Ibotta Inc

Previous wording

Ibotta is a technology company that allows consumer packaged goods (CPG) brands to deliver digital promotions to over 200 million consumers through a single, convenient network called the Ibotta Performance Network (IPN). We are pioneers in success-based marketing; we only get paid when our client’s promotion results in a sale, not when a consumer merely views or clicks on the promotion. We have built the largest digital item-level promotions network in the United States by forming strategic relationships with major retailers such as Walmart Inc., a Delaware corporation (Walmart), Dollar General Corporation, a Tennessee corporation (Dollar General), and Family Dollar, a Virginia corporation (Family Dollar), which use our digital offers to power their loyalty programs on a white-label basis. Through the IPN, our clients can also reach millions more consumers on our widely used rewards app digital properties, which include the Ibotta-branded cash back mobile app, website, and browser extension (collectively, Ibotta D2C).

Current wording

Ibotta is a technology company that allows consumer packaged goods (CPG) brands to deliver digital promotions to over 200 million consumers through a single, convenient network called the Ibotta Performance Network (IPN). We are pioneers in success-based marketing; we only get paid when our client’s promotion results in a sale, not when a consumer merely views or clicks on the promotion. We have built the largest digital item-level promotions network in the United States by forming strategic relationships with major retailers such as Walmart Inc., a Delaware corporation (Walmart), Dollar General Corporation, a Tennessee corporation (Dollar General), and Family Dollar Stores LLC, a Delaware limited liability company (Family Dollar), which use our digital offers to power their loyalty programs on a white-label basis. Through the IPN, our clients can also reach millions more consumers on our widely used rewards app digital properties, which include the Ibotta-branded cash back mobile app, website, and browser extension (collectively, Ibotta D2C).

Previous wording

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, including slower growth or a recession, inflation, bank failures, supply chain disruption, increases in interest rates, increases to fuel and other energy costs or vehicle costs, geopolitical events, including the potential for new or unforeseen conflicts such as the impact of the Russia and Ukraine conflict and Hamas and Israel conflict, changes in the labor market, or decreases in consumer spending power or confidence, are likely to result in a decline in client spending which could adversely affect the number of offer redemptions.

Current wording

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, including slower growth or a recession, inflation, bank failures, supply chain disruption, increases in interest rates, increases to fuel and other energy costs or vehicle costs, geopolitical events, including the potential for new or unforeseen conflicts, changes in the labor market, or decreases in consumer spending power or confidence, could result in a decline in client spending which could adversely affect the number of offer redemptions.

Previous wording

For the three months ended March 31, 2024 compared to the same period in 2023, D2C redemptions were approximately 27.7 million and 31.7 million, respectively. The year-over-year decrease was driven by a decrease in the offers available.

Current wording

For the three months ended June 30, 2024 compared to the same period in 2023, D2C redemptions were approximately 28.6 million and 35.5 million, respectively. For the six months ended June 30, 2024 compared to the same period in 2023, D2C redemptions were approximately 56.2 million and 67.2 million, respectively. The decrease was driven by the quantity and quality of offers available to each D2C redeemer.

Previous wording

For the three months ended March 31, 2024 compared to the same period in 2023, our third-party publisher redemptions were approximately 43.8 million and 11.6 million, respectively, primarily driven by the expansion of redemptions through Walmart, which initially launched in the third quarter of 2022 to members of Walmart’s paid membership program, Walmart+, and expanded to all Walmart customers with a Walmart.com account in the third quarter of 2023.

Current wording

For the three months ended June 30, 2024 compared to the same period in 2023, our third-party publisher redemptions were approximately 52.1 million and 15.7 million, respectively. For the six months ended June 30, 2024 compared to the same period in 2023, our third-party publisher redemptions were approximately 95.9 million and 27.3 million, respectively. This growth was primarily driven by the expansion of the Walmart program, which initially launched in the third quarter of 2022 to members of Walmart’s paid membership program, Walmart+, and expanded to all Walmart customers with a Walmart.com account in the third quarter of 2023. In addition, Dollar General launched in the third quarter of 2023, and Family Dollar launched in the second quarter of 2024.

Previous wording

For the three months ended March 31, 2024 compared to the same period in 2023, total redemptions were 71.5 million and 43.3 million, respectively.

Current wording

For the three months ended June 30, 2024 compared to the same period in 2023, total redemptions were 80.7 million and 51.2 million, respectively. For the six months ended June 30, 2024 compared to the same period in 2023, total redemptions were 152.2 million and 94.5 million, respectively.

Previous wording

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. 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.

Current wording

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.

Previous wording

For the three months ended March 31, 2024 compared to the same period in 2023, D2C redeemers were 1.9 million and 1.9 million, respectively.

Current wording

For the three months ended June 30, 2024 compared to the same period in 2023, D2C redeemers were 1.8 million and 1.9 million, respectively. For the six months ended June 30, 2024 compared to the same period in 2023, D2C redeemers were 1.9 million and 1.9 million, respectively.

Previous wording

For the three months ended March 31, 2024 compared to the same period in 2023, third-party publisher redeemers were approximately 10.6 million and 2.7 million, respectively. These redeemers grow as we add third-party publishers and as these publishers ramp up consumers on their properties. The primary driver of growth the three months ended March 31, 2024 is driven by the expansion of the Walmart program, which initially launched in the third quarter of 2022 to members of Walmart’s paid membership program, Walmart+, and expanded to all Walmart customers with a Walmart.com account in the third quarter of 2023.

Current wording

For the three months ended June 30, 2024 compared to the same period in 2023, third-party publisher redeemers were approximately 11.9 million and 3.4 million, respectively. For the six months ended June 30, 2024 compared to the same period in 2023, third-party publisher redeemers were approximately 11.2 million and 3.1 million, respectively. These redeemers grow as we add third-party publishers and as these publishers ramp up consumers on their properties. This growth was primarily driven by the expansion of the Walmart program, which initially launched in the third quarter of 2022 to members of Walmart’s paid membership program, Walmart+, and expanded to all Walmart customers with a Walmart.com account in the third quarter of 2023. In addition, Dollar General launched in the third quarter of 2023, and Family Dollar launched in the second quarter of 2024.

Previous wording

For the three months ended March 31, 2024 compared to the same period in 2023, total redeemers were approximately 12.5 million and 4.7 million, respectively.

Current wording

For the three months ended June 30, 2024 compared to the same period in 2023, total redeemers were approximately 13.7 million and 5.3 million, respectively. For the six months ended June 30, 2024 compared to the same period in 2023, total redeemers were approximately 13.1 million and 5.0 million, respectively.

Previous wording

Forthe three months ended March 31, 2024 compared to the same period in 2023, D2C redemptions per redeemer were approximately 14.4 and 16.3, respectively, due to the quantity and quality of offers available to each D2C redeemer.

Current wording

Forthe three months ended June 30, 2024 compared to the same period in 2023, D2C redemptions per redeemer were approximately 15.9 and 18.3, respectively. For the six months ended June 30, 2024 compared to the same period in 2023, D2C redemptions per redeemer were approximately 30.2 and 34.5, respectively. The decrease was driven by the quantity and quality of offers available to each D2C redeemer.

Previous wording

D2Credemption 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 “Results of Operations” for the disaggregation of revenue by Ibotta D2C and third-party publisher.

Current wording

D2Credemption 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 Ibotta D2C and third-party publisher.

Previous wording

Forthe three months ended March 31, 2024 compared to the same period in 2023, third-party publisher redemption revenue per redemption was $0.80 and $0.73, respectively, driven primarily by offer mix.

Current wording

Forthe three months ended June 30, 2024 compared to the same period in 2023, third-party publisher redemption revenue per redemption was$0.80 and $0.75, respectively. For the six months ended June 30, 2024 compared to the same period in 2023, third-party publisher redemption revenue per redemption was $0.80 and $0.74, respectively. This change was driven primarily by offer mix.

Previous wording

We define Adjusted EBITDAas netincome (loss), adjusted to exclude interest expense, net, depreciation and amortization expense, stock-based compensation expense, change in fair value of derivative, loss on equity investment, provision for income taxes, andother expense, net. We define Adjusted EBITDA marginas Adjusted EBITDA as a percent of revenue.

Current wording

We define Adjusted EBITDAas net (loss)income, adjusted to exclude interest (income) expense, net, depreciation and amortization expense, stock-based compensation expense, change in fair value of derivative, loss on debt extinguishment, provision for income taxes, andother expense, net. We define Adjusted EBITDA marginas Adjusted EBITDA as a percent of revenue.

Previous wording

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. 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 netincome (loss) and net income (loss) 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.

Current wording

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. 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 (loss) income and net (loss) 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.

Previous wording

The following table provides a reconciliation ofnet income (loss) to Adjusted EBITDA andnet income (loss) margin to Adjusted EBITDA Margin for each of the periods presented (in thousands, except percentages):

Current wording

The following table provides a reconciliation ofnet (loss) income to Adjusted EBITDA andnet (loss) income margin to Adjusted EBITDA Margin for each of the periods presented (in thousands, except percentages):

Previous wording

(1)Amortization of capitalized software development costs included in cost of revenue for the three months ended March 31, 2024 and 2023 was $0.9 million and $0.9 million, respectively.

Current wording

(1)Amortization of capitalized software development costs included in cost of revenue for the three months ended June 30, 2024 and 2023 was $1.1 million and $0.8 million, respectively and for the six months ended June 30, 2024 and 2023 was $2.0 million and $1.7 million, respectively.

Previous wording

In 2023, we made an update to fix a software error to correctly charge maintenance fees to all inactive D2C redeemers on a go-forward basis. This change resulted in a short-term benefit to U.S. GAAP revenue in 2023. For the three months ended March 31, 2023, the breakage benefit to revenue totaled $1.2 million. There was no breakage benefit associated with the three months ended March 31, 2024. D2C redemption revenue declined 1% period-over-period; excluding the breakage benefit, D2C redemption revenue growth would have been 3%. Revenue growth period-over-period was 43%; excluding the breakage benefit, revenue growth would have been 46%.

Current wording

In 2023, we made an update to fix a software error to correctly charge maintenance fees to all inactive D2C redeemers on a go-forward basis. This change resulted in a short-term benefit to U.S. GAAP revenue in 2023. For the three and six months ended June 30, 2023, the breakage benefit to revenue totaled $9.4 million and $10.6 million, respectively. There was no breakage benefit associated with the three and six months ended June 30, 2024.

Previous wording

We expect our redemption revenue to increase as a percentage of revenue for the foreseeable future as we continue to grow the IPN.

Current wording

We expect our redemption revenue to increase as a percentage of revenue as we continue to grow the IPN.

Previous wording

Cost of revenue consists primarily of personnel-related costs attributable to personnel in our engineering department who maintain our platform, data hosting costs, certain user award costs net of breakage, amortization of platform-related software development costs, revenue share with third-party publishers, software licensing costs, and processing fees. Personnel-related costs include salaries, benefits, stock-based compensation, and bonuses. User award costs net of breakage recorded in cost of revenue are associated with awards earned from gift card purchases and sponsored user awards earned from watching an advertising video. Breakage represents the undistributed earnings of consumers never expected to be cashed out due to inactivity. User award costs also include user awards that are cashed out and subsequently identified as violating our terms of use.

Current wording

Cost of revenue consists primarily of personnel-related costs attributable to personnel in our engineering department who maintain our platform, data hosting costs, revenue share with third-party publishers, amortization of platform-related software development costs, certain user award costs net of breakage, software licensing costs, and processing fees. Personnel-related costs include salaries, benefits, stock-based compensation, and bonuses. User award costs net of breakage recorded in cost of revenue are associated with awards earned from gift card purchases and sponsored user awards earned from watching an advertising video. Breakage represents the undistributed earnings of consumers never expected to be cashed out due to inactivity. User award costs also include user awards that are cashed out and subsequently identified as violating our terms of use.

Previous wording

Sales and marketing expenses consist primarily of personnel-related costs for our sales and marketing departments, self-funded user awards, net of the related breakage, media spend, B2B marketing, common stock warrant expense, software licensing costs, market research, and public relations. Self-funded user awards 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. Personnel-related costs include salaries, bonuses, benefits, taxes, stock-based compensation, and travel.

Current wording

Sales and marketing expenses consist primarily of personnel-related costs for our sales and marketing departments, common stock warrant expense, self-funded user awards, net of the related breakage, B2B marketing, media spend, software licensing costs, market research, and public relations. Self-funded user awards 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. Personnel-related costs include salaries, stock-based compensation, bonuses, benefits, taxes, and travel.

Previous wording

We expect that sales and marketing may increase for the foreseeable future as we continue to invest in marketing efforts to increase engagement and brand awareness. However, we expect sales and marketing expenses to decrease as a percentage of total revenue over time due to growth in revenue from third-party publishers.

Current wording

We expect that sales and marketing may increase as we as we continue to invest in marketing efforts to increase engagement and brand awareness. However, we expect sales and marketing expenses to decrease as a percentage of total revenue over time due to growth in revenue from third-party publishers, although they may fluctuate as a percentage of total revenue from period to period.

Previous wording

Research and development expenses consist primarily of personnel-related costs for our technology departments, software licensing costs, professional fees, and impairment of certain capitalized software development costs. Personnel-related costs include salaries, benefits, bonuses, taxes, stock-based compensation, 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 and post-implementation operation stage are expensed as incurred in research and development expenses. 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.

Current wording

Research and development expenses consist primarily of personnel-related costs for our technology departments, software licensing costs, impairment of certain capitalized software development costs, and professional fees. Personnel-related costs include salaries, stock-based compensation, benefits, taxes, bonuses, 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 and post-implementation operation stage are expensed as incurred in research and development expenses. 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.

Previous wording

We expect research and development may increase for the foreseeable future as we focus on further improvements to, and maintenance of, our platform. However, we expect our research and development expenses to decrease as a percentage of total revenue over time, although they may fluctuate as a percentage of total revenue from period to period.

Current wording

We expect research and development may increase as we focus on further improvements to, and maintenance of, our platform. However, we expect our research and development expenses to decrease as a percentage of total revenue over time, although they may fluctuate as a percentage of total revenue from period to period.

Previous wording

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

Current wording

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

Previous wording

We expect to increase the size of our general and administrative function to support the growth of our business and may incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a U.S. securities exchange and costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC. In addition, as a public company, we expect to incur increased expenses such as insurance, investor relations, and professional services. As a result, we expect the dollar amount of our general and administrative expenses to increase for the foreseeable future. However, we expect our general and administrative expenses to decrease as a percentage of total revenue over time, although they may fluctuate as a percentage of total revenue from period to period.

Current wording

We expect to increase the size of our general and administrative function to support the growth of our business and may incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a U.S. securities exchange and costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC. In addition, as a public company, we expect to incur increased expenses such as insurance, investor relations, and professional services. As a result, we expect the dollar amount of our general and administrative expenses to increase. However, we expect our general and administrative expenses to decrease as a percentage of total revenue over time, although they may fluctuate as a percentage of total revenue from period to period.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Other expense, net consists primarily of gains and losses incurred on both the convertible notes derivative liability and disposals of assets and leases and penalties.

Current wording

Other expense, net consists primarily of the loss incurred upon extinguishment of the convertible notes derivative liability, gains and losses incurred on both the convertible notes derivative liability, and disposals of assets and leases and penalties.