Ibotta, Inc. Q3 FY2024 earnings call

• Delivered revenue and adjusted EBITDA above high end of prior guidance. • Redeemers on IPN grew 63% YOY to 15.3M, redemptions nearly 100M in Q3. • Successfully rolled out Schnucks with ESL integration and deployed Instacart in test phase. • CPG redemption gross billings up 65% YTD. • Initiatives for 2025 include improving measurement framework, targeting efficiency, and campaign manager tool for easier client business.

In the third quarter, redemption revenue comprised 86% of total revenue, with third-party publisher redemption revenue at 52% ($51.3M, up 129% YOY) and D2C redemption revenue at 34% ($33.1M, down 20% YOY non-GAAP, excluding one-time breakage). Ad products and other were 14% ($14.1M). Total redeemers were 15.3 million, up 63% YOY. Redemption revenue was $84.5M, up 32% YOY non-GAAP.

• Q4 revenue expected $100-106M (4% non-GAAP growth, mid-teens redemption revenue growth). • Q4 adjusted EBITDA expected $30-34M (31% margin midpoint). • Near-term supply constraints from 2024 budget depletion, Instacart still in pilot stage, leading to softer Q4 redemption revenue. • Revenue growth expected to trough in Q4 then reaccelerate in 2025.

• Temporary downward pressure on redemption revenue in Q4 due to exhaustion of 2024 promotional budgets. • Execution risks with new publisher integrations and scaling Instacart. • Macro environment impacts on CPG marketing budgets and client allocation of funds.

Q: Commentary around exhaustion of budgets and blockers for brands to allocate incremental spend?

A: Bryan discussed temporary imbalance, need for real-time ROI measurement tool, and client retention leading to confidence in future budget allocation.

Q: Time to market for new publisher integrations and implications for product org?

A: Bryan said better technical documentation and efficiency in technical team led to faster time to market, applying to product org for faster cost per incremental product.

Q: Confidence in growing redeemers with budgets and Instacart rollout?

A: Bryan cited client retention, e-commerce budget allocation, and interest in Instacart investment as reasons for confidence.

Q: Widespread budget exhaustion and quantification of Q4 headwind?

A: Bryan said not uniformly widespread, some clients re-up budgets, pull forward in Q3, and DR mentality as key unlock.

Q: D2C vs third-party redeemers and Q4 EBITDA guidance?

A: Sunit noted D2C revenues stabilizing, Q4 EBITDA guidance impacted by holiday marketing, R&D, and Instacart costs.

Q: Acceleration in revenue growth post-Q4?

A: Sunit explained acceleration due to receding negative comps on ad and D2C, and growth in third-party publisher business.

Q: Instacart results, costs, and mix of redemptions?

A: Bryan talked about early Instacart indicators and redemption rates, Sunit discussed Instacart cost step-up in revenue, and Bryan noted mix shift to general merchandise.

Q: Confidence in supply side to fulfill demand and D2C vs third-party prioritization?

A: Bryan cited history of supply catching up, focus on overall redemption revenue, and D2C as efficient campaign source.

Q: Consistency of large clients re-upping budgets?

A: Bryan discussed historical budget growth, meeting senior executives post-IPO, and expectation of continued budget step-ups