Ibotta, Inc. (IBTA)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited annual financial statements and related notes for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K. This discussion contains forward-looking statements, such as those relating to our plans, objectives, expectations, intentions, and beliefs, which involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled Special Note Regarding Forward-Looking Statements and Risk Factors included elsewhere in this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and our interim results are not necessarily indicative of the results we expect for the full fiscal year or any other period.

Overview

Ibotta’s mission is to Make Every Purchase Rewarding. We accomplish this mission by delivering digital promotions to consumers through the Ibotta Performance Network (IPN). We source digital promotions from our clients, which are primarily consumer packaged goods (CPG) brands, and distribute these promotions to consumers via our network of publishers, which is enabled by our technology platform. We have strategic relationships with Walmart Inc. (Walmart), Dollar General Corporation (Dollar General), Family Dollar Stores, Inc. (Family Dollar), Maplebear, Inc. (Instacart), DoorDash, Inc. (DoorDash) and Uber Technologies, Inc. (Uber) (announced in March 2026 but not yet launched), among others, who are third-party publishers on the IPN and use our content to power their digital offer programs on a white-label basis. We also host offers on Ibotta’s direct-to-consumer properties, which include the Ibotta-branded cash back mobile app, website, and browser extension (collectively, direct-to-consumer (D2C), which is part of the IPN). Within D2C, we also partner with affiliate networks to access offers from certain retailer advertisers so consumers can earn cash back on a percentage of their total basket spend at those retailers.

In 2025, we introduced LiveLift™, a set of capabilities designed to help brands drive incremental sales at scale in a more cost-efficient manner. LiveLift™ enables more sophisticated projections and profitability metrics, including incremental sales and CPID, to help our clients achieve the desired scale or efficiency for their promotions. We also have partnerships with Circana and ABCS Insights, which allow our clients to obtain third-party validation of the impact of their digital promotion campaigns via third-party measurement studies.

Impact of Macroeconomic Conditions

Our business and results of operations are subject to global economic conditions. Our revenue depends on the ability of consumers to buy products that are featured on the IPN. Deteriorating macroeconomic conditions could lower promotional budgets and result in a decline in client spending, which could adversely affect the number of offer redemptions on our network. Management continues to actively monitor the impact of these macroeconomic factors on our financial condition, liquidity, operations, and workforce. For more information on risks associated with macroeconomic conditions, see the risk factor titled “Macroeconomic conditions, including slower growth or a recession and supply chain disruptions, have previously affected and could continue to adversely affect our business, financial condition, results of operations, and prospects.”

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Financial and Operational Highlights

______________

(1)See Performance Metrics and Non-GAAP Measures for more information and reconciliations of Adjusted EBITDA and Adjusted EBITDA margin to the most directly comparable GAAP financial measures.

Note that certain figures shown above may not recalculate due to rounding.

Performance Metrics and Non-GAAP Measures

We use the following key performance metrics and non-GAAP measures to help us evaluate our business, identify trends affecting our performance, and make strategic decisions. For more information regarding how we use non-GAAP measures in our business, the limitations of these measures, and a reconciliation of these measures to the most directly comparable GAAP financial measures, refer to the section titled Non-GAAP Measures.

Note that certain figures shown within this section may not recalculate due to rounding.

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Performance Metrics

The performance metrics below are presented in two categories: direct-to-consumer (D2C) and third-party publishers, which sum to the total metric. The underlying trends and drivers of our D2C business often vary from those of our third-party publisher business. Our D2C business caters to consumers who are focused on savings, irrespective of the retailer. Our third-party publisher business tends to reach consumers who may be more loyal to a specific retailer and are engaging with offers powered by Ibotta’s technology platform. The explanation of the changes in the total metric can be found in the D2C and third-party publishers sections.

Redemptions

A redemption is a verified purchase of an item qualifying for an offer by a client on the IPN. The number of redemptions is an indicator of the scale and consumer engagement of our business, as well as the value we bring to our clients and publishers. Generally, redemptions change as budgets increase or decrease with existing clients and/or as we add or lose CPG brands as clients. In addition, redemptions grow from adding publishers and redeemers, and/or increasing engagement from existing redeemers.

D2C redemptions are redemptions on any D2C property. Third-party publisher redemptions are redemptions on all publishers excluding the D2C properties, namely our retailer publishers.

Third-party publisher redemptions

For the three months ended March 31, 2026 compared to the same period in 2025, third-party publisher redemptions were approximately 70.7 million and 61.2 million, respectively. This growth was driven primarily by organic growth at existing third-party publishers, as well as the launch of new publishers, namely DoorDash, which substantially launched in the second quarter of 2025.

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D2C redemptions

For the three months ended March 31, 2026 compared to the same period in 2025, D2C redemptions were approximately 17.3 million and 21.6 million, respectively. The decrease was driven by the quantity and quality of offers available to each D2C redeemer.

Total redemptions

For the three months ended March 31, 2026 compared to the same period in 2025, total redemptions were 88.0 million and 82.8 million, respectively.

Redeemers

Redeemers are defined as consumers who have redeemed at least one digital offer within the quarter. If one consumer were to redeem on more than one publisher, they would be counted as a redeemer on each publisher. Year-to-date redeemers are calculated as the average of current year quarter-to-date redeemers. Redeemers are an indicator of the scale and growth of our business, as the number of redeemers typically drives our revenue and is an indication of our ability to grow redemptions.

D2C redeemers are consumers who have redeemed at least one digital offer on any Ibotta property within the quarter. Third-party publisher redeemers are consumers who have redeemed at least one digital offer on any publisher property that is not an Ibotta property, namely our retailer publishers.

Third-party publisher redeemers

For the three months ended March 31, 2026 compared to the same period in 2025, third-party publisher redeemers were approximately 18.3 million and 15.4 million, respectively. This growth was driven primarily by organic growth at existing third-party publishers, as well as the launch of new publishers, namely DoorDash, which substantially launched in the second quarter of 2025.

D2C redeemers

For the three months ended March 31, 2026 compared to the same period in 2025, D2C redeemers were 1.4 million and 1.7 million, respectively. The decrease was driven by the quantity and quality of offers available to each D2C redeemer.

Total redeemers

For the three months ended March 31, 2026 compared to the same period in 2025, total redeemers were approximately 19.7 million and 17.1 million, respectively.

Redemptions per redeemer

Redemptions per redeemer are the redemptions divided by the redeemers in that period. This metric is useful as redemptions per redeemer is an indication of our redeemers’ level of engagement with our platform and network. We aim to grow redemptions from our redeemers by expanding the quantity and quality of offers available and increasing engagement by continuing to improve the consumer experience. In general, redemptions per redeemer are driven by the quantity and quality of offer supply and the growth in offer supply relative to the growth in redeemers. For new redeemers, redemption frequency initially increases before stabilizing. Our D2C business caters to consumers who are focused on savings, irrespective of the retailer. Our third-party publisher business tends to reach consumers who may be more loyal to a specific retailer and are engaging with offers powered by Ibotta’s technology platform. Third-party publisher redeemers tend to have a lower redemption frequency as compared to D2C redeemers.

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Third-party publisher redemptions per redeemer

For the three months ended March 31, 2026 compared to the same period in 2025, third-party publisher redemptions per redeemer were approximately 3.9 and 4.0, respectively.

D2C redemptions per redeemer

For the three months ended March 31, 2026 compared to the same period in 2025, D2C redemptions per redeemer were approxi

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included in Item 8. Financial Statements and Supplementary Data to this Annual Report on Form 10-K. This discussion contains forward-looking statements, such as those relating to our plans, objectives, expectations, intentions, and beliefs, which involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled Special Note Regarding Forward-Looking Statements and Risk Factors included elsewhere in this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

The following discusses our financial condition and the results of operations as of and for the year ended December 31, 2025 compared to the year ended December 31, 2024. For a discussion of our financial condition and the results of operations as of and for the year ended December 31, 2024 compared to the year ended December 31, 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025, which is incorporated herein by reference.

Overview

Ibotta’s mission is to Make Every Purchase Rewarding. We accomplish this mission by delivering digital promotions to consumers through the Ibotta Performance Network (IPN). We source digital promotions from our clients, which are primarily consumer packaged goods (CPG) brands, and distribute these promotions to consumers via our network of publishers, which is enabled by our technology platform. We have strategic relationships with Walmart Inc. (Walmart), Dollar General Corporation (Dollar General), Family Dollar Stores, Inc. (Family Dollar), Maplebear, Inc. (Instacart), and DoorDash, Inc. (DoorDash), among others, who are third-party publishers on the IPN and use our content to power their digital offer programs on a white-label basis. We also host offers on Ibotta’s direct-to-consumer properties, which include the Ibotta-branded cash back mobile app, website, and browser extension (collectively, direct-to-consumer (D2C), which is part of the IPN). Within D2C, we also partner with affiliate networks to access offers from certain retailer advertisers so consumers can earn cash back on a percentage of their total basket spend at those retailers.

In 2025, we introduced LiveLift™, a set of capabilities designed to help brands drive incremental sales at scale in a more cost-efficient manner. LiveLift™ enables more sophisticated projections and profitability metrics, including incremental sales and CPID, to help our clients achieve the desired scale or efficiency for their promotions. We also have partnerships with Circana and ABCS Insights, which allow our clients to obtain third-party validation of the impact of their digital promotion campaigns via sales lift studies.

As of December 31, 2025, we worked with over 900 clients, representing over 3,100 CPG brands, to source exclusive digital offers. Most of our offers cover products in non-discretionary categories, such as grocery, but we also source offers for general merchandise categories, such as toys, clothing, beauty, electronics, pet, and home goods.

Initial Public Offering

On April 22, 2024, we closed our initial public offering (IPO), in which we issued and sold 2,500,000 shares of our Class A common stock at $88.00 per share. We received net proceeds of $198.0 million after deducting underwriting discounts and commissions of $13.2 million and offering costs of approximately $8.8 million.

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Impact of Macroeconomic Conditions

Our business and results of operations are subject to global economic conditions. Our revenue depends on the ability of consumers to buy products that are featured on the IPN. Deteriorating macroeconomic conditions could lower promotional budgets and result in a decline in client spending, which could adversely affect the number of offer redemptions on our network. Management continues to actively monitor the impact of these macroeconomic factors on our financial condition, liquidity, operations, and workforce. For more information on risks associated with macroeconomic conditions, see the risk factor titled “Macroeconomic conditions, including slower growth or a recession and supply chain disruptions, have previously affected and could continue to adversely affect our business, financial condition, results of operations, and prospects.”

Key Factors Affecting Our Performance

Our current and future financial performance is primarily driven by the following factors:

Ability to add offer supply. Securing offers from clients is critical to the ongoing success of the IPN. We seek to grow the quantity and quality of offers on the IPN by deepening offer budgets and broadening offer parameters to include more qualifying products and fewer restrictions on offer distribution, consistent with the client’s marketing objectives. These quantitative and qualitative dimensions of our offer inventory are highly correlated to our ability to attract and retain publishers and redeemers. We may also expand our offer inventory by continuing to penetrate general merchandise categories. We increase the quantity and quality of offers on the IPN through the efforts of our client-focused sales teams and business-to-business marketing.

Ability to grow our audience. Our relevance and value to clients depends on our ability to reach a growing audience of consumers who have the potential to become redeemers. Growing our consumer base, whether on our third-party publisher or D2C properties, depends on our ability to provide an attractive set of offers within our ecosystem and support seamless redemption experiences. Our ability to deliver offers at-scale will continue to depend on maintaining and growing redemptions at existing publishers and adding new publishers to the IPN. We have been able to foster and develop multi-year relationships with our retailer publishers, such as Walmart, Dollar General, Family Dollar, Instacart, and DoorDash. We intend to further grow our audience by growing redeemers at existing third-party publishers, adding new third-party publishers in retail and grocery, and expanding into new categories of publishers.

Ability to enhance the IPN through innovation. We will continue to invest in technology to further develop and accelerate the growth of the IPN for clients, retailers, publishers, and consumers. We have invested and expect to continue to invest in expanding our technologies, tools, and offerings to capitalize on new and unproven business opportunities.

For example, in 2025, we introduced LiveLift™, a set of capabilities that enables more sophisticated projections and profitability metrics, including incremental sales and CPID, to help our clients achieve the desired scale or efficiency for their promotions. We plan to continue rolling out LiveLift™ to our client base, allowing for increased frequency of campaign measurement and greater optimization capabilities. We plan to continue to use AI/ML to recommend and optimize campaign configurations rather than having our sales team manually set parameters with our clients. As the data generated from the IPN grows, we believe Ibotta will generate more valuable insights about purchase behavior and market trends, and will be able to further enhance our tools and technologies. We intend to enable clients to continue to leverage our AI/ML-powered tools to run success-based marketing programs that achieve our clients’ goals. These investments and initiatives may negatively impact our short-term financial results.

Seasonality. Our results of operations vary from quarter to quarter, largely due to the seasonal nature of our clients’ marketing spending. Our clients tend to devote a significant portion of their marketing budgets to the fourth quarter of the calendar year to coincide with consumer holiday spending and reduce their marketing budgets in the first quarter of the calendar year. At the same time, certain of

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our clients’ budgets may deplete over the course of the year. We have historically experienced heightened consumer activity during holidays, which resulted in higher redemptions on a relative basis. We typically see high redemption volume in the second half of the year where a larger number of offers being redeemed have lower redemption revenue per redemption. Although during the year ended December 31, 2025, we did not see the same seasonality we have historically seen, we expect seasonality may continue to impact our quarterly results going forward.

Financial and Operational Highlights

______________

(1)See Performance Metrics and Non-GAAP Measures for more information and reconciliations of Adjusted EBITDA and Adjusted EBITDA margin to the most directly comparable GAAP financial measures.

Note that certain figures shown above may not recalculate due to rounding.

Performance Metrics and Non-GAAP Measures

We use the following key performance metrics and non-GAAP measures to help us evaluate our business, identify trends affecting our performance, and make strategic decisions. For more information regarding how we use non-GAAP measures in our business, the limitations of these measures, and a reconciliation of these measures to the most directly comparable GAAP financial measures, refer to the section titled Non-GAAP Measures.

Note that certain figures shown within this section may not recalculate due to rounding.

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Performance Metrics

The performance metrics below are presented in two categories: direct-to-consumer (D2C) and third-party publishers, which sum to the total metric. The underlying trends and drivers of our D2C business often vary from those of our third-party publisher business. Our D2C business caters to consumers who are focused on savings, irrespective of the retailer. Our third-party publisher business tends to reach consumers who may be more loyal to a specific retailer and are engaging with offers powered by Ibotta’s technology platform. The explanation of the changes in the total metric can be found in the D2C and third-party publishers sections.

Redemptions

A redemption is a verified purchase of an item qualifying for an offer by a client on the IPN. The number of redemptions is an indicator of the scale and consumer engagement of our business, as well as the value we bring to our clients and publishers. Generally, redemptions change as budgets increase or decrease with existing clients and/or as we add or lose CPG brands as clients. In addition, redemptions grow from adding publishers and redeemers, and/or increasing engagement from existing redeemers.

D2C redemptions are redemptions on any D2C property. Third-party publisher redemptions are redemptions on all publishers excluding the D2C properties, namely our retailer publishers.

D2C redemptions

In 2025 and 2024, D2C redemptions were approximately 85.0 million and 116.1 million, respectively. The decrease was driven by the quantity and quality of offers available to each D2C redeemer.

Third-party publisher redemptions

In 2025 and 2024, our third-party publisher redemptions were approximately 255.8 million and 228.0 million, respectively. This growth was driven primarily by the launch of new publishers, namely

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Instacart and DoorDash, partially offset by modest declines at existing third-party publishers. The decline in existing third-party publisher redemptions is due to a decrease in the quantity and quality of offers available to each third-party publisher redeemer.

Total redemptions

In 2025 and 2024, total redemptions were 340.8 million and 344.1 million, respectively.

Redeemers

Redeemers are defined as consumers who have redeemed at least one digital offer within the quarter. If one consumer were to redeem on more than one publisher, they would be counted as a redeemer on each publisher. Year-to-date redeemers are calculated as the average of current year quarter-to-date redeemers. Redeemers are an indicator of the scale and growth of our business, as the number of redeemers typically drives our revenue and is an indication of our ability to grow redemptions.

D2C redeemers are consumers who have redeemed at least one digital offer on any Ibotta property within the quarter. Third-party publisher redeemers are consumers who have redeemed at least one digital offer on any publisher property that is not an Ibotta property, namely our retailer publishers.

D2C redeemers

In 2025 and 2024, D2C redeemers were 1.6 million and 1.9 million, respectively. The decrease was driven by the quantity and quality of offers available to each D2C redeemer.

Third-party publisher redeemers

In 2025 and 2024, third-party publisher redeemers were approximately 16.6 million and 12.8 million, respectively. These redeemers grow as we add third-party publishers and as these publishers ramp up consumers on their properties. This growth was driven primarily by the launch of new partners, namely Instacart and DoorDash, and growth at certain existing third-party publishers.

Total redeemers

In 2025 and 2024, total redeemers were approximately 18.2 million and 14.7 million, respectively.

Redemptions per redeemer

Redemptions per redeemer are the redemptions divided by the redeemers in that period. This metric is useful as redemptions per redeemer is an indication of our redeemers’ level of engagement with our platform and network. We aim to grow redemptions from our redeemers by expanding the breadth and depth of offers available and increasing engagement by continuing to improve the consumer experience. In general, redemptions per redeemer are driven by the quantity and quality of offer supply and the growth in offer supply relative to the growth in redeemers. For new redeemers, redemption frequency initially increases before stabilizing. Our D2C business caters to consumers who are focused on savings, irrespective of the retailer. Our third-party publisher business tends to reach consumers who may be more loyal to a specific retailer and are engaging with offers powered by Ibotta’s technology platform. Third-party publisher redeemers tend to have a lower redemption frequency as compared to D2C redeemers.

D2C redemptions per redeemer

In 2025 and 2024, D2C redemptions per redeemer were approximately 52.1 and 62.3, respectively. The decrease was driven by the quantity and quality of offers available to each D2C redeemer.

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Third-party publisher redemptions per redeemer

In 2025 and 2024, third-party publisher redemptions per redeemer were approximately 15.4 and 17.8, respectively. The decrease was driven by the quantity and quality of offers available to each third-party publisher redeemer.

Total redemptions per redeemer

In 2025 and 2024, total redemptions per redeemer were approximately 18.7 and 23.5, respectively.

Redemption revenue per redemption

Redemption revenue per redemption is the redemption revenue divided by the number of redemptions in that period. Redemption revenue per redemption is an indication of our fee, which is generally charged as a fixed dollar amount per redemption. In any period, our redemption revenue per redemption can fluctuate based on the product category mix of offers being redeemed and the impact of inflation on a product’s manufacturer’s suggested retail price (MSRP). Product category mix can be impacted by factors such as seasonal promotions, including back-to-school items in the third quarter or holiday promotions on grocery and food items in the fourth quarter of each year. Our fee is generally charged as a fixed dollar amount per redemption based on the retail price of the specific item being promoted.

D2C redemption revenue per redemption represents redemption revenue generated from offers on any Ibotta property divided by the redemptions on any Ibotta property in that period. Third-party publisher redemption revenue per redemption represents redemption revenue generated from offers on all publishers other than those on Ibotta properties divided by redemptions on all publishers other than those on Ibotta properties. Refer to the Results of Operations section below for the disaggregation of revenue by D2C and third-party publisher.

D2C redemption revenue per redemption

In 2025 and 2024, D2C redemption revenue per redemption was $1.11 and $1.11, respectively.

Third-party publisher redemption revenue per redemption

In 2025 and 2024, third-party publisher redemption revenue per redemption was $0.79 and $0.79, respectively.

Total redemption revenue per redemption

In 2025 and 2024, total redemption revenue per redemption was $0.87 and $0.90, respectively.

Non-GAAP Measures

To supplement our financial statements prepared and presented in accordance with U.S. generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA margin.

Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. These non-GAAP measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measures, but are included solely for informational and comparative purposes. Non-GAAP financial measures are subject to limitations and should be read only in conjunction with our financial statements prepared in accordance with GAAP. In light of these limitations, management also reviews the specific items that are excluded from our non-GAAP measures, as well as trends in these items.

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Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA is earnings before interest income, net, provision for (benefit from) income taxes, and depreciation and amortization expense, and excludes stock-based compensation expense, change in fair value of derivative, loss on debt extinguishment, restructuring charges, and other expense, net. We define Adjusted EBITDA margin as Adjusted EBITDA as a percent of revenue.

Adjusted EBITDA and Adjusted EBITDA margin are used by our management team as additional measures of our performance for purposes of business decision-making, including managing expenditures and developing budgets, and evaluating strategic opportunities. Period-over-period comparisons of Adjusted EBITDA and Adjusted EBITDA margin help our management team identify additional trends in our financial results that may not be shown solely by comparisons of net income and net income as a percentage of revenue, respectively. In addition, we may use Adjusted EBITDA and Adjusted EBITDA margin in the incentive compensation programs applicable to some of our employees in order to evaluate our performance.

The following table provides a reconciliation of net income to Adjusted EBITDA and net income as a percentage of revenue to Adjusted EBITDA margin for each of the periods presented (in thousands, except percentages):

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(1)Amortization of capitalized software development costs included in cost of revenue during the years ended December 31, 2025 and 2024 was $4.4 million and $4.1 million, respectively.

(2)Amounts include stock-based compensation expense, inclusive of common stock warrant expense within sales and marketing, as follows (in thousands):

(3)Other expense, net is comprised of penalties and gains and losses on disposal of assets.

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Components of Results of Operations

Revenue

We provide a platform to clients to deliver digital promotions to consumers. The majority of our revenues are derived from the fees we charge to clients when consumers redeem offers on the IPN by purchasing promoted products. We also derive revenue from the sale of ad products to clients to promote their offers, as well as from the sale of data products.

We expect our redemption revenue to increase as a percentage of total revenue as we continue to grow the IPN and conversely ad and other revenue to decrease as a percentage of total revenue.

Cost of revenue

Cost of revenue consists primarily of revenue share and related minimum commitments with certain third-party publishers, personnel-related costs attributable to personnel in certain of our engineering departments who maintain our platform, data hosting costs, amortization of platform-related software development costs, certain reward costs net of breakage, software licensing costs, and processing fees. Personnel-related costs include salaries, stock-based compensation, benefits, and bonuses. Reward costs net of breakage recorded in cost of revenue are associated with cash back earned from gift card purchases and sponsored rewards earned from watching an advertising video. Breakage represents the undistributed earnings of D2C consumers that is not expected to be cashed out due to inactivity. Reward costs also include rewards that are cashed out and subsequently identified as violating our terms of use.

We expect cost of revenue to increase as we continue to invest in our platform, acquire new publishers, and grow revenue.

Operating expenses

Sales and marketing

Sales and marketing expenses consist primarily of personnel-related costs for our sales and marketing departments, self-funded rewards, net of the related breakage, media spend, business-to-business (B2B) marketing, common stock warrant expense, software licensing costs, market research, public relations, and professional fees. Personnel-related costs include salaries, bonuses, stock-based compensation, benefits, taxes, travel, and restructuring charges. Self-funded rewards are awards related to campaigns and other incentive bonuses on our D2C properties that are funded directly by Ibotta as part of our customer acquisition and retention strategy.

We expect sales and marketing expenses to increase as we continue to invest in our sales function, as well as B2B marketing and third-party measurement studies. However, these expenses may fluctuate as a percentage of total revenue from period to period.

Research and development

Research and development expenses consist primarily of personnel-related costs for our technology departments, software licensing costs, professional fees, impairment of capitalized software development costs, and market research. Personnel-related costs include salaries, stock-based compensation, benefits, taxes, bonuses, restructuring charges, and travel. We capitalize certain software development costs that are attributable to developing new features and adding incremental functionality to our platform or infrastructure. Costs incurred during the preliminary project stage are recorded in research and development. Costs incurred during the post-implementation stage are recorded in research and development or cost of revenue, depending on the nature of the project. In addition, impairment of in-progress software projects for which completion is subsequently determined not to be probable is recorded in research and development expenses.

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We expect research and development expenses to remain relatively flat as we anticipate increased capitalization related to software development projects. However, these expenses may fluctuate as a percentage of total revenue from period to period.

General and administrative

General and administrative expenses consist primarily of personnel-related costs for our administrative departments, professional fees for external legal, accounting, and other consulting services, software licensing costs, facilities costs, corporate insurance, bad debt, taxes, licenses, and other fees, and company events. Personnel-related costs include stock-based compensation, salaries, benefits, bonuses, taxes, recruiting fees, travel, and restructuring charges.

We expect general and administrative expenses to increase to support the growth of our business. However, these expenses may fluctuate as a percentage of total revenue from period to period.

Depreciation and amortization

Depreciation and amortization consists of amortization of intangible assets, including infrastructure-related software development costs and acquired technology, and depreciation of property and equipment.

We expect depreciation to increase as we invest in the development of our infrastructure-related software and as a result of the increase in depreciation related to our new corporate headquarters.

Interest income, net

Interest income, net consists of interest income earned on cash, cash equivalents, and restricted cash, net of interest expense incurred on debt instruments.

Loss on debt extinguishment

Loss on debt extinguishment consists of the loss incurred upon the conversion of the convertible notes into shares of our Class A common stock concurrently upon the closing of the IPO.

Other expense, net

Other expense, net consists of losses on the convertible notes derivative liability, penalties, and gains and losses on the disposal of assets.

(Provision for) benefit from income taxes

The (provision for) benefit from income taxes consists primarily of income taxes related to federal and state jurisdictions in which we conduct business, with the exception of 2024 when we released our valuation allowance on our deferred tax assets.

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Results of Operations

The following tables set forth our results of operations for each of the periods presented (in thousands):

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(1)Amounts include stock-based compensation expense, inclusive of common stock warrant expense within sales and marketing, as follows (in thousands):

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Comparison of the years ended December 31, 2025 and 2024

Revenue

Total redemption revenue decreased $11.6 million, or 4%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due to a $33.8 million decrease in revenue from D2C properties, partially offset by a $22.2 million increase in revenue from third-party publishers. The decrease in D2C redemption revenue was driven primarily by a decrease in the quantity and quality of offers available to each D2C redeemer. The increase in third-party publisher redemption revenue was primarily driven by the launch of new partners, namely Instacart and DoorDash.

Ad & other revenue decreased $13.3 million, or 23%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, driven by reduced client spend on D2C ad products.

Cost of Revenue

Cost of revenue increased $20.9 million, or 42%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due primarily to the addition of new publishers.

Sales and marketing

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Sales and marketing decreased $20.3 million, or 15%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due to decreases of $20.4 million in stock-based compensation expense, $2.1 million in media spend, $2.1 million in self-funded rewards, and $1.6 million in B2B marketing. The decrease in stock-based compensation was driven by decreases of $20.5 million related to the Walmart Warrant for additional shares granted upon the closing of the IPO in 2024 under the Walmart Warrant’s anti-dilution provision, $1.9 million related to equity awards with a liquidity event-based vesting condition that was satisfied in connection with the IPO in 2024, and $1.4 million related to the departure of sales executives, partially offset by an increase of $3.5 million in recurring equity compensation. The decreases in media spend, self-funded rewards, and B2B marketing resulted from a shift in marketing strategy. These decreases were partially offset by increases of $5.4 million in personnel-related costs and $0.5 million in professional fees. The increase in personnel-related costs was primarily driven by $1.5 million of restructuring charges and the remainder by increases in sales bonus, average salary, and benefits expenses.

Research and development

Research and development decreased $2.2 million, or 3%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due to decreases of $2.7 million in personnel-related costs, excluding stock-based compensation, and $0.7 million in software licensing costs, partially offset by an increase of $0.9 million in stock-based compensation expense. The decrease in personnel-related costs, excluding stock-based compensation, was primarily related to higher capitalization due to increased investment in our platform, capabilities, and infrastructure, partially offset by $0.7 million of restructuring charges during the year ended December 31, 2025. The increase in stock-based compensation was driven by a $4.4 million increase in recurring equity compensation, partially offset by decreases of $1.6 million related to equity awards with a liquidity event-based vesting condition that was satisfied in connection with the IPO in 2024 and $1.8 million related to a reallocation of resources and related personnel costs to cost of revenue due to continued investment in our platform, capabilities, and infrastructure.

General and administrative

General and administrative increased $5.5 million, or 7%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due to increases of $5.8 million in professional fees largely attributable to legal matters, $2.3 million in facilities costs due to the commencement of a new office space lease in the first quarter of 2025, $1.6 million in software licensing costs, and $0.7 million in bad debt expense. These increases were partially offset by a $5.0 million decrease in stock-based compensation expense driven by decreases of $8.3 million related to equity awards with a liquidity event-based vesting condition that was satisfied in connection with the IPO in 2024 and $1.6 million from the reversal of previously recognized expense for unvested equity awards related to the departure of the Company’s former chief financial officer in March 2025, partially offset by a $4.9 million increase in recurring equity compensation.

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Depreciation and amortization

Depreciation and amortization did not change meaningfully during the year ended December 31, 2025, compared to the year ended December 31, 2024.

Interest income, net

Interest income, net, increased $1.4 million, or 15%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due to a $3.1 million decrease in interest expense resulting from the extinguishment of the convertible notes upon IPO in 2024, partially offset by a $1.8 million decrease in interest income driven by decreases in interest rates and cash and cash equivalents.

Loss on extinguishment of debt

Loss on extinguishment of debt decreased $9.7 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the conversion of the convertible notes into shares of our Class A common stock concurrently upon the closing of the IPO in 2024.

Other expense, net

Other expense, net, decreased $3.1 million, or 97%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a $3.1 million decrease in the loss on the convertible notes derivative liability, which was settled in connection with the IPO in 2024.

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(Provision for) benefit from income taxes

The provision for income taxes increased $50.5 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the tax benefit from the 2024 valuation allowance release, as well as the impact of non-deductible items including certain executive compensation costs, stock-based compensation, and the tax expenses related to uncertain tax positions.

Liquidity and Capital Resources

As of December 31, 2025, our principal sources of liquidity included $186.6 million of cash and cash equivalents and $99.0 million of available capacity under a revolving line of credit.

Our primary cash needs are for personnel-related expenses, sales and marketing expenses, reward and revenue share and related minimum commitments, data hosting costs, and software licensing costs. We believe our existing liquidity and cash flows from operating activities will be sufficient to meet our projected operating and capital requirements for at least the next 12 months.

Our future cash requirements will depend on many factors, including our pace of growth, the timing and extent of spend to support research and development efforts, the timing of cash collected from clients, the expansion of sales and marketing activities, the introduction of new and enhanced platform offerings, and the volume and timing of our share repurchases. As a result of these and other factors, we may be required to seek additional equity or debt financing. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. Further, our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in Part I, Item 1A. “Risk Factors” of this Annual Report on Form 10-K. If we are unable to raise additional capital when desired, our business, financial condition, results of operations, and prospects would be adversely affected.

2024 Credit Facility

On December 5, 2024, we entered into a Credit Agreement with Bank of America, N.A., as administrative agent, swingline lender, and L/C issuer, which provides us with revolving commitments in an aggregate principal amount of $100.0 million and matures on December 5, 2029 (2024 Credit Facility). The 2024 Credit Facility also allows the Company to request incremental revolving commitments of up to $100.0 million. As of December 31, 2025, we had no outstanding borrowings under the 2024 Credit Facility and availability of $99.0 million, which is net of a $1.0 million outstanding letter of credit related to an office space lease. For further details regarding the credit agreement, see Note 6 - Long-Term Debt to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Common Stock Warrant

On May 17, 2021, we issued the Walmart Warrant in connection with a multi-year strategic relationship that makes Ibotta the exclusive provider of digital item-level rebate offer content for Walmart U.S. If the shares available for exercise as of December 31, 2025 were fully exercised, the warrants could provide up to $245.6 million in proceeds to us. However, the exercisability of a portion of the Walmart Warrant is subject to certain performance conditions and forfeiture features, and there can be no assurance that any such warrant will be exercised. For further details regarding the Walmart Warrant, see Note 9 - Stockholders' Equity to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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Share Repurchase Program

In August 2024, the Company’s board of directors approved a share repurchase program, with authorization to purchase up to an aggregate of $100.0 million of the Company’s Class A common stock (Share Repurchase Program). In both March 2025 and June 2025, the board of directors approved an additional $100 million, bringing the total authorization to $300.0 million.

The Share Repurchase Program has no expiration date. Repurchases under the Share Repurchase Program may be made from time to time through open market repurchases or through privately negotiated transactions subject to market conditions, applicable legal requirements, and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended (Exchange Act). We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of shares of our Class A common stock under this authorization. We are not obligated under the Share Repurchase Program to acquire any particular amount of Class A common stock, and we may terminate or suspend the Share Repurchase Program at any time. The timing and actual number of shares repurchased may depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.

During the year ended December 31, 2025, the Company repurchased 6,869,660 of its Class A common stock for an aggregate repurchase amount of $236.3 million. The repurchase amount includes immaterial broker commissions and the 1% excise tax on net share repurchases imposed by the Inflation Reduction Act of 2022. Repurchases are reflected as treasury stock on the balance sheets on a trade-date basis. As of December 31, 2025, $34.9 million remains available and authorized for repurchase under the Share Repurchase Program.

Cash Flows

The following table summarizes our cash flows for the periods presented:

Operating Activities

Our collection cycles can vary based on payment practices from our clients, and we are required to pay our third-party publishers within a contractual timeframe, regardless of whether we have collected payment from our client. As a result, timing of cash receipts related to accounts receivable and due to third-party publishers can vary from period to period and impact both positively or negatively our cash provided by operating activities for any period.

Net cash provided by operating activities decreased $20.6 million during the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was the result of a $65.2 million decrease in net income offset by a $20.7 million increase in non-cash charges and a $23.8 million increase in net cash inflows from changes in operating assets and liabilities.

The increase in non-cash charges was primarily driven by the deferred income tax benefit in 2024 from the release of our valuation allowance, partially offset by non-cash charges incurred in 2024 in connection with the IPO, including accelerated stock-based compensation expense, common stock warrant expense, and losses on the extinguishment of the convertible notes and derivative liability.

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The increase in net cash inflows from changes in operating assets and liabilities was primarily due to cash inflows of $21.1 million from other current and long-term assets and liabilities, $5.8 million from accounts receivable due to the timing of client payments, $5.1 million from accrued expenses primarily due to accrued excise taxes on share repurchases, $2.0 million from the user redemption liability, and $1.3 million from accounts payable. The increase in net cash inflows from other current and long-term assets and liabilities was primarily driven by the collection of the majority of the lease incentive receivable in 2025, a decrease in prepaid expenses, and a decrease in deferred tax assets as a result of the One Big Beautiful Bill Act enacted in 2025. These net cash inflows were partially offset by cash outflows of $7.2 million from liabilities due to third-party publishers driven by the timing and ramp up of new publishers and $4.4 million from deferred revenue.

Investing Activities

Net cash used in investing activities increased $24.1 million during the year ended December 31, 2025 compared to the year ended December 31, 2024, driven by a $19.4 million increase in additions to property and equipment related to leasehold improvements and furniture and fixtures for our new headquarters space and a $4.7 million increase in additions to capitalized software development costs.

Financing Activities

Net cash used in financing activities increased $405.4 million during the year ended December 31, 2025 compared to the year ended December 31, 2024, driven by $200.7 million of net IPO proceeds in 2024, a $201.7 million increase in purchases of treasury stock, and a decrease of $3.9 million in proceeds from the exercise of stock options and employee stock purchase plan.

Material Cash Requirements

Operating Leases

Our operating lease commitments primarily include our corporate office space. As of December 31, 2025, we had non-cancellable lease obligations of $36.8 million, of which $2.0 million is payable within 12 months, and the remainder thereafter. For additional discussion on our operating leases, refer to Note 8 – Operating Leases to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Purchase Commitments

The Company has non-cancellable purchase obligations that relate to minimum commitments with certain third-party publishers and other contractual commitments primarily with software as a service providers in the ordinary course of business. As of December 31, 2025, we had fixed non-cancellable purchase obligations of $138.9 million, of which $38.4 million is payable within 12 months, and the remainder thereafter. For additional discussion on these contractual commitments, refer to Note 16 – Commitments and Contingencies to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. In preparing the financial statements, we apply accounting policies and estimates that affect the reported amounts and related disclosures. Inherent in such policies are certain key assumptions and estimates made by management, which we believe best reflect the underlying business and economic events. Our estimates are based on historical experience and various other factors and assumptions that we believe are reasonable under the circumstances. We regularly re-evaluate our estimates used in the preparation of the financial statements based on our latest assessment of the current and projected business and economic environment. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and may involve reliance on complex IT systems. Actual results could differ materially from the amounts reported based on these estimates.

Our significant accounting policies are described in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, and of these, management believes the following accounting policies involve a greater degree of judgment and complexity and are therefore the most critical in determining the amounts reported in our financial statements.

Revenue Recognition

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when, or as, control of the promised goods or services is transferred to the customer, in an amount that represents the consideration the Company expects to be entitled to in exchange for those goods or services. As multiple parties are often involved in our revenue transactions, including clients and retailers, judgment is required in determining whether we are the principal or agent. We are the principal and present revenue on a gross basis if we control the goods or services before they are transferred to the end customer, or we are the agent and present revenue on a net basis if we arrange for other parties to provide the goods or services to the end customer.

Redemption revenue

The Company's clients promote their products and services to consumers through rewards offered on the IPN. Consumers redeem offers to earn a reward through account linking or receipt upload on D2C properties or through integrations with third-party publisher properties. The reward is funded by the client and passed through to the consumer. We earn a fee per redemption in the period in which the redemption occurs. The Company may also charge fees to set up a redemption campaign, which are deferred and recognized over the average duration of historical redemption campaigns. We recognize revenues from redemptions net of rewards as we believe we act as the agent in the transaction.

We also contract with third-party gift card providers to facilitate the delivery of digital gift cards and recognize revenue gross of reward but net of the cost of the gift card, at a point in time when the exchange occurs.

Ad & other revenue

Our clients may also run advertisements (banners, tiles, newsletters, feature placements, etc.) on D2C properties to promote their redemption campaigns. When a consumer clicks on an advertisement, they are linked directly to the associated campaign. Ad product revenue is recognized as the marketing services are performed. Ad products often run in conjunction with an associated redemption campaign, either over the entire redemption campaign life or some portion of it. We recognize revenue from client run advertisements on a gross basis as we believe we act as the principal in the transaction.

We also offer data licensing and audience targeting services. Data revenue is recognized as it is delivered and on a gross basis as we believe we act as the principal in the transaction.

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Stock-Based Compensation

Stock-based compensation for equity awards, including stock options, restricted stock units (RSUs), and awards granted under our employee stock purchase plan (ESPP), is measured based on the grant date fair value of the award. For awards with service conditions only, we recognize compensation expense, net of actual forfeitures, on a straight-line basis over the requisite service period, which is generally four years. For awards with both service and performance conditions, we recognize compensation expense, net of actual forfeitures, under the accelerated attribution method when performance conditions are considered probable of being achieved.

The fair value of RSUs with only service or performance conditions is equal to the fair value of the underlying common stock at the date of grant. For RSUs with market-based conditions, we determine the grant date fair value utilizing a Monte Carlo simulation, which incorporates the probability of achievement of the market-based condition. The fair value of stock options and ESPP awards is estimated on the grant date using the Black-Scholes option-pricing model. Our use of the valuation models requires the input of subjective assumptions. The assumptions used in our valuation models represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment.

These assumptions and estimates are as follows:

•Expected Dividend Rate. The expected dividend assumption is based on our history and expectation of dividend payouts. We have not paid dividends and do not expect to do so in the foreseeable future, and as such, the dividend yield has been estimated to be zero.

•Expected Volatility. The expected volatility is determined with reference to historical stock volatilities of comparable guideline public companies and our own common stock over a period equivalent to the expected term of the award, as we lack sufficient trading history to rely solely on our own common stock.

•Expected Term. The expected term is the period of time for which the award is expected to be outstanding, assuming that it vests. We estimate the expected term for stock options using the simplified method, calculated as the midpoint between the requisite service period and the contractual term of the award. The simplified approach is applied as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. For ESPP awards, the expected term is the time period from the grant date to the respective purchase dates included within each offering period.

•Risk-Free Interest Rate. The risk-free rate is determined based on the U.S. Treasury Yield Curve with respect to the stock options' expected term.

•Fair Value of Common Stock. Prior to the IPO, as our common stock was not yet publicly traded, we engaged a valuation specialist to estimate the fair value of our common stock. Subsequent to the IPO, the fair value of our common stock is based on the closing price of our Class A common stock.

We will continue to use judgment in evaluating the assumptions related to our stock-based compensation on a prospective basis. As we continue to accumulate additional data related to our common stock, we may have refinements to our estimates, which could materially impact our future stock-based compensation expense.

Income Taxes

The Company accounts for income taxes using the asset and liability method, under which, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using

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enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We recognize deferred tax assets to the extent that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and our results of operations.

We recognize the tax effects of an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized. Due to uncertainties in any tax audit outcome, our estimates of the ultimate settlement of our unrecognized tax positions may change and the actual tax benefits may differ significantly from the estimates.

Although we believe our assumptions, judgments, and estimates are reasonable, changes in tax laws, our interpretation of tax laws, the resolution of any tax audits, and differences between estimated and actual taxable income could significantly impact the amounts provided for income taxes in our financial statements.

Recent Accounting Pronouncements

See Note 2 – Basis of Presentation and Summary of Significant Accounting Policies in the notes to our financial statements included elsewhere in this Annual Report on Form 10-K for more information.