Ibotta Inc

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.

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 are 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 grow as we increase budget with existing clients and/or add new 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 Ibotta D2C property. Third-party publisher redemptions are redemptions on all publishers excluding the Ibotta D2C properties, namely our retailer publishers.

Ibotta D2C redemptions

For the three months ended September 30, 2024 compared to the same period in 2023, D2C redemptions were approximately 31.6 million and 37.9 million, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, D2C redemptions were approximately 87.8 million and 105.0 million, respectively. The decrease was driven by the quantity and quality of offers available to each D2C redeemer.

Third-party publisher redemptions

For the three months ended September 30, 2024 compared to the same period in 2023, our third-party publisher redemptions were approximately 65.8 million and 30.0 million, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, our third-party publisher redemptions were approximately 161.7 million and 57.3 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 September 2023. In addition, Dollar General launched in the third quarter of 2023 and Family Dollar launched in the second quarter of 2024.

Total redemptions

For the three months ended September 30, 2024 compared to the same period in 2023, total redemptions were 97.4 million and 67.9 million, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, total redemptions were 249.5 million and 162.3 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.

Ibotta D2C redeemers

For the three months ended September 30, 2024 compared to the same period in 2023, D2C redeemers were 1.9 million and 2.1 million, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, D2C redeemers were 1.9 million and 2.0 million, respectively. The decrease was driven by the quantity and quality of offers available to each D2C redeemer.

Third-party publisher redeemers

For the three months ended September 30, 2024 compared to the same period in 2023, third-party publisher redeemers were approximately 13.4 million and 7.2 million, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, third-party publisher redeemers were approximately 11.9 million and 4.4 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 September 2023. In addition, Dollar General launched in the third quarter of 2023 and Family Dollar launched in the second quarter of 2024.

Total redeemers

For the three months ended September 30, 2024 compared to the same period in 2023, total redeemers were approximately 15.3 million and 9.4 million, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, total redeemers were approximately 13.8 million and 6.4 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. We aim to grow redemptions from our redeemers by expanding the breadth of offers available and increasing engagement by continuing to improve the consumer experience. In general, redemptions per redeemer are driven by rewards content. 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.

Ibotta D2C redemptions per redeemer

Forthe three months ended September 30, 2024 compared to the same period in 2023, D2C redemptions per redeemer were approximately 16.5 and 17.9, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, D2C redemptions per redeemer were approximately 46.7 and 52.5, respectively. The decrease was driven by the quantity and quality of offers available to each D2C redeemer.

Third-party publisher redemptions per redeemer

Forthe three months ended September 30, 2024 compared to the same period in 2023, third-party publisher redemptions per redeemer were approximately 4.9 and 4.1, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, third-party publisher redemptions per redeemer were approximately 13.5 and 12.9, respectively. The increase was driven by an increase in redeemers in September 2023 due to the expansion of the Walmart program.

Total redemptions per redeemer

Forthe three months ended September 30, 2024 compared to the same period in 2023, total redemptions per redeemer were approximately 6.4 and 7.3, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, total redemptions per redeemer were approximately 18.0 and 25.2, respectively.

Redemption revenue per redemption

Redemption revenue per redemption is the redemption revenue divided by the number of redemptions. 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 category mix of offers being redeemed and the impact of inflation on a product’s manufacturer’s suggested retail price (MSRP). 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.

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.

Ibotta D2C redemption revenue per redemption

Forthe three months ended September 30, 2024 compared to the same period in 2023, D2C redemption revenue per redemptionwas $1.05 and$1.15, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, D2C redemption revenue per redemption was

$1.12 and $1.18, respectively. This change was driven primarily by the one-time breakage benefit of $2.1 million and $12.7 million incurred during the three and nine months ended September 30, 2023, respectively. See the Breakage Benefit section below for more details, as well as offer mix.

Third-party publisher redemption revenue per redemption

Forthe three months ended September 30, 2024 compared to the same period in 2023, third-party publisher redemption revenue per redemption was$0.78 and $0.75, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, third-party publisher redemption revenue per redemption was $0.79 and $0.74, respectively. This change was driven primarily by offer mix.

Total redemption revenue per redemption

For the three months ended September 30, 2024 compared to the same period in 2023, total redemption revenue per redemption was $0.87 and $0.97, respectively. For the nine months ended September 30, 2024 compared to the same period in 2023, total redemption revenue per redemption was $0.91 and $1.02, respectively.

Non-GAAP Measures

To supplement our condensed financial statements prepared and presented in accordance with U.S. generally accepted accounting policies (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 condensed 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.

Adjusted EBITDA and Adjusted EBITDA Margin

We define Adjusted EBITDAas net income (loss), 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 (benefit from) income taxes, andother expense, net. We define Adjusted EBITDA marginas 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. 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 (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.

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):

(1)Amortization of capitalized software development costs included in cost of revenue for the three months ended September 30, 2024 and 2023 was $1.1 million and $1.0 million, respectively and for the nine months ended September 30, 2024 and 2023 was $3.1 million and $2.7 million, respectively.

(2)Amounts include stock-based compensation expense as follows (in thousands):

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