictability under rolling performance spend .
  • General merchandise: Tariff exposure more pronounced; performance product well-received, but category nuances (e.g., purchase cycles) require more pilots to calibrate CPID .
  • Operational cadence: Sales reorg caused continuity gaps and some lost opportunities; management is focused on stability, client obsession, and proactive value framing .

Estimates Context

  • Q2 2025 EPS beat: $0.49 vs $0.193* consensus; revenue miss: $86.0M vs $90.5M* consensus, with 7 EPS estimates and 9 revenue estimates . Values retrieved from S&P Global.*
  • Implication: Street EPS likely adjusts higher given stronger non-GAAP profitability, but top-line revisions lower near term given Q3 revenue guide-down and sales reorg impacts .

Key Takeaways for Investors

  • Near-term reset: Q3 guide-down (revenue $79–$84M; adj. EBITDA $9.5–$13.5M, ~14% margin) reflects conservative assumptions after pilot pauses and sales transition; expect muted top line until pilots scale .
  • Structural upside: Third-party validation and top-to-top access into larger media budgets support the thesis that performance marketing can unlock materially larger TAM over 9–12 month arcs .
  • Distribution advantage: DoorDash majority rollout and Walmart in-store integrations strengthen the demand-side of the IPN, underpinning redeemer growth despite lower DTC frequency .
  • Mix shift dynamics: Third-party redemption revenue grew YoY (Q2: +17% TPP redemption revenue) while DTC softened, pressuring redemptions per redeemer and non-GAAP gross margin .
  • Capital allocation: $67.5M buybacks in Q2 with $128.6M remaining authorization signal confidence and help support per-share metrics amid volatility .
  • Execution focus: Stabilizing sales coverage and automating measurement/reporting are key milestones to accelerate adoption and reduce forecast lumpiness .
  • Watch catalysts: Additional third-party validation releases, pilot expansions/resumptions, vertical sales maturity, and publisher growth could drive narrative inflection and re-rating .