Ibotta (NYSE:IBTA) executives said the company’s fourth quarter performance came in ahead of expectations, citing improved sales execution, enhancements to its core promotions product, and increased contribution from its newer “Live Lift” capabilities.
Q4 results topped guidance as trends improved late in the quarter
Founder and CEO Bryan Leach said fourth quarter revenue and Adjusted EBITDA both exceeded the top end of the company’s prior guidance range, and he noted the year-over-year revenue trend improved versus the third quarter. CFO Matt Puckett added that revenue and Adjusted EBITDA were 7% and 31%, respectively, above the midpoint of the guidance range issued on the prior earnings call.
Third-party publisher redemption revenue was $56.4 million, up 8% year-over-year, while direct-to-consumer redemption revenue was $22.2 million, down 26% year-over-year, which management attributed to an ongoing shift of redemption activity toward third-party publishers.
Ad and other revenue totaled $10 million, down 38% year-over-year, and represented 11% of total revenue. Puckett attributed the decline primarily to continued pressure on direct-to-consumer redeemers.
Key operating metrics showed redeemer growth but lower activity per user
Ibotta’s total redeemers were 20.4 million, up 19% year-over-year. Puckett said growth was driven by the launch of DoorDash in the second quarter of 2025, organic growth at existing publishers, and the launch of Instacart in November 2024.
Redemptions per redeemer were 4.6, down 16% year-over-year. Puckett said the decline was driven by the quantity and quality of offers available to each redeemer and by the mix shift toward third-party redeemers, who have lower redemption frequency than direct-to-consumer redeemers. He also noted that the metric improved from the third quarter, when it was down 28% year-over-year.
Redemption revenue per redemption was $0.83, down 5% year-over-year, which Puckett said reflected slightly lower like-for-like fees and mix.
Margins pressured by publisher and technology costs; company highlights transformation investments
On the cost side, Puckett said non-GAAP cost of revenue increased $3.6 million year-over-year due to higher publisher-related and technology costs, leading to a fourth quarter non-GAAP gross margin of 79%, down about 570 basis points from the prior year.
Non-GAAP operating expenses increased 1% year-over-year and were slightly above expectations due to higher professional fees and variable compensation. Because of lower revenue, non-GAAP operating expenses rose to 65% of revenue, an increase of approximately 700 basis points year-over-year.
- Sales and marketing expenses were flat, as lower marketing spend offset higher labor and the cost of third-party lift studies.
- R&D expenses decreased 11%, primarily due to higher capitalization of software development costs, which Puckett said reflected more investment directly focused on product development.
- G&A expenses increased 16%, reflecting higher professional fees and temporarily higher facilities costs.
Ibotta posted fourth quarter Adjusted EBITDA of $13.7 million for a 15% margin, adjusted net income of $8.1 million, and adjusted diluted EPS of $0.29. Puckett said adjusted net income excluded $12.9 million in stock-based compensation and included a $3.8 million adjustment for income taxes.
Management credits sales execution and core product upgrades; Live Lift adoption expands
Leach outlined several steps management said improved execution, including new sales leadership from digital media, a sales reorganization that rebalanced account loads and verticalized teams, and a more consultative selling approach aimed at engaging earlier in clients’ planning cycles. He also said the company overhauled its B2B marketing function, citing a fourth quarter SNAP-related “playbook” that helped sellers respond quickly to market changes and generated incremental revenue.
Leach also highlighted third-party measurement as a key theme. He reiterated the company’s partnership with Circana announced in the third quarter and said Ibotta added NCSolutions as another measurement partner in the fourth quarter, enabling clients to purchase sales lift studies “just as they would for other forms of digital media.” Management said early feedback suggests third-party measurement is helping build client trust.
On product, Leach said Ibotta strengthened its core product through clearer campaign goals, greater focus on incremental sales, improved profitability metrics, and changes to pricing, including tying fees more directly to product price. In Q&A, Leach described moving away from a tiered pricing approach toward a more continuous structure tied to a percentage of product price.
Leach characterized Live Lift as a next-generation set of capabilities that allows clients to see projected incremental sales and cost per incremental dollar (CPID) at intervals during campaigns, enabling optimization during the campaign. He said Ibotta launched more Live Lift campaigns in the fourth quarter than in the first three quarters combined and exceeded its revenue forecast for Live Lift in the quarter. Management said it expects about 80% of clients that have executed a Live Lift campaign to expand or renew.
Q1 outlook and 2026 trajectory: continued investment with goal of returning to growth
For the first quarter of 2026, the company guided to revenue of $78 million to $82 million and Adjusted EBITDA of $6 million to $8 million, implying an Adjusted EBITDA margin of about 9% at the midpoint. Puckett said management anticipates low single-digit sequential revenue growth in Q2 versus Q1 and “slight” year-over-year revenue growth in Q3, with improvement expected primarily in redemption revenue while ad and other revenue remains pressured.
Puckett also said the company plans to continue investing in its transformation, which he said will show up in higher year-over-year cost of revenue and non-GAAP operating expenses in 2026. He highlighted continued investment in third-party measurement, noting the company expects to purchase a “significant number” of lift studies on behalf of clients, which could approximate 1% of revenue in the near term and moderate over time.
Additional 2026 items Puckett cited included stock-based compensation expense expected to be approximately $10 million higher than 2025 and free cash flow expected to be about 65% of Adjusted EBITDA.
Ibotta ended the quarter with $186.6 million in cash and cash equivalents and no debt, according to Puckett. During the quarter, the company spent about $55 million to repurchase approximately 2.1 million shares at an average price of $25.78. The company reported 26.1 million fully diluted shares outstanding as of Dec. 31 and said it had $34.9 million remaining under its repurchase authorization.
Looking ahead, Leach said the company believes a stronger core offering alongside more Live Lift campaigns can help Ibotta return to year-over-year revenue growth later in 2026, while also positioning the business for what he called an “Outcomes Era” in CPG marketing that emphasizes rule-based, outcomes-driven resource allocation supported by AI.
About Ibotta (NYSE:IBTA)
Ibotta (NYSE: IBTA) is a Denver‐based mobile commerce platform that connects consumers, retailers and brands through a unified cash-back rewards experience. Users access the Ibotta mobile app or browser extension to unlock rebates on everyday purchases, redeemable on groceries, retail goods, travel bookings and digital services. The platform integrates with major supermarket chains, big‐box retailers and online merchants, enabling shoppers to earn automatic cash-back both in physical stores and across e-commerce channels.
Founded in 2012 by co‐founder and CEO Bryan Leach, Ibotta has evolved from a simple rebate app into a comprehensive performance marketing partner for consumer goods companies.
