Key Takeaways:
Ibotta Inc. (NYSE: IBTA) reported first-quarter revenue of $82.5 million that topped analyst estimates, driven by a 15 percent year-over-year increase in users even as the company transitions its business model.
“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,” Bryan Leach, Founder and Chief Executive Officer, said on the company’s earnings call. He added that Ibotta’s core promotions product is showing “strong market fit.”
While revenue beat consensus estimates of $81.9 million, it was down 2 percent from the $84.57 million reported in the same quarter a year ago. The company posted a non-GAAP profit of $0.24 per share, while its GAAP loss of $0.43 per share missed the consensus estimate of a $0.21 loss.
For the second quarter, Ibotta expects revenue of $82 million to $86 million and adjusted EBITDA of $9 million to $12 million. The company confirmed it anticipates returning to year-over-year revenue growth in the third quarter in the low single-digit range, a key focus for investors.
The quarter's results highlight a strategic shift in Ibotta's business. Revenue from its third-party publisher network, the Ibotta Performance Network (IPN), grew 12 percent to $54 million. This growth offset a 25 percent decline in its legacy direct-to-consumer business, which generated $19 million. The company is successfully scaling its network through partners like Walmart and the recently-launched DoorDash.
To further this strategy, Ibotta announced new multi-year exclusive partnerships with Uber and the grocery chain Giant Eagle. These integrations will embed Ibotta’s digital promotions within the Uber, Uber Eats, and Postmates apps, as well as Giant Eagle’s platform. Management expects a small revenue benefit from these new partners in the second half of the year.
The company’s adjusted EBITDA for the quarter was $8.7 million. It also generated $23.3 million in free cash flow, a 56 percent increase from the prior year, and repurchased approximately 1.9 million shares for $45 million.
The successful expansion of the third-party publisher network is the key signal for investors, showing the company can scale demand for its digital offers. Investors will watch for the ramp-up of the new Uber and Giant Eagle partnerships and the company's ability to hit its growth targets in the third quarter.
This article is for informational purposes only and does not constitute investment advice.
