Ibotta Stock

Okay. So I think in the interest of time, we're going to get going on our next conversation. It's my pleasure to have Ibotta back to the conference again this year. Chris Reidy, our Chief Revenue Officer. Chris, you were new to the company a year ago. Welcome back to [indiscernible] second year in a row. I am going to read a quick safe harbor. The conversation today could contain forward-looking statements. Please refer to Ibotta's quarterly and annual SEC filings for more information.

With that out of the way. For those who don't know the company as well, maybe just set the stage for our conversation and talk a little bit about the Ibotta platform and what you guys are trying to build and scale.

Yes. Again, thanks for having me. So if we go back to where it started, there's kind of 3 beats to the story. The first beat is Ibotta, the Direct-to-Consumer app. Ibotta was founded with the idea that there was a way to deliver digital cash back rewards and digital savings to consumers. The company was built around an app that you would download from the Google App Store or the Apple App Store. You log in, you'd see some discounts, you go to your grocery store, you buy them, everything was great.

And that business over the course of time, had a lot of traction. There were 50 million downloads or there have been 50 million downloads of the app. There was a significant amount, billions of dollars in cash back given to American consumers. Everything was really cool.

The challenge is running a digital app business is really difficult. It's hard to get people to stay engaged. It becomes expensive to get new customers into the business. And the company realized to hit the scale that it wanted, it needed to maybe rethink or retrench. At that point, the company did a deal with Walmart to be the exclusive provider of item-level cashback rewards. It comes to life in something called Walmart Cash, fully Walmart branded. You never know anything about Ibotta when you're in the Walmart experience, and that's part of the beauty of the experience.

And that initial deal started what is what we refer to now as the Ibotta performance network. And within the Ibotta performance network, we meet American consumers in native ways inside the Dollar channel at Family Dollar and Dollar General, inside last mile with Instacart, DoorDash and Uber, some regional grocers like Schnucks and Giant Eagle. And then most recently, we're really excited to add 7-Eleven to the experience, the convenience channel is very exciting.

And so think about that first V1, you've got proof of product market fit. We love that. Next, we expand the network. Now we have scale. We've got real scale that we're working with. We're now entering a part of the business that is about delivering proof back to the CPG. We want to show the CPG that when they spend a dollar with us, they are driving incremental revenue to their business. We want them to see that we are delivering profitability for their business and that we're not a subsidization vehicle. We are in that journey right now, but it's a very exciting place to be. If you can deliver performance on behalf of an advertiser and you can deliver scale, you're in a really nice place.

Okay. And all of those themes, I do want to go a little bit deeper on. Let's just stick with you for 1 minute. You were brought in to be the Chief Revenue Officer. Talk a little bit about when we spoke -- when I got the opportunity to speak a year ago in this forum, you were talking about what you were going to try to accomplish and the reorganization effort to align the organization with sort of the priorities of how to optimize for monetization and go-to-market strategy.

Just refresh us a little bit on how those efforts have gone and a little bit of mark-to-market on the journey in your specific role, and then we'll come back to the company more broadly.

I was saying this earlier today, the Chief Revenue Officer seems to mean something different at every single company you go to. And so in my case, I joined to lead the sales business, and then we realized we needed to build a B2B marketing practice inside of the revenue team. So we did that. Then we built a revenue operations team to help make sure the trains are running on time. And most recently, we brought in a measurement and insights team, again, to help the team.

But what we really focused on is pivoting from a reactive sales force to a proactive sales force. We've been really focused on building this what I consider to be a flywheel where we are showing up to talk to the customer in a customer-centric way. We want to ask the right questions to understand what is most important to that brand. There is -- just because one food brand wants to go left doesn't mean all the food brands want to go left. So it's important to show up and ask the right questions.

From there, we're really working closely with the marketing team to bring the right materials and to really promote the right ways to show up inside of the experience rather than just showing up every time and saying, "Hey, would you like to run a promotion on Walmart or would you like to run a promotion inside of Ibotta? We're getting much closer to either seasonal moments or maybe industry-focused moments that really speak to the customer.

And then finally, we've got this revenue operations team that's tracking everything just to understand what sales plays are working, how is it working when we send this e-mail versus that e-mail. When we show up in person, how much more effective we are. All of that shows up like sales. But without the whole thing, you're a much less effective sales force.

Inside of all of that, we talked a little bit about this last year. We went from a geographic focus into an industry vertical focus. When our team show up, we want them to be experts in their field. If you're going to talk to a food brand, I want you to understand the economics of food. I want you to understand what it means to be challenged by GLP-1s. I want you to know that protein is really popular right now.

Two years ago, we might have had you bouncing from laundry care to deodorant into food in a single day. And obviously, that's a lot of context switching, it's hard on the salesperson, and that makes a worse experience for the customer. We've made a lot of progress through all of that. We're feeling really good about where we are, and there's more space for us to improve.

Okay. Let's bring it back to the company and the platform transition you guys are going through. When you think about where you and the team and Brian want to take the company to the medium to long term, how is the confidence trending with respect to the pathway of that transition and the signals you're getting back from the broader market?

Confidence is high. I feel really good about the work we're doing. I also just want to say, I think it's very early innings. I mean I really think that -- we are starting to scratch the surface. I'm proud of the work that we're doing, both on the go-to-market side and on the technology side. And there's just a lot of space in front of us.

From a signal standpoint, look, we told the market we would get the business back to growth in quarter 3 of this year. We achieved that in quarter 2, so a little bit ahead of expectations. And that's a really nice signal. But every day, it's really about the behaviors of the sales team. That's the stuff we're paying attention to.

How many meetings are we having? Are we getting on the road? What does the pipeline look like? What does pipeline per account look like? Do we see more opportunities, not only at the parent brand level, but as we all know, these CPGs, they're kind of like these big holding companies.

So really just understanding that we're getting closer and closer and closer to the customer -- and that's the thing that we pay attention to every single day. And we've seen really nice growth in those metrics. And those are the inputs. Those are the leading indicators that give us confidence that ultimately, what we need to deliver is revenue growth and profit growth, and that gives us confidence we're going in the right direction.

Okay. Maybe just one more big picture one, which would be on the macro environment. Obviously, CPG advertisers have faced a shifting environment over the last couple of years. When you go in and have conversations with CPG advertisers, how do you think about what's differentiating you from other digital advertising channels? And how is the macro environment sort of impacting the overall conversation you're having with your advertisers?

Really, really good question. So a couple of things that I want to say CPG is dynamic right now from a couple of ways. One, you've got acquisitions happening at some places and then you have divestitures happening at other places. So some companies are getting bigger and then you're dealing with integration challenges. Other companies are splitting apart and you have to -- you're working through that. That's the first thing.

Second thing, in the food space, GLP-1s are a very, very real thing. And the EDLP -- excuse me, not EDLP, but the food stamps business, what's happening with just affordability is a real issue that folks are facing. And then broadly, you have the economy, whether it's tariffs, whether it's personal pocketbook, it is harder to be a consumer today and you are searching for value.

So what I find most broadly is when we talk to CPGs, it is really important to be thoughtful and empathetic when you show up there. This is not easy times, and it's new playbook times. And so that is something that I think is really important and where that customer-centric selling approach that we're trying to bring forward an insights-laden pitch rather than just, 'Look at us, we're amazing.'

I really want our teams to show up with data such that the customer knows that we're actually thinking about how to grow their business. So that is how I would describe the macro. If you think about us and just digital media in general, I think the most obvious thing is how we make money. We are a pay-for-performance vehicle. We only get paid when we sell a product on behalf of somebody else. And all things being equal, if you're a CFO and you say, okay, I can give $1 to Ibotta or I can give $1 to somebody else, and you know for sure that when you give a $1 to Ibotta, that means the product moved off the shelf. That is a nice place to be.

And that is something that I think gives us an advantage right now. Ultimately, I want to be held accountable. We want our business to be held accountable, delivering profitable revenue growth for the end customer. We want a CPG to see us as a partner. We want a CPG to see us as a mechanism that can spur units next week, if that's what needed. And over the course of the next year that can help with a steady stream of profitable growth. That's what we want to be seeing, which I think is more than a tactic. It's much more of a partnership.

Okay. Sticking with that theme of sort of earning customers on the dollar side and confidence in customers on the dollar side. Talk to us a little bit about how third-party validation has played a role in increasing or changing the nature of the conversations you're having with advertisers.

Unfortunately, we're not the only sales team in the world. It'd be nice if we were the only people that showed up and said, "Hey, we can do something for you. And there's a lot of vendors, if you will, that are showing up at CPGs, and they are compelling. And they say, we want to make your business better, trust us. And if you're that CPG, if you're the CFO or you're the CMO, it can be hard to -- gosh, these guys said they were going to do it. These guys also said they were going to do it. This team said that they could deliver better results for us.

And I think the Circana ABCS, third-party validation at all, that is really about us being transparent and willing to let somebody else grade the homework. All the digital platforms, they have to grade their own homework because the grades that come out, that's what drives the optimization. That's the whole business. You have to do that. You don't have to hand your data over to anybody else to have it validated or to let them look at it. We believe it's critically important to do that to build trust.

So when we show up and say, 'Look, we're going to run this campaign. And at the end of it, we're going to give you our read on how well it performed, and we're happy to put it in Circana's hands, and they can measure it against the media that you've run elsewhere and give you some like-for-like results.'

That is proving to give us a little bit of some tailwinds on the trust side. And again, just like the business model shows that we're in it together, this is another element of showing the CPG that -- we have skin in the game and that we want to show them that we are delivering profitable revenue growth for them rather than just being somebody that is a bit of a flash in the pan.

Okay. One of the things we've talked about on prior earnings calls would just be the journey that CPG companies themselves are going on about how they think about performance marketing broadly. And you guys have talked about trying to change some of the perception of what you are as a company, couponing, promotion, always-on performance marketing dollars. Talk a little bit about the industry transformation and how you're repositioning yourself for where the industry would like to be in a couple of years' time.

Yes. So the North Star for us is profitable incremental growth. That's really -- we think if you can deliver profitable dollar of growth. If you can show that, that growth is incremental, i.e., it wouldn't have happened otherwise, you've got something very durable. And given where we are in the macro, more and more media buyers, CMOs and CFOs, in particular, are saying, 'What did we get for that dollar?'

'Please show me what we got for that.' And so that is why that is our North Star because we're not in this for 1 to 2 months or 1 to 2 years. We're really trying to build a world-class marketing platform that CPGs can leverage every single day.

To do that really well, you have to have the scale that we talked about earlier. You have to have the data that we're able to collect from not only our first-party app, but from our third parties. And then you got to be able to build models that will tell you how incremental something is. There's a lot of work to do there.

I feel that we are really well positioned to do this. When we talk to customers and we lay that vision out for them, that's something that they want to get on board with. And they understand, like we talked about this last year, it's a year later. We're still working on this. Hopefully, we'll be back in a year, and there's still work to do. This is not an overnight build for us, but it is that commitment to delivering value on behalf of the CPG. And we just it's a consistent theme for us. And so we feel good about where we are. I think we're very well positioned. I think we're in a pretty unique space to do this well, and we have a lot of work to do to continue to execute here.

So sticking on that theme of sort of the evolution of CPG and you becoming more critical to them. The other interesting dynamic is CPGs have very unique budgeting cycles, which is both a pro and a con to this, right? You have a lot of time to prepare for the next budgeting window with a lot of CPGs. But if you miss a window, it obviously could be quite a while before you get a CPG to want to engage with you again.

Talk a little bit about both the opportunities and the challenges of how frequently you get to engage with customers where there's a budget decision that's tied to those conversations.

Well, you're right. CPGs at times can have very long decision-making cycles. And I guess that does give you a little time to get your business in order and to show up hyper effectively. But I'd much rather take -- bless you. I'd much rather take multiple swings than just one swing. I think that gives you a better shot.

So what we're really trying to do is just have an opportunity to win more frequently. And if you think about how digital media works outside of promotions or outside of CPG, if you're buying a CTV campaign right now, connected television campaign, you're looking at results intra campaign. You might be moving up on some programming, moving down on other programming. You might find that one provider is meeting your needs and meeting your goals more effectively, and you're going to move budget around accordingly. Very, very practical and pragmatic approach.

What we're trying to get to is something similar where you might have an annual allocation that you think is the right number to put forward to a partner like Ibotta. But over the course of the year, Ibotta, we might add retail partners. This year, we've added Giant Eagle, added Uber, their properties. We'll launch 7-Eleven soon. And so whatever you had in play for us at the end of last year, it's a different world now. And that's the one side.

The second is that we might just start -- maybe we're meeting your needs more effectively. Maybe we're actually meeting the target that you've set forward. And that's what's so important about delivering that incremental or profitable growth because in a performance marketing ecosystem, you tend to have dollars continue to follow when you're meeting the goals and the dollars do not follow when you're not meeting the goals. And so I think about having an opportunity every single day to sell to our customer. And the way that we do that is by highlighting the results that we're doing. And when we're beating benchmarks or beating the goals that they had set forward, we're going to ask for more, not because we want more just to have more, but because we've already agreed on what good looks like. And when we can achieve good, let's do more of that.

That's very common in digital media, less common in this world of promotions. And that's why it's one of the reasons we're so excited about what we're doing. We really think we can cross a bit of a chasm here where you start to buy this much more like you would a connected television or a social campaign, where it becomes very normal to, 'Okay, let's look at the results. Yes, we got a heavy up there because it's going really well. A year or 2 ago, that wasn't as common.

Well, sticking with that theme, you guys have introduced this concept of 'make it easy' from a platform standpoint, where do those initiatives sit today in terms of reducing as much friction as possible that's in the system to make it as easy as possible for people either on the advertiser side or the publisher side to engage with you as a company?

And even on the internal employee side, we're trying to make it easy for our employees as well. So I think the most simple answer is it's going really well. I'm very encouraged by the work that our technology team is doing this year, not to go as fast as they possibly can forward, but to really survey the full scene and to understand where are we in a place to go forward today or where are we in a place where we might want to take a step back and do a little backwards work before we go forward such that we build a really durable solution.

If you think about this year, it's really building the underlying systems, those foundational elements that will allow us to start scaling on top of. I think we'll start to see that pay off in 2027. But it gives me a lot of confidence that we are making it not only easier for one of our client partners or account managers to do their day-to-day job. But as that gets easier, then we have the infrastructure that could start to expand through APIs that could go elsewhere. That can make it much easier for the advertiser to interact either inside of Ibotta, potentially inside of an environment that they appreciate.

Obviously, the team will still be present. So we still want our sales team, managed service to be there for them. But I think that the work that's happening right now is really about just putting us in a much better place to scale effectively. And kudos to our teams because they're doing a lot of work. And I think it's often underappreciated.

Ibotta is a 14-year-old company. That means there's lines of code that are 14 years old in some repository somewhere that are still running the business. And when you're trying to evolve that technology stack and you're running a business every single day, it's like that treadmill thing that they say, you're running on one treadmill and you got to jump to the other one, you can't fall over because we got to deliver the revenue every single day.

And so the technology team is just doing a really nice job of going forward, but doing it in this methodical way such that we don't -- oh my gosh, forward and then fall over because that would be hard.

Broadly, let's talk a little bit about how AI continues to evolve as both in input in the business and how your processes are changing and the element of putting more of it into the company overall. I'd love to get a quick update there.

We're 22 minutes in according to the clock in promise, and this is the first AI...

But I am contractually obligated to bring it up in every conversation.

I'm amazed that it's 22 minutes, brings a smile in my face. Okay. Gosh, it's everywhere, isn't it? So the first thing that I would say, if you just take this artificial intelligence and a cousin of machine to machine learning, the thing that's really exciting for me is leveraging AI and ML on top of this really rich corpus of data that we have. We've got 14 years of business that's happened inside of Ibotta.

There's a lot of data that we're sitting on top of. There's a lot of data that we're collecting every day. And when you have all that transaction data, you can start to ask yourself, what is the right offer variant for somebody that's never brought this product? What is the right offer variant for somebody that seems to buy this product occasionally? What is the right offer variant to get person A, who's in category, but not with the product that I sell, but with a competitive product?'

Historically, a lot of the offer variants or what the requirements were were driven by the CPG because they said, "Hey, we've seen this, we understand, and that makes a lot of sense because it's their business. We're now able to provide a perspective based on our data. Ultimately, it is 100% their choice. If they want to do $1 off versus $0.50 off, that's going to be their choice. They are in control there.

But we can use the data and then the AI and ML on top of that to really help make informed recommendations to them. And as campaigns are going, we have the ability to think about, okay, what -- is this campaign hitting the marks that we said? Is it ahead? Is it behind? Do we need to scale it left? Do we need to scale it right? This goes back to what we're talking about a few minutes ago, which is every day, you're talking about the results.

Every day, you're striving to deliver better results on behalf of the customer based on what you talked about earlier. So I would say that's thing one. It's really working through data at a much larger scale than you or I can do reasonably. The next thing is just kind of to run the business to make it easy stuff. Being able to have agents deployed just to take tasks that are either done through a series of technological steps or through human steps and just automating those.

That's something that's really exciting. I think you probably see that in most businesses right now, but it's something that we're paying hyper -- we're paying close attention to because we do believe we can make it easier, drive more effectiveness and efficiency.

The last thing that you have to mention with AI is Agentic commerce. I don't really know what that is going to be. I think there's a lot to be determined where that lives. Does it live inside of a retailer? Does it live inside of one of these third-party applications, the GPTs, if you will. But what I believe as just as a consumer is that -- if I'm looking for a product, I'm interested in a few things every time.

How much does it cost? Is it available? When can I get it? And so for us, being a lever in that how much does it cost, acting as metadata around price, that is very important. And so however the consumer application comes to life, the fact that we're helping all of these CPGs deliver the right price to the right customer at the right time, whether that's in the Ibotta experience, the DoorDash experience, the Walmart experience or some other one, that's okay. So we're excited about where that goes. But I think that's a little bit of the the future that I don't know that we know yet.

Okay. Understood. But sticking with the idea of the partnerships you've built on the publisher side, you obviously have expanded into a lot more verticals. You did come to the public markets on the back of what you had done with Walmart and continue to expand the publisher side. What are you most excited about on the publisher side to either deepen relationships that exist today or look at new avenues of growth on the publisher side that maybe you haven't tapped into yet?

Awesome question. And similar to -- we have this technology team I think is doing great work. We have a business development and a strategic account management team that's just really operating on all cylinders right now. And it's happening on 2 sides. One side, there's bringing new businesses in, right? So Giant Eagle is something that has launched recently with us. Uber Eats something that's launched recently. We've talked about 7-Eleven. 7-Eleven is very exciting because it is the convenience channel. It is a really, really anchor tenant there.

And that is very exciting to us because for our CPG customers, it's something new. It's single serve. It's beverage-centric, snack-centric. And we might be working with a beverage manufacturer on larger pack sizes. And now we have a new opportunity to go down into more single or few different SKUs. So that's very exciting for us. And I think that team is doing a really good job putting forth the value proposition whereby we're trying to deliver profitable revenue growth to the customer we share, that CPG that we have in common.

That's going really well. The other thing that I think just have to call out is that the work that we're doing, whether it's with Walmart, the oldest partner or anyone in between, really spending more time with our existing partners just to talk about what's going well from their perspective, what's going well from our perspective.

As we look at our shared customers, how are they using us? How are they using them? What could we do together. It's not a one size fits all. All of these partners are their own businesses and they're at different stages of growth and different stages of digital penetration. But I am really happy with the work that we're doing just to lean in to deliver the best outcome we possibly can, not only to the consumer, but also to the CPG. And that's just all kudos to our business development team.

So maybe a quick follow-up there because you kind of addressed a lot of what I wanted to ask next, but I want to build on it is the network effects inside this business, where you have advertisers on one side, consumers, publishers, you're collecting a lot of data. You sit in the middle of all of this budget and transactional dynamic that plays out in the CPG space. Talk about how you could see scaled effects of network over time to continue to build.

Yes. I think it's a great question, and it's something that we're really excited about. I started to mention it with the 7-Eleven example. And it's something that I hadn't really thought of in advance of. But when we announced 7-Eleven, I got a level of response from some of our customers that surprised me. We're always, 'Hey, I just want to let you know, we've signed a new partner,' and you always get back a nice note, 'Congratulations. Happy to see your business is going well.'

But this one was, 'Congratulations, I'm glad to see your business going well. Can we get on the phone to talk about this?' And that's because it's such an important channel to some of these manufacturers because there's -- they move a lot of units through it, and it's just a different SKU set. So that's a specific example.

I think if you widen out publishers be get publishers. So each publisher that joins, it gives more confidence to the next publisher that, 'Okay, this makes sense.' Whatever could be holding you back from joining, as you're starting to add more and more, kind of, blue-chip companies, I think that just -- that makes more people say, 'Hey, let's have the conversation.'

The other thing is that publishers beget advertisers. So some advertisers thrive in the mass channel, some thrive in grocery, some thrive in convenience. As we're moving through, that opens up the opportunity for new advertisers. And then I think it happens in the other way, too, where advertisers that we start to build really good relationships with will say to us, 'Hey, where are you trying to expand next? And could we maybe be helpful to you? Could we maybe join you in a meeting with another publisher?'

So ultimately, we're doing this in service of the American consumer. Ibotta, the motto, the belief in Ibotta is to make every purchase rewarding. That is a cool concept, but it's about driving value for the American consumer. And that's what we are really focused on. And the way we do that best is by being in as many outlets as possible, be it last mile delivery, be it mass, be it club, be it convenience.

We just want to be wherever we can be. And then we want to be the best partner possible for these CPGs because it's a competitive world for them, and it's a challenging world. It's not getting any easier to be a CPG today. So we are seeing some of those network effects. We're proud of the work we're doing, and we have a long ways to go. I'm excited about what's happened in the year since we so, and I'm excited about what I might be able to tell you about a year from now.

All right. Well, I think that's a good way to maybe leave it there. Chris, thanks so much for the opportunity to talk. Please join me in thanking Ibotta for being part of the conference this year.

I guess that's the cue. So great. Thanks, everybody. Thanks for joining. I'm Ron Josey. I cover the Internet sector here at Citi. And excited to have with me Matt Puckett, who's the CFO of Ibotta. I think most people in the room know what Ibotta does, and there's a lot going on at Ibotta, a big turnaround that I think we're starting to see some traction, which is exciting. So as we kick off, Matt, tell us a little bit about what Ibotta does and maybe your background and what Ibotta does, and then we'll get through the list of questions that I've prepared here.

Yes, absolutely. Well, thank you for having me, Ron, and happy to be here. It's great to be in New York in the fall, always good.

U.S. Open as well.

U.S. Open, yes, I didn't stay up till 3:30 -- but evidently, that was pretty exciting. Yes. So Ibotta, a digital promotions provider, really kind of the first of its kind. And today, work with all of the major CPG companies and leverage the Ibotta Performance Network, which has been a real boon for us as we established that several years ago. It allows us to -- we have the app, which is kind of the origin of the company, the Ibotta app, which was able to really be a direct-to-consumer offering, providing digital promotions to consumers on the app that they could redeem across retailers, the spectrum of retailers, but created the Ibotta Performance Network a few years ago, and where a number of retailers, we're really kind of the white label provider of digital coupons, digital promotions for them, whether it's in the mass space with Walmart or in the grocery space with a number of retail -- regional grocers, whether it's in the dollar space, whether it's in last mile delivery, a number of publishers across the network that we can then procure offers.

That's kind of the supply of the business for us is budgets from CPG, promotions, the offers that we then serve up on the network to our publisher partners. And then the Ibotta app is, in essence, one of those publishers as well. And so bringing that to bear for consumers and kind of think about working -- it's kind of the flywheel, if you will, of the network effect of retailers where offers are served CPG, where the budgets are procured and consumers who benefit from that.

And a little bit about -- I've been in the company a little over a year. And I came to the company, I kind of describe us as a technology company who sits at that kind of that intersection. My background is in retail, in footwear and apparel actually. And I came into the company thinking how much can I add strategically to this business coming in as a very specific mandate from a finance perspective as the company had been public for a little bit. But understanding how retailers think and how -- really how brands make decisions about marketing spend and the trade-offs across their P&L is something that's been -- that I found pretty valuable from my background. And so it's been really good. I'm happy to be here.

That's great. No, very helpful. You said something that I wanted to sort of dive a little bit deeper on. The comment was working with most all CPG companies, I think, was the comment. Yes. Could we have said that 6 months ago?

Yes. I think you probably could have said that 6 months ago. Certainly, we're adding CPGs. But the big ones, yes, right? I mean we're today working with something like 900 clients across 3,000 or north of 3,000 brands.

It was more of the brand comment.

Yes. So a number of brands are much higher because some of our clients, obviously, are multi-branded, many are. We are adding clients for sure. We've probably call that the emerging part of our business, emerging part of our portfolio. But yes, 6 months ago, absolutely. What you would also say, though, is that 6 months ago, we're we, as effective at managing those businesses and being a good partner to our clients as kind of what we aspire to be and kind of where we are moving toward today and thus growing with a number of those businesses. No, that wouldn't have been the case.

And so while the relationships were there, in some cases, a little more nascent than others or not as optimized and certainly not meeting the full potential. And by no means are we there today. We are making steps along that journey in terms of, I would say, the client penetration, client relationship and becoming a more strategic partner to them, not just a provider of a commoditized coupon, but much more strategic in what we can do for them. And that's a big part of our journey today and really the future.

And so we've been watching and being a part of the Ibotta story for some time now and becoming that strategic partner to your both CPG partners or call it, CPG partners and brands, but also with your retailers. And so maybe talk a little bit more about becoming that strategic partner. I guess the question here specifically is with the changes in the product, with the ability to add more measurement and sort of efficacy of the product, has that strategic partnership evolved? How much is that strategic partnership evolved? Are we in the early -- or are we in the early days of that?

I think it's evolving. We're probably in the early days. We're in the early innings. I'm a sports guy. I use sports analogies, probably in the early innings. That's okay. I think I would say a couple of things. First of all, you referenced product, the product road map and the product capabilities, and I certainly will talk about that. But I would suggest that what's really, in essence, driving call it the turnaround that we've begun to see, right, in our business, both from a -- in the financials now. There was a period of time we were talking about it more in nonfinancial leading indicator kind of metrics, but we're starting to see that now in the financial results. The turnaround that we're seeing is, I would call it more execution-driven from a go-to-market perspective. And this time last year, about the time I joined the company, the company was in dealing with a substantial amount of change and particularly in the go-to-market, not so much necessarily in other parts, but clearly in the sales organization, the revenue organization.

And maybe we had kind of a sales organization before, and we've kind of built a more holistic revenue organization. And I'll tell you what I mean by that. We were dealing with a lot of transition. Chris Riedy, now been in the company 1.5 years, a little over 1.5 years as CRO, fairly quickly identified opportunity to strengthen what we're doing from a go-to-market perspective. And that included how we're organized against the opportunity from a geographic-focused sales organization to a vertical-focused sales organization, food, beverage, health and beauty, general merchandise, splitting enterprise clients to the bigger opportunity clients from emerging clients, bringing in high-level leaders for parts of that organization that hadn't existed before, elevating our B2B marketing capabilities and actually moving that part of the business into revenue, multi-threading with our clients.

So talking -- instead of just talking to a procurement specialist or someone who kind of rolls up to a finance organization, who's managing budgets in the promotion space more in a commoditized way to having conversations with CMOs and even CEOs and a much more strategic focus of those conversations. All of those things are beginning to show up. And I would suggest there's a lag time. The business was difficult in the back half of last year. It's no secret. We declined double digits. That wasn't necessarily driven by something that was happening then. It was largely driven by actions that were happening late '24, early '25, right, in terms of execution, right, missing opportunities, not being in the right conversations.

As we've begun to change, and started to execute differently late last year in the early part of this year, we're now beginning to see that show up actually a little bit quicker than we thought even in Q2 returning to growth, right?

That's what I was going to...

That's been really a really important part of what we're driving. And I think that gives us a lot of confidence in what we're doing. I talked about the runway, the opportunity to do more. And that's even without, at this point, a huge impact from some of the things we're doing on the product side. Now clearly, our core product is resonating. LiveLift is beginning to show up in the market. And we've got a product road map that takes us over the next several quarters and even a couple of years that we're really excited about.

That is one of the questions that we often get is we reached revenue growth a quarter, I think, or so before expected. How durable is this revenue growth? So to hear your conversation or your comments around better execution, following up with clients and demand. All that is a blocking and tackling that is the right thing to do. But the product has also gotten better. you mentioned -- the question number one is durability and the question number two is the product getting better and then LiveLift.

Yes. So yes, that's -- I'll try to take those in order. The durability, we're confident, right, in the opportunity that we see. We're certainly pleased with the progress, but we're not declaring victory at all. And there's a lot of work to do for sure. But when you think about very specifically durability, it's broad-based what we're seeing in terms of, I'll say, the improving performance, particularly in redemption revenue, which is kind of the core of what we do and really the future, right? In that business, we grew 3% overall in the most recent quarter, we grew redemption revenue 10%, right?

So really, really encouraged by that. But it's broad-based. It's not just a couple of big programs or one big win or a handful of clients. It's been broad-based across our client base. A number of those clients were declining last year, particularly in the back half of the year, but for the year. We've started to see that turn, and we're seeing some of those clients return to growth. And so that potential -- the fact that it's happening in such a broad way gives us confidence, the fact that we still have room to recover some of what we've lost -- and the fact that we're looking at these clients in terms of redemption revenue and kind of the underlying health metrics of each of those.

And we know in some cases, we've got a lot of penetration opportunity. When we look at where we're -- we're closer to optimize in terms of what we think is the right level of opportunity within a particular client, a number of clients are sitting well below that. So we think about that. I would also -- you're right, the product is resonating. We've talked about LiveLift, which is maybe the first instance of some of the next-generation capabilities and tools that we're bringing to bear. As we developed LiveLift, which to Bryan and the team's credit, the realization that, that opportunity existed to really to lean into more performance-based capabilities and being able to measure more like performance marketing, measurement being really critical and kind of the white space that was there. Nobody is playing in that. Our development of that has been really critical.

Was measurement the #1 pushback that you got amongst the CPGs and...

I think so. If you talk about the opportunity to, I'll call it, grow more significantly, right? I mean, clearly, the CPGs were also saying that, be a better partner, be a more consistent partner. When you come see us, don't have to introduce yourself every time because it's a new face. So clearly, the ability to be a better partner, that was one, which -- okay, that's table stakes. That's totally like, shame on us, right? And that's what we're doing. And to the team's credit, that's what they've done. And -- but also, really, to your point about, okay, that's table stakes. -- beyond table stakes, where is the growth going to come? Measurement is a linchpin to that, right? Because it's -- yes, I know that I can call you and you can help me move units for sure. You can do that. But what does that really mean? Is it incremental? Is it subsidized? What's the profit impact?

So our ability to -- the measurement capabilities, the first-party measurement capabilities that we have and are building are really critical to that. And then I would say one of the things that's been kind of confirmatory and also really helpful is the partnership with Circana, the partnership with ABCS as well, which is that third-party validation of our measurement capabilities. That's probably been I can't quantify it, but qualitatively, it's probably been, in some cases, maybe more impactful. I think Bryan and Chris will probably both say that in conversations that they're having with CPGs at senior levels and at different levels. And when you have someone who's an advocate for Ibotta inside an organization and they can point to Circana validating what we're saying, that's been really good air cover for them.

And specifically, they've been talking about, what, a 16% or so incremental sales lift. I mean this is the type of stuff that you can actually see.

Yes, household -- incremental sales, household penetration, lift on all the -- not even the products on promotion, but all the products in the catalog. That's another number that's part of that study that actually is quite -- I think it's 11%. All of these numbers are multiples of what Circana would typically see, really important. And the other thing that I think is really important, and I don't -- I think people get it, but it's really important when we -- this work that we're doing with Circana, and we put out a meta study recently, which has the numbers you're quoting, that's kind of what you're pulling from.

That's an Ibotta study, not a LiveLift-specific study, right? So that's across about 50 campaigns, some of which are LiveLift, some of which are not, right? So it suggests that the products, our core product offering, which we're consistently making better, obviously, as well as something new like LiveLift, it's working. Yes. So that's been a powerful message. Can you tie that to this to that from a revenue standpoint? Not necessarily, but I'm pretty confident to say that, that's certainly been a factor, a contributing factor that kind of gets lumped in somehow with execution.

So we have -- and that's a great way to sort of segue the next topic of conversation because I think we've gotten through execution just now. We've gotten through potentially how we are seeing revenue return to growth, the product getting better, the execution getting better, be a better partner, I think, was a comment. Let's talk about the supply side, the CPG. Can help us understand maybe bigger picture, how would you characterize the health of the broader CPG industry from an advertising perspective? That was point number one. And then point number two is just offer supply.

Yes. So I think the perception is that the it's a challenged space, which is probably not a new statement. And that perception, I certainly wouldn't argue, right? So I think probably for us, the food vertical maybe is most prominent in that and probably where a lot of that shows up when you think about inflation and some of those things. So that's clearly -- it's clearly challenged. And I think one of the things and probably another proof point for us is we're -- as we actually reported over the last couple of quarters, we've seen growth in the food vertical, right? And generally speaking, because of the nature of what we do, both the ability to prove that we can help drive incremental sales and incremental profits, we can be pretty helpful to CPG companies who are trying to figure out ways to grow.

Certainly, we can be helpful when they've got objectives they're trying to hit and inventory they need to move because they've gotten overstocked, those types of things. Certainly, there's a lever there, and we take those phone calls as well. But the opportunity to help them drive incremental is really important and benefiting from us. And if you kind of look at the fact that we're seeing this business turn in an environment that is arguably pretty challenged, I think speaks to kind of the strategic opportunity that we have as we continue to kind of prove our point.

Yes. I think the ability for your CPGs to rely on you to drive incremental demand is something that is unique or differentiated from Ibotta here. And one of the -- as we were studying the business and going through the business, the planning cycle around CPG budgets was a little bit different in terms of when Ibotta could access the opportunity. So my question here is, now that we've gotten the execution to your point, another proof point of what's happening with your relationships, how are we on just -- how close are we to the budgeting cycles of these CPG companies that give you the visibility or the confidence, I guess, to see sort of continued strength or recovery in the business?

Yes. Great. Clearly, being a part of the budgeting cycle and the planning efforts is important. And this is happening all the time, right? I mean, certainly, there are moments where they're snapping the line and they're setting budgets, and we want to make sure we're part of those conversations and that happens on a calendar basis. In some cases, it happens in the middle of the summer, sometimes depends on their calendar. I think a couple of things I'd say. One, the fact that I talked about multi-threading, I talked about a much more strategic relationship. I talked about consistency of the relationship, the amount of times we're interacting, how much of that's in person.

All of that strengthens the bond, so to speak, which allows us to be closer to kind of front and center when they're having those conversations, right? So we're kind of making sure we're there and we're understood and the opportunity is contemplated as budgets are set. So that's certainly really important. That said, the real kind of value proposition of what we're doing is how do we ultimately, because of our capabilities, drive incremental sales and incremental profit that can be understood and measured and planned for and programmed against such that you're not always reliant on setting of budgets. Now we'll be there in that process, and that's important. And the other thing that comes out of that, and I think we're seeing more and more of this is what we call preferred partnerships, right?

And with our biggest clients having partnerships where there's some level of understanding going in as to what the partnership looks like, what's the pricing structure, what's the volume expectation. These are commitments. It's not a contract, but it gives us a pretty good understanding of what the potential would be, let's say, over the next 12 months or the next 6 months or next 1.5 years. And with the history we have with the clients, the conversations that lead to a preferred partnership gives us pretty good visibility into what we think the potential of the business is for that large bucket of business. That really helps us from a planning standpoint.

One last question just on the CPG side. Are you seeing more clients come in as preferred partnerships?

Yes. I think we're seeing more of those, more clients who are becoming -- converting to a preferred partnership kind of method of working together. And in some cases, we've got clients who are -- have been preferred partners who are increasing their level of commitment.

That's great. Super helpful. Let's talk about the publisher side. So Ibotta added Uber, Giant Eagle, 7-Eleven, I think, this year alone, maybe. And then you're also on DoorDash and Instacart and Walmart is one of your largest partners. So in other words, the publisher side is you're sort of everywhere, which is wonderful. What I wanted to ask is just talk about as newer publishers get on the platform, I'd love to understand the monetization curve. Like how does that work? When we go live on Uber, for example, what should we -- how do you think about that?

Yes. It varies, I guess, Ron, is maybe the simplest answer. It's nuanced. -- it will depend -- and a lot of it is driven by the publisher, how they want to roll out and how they want to ramp and kind of the gating of that. Sometimes if we're taking over through a process as we did with Giant Eagle, a program that exists, it's kind of flip the switch more or less, right? You kind of build the interfaces and you do that and you go. Something with Uber, where it didn't exist before, and we're kind of building the program, it's rolling out in stages.

And it happens relatively quick, but it's not an overnight thing. And we've seen -- we certainly both have worked. But it gives us some ability to kind of know how to think about the implication of that over time from a planning standpoint, both as it relates to kind of what we think the business is going to ultimately materialize to, but how we then can go out and have conversations with CPGs as it relates to procuring more offer supply. So it does kind of -- generally speaking, there's going to be a ramp there instances where it's more of a quick cutover.

So Giant Eagle, understood. That was maybe a more seamless transition. Let's talk about the digital natives, if you will, the Ubers, the Instacart, Instacart, maybe one of your longer publishers online and DoorDash. So just talk to us about the adoption amongst these. Where are we on each one of these platforms? Yes.

I mean I think, kind of in a little bit of different places on all just based on the nature of how long they've been on the network. But generally, that -- we call that kind of last mile delivery, right? Now with the add of Uber, we're pretty dominant there with those 3 partners. So we're really, really pleased with that. I think, first of all. It's an area where you have a really -- it's a captive audience, people who are -- they're shopping, right? They're in buying mode when they're in this environment, right? And so the conversion from a redemption standpoint is quite high there.

So we really like that. I think what we're seeing is good growth from a redeemer standpoint across the first 2, Uber is really early days. And just like so many of our publishers, the opportunity has been somewhat constrained by offer supply. But to your point, we're kind of everywhere and consumers operate in that they are in the store on the weekend, buying their big weekly shopping spree. They're buying a few things online during the week, and they're using multiple platforms to do that, and we want to be able to be where consumers are. with the network, and that's kind of what we're after.

Yes. And so we left sort of the largest partner for last to talk about, and that's, I think, Walmart, right? We -- I think with Walmart, we're expanding our relationship or at least the reach with in-store displays, electronic shelf labels, app integrations. Just would love to hear more just about the Walmart partnership now, how it's expanded over the past. I think you're going through a -- they are going through a leadership change. And then there are 3 questions in one. And ultimately, newer verticals. So one is the integration; two, changes; and three, potential for newer verticals.

Yes. So the partnership is great. It's going well. I would say just to kind of give some kind of quantification, we talked about -- we've been talking about for the last several quarters, really in my time -- my entire tenure here, strong redeemer growth, right? And even in the last quarter, I think we reported 21% redeemer growth, some of which was non-comp. DoorDash wasn't fully comped and a little tiny fraction of redeemers from Uber probably in the quarter. But we don't grow 21% without significant growth from our existing publishers -- and we don't grow our existing publishers without significant growth from Walmart, right?

And then we certainly haven't disclosed those numbers specifically, but you can do that calculus pretty quickly and understand that the business is performing and growing from a redeemer standpoint there. So that -- it's very healthy. Their online business is growing, so we certainly benefit from that, which has been great. But as they continue to expand or make more known to Walmart Cash because Walmart consumers don't necessarily know Ibotta, they may, but they don't necessarily know Ibotta. They know Walmart. They know Walmart Cash. They know their Walmart wallet that, that cash goes into. Obviously, we sit behind all of that. As they and with us market that Walmart Cash, to your point, ever more doing that more with our partnership and in some cases, kind of helping to think through the best ways to do that, whether it's Walmart radio or it's in-store, that -- that partnership has continued to be really good and growing, right?

And the work we're doing to expand the program, I think, is quite useful. And clearly, the opportunity to grow with our business there through greater offer supply, whether that's with our existing business or potentially new verticals, I think, is tremendous, right? So I'm not going to get specific about what new verticals might be because we -- right now, we've got so much potential with where we are, right, from a CPG standpoint. There's so much that we think there's a lot of runway. So that's largely our focus. But I feel really good about the partnership and the relationship there, the actual performance of the business. I think both parties feel good about that. So we're in a good place.

And how do you think about in-store with Walmart?

Yes. In-store certainly, the ability to use your phone number at checkout and kind of get there, that was a nice add last year. It's still largely an online-driven business as most of our business is. But we're seeing that in-store piece of the business grow nicely. It's still relatively small in the scheme of things for their total business. But the more that -- you go, you see signage in the store that has a call to action, whether it's at the front, whether it's an end cap, hey, Walmart Cash is part of the program. It's on the TV screens in the electronics section. Those things and then the ability to kind of seamlessly do it at checkout -- that's helping for sure. And the potential, obviously, is great.

Some -- I think we have a few minutes left here. So I wanted to wrap up maybe just talking about the margin framework longer term, where are we today. But with the return to growth, we are seeing some offset on like margin compression here as we return to growth. But just talk about the balance between reinvestment and how you think about incremental margins.

Yes. So I think, first of all, we believe -- I think the overall headline is that as we drive consistent and sustainable top line growth, we will see outsized profit growth because the model is such that there's going to be a lot of flow-through for incremental revenue. Now clearly, we've made some investments in kind of the middle of last year, we started to we kind of leaned into some things. One is the sales organization and kind of up-leveling that. And part of it was we went down and we kind of reorganized -- there's a period of time where costs were lower. But even beyond that, there's some investment in the sales and marketing organization, which we began to make last year.

And would you say that's about a 6-month lag before you start seeing the benefits or?

Yes, probably about a 6-month lag, 6- to 9-month lag. I mean that's kind of normal. And we're starting to start to see the edges of that now, right, which is exciting. So investments that we began to make last year and investments in the technology part of the organization, which we began to make last year, some of which obviously are flowing on the balance sheet and then being amortized, right, capitalized. So I would suggest that most of the things that we needed to do are now in place or really close to in place in terms of the costs are now in. And we haven't lapped it all yet, right?

So we're beginning to lap some of those things. And so there's a little bit of period of kind of getting it lapped. But beyond that, I think we feel really good about the level of investment and the level of capability that's in play, and we can drive a lot of growth with the base that we have today. And so as you look forward into the future, we think there's quite a bit of potential with -- again, with consistent top line growth to drive margin expansion, both gross margin and EBITDA margin.

Do you think we'll get back to the days when the incremental margin was incredibly high and gross margins was higher? Or has the business changed a little bit here?

Yes. I'm not going to commit to a number, Ron, for sure. What I would say is I think the potential to drive significant margin expansion into the future is there for all the reasons I said.

And as we think about the milestones going forward, we've now crossed over this hump we're executing better. CPGs now we have a preferred partnership, and we have more CPGs coming online. The digital native and all your publishers are now several months, if not years into using the platform, and now it's about getting more supply for them. The business is now in a better spot. It seems as me talking. So when we think about the milestones going forward here, what should we be looking for as investors to track continued progress?

Yes. I agree with your premise. The business is in a better spot. It's all relative, right? So we're better from where we were, but we're not by any means where we want to be or where we think we can be. So we're pretty hard graders of ourselves in some ways, right? So I think we feel good about where we are, but we were after a lot more, right? So as I think about things to watch for, from my view, it's looking for consistency of growth, right? And probably as you look into next year, do we see accelerating growth, right, from a comp standpoint. That will be a signal that what we're doing is really working, right?

The things that we're working on both on the sales side, the product side, the add of the publishers, the consistency of what we're doing, the relationships, the flywheel effect that happens. If that's accelerating -- seeing some acceleration in growth rates, that's a really good signal. I think we've talked about product resonating. The work that we're doing today that Bryan has talked a lot about in terms of kind of setting ourselves up for being able to put out more and more products into the market and some of the kind of foundational work that's happening today from a data standpoint and API layers and AI enablement, those things.

If that is manifesting itself into the marketplace into helping to free up even more offer supply, I think that's another thing that I would say is important and would signal that we're right on track. And then the points I was just making about the ability to expand profitability. As I look into next year, into the next couple of years, that would be my expectation is that we can drive higher profits.

That's great. I don't know if there's any questions in the audience. We might have time for one. If that, maybe we'll wrap up. But that's a great way to wrap up because I think there's a lot of things to look forward to as the business gets back into execution or continues to execute. So anyway, Matt, thank you very much for time. This wonderful.

Thanks, Ron.

Thank you.

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, our ability to grow supply and demand on our network, factors contributing to our potential revenue growth our key initiatives, our partnerships and the capabilities of our offerings and technology, all of which are subject to inherent risks, uncertainties and changes. These statements reflect our current expectations and are based on the 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 our earnings press release, our 10-Q to be filed this week and our Q2 2026 earnings presentation which are all available on our Investor Relations website at investors.ibotta.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. This positive development was driven primarily by a steady improvement in our advertiser offer supply which continues to benefit from growth in both our core product and our newer capabilities like Live lift. Our top line acceleration was led by our redemption revenue growth.

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 in the demand side of our business. Today, we are reporting that we have 20.9 million redeemers. To put this in perspective, just 5 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 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 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 1 anecdote to give you a sense of how this commercial inflection is playing out, 1 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 help shape the initial concept of Live lift. While their overall spend declined in 2025, we doubled down on our in-person engagement across several of their brand teams. We deepened that relationship significantly over the past year. In fact, our leadership team was invited to present at the client's internal marketing event earlier this year.

We saw success by effectively multi-threading 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 hyper focused 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. This upgraded commercial execution is aided by our seasonal events marketing playbook, which identifies opportunities for clients to leverage retailer native Ibotta offers during peak retail moments such as back-to-school, Prime Day and Walmart deal days. Since May, a substantial portion of our closed 1 deals have directly benefited from this strategic playbook. 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 3 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. In food, which remains an important category and the one most challenged by the current macroeconomic landscape, our performance marketing message is resonating deeply, brand managers in this space now value delivery as a core mandate, and we believe they are leaning into our network because we provide scale and efficiency.

In health and beauty, our strong growth is consistent with the relatively healthy industry trends for the category. Our performance across each of these categories illustrates how the Ibotta performance network benefits from its diverse content, drive 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 Lions 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 the Adweek housenotes. Those sessions demonstrated our commitment to continuously raising the bar when it comes to measurement rigor in our industry. Along with sarcoma, 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. Crucially, the study also revealed a 10.9% average sales lift on nonpromoted 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 Sircana'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 Sircana's SVP of Global Media Enablement and Measurement noted in the release, for years promotions and media have been evaluated on different standards, limiting marketers' ability to make true investment comparisons. 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 3 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 addition 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 Sunnow 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 addition 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 of 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.

Furthermore, within our existing footprint, we continue to benefit from close collaboration with our publishers with multiple retail partners, we're expanding how offers are integrated across digital and in-store experiences. For example, we're working closely with Walmart to help customers more easily discover manufacturer funded savings throughout the shopper journey, including in stores, thereby reinforcing the retailers value proposition while creating our seamless customer experience. 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 road map 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 marked the third quarter in a row that we 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 2 to 3 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. Ad and other revenues, which represented 10% of our revenue in the quarter were $8.7 million, down 32% versus last year. We continue to see pressure on ad revenue as a result of lower direct-to-consumer redeemers, which is being partially offset by growth in data revenue. 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 2.

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 $0.88, 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 of 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 the step-up in revenue quarter-to-quarter demonstrates our opportunity to expand gross margins as revenue rose. 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 is energy lower marketing expenses.

Non-GAAP research and development expenses were unchanged, and and lastly, non-GAAP general and administrative expenses, an area of the P&L where we are 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 has been 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. And 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 30. 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 results, 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 million to $90 million, representing approximately 6% year-over-year growth at the midpoint. And we expect Q3 adjusted EBITDA in the range of $12 million 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 and 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 spin timing affecting our second quarter results, we continue to plan for modest sequential increases in quarterly non-GAAP 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 the 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 in 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.

[Operator Instructions] Our first question comes from Ron Josey with Citi. Please feel free to ask your question.

This is Jamesmichael Sherman-Lewis on for Ron Jose. Two questions here, if I may. On the steady improvement Ibotta has seen offer supply. Can you unpack the drivers of progress here and whether you're seeing macro improvement amongst CPG advertisers or having more success with this more verticalized sales structure? And then I have a follow-up.

Sure. Thanks, Jamesmichael. Appreciate the question. Yes, as I mentioned in my remarks, we're seeing the benefits of the last year of improved go-to-market execution by our team. That has included the verticalized go-to-market structure, but it's far from a comprehensive list of all the things that we've been doing differently. Our team deserves a lot of credit for spending more time in the room with our customers, meeting with more people when they visit in person with those customers, maintaining consistency, being more proactive, understanding their business more deeply our business-to-business marketing function has allowed us to have reasons to be in touch and ways to help our clients, for example, the Walmart deal days example or the example I gave last quarter relating to SNAP benefits.

And those things have meant that when in a challenging environment, these CPG companies are increasingly turning to us because they trust our measurement. They trust our team will deliver what we say we're going to deliver. And you're seeing that in the turnaround account by account, accounts that we're shrinking are now growing again. We're hearing that we're 1 of their most -- the first phone calls that they make when they face some of these headwinds in the macro. So I think -- while there are challenges in their business, clearly, they view us as a partner that can help them navigate those challenges right now.

Perfect. Appreciate it. And then on the pickup in new publisher wins, 7-Eleven of REITs, China Eagle, et cetera. Curious if you have any update on your expectations for the long-term cadence of new publisher signings. Great to see the recent win rate, but curious if you're potentially expanding further into verticals outside core grocery as well.

Yes. Thank you, James, Michael. We are, as you can see, now the leaders in multiple different verticals. So if you look at the mass vertical, we have Walmart, if you look at the dollar vertical, Dollar General and Family Dollar. If you look at the last mile delivery, you have Uber, you have DoorDash, you have Instacart. You look at something like 7-Eleven, and that's really the anchor tenant in the convenience channel. We also have Shell in that category. And so we're increasingly positioning ourselves as the place where you can put your content natively in the experience of the largest retailers in the country.

We'll continue to do that. There are other categories that we haven't penetrated yet. That will be a priority. There are other companies within categories that we have that are a priority and we have ongoing conversations with a number of them. In fact, we're finding that our CPG brand partners are some of our biggest advocates and I want to call that out with regard to the 7-Eleven win. Without naming the client, there were a couple of different clients for whom this was a very strategic channel, very important, and they made their views known as references. And I think that, that just shows you the kind of network effects in action, but we plan to celebrate this, and then we will have, we believe, is a steady stream of additional announcements in the coming quarters.

Our next question comes from Bernard McTernan with Needham.

Great. Bryan, I was hoping you could just dive into the balance of the supply and demand in your marketplace. Growth in the quarter was driven by new supply, obviously, bringing on 7-Eleven, some more redeemers. Was there a need from like a marketplace equilibrium perspective to bring on 7-Eleven now.

Yes. So I think a couple of things. The first thing is it's true that we did increase overall redeemers. And over the last 5 years have grown from 2 million to 20 million and overall redeemers, -- and it's true that by doing that, it's allowed us to stimulate some offer supply. And I think in this category is a particularly good example. I just mentioned a couple of these clients that this is a really strategic channel for them. This is where they sell a lot of their individual pack sizes. And so by bringing this on, it will unlock different budgets that are specific to that channel for us to be able to add more offer content.

So that's an example of how one leads to the other. It's also worth noting that this is the first quarter in some time in which we actually increased redemptions per redeemer. And that's important because it means that offer supply is growing buy enough to exceed the growth in redeemer demand. And thus, you're seeing there's actually more offers per redeemer even with more redeemers. And I think that's a really valuable leading indicator in this instance shows that we're on the right path in terms of rebuilding our supply -- offer supply pipeline. And we think that this development with 7-Eleven will demonstrate even more momentum.

We think that will affect the calculus of other publishers. And that in turn, sends a signal to the market that, look, -- this is the best place to drive incremental sales at scale. And now you can do that across a lot of different formats, a lot of different channels to a single set of technologies through a single set of relationships with one company, and we think that, that network is more valuable, the broader it grows.

Understood. And just as a follow-up, Bryan, you mentioned health and beauty is 1 of the 3 drivers in the quarter of strength. I don't think you've mentioned that a subcategory within CPG 4, but can you just talk to in terms of how new it is for a revenue driver for you guys?

Yes. I think it's a category that is expanding and doing well. We've had strength in that category for some time. we put more focus on the category in the last year, and I think that's paying dividends now. And I do want to clarify, Bernie, in response to your first question, that the growth in redemptions for redeemer that I alluded to is on the third-party publishers. But I think it's still a valid point because as we add more third-party publishers, we expect to be able to keep up with that on the offer supply side.

The next question comes from Ken Gawrelski with Wells Fargo.

Appreciate the questions. Two, if I may. First, I want to stay on the supplier side. It seems like from your commentary that you've seen some real progress there with your suppliers. Could you just talk about what's been effective at unlocking some more supply -- is this -- are you moving past the traditional kind of trade or promotional budgets and getting into the more traditional media side of the budgets, digital media side. That's a question one.

The second question is, when you -- maybe Bryan stepping back, when you think about the margin profile of the business, look out maybe 1 to 2 years, relative to the path you were on kind of prior to the sales reset, the go-to-market reset, how would you contrast over the future margin profile of the business relative to what the trajectory was prior to kind of the sales reset.

Thanks, Ken. I'll take those questions in turn. I'll add a few comments on the second, but then I'll hand it over to Matt to comment in more detail. So with regard to your first question, I think there are a number of different factors. Fundamentally, it's about trust. It's about building deeper relationships so that these brands pick up the phone and call us and say, "I've got a problem this quarter. I need a solution I can turn to that can act very quickly to drive a meaningful amount of market share change in my favor. I think that we're being able to go into multiple different levels of an organization, something we call multi-threading.

So we might be talking to brand leadership, but we're also talking to the shopper marketing and trade team, the marketing leadership within the overall company revenue growth management, the media agencies. And it's not -- we have thousands of brands, hundreds of clients. So there's a wide range of different arrangements that we have. But I would say that, broadly speaking, they believe that our measurement is stronger and more credible than it was a year ago. The partnership with Sircana, I think, has been very validating in terms of a third-party independent. We put out a major study at Cannes a Meta study showing that we were more effective in driving incremental sales lift than the benchmark median.

So these kinds of validating points created an environment where this sigma that may or may not have existed in the promotions category is no longer attaching to Ibotta. I think we are seen as transcending that as performance marketing that's delivering top and bottom line growth. I think the verticalization has paid off, and there's more specialized knowledge among our sellers. So they're going in proactively and saying, we noticed this trend. We think we can help you in this way. And I think that is not something that people have the data to do in many cases, and we can do it with the data that we have.

So I think that being seen as a problem solver that's trusted and having those relationships is the primary unlock that we're seeing. Now we're continuing to work on the things that I mentioned last quarter, for example, making it easier to buy on our network, make it easier to sell and spend, therefore, more time selling rather than actually setting up offers and handling the kind of quote-to-cash logistics. I believe that, that will be a further tailwind to developing more and more offer supply. But what you're seeing now is the benefit of the last year of sustained commitment, better training, better incentives, alignment, better quotas, folks that are the right folks in the role, that's what you're seeing primarily right now.

On your second question, looking out a year or 2 relative to the path we were on, I think what's exciting is these trends that I've just been alluding to are going to accelerate our ability to capture more offer supply. And we are dropping a high percentage of those incremental revenue dollars to our adjusted EBITDA line because we have relative to that a much more fixed or growing much more modestly, the cost profile of our business.

And so because that we're getting favorable terms, broadly speaking, with these publishers that we're adding on, we're not seeing a lot of hit to our margin there. In fact, -- we're really pleased with the leverage that we're getting as our marketplace grows bigger and bigger. And as far as how that translates over that time period, I'll defer a little bit to Matt on that.

Yes. So yes, I'm probably not going to give you the answer you want, meaning I'm going to give you a number necessarily. But I'll give you a couple of data points I think could be helpful as you think about this. And I would just start by saying with consistent and sustainable revenue growth, we're going to have the opportunity to deliver strong incremental unit margin and overall margin expansion. We saw that play out just right now in Q2 relative to Q1, where a step-up in revenue kind of meaningful step-up just from a value standpoint, $82 million, $82.5 million in Q1 to $89 million in Q2.

We dropped a lot of that increase to the bottom line quarter-over-quarter, right? So that gives you a sense as we see consistent top line growth, we're going to have the ability to drop more and more EBITDA to the bottom line. If you look at the business today, -- it's a very healthy business, although the margins are lower where they have been historically. We just generated on a trailing 12-month basis 16% EBITDA margin at a time when the business was declining about 7% on a same trailing 12-month basis.

So the business is sound even in a moment where the business has been declining, and we've been investing through that transformation and through that decline because different to 2 years ago, the opportunity that we see in terms of the top line potential of this business, -- and the work that we're doing to transform the company gives us a lot of confidence in the upside potential of this business over time. And the investments that we've made over the last several quarters are we think the right ones we think they're paying off already -- and there's not a significant step change in investments from here.

We need to get past to kind of lap the things that we've done, and we'll see that happen. To some degree, as we move through the end of this year and the early part of next year, -- and so we'll see kind of those increases begin to moderate a little bit. So we're set up really well both in terms of where we see the potential in the top line and how we see the opportunity to leverage the P&L as we deliver that over time.

Our next question comes from Mark Mahaney with Evercore.

Okay. maybe old school, but the 7-Eleven deal sounds like a really huge win for you. So could you spend a little bit more time on that. The amount of time it took you to put that deal together. I know you got sort of endorsements from your network to get that going, but how long it takes to get that fully up and operational kind of across the 7-Eleven franchise and put this in context with other publishers. Less materials, equally material, more material than those 2 other major publishers that you've announced year-to-date.

Yes. Thank you, Mark. I mean these wins are multiple quarters or some even years in the making. These are conversations that may involve creating new user experiences. They may involve sharing a level of data that these companies have not ever shared before or certainly not with folks in the promotion space. And the reason why is because we have a really robust innovative approach to measurement and that means we're going to be able to put this data into a way of tracking incremental sales that is really powerful from the standpoint of bringing content into these channels.

And so we've taken the time to kind of make the case that we need to do the right so we can create an environment where people really feel good about the return on their investment and then you're able to pass more value on to the 7-Eleven shopper. You build these relationships with these large companies that have year, 2-year pack product road maps and then you have to find your way into those product road maps with a business case and then you have to negotiate all of the various agreements that surround this evolving not just the commercials, but other dimensions of the partnership. So as far as this particular partner.

This is a different realm than loyalty and digital promotions has played in, in the past. This is the first time they will have a large access to those kind of offers, which is really exciting for their customers. I think they were made aware that, look, value is kind of the key thing. And so it bumped up the prominence of this opportunity. And then look, I think the more that we partner with companies like Uber, what we hear from companies like 7-Eleven is we really respect them if they've put the effort and thought and judgment into this, we ought to take a harder look at it. So you start to see these things snowballing a little bit.

In terms of the rollout timing, we're looking at the second half of this year to roll this out. Of course, you have 11,500 stores. And as you mentioned, you have these other parts of their organization that are included, which are important. The 7 now, the Speedway, et cetera, in addition to 7-Eleven, but I think they've begun the process of figuring out how they want to do this, and we work in parallel to do this as we're finalizing the commercial agreement. That will give us some time to make sure we get out and have the conversations we need to with our supply partners. In terms of the scale, there are a lot of different variables that go into that.

On the one hand, the consideration is lower in the convenience channel, and so people are making more impulse purchases, not as many people will probably select offers prior to going into a store and plan their list the way they would have grocery trip. However, we know from the deals and the content they have right now that is heavily used and very popular and something people do open when they get into the 7-Eleven and it drives their purchase decisions once they're in the store where that they choose to place our offers and how they show up in the results of searches and things like that will have a big effect on the the redemption rate and thus, the size of this opportunity.

So I'm not going to comment on the T-shirt size of it just yet, but we'll get a sense of that in the back half of this year and be able to factor that into the '27 commentary that we give you.

Our next question comes from Nitin Bansal with Bank of America.

It feels like many of the foundational pieces are getting in place. You have completed the go-to-market transformation, making steady progress on the product front and expanding the publisher network as well. So as we think about the next leg of your growth and specifically LiveLift adoption, is the biggest hurdle like customer adoption and educating market around the new way of winning promotions? Or do you believe the remaining bottlenecks are like largely internal and within your control?

I think -- thank you, Nitin, I think both of those are within our control to some extent. So let's take the premise of your question and break it down into both those. I think it's very astute to observe that just because you have a product that delivers profitable revenue that the entire market will adopt it when it has for a century viewed promotions as a risk of subsidizing purchases that are already occurring. That is why all the groundwork we've laid with measurement, the statistics, the approach, validating that, making sure to walk people through that train them.

And we had a whole on-site session with the top CPG here, in which we spent 8 hours talking about measurement and proof, that is starting to change those attitudes within the finance teams, within the people that control the purse strings and the budgets -- and that is behavioral change on the ground level. But there still is a norm of allocating resources in an annual way with kind of an annual measurement process.

And Nitin, as you might imagine, that is not the way you would do this if you were going to leverage things like machine learning and digital capabilities of the present. Instead, you would function more like a digitally native company where you set a set of rules or constraints around how profitable you want your promotion to be, and you have a target number of incremental sales that you're trying to achieve -- and then you essentially configure and change the parameters of a promotion as you go to get as close to those parameters as possible, -- and what's exciting is that if we deliver that, and we're giving ranges that are generally accurate and then hitting those ranges, the message we're hearing back from the market is we're going to keep doing that until those rules and constraints are no longer met.

So it's not the old world of kind of an aliquot of money and then come back to me in a year no matter what, it's kind of -- if you can meet these conditions, we'll continue to invest in an ongoing way until you can't meet them and then we'll cut it off. And that's what we want. I think the second part that's going on is there a thing to that I discussed last quarter that we do need to improve. So we do want to make it so that people can buy on this network in a way that is much more self-service that allows them to see the relationship between efficiency and scale and choosing where they want to be on that kind of continuum that allows them to see the recommendations that we're making for opportunities.

So we could scour the market and actually look and say, "Oh, here's an opportunity based on the data that we're crunching and then recommend a campaign design and have them implement that and then build confidence in our algorithms and our recommendations, those interfaces that make it feel more like buying media are being built right now. And that has required us to revisit the foundational data models and our program APIs and things like that, but we are making good progress on that. And I think as we head into next year, we're going to have a next-generation suite of products that grow out of those program APIs and that reimagined streamlined product catalog, things like that.

So there's a lot of kind of behind the scenes getting ready to really scale. The road map is very clear. It's got total alignment in the business. And I think what remains to be seen is how fast will that help our sales team demonstrate that this is something new and different and change those behavioral norms that have been there for so long. But what we're seeing already is that the conditions for that are there, which is that they trust us. They believe that this is a valid way of measuring. If now you could get more data and build it with a benefit of more publishers like 7-Eleven, and you can actually have a signal that's even more powerful and more definitive with better predictions would allow more clients to use LiveLift because we would have more confidence in those projections even shorter into their campaign.

They wouldn't have to run such a long campaign to benefit from LiveLift and that will open the aperture of access to that product. And I think they're confident in our current products. We have a whole new generation of products coming out. And it remains to be seen exactly the pace of adoption of that. And I think I I will be -- I'll get more information on that, and we'll have a better insight as next year unfolds. But clearly, we are going to be not just relying on the improved go-to-market execution, but a host of these other innovations, and we believe we're investing more in innovation than anyone else ever has in this space, and we're excited to see how the market responds to that.

Our next question comes from Eric Sheridan with Goldman Sachs.

Great. Maybe building on that last question, Bryan, and I certainly understand the desire to get to a point where you're sort of always on and budget is sort of being toggled with relationships on that side. But when you think about the end of this year and the budget setting exercise that the CPG industry generally goes through and the priorities that are being set, what do you see as the mission-critical pieces of execution that you have to put in place to ensure that the budgeting cycle coming out of this year and going into make sure sets the company up for the most incrementalism it can capture, especially when measuring some of the innovation you guys have introduced into the market.

Yes. So first of all, it's true. Most of our clients still do have an annual cycle. Keep in mind, not all of them at the end of the calendar year, plenty of them are midyear, different times in the year. So it kind of is always happening. And I would say the most important things are to continue to be -- to have a seat at the table in the conversation about the strategy and high-level objectives of our clients. As long as we are upstream in understanding what they're trying to achieve, we can fashion a set of proposals that will make sense for their needs. Part of that is communicating to them the growth that we anticipate in our own network and what the actual opportunity size is for their brands right now.

And that might be, hey, you've got 2 brands, but there's 9 brands that aren't participating here's the opportunity. It might be, hey, you've got 2 brands, but they're capitalizing on about 15% of the total capacity of our network and our network is projected to grow by roughly this amount. We are already having lots and lots of those 2027 conversations. And it's important to get out in front of that because, as you said, they're going to lock in those budgets. I think that what's also interesting, though, I mentioned that on-site we have with the large CPG company what I heard them say very clearly was, look, it's true we have annual budgets. And to the extent we genuinely believe that you can deliver top and bottom line growth, we're going to invest in that. I don't care what time of year it is. I don't care what budgets look like, we're still convincing them.

They're intrigued but there's some more work to do to completely convince all of our clients of that and to change that mindset. In a lot of cases, we are considered a marketing expenditure. And so when they go to protect their bottom line, the impulse is or, let me cut anything that's in the category of marketing expenditure. And what we're trying to communicate is, okay, no, if you cut this, you're actually going to cut your bottom line. You're going to worsen your bottom line because we are accretive to your bottom line. We are not like some billboard that you invest in, on the theory of long-term brand equity, very, very different very, very provable. And so distinguishing ourselves as kind of the substance of those forward conversations that we're having right now.

And I think that these more trusted relationships with our sellers on the front lines is what's going to give me the confidence that we'll have strong enough partnerships that they'll be there to capitalize on a much higher percentage of our redeemer demand capacity than they have in the past.

Our next question comes from Andrew Marok with Raymond James.

Great. Maybe one on this revamped event strategy that you've talked about. Obviously, with 3Q coming up, we do have a back to school on the calendar? Just kind of how you're thinking about that in the context of this new event strategy and anything new that you might be trying out around that?

Yes. So as you know, we've developed expertise over this -- over the years, and most notably our free Thanksgiving program, which has given away millions of free Thanksgiving meals have been a very big driver of usage and awareness of our platform. And we've just -- what we've done in the last year is add to the sales effort, a real kind of built-out scaffolding around them and a much more fully loaded revenue organization. Part of that is the B2B marketing division, which is sort of broken out of our old marketing department and put into our revenue function.

And that what they've done is identify these moments that matter. And sometimes, you can see them on a calendar, like it will be back to school or it will be St. Patty's Day or dads and grads or resolution. And they certainly got a packet of insights that are specific to each client and a proposal that makes sense. But really great companies also capitalize when things come up that they didn't necessarily think would come up. So gas prices are high or there's a challenge with changing consumer behavior because of a lettuce scare or you have something going on with Amazon that you need to defend against or worry about -- these things then cause us -- or the SNAP example where just suddenly, okay, the government is going to change the allowance for Snap.

Being responsive, being the first 1 in their inbox with a hey, we're seeing the effect of GLP-1s on your business Here's what we're going to do about it for you. We're seeing the effect of private label on your business. Here's what we think we can do. And the more we're hearing from them, what they're worried about, it's the better able we are to sort of see the world through their lens one by one. And so we're able to then hand our sellers -- think of it like a packet, but it's a kit, a set of data, a set of a collateral that they can go out with and win. And a big part of why we've done as well as we have in this last quarter and the beginning to see this going forward is that there is a kind of a cross factor between our sellers and the client analytics client insights and the B2B marketing team, the product marketing team that's enabling this go-to-market to be much more effective and we made sure those incentives are better aligned and those teams are working better together.

So I think it's the right thing to point to as an example of a variety of things we're doing, whether it's sales operations, sales finance, like I said, insights that are all supporting the sellers. And when I talk about making it easier, that's another way of supporting the sellers because that's getting the sellers -- it's close to 100% as possible, selling on the road, listening, developing solutions, creating solutions versus administering business that we've already won.

Our next question comes from Andrew Boone with Citizens.

I wanted to ask on D2C. As supply improves, what should our outlook be as we think about D2C broadly, Brian, is there a point that, that should have rest in terms of declines and start to grow again? Or how are you guys thinking about that strategically? And then we've talked in the past about pricing -- this quarter, there was a step up in third-party revenue per redemption. Is there anything behind that or anything you want to touch on in terms of pricing strategy that happened in this quarter and how we think about that going forward?

Yes. I think the pricing point, it has a lot to do with the composition of where the redeemer growth is coming and where the redemptions are coming. The third-party revenue per redemption was actually flat -- so it just is a function of that mix. But we feel like on pricing, we have gotten it to a place that is client-centric that is consistent with the goal of delivering highly effective promotions. However, that's defined by the client, whether that's profitable revenue growth that we're maximizing scale. And they want to know that we're able to charge them an amount that doesn't preclude that, and we've generally seen that reached a good equilibrium on that. It's also a more continuous rational pricing approach, and that's been, I think, well received by our clients, moving away from setup fees and things like that.

As far as the D2C business more broadly, we continue to see that when inventory of offer supply is strong, we have the opportunity to lean more into user acquisition, user retention initiatives such that we feel confident there's enough value that we'll retain those savers within our D2C, which is why we've been focusing so much on unlocking offer supply because we know that that's the primary kind of precondition for leaning back in. However, there are some things we're trying on the D2C app to try to arrest the decline and add another in particular.

So some new kinds of ad units, things like that, that we hope may cause that to level out. And there may become a point where we have such a a nice amount of offer supply and quality of offer supply that we choose to increase our investment in terms of marketing spend on the D2C property to regrow that. One of the things we're always focusing on is making sure that the data asset that we get in connection with the D2C property is not diminished. And we had some very big wins this last quarter in terms of turning that trend around and making sure we actually have more data than we did coming from D2C.

So there's -- while that doesn't translate into revenue per se directly, it is important to everything else we do as we as we -- that powers a lot of the LiveLift capabilities and so forth. So I think the first step is to begin increasing off of supply. That is now starting to happen. You're seeing double-digit growth in in redemption revenue, that's the headline. And then I think we will see on what time line we feel confident reinvesting in the D2C property.

This concludes the Q&A session of the call. I would now like to turn the call back to management for closing remarks.

Thank you very much for joining us today. We're very pleased with the progress in our business. I'm grateful to our team for their commitment to these actions we've taken over the last year. And I think we've pulled forward by a quarter the time line on which we've returned to growth as a company. On the top line, we're really excited to see that inflection and think we can build on this from here. And I appreciate the questions, everyone, and we'll see you in November.

Thank you for joining us today's session. The call has concluded. You may now disconnect.

Good afternoon, and welcome to Ibotta's Q1 2026 Earnings Conference Call. With us today are Bryan Leach, Founder and CEO; and Matt Puckett, CFO. Today's press release and this call may contain forward-looking statements.

Forward-looking statements include statements about our future operating results, our guidance for Q2 2026, our ability to grow our revenue, factors contributing to our potential revenue growth, our key initiatives, our partnerships and the capabilities of our offerings and technology, all of which are subject to inherent risks, uncertainties and changes.

These statements reflect our current expectations and are based on the 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, our 10-Q and our Q1 2026 earnings presentation, which are all available on our Investor Relations website at investors.ibotta.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.

Good afternoon, everyone. Thank you for joining our discussion of first quarter results. We're pleased to report first quarter revenue and adjusted EBITDA that are both above the top end of the guidance range we provided on our fourth quarter earnings call. We continue to anticipate that our year-over-year revenue trends will improve sequentially, returning us to overall revenue growth in the third quarter of 2026, which is consistent with the outlook we provided in February.

The improved trajectory of our business is mostly the result of our sales team's success in deepening and broadening the supply of offers available to us. Our core promotions product is demonstrating strong market fit, while our more recent offering, LiveLift, continues to receive positive early feedback.

On the publisher front, we've added 2 new partners in quick succession, both of which have entered into multiyear exclusive partnerships with us. In late March, we announced the addition of Uber, meaning that later this year, Ibotta's digital promotions will appear within the Uber, Uber Eats and Postmates apps.

And today, we announced that Giant Eagle is also joining the Ibotta Performance Network. I'll say more about the significance of these new publisher wins later on. But first, I'd like to provide a bit more context on our recent financial performance and share additional details about the from-to pathway we see ourselves on.

On a year-over-year basis, our redemption revenue performance has almost fully recovered. In the first quarter, it was down 1% year-over-year compared to being down 15% in the third quarter of last year and down 5% in the fourth quarter.

This gradual recovery has been partly driven by redeemer growth with 15% more redeemers in Q1 than in the same quarter last year. That said, increased demand for offers alone doesn't move the needle unless we also source enough offers to take advantage of it.

This is all about having the right team in place, spending more time in market, multi-threading our outreach to stakeholders at different levels within an organization and being more immediately responsive to our clients' needs.

Building trust in these ways, is allowing our team to continue moving forward further upstream in our client strategic planning processes. We're also doing a better job of supporting our sellers and account managers with B2B marketing, training and enablement and client-specific insights.

Our product team is working hard to deliver new tools that make each step in the quote-to-cash process easier, faster and more efficient. Encouragingly, our success has been broad-based, which continues to increase our conviction in the path we're on.

Our sales team is adding new clients, securing new, often larger commitments from existing clients and retaining the overwhelming majority of our clients. Our strategic partnership with measurement leader Circana continues to generate sales and marketing momentum. We recently published a case study available on our website that independently validates Ibotta's ability to deliver successful results for our clients.

Chomps, the fastest-growing meat snack brand in the United States, ran a campaign earlier this year to drive trial and household penetration. The results were outstanding and were independently verified through a sales Llift study conducted by Circana. Households exposed to the Ibotta campaign spent an average of 15% more on Chomps than their unexposed counterparts.

Even more impressively, the campaign outperformed Circana's snack category benchmarks for sales lift by more than 4.5x and surpassed household penetration benchmarks by a staggering 9x. Stacey Hartnett, the SVP of Marketing at Chomps, summarized the impact well.

She noted that achieving strong on-shelf presence was only their first milestone. The strategy has now shifted toward winning new buyers through smarter promotional strategies. She stated that our partnership has become a key lever in that effort and that the study reinforces that the IPN delivers impact well beyond a discount, helping them reach the incremental shoppers critical to their long-term growth.

Turning to LiveLift. We continue to see positive signs of product market fit, even though it's still early days. We continue to limit access to those clients willing to spend a certain amount and run their campaigns for a certain duration. For this reason, the revenue contribution from LiveLift remains modest for now, and we aren't forecasting a significant ramp in revenue until we loosen those eligibility requirements.

I'll have more to say on what that will require in a moment. Actual re-up rates among clients that have completed a LiveLift campaign remain consistent with the approximately 80% level we've discussed in prior quarters. Those clients who have not yet re-upped are primarily smaller CPGs, which we believe reflects our eligibility criteria rather than any dissatisfaction with the product, consistent with what we've said previously.

Repeat users represented approximately 60% of LiveLift campaigns in the quarter, with the remainder being first-time users running pilots. The average campaign size for LiveLift campaigns remains meaningfully larger than for our core product. The most common question I received after our last earnings call was, 'can you help me better understand what the pathway to greater adoption of LiveLift will look like?

So let me try to shed some light on what that entails and why I believe we're making solid progress. Of course, as with any innovative product development process, it's impossible to know in advance everything we will learn along the way or exactly how long that will take.

Our goal is to make it as easy as possible for our CPG clients to buy campaigns on the Ibotta Performance Network. Some will prefer to stick with managed service, while others may take advantage of our self-service tools, which we will continue to refine and improve.

In the future, our clients may also rely on agents to make more autonomous media buying decisions. Whichever interface they choose, clients will start by identifying the goals of their campaign.

Our LiveLift platform then takes this information and evaluates a wide range of possible campaigns and chooses the best fit for their goals, projects the amount of redemptions, incremental sales and cost per incremental dollar we think they will achieve, tracks these metrics on an ongoing basis, providing profitability readouts at various points during the campaign and optimizes the campaign as necessary along the way.

Scaling LiveLift to our wider client base will require greater automation of these processes. With that in mind, we are focused on a few key initiatives.

First, we're building a more sophisticated programmatic API layer so that our software as well as any agents we create, can interface with the various models and systems that power LiveLift, allowing our system to fully harness the power of AI and programmatically design, build, launch, optimize and report on a campaign. This includes considering different scenarios and making the best possible projections and recommendations more quickly and at lower cost.

Second, we are refining the underlying models that power LiveLift. These models become more robust as we train them on the data generated by running these early LiveLift campaigns as we receive additional data from existing publishers and as we expand the publisher network, gaining access to new sources of data. Widening the availability of LiveLift requires continued model training through repeated experiments and those take time. We are building a novel capability in this industry, and that necessitates a disciplined phased approach to scaling.

Third, we are working on what I would broadly call AI enablement. That means documenting processes to create additional context for AI, defining standard operating procedures and simplifying our product catalog to reduce complexity.

Creating this scaffolding takes time. But once we have a simpler set of products with the appropriate context, more reliable agentic AI flows become possible. We believe that the progress we are making along all these fronts will ultimately allow us to more meaningfully inflect the level of CPG offer supply.

Switching to the demand side of the equation. We continue to see strong results this quarter with healthy redeemer growth driven by organic growth at our existing publishers and the 2025 launch of DoorDash.

One of our top priorities has been diversifying our publisher base, and we have begun doing that with the recent additions of Uber and Giant Eagle, both of which entered into multiyear exclusive partnerships with Ibotta. Adding Uber to the IPN allows us to intercept consumers in high-intent commerce moments and solidifies our leadership position in the fast-growing and important e-commerce delivery space.

Our partnership with Giant Eagle further validates the strength of our model and enhances our presence in the traditional grocery channel. As one of the nation's largest multi-format food and pharmacy retailers and a recognized industry thought leader, Giant Eagle chose to transition to Ibotta in order to access a more robust and relevant offer gallery that moves the needle for their customers.

We're pleased with the terms and the economic profile of both of these new partnerships. These partnerships demonstrate the extensive work of our business development and technology teams behind the scenes to enable these milestones.

I'll now turn the floor over to our Chief Financial Officer, Matthew Puckett, to walk through our financial results and guidance in more detail.

Thank you, Bryan, and good afternoon, everyone. Right off the top, I'll repeat Bryan's comments. We're pleased to have delivered another quarter that was ahead of our initial outlook, further validating that we are very much on the right track.

With that, let me jump into the Q1 results. We delivered revenue and adjusted EBITDA that were respectively, 3% and 25% above the midpoint of the guidance range that we provided on our fourth quarter earnings call.

Now to unpack our top line results for the quarter.

Revenue was $82.5 million, a decline of 2% versus last year. Within that, redemption revenue was $73 million, down approximately $400,000 or 1% year-over-year. Both redemption revenue and ad and other revenue trends improved on a year-over-year basis as compared to the fourth quarter.

We continue to be pleased with the results our sales organization is driving and how both our core product offerings and LiveLift are resonating with our clients. As Bryan noted, the LiveLift re-up rate remains healthy, underscoring that clients are realizing the measurable benefits that these next-generation capabilities deliver.

Third-party publisher redemption revenue was $54 million, up 12% versus last year and accelerating sequentially versus the prior quarter's increase of 8%. Direct-to-consumer redemption revenue was $19 million, down 25% year-over-year and similar to Q4's result, where, as anticipated, we've continued to see redemption activity shift to our third-party publishers.

Ad and other revenues, which represented 11% of our revenue in the quarter, were $9.5 million, down 15% versus last year due primarily to continued pressure on ad revenue as a result of lower direct-to-consumer redeemers. This reduction was partially offset by growth in data revenue.

Turning now to the key performance metrics supporting redemption revenue. Total redeemers were $19.7 million in the quarter, up 15% year-over-year. We saw another quarter of significant growth in third-party redeemers across the IPN, including strong growth with our largest publisher partner, highlighting the continued health of the demand side of our network. In addition to organic growth with existing publishers, the quarter also benefited from the launch of DoorDash in the second quarter of 2025.

Redemptions per redeemer were 4.5, down 6% versus last year, a meaningful improvement in trend versus the second half of last year when redemptions per redeemer were down 22%, but where the decline continues to be driven by both the quantity and quality of offers available to each redeemer as well as the growth in third-party redeemers, which have a lower redemption frequency as compared to our direct-to-consumer redeemers.

Redemption revenue per redemption was $0.83, which was flat versus Q4 and down 7% versus last year, driven primarily by the mix of redemption activity.

Summing it all up, total redemptions were $88 million, up 6% versus last year, driven by 15% redemption growth on our third-party publishers. This represents a more measurable return to year-over-year growth in redemptions for the first time since the first quarter of 2025 after being flattish in the fourth quarter.

Now switching to the cost side of our business. As anticipated, non-GAAP cost of revenue was up $2 million versus a year ago, largely driven by an increase in technology-related costs, along with a more modest increase in publisher costs.

This resulted in a Q1 non-GAAP gross margin of 78%, down approximately 300 basis points versus last year. As we discussed last quarter, much of the increase in technology-related costs is a function of increased investment in product development, as well as a higher allocation of certain costs from R&D expense to cost of revenue.

Before I review non-GAAP operating expenses, let me point out that we've made a change in how non-GAAP operating expenses are defined and shown on Page 12 of the presentation that accompanies our earnings materials. You'll notice we are now including depreciation and amortization in non-GAAP operating expenses.

Now turning back to the results. Non-GAAP operating expenses were up 5% versus last year and were 71% of revenue, an increase of approximately 470 basis points year-over-year. Within that, non-GAAP sales and marketing expenses were up 17%, driven by higher sales labor, the cost of third-party Lift studies and B2B marketing expenses.

Non-GAAP Research & Development expenses decreased by 21%, primarily a result of higher capitalization of software development costs and a higher allocation of labor expense to cost of revenue. This is due to more of our investment in R&D being directly focused on product development.

Lastly, non-GAAP General & Administrative expenses increased by 5%, while depreciation and amortization increased by approximately $600,000 or 60%.

Similar to the last couple of quarters, while overall non-GAAP operating expenses grew modestly year-over-year, 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. This increase was approximately 12% and again was highlighted by higher labor costs in the sales organization and other technology-related costs.

We delivered Q1 adjusted EBITDA of $8.7 million, representing an adjusted EBITDA margin of 11%, non-GAAP net income of $6 million and non-GAAP diluted net income per share of $0.24.

Our non-GAAP net income excludes $16.7 million in stock-based compensation, and it includes a $0.3 million adjustment for income taxes. We ended the quarter with $164.6 million of cash and cash equivalents. And in Q1, we spent approximately $45 million repurchasing approximately 1.9 million shares of our stock at an average price of $22.92.

We had 25.6 million fully diluted shares outstanding as of 3/31. And as of the end of the quarter, we had $90.3 million remaining under our current share repurchase authorization, which, as previously disclosed, was increased by $100 million upon authorization from the Board of Directors on March 11.

And finally, we generated $23.3 million in free cash flow, an increase of 56% versus last year, largely driven by higher cash flow from operations as a result of decreases in working capital compared to the first quarter of 2025.

Now shifting to Q2 guidance. We currently expect revenue in the range of $82 million to $86 million, representing a 2% year-over-year decline at the midpoint and at the same time, a 2% sequential increase versus Q1 at the midpoint. And we expect Q2 adjusted EBITDA in the range of $9 million to $12 million, representing about a 12.5% adjusted EBITDA margin at the midpoint.

With that, let me provide a little more color on our outlook.

First off, as both Bryan and I have mentioned, we continue to be pleased with the consistency of our execution with our clients and publisher partners, both with core product offerings and with LiveLift pilots. This has been the driver of improving revenue trends during the last couple of quarters, and we expect that to continue.

One other point to make on Q2 revenue.

At the midpoint of our revenue outlook, we would expect redemption revenue to return to growth for the first time since Q1 of 2025. Beyond our specific Q2 revenue guidance, we are confirming our expectation of a return to year-over-year growth in total revenue in Q3 in the low single-digit range.

It's probably on your mind, so let me highlight the assumptions implied in our outlook specific to the 2 new publishers we are adding to the network. We've assumed an immaterial impact on Q2 during the testing and piloting phase and expect a small benefit to revenue in the second half of the year as we ramp up with these partners. I'll note that offer supply will be the governor on the near-term revenue impact of this expansion on the demand side of our network.

As it relates to costs, our expectations are broadly unchanged from last quarter. We continue to expect to see a modest sequential increase in quarterly non-GAAP cost of revenue and operating expenses throughout the balance of the year. That continues to be a function of investing in areas that are critical to our transformation.

Specifically within cost of revenue, as we said last quarter, we expect to have substantially less growth in publisher-related costs as compared to what we saw in 2025. And we do expect similar to the first quarter that the biggest factor driving an increase in cost of revenue will be higher technology costs, which is partially a function of where these costs are allocated in the P&L relative to last year.

Lastly, with a healthy balance sheet and positive free cash flow, we'll continue to prioritize investing in organic growth and the strategic priorities of the business while also returning cash to shareholders.

We remain excited and energized by the opportunities ahead and look forward to returning to year-over-year revenue growth in the second half of this year. With that, operator, let's please open up the line for Q&A.

[Operator Instructions]. Our first question will come from Ken Gawrelski with Wells Fargo.

Can you hear me okay?

Yes.

Could you maybe, Bryan, could you talk about how you, as move more to LiveLift over time and you get the sales process really humming, when you look into '27 and '28, how do you think the financial picture may change? Like what does it mean for the margin structure of the business relative to kind of post IPO? What fundamental differences do you see there? Maybe the first one.

Sure. And then go ahead, please. I'll follow up.

The second one is this is like if, as you think about the progress you can make in the back half of this year and into early next year, how much of it is like a change in the calendar year provides another opportunity to kind of another bite at the apple with some of those big CPG brands versus just getting your go-to-market strategy and process working?

Thanks, Ken. So, I'll take those in turn. So, the first one, I'll answer at a high level and then let Matt provide additional detail, and then I'll have him pass it back to me for the second question. So, for the first one, I would say, broadly speaking, we feel like we're in a good place with our expenses to be able to build the products we need to drive the increase in office supply over the next few years, you asked about '26, '27, '28. And so that should, in other words, we don't expect to have to continue to ramp expenses at the same rate that we're ramping revenue. And so that should be positive in terms of the margins and the contribution to adjusted EBITDA over the next 3 years.

We have ongoing innovation that's baked into the R&D that's part of our current effort. I think more time will allow us to get in front of our customers with the Liveliest message. It is an evolution in the industry that is moving from annual planning and annual allocation and annual measurement to more ongoing measurement and optimization using rule-based or outcome-based systems. And that go-to-market takes some time to build the necessary trust and conviction and then have the cultural changes that need to happen on the client side.

But I feel like the developments that I described in my remarks will put us in a position where there'll be, more a variety of different ways that people can buy on our network. And those ways will be much more sophisticated and allow us to meet the needs of our clients more often and allow us to earn the way into larger and larger budgets, which is what's really going to move the needle and drive revenue in this business.

I'll let Matt add any additional thoughts on that before turning to your second question.

Yes, Ken, just a couple of things I would add. Without being precise, which obviously we're not going to do about regarding our financial algorithm, a couple of things I'll say.

One is kind of more medium term and then longer term, which is really kind of reiterating Bryan's points. We've been talking for a couple of quarters now about the investments that we were making, right, in first in the sales organization, which is restructuring, reorganizing and really just leveling up the capabilities in the sales organization as well as the investments we've been making in our technology as it relates to the transformation of the business and the capabilities that we've been building.

We're kind of nearing lapping most of those investments. We're not fully there. But over the course of this year, we will lap all of those investments. That's factored into everything we've said about what the forward picture looks like. Once we've done that, then as we sit here today with what we see that needs to get done, we don't expect to have to add.

There's not another step change in the investment profile from here. So, as we see the top line stabilize and then we start to drive consistent, sustainable growth, we're going to see the opportunity to expand both gross margins and EBITDA margins over time. So hopefully, that helps answer.

The second question, Ken, about the back half and the change in the calendar year. I would say that different clients have different fiscal years. Some of our clients reset in July, some of them reset in the fall, some of them reset on the calendar year. And while that is definitely a factor in situations where we have kind of gotten through the budget that was allocated to us in the previous cycle, we get a chance to kind of demonstrate the effectiveness of that, the level of performance earns us into a larger budget. That's true.

However, I think it is more a function just of being able to get in front of clients with our core product, demonstrate the scale that we have that we are along the breadth of purchase in all these different places now, the addition of these new publishers that allows us even in between even intra-year to go back and make the case that this is where they should be spending more money at a time when they're aware that this is how they gain market shares by intelligently thinking about where they're pricing their products and how they're promoting their products.

So I don't want to lean too much on that as sort of some major driver. We are always selling both in the annual planning process and then within that year. And then I would say also our whole goal here is to move the industry away from that mentality of annual planning into a mindset of 'I always want to buy this as long as these rules and constraints are being met.

So I want every dollar of top and bottom line revenue and profit that I can get through this platform, and I'll spend until I'm no longer seeing that level of efficiency. And so that's ongoing. But I think it's safe to say that for now, we are still living in a world where we do participate in those annual re-up conversations. There are just thousands of brands happening all the time at different parts of the year. And Matt was going to add one more thing.

Yes, Ken, just one more thing to make sure we got to the essence of part of your question there on the kind of the margin profile. As we grow LiveLift over time as a bigger penetration of the business, that doesn't materially change the margin profile, whether it's the core product offering or LiveLift, you wouldn't see a really different outcome. It's really about the investments we've made to enable the growth that will flow through our business model.

Our next question will come from Tim Mitchell with Raymond James.

So first, a couple. So first, if you can just kind of talk about some of the early progress with the Uber partnership and how that is tracking. And then within that commentary, you gave on some of the initiatives surrounding LiveLift in terms of what it's going to take to ramp that a little further. Just any thoughts on like, what inning you're in, any progress made on those initiatives so far?

And then secondly, just on the macro, curious if you're seeing any impacts from energy prices, whether it be on CPG spend or on the health of the lower end consumer.

Great. Thanks, Tim. So first, on the Uber partnership, pleased to have announced that a little while ago. That's, like all of our publishers, they don't just turn that on overnight to 100% of all of their customers across thousands of stores that they support. They do that in a stepwise function, and we are in, the early part of the process of that rollout. And we will then begin working with them on other aspects of that partnership to make sure that we're able to do the most sophisticated forms of measurement and personalization, et cetera, marketing, reactivation, activation, those best practices.

I would say we're, but we are in a position where the technology to support this, has been built. And we're, like I said, in the early days in the process of introducing that to different customers at Uber. And we're excited about that. As you know, we have a strong presence in that area, and that's something where we hope that it will also have the same level of uptake and high redemption rates that we've seen in that category more broadly.

Second question, or I guess the second part of your first question, was to do with the progress we've made on the ramp of LiveLift. I think we've made significant progress from the last time we had a conversation in late February. That is along all the different dimensions that I mentioned.

AI itself is evolving very rapidly. And so, we are investing heavily in AI enablement to take advantage of the efficiencies that are available to us through using things like Claude Code, but also our ability to create this programmatic API layer.

We're absolutely working on that around the clock, getting that to a place where we'll be able to automate more of these processes, which will benefit our entire business, not just LiveLift but also LiveRamp, but also all of our core offers, and benefit from having it be easier to design, set up, revise, and so forth from beginning to end a campaign.

And then the models underlying, I think I mentioned that those get better with the more data, with the more refinement of the model, and the more publishers you add. The addition of Uber and Giant Eagle will help us refine those models. That itself represents progress. But we are also seeing that as we get a second and a third LiveLift campaign from some of these repeat customers.

I mentioned 60% of LiveLift is from a repeat customer. They're able to test out different strategies, and we're able to learn something about the way the consumer responds to different structured promotions based on their goals. That then helps project the next campaign that much better. So those clients that are participating or gaining an advantage, they are all aware that doing that in this environment is important, which is a good segue to your last question about the macro.

The news you're reading is the same thing we're hearing from our clients. The American consumer is looking for value. We're excited that we're an integral part of that. Whether that is driven by the war in Iran, gas prices, tariffs, or some other exogenous factor, there's a lot of focus on this topic.

Even earlier today, the CEO of Kraft Heinz put out a message, Steve Cahillane, saying the new mantra is value. Consumers are literally running out of money.

Those are the kinds of things that cause people to take a closer look at the product that we sell. And I think that we're making the case that there are smarter and less smart ways to do that to deliver that value, and we think the Ibotta Performance Network is a really good way to do that in a way that's also capitalizing on the latest technologies that are available.

So I think that will continue to be true. But I also want to stress that this is nondiscretionary spending. So no matter what the macro environment is, people are looking for value in the things they have to buy week in, week out.

If you look at the press release we put out today from Giant Eagle, they commented on why they switched to Ibotta. They switched to Ibotta because they wanted to see an 8x increase in value delivery for their customers. And they're hearing consistently that that is what makes the difference in why people shop at Giant Eagle versus somewhere else. And so both on the CPG side, for example, Kraft, or on the publisher side, for example, Giant Eagle, being in this field right now is particularly important.

Our next question will come from Stefanos Crist with Needham & Company.

Can you hear me?

Yes, we got you.

I just wanted to ask about the third quarter revenue inflecting positively. What are the assumptions in there? Are you baking in a certain ramp in LiveLift? Are you including Uber and Giant Eagle? I would just love to go through the assumptions there and where there could be upside.

Great. I'm going to hand that one to Matt.

Yes. So it's really kind of what we're doing today, continuing, right? We've seen sequentially improving results in our business, particularly driven by redemption revenue, and that's really the driver. We expect to see that get better in Q2 versus Q1, and the same to be true for Q3 versus Q2, and that's all going to translate into growth.

There's no step change assumed in terms of LiveLift adoption or us further opening the aperture to that. It's kind of where we are today, the expectation. We've assumed a very modest impact from the 2 new publishers in the back half of the year. That'd be a little bit less in Q3 and a little bit more in Q4.

That's probably the way to think about that. But it's really an ongoing kind of performance that we've seen to date, driven by consistent execution and the fact that our products, both core products and obviously, LiveLift as well, are resonating with our clients.

Got it. If I could squeeze one more. Just on the monetization of Uber and Giant Eagle. I assume Uber is similar to DoorDash, but how about Giant Eagle? Is that similar to Dollar General, or are there any differences between these 2 partnerships?

Yes. I think without going into the specifics of the economics of individual partnerships, broadly speaking, those are similar to how we've approached these in the past, and we're happy with the economics of those partnerships. And I think, as we get greater scale and more momentum, greater access to supply, we continue to see publishers that much more interested and motivated to deliver the best possible value for their customers, and that we think will continue to contribute to favorable economics going forward.

Our next question will come from Nitin Bansal with Bank of America.

Bryan, can you provide some more details on your progress with the go-to-market transformation, specifically, like how the new sales motion impacted your 1Q results? And what additional changes are you making to the sales team that could impact your performance for the rest of the year?

Thanks, Nitin. Absolutely. There are a number of different things that have been going on since the arrival of Chris Reidy on our team. And that started with taking a look at the team itself and making sure we have the right people in the right roles to help ourselves with the kind of sales that we're going to need to do, which is much more of a kind of consultative sale where we have to be fluent in the businesses of our clients.

We reorganized the sales organization to be no longer geographic but focused on the actual industry-based approach. So, we have experts in beverages, for example, or in household products or what you have. We separated into enterprise clients versus emerging clients with each having its own industry subvertical.

We focused on a variety of support structures that weren't in place that needed to be such as bringing in an SVP of Enterprise Sales, SVP of Business Marketing to help us with sort of the B2B marketing expertise, beef up the sales finance, sales operations, training and enablement of our sellers.

And I think that was very important. We filled all those senior leadership roles by early October of 2025, as I've said on previous calls.

And we brought in the right people. We have brought in excellent talent, and that has helped us in a lot of different fronts. So, we mentioned on the last call, the thought leadership, the ability to be proactive, get in front of our clients.

I think the example I gave was the SNAP program. We had a kind of a playbook that was designed. We reached out that led to incremental dollars being committed to Ibotta that weren't in their previous annual plan that were kind of opportunistic, which is really valuable.

We've talked a little bit about other things that we've done like multi-threading is a term we've used, meaning teaching our sellers to go in at multiple different levels of an organization at the same time to speak to different needs and pain points of the people in those organizations using the language of their business.

The simple fact of being on the ground more often, being in the room more often, the hustle factor, continuity, so not handing people over between rep to rep. That is really about trust. Most of the structural changes were made last year, but we're continuing to build that trust. And as we're doing that, we're getting invited into more and more important strategic conversations.

We're getting clients that are wanting to say, 'let's come out and spend a day with you', and we're going to bring significant senior members of our team to discuss where you think this industry is heading and how it's impacted by things like technology, AI, et cetera.

So I think we're being embraced more as a thought leader and invited more into upstream strategic planning conversations. I think the introduction of Circana and ABCS has allowed our sales team to provide this third-party independent analysis. That's given them another important platform.

We've done a better job with event marketing. So Chris Reidy has been on stage all over the place. He's on the stage at ADWEEK in places like this is possible, NACDS, lots of different conferences where we're getting in front of all different parts of the CPG organization.

So I think it's not one thing, Nitin. It's a variety of different upgrades to how our team sells. And I think that, of course, having something like LiveLift to discuss, having the ability to focus on incremental sales and really lead the conversation around rigorous measurement, that's given them a lot to talk about, and I'm really proud of the work they're doing.

Our next question will come from Tim Huang with Citizens JMP.

I wanted to follow up about the pricing changes that were talked about in last quarter's call with regard to pricing being more linked to AOV. Just like could you give any color on how that's been received or just like further progress during the quarter on pricing and what's been flowing through?

Thanks, Tim. Sure. You're right. And your memory is spot on. It's a question of moving from a flat fee that is applied based on the price band that a product falls within.

So, the old system is if your product was $3 to $4, you paid this cost per unit sold or per redemption rather. If your product was $4 to $5, $5 to $6, $10-plus, you might pay a different cost per redemption under the old model. And of course, the problem with that is that as you get to either side of that range, you get kind of discontinuities.

So, you get the ratio that your fee represents as a percentage of the overall product price, and that's the kind of total economics available to the brand varies. And that can create inadvertent inefficiencies. So, it might make it unnecessarily expensive, for example, to use Ibotta with lower-cost products where our fee per redemption constitutes a high enough percentage that it's hard to deliver a cost per incremental dollar that's attractive, meaning lower than the contribution margin of that product, consistent with a goal of profitability.

So, the solve for that is to shift toward a system where it's continuous. So, it is a fixed percentage of the price itself. And that way, whether you're at $1.01 or $1.99, you're equally able to take advantage of that structure.

What we've been doing is introducing this transition in our pricing as part of a broader reset of some terms that we have in our preferred partnerships and our agreements. That was very well received. I think people view that as simplifying the system, dispensing with discrete fees for things like setup costs and things, makes it simpler. Everything is wrapped into this one percentage of the price fee.

As I said, it's encouraging clients to promote lower-priced items. We're still very much in the middle of that transition because we didn't want to just mandate that. Everybody turn on a dime. You have to now institute this new pricing.

But as we come back through these conversations on our annual preferred partnerships, for example, that, along with other conversations around things like payment terms are a natural part of our conversation. And that's been, broadly speaking, I think, going well. We're seeing success in that transition, although we're still very much in the midst of it.

And Matt is going to add one more thing.

Yes. I would just say, and you'll see this, obviously, in our results, our redemption fee, those numbers are going down a little bit, right, in terms of kind of the way to think about price. We pay attention to that. We understand it, but it honestly doesn't scare us. In order to maximize revenue, in many cases, it makes sense to lower fees. It allows our clients to hit profitability objectives.

And think about our business model, our financial model as it sits here today, incremental revenue flows to the bottom line at a really high rate. So it's actually not a bad thing. We do understand it and pay attention to it. But seeing revenue coming down as a result of fees but then offset by higher volume is actually a good answer for us in most cases.

Yes. I think broadly speaking, Tim, it's fair to say we've been, we've had a greater level of analytical rigor. And I think looking at that has caused us to, is one of the reasons why we arrived at this transition in our pricing. And I think we did a lot of, had a lot of conversations with our clients before we settled on this. And so fortunately, I think we had properly prepared for the transition, and I'm happy with how it's going.

[Operator Instructions] This now concludes the Q&A section. I would now like to turn the call back to management for closing remarks.

Thanks very much, everyone, for your time today. We are pleased with the results that we reported and the momentum in our business, and we look forward to speaking with you again soon.

Thank you for joining today's session. This call has concluded. You may now disconnect.

Good afternoon, and welcome to Ibotta's Q4 2025 Earnings Conference Call. With us today are Bryan Leach, Founder and CEO; and Matt Puckett, CFO. Today's press release and this call may contain forward-looking statements. Forward-looking statements include statements about our future operating results, our guidance for Q1 2026, our ability to grow our revenue factors contributing to our potential revenue growth and the capabilities of our offerings and technology, all of which are subject to inherent risks, uncertainties and changes.

These statements reflect our current expectations and are based on the 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 and our 10-K which are available on our Investor Relations website at investors.ebata.com.

Also, during the call today, we will be referring to the slide deck posted on our website. 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 Brian.

Good afternoon, everyone. Thank you for joining our discussion of fourth quarter results. We're pleased to report fourth quarter revenue and adjusted EBITDA that are both above the top end of the guidance range we provided on our third quarter earnings call. This represents an improvement in year-over-year revenue trends when compared to the third quarter.

Based on the trends we saw in our business in the second half of Q4 and quarter-to-date, we are also guiding to first quarter 2026 results that are above our previous expectations. There were 3 main drivers of our fourth quarter outperformance, improved execution, the strengthening of our core product and the continued expansion of Live Lift. Let me give you an update on each.

In terms of improved execution, here are a few specific things we've been focused on. First, we leveled up our sales leadership, bringing in elite talent from the digital media space. Second, we restructured and reorganized our sales organization. This included rebalancing our account loads and verticalizing our teams to better speak the language of our clients' industries. Third, we emphasize a consultative approach that ensures our team is providing a solution that meets our clients' needs.

We're doing a better job of getting further upstream in client strategic planning and budgeting cycles. This involves building relationships, not just with the procurement department and promotion centers of excellence, but also with brand leaders and senior executives such as CEOs, CMOs and CCOs, Chief Commercial Officers. Fourth, we overhauled our B2B marketing function. That team is enabling our sellers to be more timely, relevant and proactive in their outreach. For example, when the SNAP program underwent significant changes for millions of U.S. consumers, our B2B marketing team developed a fourth quarter playbook, which allowed our sellers to quickly communicate how clients could respond using the Ibotta Performance network.

This initiative generated additional revenue, solved a real problem for our clients and help consumers in a time of need. Fifth, we addressed the concern that CPGs have never had access to independent third-party measurement. For the first time, we made it possible for our clients to purchase sales lift studies just as they would for other forms of digital media. In the third quarter, we announced our partnership with [indiscernible] and then last quarter, we added ABCS insights, giving our clients another choice of measurement partner.

Based on early feedback, it appears that the availability of third-party measurement is helping our sellers build trust with our clients. In addition to better sales execution, we strengthened our core product offering in important ways. Here are some examples of the improvements we made, one, setting clearer goals for each campaign in advance. Two, focusing on the incremental sales our campaigns deliver; three, improving the profitability metrics that we use to measure our campaigns, and four, revisiting our approach to pricing, including tying our fees more clearly to the price of the products being promoted.

I want to stress that these things I just mentioned are not live lift per se. They are simply an evolution of our industry-leading core product. We are now seeing clients lean into these core capabilities, which is improving offer supply and driving the recent trends we've seen in our redemption revenue. Live Lift is best understood as a set of next-generation capabilities that allow clients to see the projected incremental sales and cost per incremental dollar said at various intervals during their campaigns, thereby enabling them to better optimize the performance of those campaigns.

A helpful way to think about Live Lift is using the following analogy. Our core product is like a best-in-class luxury car. It's already seen as the leading performance vehicle in the category. Each year, there's a new and improved model, making it even better, higher-performing cars. LiveLift is like a powerful new feature that is added on to the vehicle for certain customers. say, for instance, like autopilot. That feature enhances the car's performance, and it also generates buzz and excitement. It continues to improve as well over time until it more closely resembles something like fully autonomous driving, which holds the potential to transform how we think about driving itself.

So the operative question is not how fast can I bought to transition clients away from its core product and into Live lift. But how much can I bought to grow revenue based on the strength of its continually improving core product and then how much can Live lift further accelerate that growth and ultimately transform the category. Clients whose campaigns meet certain criteria. For instance, they're spending a certain amount and the campaign is running for a certain duration are eligible to pilot and adopt these exciting new live lift capabilities.

As we continue to improve the models that Power Live Lift and work towards greater automation, we expect that more and more clients will take advantage of these features over time. In terms of the limited number of clients who've already piloted Live Lyft, the feedback has been extremely positive. As we shared on our last earnings call, we launched more Live Lift campaigns in the fourth quarter than we did in the first, second and third quarters combined.

We also exceeded our revenue forecast associated with Live lift for the fourth quarter. Of the clients that have executed a live lift campaign, we expect to see about 80% expand or renew their campaigns. In summary, we believe our performance in fourth quarter and our continued momentum in the first half of the first quarter confirms that thanks to our team's hard work, we are very much on the right track.

As we look out to the future, we envision our CPG clients allocating resources in a manner that more closely resembles that of digitally native companies. Today, most still rely heavily on the annual planning process and budgeting process, whereby they agreed to place certain bets over the course of the upcoming year, then measure the outcome of those bets 6 to 12 months after the fact. We believe this way of working is fundamentally incompatible with the goal of harnessing the full power of artificial intelligence. Instead, we see the CPG industry moving into what has been called the outcomes era.

Going forward, we believe CPG clients will determine what their desired outcomes are and input any constraints or conditions that are important to them. For instance, they might want to gain 3 points of market share, but they want to do so without eroding profitability or they might want to put in place a standing rule that they want every incremental dollar they can get as long as it doesn't cost them more than $0.35 per incremental dollar.

Once these goals are outlined, what constitutes a winning outcome will be clear, and it will be possible to test a larger number of offer permutations and solve for whichever combinations yield the best results. This is what artificial intelligence is especially good at doing. We expect that the faster CPG company transitions away from annual discrete allocations of dollars to outcomes-driven rule-based resource allocation. The more agile it will become and the better it will be able to translate its investments into market share gains.

In closing, we remain focused on delivering unrivaled value to our CPG partners. By bringing the proven principles of performance marketing to the CPG industry, we believe we can capture a greater portion of the total addressable market for CPG marketing spend beyond what has historically been available to promotions. We're confident that the combination of a stronger core offering alongside more Live Life campaigns will help ibotta return to year-over-year revenue growth later this year.

We're beginning to see the fruits of all the hard work our team put in during 2025, and we look forward to what lies ahead in 2026.

With that, let me turn it over to Matt.

Thank you, Brian, and good afternoon, everyone. Jumping straight into Q4 results. We delivered revenue and adjusted EBITDA that were respectively 7% and 31% above the midpoint of the guidance range we provided on our third quarter earnings call. To impact our top line results in the quarter. Revenue was $88.5 million, a decline of 10% versus last year. Within that, redemption revenue was $78.5 million, down 5% year-over-year. We saw broad-based sequential progress in our year-over-year redemption revenue trends throughout the quarter.

In addition, Live Lift revenue was better than projected. -- and the SNAP program that Brian referenced in his remarks also resulted in incremental revenue versus our forecast. I'll just add, when we talk about improving execution, the SNAP program is a great example of that in action. From ideation to the building of the program, to selling it in to the marketplace and having an impact on business performance, great work by our team. Third-party publisher redemption revenue was $56.4 million, up 8% versus last year. while direct-to-consumer redemption revenue was $22.2 million, down 26% year-over-year, where, as anticipated, we've continued to see more redemption activity shift to our third-party publishers.

Ad and other revenues, which represented 11% of our revenue in the quarter were $10 million, down 38% versus last year due primarily to continued pressure on direct-to-consumer redeemers. Turning now to the key performance metrics supporting revenue. Total Redeemers were $20.4 million in the quarter, up 19% year-over-year. We saw continued growth in third-party redeemers across the IPN versus last year. highlighting the health of the demand side of our network.

Growth was driven by the launch of DoorDash in the second quarter of 2025, organic growth at our existing publishers and the launch of Instacart in November of 2024. Redemptions per Redeemer were 4.6%, down 16% versus last year, where the decline continues to be driven by both the quantity and quality of offers available to each redeemer as well as the growth in third-party redeemers which have a lower redemption frequency as compared to our direct-to-consumer redeemers. It is worth noting this represents an improvement in trend versus Q3, where redemptions per Redeemer were down 28% year-over-year.

Redemption revenue per redemption was $0.83, down 5% versus last year, driven primarily by slightly lower like-for-like fees and the mix of redemption activity. Now shifting to the cost side of our business. As anticipated, non-GAAP cost of revenue was up $3.6 million versus a year ago, driven by an increase in publisher related and technology costs. This resulted in Q4 non-GAAP gross margin of 79%, down approximately 570 basis points versus last year. Over the course of 2025, we've seen a meaningful increase in costs related to new publishers as well as an increase in technology-related costs within cost of revenue. which is reflective of an increased investment in product development.

Non-GAAP operating expenses were up 1% versus last year and slightly above our expectations due to higher professional fees and variable compensation. This resulted in non-GAAP operating expenses being 65% of revenue, an increase of approximately 700 basis points year-over-year due to the lower revenue. Within that, non-GAAP sales and marketing expenses were flat as lower marketing spend offset higher labor and the cost of third-party lift studies. Non-GAAP research and development expenses decreased by 11%, primarily a result of higher capitalization of software development costs. This is due to more of our investment in R&D being directly focused on product development.

Lastly, non-GAAP general and administrative expenses increased by 16%, reflecting higher professional fees and temporarily higher facilities costs in the quarter. Similar to last quarter, while overall non-GAAP operating expenses changed minimally year-over-year, our investments in areas related to our transformation inclusive of both the P&L and what is being capitalized to the balance sheet were up in the quarter. This increase was approximately 15% and again, was headlined by higher labor costs in both the sales and technology organizations.

We delivered Q4 adjusted EBITDA of $13.7 million, representing an adjusted EBITDA margin of 15%, adjusted net income of $8.1 million and adjusted diluted net income per share of $0.29. Our adjusted net income excludes $12.9 million in stock-based compensation and includes a $3.8 million adjustment for income taxes. We ended the quarter with $186.6 million of cash and cash equivalents. In Q4, we spent approximately $55 million purchasing approximately 2.1 million shares of our stock at an average price of $25.78. We had 26.1 million fully diluted shares outstanding as of 12/31. And as of the end of the quarter, we had $34.9 million remaining under our current share repurchase authorization.

Now turning to Q1 guidance. We currently expect revenue in the range of $78 million to $82 million, representing a 5% year-over-year decline at the midpoint. And we expect Q1 adjusted EBITDA in the range of $6 million to $8 million. representing about a 9% adjusted EBITDA margin at the midpoint. With that, let me provide a little more color on what we anticipate the shape of revenue for 2026 to look like. First off, we are pleased with the improvement in execution, the upgrades to our product capabilities in our core business and the growing contribution of Live left. We expect that this will gradually translate into improving revenue trends just as we began to experience in Q4.

Beyond our specific Q1 revenue guidance, we anticipate low single-digit sequential revenue growth in Q2 versus Q1 and then to generate slight year-over-year revenue growth in Q3. We believe the anticipated improvement in our revenue trajectory will primarily show up in redemption revenue, while ad and other revenues will remain under pressure. Part of the story here is that add another revenue continues to shrink as a percentage of total revenue meaning the drag on the aggregate business should become smaller. In addition, within ad and other, the data business is expected to grow and become a larger percentage of that total.

While we are working hard to improve the offer supply to the point that direct-to-consumer redeemers stabilize, we haven't assumed that in our planning for 2026. As it relates to the cost side of the equation, there are a few things to note. While in some aspects, we outperformed on cost in 2025, it's important to recognize that we faced greater vacancy rates than we would typically see, particularly within the sales team, where we expect to be more fully staffed for the entirety of 2026 across that organization. In addition, we saw lower variable compensation expense during 2025. As we mentioned last quarter, we are committed to investing in areas critical to our transformation, which will show up in both higher year-over-year cost of revenue and non-GAAP operating expenses in 2026.

From a modeling standpoint, you should expect to see a modest sequential increase in quarterly non-GAAP cost of revenue and operating expenses throughout the course of the year. However, we expect to have substantially less growth in publisher related costs within cost of revenue as compared to what we saw in 2025. It's not going to be 0 growth, but it likely won't be nearly the headwind we faced last year. We also expect higher technology cost and cost of revenue, which is partially a function of where these costs are allocated relative to last year to have approximately a negative 100 basis point impact on gross margins.

As it relates to non-GAAP operating expenses, 1 area I would reiterate where we are investing is third-party measurement. We expect to purchase on behalf of our clients, a significant number of third-party lift studies from our measurement partners that will allow them to independently validate the incremental sales list of our platform. This number could approximate 1% of revenue in the near term, but would likely moderate over time as we substantiate the benefits of our platform and in some cases, shift the cost of these studies to our clients.

A few other data points to mention as it relates to the full year 2026. We expect stock-based compensation expense to be approximately $10 million higher than 2025. And as it relates to cash generation, we expect free cash flow to be approximately 65% of adjusted EBITDA. And finally and importantly, we exit 2025 with a healthy balance sheet and no debt. And that, in conjunction with continued free cash flow generation gives us the flexibility to continue investing in the organic growth and strategic priorities of the business and at the same time, return cash to shareholders.

As I hope you can tell, we are energized by what lies ahead. In 2026, we expect to move from a year of transition and learning to a year of greater consistency and execution. While there's still significant work ahead, we feel good about the progress we're making today. optimistic about our trajectory moving forward and confident we'll see an inflection to revenue growth later this year.

With that, operator, let's please open up the call for Q&A.

[Operator Instructions] Our first question comes from Ron Josey with Citi.

Good afternoon -- this is James Michael from at Louis on for Ron. First off, for Brian, could you elaborate on the relationship between the core products and the new LiveFit solution and how you see each of these offerings progressing? And then I have a follow-up.

Yes. Thanks, James, it's Michael. Happy to. We've been learning a lot over the last year in the market, listening to our clients and focusing on how we can improve the core offering of IBA. And we've made some broad improvements that I alluded to in my remarks that I think have made clear that what we deliver is profitable revenue growth. And that's things like focusing on incremental sales, focusing on the cost per incremental dollar providing access to third-party measurement, thinking differently about our approach to pricing. And those are things that are applied across the board to our foundational promotions. Then there's this capability, we call a live lift, which is all those things plus plus the capability to project and measure profitability incremental sales on a more regular cadence during the campaign and then be able to use that to optimize those campaigns to take into account those metrics that are evolving -- and that's what we mean when we say Live Lift is that sort of most sophisticated capability, which is where we see the industry heading.

But I want to stress that we've got a very popular and getting better all the time, core product that is driving most of the outperformance that we described just now.

Great. Thank you, Brian. Moving on to the go-to-market transformation. With the new deals leadership and the sales reorg in place for a full quarter, could you share an update on the evolution of your client approach and any specific benefits from verticalize teams on a more consultative approach?

Yes. I think I made some high-level remarks about this. We're doing a much better job in terms of understanding our clients' industries in detail, meeting them where they are, being proactive and timely with our outreach so that when they're confronting something in the market that arises, we're in there with a potential solution. I think it's fair to say we're further upstream with a lot of these clients going beyond just the procurement department going beyond just the center of excellence that's traditionally bought things like digital promotions and really encouraging the senior leaders of these organizations to take a step back and think about this concept of the outcomes era and this idea of how they can take advantage of be able to set targets and metrics for things like profitability and market share growth and then allowing the power of artificial intelligence to over the coming years, make their businesses more and more efficient and profitable.

And I think that we refer to internally as multithreading, the idea of reaching out to different parts of the organization simultaneously at different levels within that word. I think that's been paying dividends.

Yes. James, I'll just add the questions that you asked kind of hit on the 3 areas around core product, live lift and execution in all 3 of those areas the results we saw in Q4 were greater than what we were forecasting. So we saw all of that benefiting our financial results in the quarter, which is really encouraging.

Our next question comes from Bernie McTernan at Needham & Company.

Great. Maybe just to start, I want to start on the macro Brian, just the sentiment of your clients right now as we enter the year. I think the macro over the last year was characterized by a lot of uncertainty. How does this year compare to what you're hearing?

Yes. I mean I think there's different kinds of uncertainty, I suppose. Bernie, there's still some conversation that we're hearing about things like tariffs, but I think that people have adjusted their businesses for that. And that's not a primary factor, I would say, in people's evaluation of whether to invest with a I think now there's a lot of focus on what does the acceleration of AI mean for the industry? How does it present opportunities for these companies to think differently and to gain a competitive advantage to regain market share after they have lost to private label a certain amount of market share I think that there's a real emphasis on value.

Still, we put out a state of the spend report recently that underscored this very, very clearly that a high percentage of consumers go into the store with their minds still open about what they want to buy. And they want to decide that primarily based on value. And I think that message has gotten across to companies. And then there's some conversation about other ways in which consumer shopping may evolve, things like genic shopping, where we think we're particularly well positioned and they're thinking about, okay, what does that imply in terms of the kinds of investments I want to make and things that affect value and ultimately, the price and promotion -- those are core foundational things that they know they need to spend more time focused on.

So I think we're well positioned in terms of the macro at the moment, broadly speaking.

Yes, Brian, that was 1 of the things I wanted to ask on was Gentocommerce and how you think you're situated. And is it too early to be having conversations with some of the LLM to see if there can be integration opportunities there? Or is that something that should be further down in the future?

I mean it remains to be seen exactly how this is going to shake out. I think we've got -- certainly, we've got some shopping agents that exist on retailer websites Walmart reported some data on that in a recent earnings call. There are some people who believe that these LMs will aggregate demand and be a front door for shopping I think our strategy is clear, which is that wherever that purchase intent is arising for these types of nondiscretionary items, we want our content to be influencing those algorithms. And to be -- for those systems to be taking into account the availability of offers on the Ibotta performance network is just another reason why it's so important to be part of the Ibata performance network. I think that -- it's too early to tell, but I will say, I believe that I think it is likely that the retailers who are part of our network will have a pretty large role to play in whatever form a genic commerce takes.

And that's why it's that much more powerful that we have direct relationships with them so we can ensure that our content is presented in all the different touch points that consumers may have in the store, online, et cetera.

Our next question comes from Alex Vegilanti with Goldman Sachs.

This is Alex on for Eric Sheridan. Congrats on the really solid quarter. I just want to dig in a little bit more on the third-party redeemer results, really strong results both sequentially and year-over-year. I know you mentioned really all of your publisher partnerships humming along. But are there any like 1 to 2 drivers of that really strong sequential growth? Or is it sort of all of your partners continuing to have success?

I would say we're seeing success across all of our third-party publishers in 1 form or another, Alex. Of course, we rolled out DoorDash last year, and that was a driver that was important because it was new to our network, and they rolled out gradually. And so that -- I guess I would call that out. But with our current publishers, we're also seeing them find ways of leaning into this content in different forms, right? So it might be that there is more of an emphasis on making their shoppers aware of this in the store, for example, through something like in-store mode that they might have featuring or highlighting surfacing this type of content or it might be something that they're experimenting with along the lines of in-store messaging through audio or through visuals on screens throughout the store. -- those things are still very much in the kind of testing phases.

But as those roll out more broadly, there should be more awareness of this type of content not in the physical store environment. And then just generally speaking, e-commerce and these types of ways of buying are growing, right? So if you, again, look at the Walmart earnings, they still have really strong growth in their e-commerce in the U.S. and their grocery e-commerce in particular, and we benefit from those tailwinds in terms of just people -- more people coming in and finding that content. And I think that we are always working with our publishers, whether it's improving our ability to put the right offer in front of the right consumer to improve conversion or another surface area that they may be coming out with that allows us to reach consumers in a different place. Those are all, I think, drivers of third-party redeemer growth over the past period.

Yes, I'll just add to give you a little bit of quantification, I think it validates we actually grew, as you can see, obviously, in our numbers, we grew third-party redeemers by almost $3.5 million in the quarter. and about 1/3 of that was from existing publishers. So it wasn't a small increase in existing positions, which highlights, I think, numerically, the point Brian was making.

That's really helpful. One more if I can. Just in terms of -- you mentioned fees being sort of more tied to the underlying price of the items. Is that sort of a new policy that you've been implementing? And is that coming from your CPG partners? Or is that more something that you're proactively sort of pushing and how can diversification on the types of items that you offer more than offset that going forward?

Yes. I mean I think everything comes from our CPG partners in the sense that we listen to our clients, right? And we did a lot of that over the last 18 months and took a step back and said, how could we be a more client-centric organization. And -- there are many ways in which I alluded to us doing that. But on the topic of pricing, we wanted to have a more continuous approach to pricing. So rather than having a tiered system where if you're on 1 side of the tier or the other side of the tier, there could be a meaningful step off in terms of the fee per redemption that you're paying to have a percentage of the price of the product is just more logical, right? It doesn't have those kind of breaks in it.

And that also makes sense when you were beginning to think about automation and optimization, being able to have a simpler, more universal form of rules for pricing, rather than differentiated depending on category or client. Just as you think about it more broadly, it's part of a larger effort for us to streamline, automate, and that really starts with standardizing our approach and making sure it's the 1 that fits the next chapter of how we want to serve our clients. I think that has been very well received by our clients. I wouldn't say that our clients kind of specifically demanded that. I think we took a step back, like I said and said what would be better for them and came up with this approach, and it's been well received today.

Our next question comes from Ken Goreski with Wells Fargo.

A couple of questions, if I may, first. First, Brian, could you talk about the Live Lift sales cycle I know you talked about you trying to eventually moving CPG industry off the annual budgeting cycle. But can you talk about your progress to date shortening that sales cycle in Live lift? And you talked about in previous calls about how there was a lot of test and learn, you talk about if there's any -- have you seen any acceleration in the adoption or the time to market in some of those sales cycles? That's the question one. Second question, please, is -- as you think about in the longer term, not in the shorter term, when you're still kind of refining the go to market. But in the longer term, if you think about your historical IP third-party business, relative to the live more -- a business that has heavier tail towards Live lift.

Do you see profitability similarly? Or -- is there anything we should think about either from a cost of goods sold side or a profitability of the new go-to-market in the longer term, not the short term, but longer term versus the historic method?

Thank you, Ken. Both great questions. I'll take them in turn. The first one, yes, a couple of things I can say about Live lift. We've been pleased with the progress. It exceeded our expectations in a number of different respects. I mean, first of all, the number of companies that have had a chance to experience this, the number of pilots, like I said, was more on the fourth quarter than in the previous 3 combined. So we've just gotten a greater breadth of feedback from more categories, more clients. What do they think about it? What do they -- how does it change the way they think about the promotional space more broadly and about their relationship with IATA.

We also have been able to look at the kind of the median or the average campaign size in live lift compared to the average campaign size in the core Ibotta offer from those same companies that have been piloting Live Lift and it is a substantially larger amount of investment in the Live Lift campaign. And part of the reason for that is that the idea of Live Lift has generate enough interest and excitement that we've been able to get higher up in these organizations to folks who have authority to make bigger bets. And if it goes well in the pilot, even bigger bets still. I think they look at it as a driver of profitable revenue growth, not a tactic they need to do a little bit of because the merchant said they should.

And that mindset shift has a lot to do with why there's significantly more being spent per campaign. It's also because in order to be eligible for the Live Lift product at the moment, you need to run a slightly longer or larger campaigns. So we have the requisite material data, so the statistics of Live Lift can be delivered with confidence. And so that tends to steer clients into a larger investments, which has been noteworthy. -- the fact that last time when we told you we had 83% re-up rate, that was on a pretty small denominator, right? And that was -- like I said, we had more in the fourth quarter than the previous 3 to be still at or around 80% is what we expect to re-up is powerful.

And when you think about what's the other 20%, those are small and emerging brands that as far as I know, love Live Lift and we plan to continue to do it in the future, but just don't necessarily have the budget at the moment to go right back into it at the level required for it to to be eligible. And so I'm not aware of actually a single 1 of our Live Life clients saying they're not really excited about the value proposition. And I've seen some publicly available research that corroborates that as well. That's something that we're really excited about in terms of shortening the cycle, I mean, yes, look, I mean, the more time somebody uses live lift we get a baseline get excited. They see that we define a goal upfront. We delivered on that goal. They want to come back and they want to do it again.

And so they're not going to require the same length of time that they did on the front end. In most cases, they're going to re-up based on the fact that they're familiar with it, maybe they bought a third-party list study, maybe that's given them additional confidence in the results. And so there should be -- we should see that those companies that are more familiar with it, start to introduce it to other brands. for example, or start to make it more part of their plans on a larger scale. And so I do think there will be some acceleration. And over time, we anticipate that as we automate our processes, we'll be able to make this available to more of our clients and kind of open the aperture for that product. In terms of your second question, broadly speaking, I think the profitability characteristics over the long term are the same, right?

We are -- we envision taking the market in the direction of Live Lift -- and that is very much what we see as sort of pointing to the future of the industry. And so we believe that once we are making that available to the great majority of our clients, they will adopt that and use that, and we will see that those characteristics are about the same because it's not like we're charging a price premium to use live lift or anything like that. It's just going to encourage people to spend I think, significantly more than they've been in the category in the past.

Our next question comes from Mark Mahaney with Evercore ISI.

This is Austin Reddick on for Mark Mahaney. And I apologize if I missed it, but what I wanted to ask like what does Livelift change economically? Is it increasing conversion? Is it improvements in pricing power? Is it reducing churn? Is it a TAM expander? And I guess what milestones should we track in '26?

Yes. I think, first of all, just to reiterate, I think it's worth just stating what is it and how is it different from a regular I bought a core capability our offers. What's different is the ability to get a projected range of incremental sales and a projected cost per incremental dollar before you start your campaign and then to check in regularly during that campaign at more frequent intervals on the profitability of that campaign as measured by incremental sales as measured by cost per incremental dollar and then be able to optimize and course correct and adjust the parameters of that offer during the campaign against those profitability metrics.

To be clear, we've always allowed people to see performance metrics during the pendency of a campaign. -- things like how fast is the campaign moving along, how many redemptions are there. Those are important forms of performance. And that was the standard. Live Lift introduces this idea of profitability being something you want to be able to check more regularly and do something about much more regularly, which gives them a sense of control. It gives them the optimism and we've proven that by making those optimizations, you can actually tack in the direction you want. So let's say, for example, you have a goal of $0.30 cost per incremental dollar and you're trending toward $0.40 cost per incremental dollar with Live lift, you can adjust the parameters of your offer to make them less as, for example, or the threshold is different that you could come in closer to your original goal? Or conversely, you're coming in at $0.15, and you're leaving a ton of profitable revenue on the table and you don't want to do that, right?

You want to adjust those parameters so that you're capturing things up to that last threshold the profitability that you defined upfront. So that's what's so revolutionary and exciting about the prospect of Live Lift -- it's a TAM -- it's a dramatic TAM expander over the long term. Is the way to answer your question. I think Austin, because in the past, promotions have been principally viewed as something that was a lever that you did necessarily to spike sales, which is still an important use case to introduce a new product to market, which is still an important use case. But when it came to it being perceived as 1 of the most profitable drivers of revenue growth -- there were some who felt that it engaged in subsidy or whatever the received wisdom was from the era of paper coupons kind of carried over and made it harder to make this a primary category out of the -- all of the couple of hundred billion dollars that are spent across trade and marketing and media and so forth in the CPG industry in the U.S.

So we believe that by reframing this, what we're doing is getting the industry to think differently about our entire category -- like I said, we were already the leaders in that category. That's my luxury car analogy, right? This takes it and reframes and elevates the category, expanding the TAM in the process.

Our next question comes from Nitin Bansal with Bank of America.

So in 4Q and quarter-to-date, did you see any changes in budget allocation now like renewal patterns that you can -- that could serve as like a leading indicator for trends for the balance of the year? And secondly, as we look forward to like 2026, how should we think about the key elements of your strategy that still need to be put in place to fully execute your plan, particularly the parts that are within your control?

Thanks, Nitin. I'll answer those. First, yes, I mean, we had more companies coming in and testing something and piloting something. And the great majority of them, we're pleased with that enough to want to add or expand to those campaigns. And so that would lead us to believe that they're going to continue to do that and continue to broaden the number of brands that they introduced. We did see instances where companies added additional budget to the same brand. We saw instances where they added additional brands into the program. We had instances where when we socialized this relatively late in the quarter, midway through the quarter, people said, "Well, I want to use this to help close a sales gap in my quarter right now, and we're able to stand that up inside of a week of hearing about this capability, which was, I think, powerful leading indicator that this is something they don't otherwise have access to, but which is valuable.

So those are all leading indicators, and we've seen that momentum carry forward as we said, which is why we're raising our guidance for the current quarter. As far as your second question on the elements that still need to be put in place, There are a number of things that need to happen. I mean, first of all, you're talking about an industry that has been accustomed to a certain way of thinking about promotions and a certain way of allocating their annual resources and measuring their tactics using mix media models and so forth. And we are challenging that paradigm, broadly speaking. We are envisioning a world in which they can define outcomes upfront the way a digitally native company would and then using these systems that are getting smarter and smarter over time to help them deliver that outcome.

And that requires a level of agility and a level of clarity around what kind of the rule set needs to be in order to harness the power of these new technological capabilities. So it remains to be seen how long that behavioral shift will take to effectuate -- that is within our control. Of course, we're out there leading the thought leadership in the industry. We are socializing the power of these tools, getting more companies to try it. It's also the case that we need to continue to standardize and automate our systems so that we can accommodate -- we have a couple of thousand brands that use ibotta for promotions. Right now, a very small number of them are seeing or testing live lift. And that's because we are working hard this year to make everything we do easier, easier to set up offers automatically, easier to report quickly, accurately and automatically easier to project these things in a more scalable fashion.

And as that happens, as our models get more data running through them, our predictions are getting better, tighter, more confidence in those. We think that the system will get to the point where we can introduce it to like I said, a broader and broader swath or widen broaden the aperture of availability. Right now, we have imposed those conditions essentially on the market. And so those are the kinds of things that we're going to be working on to make this a higher and higher and higher percentage of what our offering looks like going forward.

Our next question comes from Stephen Ju with UBS.

So Brian, the third-party redemptions per redeemer seems to have bottomed sequentially and seems to be heading higher. -- but it still remains below where it was last year. So do you think the path to get back up there in terms of where you were a year ago plus is just a normalization of CPG budgets and -- what kind of conversations are you having with your clients to come back with offers that will be attractive and more compelling to the redeemers as we think about the quality of the quality versus quantity equation in terms of what you're putting in front of the redeemers.

Yes, I'll answer it and I'll let Matt jump in with some backup data in terms of that statistic. I mean what I would say is that offer supply, right? The more offers, the better quality offers, the longer they stay up across our network, the more redemptions per Redeemer, we know you're going to see the higher percentage of the basket you hit the more people are going to avail themselves of these offers, and we get paid more. And you'll see it in that metric. I think all the things I mentioned on the call are designed to create a climate where our sellers coupled with their better and better execution can win and get more offer supply. And that applies to our core capabilities, things like saying, here's a better approach to pricing. Here's a better approach to measurement broadly.

At the end of your campaign, you're going to get a cost per incremental dollar, you're going to get a focus on the number of incremental dollars sold. Those are just broadly creating a climate where people are -- view our company as having greater credibility. There's more continuity in their contacts with us. There's more credibility in what we're selling and as things like Live Lyft, which have never been introduced to this market before come online, that's just another stimulus to get more offer supply up there longer. Now I would say our focus is primarily Stephen, on total redemptions, right, and total redeemers because you can have a huge bolus of new redeemers and they could depress your redemptions per redeemer. But if your overall redemptions are going up, that is a healthy indicator.

And we did see almost just shy of 25% increase year-over-year in redeemers, right? So that is a really positive indicator. That does mean that the offer supplier we have comes under more pressure from the people who want those offers, but ultimately, the core metric that we get paid on is a fee per redemption. So total redemptions is always our focus. I'll let Matt add to that.

Yes. I would just say, I mean, it's an outcome metric, right? And when you think about the publishers, right, and the access to consumers and as that's grown, that impacts that metric, right? I think we all understand that. But what's really important, I think, really at the crux of your question, you said bottomed out. Certainly, we saw that number improve at least relationally quarter-over-quarter is really kind of manifest in how we open this call, which is great execution. And in many ways, the strength of our core product and then you add on top of that, the benefits of an ever-expanding live lift program.

All of that's factoring into more redemptions because the ultra supply has gotten better. Is it where we want it to be, it is not, but it has gotten better. And I think it's really important to recognize that all of those things coming together is what we saw to help change the trend of the business in the near term and what gives us confidence as we move into 2026 with the trajectory that we're heading and our ability to see the business return to growth later this year.

Our next question comes from Andrew Boone with Citizens.

Sticking on Live Lev, Brian, how do you get Livelift out to more clients? What are your key operational hurdles as you think about expanding the product more broadly -- and then 1 of the other things you talked about was just moving off of the annual planning cycle with slippages. Can you just help us understand how exactly do you do that? What are the key operational hurdles that you got to have in terms of moving to more always a lot better day?

Thanks, Andrew. Yes, and I will answer that. I think -- the first thing is build credibility as a company with our partners. -- and make sure they understand the power of our core capabilities, whether they're eligible for Live Lift or not, right? And that's kind of this foundational thing reminding them that we can reach a Walmart, and Instacart shopper right where they are right when they're shopping, full of opportunity to do that. And then as they are starting to see, wow, that's pretty powerful, and you have third-party measurement and you have more favorable pricing and you have the ability to tell me my cost per incremental dollar at the end of the campaign in most cases. Now we go to them and say, now if you're willing to spend a little bit more in terms of the duration of your campaign in terms of the amount we would require you to spend for -- to have kind of the signal that we need to give you the live life capability, right?

Imagine if you're coming in and saying, "I want to run a 2-week campaign, to spike sales for this period of time. Well, that's not going to be possible to run live lift because we need a certain number of purchase cycles. We need to be able to create match audiences and look at the statistically significant differences to isolate what's caused by the promotion. And there are just certain restrictions on that. And we think that what we're having success doing is saying to people, it's worth it. right? If you invest in our most sophisticated capability, you're going to get this kind of more frequent readout. It's going to unlock the ability for you to capitalize on the core things that artificial intelligence does well sooner -- and so it sort of naturally follows from the foundational excellence of our core product.

And so as far as barriers, like, of course, we want to continue to automate our systems so that when we create these readouts, it doesn't require the amount of time and manual effort than it does right now. And so if we were to try to do this across 2,500 brands, it would be impossible. It would not be scalable. And this year, our mantra is make it easy. We want to make it easy to set up offers, to measure offers, to create these projections, to create these rolling metrics to create the reporting to put everything into our portal so that people can start to understand these things without having to pick up the phone and call their rep, and it's sort of gunking up the efficiency of it, but we're making good strides in that direction.

We have really defined what we think it is the market wants and gotten a very clear signal back from the market that they want more of this. right? And for a while, it may be that these are the eligibility requirements, and they're precluding a decent number of our clients from using it. But over time, we will relax those barriers and more and more folks will come into this product, and we'll be able to brief you on how that's going along the way. As far as the annual planning cycle concept, Yes, look, I mean, that's a centrally old construct. And so it is -- that's 1 that is a set shift, right? If you've always operated in the sense that kind of a person has a hypothesis, they get the dollars approved in there -- it's like the federal government. There's like an annual budget process. They get it approved. They go run it, then they measure it a year later. That is very different than how you would manage say, a Google campaign or a Trade Desk campaign or an app loving campaign.

And the brands that kind of are thinking about the implications of the changing way that consumers are shopping, the growth of e-commerce, the rise of really get that, and we're sort of hitting them at a moment where they're willing to revisit that. right? And I think the first thing they have to do though is validate, right? They're not going to spend always on money right out of the gate. They want to understand what is your measurement, how does it work? What is your methodology? Let me check it against the third party. So there's a certain amount of kind of kicking the tires that has to happen before you can realistically ask someone to turn on the fire hose always done. But we have had more than 1 of our live lift partners say to us things in the room like why wouldn't I put all of my ex budget into this. turning and looking to their colleagues as if to say, can someone explain to me here, why we don't spend dramatically more money on this.

And I'm sitting there thinking, I'm not going to say a word. This guy is selling the product for me, right? So I think that people are thinking along those lines, but they just need to develop a level of conviction that's pretty high because it really goes against the grain with how people vided for resources for so long.

Our last question comes from Andrew Merrick with Raymond James.

Just 1 for me. Can we talk a bit about the prioritization of publisher expansion as you're talking about training your internal AI models, just the way that potentially expanding publisher reach could offer a little bit more in terms of diversity of signal for your internal models?

Yes, it's a very astute question. You're right. I mean adding more publishers is valuable in many, many ways. Obviously, it diversifies the network. It increases the number of redeemers. It makes us able to influence these markets even greater way that really is kind of pops out and goes, "Wow, I have to have a strategy for this. This is something that is touching my business in a way that's showing up in my weekly numbers. It's also -- you're also right that having more publishers give us more data and being able to run in more locations with different permutations of these offers makes the models smarter and it allows us to kind of widen the aperture by coming back and saying, All right, we have enough signal now at 4 weeks, right, or at 2 weeks, like in my example, theoretically, the more data you have, the more you're getting those signals from across the economy, the sooner you have kind of a statistically significant readout, right?

And so part of our strategy for continuing to accelerate into this part of our business is to continue to add publishers and also to make sure that we do that, that we have access to the kind of data, the kind of proprietary data sources that are so important in the era of AI, right? I ultimately, our ability to build on top of this data that nobody else has access to that is going to make this such a compelling and sort of powerful and unique differentiated solution that sustained into the future. So that's why that is very much still a priority for us.

This concludes the Q&A section of the call. I would now like to turn the call back to the management team for closing remarks.

Thank you very much to everyone for your questions and for your attention. We're excited about some of the trends that we're seeing in the business right now, and we look forward to engaging with you in the future. For those of you who will see at the upcoming investor conference -- next week, we look forward to your questions there as well. Thanks, everyone.

Thank you for joining today's session. The call has concluded. You may now disconnect.

Greetings, and welcome to Ibotta Third Quarter 2025 Financial Results. [Operator Instructions] As a reminder, this event is being recorded.

I would now like to pass the call over to the management team. Please go ahead.

Good afternoon, and welcome to Ibotta's Q3 2025 Earnings Conference Call. With us today are: Bryan Leach, Founder and CEO; and Matt Puckett, CFO.

Today's press release and this call may contain forward-looking statements. Forward-looking statements include statements about our future operating results, our guidance for Q4 2025, our ability to grow our revenue, factors contributing to our potential revenue growth and the capabilities of our offerings and technology, all of which are subject to inherent risks, uncertainties and changes. These statements reflect our current expectations and are based on the 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 and our 10-Q, which are available on our Investor Relations website at investors.ibotta.com.

Also, during the call today, we'll be referring to the slide deck posted on our website. 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.

Good afternoon, everyone. Thank you for joining our discussion of third quarter results. We're pleased to report revenue in the upper half of the guidance range we provided on our second quarter earnings call, while delivering adjusted EBITDA well above the top end of the range. We're also guiding to fourth quarter results that are broadly consistent with our prior expectations. In fact, when combining our third quarter results with our fourth quarter outlook, our total second half performance is right in the range we would have expected midyear, both for revenue and adjusted EBITDA. So the business is unfolding about as we anticipated.

We've continued to make progress transforming our company into a full-service performance marketing platform for the CPG industry. Our product and engineering teams have been working hard to enhance our capabilities in preparation for greater automation and scale in 2026. At the same time, our recently reorganized and upgraded sales team has improved our infrastructure, systems and processes in order to support a stronger and more consistent go-to-market organization. We expect this will result in better service and greater continuity for our clients, which we believe will be rewarded over time.

Within the last 6 weeks, we've made 2 major announcements that demonstrate our thought leadership within the industry. First, on September 30, we announced a major strategic partnership with Circana, a leading provider of Media Measurement services. This will allow our clients to receive independent lift studies from a trusted third party just as they can for other forms of digital media.

Second, on November 3, we announced the launch of LiveLift, our latest groundbreaking innovation designed to help brands drive incremental sales at scale in a cost-effective way. LiveLift represents an improvement over our previous approach to measuring sales lift during a campaign. Initial client feedback on both the Circana and LiveLift announcements has been overwhelmingly positive, and this has increased our confidence that we are prioritizing the right investments and pursuing the right long-term strategy.

To ensure that we're all on the same page, allow me to say a word about our nomenclature. Throughout much of this year, we've spoken about incremental sales, which are sales that would not have occurred otherwise; and CPID, which refers to the cost per incremental dollar that a campaign achieves. Both of these are metrics we use to help an advertiser understand the performance of their campaign. Clients will now be able to receive these metrics using LiveLift, which is what we're calling our latest solution for ongoing measurement and optimization. Going forward, we will no longer be using the word CPID as a shorthand for that solution.

The current macro environment continues to present challenges for CPG companies. Many of our larger clients are facing a sustained period of depressed organic sales growth. The University of Michigan index of consumer sentiment is near an all-time low, which may indicate increased consumer pessimism and pullbacks in consumer spending, particularly in lower- to middle-income consumers. This, combined with the recent disruption to the SNAP program and ongoing uncertainty related to tariffs has translated into some large clients taking a wait-and-see approach, which can include pausing spending in what they perceive to be discretionary areas like promotions.

Expectations for rigorous measurement have gone up as CPGs demand evidence of demonstrable ROI across their marketing spend. All of this has further validated the importance of our strategic transformation because it underscores the need for us to move toward the outcomes-based world of performance media where demonstrated returns can lead to increased investment regardless of the external climate. Ibotta is working to position itself as an invaluable strategic partner that can deliver profitable revenue growth at scale.

Diving into third-party measurement in a little more depth. Our partnership with Circana will enable CPG brands to compare the purchase behavior of consumers who are exposed to an Ibotta offer versus those who aren't, allowing advertisers to measure the full impact of their promotional campaigns, including the lift in incremental sales that extends beyond the initial promotional period. Brands will be able to access third-party lift studies and benchmark their Ibotta campaigns against other media spend that Circana already measures using the same methodology. Because Circana is a trusted name in the measurement space, we believe our announcement helps address the concern that we are creating our own homework.

In just a matter of weeks, we've already seen significant interest from clients who want to learn more about this new offering. It has also had an immediate impact in at least one instance. Our first pilot partner decided to launch a new campaign on the IPN after receiving a Circana lift study. For them, the lack of independent verification of household lift had been a critical gating factor. Once it existed, they felt comfortable reengaging.

Our other early pilot partner has also recently relaunched campaigns on the IPN despite a lack of previously allocated budget. While this end-of-year campaign is relatively small, we've had several senior leadership meetings to start Q4, and we believe we are well positioned to become a more meaningful part of this client's 2026 plans. Beginning next year, we're not planning to comment on specific clients or campaigns, but rather expect to describe the overall transition of our business to our LiveLift solution.

In the second half of this year, we've made it easier for our enterprise clients to pilot LiveLift. For those that don't have incremental dollars to allocate, we're allowing them to use existing budget dollars to make it as easy as possible to try out our latest capabilities. We expect that more and more of our clients will launch pilots over the next few quarters.

Not every campaign can benefit from these new capabilities because some clients do not run campaigns that are live long enough for us to measure with statistical confidence, but the vast majority of campaign dollars are eligible. As expected, we've seen an uptick in new pilots since our last call, in part because LiveLift is now being pitched by a larger percentage of our sales team. We anticipate our entire team selling the product beginning in Q1.

Several of our clients have now used LiveLift long enough to have clearly seen a positive impact on their business. Just a week ago, I was at Brand Week and did a fireside chat with Benoit Vatere, the Chief Media Officer of Liquid Death. In case you haven't seen it, you can access a recording on our Investor Relations site. Benoit spoke to the importance of marrying top-of-funnel advertising with effective bottom-of-funnel tactics. He explained that with LiveLift, Liquid Death was able to drive sales in a much more precise and profitable way. Not only were they able to get their offers in front of customers who are new to the brand, but they also managed to reduce the sales cycle and increase the buy rate for existing customers.

Another enterprise client said the following after evaluating the results of their pilot, "LiveLift isn't just a tool. It's a powerful commitment from Ibotta to deliver data from in-flight campaigns that drive smarter decisions." For the first time, we can analyze our customer segments with the depth needed to see exactly how each group reacts to our promotions. This gives us unprecedented, precise and powerful ways to grow.

It's still very early days and the number of clients who have piloted LiveLift is small relative to our total client base. Nonetheless, we think these initial testimonials speak to both the unique capabilities we're building and the enthusiasm for clients who've experienced LiveLift so far.

Turning to organizational updates. As discussed last quarter, we reorganized and restructured our sales organization in early Q3, which resulted in some additional turnover and account handoffs to start the quarter. With these changes now behind us, we expect greater continuity and improved execution with our clients. I'm pleased to report that we have filled all open VP level sales roles as of the beginning of Q4. Chris and I are happy with the leadership, talent and energy coming out of the new organization. Improving our B2B marketing has been a clear focus, and that has resulted in greater emphasis on thought leadership.

To cite just one example, Chris Riedy hosted a successful fireside chat at Grocery Shop with Mike Ellgass, Circana's EVP of Global Media, CPG and Retail, and they talked about the future of measurement and digital promotions. Our sales enablement and training efforts have improved dramatically, which has allowed us to reach out to most of our enterprise clients with the LiveLift offering just within the last few weeks. We've already begun to see improvement in several of our input metrics such as average meetings per sales rep, average opportunities generated and number of accounts with in-person engagement.

Before I turn it over to Matt, let me wrap up by providing a few thoughts on where we are leading the industry in 2026 and beyond. We believe that CPG marketing is entering what we call the outcomes era. In the past, brand marketers have typically relied on market research to develop a specific hypothesis about how to grow their market share. Once they have that working hypothesis, they pitch it internally, hoping to secure funding for their program and the annual operating budget. Assuming it gets greenlighted, they execute their plan several months later, often with the help of a media agency. Finally, they measure a campaign's performance using mixed media models, but they have to wait several months to get a readout. Most of the time, these programs are declared a success even if overall sales didn't grow as desired.

In the outcomes era, CPG brands will start by clearly defining the specific business outcomes they want to achieve and allow AI-enabled systems to help them find the most efficient path to reaching those goals. For example, they might target a certain number of dollars of incremental sales or a certain percentage increase in market share within a given quarter. From there, they'll provide any constraints such as the acceptable cost per incremental dollar for the program or the duration of the program. Once these parameters are defined, machines will begin testing multiple different hypotheses, all at the same time and at much lower cost.

By optimizing program parameters along the way, the best tactics will be emphasized while the underperforming ones will be weeded out. This is how AI-enabled systems will ensure that the goal is achieved at the lowest possible cost. This is not a novel idea. It just hasn't been made available to the CPG industry at scale because until now, ongoing measurement of incremental sales hasn't been possible for products that are sold in an in-store environment. Without that reliable signal, optimization has been nearly impossible. We believe Ibotta's capabilities, including most recently LiveLift, are changing all of that, helping to usher in a new golden age for promotions and demonstrating the power of optimization at scale.

This will not happen overnight. In 2026, we expect to bring LiveLift to market in a more scaled and automated fashion to our broader client base. This will require patience as clients need time to go through the testing phase, evaluate their results, commission third-party studies and then ultimately go through budget cycles to allocate more dollars to Ibotta. Each year, our company decides on a central theme that will organize our work. In 2026, that theme will be Make It Easy.

We plan to make it easier for our clients to set up and execute LiveLift campaigns, evaluate their results and optimize their campaigns. We still have work to do to continue enhancing the core features of a best-in-class performance marketing solution, both for clients and internal stakeholders. This includes streamlining the process of setting up offers, projecting results and optimizing campaigns. This is an ongoing and iterative process. I'm confident that we're on the right track strategically and organizationally, and I'm looking forward to bringing more of our CPG clients on this journey with us.

As I said last quarter, transformation on this scale is never easy, but I'm proud of our leadership and our whole team for confronting the challenges head on and putting in the work to bring the proven principles of performance marketing to the world of promotions. It is long overdue.

With that, let me turn it over to Matt.

Thank you, Bryan, and good afternoon, everyone. I'm happy to be with you today for my first Ibotta quarterly earnings call. I was excited to join Ibotta at such a transformative moment in the company with the opportunity to impact the direction and trajectory of the business alongside Bryan and the leadership team and the chance to work with great people. I have found all of that, and I couldn't be more enthused to be here.

Now let's jump into the results. In summary, we delivered revenue and adjusted EBITDA that were respectively, 2% and 44% above the midpoint of the guidance range that we provided on our second quarter earnings call. Looking further into our revenue results in the quarter. Revenue was $83.3 million, a decline of 16% year-over-year. Within that, redemption revenue was $72.1 million, down 15% year-over-year, a reflection of the difficult comparisons after a very strong third quarter last year, the previously mentioned lagged impact of some execution challenges and the continued noisy macro, particularly in the CPG space.

Third-party publisher redemption revenue was $49.3 million, down 4% year-over-year, while direct-to-consumer redemption revenue was $22.8 million, down 31% year-over-year as we've continued to see more redemption activity shift to our third-party publishers. Ad and other revenues, which now represent 13% of our revenue, were $11.2 million, down 21% year-over-year due to continued pressure on direct-to-consumer redeemers.

Turning to the key performance metrics supporting revenue. Total redeemers were 18.2 million in the quarter, up 19% year-over-year. We saw healthy growth in third-party redeemers across the IPN versus last year, highlighting the continued strength of the demand side of our network. Growth was driven by the launch of Instacart during the fourth quarter of 2024 and the launch of offers to a majority of DoorDash customers in the second quarter of this year.

Redemptions per redeemer were 4.6, down 28% year-over-year, driven by the quantity and quality of offers available to each redeemer as well as the growth in third-party redeemers, which have a lower redemption frequency as compared to our direct-to-consumer redeemers. Redemption revenue per redemption was $0.87, flat year-over-year.

Now shifting to the cost side of our business. As anticipated, non-GAAP cost of revenue was up $4.8 million versus a year ago, driven by an increase in publisher-related costs. This resulted in a Q3 non-GAAP gross margin of 80%, down nearly 800 basis points year-over-year, but up 30 basis points sequentially. Non-GAAP operating expenses were down 1% versus last year and slightly below our expectations due to the timing of spend between the third and fourth quarters and modestly lower labor costs in the quarter. This resulted in non-GAAP operating expenses being 61% of revenue, an increase of approximately 870 basis points year-over-year due to the lower revenue and flat sequentially versus Q2.

Within that, non-GAAP sales and marketing expenses decreased by 6%. Non-GAAP research and development expenses decreased by 16%, primarily a result of higher capitalization of software development costs and more of the R&D costs being categorized in cost of revenue in the period as compared to last year.

Lastly, non-GAAP general and administrative expenses increased by 19%, reflecting higher professional fees and temporarily higher facilities costs. It's important to note that while overall non-GAAP operating expenses were slightly down year-over-year, our investments in areas related to our transformation, inclusive of both the P&L and what is being capitalized to the balance sheet were actually up approximately 11%, headlined by higher labor costs in sales and technology.

We delivered Q3 adjusted EBITDA of $16.6 million, representing an adjusted EBITDA margin of 20%, adjusted net income of $16.3 million and adjusted diluted net income per share of $0.56. Our adjusted net income excludes $12.6 million in stock-based compensation and $400,000 in restructuring charges and includes a $1.8 million adjustment for income taxes.

We ended the quarter with $223.3 million of cash and cash equivalents. In Q3, we spent approximately $38.7 million repurchasing approximately 1.4 million shares of our stock at an average price of $26.73. We had 28.3 million fully diluted shares outstanding at the end of the quarter. And as of the end of the quarter, we had 89.9 million remaining under our current share repurchase authorization.

Turning to Q4 guidance. We currently expect revenue in the range of $80 million to $85 million, representing a 16% revenue decline at the midpoint. And we expect Q4 adjusted EBITDA in the range of $9 million to $12 million, representing about a 13% adjusted EBITDA margin at the midpoint.

With that, let me provide you a little more color on the fourth quarter outlook. While we are encouraged by the larger number of clients piloting LiveLift, we expect that it will take some time before this starts to meaningfully impact our top line results. And while we've outperformed on the cost side year-to-date, it's important to recognize we have several million dollars of seasonal marketing expense, which will be incremental in the fourth quarter relative to the third quarter, and we will now be more fully staffed for the entirety of the fourth quarter across the sales organization.

Finally, I'll share some early thoughts on 2026. We did not see our typical seasonality throughout 2025, but we would expect 2026 to more closely resemble the seasonal patterns of prior years with both the benefit of improved sales execution and the ongoing success of our business transformation beginning to more clearly show up in the results, particularly as we move into the second half of next year. That more normalized seasonality would imply as much as a low double-digit decline in revenue from Q4 '25 to Q1 '26, followed by sequential increases in revenue each quarter thereafter.

From a cost perspective, we expect to continue to invest in areas critical to our transformation. But at the same time, we remain disciplined and continue to optimize our cost structure. One area I'd highlight where we will lean into growth investments is in third-party measurement. We expect to purchase for our clients a significant number of third-party lift studies from our measurement partners, subject to certain financial thresholds and program requirements to independently validate the incremental lift of our platform.

We view this as an upfront and transitory investment that is necessary in the early days of any kind of new ad platform. We do not yet know how many of these studies we will purchase on behalf of our clients, but we are estimating several million dollars' worth. And frankly, we'd be happy if that number is on the higher end of our estimates. We expect to exit 2025 with a healthy balance sheet, and that, coupled with continued free cash flow generation, gives us flexibility to both invest in the organic growth and transformation of our business and return cash to shareholders, and both will continue.

It's an exciting time at Ibotta. And as Bryan said, we are confident that we are on the right track and making good progress on our transformation journey. I look forward to sharing more about our expectations for 2026 when we speak again in February.

I'll hand it back over to Bryan to sign off.

Thanks to everyone for joining us on this call. A special thank you to our investors who believe in the new paradigm we're introducing and whose patience we are working hard to reward.

With that, operator, let's please open up the call for Q&A.

[Operator Instructions] Our first question comes from Ron Josey with Citi.

Bryan, I wanted to understand LiveLift a little bit more. Very helpful to see all of the insights and early results. But talk just about the time line. I think I heard the sales team that's now fully staffed will be -- will start to fully sell it in the first quarter. And then I think you've also talked about there's some time that goes from trial or setting up the trial to when budgets are allocated, results and then budgets allocated.

So I would love your thoughts on just how you think the year progresses here. Would the time line -- what could cause the time line to be accelerated, I guess, is question one.

And then just a quick follow-up on macro, Matt. You mentioned some of the CPG sort of headwinds here. Would love your thoughts on what you're seeing currently.

Thanks, Ron. Appreciate the question. So I'll take your first question regarding LiveLift progress, time line, kind of puts and takes on what to expect in the coming year. So we're very pleased with the progress that we've seen so far. As you know, we said in the last call, we would be hoping to be on track to have about 20 LiveLift pilots take place before the end of the year, and we are on track to do that.

To put that in perspective, we have more LiveLift pilots happening right now than in the first, second and third quarter combined. We've also seen that of the subset of those that have finished the program, gone through the evaluative process, 83% have already re-upped with campaign investments after the pilot. And the remaining program, we just haven't heard yet. So very encouraged both by the velocity of these pilots and also by the quality as evidenced by the hard data.

As far as part of the drivers of the time line, for one, we've expanded the aperture of people that are able to -- are trained to sell this in. So what was a much more controlled process with a select few clients, we've now gone out to the great majority of our enterprise-level clients. And that's happened just in the last few weeks, as I mentioned. That's going to mean that we can have many more simultaneous conversations about the solution than we've had in the past.

In terms of what the time line is, you're talking about outreach, then you're pitching them on the benefits of this new solution, then you're setting up the parameters of the pilot, running the pilot, that generally takes a couple of months at a minimum. And then you have a time period of evaluation. There might be a third-party list study, there might not. And then there's this conclusion that they want to invest further in the solution. And then there's considerations related to their budget cycle and whether or not we can do that sort of out of cycle, it depends on their fiscal year, et cetera. That's sort of the arc of what we've seen over this first year. And I've mentioned that, that can take up to 12 months because of all those steps I just mentioned.

Things that could accelerate that. Obviously, the performance of the campaigns being good is all else equal, a really encouraging thing that causes people to say, how do I get more of this? We've seen that happen already. People saying, "Wow, this is something I can do much with much shorter lead times", and they realize this can be used to close gaps. That could cause them to say, "Give me a proposal right away." And I think just the more we put out news about things like LiveLift and about Circana, the more we're going to get people talking about it, inbound interest, and we started to see that. So I think that could be a tailwind perhaps in 2026.

Yes. And Ron, relative to your question about the macro and the comments that I made there, I don't think we're breaking any news here. I mean it's been noisy. And in fact, maybe it's even more noisy right now here in Q4 when you consider tariffs that are continuing to impact, particularly for us in the ad revenue space, but generally speaking, tariffs are impacting -- consumer sentiment is quite low, I guess, maybe even historically low.

Now we're dealing with the disruption of SNAP benefits. It just generally a lot of macroeconomic uncertainty. And clients, our clients are taking generally a wait-and-see approach and a cautious approach, and that filters to us as well. That's really the point we're making.

Our next question comes from Nitin Bansal at Bank of America.

So AI is increasingly becoming a core driver of performance outcomes. Can you elaborate on how you're integrating AI within the platform? What tangible improvements have you seen so far? And looking forward to 2026, where should we expect like the highest AI benefit for your platform?

Thanks, Nitin. Yes, so I think there are a couple of different places and ways in which we're incorporating AI, particularly machine learning, when I say AI. So one of the most important is in how we use AI to model the pre-campaign as well as the in-flight projections of how many incremental sales and what the cost per incremental dollar will be for a given campaign. That's powerful. That gives us the ability to crunch a large amount of data and kind of come up with a set of recommended parameters for that offer that we think are more likely to achieve the goal that our clients tell us that they have from the outset -- that's something that we will continue to refine and iterate on over time, and that will -- AI will be an important part, not just of projections, but ultimately of optimization, recommendation, et cetera. That's kind of in the core product itself.

As you think about the processes we use internally to configure and launch offers, we use AI across a variety of solutions to make that more efficient. So to use one example, we recently launched our first Agentic solution in-house, which is reducing the time we spend on setting up campaigns by finding the appropriate UPCs, uniform product codes that need to be included in each campaign, and that's reduced that setup time by approximately 50%. So those are some examples of how our processes and our product itself are going to benefit from AI, going forward.

Our last question comes from Andrew Boone.

Bryan, I wanted to go back to one of the themes you talked about on the call in terms of just making things easier. Can you just speak to the road map and what that entails? And what gets you most excited about just reducing friction across the platform?

Thanks, Andrew. Yes, look, we've talked about some of the execution opportunities that we've had over the last several calls in going out and talking to our clients and our partners, we've heard consistent feedback. It is not as easy as it needs to be to work with you. That might be a matter of we haven't had continuity in the sales rep, somebody who understands our business and is working hard to anticipate opportunities to use your solutions to benefit our business.

It might be something as mundane as we have a difficult time with the billing or the invoicing aspect of working with you. You need to clean that up, you need to make that easier. But it's also just a matter of creating a set of tools and solutions that are really easy to kind of speak their language, right? So instead of speaking to them about metrics that ultimately aren't what they're accountable for, like, for instance, clips or even the pacing of their campaign to be able to speak directly in terms of incremental sales, directly in terms of market share gain that we think we can deliver and compare our costs directly to their profit margin, that makes it much easier for them to go to their internal teams, their finance teams and get approval.

Then there's also just the process of selling. So for our sellers to be able to execute before, during and after the campaign, that means we have to be able to automatically and accurately generate these campaign projections very quickly. So if you have a really exciting sales meeting, it's easy to come back to people and say, here's what we're proposing, here's what we think it will deliver. These are the ranges we think we'll be in. We're doing that today, but that process needs to become more automated, less manual. And that will help our sellers.

Same thing during the campaign, being able to provide that readout, be able to provide it ever more frequently over time, more accurately. The more data we have to feed these models, the more accurate they'll become. And then turning around standardized reporting after the campaign in a way that's very turnkey and doesn't require us to pull in a number of different client analytics resources. Those are all things that I think sellers here at Ibotta are incredibly excited to see. These are all investments that we think are going to delight our clients and improve our overall go-to-market motion.

And then, Matt, I wanted to ask about 2026. As we think about some of some of the new merchants that you guys have added and lapping those adds in 2026. How should we be thinking about third-party redeemer count on a go-forward basis in terms of next year?

Yes, I think -- we certainly are not going to get real specific about 2026 from a guide standpoint. But I think we aren't factoring in any increases in publishers from a networking standpoint. So I think you could assume that, that's going to be relatively stable across time.

One of the things I think is really important to remember though that we're really driving the business through a significant transformation. And at the same time, we're recovering from big execution challenges that's played this over the last few quarters and a large-scale sales reorganization. So -- while we're not guiding for 2026 today, really across the P&L, or certainly not any of the inputs to that, we did think it was important to provide some shaping.

So that's what we did in the prepared remarks around expecting more normalized seasonality leading from Q1 through the balance of the year, but really importantly, understanding that from Q4 to Q1 -- Q4 '25 to Q1 '26, we'd expect to see as much as a low double-digit decline in revenue.

Yes. I'll just add that redeemer growth is ultimately a function of improving the offer content on our on our network. And so we're working very hard to do that so that we can both increase overall number of redeemers and the redemption per redeemer on third-party publishers to your question, and on D2C. I think both of those factors are very important. And we're starting to see the LiveLift solution increasing investment and increasing the breadth and quality of the brands that are on the network, even as some of these are still small dollar numbers.

So for example, recently, one of our partners, just as recently as last week, said on their earnings call that they were piloting Ibotta, that they were using performance marketing and incentives that they have seen promising early results in driving new users and incremental sales across key snack brands and soon formula. That's just one client that's gone public in the last week. We're continuing to see clients contemplate putting in more mainstream brands versus just innovation brands. And so we think that's ultimately going to hit a higher percentage of the basket and increase overall redeemers to your question.

Our next question comes from Stefanos Crist at Needham & Company.

This is Stef calling in for Bernie. Kind of maybe a different way to phrase the last question, but could you just talk about the contribution from Instacart and DoorDash in the quarter and maybe how to think about that going into next year?

And then you said the majority of DoorDash customers are using Ibotta. How does that get to all DoorDash customers?

Yes. Thanks, Stef. Appreciate it. Say hi to Bernie for me. We're pleased with the momentum of our partnerships with both Instacart and DoorDash. We've made progress there this year in terms of improving the functionality. At DoorDash, they were taking a cautious approach, growing to make sure that there's no impact on their core user experience. And I think they've satisfied themselves to a great extent. That at this point, to the extent it's not truly 100%, it's a very small holdout at this point, not worried about functionality, but -- and that's just to keep an eye on any long-term unintended consequences of having this content.

But we are pleased with how those have performed. We've also added Beer, Wine and Spirits in the jurisdictions where that has been possible, the 13 or so states where that has been possible in those environments. And so we continue to grow both those channels. You heard that we've grown redeemers year-over-year substantially, and those have been a big part of how we've achieved that.

[Operator Instructions] That concludes the Q&A section of the call. I would now like to turn the call back to management for closing remarks.

Thanks very much to all of you for your questions. We are excited about where the business is heading in 2026, and we look forward to giving you a further report early next year.

Thank you for joining today's session. The call has concluded. You may now disconnect.

Okay. All right. I think in the interest of time, we're going to keep moving along. It's my pleasure to welcome the team from Ibotta here in the conference on our fourth day. And making his conference debut, Chris Riedy, CRO. I'm going to read a safe harbor then Chris and I are going to give into the conversation.

Today's discussion may contain forward-looking statements. These statements reflect Ibotta's current expectations and are based on the information currently available to Ibotta, and Ibotta's actual results could differ materially. For more information, please refer to the risk factors in Ibotta's recent SEC filings, including its 10-K and its 10-Q.

Okay. So we got through that.

We did it.

Chris, I know you're relatively new to the company, but for those who don't know it as well, either in the room or listening, talk to me a little bit about just level setting the story around about Ibotta and what the company's mission is?

100%. First, thanks very much for having me. It's great to be here. Glad to be here on your fourth day. So hopefully, we keep it interesting.

So Ibotta, think about it. Mission, make every purchase rewarding. You go back 13 years in time, Bryan Leach, our founder and CEO, really had this idea that there was an opportunity to connect shoppers with manufacturer offers or coupons and retailers. So you can create this kind of holy trinity of you've got a shopper that's interested in something, a manufacturer can compel them to buy it with an offer, and then they can go into a retail outlet and make a purchase.

That business came to life through a mobile application called Ibotta, you go to the App Store, you download it and inside of that Ibotta application, you'd find these manufacturer offers, you could link your loyalty card from a given retailer and everything works really great. Over the history of time, about 50 million downloads of that app. So pretty meaningful and a really nice business emerged.

I think the company from there realize that there might be a bigger opportunity. And the bigger opportunity really stems from rather than saying to the consumer, you've got to come to Ibotta every time to find these offers. What if we met the shopper where they are.

So 6, 7 years into the experience, started thinking about how could we do that and ultimately formed a partnership with Walmart and helped build the Walmart Cash program that effectively took this solution and turned it into a white label. So same concept. We've got shoppers. We've got manufacturer offers. But at this time, it's actually at the retailer. So the shopper finds it in the flow of shopping within the Walmart ecosystem, and that kicked off what we call the Ibotta Performance Network. We work with Walmart, Dollar General, DoorDash, Family Dollar, Instacart. And we've got a broad swath of partners there.

And what really happened is you go from this installed base of 50 million people, which is big. But again, remember, they got to come to Ibotta to now you go to over 200 million shoppers. And rather than meeting them at Ibotta, you're meeting them where they shop every single day. And that's just incredibly important.

And then I think what we'll talk a little bit about today is you go from Version 1 to Version 2, and now we're emerging into version 3, which is really about doing that exact same thing, but delivering more obvious value to the manufacturer. How do we help the manufacturer understand that these coupons that they're providing are actually contribution margin positive revenue drivers. They're not just tactics their actual revenue drivers, profitable revenue drivers.

I want to build on that because I think one of the central themes that we keep coming back to and what we write about the company is that there is a desire out there among CPG advertisers and big brands to be at the bottom of the funnel where decisions and purchases are being made. And now you're in this new transition for the business. Level set what this transition looks like? And how is the conversation evolving with your partners around adopting the transition and understanding what it might mean for their businesses.

100%. So I think first and foremost, we have to take a customer-centric approach. So really being customer obsessed, understanding what the customer needs, building trust with the customer and then ultimately building alignment.

And what Bryan realized, he did this to his credit last year post-IPO, he went on a bit of a roadshow and said, "Hey, what more do you need from us?" He asked the right question to the marketer. And they said, "We need a little more proof. We love you as a partner, but we need a little more proof that this is really driving, again, profitable revenue for me. This is not just some dollar we would have earned anyways." And so with that learning, we have to evolve or we have an opportunity to evolve a little bit with regard to who we talk to.

So historically, think about us maybe more as a service provider. We're a vendor, "Hey, I've got a promotion, my boss asked me to run it. I bought as an amazing digital promotions platform. I'm calling them." And we did that rinse and repeat for a long time.

We're moving now to more of a solutions provider where we're going to move up the stack inside the company we would have worked historically with the center of excellence around coupons or promotions. We would have worked with the procurement team that says I want the best value, please give us the best value. We'll give you our promotions.

And now we're going to business leaders. So the head of a business unit or maybe the CMO or maybe the CEO to find the right person to share the story that we're going to deliver profitable revenue growth for you, and we want you to hold us accountable for that. So if we don't do that, we're not doing our job.

And that's just -- that's an evolved conversation that in some instances, our old contacts the right people. But in many, we have to, what we would call multi-thread our way through an organization so we can find the people that are most interested in that.

Okay. Let's build on that theme a little bit because when you go through that transition and you talk about making sure you're talking to the right people in the organization you're trying to garner on the client side.

Talk a little bit about the transition the sales organization has to go through so that you're optimized in your go-to-market strategy against what your sort of business goals are?

A couple of big things. First thing I'm going to say it again, just because it's so important. Our company has to be customer obsessed. We have to just live and breathe what the customer needs. When the customer wins, we win. That's our business model. We are only paid when we actually move a product for somebody. So that's the first thing.

As it relates to the sales team, there's a lot of simplification that we're doing right now. We've moved to a 2-channel system. We have an enterprise sales team, and we have an emerging sales team. That enterprise sales team, it's white glove, it's high touch. It is in front of the customer. It is in person, and it's really working on not just one relationship. It's trying to build multiple relationships across the line.

Emerging side is a little more scaled. That's going to be for more of an emerging or a mid-market company, and we want to find a solution that's really easy to buy, really easy to work through. That's the first thing I would say.

Second thing is helping our teams manage a smaller number of accounts. So when you think about -- if you're on an Excel sheet or a whiteboard and we say, you've got 2 clients, 2 consumer packaged goods companies. Well, underneath those brand names, you have business units underneath those business units, you've got sub brands and child brands. That's a lot of work for a single person.

And so we've worked really hard to think about the right account load on a rep-by-rep basis such that we can actually do what we want to do. We want to be able to go in and multi-thread et cetera, et cetera. That's a big change for us. And then we're really being thoughtful about the folks that -- we've got some great folks on the team that are doing really great work. And then we want to augment those folks with new hires that have worked in the performance marketing space before, so that have had these conversations with brands and that understand the key tenets of performance marketing. That's critical on the sales side.

I don't want to leave out though, if you think about sales support, think about B2B marketing. We've made some changes, as we've talked about over the last 6 months, where we've moved B2B marketing organization into the revenue organization. And that's critically important because if those 2 teams aren't working harmoniously, it's not going to work. You have to have the right story. You've got to get the seller informing, okay, this is what we're hearing. How do we take that back and forth.

So we've made that change to not only do better product marketing, sales enablement, but also to lean into training and to really invest in our sales team, such that they have the right materials such that when they show up, to talk to that consumer packaged goods company or packaged goods company, they're doing so at an empathetic thoughtful way.

Additionally, we've built a sales operations function or revenue operation function that didn't exist before. And that is really about a couple of things. One, it's about just being highly effective from how are we running the business standpoint. It's also about how are we forecasting the business, building the right tools, building the right system. There's a lot of software that we all know about that exist for salespeople to track their calls and build pipelines and make it more visible, you got to actually go implement all of that.

And then the last thing I'll say that I've been really encouraged by inside the company is the company's commitment on the product side to lean into systems and tools that just make selling more simple. So if you think about, if you go launch a campaign at a big performance marketing or any digital media shop, at Google, Snap, whatever it may be, it's pretty easy, pretty -- you go pretty fast through it.

And there's opportunity at Ibotta for us to not only make that better for the end customer, the self-service customer at some point, but also for our teams. And so that is really important to me, and I've been, again, like I said, just so appreciative that, it's not just build this great new thing in the future. It's also how do we take what we have today and make it better and better and better, so that our sellers spend more time in front of their customers, and less time doing key stroke manual entry of things.

Okay. Understood. Maybe just one follow-up there because you did do a nice job of rolling out sort of the before versus the after. Maybe just one follow-up would be when you're talking to clients, especially with inside CPGs, how can you reflect on the way they want to buy versus how you're changing their mindset around your product set in your platform?

Super helpful. So you said it a few minutes ago. CPGs want to get further down the phone. That is known inside of the CPG. And that is maybe the CEO's point of view, maybe it's a CMO's point of view, maybe the media team. And definitely, if I have hair care or family care or laundry care, I want that.

Traditionally, the center of excellence for promotions, they haven't been as focused on how am I -- how am I optimizing the profitability or how am I really driving growth at that level? Because think about promotions is over 100-year-old tactic. Born offline. It's a little blunt force in many instances. And so that human -- that human, their job has not been to come back to the organization and say, "Hey, I found a more profitable way to do this. I found a way to grow business in a different way. I found a way that might be crossing the CASM into performance marketing." So that's the evolution. It's making sure that person -- I don't want to -- we don't want to go around that person.

That's a great partner of ours. So it's making sure they understand where we're going and then asking them, who's the right person to get this in front of inside your company? And what I'll tell you is, I've only been here for 9 months, we've been really doing this maybe for a little bit longer than that. But here and in my previous experience, it's not a one-size-fits-all. So it's not the same person at every company that's going to make the decision.

And that is why it is so important to take that customer-centric approach to be really thoughtful to be really empathetic to understand their business so that you don't show up saying, "Hey, I want to sell you something." You show up and say, "I want to solve a problem for you." And that might be the CMO. It might be the CEO. It might be the head of media, it might be the head of the business unit, as I said. The key thing is making sure we understand their business so that they're willing to spend time with us.

Yes. And to that point, sticking with this theme of building confidence and moving people towards an understanding in the bottom part of the funnel. How critical is third-party measurement to advertiser confidence, budget allocation? Talk about some of the building blocks there to get to a point where there's data and insights that can help inform this decision on behalf of your clients.

Yes. So let me just start by saying third-party validation. I think it's table stakes, full stop. I'll back up a little bit and say, when we sit down with a CEO or CMO or all those people I just mentioned and we say, "Hey, if we could deliver $100 of revenue for you for, call it, $30, would you be interested in that? " The answer is yes. It's an obvious answer.

Then you unpack for them. Okay, here's what we've seen with your campaigns in the past. And they say, wow, okay, does my team understand this? This looks a little bit different than traditional promotions. So you present all of this upfront and they're compelled, that usually you can get somebody into a pilot that way.

To get somebody to really get to that rolling, I want to do this all the time and I want to increase -- or I want to increase spend with you, third-party validation is critical. And that's something that is very normal in the space. 10 years ago when I was at a different place, we weren't looking as much at sales lift studies. We were looking at it's called brand effect studies. And marketers would come to us and say, we ran this great campaign, you told us it was great. Could somebody else tell us it was great also.

And so we contracted with third parties like at that time, Kantar and Millward Brown, and they were great partners to us. And we are going to go down a very similar path here, where we will have the results -- excuse me, it's very important for us to provide those results. But at any time, when a manufacturer wants it to be validated by a third party, we want to do that. Because like I said earlier, we win when they win. And it's really critical that they see that and they believe that because once they do, that's when you'll see the revenue truly accelerate.

And one of the questions we get, and it might not be a great answer today. But in terms of like where -- when you get there so that you feel confident in what you've built and what you've scaled that it can drive decisions. Any thoughts on how we get from here to the end state of this so you feel the most confident in?

I wish it was more than just like doing the work. The software -- building software and taking software to market is AI, machine learning and everything so fast, but you really have to do the work. And that's one of the things that compelled me to join the company is I just have a tremendous amount of faith in the folks that are building the software at Ibotta.

And it's really important that we do that in a very measured way. So think about, okay, we're going to go a little bit. We're going to get in front of customers. Customers are going to use it. They're going to give us feedback, take that feedback. Now we go a little bit further. Keep doing that. And that's what's in our control, right? And that's what we're going to keep doing. We're going to keep evolving. And I think everybody's heard Bryan talk about how we're doing that.

The third-party stuff kind of runs parallel to that. So where we are, we've identified third parties. We're working with a couple right now. We're really encouraged by that work. And if you think about how that evolves, you go from manually passing campaign data to one of those companies. And they run a big analysis, they come back. It's like, okay, what did it say? It's Christmas morning.

The way you get to, you get to a place where you just have direct data connection. That data is flowing into that entity all the time. And you get much more of a kind of rolling or every couple of weeks you're getting these results. I'm really comfortable with the process that we're moving through. And I think ultimately, we have a very clear vision about where we want to go. We have a very clear vision of the value that we want to deliver to the CPGs, but we're not just sitting in a room building this stuff, and then there's going to be this grand reveal. We just keep taking it bit by bit out to market. We get great feedback. And we execute on that.

Okay. Understood. incumbent upon this, though, and it is been a conversation, the collective sell-side, include myself have had on the earnings calls is that you also live somewhat at the whim of advertiser budget cycles. So there's elements of product versus proving out the product versus cycles.

Where are we in terms of the strategic shifts you're trying to implement against the usual cadence of sort of 6-, 12-, 18-month budget cycles and how you're thinking about aligning product with budget cycles and where we are as another overlay on top of the transition?

Yes, it's complex. So I think that there's a couple of things I've said this and I want to reiterate it. First and foremost, we have to be customer obsessed. We really have to not be a service provider where someone says, "Hey, we're ready to execute some promotions, we'd like you to do it." we need to show those entities independent of what they're -- how they're working with us that we're obsessed with them. That's the first thing.

The second thing that we've learned is talking about this is great, actually showing existing customers and future customers results in advance is actually better. So how do we think about showing up to a meeting and saying, "Here's what's happened over the last year." A lot of the first meetings that Bryan and I had to get these vigorous head nod, this sounds great, now show me, how do we do it? How do we do it? And that's an evolution for us.

The other thing where we're evolving is like, this doesn't require you to sign up for some new contract with us or put some new amount of money. Of course, we'd love that. But if you have existing programming with us, think about where we are today, we're about to go into quarter 4. You've got a campaign that's ready to go. We're going to do everything we can to take that campaign and run it through this new bit.

We want to prove as quickly as we possibly can that we're delivering, again, that demonstratable value to you. So you're absolutely right that budget cycles, those are challenging. Purchasing funnels, who's making the purchase that can be challenging. Gosh, I'd really love to buy this, but we're already committed to this other thing. And so, what we need to do in this regard is just be in the right place and be really flexible to the customer. We are incredibly confident that we're going to deliver the value. We're seeing that in early days, being validated.

So I think that we will continue to make steady progress here. And I hope we're going to end up in a place where brands will say that yes, we do have a 12-month budgeting cycle, but this is delivering such clear value. We've got to find a way for you to get the money sooner.

Got it. And you alluded to it earlier in one of your answers, talking about getting to a point where you have high confidence interval in revenue visibility. How does that also feed into it to the extent to which you take what we've talked about up to this point the repositioning of the platform around where you want to go, the conversation you're going to build the go-to-market strategy. Is the output greater levels of revenue visibility, revenue predictability, is that how the way investors should think about it?

Yes. I would like to be able to deliver that. And I think the -- there's a couple of key ingredients there. The first, again, being customer-obsessed. We need to understand, we need customers to say if something -- sometimes things budgets fall out. I've been doing this for a while, and you never want to hear that we've had a change in our business.

But having a customer tell you that is the first part of the battle because if you understand that, okay, well, let's reattack and we'll reframe and figure out if there's another way for us to provide value to you. So that first thing is just being present with the customer.

Second thing is really getting to the place of doing joint business plans. Very common in my old world, but this is what we endeavor to do this year. The only way you can do that is by understanding what they're trying to accomplish such that, again, that you have that alignment. We've talked about whether it's the revenue operations team, the sales finance team, we're just surrounding the sales organization with more support such that you have some quantitative inputs to go along with the qualitative inputs, that will help forecast ability without a doubt.

The last thing that I'll say is, the more demonstrated value you provide to a customer, the more predictable the revenue gets. And that is the thing that we are -- that's why we're so focused here. We want to deliver value to the customer. We make money when they make money. When they -- everybody is in this harmonious cycle gets much more easy to predict. I think it's harder when it's -- you can be in this lumpy environment when it's unclear what the value is. So there's a lot of things that are at play there, but I think we've got the team in place to provide that for you.

Maybe just one more to close out this whole sort of broader theme. When you think about how the products you offer are priced and how the pricing actions of the company tie back to the sales motion of the company. Maybe just close the loop on all of that as sort of the last point of the things involved more in the transition than to external.

Sure. North Star revenue growth, not fee growth. So you think about that, you could be in conflict there. You may want to raise fees. Maybe that's the right thing. My belief is that our #1 goal and our #1 job is to grow revenue, do that in a cost-effective way. To do that, we need to make sure that with our customers, we're understanding their margin profile. We're understanding what good looks like for them.

And then we are giving them the ability to spend money with us in a way that is again profitable for them. If you think about how Bryan has been talking about this rollout that we're doing, we endeavor to say, if you want to be high, high, high margin, you can do that. You probably move less units, but we want to give you that control. If you want to drive a lot of scale right now and you want to open up the aperture on cost, we can do that too.

That is different than how we were doing pricing before. So I think we're taking much more of a market-based and customer-centric pricing program. Price shouldn't be a blocker for us. that's something that shouldn't be a blocker. You may have a very low fee that may impact your volume ultimately. But that's something that's pretty standard in performance marketing.

Yes. Understood. Maybe I'm pivoting some questions, and we'll try to move through them quickly in the time we have. Maybe just thinking broadly, competition. One question we get asked a lot is how does the Ibotta Performance Network both interact with, but also compete with retail media networks?

And the broader question would be, where do you see yourself fitting into the broader competitive landscape for budget against that more sort of idiosyncratic question with respect to with or against RMNs?

Sure, for sure. So the first thing that I'll say take retail media out, just take marketing budgets, full stop and the story. We want to deliver proof undeniable proof that we deliver contribution margin and positive revenue growth, full stop.

So I want anyone in the CPG to say, "Well, that looks interesting to me." I think that's of critical importance. And as we see in the landscape today, being able to deliver outcomes makes a difference. So that's the first thing I'll say. That's not competitive with anybody. That's just what we're going to do. As it relates to retail media networks, you're absolutely right, just a massive rise over the last 10 years to where that's a household board now retail media network.

I think about our solution as very complementary to the retail media network. If you think about how we work with Walmart right now, you can be a brand you can buy a sponsored search result. What does that do? That brings you to the top of the search result for toothpaste or for laundry care or for fabric, whatever it may be. And you have the ability to augment that search result, that small product listing that you'll see there, with the Walmart Cash offer, which is powered by Ibotta.

That is absolutely like a perfect example of complementary service. That will make your search results stand out more. That will probably compel the user to click through to get some more information and hopefully to make a purchase at a higher level of frequency. And so that's what we see with our partners. We don't see it as either/or, we see it as an and, because those brands should be buying retail media to drive discovery. They should be buying retail media to drive awareness.

And then when you get into that consideration phase, retail media also very important. That's when we can really start to add value. And I'm encouraged by what we see with our partners like Instacart, like DoorDash, like Walmart. I think very complementary.

Okay. How should investors think about the pipeline or potential around new advertiser segments for the IPN over the longer term.

So look, anything that's a packaged good, anything that exists out of Walmart, anything that you could get through a DoorDash on the grocery or mass merchant side. That's in play. I think for us right now, what you'll see is we've expanded over the last couple of years into general merchandise, seeing we're happy with how that's going.

But I think we also have a really massive opportunity just sitting in front of us with the CPGs, plus or minus $200 million -- $200 billion spent in marketing from that cohort of customers. And I think it's really important that we think about our resources and attacking the enterprise level and the emerging level effectively because there is just a lot of revenue there and there's a lot of revenue to be had.

So we're very interested in working our way to every single product that you could find inside of one of those stores. But right now, there's a ton of opportunity for us just to get better at how we service that CPG. It doesn't mean we're going to stop serving general merchandise, not at all. I just want to double-click on underscore the point that, that CPG market is a big one.

Okay. Pretty much the conversation at this point had focused more on where you're going as a platform and a product how you incent budget and conversations with advertisers. We only have a few minutes left. Maybe we'll end on a collection of questions about the redeemer or the consumer side of the equation.

So what do you see today in terms of the behavior of redeemers? How do you think about the opportunities to stimulate redeemer growth from here, both with some of your bigger partners like Walmart in store or across other campuses where you can engage with redeemers?

Yes. Okay. So the American shopper today cares a lot about value. That's obvious. Everybody understands that. We're going into the holiday season right now, and there's a real challenge between how do I deliver value. Retailers are thinking about value versus discovery? How do I get this right at this time of the year that is so critical to my business.

So first and foremost, the core thing that we do, we need to keep doing. We need to help manufacturers connect with shoppers such that those shoppers can find value and be compelled to make a purchase. That's the first thing that I think is really important.

The second thing is, if you think about that the IPN in totality, as we've discussed, we reached 200 million shoppers. That's a very big number. And what we're going to do is keep working with our partners to find the right way to show up. So whether that's again, showing up in the sponsored search results, which we do at Walmart or finding the right way to be included in traditional retail media network advertising. That's really important.

I think it's also important for us to work with our partners. So working with the manufacturers to make sure that we get the right swath of offers, and we get a broad enough swath of offers such that we can take that 200 million opportunity and keep expanding into that. That's where I see the sales team really delivering a lot of value. It's helping educate the marketer packaged goods company that, yes, here's what you want to do. We're going to do that for you, but you also have an opportunity here to deliver profitable growth. You may not have been thinking about that. there's an opportunity here to deliver profitable growth.

And so as we demonstrate that we're delivering profitable growth, that will allow us to expand from 1s to 10s to 20s of offers from a company to 20 to 50 to hundreds of offers. And I think that's what allows us to really increase that redeemer count because the total population of shoppers that we reach it's tremendous.

Maybe just one quick follow-up before we run out of time. We get asked a fair bit about how much of this activity will happen online versus potentially how much of this activity could happen in store. I know we've had this conversation on the public earnings calls about Walmart in-store over time.

But just broaden it out a little bit, how much you are sort of agnostic to where the redeemers activity is relative to the market opportunity and whether there's a world view inside the company about that?

Yes. I think we want to meet the shopper where they are, full stop and end of story. That's the thing that we have to do. If you look at the e-commerce growth in grocery and mass merchant sales, it's tremendous right now.

If you look at what's expected in holiday shopping, it's the mobile device that is the key entry point for shoppers. So it doesn't mean that there's not a lot of folks going in store. We want to be there for them. But ultimately, I think for us to be the best connector, if you go back to where we started, you've got the shopper, you've got the manufacturer who's trying to provide value to the shopper, you got the retailer who's helping them make that purchase. That's what we're trying to satisfy.

We want to be a solution to each of those. And therefore, whether it's testing in-store opportunity with Walmart if it's testing different ways we can show up in a mobile experience or in a web experience, all of those are critically important. We want the shopper to have equal opportunity to redeem these offers to receive the value because that's good for everybody.

Okay. Well, I think we're going to leave it there, which just a minute or so to go. But Chris, thanks for coming out of the having the conversation and a lot of exciting things that you're working on at Ibotta, look forward to possibly having the conversation a year from now.

I hope we can.

All right. Thanks, everybody.

Thank you.

And now we're officially live. [indiscernible] your voice. We're officially live now. So great. Let's kick off. So I'm Ron Josey, I cover the Internet sector here at Citi. And look, I'm happy to have with us today, Ibotta's CEO, Founder; Bryan Leach.

Bryan -- I think you all know who Bryan is, your background from the legal industry to entrepreneur and now, call it disrupting the promotion industry, not disrupting, call it, evolving the promotions industry. I think there's a lot that we can learn from and go through. So Bryan, thanks for joining us today.

Thanks for having me.

So we're about 1.5 years post IPO, if I have that right. And I think for those in the audience that are less familiar with Ibotta, given we're still relatively new to the public markets, give us an overview of the platform, how the strategic focus has evolved for the most part? And and then we'll go from there.

Yes. So we're in the consumer packaged goods industry, helping these companies figure out how to deliver profitable revenue by using digital promotions. And so traditionally, in our industry, you had paper coupons, very blunt instruments, and they developed a certain conventional wisdom around that, that you do a certain amount of that, but not more than that because your fear was you might be subsidizing somebody who is already going to buy your product.

And so it was a way of moving sales very quickly. It was a way of placating your retail partners through whom your products are distributed, but it wasn't necessarily agreed that it was a very profitable way to drive market share growth. It was still a large industry, an important industry, and we went a very long way initially as a D2C app, just disrupting the distribution of paper coupons and clearing houses and this sort of thing. So now you could have an app that you could download, it would work anywhere. You could go in and buy a featured item that you saw on our app and get cash back instantly on your PayPal account.

So we gave away more than $2 billion to American consumers. We -- our mission is to make every purchase rewarding. And about 5 years into our business, we realized, gosh, we could take this and make it a much broader network. So we could distribute these same promotions on Walmart's website, on Dollar General's website, on Instacart, DoorDash, et cetera. And so we built out something called the Ibotta Performance Network. And the reason why it's called the performance network is that unlike traditional media where you pay for clips or impressions, you paid on a performance basis, a fee per sale, fee per redemption model. So it was lower risk.

The evolution since then, since the IPO, has been the realization that the industry is ripe for a revolution in measurement. And so what has been measured in a very kind of course way, here were the sales in period A, here are the sales in period B when we ran the promotion, the difference must be lift. Well, the problem with that is there are many variables occurring between period A and period B. And so everyone is claiming that they cause the lift. And that's why you have things like mixed media models that are complicated and debatable.

The gold standard is a true media lift study, where you have 2 statistically matched populations in the same time period, and you're looking at one is exposed and the other is not exposed. So you're isolating the variable of exposure and making claims about causation that are way, way more rigorous. And this is what Google does, Facebook does, the Trade Desk does. Everybody relies on these lift studies.

We basically, since the IPO, built a system where we're able to measure incremental sales lift on a real-time rolling basis. And that statement, real-time measurement of incremental sales is truly a revolution in our industry. No one has done that, not just in promotions, but anywhere in the CPG industry because most of these products are sold, 85% of them in stores.

And so unlike where you have a pixel or an SDK and you know which Google ad or which Facebook ad converted to an app download or a sale, it's very hard to do that in the physical world until now because Ibotta has millions of consumer loyalty card baskets that we can look at, and we can create these statistically matched audiences and actually track the number of incremental sales that our promotions are delivering down to the day, compare that to the cost and prove that it's actually profitable. So that is the big revolution that we've been working on the last year.

And so it's a big revolution. Measurement in all of advertising is always a challenge. And so we've seemed to have figured out that incremental lift. And we call that CPID, right, cost per incremental...

Cost per incremental dollar. And the reason why we express it that way rather than incremental ROAS or whatever is that we want you to compare the margin of your product and say, you know what, as long as my cost per incremental dollar is lower than my -- in light of my variable cost, I am contribution margin positive. Why would I ever turn this off and take it from a limited tactical some -- uptime some of the time to an always imperative thing I want as much of as possible.

So how do we do that? How do we develop this incremental measurement of sales that forever the coupon industry or the performance industry has not been able to do. So take us a little bit deeper into just how we did it on the technology side, and then I have questions about how we implement it.

Yes. So Ibotta is the first company that's had enough data and enough innovation capability to reproduce these best practices of media list studies on a rolling basis for promotions in the CPG industry. So we take millions of consumer baskets, and let's say, I'll exaggerate this for effect, but 1 million people were statistically matched to another 1 million people. And the only variable that's different is exposure to the offer or not exposure.

And then we track how many of the featured items or related items are purchased by each group. And we only take credit for the difference between those, that's statistically significant. So I don't care about total sales. I care about total incremental sales only. So if you were already buying this product, that's fine. But if I got you to buy 2, then I take credit for that one that's above and beyond what you would have bought anyway.

And I don't take credit for the other one, right? And so that responds to this fear of subsidization because you say, well, look, loading all that in, taking all that into account, had you not done this, you would have had $35 million of sales. Because you did this, you had $70 million of sales. So we'll take that $35 million difference, divide it into the fully loaded cost, not what the industry has sometimes done where they don't include the user awards or don't include the setup fees. No, no, no, no, no.

We'll look at the fully loaded cost compared to just the incremental, and we'll prove to you that you're in the black. And that's a big, big, big turning point, right? And we -- the other thing that's happened since the IPO, Ron, is that we now have third-party validation. So this industry has graded its own homework for 140 years until this year, until this year. So there were occasionally data put into a mixed media model based on a generic idea of a coefficient of causality of coupons modeled after some 1980 survey. That's not what I'm talking about.

This industry has never had a third-party measure lift in this kind of test versus control way. Now it has. So now from Ibotta, you'll be able to buy a lift study that says, don't take our word for it. These are other companies that have their own data, their own data scientists, their own statistical methodologies, and they will tell you the statistically significant lift to the 99% confidence level between the control group that didn't see the offer, the group that did see the offer across the network. They will tell you, here's how many incremental sales and here's your CPID according to us. That's a major deal, right?

And if you look in the history of performance marketing, we think that, that is something that has always unlocked more investment. I should say it will be a major deal. We have only a couple of these studies right now. Until we got hundreds of them, I can't claim that we've shifted the paradigm, but we now have 2 companies, 2 separate companies that have produced reports that show that our methodology is conservative at Ibotta, which is a really exciting start.

That's great. And so that was the next question. So we have the validation, but we've also run 2 pilots, and we have multiple pilots coming up here of the cost per incremental dollar. And so tell us about the pilots thus far. And then how this third -- the third-party measurement, which might have come after the pilots or during the -- how has that changed your conversations with the buyers, if you will, the CPID?

Yes, it's a great question. I think the way I'll answer it is to say that we have all -- since the last year, we've built a system to measure the cost per incremental dollar using Ibotta's capabilities. But that has been more manual to calculate that. That has taken some time to do that, which has prevented us from scaling this across our entire client base. Now we've gotten that process down to a much, much more automated, shorter, and it's getting better all the time.

And so what we'll now be able to do before too long is just make available to all of our clients. Here is your historical data for the last year of every campaign you run on Ibotta, here's your CPID. As long as there's statistically enough data there to make claims, most of our -- almost all our clients will see in a portal, all of a sudden, oh my gosh, there's this whole completely new world of data measurement, right, which is just activated, lit up for everyone, right?

If they want, they can go check that with third parties, and we're now making that available if they would feel more comfortable taking that to their finance team. And that's a really big step because you don't have time as a person at one of these companies to go deep into Ibotta's methodology. You want to be able to say, I check with such and such third company, and they said it's good. And so I'm sort of politically in a much safer place to make a much, much larger investment in that company.

I think that the automation of the process internally now allows us to where we'll be in a situation where we can have a conversation not just every other week about performance, but every week about performance. And then it will be every day they can log in and see the performance. So you're getting to this place where it really does start to resemble other forms of media that they're accustomed to, the Trade Desk, AppLovin, Meta, Google, they all have the ability to set targets, right?

This is my cost per install. This is my cost per conversion. Ongoing measurement, I can log in weekly or daily and see how it's going. And the third principle, optimization. I don't want to wait until after the campaign. I want to optimize in-flight. So if you take these 3 ideas, set targets, measure in an ongoing way, optimize, we're just taking those very well-worn proven constructs and applying them to one of the last industries that doesn't have them.

And so we have a lot to jump off...

I know, I know.

So I love the comment, all the historical data will be available. This is for 800 clients. The questions we always get is what's the time line for this? And so talk to us about if I am one of your 800 clients, when does my portal for Ibotta get populated with histories? And then what's the process to get a third party to validate and things like that?

Right. So I don't know exactly by when because we do these things in phases, and we want to make sure we get through the first phase and that we incorporate learnings before we move to the second phase. But our intention is that within the next 6 months, we should be in a place where all the clients that have enough statistically significant data in our platform have access to our new measurement breakthrough, right?

So they should be able to see their historical CPIDs and incremental sales, not just the CPIDs, but what -- how many incremental sales have they delivered for every offer filterable by brand soon. And the other thing people don't realize is that we're not going to make our clients come up with a net new budget to pilot this capability. They can take the dollars they've already allocated to Ibotta on our old rails, our old capability, and we can use those dollars to demonstrate.

So they don't have to go -- there's something already in the budget. Let us take that and demonstrate the full power of these new optimization capabilities, in-flight measurement, in-flight optimization, using more machine learning-based recommendations. That's, I think, an important point to get across because it gives you more optimism that we'll be able to fairly quickly demonstrate the quantum leap that we believe we're bringing to the industry.

As far as the third-party, part of your question, look, right now, a brand that wants to can say, I would like to get -- I'd like to purchase a third-party study from one of these 2 companies, and we're talking to many, many more companies. But these are the leaders in media list studies, and they can look at that analysis and decide if it's what they're looking for to corroborate. They have norms. They average for media. They can see that our is typically outperforming those norms by a pretty meaningful amount. They can see the breakdown of how am I getting to those incremental sales? Is it by greater household penetration? Statistically, what's the significance in the lift of net new households? They can see the buy rate. They can see the basket size.

So they can actually see a subcomposition of how they're getting to those incremental sales on the third-party reports that are -- that speaks their language in an exciting way. So as they start to socialize those in the building, we'll see how many of those they want to -- it may turn out like Google and Facebook, where they check once or twice a year. It may turn out that we buy some of those for them. It may turn out that there's more of that going on in the early days and less of that going on as they feel, okay, this means I can trust the daily dashboard that Ibotta is giving me. We're going to have to see.

Yes. And so seating adoption. And so we've got some pilots coming on here. I would love your thoughts on the changes inside of your 800 or so clients, like how you go to market. So now it's a different conversation. You're sitting down, you're saying we can actually talk about the incremental dollar. So talk to us about how we go to market and the changes, we go to market to sell inside of CPGs.

It really is a great question because it's different. It's meaningfully different. We've been talking to the Center of Excellence, the procurement team, the folks that buy this thing, sometimes viewed as more of a commodity tactic that they need a certain amount of, right? And that might be the coupon team. We're now talking to the brand owner, the P&L owner, the people that actually are responsible for the need to deliver top line growth and bottom line growth.

And we're saying to them, you can think about this as a promotions vendor, if you want. But a better way to think about it is we are an engine that can deliver a certain amount of profitable revenue growth. And if you want this much profitable revenue growth that corresponds to 1%, 2%, 3%, 4%, 5% year-over-year increase in sales, we're your Huckleberry.

Would you like that? Here's a bundle of $100 million of incremental sales. Would you like to buy that bundle of $100 million of incremental sales for $25 million? Does that sound interesting to you? Great. Don't -- you want to try it out? Sure. Give me $5 million, I'll show you that I can deliver $25 million, and then you can test it out with a third party. And then as soon as you do, you're going to go, how much of this can you give me? How do I help you grow your network even faster?

And what were the conversations like before? Because you weren't talking to brand managers, you were talking to, to your point, the procurement specialists, if you will, the couponing team. So before you couldn't offer that...

No, I still want to stress like Ibotta is still beloved. I mean we've had over 95% client retention in our existence because we're the best at delivering promotions. We have the largest network. We have a fee per sale model. And so we were the sort of best in a confined space. But now it's a different conversation. There are companies that spend a lot of money with us that, that -- where the brands -- the people that own the multibillion-dollar brand P&L have never heard of us.

And that's changed. And so I think it is a difference between what's the best company to do this thing that I want to do a certain amount of but not more to this is a unique company, I want as much of what they sell as possible. And that is a very palpable difference in the conversations. That just has to flow through to our financials. And I understand the investment community is waiting to see that happen, and we're waiting to deliver that.

Yes. No, no, for sure. And so we've got new -- and maybe last one, then we'll move on to a different topic here, similar but different topic. We get questions all the time. We had some pilots in the first half of the year. Some of those pilots have not renewed, timing issues maybe. But then we have multiple pilots coming up in the back half.

Yes. And I would say it's not that they haven't renewed. It's that there's -- they paused for idiosyncratic reasons. And I understand how if you're an investor, you're going, oh, so they paused for idiosyncratic reasons. That's convenient. But it really is what happened, right? The first client is a situation where they wanted to take a breath and prove it out with a third party because we're asking them to spend dramatically more than they've ever spent.

I think we cited that they were up about 8x in their trajectory of their annual year-over-year spend. To get them to do that, it's understandable that they would say, well, now we need to show our finance team this third-party measurement study. We've now done that with not 1 but 2 companies. So we feel good about having carried the burden of sort of proof production persuasion on that.

The other company is representative of, I think, what you see when you're in the middle of a budget cycle and you're asking someone for tens of millions of dollars that hasn't been allocated. You get into questions of, well, whose budget is this coming from and when is it being allocated? And they just have a lot of other things on their plate. So even if you're offering them $0.25 billion of incremental sales, that is important. That represents a meaningful market share gain, but they have a lot of other priorities in their business that are distracting them.

And so we're having the meetings we need to have with the senior level executives that can authorize these things, and I feel really good. They're happy with the results. In either case, it's either side saying they're not saying this isn't what we hoped it would be. This isn't performing. I already have this, I've seen this elsewhere. Your competitors provide this. This isn't interesting to me conceptually. We're not hearing any of that. It's really important that I say that clearly because I can understand how the inference would be that they're dissatisfied with it. That is not what we're hearing.

Yes. That's a really key point. Okay. So it's exciting because the 800 clients will start seeing their data being populated with a CPID, they can get third party. Let's move on into the sales force side. So I think you brought in some new leadership there. We're now looking -- we're organizing, I think, as a shift to an industry versus a regional sales organization. So just talk to us the strategic rationale of changing the sales force and where we are in that process.

Yes. I think there are a couple of different components to this. I think, first of all, we brought in a leader who has seen later-stage multibillion-dollar revenue company scale, right? So he ran global revenue for Twitter. And his network brings in that digital media type of seller, someone who's gone in and built that really relational sale where they become experts in the business. And I think it's not just selling to that's -- on that scale, it's also operating at that scale.

So what does sales operations need to look at like in a business that aspires to be what we aspire to be. And that is about having proper sales training and enablement, better B2B marketing. It's about better -- having better sales operations, sales finance. These are just functions that a smaller company at some point realizes that it lacks and needs. And so adding that supports our sellers so they can spend way more time actually traveling, meeting with our clients, listening to them, mastering their business. Client analytics becomes much more of an outside sales function, less of a sort of producing deck support.

We're automating a lot of that so that the decks can be standardized, reports can be standardized. We don't spend as much time fiddling around with PowerPoint and more time selling. And then we're bringing in an upgraded caliber of talent. We're rethinking how we do our quotas and making those much more rational. We're paying more for top talent. So there's a lot that's going on in terms of the way we go to market, in terms of the people and the process.

And then, of course, we have a whole new product, right, in which we're training them, how to talk about that product differently to a different audience, much more of a multi-threaded go-to-market sales approach where we don't just talk to the day-to-day buyer of coupons and wait for the phone to ring and go, oh, yes, we're the best at that. Here's a couple of options.

Much more proactive talking to the CEO, CMO, Head of Trade Spend, Head of Commercial. I've had probably 10x more meetings in the last 9 months with C-level executives at CPG than I did in the previous 8, 10 years. Like it is a completely different situation because we're able to say, we're using principles of artificial intelligence to help you find the most efficient frontier for growing your market, and they're interested in hearing from a thought leader about technology.

So it's this moment where they know AI is important. They want to harness it somehow. They're all -- a lot of them are suffering on year-over-year top line growth is down, so they're hungry for better solutions. We've got a scale that now reaches 200 million consumers. So it's -- wow, this really moves the needle for this, it's worth my meeting, I won't take this meeting. And it's starting to get through that now you've got third parties saying that -- and so what's happening is it's teeing up and people are having to decide, I don't want this incremental $150 million, $200 million of sales for $30 million, $40 million of cost.

And a lot of people before they make that decision are going to go talk to a C-level executive. So we're penetrating a different tier within the company, but we still have to earn our stripes as a really strategic partner that's brought in much more upstream in their planning process.

And then to that as we -- so I mean, we started this conversation on post-IPO and the evolution of the company. And it seems as if we are finding something with CPID that is proving out the model in a way that maybe we didn't talk as much about during the IPO. We knew about it, we didn't see. So my -- and now we're optimizing the sales force to go after, and it's turning into better meetings or more meetings for the decision makers. Talk to us about the evolution of pricing.

Yes. I want to -- I just want to clarify one thing. So after the IPO, it was a quarter or 2 after the IPO that I went around and did a concerted listening tour. And I said, what would it take for you to spend 10x more money on this platform? It was that sort of set of meetings, August, September, October of last year, where we realized, okay, what got us here, we can continue to do this. We can continue to make refinements and improvements around the edges and still be the best in our industry, and we could grow, and we can be profitable.

However, if we want to go for something in order of magnitude more exciting than that, there's an opportunity. But it's going to require us to make a different level of investment in R&D than we realized we might need to at the IPO. Sitting at the IPO, that wasn't clear. What became clear later was that this opportunity was really a bigger opportunity to really transform ourselves and measurement was at the heart of that.

Pricing is also part of that. So I think it's important to maximize revenue, not maximize price per se. And I think we hadn't taken enough of a look at what is going to be consistent with delivering profitable revenue growth for each client. So for example, we have a pricing sheet that says from X to Y, maybe $2 to $2.99, you pay this, flat fee. Well, by definition, if your price is $2.99, this is this percentage of your price, $0.35, $0.40 is this percentage of $2.99. It's this percentage of $2. This is a very wide range in the percentage of the price of the product that you're selling.

And so since that's an input into how profitable the whole thing is, that doesn't make a ton of sense versus a single fixed percentage. So whether it's $2.13, $2.72, $2.99, it's the same percentage. That's just rationalizing the pricing, right? And it's making clear that no matter whether you sell a $40 bag of dog food or a $4 single-serve Coke Zero, whatever, there's a way for you to use this platform and have it makes sense, right?

And so that was part of the pricing. The philosophy of working with our clients to be more client-centric about pricing is part of it. And then I think just generally speaking, being able to demonstrate that even with our pricing, fully baked in with the user awards and so forth, it's still a very profitable thing to do.

We realized that since we could put it all into one single simplified price, we don't need fees for setup and fees for termination and fees for targeting. People expect to optimize and target. That's just table stakes. So why are we charging people for that, right? So we just decided to radically simplify, make it more client-centric and make it more rational basically all at the same time.

Yes, T.hat's great. That makes a lot of sense. Let's -- we spent much of this conversation talking about the supplier side or the advertiser side. Let's talk on the demand side and sort of your partnerships with Walmart and Instacart and DoorDash and many others, Dollar General, I think, is in there and et cetera. So let's think about that. Let's say, Walmart, for example. We've often talked about, Bryan, I think Walmart is the next Walmart -- or the next Walmart is Walmart, right? So now we have, I think...

It's a good line.

The opportunity to be more in-store.

Yes. I think you're right.

Take it in store. So talk to us about why in-store is working digital cards on the aisles...

There's -- we're in the most exciting place we've been with Walmart, hands down. [ Went ] to see them a couple of times in the last quarter. The level of sort of collaboration, cooperation, invention, alignment is very high across many different parts of the organization from the merchandising organization to the marketing organization to the retail media group to the Walmart Data Ventures group to the senior executive level, everywhere in between the in-store tech overhaul of their in-store mode.

There's just a lot of realization that what we provide can help shape consumer behaviors in ways that they prioritize, whether that's I need more digital ID. I need more people putting in their phone number in that checkout so that we can build a retail media empire on top of that digital ID or whether it is digital engagement. I need more people visiting my app, opening my app in the store or bringing retail media into the store. I need people to have a reason to bring their phone out.

Therefore, in-store mode needs to more prominently reference digital promotions. I need people to be aware of these promotions so that we can pay off the idea of everyday low price, and there isn't a disparity between how much people are saving online versus in-store. And so there's real alignment around this. And they've started to do a number of different things. There was a marketing push that just went out recently. That's one of the first nationwide e-mail pushes that references Walmart Cash and Walmart manufacturer offers.

There's more work being done to deliver awareness of personalized savings opportunities, not just digital manufacturer offers. We're talking savings period, clearance, rollback and digital manufacturer offers, all being brought to the customers' attention through the Walmart app, signage of various forms. There are some tests that we believe will happen over the balance of the year that we hope go well in terms of in-store awareness.

So there's a lot of exciting vectors of collaboration with Walmart. And then with other publishers, we're starting to do other things to bring new forms of content or just bringing some of these best practices to them. And then we've got a pipeline of new publishers that we're actively pursuing that is really exciting. And that I think continues to...

On the [indiscernible] Bryan, we get the question, do we need more supply to bring in a major new publisher? Or -- in other words, do we need the advertiser side to really start ramping before we bring in because we've got a lot of publishers on the platform with a lot -- 200 million people.

It's certainly not escaped our attention that we will need to continue to ramp the offer supply. However, we -- the whole industry needs that, right? So right now, for example, I can think of a major mass retailer that has, I think, 13 national offers live. Were they to sign on with us, even with our current constrained supply, they would have 45x more offers, national offers for their guests. So it's all relative, first of all, right?

And there are plenty of budgets that were not fully exhausting that would immediately go and be available to them. There are some very popular offers that we're getting through more quickly. But I think these are chicken and egg, right? The more we bring in these exciting national publishers, I think it will only accelerate the interest in testing out all these new capabilities on the offer supply side. But look, there's a reason why we focus so much on measurement and these new types of optimization and capabilities because that is really the rate-limiting step that we think is the most important right now.

Let's talk about your other partner, the digital native partners, if you will, Instacart, DoorDash. Are you seeing greater adoption in roughly similar time frames to Walmart? I don't know how to say it, but talk to us about adoption from these audiences, how they've started off the bat? How they're evolving and...

Yes. The adoption is similar. The redemption rates are similar. There are some -- obviously, they don't have the in-store upside. I mean, we see the vast majority of our Walmart redemptions are still online flow, and yet there's this world of off-line shoppers who don't even know about Walmart Cash. So there's still a huge upside there to capture. That's different. But when you look at how high the redemption rates are because the user experience is so integrated into the search results into the retail media display ads, there's still a very high opportunity -- a large opportunity there.

And as we think -- bringing things like beer, wine and spirits, which we've done in some cases, but not others, that's another opportunity, other types of general merchandise. And then just looking at the growth of the underlying platform. So you look at something like DoorDash, they're growing really, really nicely on just online grocery delivery period. So we ride the upside of all of that growth in the overall marketplace in those categories.

And so yes, I think that -- and as they continue to reach the next level, they say, well, what else should we be thinking about? What other forms of offer should we be contemplating or what other forms of personalized marketing could we contemplate? And then some of that is also working with them to just upgrade measurement or targeting capabilities so that the performance we can get on their platform is that much better, that much more measurable. And so sometimes that might be kind of invisible, but it's an important part of the conversation.

Yes. We've got about a few minutes left to see if there's any questions in the audience. If not, I keep going, of course.

Let's do it. As I like to say in my company, who's got the first question?

Not -- are there any questions? Otherwise, Ron is just going to keep it going.

I'm going to keep going, which is exciting too.

No, it's exiting.

All right. Well, let's tee up the questions. We've got 2, 3 minutes left here. But I have an industry question and then some other questions. But we -- the news flow is pretty high in terms of CPG companies either breaking themselves up or looking for that next leg of growth, new management teams, et cetera, et cetera. How do we think about those that -- those headlines relative to Ibotta?

Yes. I mean, this is a moment where these companies really need innovation. They really -- not just a new product, but a new way of building a brand. And I think when some of these big companies that are piloting our network get on stage and start talking about what a game changer this is, a lot of folks are going to be -- have a high appetite to bring us in and hear what these innovations are. Year-over-year, sales are struggling. They took a lot of price in the last 3 years.

Now they realize they've lost market share in some cases because of that, they need to reset their price in a more rational way. But rather than doing that in an across the board kind of very blunt way, doing that in a smarter way in a way that takes into account a person's prior propensity to buy the product. You don't want to needlessly reduce the price across the board and overdo that when someone's elasticity was such that, that was totally unnecessary loss of revenue.

So I think people understand that. But it does present a challenge in getting their attention. If you're going through a major acquisition or divestiture, it can be, well, let's wait until the new team is in place until we decide to make this giant investment. So it's business as usual kind of, right? And so that can be both good and bad.

Got it. That makes a lot of sense. And then I want to sort of wrap up today just talking capital allocation. I mean the balance sheet is awfully strong. We've, I think, authorized several share repurchases. How do you think about the use or the priorities of the cash on the balance sheet?

Yes. We're big believers in capital allocation being a great way to drive shareholder value. My investors have sent me the outsiders. I've read it carefully page by page. Bottom line is we have a lot of information about the trajectory of the business. We're sharing it here, so everybody can hear it. But we believe that we have the ability to recognize the significance of that information, and we're going to be able to add value for shareholders if we believe it's a better use of money than an acquisition or additional R&D investment or whatever we can get on the treasury.

We also realize that there's some value in having cash on the balance sheet for a rainy day for another pandemic for who knows what. I will say, by and large, we're very happy with the rate at which we're investing in R&D. We feel like it's certainly responsible to spend that in a share buyback. But as you might imagine, we have active conversations with our Board.

We look at different price points and different scenarios, what the return to investors is compared to alternatives, and we evaluate that. And it's really got to be above a hurdle rate of what our [indiscernible] is. So I think we're pretty rational about it, but we're very -- we've higher conviction in where we're going, higher ceiling, larger addressable market than I think we've ever felt we've had. And so that's why we keep authorizing share buybacks.

Well, that's a great way to sort of wrap this up for today. So higher conviction on where we're going and a path to get there.

You bet. Thanks, Ron.

Bryan, thank you for joining us today.

Appreciate it.

Very much appreciate it. Thanks, Bryan.

Thank you.