CORRECTION -- Ibotta Reports Second Quarter 2024 Financial Results | IBTA Stock News

08/14/2024 - 08:10 PM DENVER, Aug. 14, 2024 (GLOBE NEWSWIRE) -- In a release issued under the same headline August 13, 2024 by Ibotta (NYSE: IBTA) please note that in the Condensed Statements of Cash Flows table, a Proceeds from initial public offering, net row has been added. Everything else remains the same. The corrected release follows. Grew revenue by 14% year-over-year to $87.9 million and non-GAAP revenue by 29% Generated a net loss of $34.0 million, representing net loss as a percent of revenue of 39%, and Adjusted EBITDA of $25.3 million, representing a 29% Adjusted EBITDA margin Announced Instacart as new IPN partner with revenue contribution expected to begin by end of year Ibotta, Inc. (NYSE: IBTA), a leading technology company providing digital promotions and performance marketing solutions, today announced financial results for the second quarter ended June30, 2024. “Our strong second quarter results demonstrate that Ibotta’s pay-for-performance model is resonating with our clients and consumers,” said Ibotta CEO and founder, Bryan Leach. “In the current macroeconomic environment, now more than ever, CPG brands are turning to the IPN to win back market share, and that is leading to strong third-party redeemer and redemption growth. I am also excited about our recently announced strategic partnership with Instacart that highlights the expansion of our network into the promising vertical of online grocery delivery.” Second Quarter 2024 Financial Highlights: Total revenue of $87.9 million, representing year-over-year growth of 14%. Excluding a one-time breakage benefit of $9.4 million in the second quarter of 2023, non-GAAP revenue growth was 29%.Total redemption revenue of $74.0 million, an increase of 27% year-over-year. Excluding a one-time D2C redemption revenue breakage benefit of $9.4 million in the second quarter of 2023, non-GAAP redemption revenue growth was 51%.During the quarter, the IPN had 13.7 million redeemers, compared to 5.3 million redeemers in the second quarter of 2023, an increase of 158% year-over-year. The primary driver of year-over-year growth was the expansion of the Walmart program (which initially launched in the third quarter of 2022 to members of Walmart’s paid membership program, Walmart+) to all Walmart customers with a Walmart.com account in the third quarter of 2023.Increased redemptions to 80.7 million, compared to 51.2 million in the second quarter of 2023, an increase of 58% year-over-year.Generated net loss of $34.0 million, representing net loss as a percent of revenue of 39%, and adjusted net income of $19.9 million, representing adjusted net income as a percent of revenue of 23%.Delivered Adjusted EBITDA of $25.3 million, representing an Adjusted EBITDA margin of 29%.Generated cash from operating activities of $35.0 million and free cash flow of $32.7 million.On April 22, 2024, Ibotta completed its initial public offering (IPO), raising $198.0 million in net proceeds by selling 2.5 million primary shares with an additional 5.0 million secondary shares sold by certain selling stockholders. The following table summarizes the Company’s consolidated financial results for the three and six months ended June30, 2024 and 2023: Three months ended June 30,Six months ended June 30,20242023% Change20242023% Change(in thousands, except per share figures and percentages)GAAP ResultsRedemption revenue$73,951$58,27127%$141,940$99,97442%Revenue$87,926$77,38514%$170,253$135,07626%Net (loss) income$(33,966)$15,341(321)%$(24,669)$11,058(323)%Net (loss) income per share, diluted$(1.32)$0.58(328)%$(1.41)$0.42(436)%Net (loss) income as a percent of revenue(39)%20%(295)%(14)%8%(275)%Non-GAAP ResultsNon-GAAP redemption revenue$73,951$48,87151%$141,940$89,40459%Non-GAAP revenue$87,926$67,98529%$170,253$124,50637%Adjusted EBITDA$25,274$23,2079%$47,933$25,71186%Adjusted EBITDA margin29%30%(3)%28%19%48%Adjusted net income$19,859$18,2569%$35,257$17,413102%Adjusted net income per share, diluted$0.68$0.69—%$1.76$0.66168% The following table summarizes the Company’s performance metrics for the three and six months ended June30, 2024 and 2023: Three months ended June 30,Six months ended June 30,20242023% Change20242023% Change(in thousands, except per share figures and percentages)Performance MetricsRedemptions:Direct-to-consumer redemptions28,57335,463(19)%56,24867,150(16)%Third-party publisher redemptions52,14215,738231%95,93427,324251%Total redemptions80,71551,20158%152,18194,47461%Redeemers:Direct-to-consumer redeemers1,8001,940(7)%1,8641,944(4)%Third-party publisher redeemers11,9023,375253%11,2303,055268%Total redeemers13,7025,315158%13,0954,999162%Redemptions per redeemer:Direct-to-consumer redemptions per redeemer15.918.3(13)%30.234.5(12)%Third-party publisher redemptions per redeemer4.44.7(6)%8.58.9(4)%Total redemptions per redeemer5.99.6(39)%11.618.9(39)%Redemption revenue per redemption:Direct-to-consumer redemption revenue per redemption$1.13$1.31(14)%$1.16$1.19(3)%Third-party publisher redemption revenue per redemption$0.80$0.757%$0.80$0.748%Total redemption revenue per redemption$0.92$1.14(19)%$0.93$1.06(12)% Second Quarter 2024 Business Highlights: Launched the new and upgraded Family Dollar digital coupon program, which gives customers access to more national offers and an improved shopping experience. The partnership aims to advance Family Dollar’s digital engagement and customer experience strategy, ultimately driving more value and loyalty among its customers in nearly 8,000 store locations. The multi-year agreement, in which Ibotta is the exclusive provider of digital promotions, expands the array of offer types Ibotta supports to include digital coupons.Enabled Digital offers on AppCard, a leading personalized marketing and shopper analytics solution for independent grocers. At the end of the quarter, Ibotta’s offers were available at approximately one-third of all AppCard banners.Signed and announced partnership with Schnuck Markets Inc. (Schnucks) to roll out Ibotta’s digital offers to Schnucks’ customers. Digital offers from the IPN will become available to Schnucks’ customers later this year. In addition, Ibotta and Schnucks began collaborating on research and development initiatives related to novel ways of delivering personalized savings to consumers.Subsequent to the quarter-end, Ibotta and Instacart entered into a multi-year strategic partnership to bring Instacart customers savings on their groceries. Ibotta-provided digital offers will be live on Instacart’s mobile app and website later this year. Financial Guidance: Third quarter 2024 outlook summary: Revenue of $91 - $96 million, a year-over-year increase of 12% at the midpoint on a non-GAAP basis excluding the breakage benefit during the third quarter of 2023.Adjusted EBITDA of $28 - $32 million, representing a margin of 32% at the midpoint. Guidance for Adjusted EBITDA is earnings before interest (income) expense, net, provision for income tax, depreciation and amortization, and excludes stock-based compensation, change in fair value of derivative, loss on debt extinguishment, and other expense, net. We have not reconciled Adjusted EBITDA to GAAP net income because we do not provide guidance on GAAP net income and would not be able to present the various reconciling cash and non-cash items between the GAAP and non-GAAP financial measures since certain items that impact these measures are uncertain or out of our control, or cannot be reasonably predicted, including share-based compensation expense, without unreasonable effort. The actual amounts of such reconciling items could have a significant impact on the Company's GAAP net income. Use of Non-GAAP Financial Information Included within this press release are the non-GAAP financial measures of non-GAAP revenue, non-GAAP redemption revenue, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted net income as a percent of revenue, adjusted diluted net income per share and free cash flow that supplement the condensed financial statements of the Company prepared under generally accepted accounting principles (GAAP). The non-GAAP financial information is presented for supplemental informational purposes only and is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please see the accompanying tables for reconciliations of these non-GAAP financial measures to their nearest GAAP equivalents. Non-GAAP revenue and non-GAAP redemption revenue exclude the breakage benefit. Adjusted EBITDA is earnings before interest (income) expense, net, provision for income tax, depreciation and amortization, and excludes stock-based compensation, change in fair value of derivative, loss on debt extinguishment, and other expense, net. Adjusted EBITDA margin is calculated as Adjusted EBITDA as a percent of revenue. Adjusted net income excludes stock-based compensation, loss on debt extinguishment, change in fair value of derivative, and the related income tax effects. The income tax effect of non-GAAP adjustments is the difference between GAAP and non-GAAP income tax expense. Non-GAAP income tax expense is computed on non-GAAP pre-tax income (GAAP pre-tax income adjusted for non-GAAP adjustments). Adjusted diluted net income per share is calculated as adjusted net income divided by diluted weighted average common shares outstanding. Free cash flow is defined as cash provided by operating activities, less additions to property and equipment and capitalization of software development costs. The Company's management believes that these non-GAAP measures can assist investors in evaluating the Company's operational trends, financial performance, and cash-generating capacity. Management believes these non-GAAP measures allow investors to evaluate the Company’s financial performance using some of the same measures as management. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures versus their nearest GAAP equivalents. Other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Second Quarter 2024 Financial Results Webcast and Conference Call Details When:Tuesday, August 13, 2024 at 2:30 p.m. MT/ 4:30 p.m. ETLive Call:US/Canada: 877-405-1211; International: +1 215-268-9896Webcast:ir.ibotta.comAudio replay:An audio replay of the call will be available beginning about two hours after the call. To listen to the replay in the United States please dial 877-660-6853 (replay code 13747861). Outside of the United States, please dial 201-612-7415. Key Business Terms and Notes Ibotta Performance Network (IPN): An AI-enabled technology platform that allows CPG brands to deliver digital promotions to consumers via a network of publishers, in a coordinated fashion and on a fee-per-sale basis. One-time Breakage Benefit: On the Company’s balance sheet, the Company has a user redemption liability balance that is an accumulation of direct-to-consumer redeemers’ account balances net of estimated breakage. Consumers’ accounts that have no activity for six months are considered inactive and charged a $3.99 per month maintenance fee (i.e., breakage) until the balance is reduced to zero or new activity ensues. Every month the user redemption liability increases by the amount credited to D2C redeemers for redemptions and is offset by D2C redeemer cash outs, actual inactivity maintenance fees, and estimated breakage. The Company estimates breakage at the time of user redemption and reduces the user redemption liability accordingly. In 2023, the Company made an update to fix a software error to correctly charge maintenance fees to all inactive D2C redeemers on a go-forward basis. This change resulted in a short-term benefit to U.S. GAAP revenue in 2023. For the three and six months ended June30, 2023, the breakage benefit to revenue totaled $9.4 million and $10.6 million, respectively. There was no breakage benefit associated with the three and six months ended June30, 2024. Redeemers: A consumer who has redeemed at least one digital offer within the quarter. If a consumer were to redeem on more than one publisher during that period, they would be counted as multiple redeemers. Year-to-date redeemers are calculated as the average of current year quarter-to-date redeemers. Redemptions: A verified purchase of an item qualifying for an offer by a client on the IPN. Redemption Revenue: The Company’s customers promote their products and services to consumers through cash back offers on the IPN. The Company earns a fee per redemption, which is recognized in the period in which the redemption occurred. The Company may also charge fees to set up a redemption campaign which are deferred and recognized over the average duration of historical redemption campaigns. About Ibotta ("I bought a...") Ibotta (NYSE: IBTA) is a leading performance marketing platform allowing brands to deliver digital promotions to over 200 million consumers through a network of publishers called the Ibotta Performance Network (IPN). The IPN allows marketers to influence what people buy, and where and how often they shop – all while paying only when their campaigns directly result in a sale. American shoppers have earned over $1.8 billion through the IPN since 2012. The largest tech IPO in history to come out of Colorado, Ibotta is headquartered in Denver, and is continually listed as a top place to work by The Denver Post and Inc. Magazine. Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements relating to expectations concerning matters that are not historical facts may constitute forward-looking statements. Forward-looking statements may include, without limitation, statements regarding Instacart contributing revenue by the end of the year, digital offers from the IPN becoming available to Schnucks’ customers later this year, Ibotta-provided digital offers being live on Instacart’s mobile app and website later this year, and the Company’s financial guidance, such as revenue and Adjusted EBITDA. When words such as “believe,” “expect,” “anticipate,” “will”, “outlook” or similar expressions are used, the Company is making forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot give readers any assurance that such expectations will prove correct. These forward-looking statements involve risks, uncertainties and assumptions, including those related to the Company’s relatively limited operating history, which makes it difficult to evaluate the Company’s business and prospects, the demands and expectations of clients and the ability to attract and retain clients. The actual results may differ materially from those anticipated in the forward-looking statements as a result of numerous factors, many of which are beyond the control of the Company. These and other factors are disclosed in the Company’s reports filed from time to time with the Securities and Exchange Commission, available at www.sec.gov. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company does not intend to update any forward-looking statement contained in this press release to reflect events or circumstances arising after the date hereof, except as required by law. Ibotta, Inc.CONDENSED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts)(unaudited)Three months ended June 30,Six months ended June 30,2024202320242023Revenue$87,926$77,385$170,253$135,076Cost of revenue(1)12,2839,64422,79820,894Gross profit75,64367,741147,455114,182Operating expenses(1):Sales and marketing50,01822,20878,14743,810Research and development17,52612,22031,16723,915General and administrative28,70812,73741,86226,071Depreciation and amortization1,0487622,0311,514Total operating expenses97,30047,927153,20795,310(Loss) income from operations(21,657)19,814(5,752)18,872Interest income (expense), net2,672(1,545)867(3,217)Loss on debt extinguishment(9,630)–(9,630)–Other expense, net(1,414)(238)(3,116)(1,741)(Loss) income before provision for income taxes(30,029)18,031(17,631)13,914Provision for income taxes(3,937)(2,690)(7,038)(2,856)Net (loss) income$(33,966)$15,341$(24,669)$11,058Net (loss) income per share:Basic$(1.32)$1.73$(1.41)$1.25Diluted$(1.32)$0.58$(1.41)$0.42Weighted average common shares outstanding:Basic25,659,4658,882,35017,484,0928,851,194Diluted25,659,46526,563,55017,484,09226,528,229 (1) Amounts include stock-based compensation expense as follows (in thousands): Three months ended June 30,Six months ended June 30,2024202320242023Cost of revenue$365$133$523$353Sales and marketing26,80855830,4301,122Research and development4,0365104,5891,037General and administrative13,60855414,1201,072Total stock-based compensation expense$44,817$1,755$49,662$3,584 Ibotta, Inc.CONDENSED BALANCE SHEETS (In thousands)June 30, 2024December 31, 2023(unaudited)AssetsCurrent Assets:Cash and cash equivalents$317,858$62,591Accounts receivable209,023226,439Prepaid expenses and other current assets7,3539,314Total current assets534,234298,344Property and equipment2,2722,541Capitalized software development costs14,36112,844Equity investment4,5314,531Other long-term assets6521,530Total assets$556,050$319,790Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ EquityCurrent liabilities:Accounts payable$5,235$8,937Due to third-party publishers80,54273,155Deferred revenue2,8312,628User redemption liability81,04484,531Accrued expenses16,91824,582Other current liabilities3,5964,317Total current liabilities190,166198,150Long-term liabilities:Long-term debt, net–64,448Convertible notes derivative liability–25,400Other long-term liabilities6,1823,864Total liabilities196,348291,862Redeemable convertible preferred stock––Stockholders’ equity:Preferred stock––Common stock––Class A common stock––Class B common stock––Additional paid-in capital593,559237,116Accumulated deficit(233,857)(209,188)Total stockholders' equity359,70227,928Total liabilities, redeemable convertible preferred stock, and stockholders' equity556,050319,790 Ibotta, Inc.CONDENSED STATEMENTS OF CASH FLOWS (In thousands)(unaudited)Six months ended June 30,20242023Operating activitiesNet (loss) income$(24,669)$11,058Adjustments to reconcile net (loss) income to net cash provided by operating activities:Depreciation and amortization4,0233,254Impairment of capitalized software development costs366692Stock-based compensation expense24,8023,584Common stock warrant expense24,860–Credit loss expense681409Loss on extinguishment of debt9,630–Amortization of debt discount and issuance costs1,0291,641Change in fair value of convertible notes derivative liability3,0851,700Other2340Changes in assets and liabilities:Accounts receivable16,741(23,628)Other current and long-term assets(1,603)895Accounts payable(2,917)745Due to third-party publishers7,38711,257Accrued expenses(7,787)(2,347)Deferred revenue203596User redemption liability(3,487)(8,069)Other current and long-term liabilities2,019(756)Net cash provided by operating activities54,3861,071Investing activitiesAdditions to property and equipment(353)(202)Additions to capitalized software development costs(4,436)(3,560)Maturities of short-term investments–27,900Net cash (used in) provided by investing activities(4,789)24,138Financing activitiesProceeds from exercise of stock options4,706671Proceeds from initial public offering, net206,692–Deferred offering costs(5,637)–Other financing activities(91)–Net cash provided by financing activities205,670671Net change in cash and cash equivalents255,26725,880Cash and cash equivalents, beginning of period62,59117,818Cash and cash equivalents, end of period$317,858$43,698 The following table disaggregates the Company’s direct-to-consumer and third-party publishers revenue by redemption and ad & other revenue: Supplemental Revenue Detail Three months ended June 30,Six months ended June 30,20242023%Change20242023% Change(in thousands, except percentages)Direct-to-consumer revenueRedemption revenue$32,300$46,530(31)%$65,282$79,801(18)%Ad & other revenue13,97519,114(27)%28,31335,102(19)%Total direct-to-consumer revenue46,27565,644(30)%93,595114,903(19)%Third-party publishers revenueRedemption revenue41,65111,741255%76,65820,173280%Ad & other revenue———%———%Total third-party publishers revenue41,65111,741255%76,65820,173280%TotalRedemption revenue73,95158,27127%141,94099,97442%Ad & other revenue13,97519,114(27)%28,31335,102(19)%Total revenue$87,926$77,38514%$170,253$135,07626% The following tables show the Company’s non-GAAP financial metrics reconciled to the comparable GAAP financial metrics included in this release: Reconciliation of Adjusted EBITDA Three months ended June 30,Six months ended June 30,2024202320242023(in thousands)Net (loss) income$(33,966)$15,341$(24,669)$11,058Add (deduct):Interest (income) expense, net(2,672)1,545(867)3,217Depreciation and amortization2,1141,6404,0233,255Stock-based compensation44,8171,75549,6623,584Change in fair value of derivative1,3852003,0851,700Loss on debt extinguishment9,630–9,630–Provision for income taxes3,9372,6907,0382,856Other expense, net29363141Adjusted EBITDA$25,274$23,207$47,933$25,711Revenue$87,926$77,385$170,253$135,076Net (loss) income as a percent of revenue(39)%20%(14)%8%Adjusted EBITDA margin29%30%28%19% Reconciliation of Adjusted Net Income Three months ended June 30,Six months ended June 30,2024202320242023(in thousands)Net (loss) income$(33,966)$15,341$(24,669)$11,058Stock-based compensation44,8171,75549,6623,584Loss on debt extinguishment9,630–9,630–Change in fair value of derivative1,3852003,0851,700Adjustment for income taxes(2,007)960(2,451)1,071Adjusted net income$19,859$18,256$35,257$17,413Revenue$87,926$77,385$170,253$135,076Adjusted net income as a percent of revenue23%24%21%13%Weighted average shares of common stock outstanding, diluted25,659,46526,563,55017,484,09226,528,229Net (loss) income per share, diluted$(1.32)$0.58$(1.41)$0.42Adjusted weighted average common shares outstanding, diluted29,022,34726,563,55020,065,49026,528,229Adjusted net income per share, diluted$0.68$0.69$1.76$0.66 Reconciliation of Non-GAAP Revenue Three months ended June 30,Six months ended June 30,2024202320242023(in thousands)Revenue$87,926$77,385$170,253$135,076Breakage benefit—(9,400)—(10,570)Non-GAAP revenue$87,926$67,985$170,253$124,506 Reconciliation of Non-GAAP Redemption Revenue Three months ended June 30,Six months ended June 30,2024202320242023(in thousands)Redemption revenue$73,951$58,271$141,940$99,974Breakage benefit—(9,400)—(10,570)Non-GAAP redemption revenue$73,951$48,871$141,940$89,404 Reconciliation of Free Cash Flow Three months ended June 30,Six months ended June 30,2024202320242023(in thousands)Net cash provided by (used in) operating activities$35,020$(1,621)$54,386$1,071Additions to property and equipment(201)(191)(353)(202)Additions to capitalized software development costs(2,121)(2,565)(4,436)(3,560)Free cash flow$32,698$(4,377)$49,597$(2,691) Contact Corporate CommunicationsHilary O’Byrne, hilary.obyrne@ibotta.com Investor RelationsShalin Patel, shalin.patel@ibotta.com