Ibotta, Inc.

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

Adjusted EBITDAis earnings before interest income, net, provision for income taxes, anddepreciation and amortization expense, and excludes stock-based compensation expense, change in fair value of derivative, loss on debt extinguishment, restructuring charges, andother (income) 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, and evaluating strategic opportunities. 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 and net 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.

The following table provides a reconciliation ofnet income (loss) to Adjusted EBITDA andnet income (loss)as a percentage of revenue 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, 2025 and 2024 was $0.6 million and $1.1 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $3.2 million and $3.1 million, respectively.

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

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

Components of Results of Operations

Revenue

We provide a platform to CPG brands to deliver digital promotions to consumers. The majority of our revenues are derived from the fees we charge to clients when consumers redeem offers on the IPN by purchasing promoted products. We also derive revenue from the sale of ad products to clients to promote their offers, as well as from the sale of data products.

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

Cost of revenue

Cost of revenue consists primarily of revenue share with third-party publishers, personnel-related costs attributable to personnel in our engineering department who maintain our platform, data hosting costs, 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, stock-based compensation, benefits, 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 D2C consumers that is not 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.

We expect cost of revenue to increase as we continue to invest in our platform, acquire new publishers, and grow revenue.

Operating expenses

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, public relations, and professional fees. Personnel-related costs include salaries, stock-based compensation, bonuses, benefits, taxes, restructuring charges, and travel. 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.

We expect sales and marketing expenses to increase as we invest in our sales function. However, they may fluctuate as a percentage of total revenue from period to period.

Research and development expenses consist primarily of personnel-related costs for our technology departments, software licensing costs, professional fees, impairment of capitalized software development costs, and market research. Personnel-related costs include salaries, stock-based compensation, benefits, taxes, bonuses, restructuring charges, 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.

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

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

We expect to increase the size of our general and administrative function to support the growth of our business, including increased facilities costs, and expect to continue to incur additional expenses as a result of operating as a public company. As a result, we expect the dollar amount of our general and administrative expenses to increase. However, they may fluctuate as a percentage of total revenue from period to period.

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

We expect depreciation to increase when we place assets in service related to our new corporate headquarters, currently expected to occur in late 2025.

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

Loss on debt extinguishment

Loss on debt extinguishment consists of the loss incurred upon the conversion of the convertible notes into shares of our Class A common stock concurrently upon the closing of the IPO.

Other income (expense), net

Other income (expense), net consists of losses on the convertible notes derivative liability, penalties, and gains and losses on the disposal of assets.

The provision for income taxes consists primarily of income taxes related to federal and state jurisdictions in which we conduct business, with the exception of the fourth quarter of 2024 when we released our valuation allowance on our deferred tax assets.