Ibotta(IBTA -28.10%) reported second quarter 2025 earnings on August 13, 2025, with revenue of $86 million, a 2% year-over-year decline, and adjusted EBITDA of $17.9 million. Management cited a 48% shortfall at the midpoint of prior guidance and issued third quarter guidance below expectations due to ongoing business model transformation. This summary highlights key executional setbacks, transformation progress, and evolving client engagement, with a focus on long-term investor implications. (Note: All quarters refer to fiscal periods ending June 30, 2025, unless otherwise specified.)

Transformation drives Ibotta revenue volatility

Revenue for the quarter fell below the prior guidance range, and management now forecasts a 17% year-over-year revenue decline at the midpoint for the third quarter. The primary driver was the failure to reactivate two initial pilot partners for the new Cost Per Incremental Dollar (CPID) performance marketing model, with neither expected to participate in the upcoming quarter. Additionally, a reorganization of the enterprise sales team created further near-term disruption, impacting continuity across top accounts.

"We reported revenue (GAAP) below the guidance range we provided on our first quarter earnings call, while adjusted EBITDA was in the lower half of the range. We are also guiding to third quarter results that are significantly below our prior expectations. These disappointing results can be explained by short-term headwinds, but I think it's important to first pan back and provide context on the broader transformation we are undertaking."
-- Bryan Leach, CEO

This combination of a significant revenue miss and weak forward guidance amplifies transition risk, increasing earnings volatility for shareholders and extending the timeline for sustainable growth reacceleration.

CPID validation boosts Ibotta credibility

Ibotta recently secured third-party validation for its CPID digital promotions model, with campaign results exceeding the company’s own conservative internal metrics. Despite positive feedback from consumer packaged goods (CPG) clients, management noted that pilot-to-scale rollouts remain unpredictable, with a typical adoption cycle of 9-12 months at major clients based on recent experience.

"I'm happy to report that recently 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. Based on these initial results, we are in active dialogue with our client about resuming and expanding their programming on the Ibotta performance network."
-- Bryan Leach, CEO

While third-party measured sales lift increases Ibotta’s credibility among advertisers, slow enterprise adoption and lengthy client decision cycles limit the near-term financial impact of this innovation and hinder reliable forecasting.

Ibotta publisher channel offsets DTC weakness

The publisher channel, led by Walmart and DoorDash, drove 17% year-over-year growth in third-party publisher redemption revenue to $48.6 million, even as direct-to-consumer (DTC) redemption revenue declined 24% year over year. Enhanced collaboration with Walmart included digital manufacturer offer integration at self-checkout, phone-number identification, and expanded in-store and online promotions, signaling growing publisher-side momentum.

"We've picked up steam and gained momentum in terms of the tightness of our collaboration and these efforts they're making to increase awareness and decrease friction in terms of using the programs that feature our digital manufacturer offers. With Walmart, for example, we've been collaborating ever more closely across the board, ranging from how they communicate with their customers at every touchpoint, you know, digitally and in the store. Beyond just search results. You'll now see that there are certain display ads that have a reference to a relevant digital manufacturer offer that wasn't true before. They're badging other forms of digital media with something that indicates that a digital manufacturer offer."
-- Bryan Leach, CEO

Expanding integration with leading retailers enhances Ibotta’s network effects and shopper reach, potentially offsetting DTC channel headwinds and creating a foundation for long-term scale advantage.

Looking Ahead

Management provided third quarter revenue guidance of $79 million to $84 million (midpoint: $81.5 million), representing a 17% year-over-year decline, and adjusted EBITDA guidance of $9.5 million to $13.5 million (midpoint margin: 14%), implying a sequential margin decrease. No specific timeline or quantified targets were given for CPID adoption, scaled client rollouts, or overall revenue reacceleration. Management expects near-term operating expenses to rise due to sales investments and lower full-year performance, with de minimis cash taxes anticipated for the remainder of the year.