Editor's note: This article has been corrected. A previous version included outdated information on initial pilot partners for the company's new performance marketing model and some incorrect numbers.
Ibotta (IBTA 1.62%), 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 revenue missed consensus estimates: GAAP revenue came in at $86.0 million, below the estimate of $90.6 million. 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.
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–$85.0 million, representing a year-over-year decrease of 17% at the midpoint.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| EPS, diluted (Non-GAAP) | $0.49 | $0.68 | (28%) |
| Revenue | $86.0 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 decline 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. 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.
Margins compressed sharply, with adjusted EBITDA margin declining from 29% in Q2 2024 to 21% in Q2 2025. Cash from operating activities was $25.9 million, down from $35.0 million in Q2 2024, and share repurchases totaled $67.5 million.
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: Third-party publisher redeemers reached 15.7 million, up 32%, and third-party publisher redemptions grew 12% year-over-year. Direct-to-consumer metrics, however, continued their steady decline. D2C redemptions fell 23% year over year, and redemptions per redeemer fell 13%.
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.
CEO Bryan Leach that "our 2 initial pilot partners for our new performance marketing model decided not to run additional campaigns in the second half of the second quarter, contrary to our expectations. Had this not happened, we believe our results would have come in above consensus. As of now, neither client has reactivated their campaigns in Q3. Based on our most recent conversations, we believe both are happy with our initial results and planning to resume their programming. … The bottom line is this: Progressing from initial enthusiasm about a pilot to rolling campaigns on a much larger scale requires navigating complex matrix organizations that can't always move as quickly as we would like. Chris Reidy and his team are doing everything possible to get this back up and running as soon as we can."
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.
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. Revenue is projected at $79 million to $85 million, with adjusted EBITDA expected at $9.5 million to $13.5 million, a 14% margin at the midpoint. 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 improvemen.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
