Ibotta, Inc.(IBTA) - 2025 Q2 - Quarterly Report

Part I: Financial Information This section presents unaudited financial statements and management's analysis of financial condition and operations Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed financial statements for the quarterly period ended June 30, 2025. It includes the balance sheets, statements of operations, statements of stockholders' equity, and statements of cash flows, along with accompanying notes that provide detailed explanations of the company's accounting policies and financial data Condensed Balance Sheets This section details the company's financial position, including assets, liabilities, and stockholders' equity Condensed Balance Sheet Summary (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $600,778 | $678,429 | | Cash and cash equivalents | $250,549 | $349,282 | | Accounts receivable, net | $208,976 | $220,883 | | Total Liabilities | $246,650 | $221,146 | | User redemption liability | $70,922 | $74,006 | | Total Stockholders' Equity | $354,128 | $457,283 | - Total assets decreased primarily due to a reduction in cash and cash equivalents, while total stockholders' equity declined significantly, driven by a large increase in treasury stock from $31.3 million to $172.9 million due to share repurchases[16] Condensed Statements of Operations This section presents the company's financial performance, including revenue, expenses, and net income or loss Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $86,029 | $87,926 | $170,603 | $170,253 | | Gross Profit | $68,104 | $75,643 | $135,586 | $147,455 | | Income (Loss) from Operations | $1,238 | $(21,657) | $(1,565) | $(5,752) | | Net Income (Loss) | $2,490 | $(33,966) | $3,045 | $(24,669) | | Diluted EPS | $0.08 | $(1.32) | $0.10 | $(1.41) | - The company shifted from a significant net loss in Q2 and H1 2024 to a net income in the same periods of 2025, despite relatively flat revenue. This was primarily driven by a substantial reduction in operating expenses, particularly in Sales and Marketing[18] Condensed Statements of Cash Flows This section details cash flows from operating, investing, and financing activities Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $45,715 | $54,386 | | Net cash used in investing activities | $(11,968) | $(4,789) | | Net cash (used in) provided by financing activities | $(132,830) | $205,670 | | Net change in cash | $(99,083) | $255,267 | - Financing activities resulted in a significant cash outflow of $132.8 million in H1 2025, mainly due to $140.2 million in treasury stock purchases. This contrasts sharply with H1 2024, which saw a $205.7 million cash inflow from the company's IPO[30] Notes to the Condensed Financial Statements (Unaudited) This section provides detailed explanations of accounting policies, significant transactions, and financial data - The company's primary revenue source is fees from CPG brands when consumers redeem digital promotions through the Ibotta Performance Network (IPN)[34] - In April 2024, upon the IPO, the company's convertible notes automatically converted to Class A common stock, resulting in a $9.6 million loss on debt extinguishment[65] - A securities class action complaint was filed against the company on April 17, 2025, alleging false and misleading statements in the IPO registration statement. The company intends to defend the case vigorously[128][130] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance and condition, focusing on key operational metrics, results of operations for the three and six months ended June 30, 2025 compared to 2024, and liquidity and capital resources. The analysis highlights a strategic shift with growth in third-party publisher revenue offsetting a decline in direct-to-consumer (D2C) revenue, and a significant use of cash for share repurchases Financial and Operational Highlights This section details Financial and Operational Highlights Key Metrics Comparison (in thousands, except per-unit data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Redemptions | 80,484 | 80,715 | 163,324 | 152,181 | | Redeemers | 17,336 | 13,702 | 17,213 | 13,095 | | Redemptions per redeemer | 4.6 | 5.9 | 9.5 | 11.6 | | Revenue | $86,029 | $87,926 | $170,603 | $170,253 | | Net Income (Loss) | $2,490 | $(33,966) | $3,045 | $(24,669) | | Adjusted EBITDA | $17,882 | $25,274 | $32,555 | $47,933 | - While total redeemers grew significantly year-over-year, redemptions per redeemer declined, indicating lower engagement per user. Adjusted EBITDA also saw a notable decrease in both the three and six-month periods[137] Performance Metrics This section details Performance Metrics - The company's growth is driven by its third-party publisher network, which saw redeemers increase from 11.9 million to 15.7 million in Q2 YoY[142][152] - Conversely, the direct-to-consumer (D2C) segment experienced a decline, with D2C redeemers falling from 1.8 million to 1.6 million in Q2 YoY, attributed to the quantity and quality of available offers[142][151] - Growth in third-party publisher redemptions was primarily driven by the launch of new partners, including Family Dollar, Instacart, and DoorDash[147] Results of Operations This section details Results of Operations Revenue Breakdown - Q2 2025 vs Q2 2024 (in thousands) | Revenue Source | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total D2C Revenue | $37,441 | $46,275 | $(8,834) | (19)% | | Total Third-Party Publishers Revenue | $48,588 | $41,651 | $6,937 | 17% | | Total Revenue | $86,029 | $87,926 | $(1,897) | (2)% | - Sales and marketing expenses for Q2 2025 decreased by $21.2 million (42%) compared to Q2 2024, mainly due to a $21.9 million reduction in stock-based compensation expense, a significant portion of which was related to the Walmart Warrant[189] - Cost of revenue increased by $5.6 million (46%) in Q2 2025 compared to Q2 2024, primarily due to the addition of new third-party publishers[188] Liquidity and Capital Resources This section details Liquidity and Capital Resources - As of June 30, 2025, principal sources of liquidity were $250.5 million in cash and cash equivalents and $99.0 million available under a revolving credit facility[208] - The Board of Directors has authorized a Share Repurchase Program of up to $300 million. During the six months ended June 30, 2025, the company repurchased $141.6 million of its Class A common stock[214][216] - The company has non-cancelable purchase obligations of $148.2 million and operating lease obligations of $37.5 million as of June 30, 2025[223][224] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company identifies its primary market risks as interest rate risk and inflation risk. Interest rate risk pertains to fluctuations on its cash holdings and potential future debt. Inflation risk could increase operating costs. Management states that neither of these risks has had a material effect on the business to date - The company is exposed to interest rate risk on its $250.6 million in cash, cash equivalents, and restricted cash, and on its floating-rate credit line, which had no outstanding balance as of June 30, 2025[231][232] - Management does not believe that inflation has had a material effect on the business, but acknowledges that significant inflationary pressures on costs could harm the business if they cannot be offset[233] Item 4. Controls and Procedures Management, including the CEO and interim CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of June 30, 2025. There were no material changes to the company's internal control over financial reporting during the quarter - Based on an evaluation as of the end of the period, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[234] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[235] Part II: Other Information This section covers legal proceedings, risk factors, equity transactions, and other disclosures Item 1. Legal Proceedings The company reports it is a defendant in a consolidated putative securities class action lawsuit filed in April and May 2025. The complaints allege violations of the Securities Act and Exchange Act related to materially false and misleading statements in the company's IPO registration statement and subsequent public statements. The company intends to defend the case vigorously but cannot estimate a range of potential loss - Two putative securities class action complaints were filed against the company, its officers, directors, and IPO underwriters in April and May 2025, which have since been consolidated[239] - The lawsuits allege materially false and misleading statements in the IPO registration statement regarding risks, data measurement tools, the D2C platform, and client budgets. The company intends to defend itself vigorously[239] Item 1A. Risk Factors This section outlines significant risks that could adversely affect the company's business, financial condition, and stock price. Key risks highlighted include a history of net losses, dependence on key publishers (like Walmart) and CPG brands, potential failure to sustain revenue growth, intense competition, macroeconomic pressures, and risks associated with the dual-class stock structure which concentrates voting power with the CEO - The company has a history of net losses and an accumulated deficit of $137.4 million as of June 30, 2025, with an expectation of increasing future expenses[244] - A substantial portion of the company's white-label redemptions originate from its relationship with Walmart. The termination or non-renewal of the Walmart Program Agreement could materially and adversely affect the business[252] - The dual-class stock structure concentrates approximately 71.4% of the voting power with Founder and CEO Bryan Leach as of June 30, 2025, allowing him to control stockholder decisions[422] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities This section provides details on the company's repurchases of its Class A common stock during the second quarter of 2025. The repurchases were made under a board-authorized Share Repurchase Program, which was increased to a total of $300 million Share Repurchase Activity - Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 1,043,146 | $45.77 | | May 2025 | 345,227 | $48.56 | | June 2025 | 60,000 | $49.44 | | Total | 1,448,373 | N/A | - The total authorization under the Share Repurchase Program was increased to $300 million after the board approved an additional $100 million in both March and June 2025[455] Item 5. Other Information This section discloses the adoption of Rule 10b5-1 trading plans by certain executive officers during the quarter. CEO Bryan Leach and Chief People Officer Marisa Daspit both established such plans in May 2025 to facilitate the sale of company stock - On May 19, 2025, CEO Bryan Leach and his family trusts adopted a Rule 10b5-1 trading plan for the sale of up to 281,532 shares of Class A common stock, plus additional shares related to vested RSUs[459] - On May 29, 2025, Chief People Officer Marisa Daspit adopted a Rule 10b5-1 trading plan for the sale of up to 51,625 shares of Class A common stock[461] Other Items (Defaults, Mine Safety, Exhibits) This section covers standard reporting items including defaults, mine safety disclosures, and filed exhibits - The company reported no defaults upon senior securities and had no mine safety disclosures to report for the period[457][458]