Ibotta 2025 Q1 Earnings Net Income Plummets 94%

Ibotta (IBTA) reported its fiscal 2025 Q1 earnings on May 15th, 2025. The company saw its revenue grow by 2.7% to $84.57 million, compared to the previous year's $82.33 million. Despite this revenue growth, the company faced a significant decline in its earnings per share, dropping by 98% from $1.00 to $0.02. Ibotta’s guidance for the second quarter of 2025 anticipates revenue between $86.5 million and $92.5 million, with an adjusted EBITDA margin of 22% at the midpoint, reflecting cautious optimism for future performance.

Revenue
Ibotta experienced a modest increase in total revenue for Q1 2025, reaching $84.57 million from the previous year's $82.33 million. Redemption revenue rose to $73.40 million, while ad and other revenue amounted to $11.18 million, contributing to the overall revenue growth.

Earnings/Net Income
The company's EPS dropped sharply by 98% to $0.02, down from $1.00 in the same quarter last year. Similarly, net income fell by 94% to $555,000, compared to $9.30 million in the previous year’s first quarter. This significant decline illustrates a challenging earnings period for Ibotta.

Post-Earnings Price Action Review
The strategy of purchasing Ibotta stock following a revenue miss and holding for 30 days proved ineffective. This approach resulted in a backtested return of -36.49%, starkly underperforming against a benchmark return of 11.10%, leading to an excess return of -47.59%. The strategy demonstrated high risk, with a maximum drawdown of -65.37% and a negative Sharpe ratio of -0.47, indicating substantial volatility and losses. The poor performance underscores the challenges of relying on historical data to predict future stock movements, especially in cases of revenue shortfalls. Investors may need to reassess this approach, considering the broader market context and company-specific factors.

CEO Commentary
Ibotta CEO and founder Bryan Leach emphasized the company's progress in establishing itself as a comprehensive performance marketing platform for the CPG industry. He highlighted successful campaigns with major CPG companies, showcasing Ibotta’s capabilities in achieving scalable and profitable revenue growth. The expansion of pilot programs to new clients was noted, with plans for further scaling, pointing to an optimistic future outlook.

Guidance
For the second quarter of 2025, Ibotta projects revenue between $86.5 million and $92.5 million, marking a 2% year-over-year increase at the midpoint. The company also anticipates an adjusted EBITDA of $17.0 million to $22.0 million, with an adjusted EBITDA margin of 22% at the midpoint. Reconciliation of adjusted EBITDA to GAAP net income was not provided due to uncertainties related to certain reconciling items.

Additional News
In recent weeks, Ibotta announced the appointment of Valarie Sheppard as Interim Chief Financial Officer, following the departure of Sunit Patel. Sheppard, who has been on Ibotta’s board since 2021, brings extensive experience from her previous role at Procter & Gamble. Additionally, the company expanded its share repurchase program by $100 million, demonstrating a commitment to returning value to shareholders. Furthermore, Ibotta partnered with DoorDash, integrating its digital promotions on DoorDash’s platform, which aims to enhance consumer engagement and drive incremental sales for CPG brands.