Ibotta, Inc.

Good afternoon and welcome to Ibotta's Q2 2026 earnings conference call. With us today are Bryan Leach, founder and CEO, and Matt Puckett, CFO. Today's press release and this call contain forward-looking statements. Forward-looking statements include statements about our future operating results, our guidance for Q3 2026, our ability to grow our revenue, Thank you. Thank you for joining us. Reconciliations to the most comparable gap measures are available in our earnings press release, our 10Q to be filed this week, and our Q2 2026 earnings presentation, which are all available on our investor relations website at investors.ibata.com. Unless otherwise noted, revenue and adjusted EBITDA comparisons to prior periods are provided on a year-over-year basis. With that, I'll turn it over to Bryan.

Thank you and good afternoon, everyone. I'm pleased to report that in the second quarter, Ibotta delivered top and bottom line financial results that exceeded the high end of our guidance range. And importantly, we've returned to year-over-year revenue growth a full quarter ahead of our expectations. Thank you for watching. In Q2, redemption revenue grew by 10% year over year, marking our fastest pace of growth in this core part of our business since the third quarter of 2024. Third party redemption revenue grew 27% year over year. This growth corresponded to the continued growth in our Redeemer base. We achieved year-over-year redeemer growth of 21% in the quarter. This represents our fastest rate of expansion since Q2 of 2025, at a time when our metrics were benefiting from the launch of our Instacart and DoorDash partnerships. What's most exciting about these results is that we're driving this redeemer velocity efficiently across a significantly larger network footprint, which speaks to the continued health and the demand side of our business. Today, we're reporting that we have 20.9 million redeemers. To put this in perspective, just five years ago, we had approximately 2 million redeemers, an increase of more than 10x since then. as you've heard me say before increased demand for offers alone isn't enough until we have the depth of offer supply to match the demand we can't capitalize fully on the opportunity it presents there are positive signs on that front including the fact that we've delivered year-over-year growth in our third-party redemptions per redeemer for the first time since the third quarter of 2024. these results are a direct outcome of stronger execution by our team With a few quarters now under their belt, it's clear that the new verticalized sales structure and broader revenue organization we put in place beginning in Q3 of last year is working as intended. Our teams are providing customers with an upgraded consultative sales and service motion, spending more time in market, strengthening client relationships at all levels and ensuring the level of account management continuity required to unlock deeper advertising budgets. The recovery we're seeing is distributed broadly across our clients. In fact, within our enterprise client base, the majority of accounts that declined in 2025 were back to year-over-year growth in Q2. To share one anecdote to give you a sense of how this commercial inflection is playing out, one of our largest household products partners, a consistent top 20 client for us, was actually an early pioneer who gave us feedback back in 2024 that helped shape the initial concept of LiveLift. Thank you for joining us. We saw success by effectively multithreading and engaging with teams across shopper marketing, analytics, and sales. This high-touch service motion quickly translated into expanded business. With recent share losses in a key segment, the client has been hyperfocused on driving incremental sales and household penetration. Given these objectives, LiveLift is a strong fit. After running a successful initial LiveLift campaign late last year, they expanded LiveLift in the first half of 2026 across the original brand as well as new brands in different product divisions. As a result of this upgraded execution and LiveLift expansion, our net revenue with this key partner is up 75% year-over-year in the first half of 2026. Thank you for watching. as brands look to capture outsized market share and maximize visibility during times when consumer volume and engagement are high. From a vertical perspective, our growth this quarter was driven by three core categories, emerging brands, food, and health and beauty. In emerging, we're seeing significant budget inflows from challenger brands that are leveraging our network to drive immediate, efficient, net new household acquisition. Thank you for joining us. Our performance across each of these categories illustrates how the Ibotta Performance Network benefits from its diverse content, driving critical volume in more challenged sectors like food, while capturing high velocity dollars in healthier expanding categories like health and beauty. We also continue to position ourselves as thought leaders in the promotion space. In June, our team was on stage at the Ken Lyons International Festival of Creativity alongside key partners from Kenview, Grupo Bimbo, DoorDash, and Uber. In July, our team appeared with the SVP of Marketing and Insights at Mondelez at the Adweek House Sports Summit. Those sessions demonstrated our commitment to continuously raising the bar when it comes to measurement rigor in our industry. Along with Cercana, we recently released a comprehensive meta-study and analysis evaluating 48 different Ibotta campaigns across multiple CPG categories. The data from this independent study showed an average lift of 16.5% in incremental sales and a 17% average increase in new household penetration for the products promoted in our network. The study also revealed a 10.9% average sales lift on non-promoted items within the same brand portfolio, demonstrating that our promotions generate a powerful cross-retailer halo effect for a brand's broader catalog. These campaigns exceeded Cercana's standard sales lift benchmarks by a factor of 7x, showing the power of our promotions to move the needle for our CPG brand clients. As Cercana's SVP of Global Media Enablement and Measurement noted in the release, quote, What this research shows is that when you apply the same methodology used for traditional media, promotions can play a much larger role in driving incremental growth than many organizations currently assume. We believe that stronger execution coupled with continued investment in innovation and thought leadership reinforces our position as a trusted partner our clients look to in order to deliver more revenue and grow market share. We continue to focus on making it as easy as possible for our CPG clients to buy campaigns on the Ibotta Performance Network. This, we believe, creates a larger TAM opportunity and unlocks access to even greater offer supply. As it relates to the key automation initiatives I discussed last quarter, we remain on track and have made significant progress against all three work streams. We're building a powerful and intuitive next generation buying experience for our clients, which we believe will also free up our sales force to focus on selling rather than navigating administrative tasks, as well as enabling greater scaling of LiveLift. At the same time, revenue from LiveLift continues to grow both year over year and quarter over quarter. Finally, as I alluded to at the top of my comments, we believe the value proposition of the Ibotta Performance Network is resonating on the demand side of the marketplace. Earlier today, we officially welcomed 7-Eleven, Inc. to the IPN, marking our third major publisher edition this year and significantly expanding our convenience store footprint. ibotta will serve as the exclusive third-party provider of CPG digital promotions, excluding age-restricted items, to the 7-Eleven, 7Now, and Speedway apps, reaching shoppers across more than 11,500 U.S. store locations. The convenience store channel is strategically vital for many of our largest food and beverage clients, and we are thrilled to bring Ibotta's national offer supply to this broad and important consumer base. Historically, this specific retail channel has lacked access to coordinated digital promotions. By embedding our digital offers natively into this environment, we're unlocking another high-intent surface for our advertisers, giving them an opportunity to impact consumer consideration and purchase behavior at the C-Store digital shelf. This edition is also a great example of how our network reinforces itself, as several of our key CPG clients actively helped us advocate for and secure this new publisher. In addition to this new signing, we officially launched our native offer experiences at Uber at the tail end of the second quarter, and our integration with Giant Eagle went live in July. Both onboarding processes are progressing smoothly and according to plan. Thank you for watching. Our partners continue to see substantial strategic benefits from these integrations, including deeper digital engagement, greater loyalty, and increased basket size. Across the board, our network is strong and growing, our go-to-market engine upgrades and product roadmap are moving forward on schedule, and our team is delivering against our plans. We look forward to building on this positive momentum throughout the back half of the year. With that, I'll turn the call over to Matt to walk through our financial results and outlook in greater detail.

Thank you, Bryan, and good afternoon, everyone. We are encouraged with the recent performance of the business. These results mark the third quarter in a row that we've delivered top and bottom line results above the high end of our guidance range. In addition, we achieved an even more important milestone. Total company revenue has returned to growth for the first time since the first quarter of 2025. We delivered revenue and adjusted EBITDA that were respectively 6 and 58% above the midpoint of the guidance range that we provided on our first quarter earnings call. Now, to share the details of our top line results in the quarter. Revenue was $88.9 million, up 3% versus last year. Within that, redemption revenue was $80.2 million, up 10% year over year, driving the stronger than anticipated performance in the quarter. As Bryan highlighted, this was the fastest pace of redemption revenue growth since the third quarter of 2024. During the quarter, we benefited from continued strong go-to-market execution, which led to increased offer supply. Specifically, we had great results this quarter, leveraging our seasonal events playbook. The pull forward of Walmart deal days into June this year from July last year represented exactly this type of opportunity and generated more revenue in the quarter than we had projected. In fact, it added approximately two to three points of growth versus our outlook. Finally, LiveLift revenue remains on track relative to our expectations and, as Bryan mentioned, grew both year over year and sequentially versus Q1. Third-party publisher Redemption revenue was $61.5 million, or up 27% versus last year, accelerating meaningfully versus the prior quarter's increase of 12%. Direct-to-consumer redemption revenue was $18.7 million, down 24% year-over-year, and similar to Q1's result, where, as anticipated, we've continued to see redemption activity shift to our third-party publishers. Thank you for watching. It is worth noting the year-over-year decline in ad and other revenue in Q2 was significantly larger than both what we reported in Q1 and what we expect to see in half two. This quarter's comparison to last year was up against a period when CPG ad revenue grew. That was the only quarter in 2025 where that occurred. Turning now to the key performance metrics supporting redemption revenue. Total Redeemers were 20.9 million in the quarter, up 21% year over year. We again delivered significant growth in third-party Redeemers across the IPN, including strong growth with our largest publisher partner, highlighting healthy engagement on the demand side of our network. On top of organic growth with existing publishers, the quarter also benefited from the launch of DoorDash in the second quarter of 2025. Redemptions per redeemer were 4.4, down 6% versus last year, a comparable result to Q1. The primary driver of this decline was the mix of redeemers, specifically the growth in third-party redeemers, which have a lower redemption frequency as compared to our direct-to-consumer redeemers. Notably, in another indication of improving offer supply, third-party redemptions per redeemer were 3.8, up 2% year-over-year, representing a return to growth in this metric for the first time since the third quarter of 2024. Redemption revenue per redemption was 88 cents, representing a 4% decline versus last year, driven primarily by the mix of redemption activity. Bringing it all together, total redemptions were $91.4 million, up 14% versus last year. This acceleration in growth versus Q1 was driven by 27% redemption growth with our third-party publishers. Switching to the cost side of our business, non-GAAP cost to revenue was up $1.1 million, or 6% versus a year ago, driven by an increase in both technology and publisher-related costs. This resulted in a Q2 non-GAAP gross margin of 79.3%, down approximately 60 basis points versus last year, but up 170 basis points sequentially versus Q1. This increase versus Q1, coinciding with a step up in revenue quarter to quarter, demonstrates our opportunity to expand gross margins as revenue grows. Non-GAAP operating expenses were up 8% versus last year and were 64.5% of revenue, an increase of approximately 250 basis points year over year. Non-GAAP operating expenses were slightly favorable versus our prior expectations as we realized certain timing-related benefits in the quarter. Within that, non-GAAP sales and marketing expenses were up 17% versus the prior year, driven by a planned increase in labor and the previously mentioned investment in third-party lift studies, partially offset by lower marketing expenses. Non-GAAP research and development expenses were unchanged. And lastly, Non-GAAP general and administrative expenses, an area of the P&L where we were intent on driving leverage, decreased by 5%, while depreciation and amortization increased by approximately $800,000, or 77%. As planned, our investments in areas related to our transformation, inclusive of both the P&L and what is being capitalized to the balance sheet, increased at a faster pace than our overall costs. This increase in investments was approximately 17%, and again was highlighted by higher labor costs in the sales organization, third-party lift studies, and other technology-related costs. We delivered Q2 adjusted EBITDA of $16.5 million, representing an adjusted EBITDA margin of 18.6%, non-GAAP net income of $11.7 million, and non-GAAP diluted net income per share of $0.46. Our non-GAAP net income excludes $15 million in stock-based compensation and includes a $2.1 million adjustment for income taxes. We ended the quarter with $148.2 million of cash and cash equivalents. In Q2, we spent approximately $23 million repurchasing approximately 700,000 shares of our stock at an average price of $32.33. We had 25.8 million fully diluted shares outstanding as of June 30th, and as of the end of the quarter, we had 67.3 million remaining under our current share repurchase authorization. And finally, on cash flow, we generated $8.1 million in free cash flow in the quarter. Stepping back and looking at the year-to-date result, we generated $31.3 million in free cash flow in the first half, a decrease of 7% versus last year, but tracking a bit higher than our plans halfway through the year as a result of modestly higher earnings and favorable working capital. Now, shifting to Q3 guidance, we currently expect revenue in the range of $86 to $90 million, representing approximately 6% year-over-year growth at the midpoint. and we expect Q3 adjusted EBITDA in the range of 12 to 14 million, representing about a 15% adjusted EBITDA margin at the midpoint. With that, let me provide a little more color on the outlook. As both Bryan and I have referenced, we are benefiting from the consistency and effectiveness of our go-to-market execution with our clients and publisher partners. It's showing up in our results with both our core product offerings and with LiveLift. This has been the catalyst for improving revenue trends during the last few quarters, and we are confident that can continue. I do want to highlight that while our guidance implies improving year-over-year growth rates in Q3, we do expect a slight quarter-over-quarter revenue decline at the midpoint. This is a result of the timing of important seasonal promotional events that shifted into Q2 as I referenced in my comments earlier. Regardless, our current expectations for Q2 and Q3 in combination for both revenue and adjusted EBITDA are higher than a quarter ago. Looking forward, beyond our specific Q3 revenue guidance, we continue to expect a modest sequential increase in revenue quarter over quarter into Q4. And factoring that in, we'd expect to exit 2026 with mid-single-digit year-over-year growth. As it relates to our cost outlook, while there was spend timing affecting our second quarter results, we continue to plan for modest sequential increases in quarterly non-gap cost of revenue and operating expenses across the back half of the year. These increases will continue to be squarely in areas that are critical to our transformation and geared toward our largest growth opportunities. With regards to free cash flow, given the strong cash generation in the first half, we now expect full-year free cash flow as a percentage of adjusted EBITDA to be approximately 70% as compared to our expectation of 65% at the start of the year. Lastly, with a healthy balance sheet and strong free cash flow generation, we remain committed to the balanced capital allocation approach we've now consistently deployed across a number of quarters. Investing in organic growth and our strategic priorities while also returning cash to shareholders. We are excited by the renewed traction in our business and the significant gains we've made in the first half, both in unlocking more offer supply and continuing to drive growth and redeemers from existing publishers and the addition of new publishers to the IPN. We look forward to making further progress along these vectors and driving even greater value for our CPG partners, retailer publishers, and consumers in the coming quarters. With that, operator, let's please open up the line for Q&A.