Ibotta, Inc. reported third‑quarter 2025 revenue of $83.3 million, a 16% year‑over‑year decline, but the figure still surpassed analyst consensus of roughly $81.9 million to $82.1 million, a beat of about $1.2 million or 1.5%. Net income fell to $1.5 million, a 91% drop from the $17.2 million earned in Q3 2024, and earnings per share were $0.56, missing the consensus estimate of $0.77 by $0.21 or 27%. Adjusted EBITDA reached $16.6 million, giving a margin of 20% versus 37% in the prior year, a compression driven largely by lower operating leverage and a one‑time restructuring charge.
The revenue decline was concentrated in direct‑to‑consumer (DTC) redemption, which slipped 24% year‑over‑year, reflecting weaker consumer demand and tighter promotion budgets in the CPG sector. In contrast, third‑party publisher redemption grew 17%, indicating that partner‑based promotions were still attracting spend. The mix shift toward third‑party revenue, which carries higher gross margins, partially offset the DTC decline but was insufficient to maintain overall revenue growth.
Margin compression from 37% to 20% was largely a result of higher operating expenses and the restructuring charge, which reduced operating leverage. The company’s cost‑control program was unable to fully counterbalance the decline in high‑margin DTC revenue, leading to a sharper drop in adjusted EBITDA margin. This pattern signals that while the business is investing in new initiatives, it is still grappling with cost pressures and a changing revenue mix.
The EPS miss can be traced to the combination of the restructuring charge and the margin squeeze. Even though revenue beat expectations, the lower margin and the one‑time expense pushed earnings below analyst forecasts. The miss underscores the company’s short‑term profitability challenges, even as it continues to pursue growth initiatives.
For the fourth quarter, Ibotta guided revenue to $80 million to $85 million, a 16% decline at the midpoint, and adjusted EBITDA to $9 million to $12 million, a 13% margin at the midpoint. The guidance reflects management’s view that demand will remain subdued in the near term, but that the company’s new performance‑marketing platform will begin to generate incremental revenue once it scales.
Strategic moves highlighted in the earnings call include a partnership with Circana to provide third‑party sales‑lift measurement and the launch of LiveLift, a real‑time campaign optimization tool. These initiatives are intended to shift Ibotta from a traditional digital‑promotion platform to a full‑service performance‑marketing solution, potentially capturing a larger share of CPG marketing spend and improving long‑term profitability.
Investor sentiment was mixed. The revenue beat and the launch of new tools generated optimism, but the EPS miss and the cautious revenue guidance tempered enthusiasm, leading to a balanced outlook on the company’s near‑term prospects.
"We made significant strides in recent months to further strengthen our performance marketing platform," said CEO Bryan Leach. "The LiveLift solution improves a brand’s ability to measure and optimize campaigns while they are live, giving marketers a new way to drive incremental volume at scale with control and efficiency."
The company’s focus on performance marketing, coupled with its strategic partnership and new product launch, suggests a long‑term shift toward higher‑margin, data‑driven services. However, the current quarter’s margin compression and earnings miss highlight the challenges of scaling these initiatives while managing costs in a competitive environment.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.