Ibotta, Inc.

1. Nature of Operations

Ibotta, Inc. (Company, we, or our) is a technology company that allows consumer packaged goods (CPG) brands to deliver digital promotions to millions of consumers through a single, convenient network called the Ibotta Performance Network (IPN). We provide promotional services to publishers, retailers, and advertisers through the IPN, which includes our direct-to-consumer (D2C) mobile, web, and browser extension properties and our growing network of third-party publisher properties. The majority of the Company’s revenues are derived from the fees we earn from clients when consumers redeem offers. The Company also derives revenue from fees we earn from clients for ad products across the Company’s platform in support of their promotional campaigns, as well as from data products.

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and pursuant to the applicable rules and regulations of the U.S. Securities and Exchange Commission (SEC) for interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these unaudited condensed financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2024, which can be found in the Company’s Annual Report on Form 10-K. Certain prior year amounts have been reclassified to reflect to the current year presentation.

The condensed financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. These operating results are not necessarily indicative of the results that may be expected of the full year performance.

Other than those described below, there were no significant changes to the significant accounting policies from those that were disclosed in the audited consolidated financial statements and accompanying notes for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K.

Emerging Growth Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these condensed financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Use of Estimates

The preparation of condensed financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and the related disclosures of contingent liabilities in the condensed financial statements and accompanying notes. Management evaluates its estimates that include, but are not limited to, revenue recognition, breakage, stock-based compensation, allowance for credit losses, income taxes and associated valuation allowances, leases, contingent liabilities, convertible notes derivative liability, software development costs, including capitalization and the allocation of labor costs between cost of revenue and research and development expense, and the useful lives and impairment of long-lived assets. The Company believes that the estimates, judgments, and assumptions used to determine certain amounts that affect the condensed financial statements are reasonable, based on information available at the time they are made. Actual results could differ materially from these estimates.

Segments

Operating segments are components of a company for which separate financial information is internally produced for regular use by the chief operating decision maker (CODM) to allocate resources and assess the performance of the business. Our CODM, the Chief Executive Officer, manages the Company’s operations as a single operating and reportable segment at the consolidated level. Accordingly, our CODM uses net income as reported in the condensed statements of operations to measure segment profit or loss, allocate resources, and assess performance, including in deciding whether to reinvest profits into the segment or into other parts of the entity, such as for acquisitions or other investments. Significant segment expenses provided to the CODM are the same as those reported in the condensed statements of operations. The measure of segment assets is reported on the condensed balance sheets as total assets.

Cash, Cash Equivalents, and Restricted Cash

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents.

Restricted cash is pledged as security for a standby letter of credit for the Company’s office lease. Restricted cash is classified as current based on the expiration date of the lease.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported in the balance sheets to the amounts reported in the condensed statements of cash flows (in thousands):

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents, restricted cash, and accounts receivable. At times, such amounts may exceed federally insured limits. The Company reduces credit risk by placing its cash, cash equivalents, and restricted cash with major financial institutions within the United States. Credit risk with respect to accounts receivable is dispersed due to the large number of clients. The Company does not require collateral for accounts receivable.

User Redemption Liability and Due to Third-Party Publishers

Consumers earn user awards by redeeming offers on both Ibotta’s D2C properties and our third-party publisher properties. The undistributed user awards earned by consumers on D2C properties are reflected in the user redemption liability in the condensed balance sheets. The user redemption liability is reduced as consumers cash out and through breakage (see Note 3 – User Redemption Liability Extinguishment). User awards earned by consumers on third-party publisher properties represent a payable reflected in the due to third-party publishers liability in the condensed balance sheets. The due to third-party publishers liability also includes revenue share payable to certain publishers.

Operating Leases

The Company determines if an arrangement is a lease at the inception of the contract. Right-of-Use ("ROU") assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. All of the Company’s leases are operating leases.

Operating ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Leases may contain tenant improvement allowances, rent abatement, and rent escalation provisions, which are considered lease payments in determining the lease liabilities. To determine the present value of lease payments, we estimate the incremental borrowing rate based on the information available at commencement date. ROU assets are determined based on the initial lease liabilities adjusted for any prepayments, initial direct costs, and lease incentives received. The Company's lease terms include options to extend or terminate the lease when it is reasonably certain that the options will be exercised.

The Company begins recognizing lease expense when the lessor makes the underlying asset available for use. Lease expense is recognized on a straight-line basis over the lease term. Certain leases contain variable costs, such as common area maintenance, real estate taxes or other costs, which are expensed as incurred.

Leases with an initial term of 12 months or less are not recorded on the balance sheets. The Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term. In addition, the Company elected to not separate lease and non-lease components for all of the Company's leases.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The principal activities from which the Company generates revenue are as follows:

Redemption Revenue

The Company’s clients promote their products and services to consumers through cash back offers on the IPN, and the Company earns a fee per redemption. The Company recognizes revenue from redemption campaign clients as fees are earned, net of awards to consumers, as the Company acts as the agent to the Company's clients in the facilitation of the sale to the consumer. 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.

Ad & Other Revenue

The Company’s clients may also run advertisements such as banners, tiles, newsletters, and feature placements on Ibotta D2C properties. Ad products are billed, and revenue is recognized, as the service is performed over the advertising period. The Company also offers a number of data products and services to clients, including data licensing and audience targeting. Some products and services are billed as a flat fee amount while others are billed based on usage. Data revenue is recognized as it is delivered.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires enhanced disaggregation within the rate reconciliation table and disaggregation of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. While the application of this guidance will result in enhanced disclosures, it is not expected to have a significant impact on the Company’s financial statements.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires new tabular disclosures disaggregating prescribed expense categories within relevant income statement captions. In January 2025, the FASB issued ASU No. 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which clarified the effective date of ASU No. 2024-03. The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. While the application of this guidance will result in additional disclosure of expenses presented in the Company’s statements of operations, it is not expected to have a significant impact on the Company’s financial statements.

The Company reviewed all other recently issued accounting standards and determined they were either not applicable or are not expected to have a material impact on our consolidated financial statements.

3. User Redemption Liability Extinguishment

The Company reflects a user redemption liability in the condensed balance sheets associated with the undistributed earnings of consumers on Ibotta’s D2C properties. A portion of these undistributed earnings is never expected to be cashed out by consumers due to inactivity and will therefore be recognized as breakage by the Company.

Consumers’ accounts that have no activity forsix months are considered inactive and charged a $3.99 per month maintenance fee until the balance is reduced tozero or new activity ensues. Balances associated with accounts that are deactivated for violation of the Company’s terms of use are also recognized as breakage. The Company estimates breakage at the time of the user redemption and reduces the user redemption liability accordingly. Breakage estimates are made based on historical breakage patterns, and the preparation of estimates includes judgments of the applicability of historical patterns to current and future periods. Breakage is recorded in revenue related to funded awards, as an offset to sales and marketing expense related to self-funded awards, and as an offset to cost of revenue related to gift card purchases and sponsored user awards earned from watching an advertising video.

The Company’s breakage is recorded as follows (in thousands):

The user redemption liability was $72.5 million and $74.0 million as of March 31, 2025 and December 31, 2024, respectively.

4. Accrued Expenses

Accrued expenses consist of the following (in thousands):

5. Long-Term Debt

The Company recorded interest expense of $2.8 million during the three months ended March 31, 2024, of which, $0.8 million was related to the amortization of the debt discount and issuance costs. Interest expense during the three months ended March 31, 2025 was immaterial.

Convertible Notes

Prior to the Company’s initial public offering (IPO) in April 2024, the Company had convertible unsecured subordinated promissory notes (notes or convertible notes) that included certain conversion provisions that qualified as embedded derivatives under ASC 815, Derivatives and Hedging. The qualifying features were collectively bifurcated from the debt host and recorded as a derivative liability in the condensed balance sheets with the offset recorded as a discount to the notes. The derivative liability was accounted for on a fair market value basis. Changes in fair value were recognized in other expense, net, in the condensed statements of operations. The debt discount was amortized to interest expense over the contractual term of the debt using the straight-line method which approximates the effective interest method. Refer to Note 6 – Fair Value Measurements for further discussion of the valuation of the derivative liability.

2024 Credit Facility

On December 5, 2024, the Company, as borrower, entered into a Credit Agreement with Bank of America, N.A., as administrative agent, swingline lender, and L/C issuer, and certain other institutional lenders (2024 Credit Facility). The 2024 Credit Facility, which matures on December 5, 2029, provides the Company with revolving commitments in an aggregate principal amount of $100.0 million, with a letter of credit sub-facility of up to $10.0 million and with a swingline loan sub-facility of up to $10.0 million. The obligations of the Company under the 2024 Credit Facility are secured by a lien on all of the assets of the Company. The 2024 Credit Facility also allows the Company to request incremental revolving commitments of up to $100.0 million.

Loans under the 2024 Credit Facility bear interest through maturity at a variable rate based upon, at the Company’s option, an annual rate of either a Base Rate or a SOFR rate, plus an applicable margin (Base Rate Loan and Term SOFR Loan, respectively). The Base Rate is defined as a fluctuating rate of interest per annum equal to the highest of (1) the federal funds rate plus 0.50%, (2) Bank of America N.A.’s prime rate, and (3) Term SOFR plus 1.00%. The applicable margin is defined as a rate between 0.75% to 1.25% for Base Rate Loans and between 1.75% and 2.25% for Term SOFR Loans, depending on the Consolidated Net Leverage Ratio as defined in the 2024 Credit Facility. The 2024 Credit Facility bears a commitment fee ranging from 0.30% to 0.40% payable quarterly in arrears based on undrawn amounts.

The 2024 Credit Facility contains customary affirmative and negative covenants and restrictions, including limitations on additional indebtedness, creation of liens, restricted payments, investments and certain transactions with affiliates. The Company is also subject to financial covenants to maintain a minimum Consolidated Interest Coverage Ratio of 3.0 to 1.0 and a maximum Consolidated Net Leverage Ratio of 3.0 to 1.0. In addition, the 2024 Credit Facility contains other customary covenants, representations and warranties, and events of default.

As of March 31, 2025, the Company hadno 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. Refer to Note 14 – Commitments and Contingencies for further discussion of the Company’s letters of credit.

6. Fair Value Measurements

The following tables present information about financial instruments measured at fair value on a recurring basis (in thousands):

The Company’s cash equivalents are held in money market funds, which are measured using quoted prices for identical assets in active markets and are therefore classified as Level 1 in the fair value hierarchy.

Convertible Notes Derivative Liability

As discussed in Note 5 – Long-Term Debt, the convertible notes held prior to the IPO contained certain embedded features that were required to be bifurcated and recorded separately from the debt host as a derivative liability at fair value. The following table summarizes the activity related to the fair value of the convertible notes derivative liability (in thousands):

Equity Investment

On July 2, 2019, the Company acquired 628,930 shares of the Series A Preferred Stock of a privately held software company in exchange for cash consideration of $0.8 million. The investment represents a minority interest, and the Company has determined that it does not have significant influence over the company. The preferred shares comprising the investment are illiquid, and the fair value is not readily determinable. The Company has elected the measurement alternative to measure this investment at cost, less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment.

During the three months ended March 31, 2025 and 2024, the Company recordedno adjustments to the equity investment. Since inception, the Company has recorded positive cumulative adjustments in the equity investment of $8.3 million and negative cumulative adjustments of $4.5 million.

7. Operating Leases

The Company’s leases primarily include office space for its corporate headquarters. Our current headquarters lease expires in October 2025, and in November 2024, we executed a noncancelable operating lease for a new headquarters space that expires in February 2036. The new headquarters lease commenced during the three months ended March 31, 2025, and we recognized an initial long-term lease liability of $24.2 million, an operating lease asset of $11.0 million, and a lease incentive receivable of $13.2 million. The lease incentive receivable is the amount the landlord will reimburse the Company for certain leasehold improvements provided for under the lease agreement. The new lease includes options to extend through 2056 that we are not reasonably certain to exercise and are excluded from the lease term.

The components of lease cost were as follows (in thousands):

Supplemental cash flow information related to operating leases was as follows (in thousands):

Supplemental balance sheet information related to operating leases was as follows (in thousands):

The weighted average remaining lease term and discount rate were as follows:

Future maturities of lease liabilities as of March 31, 2025 are as follows:

8. Stockholders’ Equity

The Company’s authorized capital stock consists of 3,000,000,000 shares of the Company’s Class A common stock, par value $0.00001 per share,350,000,000 shares of the Company’s Class B common stock, par value $0.00001 per share, and 100,000,000 shares of preferred stock, par value $0.00001 per share.

Preferred Stock

As of March 31, 2025 and December 31, 2024, there wereno shares of preferred stock issued or outstanding.

Common Stock

The rights of the holders of the Company’s Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of the Company’s Class A common stock is entitled to one vote per share and is not convertible into any other shares of the Company’s capital stock. Each share of the Company’s Class B common stock is entitled to 20 votes per share and is convertible at any time into one share of the Company’s Class A common stock at the option of the holder.

The Company had shares of common stock reserved for issuance as follows:

Restricted Stock Purchase

On February 9, 2021, the Company granted an officer of the Company the right to purchase 408,824 shares of restricted common stock, and the officer exercised the purchase option at the grant date fair value of $8.30 per share, for a total exercise price of $3.4 million (restricted stock purchase). As the restricted stock purchase contained a repurchase option for the Company, the exercise price was initially recognized as a deposit liability that is offset to additional paid-in capital as the repurchase option is released. One quarter of the shares were released from the Company’s repurchase option on theone-year anniversary of the grant, and one forty-eighth of the shares are released monthly for the 36 months thereafter.

As of March 31, 2025, the purchase price of $3.4 million had been released from the Company’s repurchase option and recorded to additional paid-in capital. As of December 31, 2024, $3.3 million had been released from the repurchase option and recorded to additional paid-in capital with the remainder of $0.1 million recorded in other current liabilities.

Common Stock Warrant

On May 17, 2021, the Company 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. (Commercial Agreement). The Walmart Warrant was issued in exchange for access to Walmart consumers and is accounted for under ASC 718, Compensation–Stock Compensation (ASC 718), as a share-based payment to a nonemployee in exchange for services to be recognized in the same manner as if the Company paid cash for the services.

Pursuant to the terms of the Walmart Warrant, Walmart has the right to purchase up to 3,528,577 shares of the Company’s common stock, subject to a non-discretionary anti-dilution provision, at an exercise price of$70.12, subject to decreases in the event of an initial public offering, a change in control, a direct listing, or a special purpose acquisition company transaction (i.e., liquidity event), if certain pricing thresholds were not met. In accordance with the non-discretionary anti-dilution provision, prior to the consummation of the IPO, the number of shares exercisable increased by an amount equal to 12.4% of the total increase of the Company’s fully diluted capitalization since issuance. The Walmart Warrant shares increased by 592,457 shares to a new total of 4,121,034 shares.

Vesting of the Walmart Warrant is subject to certain conditions, includingthe achievement of certain milestones and satisfaction of obligations of both parties, or (with respect to 1,648,413 of such shares after the anti-dilution adjustment) the passage of time after the achievement of certain milestones, subject to acceleration if certain operating goals are achieved. Failure to satisfy these conditions or termination of the Commercial Agreement would result in a decrease in the number of shares vesting under the Walmart Warrant. The Walmart Warrant expires, and any vested warrants are no longer exercisable, effective May 17, 2031, or May 17, 2028 in certain cases if the Commercial Agreement is no longer in effect.

The grant date (measurement date) of the Walmart Warrant is May 17, 2021, which is the date of the Commercial Agreement. The aggregate grant date fair value of the Walmart Warrant was$35.3 million. To factor in the various terms and conditions of the Walmart Warrant, including the potential adjustments if certain pricing thresholds were not met upon an initial public offering or other liquidity event (i.e., considered a market condition), the fair value was determined based on probability weighted estimated fair values determined under both a Black-Scholes option pricing valuation model (assuming no liquidity event) and a Monte Carlo simulation valuation model (assuming a potential liquidity event) with the following assumptions:

The adjustment under the anti-dilution provision on April 22, 2024 represented a modification under ASC 718. The aggregate grant date fair value of the 592,457 additional shares granted under the anti-dilution provision was $37.2 million. The fair value was determined based on a Black-Scholes option pricing valuation model with the following assumptions:

The fair value of the portion of the Walmart Warrant that vests upon achievement of the performance conditions is recognized as sales and marketing expense when the performance conditionsare considered probable of achievement, and the fair value of the remaining portion is recognized as sales and marketing expense over time beginning upon achievement of certain performance conditions through the remainder of the Commercial Agreement term, subject to acceleration if certain operating goals are achieved, and subject to certain forfeiture and repurchase terms.

In September 2023, the performance conditions required for vesting were deemed probable, and the Company began to recognize stock-based compensation expense. During thethree months ended March 31, 2025 and 2024, we recognized stock-based compensation of $2.2 million and $3.0 million, respectively, in sales and marketing expense associated with the Walmart Warrant. All expense for the periods presented is related to the vesting of the service conditions.

Unrecognized stock-based compensation expense related to the unvested portion of the Walmart Warrant was $27.9 million as of March 31, 2025. This amount is expected to be recognized over a weighted average period of 3.5 years.

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 million of the Company’s Class A common stock (Share Repurchase Program). In March 2025, an additional$100 million was authorized under the program by the board of directors.

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). The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of shares of its Class A common stock under this authorization. The Company is not obligated under the Share Repurchase Program to acquire any particular amount of Class A common stock, and the Company 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 thethree months ended March 31, 2025, the Company repurchased 1,840,554 shares of its Class A common stock for an aggregate repurchase amount of$73.4 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 condensed balance sheetson a trade-date basis. As of March 31, 2025, $96.1 million remains available and authorized for repurchase under the Share Repurchase Program.

9. Revenue

Disaggregation of Revenue

The Company’s disaggregated revenue by type of service is as follows (in thousands):

Deferred Revenue

Deferred revenue, a contract liability, consists of fees and cash back offers collected from clients that will be applied to future campaigns. Deferred revenue is expected to be recognized as consumers redeem offers over the term of the campaigns, net of the cash back offer, which generally occurs within 12 months. Deferred revenue was $5.6 million and $5.0 million as of March 31, 2025 and December 31, 2024, respectively.

Revenue recognized from deferred revenue at the beginning of the year is as follows (in thousands):

10. Stock-Based Compensation

Stock-Based Compensation Expense

The Company’s stock-based compensation expense is recorded as follows (in thousands):

(1)Sales and marketing includes common stock warrant expense of $2.2 million and $3.0 million recognized during the three months ended March 31, 2025 and 2024, respectively. See Note 8 – Stockholders’ Equity.

The Company capitalized an immaterial amount of stock-based compensation expense to capitalized software development costs during the three months ended March 31, 2025 and 2024.

Equity Incentive Plan

In April 2024, the Company’s board of directors approved the 2024 Equity Incentive Plan (2024 Plan), which became effective in connection with the IPO. The 2024 Plan provides for the grant of stock options, restricted stock, RSUs, stock appreciation rights, performance units, and performance shares to eligible employees, directors, and consultants. The 2011 Equity Incentive Plan (2011 Plan), which terminated effective immediately prior to the effectiveness of the 2024 Plan, provided for the grant of various stock awards to employees of the Company, including incentive stock options, nonqualified stock options, and RSUs.

Stock Options

A summary of option activity for the three months ended March 31, 2025 is as follows:

During the three months ended March 31, 2025, no stock options were granted and the total intrinsic value of stock options exercised was $8.8 million. As of March 31, 2025, unrecognized stock-based compensation expense was $7.4 million for unvested stock options and is expected to be recognized over a weighted average period of 2.2 years.

Restricted Stock Units (RSUs)

A summary of RSU activity for the three months ended March 31, 2025 is as follows:

As of March 31, 2025, unrecognized stock-based compensation expense was $105.6 million for unvested RSUs and is expected to be recognized over a weighted average period of 3.4 years.

CEO Performance-Based RSU

On April 17, 2024, the Company issued a performance-based RSU award to the CEO (CEO PRSU). The CEO PRSU awards a target number of RSUs to the CEO, totaling 125,216 RSUs, that become eligible to vest based on the Company’s total shareholder return (TSR) relative to the TSRs of the companies in the Russell 2000 Index during the performance period from the grant date through December 31, 2026. A percentage of the target number of RSUs, ranging from zero to 200%, will vest based on the percentile rank of the Company's TSR relative to that of the other companies in the index over the performance period. The award is subject to the CEO’s continued service to the Company, and the TSR condition is a market condition. In addition, the CEO PRSU is subject to acceleration upon a change in control. During the three months ended March 31, 2025, we recognized $1.3 million of stock-based compensation expense related to the CEO PRSU.

Employee Stock Purchase Plan (ESPP)

In April 2024, the Company’s board of directors approved the 2024 ESPP, which became effective in connection with the IPO. The ESPP allows eligible employees to purchase shares of the Company’s Class A common stock at a discounted price per share through payroll deductions over consecutive offering periods that are approximatelysix months in length. Each offering period has a single purchase period of the same duration. The offering periods will generally start on the first trading day on or after May 15 and November 15 each year and end on the first trading day on or after the following November 15 and May 15, respectively. The per share purchase price is equal to 85% of the lesser of the fair market value of a share of the Company’s Class A common stock on (i) the first trading date of the offering period or (ii) the last trading day of the offering period.

Stock-based compensation expense recognized during the three months ended March 31, 2025 and unrecognized as of March 31, 2025 related to the ESPP were immaterial.

11. Income Taxes

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

During the three months ended March 31, 2025, the Company recorded an income tax benefit of $0.1 million, resulting in an effective tax rate of (15.0)%. The effective tax rate differs from the U.S. federal statutory rate primarily due to the impact of nondeductible items, including certain executive compensation costs, stock based compensation, and the tax expense related to uncertain tax positions; partially offset by the benefit of research and development tax credits.

During the three months ended March 31, 2024 the Company recorded an income tax provision of $3.1 million, resulting in an effective tax rate of 25.0%. The effective tax rate differs from the U.S. federal statutory rate primarily due to the effects stock-based compensation and the impact of U.S. research and development credits.

The Internal Revenue Service (IRS) commenced an examination of our consolidated U.S. income tax return for 2021 in the second quarter of 2024. During the first quarter of 2025, the IRS completed this examination with no changes to the reported tax. However, the IRS has the ability to adjust the research and development credit claimed and net operating loss generated in 2021 when these carryforward tax attributes are utilized in future tax years.

12. Net Income Per Share

The rights of the holders of the Company’s Class A common stock and Class B common stock are identical, except with respect to voting and conversion. As the liquidation and dividend rights are identical, basic and diluted net income per share are the same for Class A common stock and Class B common stock.

Basic and diluted net income per share is calculated as follows (in thousands, except share and per share amounts):

The following potentially dilutive common shares, presented based on amounts outstanding, were excluded from the computation of diluted net income per share because their effect would have been antidilutive for the periods presented, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period:

Potentially dilutive common shares with respect to the convertible notes are not presented in the table above. The shares are excluded as of March 31, 2024 because no conditions required for conversion had occurred, and as of March 31, 2025 because the shares are included in the calculation of basic net income per share after converting into shares of the Company’s Class A common stock in connection with the IPO.

13. Related Parties

Retention of Wilson Sonsini Goodrich & Rosati, P.C.

Larry W. Sonsini, a member of the Company’s board of directors, is a founding partner of the law firm Wilson Sonsini Goodrich & Rosati, P.C. (Wilson Sonsini), which serves as outside corporate counsel to the Company. During the three months ended March 31, 2025 and 2024, the Company spent $0.9 million and $1.6 million, respectively, with Wilson Sonsini. Amounts payable to Wilson Sonsini were $0.6 million as of March 31, 2025 and $0.4 million as of December 31, 2024.

14. Commitments and Contingencies

Letter of Credit

As of March 31, 2025 and December 31, 2024, the Company had standby letters of credit in the aggregate amount of $1.4 million related to office space leases. The Company’s restricted cash is held to secure $0.4 million of the balance of the letters of credit, and the remainder is collateralized by our 2024 Credit Facility.

Tax Reserves

We conduct operations in many tax jurisdictions. In some of these jurisdictions, non-income-based taxes, such as sales and other indirect taxes, may be assessed on our operations. There is uncertainty and judgment as to the taxability of the Company’s services and what constitutes sufficient presence for a jurisdiction to levy such taxes.

The Company records tax reserves in other current liabilities on the condensed balance sheets when they become probable and the amount can be reasonably estimated. As of March 31, 2025 and December 31, 2024, tax reserves were immaterial. Due to the estimates involved in the analysis, the Company expects that the liability will change over time and could exceed the current estimate. The Company may also be subject to examination by the relevant state taxing authorities.

Purchase Commitments

The Company has non-cancelable purchase obligations which relate to minimum commitments with certain third-party publishers and other contractual commitments primarily with software as a service providers and marketing vendors in the ordinary course of business.

As of March 31, 2025, future minimum payments under these non-cancelable purchase obligations were as follows:

Legal Proceedings

On April 17, 2025, a putative securities class action complaint, captioned Fortune v. Ibotta Inc., et al., No. 25-cv-01213-NYW, was filed in the U.S. District Court for the District of Colorado against the Company, certain of its current and former officers and directors, and the underwriters of the Company's initial public offering. The complaint asserts claims for alleged violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 and generally alleges that the defendants made materially false and misleading statements in the registration statement and prospectus that was filed in connection with the initial public offering. The action seeks unspecified damages and other relief. The Company believes the complaint is without merit and intends to defend the case vigorously. The Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final outcome in this action. If an unfavorable outcome were to occur, it is possible that the impact could be material to the Company’s results of operations in the period(s) in which any such outcome becomes probable and estimable.

Additionally, in the ordinary course of its business, the Company may be involved in various legal proceedings involving contractual and employment relationships, patent or other intellectual property rights, and a variety of other matters. The Company is not aware of any pending legal proceedings that would reasonably be expected to have a material impact on the Company’s financial position or results of operations.