Ibotta (IBTA 5.05%), a leading digital promotions and performance marketing platform for consumer packaged goods (CPG), released financial results for Q2 2025 on August 13, 2025. The most notable headline was that both GAAP revenue and adjusted earnings (non-GAAP) missed consensus estimates: GAAP revenue came in at $86.0 million, below the estimate of $90.6 million, and diluted non-GAAP earnings per share (EPS) were $0.49, below last year's non-GAAP adjusted net income per diluted share of $0.68 for Q2 2024. The quarter was marked by expanding reach through third-party partnerships and redeemer growth, but also by compressing profit margins and continued weakness in direct-to-consumer channels. Overall, the quarter underscored operational and strategic progress, but short-term financial results lagged expectations and Management guided to further declines in revenue for Q3 2025, with an outlook of $79.0–$84.0 million, representing a year-over-year decrease of 17% at the midpoint.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS, diluted (Non-GAAP) | $0.49 | $0.19 | N/A | N/A |
| Revenue | $86.0 million | $90.6 million | $87.9 million | (2)% |
| Adjusted EBITDA | $17.9 million | $25.3 million | (29)% | |
| Free Cash Flow | $18.9 million | $32.7 million | (42)% | |
| Adjusted net income | $14.9 million | $19.9 million | (25)% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Inside the Ibotta Business and Strategy
Ibotta connects CPG brands, retailers, and consumers through its digital promotions platform, the Ibotta Performance Network (IPN). It enables brands to deliver targeted, measurable promotions both directly to consumers and through third-party publishers such as grocers and e-commerce platforms. These promotions are designed to drive sales, capture insights, and improve return on marketing investment for brands.
Recently, the company has made scaling the IPN a top focus. This expansion means integrating with more third-party publishers and leveraging artificial intelligence (AI) to improve targeting and tracking. Key success factors include broadening redeemer reach, deepening partnerships with retailers, and transforming the business from episodic promotions toward always-on, automated marketing campaigns that are more measurable and effective for brands.
Quarterly Performance: Progress and Pressure
The second quarter saw GAAP revenue declined by 2% year-over-year to $86.0 million, running about 5% short of consensus analyst estimates. Adjusted net income dropped 25% year-over-year, and adjusted EBITDA fell 29%, reflecting clear margin pressure.
Redeemers using the platform grew to 17.3 million, a 27% increase from the previous year. The number of people redeeming offers through third-party publishers rose even faster—up 32%. However, direct-to-consumer (D2C) redeemers fell by 11%, and D2C redemptions declined by 23%. This decline in D2C activity offset third-party channel gains, leaving total redemptions flat year-over-year at about 80.5 million.
The growth in redeemers was driven by expanded distribution and partnerships, including integration with online grocery service Instacart and the partial rollout with on-demand delivery service DoorDash. The addition of Family Dollar and ongoing enhancements with Walmart -- such as phone-number-based in-store checkouts -- also boosted engagement. Third-party publisher revenue grew 17%, while direct-to-consumer revenue fell 19%, showing the two-speed nature of Ibotta's business model.
The company's technology platform, powered by AI, remains central to its transformation. Through new performance marketing tools and automated offer targeting (referred to as cost-per-incremental-dollar campaigns), early pilots with top CPG clients led to significant increases in redemption revenue for those customers during the first half of 2025. However, management described progress as "deliberately throttled" to ensure systems and processes are ready before scaling more broadly.
Margins compressed sharply, with adjusted EBITDA margin declining from 28% in Q1 2024 to 17% in Q1 2025, and from 29% in Q2 2024 to 21% in Q2 2025. Adjusted EBITDA margin dropped 800 basis points year-over-year to 21% (non-GAAP). Cash from operating activities was $25.9 million, down from $35.0 million in Q2 2024, and share repurchases totaled $67.5 million.
Notably, the company does not pay a dividend and no new dividend was initiated or announced in the quarter.
Key Metrics and Business Shifts
Growth in third-party publisher activity was a bright spot: publisher redeemers reached 15.7 million, up 32%, and publisher redemptions grew 12% year-over-year. Direct-to-consumer metrics, however, continued their steady decline. D2C redemption revenue fell 24% year-over-year in Q1 2025, and redemptions per redeemer in this segment dropped 9%, and redemptions per redeemer in this segment dropped 13%.
Monetization per redeemer also weakened. Redemptions per redeemer for all users declined from 5.9 to 4.6, or 21%, compared to Q2 2024. The company pointed to the influx of newer, less-engaged users from the expanded network as the reason -- these users tend to claim fewer offers than long-term direct-to-consumer users. Total redemption revenue per redemption slipped 1% to $0.91.
On technology, the company's investment into performance-driven, always-on promotions for brands continued, with leadership reporting notable results from large CPG clients in their AI-driven pilot campaigns, with one client's redemption revenue expected to almost double year-over-year and another's expected to be up 8x in the first half of 2025. These pilots reportedly delivered revenue growth of 2x and 8x for top clients in the first half of 2025. However, company leaders highlighted that moving from manual client onboarding and campaign management to a self-serve, automated system is a slow transition -- and one that still puts a drag on short-term results.
Cash and cash equivalents (GAAP) at period end stood at $250.5 million as of June 30, 2025, down from $349.3 million as of December 31, 2024. The decline is partly due to significant share repurchases during the quarter.
Looking Ahead: Guidance and Watch Areas
Management provided weaker guidance for Q3 2025, with revenue expected to decrease 17% year-over-year at the midpoint. GAAP revenue is projected at $79–84 million, with adjusted EBITDA expected at $9.5–$13.5 million. At the midpoints, this suggests a 17% year-over-year decline in GAAP revenue compared to Q3 2024. and a further reduction in adjusted EBITDA margin to 14% (non-GAAP guidance). The outlook reflects ongoing declines in the direct-to-consumer channel and continued margin pressure.
As the company continues to navigate the transition from episodic, one-off campaigns to always-on, measurable promotions for consumer brands, key areas to watch will be the ability of its technology platform to drive higher conversion rates. The next several quarters will test whether recent redeemer and publisher growth can start to translate into overall revenue improvement. IBTA does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
