Ibotta, Inc.(IBTA) - 2025 Q1 - Quarterly Report

Part I FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited statements show a slight revenue increase but a significant drop in net income due to higher expenses Condensed Balance Sheets Total assets and stockholders' equity decreased, primarily driven by a reduction in cash and share repurchases Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $297,125 | $349,282 | | Total current assets | $527,986 | $581,741 | | Total assets | $639,264 | $678,429 | | Total current liabilities | $196,504 | $204,165 | | Total liabilities | $237,988 | $221,146 | | Total stockholders' equity | $401,276 | $457,283 | Condensed Statements of Operations A slight revenue increase was offset by higher costs, resulting in a sharp decline in operating and net income Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $84,574 | $82,327 | | Gross profit | $67,482 | $71,812 | | (Loss) income from operations | $(2,803) | $15,905 | | Net income | $555 | $9,297 | | Net income per share, basic | $0.02 | $1.00 | | Net income per share, diluted | $0.02 | $0.33 | Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity Stockholders' equity decreased significantly due to a substantial common stock repurchase of $73.4 million - The company repurchased common stock for $73.4 million during the three months ended March 31, 2025, which is recorded as treasury stock[20] Condensed Statements of Cash Flows A significant cash outflow from financing activities for stock repurchases led to a net decrease in cash Q1 2025 vs. Q1 2024 Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $19,860 | $19,366 | | Net cash used in investing activities | $(4,968) | $(2,467) | | Net cash (used in) provided by financing activities | $(67,049) | $9 | | Net change in cash, cash equivalents, and restricted cash | $(52,157) | $16,908 | Notes to the Condensed Financial Statements (Unaudited) Key disclosures cover revenue sources, a share repurchase program, a new credit facility, and a pending lawsuit - The company's revenue is primarily derived from client fees on the Ibotta Performance Network (IPN)[27] - The company repurchased 1,840,554 shares for $73.4 million in Q1 2025 under its expanded $200 million share repurchase program[89][91] - A securities class action complaint related to the IPO was filed, which the company believes is without merit[120] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Growth in third-party channels was offset by a decline in the D2C business, leading to decreased profitability Financial and Operational Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Redemptions (thousands) | 82,840 | 71,466 | | Redeemers (thousands) | 17,089 | 12,487 | | Revenue (thousands) | $84,574 | $82,327 | | Gross Margin | 80% | 87% | | Net Income (thousands) | $555 | $9,297 | | Adjusted EBITDA (thousands) | $14,673 | $22,659 | - The business is subject to macroeconomic risks, including inflation and potential declines in consumer spending[126] Performance Metrics and Non-GAAP Measures Total redemptions grew, fueled by third-party publishers, while D2C metrics and Adjusted EBITDA declined Performance Metrics by Channel (Q1 2025 vs Q1 2024) | Metric | Channel | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | :--- | | Redemptions (thousands) | D2C | 21,629 | 27,675 | | | Third-party | 61,211 | 43,791 | | Redeemers (thousands) | D2C | 1,656 | 1,928 | | | Third-party | 15,433 | 10,559 | - Growth in third-party publisher redemptions was primarily driven by the launch of Family Dollar and Instacart[138] - The decrease in D2C metrics was driven by the quantity and quality of available offers[137][142] Results of Operations Revenue grew 3% as third-party growth offset D2C decline, but surging costs drove an operating loss Revenue by Channel (in thousands) | Revenue Type | Q1 2025 | Q1 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Total D2C revenue | $36,379 | $47,320 | $(10,941) | (23)% | | Total third-party publishers revenue | $48,195 | $35,007 | $13,188 | 38% | | Total revenue | $84,574 | $82,327 | $2,247 | 3% | - Cost of revenue increased by $6.6 million (63%) primarily due to the addition of new publishers[178] - General and administrative expenses increased by $8.2 million (63%) due to higher stock-based compensation and public company costs[181] Liquidity and Capital Resources The company maintains strong liquidity with nearly $300 million in cash and an undrawn $100 million credit facility - The company has a $100 million revolving credit facility with no outstanding borrowings as of March 31, 2025[190] - During Q1 2025, the company repurchased 1,840,554 shares of its Class A common stock for $73.4 million[195] - Net cash used in financing activities increased by $67.1 million year-over-year, driven by $69.8 million in treasury stock purchases[201] Item 3. Quantitative and Qualitative Disclosures About Market Risk Primary market risks are identified as interest rate and inflation risk, with no material effect to date - The company is exposed to interest rate risk on its $297.5 million of cash and cash equivalents and its floating-rate line of credit[210][211] - The company does not believe that inflation has had a material effect on its business but acknowledges potential future harm[212] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of the quarter-end - Based on an evaluation, the principal executive and financial officers concluded that disclosure controls and procedures were effective[213] - There were no material changes in internal control over financial reporting during the quarter[214] Part II OTHER INFORMATION Item 1. Legal Proceedings A securities class action lawsuit related to the IPO was filed, which the company intends to defend vigorously - A securities class action complaint, Fortune v. Ibotta Inc., et al., was filed on April 17, 2025, alleging false statements in the IPO registration[219] - The company believes the complaint is without merit and cannot estimate a potential range of loss[219] Item 1A. Risk Factors Key risks include a history of net losses, dependence on Walmart, and concentrated voting control with the CEO - The company has a history of net losses, with an accumulated deficit of $139.9 million as of March 31, 2025[224] - The business is highly dependent on its relationship with Walmart, and a termination could materially harm the company[232] - The dual-class stock structure concentrates approximately 70.5% of voting power with the Founder and CEO[397] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Securities The company repurchased 1.84 million shares for $73.4 million in March 2025 under its repurchase program Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining for Repurchase (in thousands) | | :--- | :--- | :--- | :--- | | Jan 2025 | — | — | $68,762 | | Feb 2025 | — | — | $68,762 | | Mar 2025 | 1,840,554 | $39.47 | $96,109 | Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities during the period - Not applicable[432] Item 4. Mine Safety Disclosures The company reports that this item is not applicable - Not applicable[433] Item 5. Other Information The Chief Technology Officer adopted a Rule 10b5-1 trading plan for the potential sale of company stock - On March 5, 2025, Chief Technology Officer Luke Swanson adopted a Rule 10b5-1 trading arrangement for the sale of up to 252,000 shares[434] Item 6. Exhibits This section lists exhibits filed with the report, including officer certifications and XBRL data files Signatures The report is duly signed by the Principal Executive, Financial, and Accounting Officers on May 14, 2025