Ibotta, Inc.

Greetings and welcome to the Ibotta First Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Shalin Patel, Head of Investor Relations. Thank you, Shaulin. You may begin.

Good afternoon, and welcome to Nevada's Q1 2024 earnings conference call. With us today are Brian Leach, founder and CEO, and Sunith Patel, CFO. Today's press release and this call may contain forward-looking statements, including our guidance for Q2 2024, that are subject to inherent risks, uncertainties, and changes, and reflect our current expectations and information currently available to us and our actual results could differ materially. For more information, please refer to the risk factors in our recent SEC filings. In addition, our discussion today will include references to certain supplemental non-GAAP financial measures and should be considered in addition to and not as a substitute for our GAAP results. Reconciliations to the most comparable GAAP measures are available in today's earnings press release, which is available on our investor relations website at investors.ibata.com. Also, during the call today, we'll be referring to the slides that I posted on our website. Unless otherwise noted, revenue and adjusted EBITDA comparisons to prior periods are provided on a year-over-year basis. Lastly, references to non-GAAP revenue growth reflect the exclusion of one-time breakage revenue benefits in 2023. This is due to an update we made in 2023 to fix the software error to correctly charge maintenance fees the inactive direct-to-consumer redeemers, which resulted in the short-term benefit to GAAP revenues last year. Please see slide 31 in the appendix for more detail. With that, I'll turn it over to Brian.

Thanks, Shalin, and good afternoon, everyone. Welcome to our first quarterly earnings call as a public company. Let me begin by saying thank you to all our employees, clients, and most of all, the millions of consumers who use our services to save money and discover new products. To all our new investors, thank you for spending time getting to know our company, for sharing advice that will make us stronger, and for choosing to partner with us. Given that this is our first earnings call, I'm going to take just a few minutes to provide a brief background on Ibotta and what makes us so excited about the future of our company. We began our journey 12 years ago in the basement of a 19th century fire station in downtown Denver. Our first product was a free mobile app that allowed consumers to earn cashback rewards on everyday purchases in the grocery store. Previously, consumer packaged goods companies, CPGs, did not have a reliable way to efficiently promote their products directly to millions of consumers via a single mobile application that worked across major retailers. Because we were outsiders who did not come from the coupon industry, we asked ourselves, if we could design a new system for promoting products using the latest technologies and aligning everyone's incentives, how would that change the way promotions have been delivered for the past 140 years? We started by introducing a success-based business model for CPG brands. For the first time, instead of paying for impressions, clicks, clips, or prints, CPG brands could pay on a fee-per-sale basis, meaning only when our campaign led to a verified sale of their product. And instead of needing to reimburse retailers for the discounts they provided at checkout using an antiquated coupon clearinghouse, we paid consumers digital rebates that went straight into their PayPal account without the retailer needing to discount the product at all. Over the years, we've grown the Ibotta app to over 50 million registered users and American consumers have earned over $1.8 billion in cashback rewards. Our direct-to-consumer properties have since expanded to include our website and our web browser extension. In addition to generating revenue, Ibotta's B2C products are strategically important because they allow us to experiment with new kinds of AI-driven promotional techniques. They help us attract a much larger quantity of cross-retailer national offers than our competitors. And they form the backbone of our unique data set of cross-retailer item-level purchase data that can be tied out to millions of individual consumers. Beginning in 2020, we realized that while our CPG brand clients loved our pay-per-performance model, in order for them to view us as a primary pillar of their marketing strategy, they needed us to deliver dramatically more scale. To achieve this, we took the technology underpinning our direct-to-consumer products and turned it into the foundation of what we now call the Ibotta Performance Network, or IPN. The IPN is a first-of-its-kind tech platform that allows CPG brands to distribute their digital promotions to tens of millions of American households in a coordinated way. Through our network, marketers can reach consumers on a variety of different websites all at once, and they can manage their campaigns through a single interface called the Ibotta Partner Portal. Our cloud-based technology allows us to ingest and process vast amounts of cross-retailer item-level purchase data. And this valuable data set powers proprietary AI models that help us put the right offer in front of the right consumer at the right time. Each content distribution point, or node, on the network is called a publisher. And our original D2C app is now one of many publishers on the IPN. We also have a variety of third-party publishers that hook up to Ibotta's network for two main reasons. First, to gain access to Ibotta's unique selection of digital offers. And second, to leverage our AI-enabled offer delivery technology and analytical tools. Partnering with Ibotta helps publishers build loyalty with their consumers, grow their basket sizes, and increase trip frequency in their stores and on their websites, all at no cost to them. As you'll soon hear from Sunit, these third-party publishers now account for a majority of the offer redemptions on our network. Our largest third-party publisher is Walmart, which relies on Ibotta to deliver digital manufacturer offers that appear on Walmart's website in white-label fashion. That means consumers can earn Walmart cash regardless of how they shop, in-store, online, buy-ahead, pick-up-in-store, without needing to create an Ibotta account. Ibotta has an exclusive relationship with Walmart, meaning that all categories of products, we're the only company that manufacturers can use to deliver item-level promotion on Walmart's digital properties in the U.S. Walmart's program rolled out to 100% of consumers with a Walmart.com account last year, and the program has grown steadily since then. We continue to work closely with our counterparts at Walmart to prioritize the initiatives that we believe will help grow Redeemers and Redemptions per redeemer as quickly as possible. In addition to Walmart, we also power digital loyalty programs for other leading retailers, such as Dollar General, Kroger, and Chevelle. Our team is constantly working with each of these publishers to help them improve their loyalty programs, add more redeemers, and grow redemptions per redeemer. At the same time, our team of sellers and account managers focuses on sourcing digital promotions from the world's leading CPG brands. Our goal is to grow budgets within our current CPG brands, add new CPG brands with the clients that we already work with, add new clients, and expand into new categories outside of groceries such as pet, toys, and other general merchandise. Year to date, we've had particular success in expanding our general merchandise content to include offers within automotive, home improvement, video games, and more. In terms of our progress with new partners, Users of our various Ibotta properties might notice that nearly 50 new partnerships have been formed in 2024 with new CPG and general merchandise brands such as Jockey, Phillips, Castrol, Alcon, PowerStop, and SoloCup. Today, we have more than 2,400 CPG clients, and with our campaigns, our clients typically see strong incremental sales and high returns on their investments. This explains why we've retained 96% of our top 100 clients last year and why we believe we represent a compelling alternative to other marketing channels such as social media, search, display ad, linear television, streaming television, and other channels that are not performance-based. Our network benefits from powerful flywheel effects. The more offers we source from CPG brands, the greater value we're able to deliver for consumers. and the more likely that they continue to engage with and recommend our offers to friends. The more consumers engage, the more investments we receive from CPG brands are eager to influence that greater spending power. And in addition, as retailers make offers easier to redeem, more consumers use them, which in turn attracts greater investments in offers from CPG brands, which ultimately results in more consumers using the retailer's loyalty program. Turn to this quarter's results. We're pleased with our strong financial performance, which has allowed us to maintain our trajectory of profitable growth for the sixth straight quarter. We saw strong performance in redemption revenue on our third-party publishers, which we expect will be the primary driver of overall revenue growth going forward. We were successful in adding new retailer publishers to the IPN, such as Schnucks, a $3 billion grocery chain with 115 stores located in Missouri, Illinois, Indiana, and Wisconsin. Family Dollar, which has approximately 8,000 store locations nationwide, and AppCard, which represents 375 independent grocers across 2,000 store locations. We are ramping up each of these new publishers while at the same time building upon our strong foundation with existing publishers. We believe iBotto remains well-positioned to capitalize on a large and growing market opportunity. CPG brands compete fiercely to influence the spending habits of American consumers, investing approximately $200 billion on marketing annually in the U.S. In addition to the size of the market, consumers today are looking for value perhaps more than ever given the inflation of recent years. According to the Bureau of Labor Statistics, U.S. grocery prices have risen by 25% since pre-COVID levels. As these price increases cause more consumers to consider switching from national brands to private label brands, our targeted promotions represent a highly efficient way for CBD brands to influence current and future consumer behavior, holding on to their existing consumers while adding new ones. Our data allows us to demonstrate to our clients that their campaign dollars not only drive sales volume today, but also enhance lifetime value as consumers continue to purchase post-campaign on a full price basis. We expect these trends to continue, causing more brands to launch more promotions in the back half of the year. We're excited about the future and remain focused on building upon our track record of profitable growth. With that, let me hand the call over to Sunit to discuss our first quarter results, as well as our second quarter guidance. I'll then wrap up with some final thoughts before fielding your questions. Sunit?