Ibotta, Inc. Q3 FY2026 earnings call

• Strong Financial Execution: Delivered top and bottom line results above the high end of guidance for the fourth consecutive quarter. Adjusted EBITDA grew 43% to $23.8 million with a margin of 24.3%, demonstrating significant operating leverage.
• Redemption Growth Acceleration: Total redemptions reached 116.4 million (up 40% YoY). Third-party publisher redemptions surged 57% YoY, while direct-to-consumer redemptions declined due to a strategic shift toward third-party networks.
• User Base Expansion: The number of Redeemers hit an all-time high of 23.6 million, up 30% YoY. Sequential growth from Q2 to Q3 added 2.7 million users, the largest increase since late 2023.
• Offer Supply & Sales Execution: Improved offer supply is growing faster than redeemer demand. Key drivers include stronger sales execution, deeper client penetration (increasing contacts per meeting by 44% and brand portfolio penetration by 7%), and successful seasonal campaigns like Back-to-School.
• LiveLift Product Success: LiveLift adoption is accelerating, highlighted by a Danone pilot that achieved over $3 incremental return per dollar invested with 30% greater efficiency. The product allows for in-campaign optimization, a key differentiator.
• Publisher Network Expansion: Onboarded new partners including Giant Eagle, Uber, and 7-Eleven (including Speedway). Giant Eagle’s switch resulted in nearly three times more coupons available to shoppers, validating the network's breadth.
• Strategic Board Changes: Added Tony Wiseman (former Dunkin’ CMO/Digitas CEO) to the board to aid digital transformation; Thomas Lehrman stepped down after a decade of service.

Total Revenue: $97.8 million (up 17% YoY). Redemption Revenue: $88.5 million (up 23% YoY), representing approximately 90.5% of total revenue. This was driven by Third-Party Publisher Redemption Revenue of $70.7 million (up 43% YoY) and Direct-to-Consumer Redemption Revenue of $17.9 million (down 22% YoY). Add and Other Revenues: $9.3 million (down 17% YoY), representing 9% of total revenue.

• Q4 2026 Revenue: Expected between $94 million and $98 million, implying ~8% YoY growth at the midpoint. This represents a deceleration in YoY growth rate compared to Q3, partly due to easier comparisons in Q3 2025 and changing seasonality as D2C/Add businesses shrink relative to the whole.
• Q4 2026 Adjusted EBITDA: Expected between $15 million and $17 million, representing a ~17% margin at the midpoint.
• 2027 Preliminary Outlook: Management projects at least mid-single-digit revenue growth for 2027, driven by continued acceleration in core redemption revenue and the rollout of next-generation products powered by LiveLift technology.

• Revenue Mix Shift: Strategic pricing actions favoring lower-priced items and growth in third-party publishers (which have lower redemption frequency/value) are driving down 'Redemption Revenue per Redemption' by 13%. While this grows volume, it alters the revenue composition.
• Seasonality Normalization: The typical step-up in revenue from Q3 to Q4 is becoming less pronounced as the higher-growth third-party segment becomes a larger portion of the mix, while historically strong Q4 segments (D2C/Add) decline in relative importance.
• Macro Sensitivity: While management views their offering as essential during macro pressures, reliance on consumer demand for savings creates exposure to shifts in consumer spending behavior or promotional budgets if inflation eases significantly.

Q: Analyst asked about LiveLift progress, adoption rates, and necessary investments to accelerate it. / A: CEO stated LiveLift is tracking in line with expectations, citing Danone’s success where in-campaign optimization improved efficiency by >30%. Adoption is driven by superior measurement via Circona partnerships. Ongoing investment focuses on refining AI models to handle shorter campaign durations and broader data sets. Next year will see LiveLift powering new generational products that offer clients a suite of optimization tools rather than just a single metric.