Ibotta’s second quarter results were met with a strongly negative market reaction, largely due to performance that came in below Wall Street expectations. Management attributed the underperformance to short-term disruptions stemming from an ongoing business transformation and reorganization of the sales force. CEO Bryan Leach described the company’s decision to pursue a broader strategic shift as a deliberate move to access larger media budgets and reposition Ibotta within the consumer packaged goods (CPG) promotions industry. He further acknowledged that, while early feedback on the new performance marketing model has been positive, delays in client ramp-up and validation were the primary causes of the revenue shortfall.
Is now the time to buy IBTA? Find out in our full research report (it’s free).
Ibotta (IBTA) Q2 CY2025 Highlights:
- Revenue: $86.03 million vs analyst estimates of $90.53 million (2.2% year-on-year decline, 5% miss)
- EPS (GAAP): $0.08 vs analyst expectations of $0.19 (57.5% miss)
- Adjusted EBITDA: $17.88 million vs analyst estimates of $20.07 million (20.8% margin, 10.9% miss)
- Revenue Guidance for Q3 CY2025 is $82 million at the midpoint, below analyst estimates of $101.6 million
- EBITDA guidance for Q3 CY2025 is $11.5 million at the midpoint, below analyst estimates of $31.5 million
- Operating Margin: 1.4%, up from -24.6% in the same quarter last year
- Total Redemptions: 80.48 million, in line with the same quarter last year
- Market Capitalization: $772.7 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Ibotta’s Q2 Earnings Call
- Ronald Victor Josey (Citi): Asked about third-party validation of the new performance marketing model and differences between new pilots and earlier ones. CEO Bryan Leach explained the validation process and highlighted that recent pilots involve larger CPG clients new to Ibotta’s platform.
- Eric James Sheridan (Goldman Sachs): Inquired about steps required to complete the transformation and how client budgeting cycles impact rollout. Leach detailed the need for sales team ramp-up, product automation, and the long client adoption cycles, often aligning with annual budget planning.
- Mark Stephen F. Mahaney (Evercore): Sought updates on core partnerships, particularly with Walmart, and the retention and effectiveness of loyalty programs. Leach emphasized deepening collaboration with Walmart and noted continued growth in third-party redeemers, calling publisher partnerships a bright spot.
- Kenneth James Gawrelski (Wells Fargo): Questioned the broader promotional environment and investment needs over the next year. Leach acknowledged pullbacks from some clients due to macro headwinds and highlighted ongoing heavy investment in R&D and analytics to support transformation.
- Andrew M. Boone (JMP Securities): Probed the timeline for automating third-party measurement and whether growth acceleration should be expected before 2027. Leach clarified that full automation is underway but will take time, and that growth reacceleration depends on how quickly large clients scale their adoption.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will be monitoring (1) the pace at which major CPG clients move from pilot programs to rolling out performance marketing campaigns at scale, (2) the effectiveness and stability of Ibotta’s reorganized sales force in driving new business and retaining key accounts, and (3) continued expansion of publisher partnerships and in-store integrations, which could broaden Ibotta’s reach and value proposition. Progress in automating measurement tools and reducing client onboarding friction will also be key indicators of transformation momentum.
Ibotta currently trades at $26.70, down from $34.07 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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