Ibotta 2025 Q3 Earnings Revenue Declines 15.6% Despite 20% Adjusted EBITDA Margin

Ibotta (IBTA) reported Q3 2025 earnings on Nov 13, 2025, with revenue falling 15.6% year-over-year to $83.26 million, missing market expectations for a 16.9% decline. The company’s adjusted EBITDA margin of 20% highlighted operational efficiency, but net income plummeted 91.1% to $1.53 million. Guidance for Q4 revenue of $80–$85 million (16% YOY decline at midpoint) disappointed investors, contributing to a 16% post-earnings stock drop.

Revenue

Total revenue declined to $83.26 million in Q3 2025, a 15.6% drop from $98.62 million in the prior-year period. Redemption revenue, a core segment, fell to $72.1 million, while third-party publisher redemptions dipped 6% year-over-year to $49.3 million. Direct-to-consumer redemption revenue declined sharply by 34% to $22.8 million, reflecting broader macroeconomic headwinds and shifting client behavior. The company attributed the decline to a strategic shift toward performance marketing and increased investment in third-party lift studies.

Earnings/Net Income

Ibotta’s EPS fell 91.1% to $0.05 in Q3 2025 from $0.56 in Q3 2024, while net income contracted to $1.53 million from $17.24 million. Adjusted EBITDA of $16.6 million (20% margin) outperformed expectations but masked underlying profitability challenges. The significant decline in EPS underscores the company’s profitability challenges amid revenue contraction and increased operational costs.

Post-Earnings Price Action Review

Ibotta’s stock plunged 16% in after-hours trading following the earnings report, reflecting mixed sentiment toward the results. While the company exceeded revenue expectations, the sharp decline in profits and weak Q4 guidance raised concerns. The 20% adjusted EBITDA margin signaled operational efficiency, but the need for upfront investments in third-party lift studies and macroeconomic pressures posed near-term risks. A 30-day holding strategy might capture short-term gains if the market reacts positively to the earnings beat, but long-term investors should monitor the company’s transformation into a performance marketing platform and the adoption of LiveLift. Strategic partnerships, such as the Circana collaboration, and a restructured sales team could drive future growth, though execution risks remain.

CEO Commentary

Bryan Leach, CEO and founder, emphasized strategic advancements, including the Circana partnership for third-party lift measurement and the launch of LiveLift™. He highlighted a 19% year-over-year increase in redeemers, driven by Instacart and DoorDash integrations, and expressed confidence in the platform’s potential to reshape CPG marketing.

Guidance

Ibotta provided Q4 2025 revenue guidance of $80–$85 million (16% YOY decline at midpoint) and adjusted EBITDA of $9–$12 million (13% margin at midpoint). The company expects continued cost efficiency and operational leverage but cautioned that LiveLift adoption may take time to impact top-line results.

Additional News

1. Strategic Partnerships: Ibotta announced a partnership with Circana for third-party sales lift measurement, enhancing credibility in campaign effectiveness.

2. Product Launch: The company launched LiveLift™, enabling real-time campaign optimization for CPG brands, with positive early client feedback.

3. Stock Buybacks: Ibotta repurchased 1.4 million shares for $38.7 million in Q3, signaling confidence in its long-term value.

Backtest Anchor

The strategy of buying IBTA when revenues beat and holding for 30 days shows promising potential, though it's crucial to consider the broader context before implementing such a strategy. Ibotta's recent performance indicates a complex scenario. Despite beating revenue expectations in Q3 CY2025, the company's sales fell by 15.6% year-on-year, and the Q4 revenue guidance was below expectations. This suggests that while there may be short-term upside potential, there are underlying challenges that could impact long-term returns. Market sentiment reflects mixed reactions, with an initial 16% drop due to profit erosion and disappointing guidance. The stock's 20% adjusted EBITDA margin is a positive indicator of operational efficiency, but the need to invest in third-party lift studies and macroeconomic challenges could limit profitability. The company's strategic shift toward a full-service performance marketing platform and innovation in partnerships may position it for long-term growth. A 30-day holding period could capture gains from the earnings beat, but investors must balance this with risks like revenue declines and macroeconomic headwinds.