UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 001-42018

IBOTTA, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	35-2426358 (I.R.S. Employer Identification Number)
1801 California Street, Suite 400 Denver, Colorado (Address of principal executive offices)	80202 (Zip Code)

(303) 593-1633

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.00001 per share	IBTA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of April 30, 2024, the registrant had outstanding 27,313,740 shares of Class A common stock and 3,137,424 shares of Class B common stock, each with a par value of $0.00001 per share.

TABLE OF CONTENTS

		Page
Special Note Regarding Forward-Looking Statements		2
Part I	FINANCIAL INFORMATION	4
Item 1	Financial Statements (Unaudited)	4
	Condensed Balance Sheets	4
	Condensed Statements of Operations	5
	Condensed Statements of Comprehensive Income (Loss)	6
	Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)	7
	Condensed Statements of Cash Flows	8
	Notes to the Condensed Financial Statements	9
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4	Controls and Procedures	42
Part II	OTHER INFORMATION	42
Item 1	Legal Proceedings	42
Item 1A	Risk Factors	44
Item 2	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Securities	92
Item 3	Defaults upon Senior Securities	93
Item 4	Mine Safety Disclosures	41
Item 5	Other Information	93
Item 6	Exhibits	94
	Signatures	97

1

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “seek,” “aim,” “look,” “wish,” “hope,” “pursue,” “propose,” “design,” “forecast,” “try,” “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•our expectations regarding financial results and performance, including our operational and financial targets, key metrics, and our ability to maintain profitability and generate profitable growth over time;

•our ability to successfully execute our business and growth strategy;

•our expectations regarding the capabilities of our platform and technology;

•the sufficiency of our cash, cash equivalents, and marketable securities to meet our liquidity needs;

•the demand for the Ibotta Performance Network (IPN) including the size of our addressable market, market share, and market trends;

•our ability to renew, maintain, and expand our relationships with publishers, specific products or groups of products identified by particular names and owned by a company that sells consumer packaged goods, including in the grocery and general merchandise categories (CPG brands (or brands)), and retailers;

•our ability to grow the number of redeemers that use our platform and the amount redeemed by our redeemers;

•our expectations regarding the macroeconomic environment, including rising inflation and interest rates, and uncertainty in the global banking and financial services markets;

•our ability to develop and protect our brand;

•our ability to effectively manage costs;

•our ability to develop new offerings, services, and features, bring them to market in a timely manner, and make enhancements to our platform;

•our ability to compete with existing and new competitors in existing and new markets and offerings;

•our expectations regarding outstanding litigation and legal and regulatory matters;

•our expectations regarding the effects of existing and developing laws and regulations, and our ability to comply with such laws and regulations, including privacy matters;

•our ability to collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, and share data about redeemers and our publishers, CPG brands, and retailers;

•our ability to manage and insure operations-related risk associated with our business;

2

•our expectations regarding our market opportunity and new and evolving markets;

•our ability to maintain the security and availability of the IPN;

•our expectations and management of future growth;

•our expectations concerning relationships with third parties, including with Walmart Inc., a Delaware corporation, and Dollar General Corporation, a Tennessee corporation;

•our ability to expand into new verticals;

•our ability to maintain, protect, and enhance our intellectual property;

•the need to hire additional personnel and our ability to attract and retain such personnel;

•our ability to obtain additional capital and maintain cash flow or obtain adequate financing or financing on terms satisfactory to us;

•our expectations that we will not rely on the “controlled company” exemption under the listing standards of the New York Stock Exchange;

•the increased expenses associated with being a public company; and

•the impact of the COVID-19 pandemic, or a similar public health threat, or the ongoing conflict between Russia and Ukraine and the recent escalation of conflict between Hamas and Israel, on global capital and financial markets, political events, general economic conditions in the United States, and our business and operations.

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate, and financial trends that we believe may affect our business, financial condition, results of operations, and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties, and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q, whether as a result of any new information, future events, or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Ibotta, Inc.

CONDENSED BALANCE SHEETS

(In thousands, except share and per share amounts)

	March 31, 2024		December 31, 2023
	(unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	79,499	$	62,591
Accounts receivable, less allowances of $3,111 and $3,160, respectively	206,433		226,439
Prepaid expenses and other current assets	14,203		9,314
Total current assets	300,135		298,344
Property and equipment, less accumulated depreciation of $9,299 and $8,905, respectively	2,385		2,541
Capitalized software development costs, less accumulated amortization of $14,574 and $13,482, respectively	13,904		12,844
Equity investment	4,531		4,531
Other long-term assets	1,112		1,530
Total assets	$	322,067	$	319,790
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Equity
Current liabilities:
Accounts payable	$	7,675	$	8,937
Due to third-party publishers	67,523		73,155
Deferred revenue	4,190		2,628
User redemption liability	82,990		84,531
Accrued expenses	15,401		24,582
Other current liabilities	3,886		4,317
Total current liabilities	181,665		198,150
Long-term liabilities:
Long-term debt, net	65,270		64,448
Convertible notes derivative liability	27,100		25,400
Other long-term liabilities	3,937		3,864
Total liabilities	277,972		291,862
Commitments and contingencies (Note 13)
Redeemable convertible preferred stock, $0.00001 par value: 17,245,954 shares authorized, issued and outstanding as of March 31, 2024 and December 31, 2023	–		–
Stockholders’ equity:
Common stock, $0.00001 par value: 40,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 9,417,665 and 9,207,337 shares outstanding as of March 31, 2024 and December 31, 2023, respectively	–		–
Additional paid-in capital	243,986		237,116
Accumulated deficit	(199,891)		(209,188)
Total stockholders' equity	44,095		27,928
Total liabilities, redeemable convertible preferred stock, and stockholders' equity	$	322,067	$	319,790

See accompanying notes to the condensed financial statements.

4

Ibotta, Inc.

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(unaudited)

	Three months ended March 31,
	2024		2023
Revenue	$	82,327	$	57,691
Cost of revenue	10,515		11,250
Gross profit	71,812		46,441
Operating expenses:
Sales and marketing	28,129		21,602
Research and development	13,641		11,695
General and administrative	13,154		13,334
Depreciation and amortization	983		752
Total operating expenses	55,907		47,383
Income (loss) from operations	15,905		(942)
Interest expense, net	(1,805)		(1,672)
Other expense, net	(1,702)		(1,503)
Income (loss) before provision for income taxes	12,398		(4,117)
Provision for income taxes	(3,101)		(166)
Net income (loss)	$	9,297	$	(4,283)
Net income (loss) per share:
Basic	$	1.00	$	(0.49)
Diluted	$	0.33	$	(0.49)
Weighted average common shares outstanding:
Basic	9,310,928		8,819,693
Diluted	28,356,797		8,819,693

See accompanying notes to the condensed financial statements.

5

Ibotta, Inc.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(unaudited)

	Three months ended March 31,
	2024		2023
Net income (loss)	$	9,297	$	(4,283)
Other comprehensive income:
Net unrealized gain on short-term investments	–		77
Total other comprehensive income	–		77
Comprehensive income (loss)	$	9,297	$	(4,206)

See accompanying notes to the condensed financial statements.

6

Ibotta, Inc.

CONDENSED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share amounts)

(unaudited)

	Redeemable Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Stockholders’ Deficit
	Shares	Amount		Shares	Amount
Balance, December 31, 2022	17,245,954	$	–	8,793,880	$	–	$	212,637	$	(247,305)	$	(126)	$	(34,794)
Net loss	–	–		–	–		–		(4,283)		–		(4,283)
Other comprehensive income	–	–		–	–		–		–		77		77
Exercise of stock options	–	–		23,991	–		262		–		–		262
Stock-based compensation expense (inclusive of capitalized stock-based compensation)	–	–		–	–		1,886		–		–		1,886
Release of restricted stock purchase shares from repurchase option	–	–		25,551	–		212		–		–		212
Balance, March 31, 2023	17,245,954	$	–	8,843,422	$	–	$	214,997	$	(251,588)	$	(49)	$	(36,640)

	Redeemable Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance, December 31, 2023	17,245,954	$	–	9,207,337	$	–	$	237,116	$	(209,188)	$	–	$	27,928
Net income	–	–		–	–		–		9,297		–		9,297
Exercise of stock options	–	–		187,777	–		1,799		–		–		1,799
Other	–	–		(3,000)			(91)		–		–		(91)
Stock-based compensation expense (inclusive of capitalized stock-based compensation)	–	–		–	–		4,950		–		–		4,950
Release of restricted stock purchase shares from repurchase option	–	–		25,551	–		212		–		–		212
Balance, March 31, 2024	17,245,954	$	–	9,417,665	$	–	$	243,986	$	(199,891)	$	–	$	44,095

See accompanying notes to the condensed financial statements.

7

Ibotta, Inc.

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Three months ended March 31,
	2024		2023
Operating activities
Net income (loss)	$	9,297	$	(4,283)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	1,909		1,615
Impairment of capitalized software development costs	92		320
Stock-based compensation expense	1,814		1,829
Common stock warrant expense	3,031		–
Credit loss expense	81		308
Amortization of debt discount and issuance costs	826		816
Change in fair value of convertible notes derivative liability	1,700		1,500
Other	(3)		(53)
Changes in assets and liabilities:
Accounts receivable	19,925		3,679
Other current and long-term assets	(2,136)		(1,094)
Accounts payable	(1,214)		(619)
Due to third-party publishers	(5,632)		6,617
Accrued expenses	(10,197)		(9,376)
Deferred revenue	1,562		1,135
User redemption liability	(1,541)		499
Other current and long-term liabilities	(148)		(201)
Net cash provided by operating activities	19,366		2,692
Investing activities
Additions to property and equipment	(152)		(11)
Additions to capitalized software development costs	(2,315)		(995)
Maturities of short-term investments	–		10,500
Net cash (used in) provided by investing activities	(2,467)		9,494
Financing activities
Proceeds from exercise of stock options	1,799		260
Deferred offering costs	(1,700)		–
Other financing activities	(90)		–
Net cash provided by financing activities	9		260
Net change in cash and cash equivalents	16,908		12,446
Cash and cash equivalents, beginning of period	62,591		17,818
Cash and cash equivalents, end of period	$	79,499	$	30,264

See accompanying notes to the condensed financial statements.

8

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

1. Nature of Operations

Ibotta, Inc. (Company, we, or our) is a technology company that allows consumer packaged goods (CPG) brands to deliver digital promotions to millions of consumers through a single, convenient network called the Ibotta Performance Network (IPN). We provide promotional services to publishers, retailers, and advertisers through the IPN, which includes our direct-to-consumer (D2C) mobile, web, and browser extension properties and our growing network of third-party publisher properties. The majority of the Company’s revenues are derived from the fees we earn from customers when consumers redeem offers. The Company also derives revenue from fees we earn from customers for digital promotions across the Company’s platform in support of their promotional campaigns, as well as from data products.

Initial Public Offering

On April 22, 2024, the Company closed its initial public offering (IPO), in which it issued and sold 2,500,000 shares of Class A common stock at $88.00 per share (IPO price). The Company received net proceeds of $197.5 million after deducting underwriting discounts and commissions of $13.2 million and offering costs of approximately $9.3 million. Certain selling stockholders (Selling Stockholders) offered an additional 4,060,700 shares of Class A common stock at the IPO price in a secondary offering, for which the Company received no proceeds. In connection with the secondary offering, on April 25, 2024, the underwriters for the IPO exercised their option to purchase an additional 984,105 shares of Class A common stock from the Selling Stockholders at the IPO price less underwriting discounts and commissions, with all proceeds going to the Selling Stockholders.

In connection with the IPO, 9,511,741 shares of common stock outstanding were reclassified into an equal number of shares of Class A common stock, 17,245,954 shares of redeemable convertible preferred stock automatically converted into an equal number of shares of Class A common stock, $75.1 million of convertible notes automatically converted into 1,177,087 shares of Class A common stock, an anti-dilution adjustment to the common stock purchase warrant to Walmart, Inc., a Delaware corporation (Walmart Warrant) increased the number of shares of Class A common stock issuable under the Walmart Warrant by 592,457 shares, and 3,668,427 shares of Class A common stock were exchanged for an equivalent number of Class B common stock shares. In addition, certain equity awards with liquidity event-based vesting conditions accelerated in vesting, resulting in the recording of additional stock-based compensation expense.

Refer to Note 14 – Subsequent Events for further information.

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and pursuant to the applicable rules and regulations of the U.S. Securities and Exchange Commission (SEC) for interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these unaudited condensed financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended December 31, 2023, which can be found in the Company’s final prospectus dated April 17, 2024, filed with the SEC pursuant to Rule 424(b)(4) (Prospectus) under the Securities Act of 1933, as amended.

The condensed financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial

9

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

condition as of and for the periods presented. These operating results are not necessarily indicative of the results that may be expected of the full year performance.

Other than those described below, there were no significant changes to the significant accounting policies from those that were disclosed in the audited consolidated financial statements and accompanying notes for the year ended December 31, 2023 included in the Prospectus.

Emerging Growth Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The Company expects to use the extended transition period for any other new or revised accounting standards during the period in which it remains an emerging growth company.

Use of Estimates

The preparation of condensed financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts and classifications of assets and liabilities, revenue and expenses, and the related disclosures of contingent liabilities in the condensed financial statements and accompanying notes. Management evaluates its estimates that include, but are not limited to, revenue recognition, breakage, allowance for credit losses, income taxes and associated valuation allowances, leases, stock-based compensation, contingent liabilities, convertible notes derivative liability, software development costs, including capitalization and the allocation of labor costs between cost of revenue and research and development expense, and the useful lives and impairment of long-lived assets. The Company believes that the estimates, judgments, and assumptions used to determine certain amounts that affect the condensed financial statements are reasonable, based on information available at the time they are made. Actual results could differ materially from these estimates.

Segments

The Company manages its operations and allocates resources as a single operating segment. Further, the Company manages, monitors, and reports its financials as a single reporting segment. Operating segments are components of a company for which separate financial information is internally produced for regular use by the Chief Operating Decision Maker (CODM) to allocate resources and assess the performance of the business. The Company’s CODM is its Chief Executive Officer who makes operating decisions, assesses financial performance, and allocates resources based on Company-wide financial information.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash, cash equivalents, and accounts receivable. At times, such amounts may exceed federally insured limits. The Company reduces credit risk by placing its cash and cash equivalents with major financial institutions within the United States. Credit risk with respect to accounts receivable is dispersed due to the large number of customers. The Company does not require collateral for accounts receivable.

10

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

User Redemption Liability and Due to Third-Party Publishers

Consumers earn user awards by redeeming offers on both Ibotta’s D2C properties and our third-party publisher properties. The undistributed user awards earned by consumers on D2C properties are reflected in the user redemption liability in the condensed balance sheets. The user redemption liability is reduced as consumers cash out and through breakage (see Note 3 – User Redemption Liability Extinguishment). User awards earned by consumers on third-party publisher properties represent a payable reflected in the due to third-party publishers in the condensed balance sheets. The due to third-party publishers liability also includes a revenue share payable for certain publishers that is a negotiated fixed percentage of our fee per redemption on the third-party publishers’ properties.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. The principal activities from which the Company generates revenue are as follows:

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.

Ad & Other Revenue

The Company’s customers may also run advertisements such as banners, tiles, newsletters, and feature placements on Ibotta D2C properties to promote their redemption campaigns, referred to as marketing services. Ad products are billed, and revenue is recognized, as the marketing services are performed over the advertising period. The Company also offers a number of data products and services to customers, including audience targeting and data licensing. Some products and services are billed as a flat fee amount while others are billed based on usage. Data revenue is recognized as it is delivered.

Deferred Offering Costs

Deferred offering costs, which consist of direct incremental legal, consulting, accounting, and other fees related to the anticipated sale of the Company’s common stock in the IPO, are capitalized and recorded in prepaid expenses and other current assets on the condensed balance sheets. After the IPO, all deferred offering costs will be reclassified into additional paid-in capital as a reduction of proceeds, net of underwriting discounts, received from the IPO on the condensed balance sheets.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires enhanced disclosures about significant segment expenses. In addition, the amendments include enhanced interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and provide new segment disclosure requirements for entities with a single reportable segment. The amendments of ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. While the application of this guidance will result in additional disclosure concerning the Company’s single reportable segment, it is not expected to have a significant impact on the Company’s condensed financial statements.

Other than the item noted above, there are no new accounting pronouncements not yet effective or adopted during the three months ended March 31, 2024 that the Company believes have a significant impact, or potentially significant impact, to its condensed financial statements.

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Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

3. User Redemption Liability Extinguishment

The Company reflects a user redemption liability in the condensed balance sheets associated with the undistributed earnings of consumers on Ibotta’s D2C properties. A portion of these undistributed earnings is never expected to be cashed out by consumers due to inactivity and will therefore be recognized as breakage by the Company.

Consumers’ accounts that have no activity for six months are considered inactive and charged a $3.99 per month maintenance fee until the balance is reduced to zero or new activity ensues. Balances associated with accounts that are deactivated for violation of the Company’s terms of use are also recognized as breakage. The Company estimates breakage at the time of user redemption and reduces the user redemption liability accordingly. Breakage estimates are made based on historical breakage patterns, and the preparation of estimates includes judgments of the applicability of historical patterns to current and future periods. Breakage is recorded in revenue related to funded awards, as an offset to sales and marketing expense related to self-funded awards, and as an offset to cost of revenue related to consumer insights awards and gift card redemptions.

The Company’s breakage is recorded as follows (in thousands):

	Three months ended March 31,
	2024		2023
Revenue	$	3,923	$	2,988
Cost of revenue	61		68
Sales and marketing	539		749
Total breakage	$	4,523	$	3,805

The user redemption liability was $83.0 million and $84.5 million as of March 31, 2024 and December 31, 2023, respectively.

4. Accrued Expenses

Accrued expenses consist of the following (in thousands):

	March 31, 2024		December 31, 2023
Accrued employee expenses	$	7,148	$	18,156
Other accrued expenses	8,253		6,426
Total accrued expenses	$	15,401	$	24,582

5. Long-Term Debt

Long-term debt consists of the following (in thousands):

	March 31, 2024		December 31, 2023
Convertible notes	$	75,099	$	75,099
Revolving line of credit	–		–
Total debt	75,099		75,099
Less: unamortized debt discount	(9,635)		(10,440)
Less: unamortized debt issuance costs	(194)		(211)
Long-term debt, net	$	65,270	$	64,448

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Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

Our convertible notes are scheduled to mature in 2027. As of March 31, 2024, no other contractual principal repayments of long-term debt are due within the next five years.

The Company recorded interest expense of $2.8 million and $2.0 million for the three months ended March 31, 2024 and 2023, respectively, of which $0.8 million was related to the amortization of the debt discount and issuance costs, in each respective year. As of March 31, 2024, $0.1 million of interest was capitalized to the outstanding principal balance of the notes.

Convertible Notes

On March 24, 2022 (Initial Closing), the Company issued convertible unsecured subordinated promissory notes (notes or convertible notes) to certain investors, including certain related parties and a then officer of the Company (see Note 12 – Related Parties), in an aggregate principal amount of $75.0 million with a maturity date of March 24, 2027. Up to but not including the date that is 18 months after the Initial Closing, the convertible notes bear interest at a rate of 6.00% per annum, payable quarterly in cash or as payment-in-kind at the Company’s election. Thereafter, subject to certain exceptions, the convertible notes bear interest at a rate of (A) the greater of (x) the three-month Secured Overnight Financing Rate and (y) 1.00% plus (B) 5.00%, payable quarterly in cash.

The outstanding amount of the notes will automatically convert into shares of the Company’s common stock upon a qualified public transaction, including a qualified initial public offering, qualified direct listing, or qualified special purpose acquisition company transaction. The conversion price is the lesser of (i) $2.5 billion divided by the fully diluted outstanding capitalization of the Company immediately prior to the qualifying public transaction and (ii) the per share value of the Company as determined by the qualifying public transaction multiplied by a discount rate. The applicable discount rate prior to or on the date 18 months after the Initial Closing is 77.5% and thereafter is 72.5%.

The Company determined that certain conversion provisions embedded in the convertible notes represent contingent exchange features that qualify as embedded derivatives under ASC 815, Derivatives and Hedging. The qualifying features were collectively bifurcated from the debt host and recorded as a derivative liability in the condensed balance sheets. The derivative liability is accounted for on a fair market value basis. The initial value of the derivative liability at issuance was $16.1 million with the offset recorded as a discount to the notes. Changes in fair value are recognized in other expense, net, in the condensed statements of operations. The debt discount is amortized to interest expense over the contractual term of the debt using the straight-line method which approximates the effective interest method. Refer to Note 6 – Fair Value Measurements for further discussion of the valuation of the derivative liability.

Concurrently upon the closing of the IPO, the $75.1 million of convertible notes automatically converted into 1,177,087 shares of Class A common stock. Refer to Note 14 – Subsequent Events for further information.

2021 Credit Facility

On November 3, 2021, the Company executed the Third Amended and Restated Loan and Security Agreement with Silicon Valley Bank (Silicon Valley Bank), which consists of a $50.0 million revolving line of credit with a maturity date of November 3, 2024 (2021 Credit Facility). In the event of a public offering, the maturity date of the 2021 Credit Facility will be extended to November 3, 2026.

In March 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation due to liquidity concerns and entered into receivership with the Federal Deposit Insurance Corporation. First Citizens BancShares, Inc. (First Citizens Bank) purchased substantially all loans and certain other assets and assumed all customer deposits and certain other liabilities of the former Silicon Valley Bank, including the Company’s 2021 Credit Facility. On March 28, 2023, the Company executed a letter agreement to amend the 2021 Credit Facility to reduce the percentage of funds required to be maintained with Silicon Valley Bank.

13

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

In December 2023, the Company executed the Second Loan Modification Agreement with Silicon Valley Bank, which, among other things, extended the initial maturity date of the 2021 Credit Facility to November 3, 2025 and amended the financial covenant liquidity ratio calculation. The 2021 Credit Facility, as amended by the subsequent amendment and modification agreements, is referred to herein as the Amended 2021 Credit Facility.

Borrowings under the Amended 2021 Credit Facility bear interest at a floating annual rate equal to the greater of (i) an applicable floor rate that ranges from 2.25% to 3.0% based on the Company’s average liquidity position as defined in the Amended 2021 Credit Facility and (ii) the prime rate less a margin that ranges from 0.25% to 1.0% based on the Company’s average liquidity position as defined in the Amended 2021 Credit Facility. In addition, the Company pays an unused revolving line facility fee of 0.25% per year on the average monthly unused amount of commitments under the Amended 2021 Credit Facility. The Company is subject to a springing financial covenant to maintain a minimum liquidity ratio of 1.50x, depending on the Company’s average liquidity position as defined in the Amended 2021 Credit Facility.

As of March 31, 2024, there was no outstanding balance under the Amended 2021 Credit Facility and $50.0 million available. The Company is in compliance with all financial covenants under the Amended 2021 Credit Facility during all periods presented. All obligations under the Amended 2021 Credit Facility are secured by substantially all of the assets of the Company, including intellectual property.

6. Fair Value Measurements

The following tables present information about financial instruments measured at fair value on a recurring basis (in thousands):

	March 31, 2024
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	76,788	$	76,788	$	–	$	–
Total assets	$	76,788	$	76,788	$	–	$	–
Liabilities:
Convertible notes derivative liability	27,100		–		–		27,100
Total liabilities	$	27,100	$	–	$	–	$	27,100

	December 31, 2023
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	57,890	$	57,890	$	–	$	–
Total assets	$	57,890	$	57,890	$	–	$	–
Liabilities:
Convertible notes derivative liability	25,400		–		–		25,400
Total liabilities	$	25,400	$	–	$	–	$	25,400

The fair values of cash equivalents are measured using quoted prices for identical assets in active markets and are therefore classified as Level 1 in the fair value hierarchy.

Long-term debt is recorded at its carrying value in the condensed balance sheets, which may differ from its fair value. The fair value is estimated using Level 3 inputs in a Monte Carlo simulation. As of March 31, 2024 and December 31, 2023, the estimated fair value of the Company’s convertible notes was $102.5 million and $95.4 million, respectively.

14

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

Convertible Notes Derivative Liability

The convertible notes contain certain embedded features that are required to be bifurcated and recorded separately from the debt host as a derivative liability at fair value. Refer to Note 5 – Long-Term Debt for further information.

The fair value of the derivative liability was determined using a Monte Carlo simulation and a “with-and-without” valuation methodology. The inputs used to estimate the fair value of the derivative instrument include the probability of potential settlement scenarios, the expected timing of such settlement, and an expected volatility determined with reference to historical stock volatilities of comparable guideline public companies. The derivative liability is classified as Level 3 in the fair value hierarchy.

The following table summarizes the activity related to the fair value of the convertible notes derivative liability (in thousands):

	Three months ended March 31,
	2024		2023
Fair value at beginning of period	$	25,400	$	20,400
Initial recognition of derivative liability	–		–
Change in fair value	1,700		1,500
Fair value at end of period	$	27,100	$	21,900

Concurrently upon the closing of the IPO, the convertible notes automatically converted into shares of the Company’s Class A common stock, resulting in the extinguishment of the debt and the settlement of the embedded derivative liability. Refer to Note 14 – Subsequent Events for further information.

Equity Investment

On July 2, 2019, the Company acquired 628,930 shares of the Series A Preferred Stock of a privately-held software company in exchange for cash consideration of $0.8 million. The investment represents a minority interest, and the Company has determined that it does not have significant influence over the company. The preferred shares comprising the investment are illiquid, and the fair value is not readily determinable. The Company has elected the measurement alternative to measure this investment at cost, less impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment.

During the three months ended March 31, 2024 and 2023, the Company recorded no adjustments to the equity investment. Since inception, the Company has recorded positive cumulative adjustments in the equity investment of $8.3 million and negative cumulative adjustments of $4.5 million.

15

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

7. Redeemable Convertible Preferred Stock, Common Stock, Restricted Stock Purchase, and Common Stock Warrant

Redeemable Convertible Preferred Stock

As of March 31, 2024, the Company was authorized to issue 17,245,954 shares of redeemable convertible preferred stock at a par value of $0.00001, designated in series as follows:

Series	Shares Authorized	Shares Issued and Outstanding	Per Share Issuance Price		Per Share Liquidation Preference		Per Share Dividend Rate Per Annum
Series Seed	2,407,363	2,407,363	$	0.74	$	0.74	$	0.0592
Series A	1,984,186	1,984,186	4.10		4.10		0.3280
Series B	3,824,091	3,824,091	5.23		5.23		0.4184
Series C	3,300,548	3,300,548	11.61		11.61		0.9288
Series C-1	1,578,552	1,578,552	15.83		15.83		1.2660
Series D	4,151,214	4,151,214	36.13		36.13		2.8907
Total	17,245,954	17,245,954

The rights, preferences, and privileges of the redeemable convertible preferred stock are as follows:

Dividend Rights

The holders of redeemable convertible preferred stock shall be entitled to receive noncumulative dividends, when, as and if declared by the board of directors of the Company at the dividend rate specified for such shares of redeemable convertible preferred stock, payable in preference and priority to any declaration or payment of any distribution on common stock of the Company. Payment of any dividends to the holders of preferred stock shall be on a pro rata, pari passu basis in proportion to the dividend rates for each series of redeemable convertible preferred stock.

Redemption

No shares of redeemable convertible preferred stock are unilaterally redeemable by either the stockholders or the Company; however, the Company’s amended and restated certificate of incorporation in effect prior to the closing of the IPO (Prior Certificate) provides that upon any Deemed Liquidation Event (defined below), the shares of a series of redeemable convertible preferred stock shall be entitled to receive the applicable liquidation preference for such series.

Liquidation Preference

In the event of any Deemed Liquidation Event, each holder of Series D redeemable convertible preferred stock shall be entitled to receive prior and in preference to any distribution of any of the assets to the holders of Series B, Series C, and Series C-1 redeemable convertible preferred stock (collectively, the Senior redeemable convertible preferred stock), Series Seed and Series A redeemable convertible preferred stock (collectively, the Junior redeemable convertible preferred stock), and common stock, an amount per share equal to the greater of (i) the amount equal to liquidation preference specified for such share plus an amount equal to all declared but unpaid dividends or such lesser amount as may be approved by the holders of at least two-thirds of the outstanding shares of Series D redeemable convertible preferred stock or (ii) such amount per share the holder of Series D redeemable convertible preferred stock would be entitled to receive if such shares had been converted to common stock immediately prior to such Deemed Liquidation Event.

After the payment to the holders of Series D redeemable convertible preferred stock, each holder of Senior redeemable convertible preferred stock shall be entitled to receive prior and in preference to any

16

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

distribution of any of the assets to the holders of Junior redeemable convertible preferred stock and common stock, an amount per share equal to the greater of (i) the amount equal to liquidation preference specified for such share plus an amount equal to all declared but unpaid dividends or such lesser amount as may be approved by the holders of at least two-thirds of the outstanding shares of Senior redeemable convertible preferred stock or (ii) such amount per share the holder of Senior redeemable convertible preferred stock would be entitled to receive if such shares had been converted to common stock immediately prior to liquidation event.

After the payment to the holders of Series D redeemable convertible preferred stock and Senior redeemable convertible preferred stock, each holder of Junior redeemable convertible preferred stock shall be entitled to receive prior and in preference to any distribution of any of the assets to the holders of common stock, an amount per share equal to the greater of (i) the amount equal to liquidation preference specified for such share plus an amount equal to all declared but unpaid dividends or such lesser amount as may be approved by the holders of at least two-thirds of the outstanding shares of Junior redeemable convertible preferred stock or (ii) such amount per share the holder of Junior redeemable convertible preferred stock would be entitled to receive if such shares had been converted to common stock immediately prior to liquidation event.

A “Deemed Liquidation Event” is defined to include (i) the acquisition of the Company by another entity in a transaction or series of related transactions to which the Company is a party in which the holders of the voting securities of the Company outstanding immediately prior to such acquisition do not continue to retain immediately following such acquisition at least a majority of the total voting power represented by the outstanding voting securities of the Company or the surviving or resulting entity, or the parent entity that wholly owns the Company or the surviving or resulting entity immediately following such acquisition, (ii) a sale, lease, or other disposition of all or substantially all of the assets of the Company and its subsidiaries taken as a whole (other than to a wholly owned subsidiary of the Company), or (iii) any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary.

Optional Conversion Option

Each share of redeemable convertible preferred stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, into the number of fully paid, non-assessable shares of common stock determined by dividing the original issue price for the relevant series by the conversion price for such series.

Conversion Price Adjustments

The conversion price per share of the redeemable convertible preferred stock will be reduced if the Company issues additional shares of common stock without consideration or for a consideration per share less than the applicable conversion price of a series of redeemable convertible preferred stock in effect.

The conversion ratio, the dividend rate, original issue price, and the liquidation preference, as the case may be, of the affected series of redeemable convertible preferred stock will be adjusted in the case of specified changes to the Company’s capitalization as a result of subdivisions, combinations, reclassifications, reorganizations, exchanges, and substitutions.

Automatic Conversion

Each share of redeemable convertible preferred stock shall automatically be converted into fully paid, non-assessable shares of common stock at then effective conversion rate for such share upon the occurrence of the earlier of the following events: (i) immediately prior to the closing of a firm commitment underwritten initial public offering covering the offer and sale of the Company’s common stock, provided that the aggregate gross proceeds to the Company from the offering are not less than $50.0 million; or (ii) upon the receipt of a written request for such conversion from holders of at least two-thirds of the shares of redeemable convertible preferred stock then outstanding.

17

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

Voting Rights

Each holder of redeemable convertible preferred stock is entitled to the number of votes equal to the number of shares of common stock into which the shares of the redeemable convertible preferred stock held by such holder could be converted as of the applicable record date. However, with respect to potential Deemed Liquidation Events, as well as other situations, the common stockholders have protective rights whereby holders of a majority of the common stock, exclusive of all shares of redeemable convertible preferred stock, must approve any Deemed Liquidation Event. Given that Deemed Liquidation Events are within the control of the common stockholders, the redeemable convertible preferred stock is recognized as permanent equity within the condensed statements of redeemable convertible preferred stock and stockholders’ equity (deficit).

Protective Provisions

For so long as at least 500,000 shares of redeemable convertible preferred stock remain outstanding, the Company shall not without first obtaining the approval of the holders of at least two-thirds of the outstanding shares of the redeemable convertible preferred stock, (i) amend, alter, or repeal any provision of the Prior Certificate in a manner that adversely alters the rights, preferences, privileges, or powers of, or restrictions provided for the benefit of, the redeemable convertible preferred stock or any series thereof; (ii) increase or decrease the authorized number of shares of the Company’s capital stock; (iii) acquire any shares of the common stock of the Company by purchase, redemption, or other acquisition, other than a repurchase approved by the Board, including the Series B Director, of shares of common stock issued to or held by employees, officers, directors, or consultants of the Company or its subsidiaries, either upon termination of their employment or services pursuant to agreements providing for the right of said repurchase or pursuant to rights of first refusal contained in agreements providing for such right; (iv) declare or pay any distribution with respect to the common stock; (v) authorize, approve, or enter into any agreement to consummate a Deemed Liquidation Event; or (vi) amend, alter, or repeal Article V, Sections 5 or 6(a) of the Prior Certificate.

For so long as at least 500,000 shares of Series D redeemable convertible preferred stock or Series C-1 redeemable convertible preferred stock remain outstanding, the Company shall not without first obtaining the approval of the holders of at least two-thirds of the outstanding shares of the Series D redeemable convertible preferred stock or Series C-1 redeemable convertible preferred stock, as the case may be, (i) authorize a merger, acquisition, sale of assets, or other corporate reorganization of the Company or any of its subsidiaries that would provide consideration to the holders of Series D redeemable convertible preferred stock or Series C-1 redeemable convertible preferred stock in an amount per share for each share that is less than the then-current liquidation preference of such series of redeemable convertible preferred stock; (ii) voluntarily liquidate or dissolve the Company; (iii) initiate or consummate an initial public offering with an offering price for each share of common stock that is less than the then-current liquidation preference amount per share of such series of redeemable convertible preferred stock; (iv) authorize an automatic conversion of the redeemable convertible preferred stock if such conversion will be consummated in connection with a Deemed Liquidation Event that will provide consideration to the holders of these series in an amount per share for each share that is less than the then-current liquidation preference amount per share for such series of redeemable convertible preferred stock; (v) amend, alter, or repeal any provision of the Prior Certificate in a manner that adversely alter the rights, preferences, privileges, or powers of, or restrictions provided for the benefit of Series D redeemable convertible preferred stock or Series C-l redeemable convertible preferred stock, as the case may be; or (vi) amend Section 6(c) or 6(d) of the Prior Certificate, as applicable to such series of redeemable convertible preferred stock.

18

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

Common Stock

As of March 31, 2024, the Company was authorized to issue 40,000,000 shares of common stock with a par value of $0.00001. As of March 31, 2024, the Company had reserved shares of common stock for future issuances in connection with the following:

	Number of Shares
Redeemable convertible preferred stock outstanding	17,245,954
Stock options outstanding	4,377,241
Restricted stock units outstanding	304,472
Restricted stock purchase	88,295
Common stock warrant	3,528,577
Total shares	25,544,539

Protective Provisions

With respect to potential Deemed Liquidation Events, as well as other situations, the common stockholders have protective rights whereby holders of a majority of the common stock, exclusive of the redeemable convertible preferred stock, must approve any Deemed Liquidation Event. As such, the Deemed Liquidation Event is within the control of the common stockholders.

Restricted Stock Purchase

On February 9, 2021, the Company granted an officer of the Company the right to purchase 408,824 shares of restricted common stock, and the officer exercised the purchase option at the grant date fair value of $8.30 per share, for a total exercise price of $3.4 million (restricted stock purchase). As the restricted stock purchase contained a repurchase option for the Company, the exercise price was initially recognized as a deposit liability that will be offset to additional paid in capital as the repurchase option is released. One quarter of the shares were released from the Company’s repurchase option on the one-year anniversary of the grant, and one forty-eighth of the shares shall be released monthly for the 36 months thereafter.

As of March 31, 2024, $2.7 million had been released from the Company’s repurchase option and recorded to additional paid in capital. The portion of shares to be released from the repurchase option in the next 12 months, recorded in other current liabilities, is $0.7 million. As of December 31, 2023, $2.4 million had been released from the Company’s repurchase option and recorded to additional paid in capital. As of December 31, 2023, the portion of shares to be released from the repurchase option in the next 12 months, recorded in other current liabilities, was $0.8 million, and the remainder of $0.2 million was recorded in other long-term liabilities.

Common Stock Warrant

On May 17, 2021, the Company issued the Walmart Warrant in connection with a multi-year strategic relationship that makes Ibotta the exclusive provider of digital item-level rebate offer content for Walmart U.S. (Commercial Agreement). The Walmart Warrant was issued in exchange for access to Walmart consumers and is accounted for under ASC 718, Compensation–Stock Compensation (ASC 718), as a share-based payment to a nonemployee in exchange for services to be recognized in the same manner as if the Company paid cash for the services.

Pursuant to the terms of the Walmart Warrant, Walmart has the right to purchase up to 3,528,577 shares of the Company’s common stock, subject to a non-discretionary anti-dilution provision, at an exercise price of $70.12, subject to decreases in the event of an initial public offering, a change in control, a direct listing, or a special purpose acquisition company transaction (i.e., liquidity event), if certain pricing thresholds are not met.

19

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

Vesting of the Walmart Warrant is subject to certain conditions, including the achievement of certain milestones and satisfaction of obligations of both parties, or (with respect to 1,411,430 of such shares) the passage of time after the achievement of certain milestones, subject to acceleration if certain operating goals are achieved. Failure to satisfy these conditions or termination of the Commercial Agreement would result in a decrease in the number of shares vesting under the Walmart Warrant. The Walmart Warrant expires, and any vested warrants are no longer exercisable, effective May 17, 2031, or May 17, 2028 in certain cases if the Commercial Agreement is no longer in effect.

The grant date (measurement date) of the Walmart Warrant is May 17, 2021, which is the date of the Commercial Agreement. The aggregate grant date fair value of the Walmart Warrant was $35.3 million. To factor in the various terms and conditions of the Walmart Warrant, including the potential adjustments if certain pricing thresholds are not met upon an initial public offering or other liquidity event, the fair value was determined based on probability weighted estimated fair values determined under both a Black-Scholes option pricing valuation model (assuming no liquidity event) and a Monte Carlo simulation valuation model (assuming a potential liquidity event) with the following assumptions:

	Black-Scholes Option Pricing Model		Monte Carlo Simulation
Risk-free interest rate	1.64	%	1.64	%
Expected dividend yield	–		–
Expected volatility	50	%	50% / 65%
Expected term (in years)	10		10

The potential impact of adjustments to the exercise price if certain pricing thresholds are not achieved upon a liquidity event is factored into the grant date fair value of the Walmart Warrants (i.e., considered a market condition). To the extent the Walmart Warrants are modified under the anti-dilution or other provisions, the modification guidance in ASC 718 would be applied, which could result in incremental expense.

The fair value of the portion of the Walmart Warrant that vests upon achievement of the performance conditions is recognized as sales and marketing expense when the performance conditions are considered probable of achievement, and the fair value of the remaining portion is recognized as sales and marketing expense over time beginning upon achievement of certain performance conditions through the remainder of the Commercial Agreement term, subject to acceleration if certain operating goals are achieved, and subject to certain forfeiture and repurchase terms.

As of March 31, 2023, the performance condition required for vesting was not considered probable, and therefore no stock-based compensation expense was recorded during the three months ended March 31, 2023. During the three months ended March 31, 2024, the performance condition required for vesting was considered probable; therefore, stock-based compensation expense of $3.0 million was recognized during the three months ended March 31, 2024 in sales and marketing expense, all of which related to the vesting of the service condition. Stock-based compensation expense yet to be recognized related to the unvested portion of the Walmart Warrant was $19.1 million as of March 31, 2024, subject to a non-discretionary anti-dilution provision. This amount is expected to be recognized over a weighted average period of 4.5 years.

In connection with the IPO, 9,511,741 shares of common stock outstanding were reclassified into an equal number of shares of Class A common stock, 17,245,954 shares of redeemable convertible preferred stock automatically converted into an equal number of shares of Class A common stock, $75.1 million of convertible notes automatically converted into 1,177,087 shares of Class A common stock, an anti-dilution adjustment to the Walmart Warrant increased the number of shares of Class A common stock issuable under the warrant by 592,457 shares, and 3,668,427 shares of Class A common stock were exchanged for an equivalent number of Class B common stock shares. Refer to Note 14 – Subsequent Events for further information.

20

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

8. Revenue from Contracts with Customers

Disaggregation of Revenue

The Company’s disaggregated revenue by type of service is as follows (in thousands):

	Three months ended March 31,
	2024		2023
Redemption revenue	$	67,989	$	41,703
Ad & other revenue	14,338		15,988
Total revenue	$	82,327	$	57,691

Deferred Revenues

Deferred revenues primarily consist of fees and cash back offers collected from customers that will be applied to future campaigns. Deferred revenues are expected to be recognized as consumers redeem offers over the term of the campaigns, net of the cash back offer, which generally occurs within 12 months. Deferred revenues were $4.2 million and $2.6 million as of March 31, 2024, and December 31, 2023, respectively.

During the three months ended March 31, 2024 and 2023, the Company recognized revenue of $1.4 million and $2.2 million, respectively, that was included in the deferred revenue balance as of December 31, 2023 and 2022, respectively.

9. Stock-Based Compensation

Stock-Based Compensation Expense

The Company’s stock-based compensation expense is recorded as follows (in thousands):

	Three months ended March 31,
	2024		2023
Cost of revenue	$	158	$	220
Sales and marketing(1)	3,622		564
Research and development	553		527
General and administrative	512		518
Total stock-based compensation expense	$	4,845	$	1,829

_______________

(1)Sales and marketing includes common stock warrant expense of $3.0 million recognized during the three months ended March 31, 2024. No common stock warrant expense was recognized during the three months ended March 31, 2023.

The Company capitalized an immaterial amount of stock-based compensation expense to capitalized software development costs during the three months ended March 31, 2024 and 2023. Unrecognized stock-based compensation expense for unvested restricted stock units and stock options as of March 31, 2024 was $26.0 million and is expected to be recognized over a weighted average period of 2.80 years.

Equity Incentive Plan

The 2011 Equity Incentive Plan (2011 Plan) permits employee grants of up to 14,957,531 shares of common stock as of March 31, 2024. The 2011 Plan provides for the grant of various stock awards to employees of the Company, including incentive stock options, nonqualified stock options, and restricted stock units (RSUs).

21

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

Stock Options

The Company’s option awards typically vest over a three- or four-year period and expire 10 years from the grant date. The exercise price of the option awards is typically equal to the fair value of the Company’s common stock at the date of grant. As defined in the individual option award agreements, certain option awards provide for accelerated vesting if there is a sale of the Company and the outlined employees are terminated in a specific time period thereafter.

A summary of option activity for the three months ended March 31, 2024, is as follows:

	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Options outstanding as of December 31, 2023	4,516,612	$	14.34	7.45	$	75,915
Granted	184,148	31.15
Exercised	(187,777)	9.58
Forfeited or expired	(135,742)	18.12
Options outstanding as of end of period	4,377,241	$	15.14	7.33	$	70,096
Options vested and exercisable as of March 31, 2024	2,578,934	$	13.26	6.53	$	46,137

The total intrinsic value of stock options exercised during the three months ended March 31, 2024 was $4.0 million.

In July 2021, the Company granted stock option awards to our named executive officers in anticipation of an initial public offering in 2021. The stock options were scheduled to vest in equal monthly installments over the four-year period after the vesting commencement date (or in the case of one of the two awards granted to the CEO, the one-year anniversary of the vesting commencement date). The vesting commencement date for each award was the effectiveness of a registration statement on Form S-1 under the Securities Act. In March 2024, the awards were modified to accelerate the vesting by amending the vesting commencement date to be the grant date. The modification increased the fair value of the options by $3.0 million. During the three months ended March 31, 2024, no stock-based compensation expense was recognized for these stock options as the performance condition was not probable.

Upon closing of the IPO, certain options with liquidity event-based vesting conditions were satisfied, and the Company will recognize a cumulative stock-based compensation expense adjustment for which the service-based vesting condition had been satisfied. Refer to Note 14 – Subsequent Events for further information.

Restricted Stock Units

During the three months ended March 31, 2024, the Company granted RSUs to employees that vest upon the satisfaction of both a service condition and a liquidity event condition, collectively referred to as “double-trigger awards.” The service condition for the majority of these awards is satisfied over four years with awards vesting on each quarterly vesting date (defined as the first trading day on or after March 1, June 1, September 1, and December 1). The liquidity event condition is satisfied upon the occurrence of a qualifying event, defined as the earlier to occur of (i) a change of control or (ii) the first quarterly vest date after the expiration of the lock-up period following the completion of an IPO, subject in each instance to continued service to the Company. During the three months ended March 31, 2024, no stock-based compensation expense was recognized for RSUs.

22

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

A summary of RSU activity for the three months ended March 31, 2024, is as follows:

	RSUs	Weighted Average Grant Date Fair Value per Share
Unvested and outstanding as of December 31, 2023	–	$	–
Granted	305,172	31.15
Vested	–	–
Forfeited or expired	(700)	31.15
Unvested and outstanding as of March 31, 2024	304,472	$	31.15

Upon the closing of the IPO, the Company will recognize a cumulative share-based compensation expense adjustment associated with the double-trigger awards for which a portion of the service period had been satisfied and vested through achievement of the liquidity event condition upon the IPO. Refer to Note 14 – Subsequent Events for further information.

10. Income Taxes

Our income tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.

Our income tax provision was $3.1 million for the three months ended March 31, 2024 compared to our income tax provision of $0.2 million for the three months ended March 31, 2023. Our effective income tax rate was 25.0% and (4.0)% for the three months ended March 31, 2024 and 2023, respectively. The variations in our effective tax rate from the U.S. federal statutory rate for the three months ended March 31, 2024 were primarily due to tax effects of stock-based compensation and the impact of U.S. research and development credits. The variations in our effective tax rate from the U.S federal statutory rate for the three months ended March 31, 2023 were primarily due to the valuation allowance.

11. Net Income (Loss) Per Share

Basic and diluted net income (loss) per share is calculated as follows (in thousands, except share and per share amounts):

	Three months ended March 31,
	2024		2023
Numerator:
Net income (loss)	$	9,297	$	(4,283)
Denominator:
Weighted average shares of common stock outstanding, basic	9,310,928		8,819,693
Plus: dilutive effect of stock options	1,799,915		–
Plus: dilutive effect of redeemable convertible preferred stock	17,245,954		–
Weighted average shares of common stock outstanding, diluted	28,356,797		8,819,693
Net income (loss) per share, basic	$	1.00	$	(0.49)
Net income (loss) per share, diluted	$	0.33	$	(0.49)

23

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

The following potentially dilutive common shares were excluded from the computation of diluted net income or loss per share because their effect would have been anti-dilutive for the periods presented, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period:

	Three months ended March 31,
	2024	2023
Stock options	386,359	4,776,024
RSUs	304,472	—
Unvested shares of restricted stock purchase	88,295	190,501
Redeemable convertible preferred stock	—	17,245,954
Common stock warrant	3,528,577	—
Total shares excluded from diluted net income (loss) per share	4,307,703	22,212,479

Potentially dilutive common shares with respect to the convertible notes are not presented in the table above, as no conditions required for conversion have occurred.

On April 22, 2024, the Company closed its IPO, in which it issued and sold 2,500,000 shares of its Class A common stock at a price of $88.00 per share. On that date, the Company’s 17,245,954 shares of outstanding redeemable convertible preferred stock automatically converted into an equal number of shares of Class A common stock and $75.1 million of convertible notes automatically converted into 1,177,087 shares of Class A common stock. These shares will be included in the Company’s issued and outstanding Class A common stock starting on that date. In addition, an anti-dilution adjustment to the Walmart Warrant increased the number of shares of Class A common stock issuable under the warrant by 592,457 shares. Refer to Note 14 – Subsequent Events for further information.

12. Related Parties

Retention of Wilson Sonsini Goodrich & Rosati, P.C.

Larry W. Sonsini, a member of the Company’s board of directors, is a founding partner of the law firm Wilson Sonsini Goodrich & Rosati, Professional Corporation (Wilson Sonsini), which serves as outside corporate counsel to the Company. During the three months ended March 31, 2024 and 2023, the Company spent a total of $1.6 million and $0.2 million, respectively. Amounts payable to Wilson Sonsini were $1.5 million as of March 31, 2024, and $1.0 million as of December 31, 2023.

Convertible Notes

The Company issued convertible notes to certain investors on March 24, 2022 (see Note 5 – Long-Term Debt). Convertible notes in the principal aggregate amount of $69.5 million were issued to Koch Disruptive Technologies, LLC (KDT), which was the sole purchaser of the Company’s Series D convertible preferred stock, the beneficial owner of more than 5% of the Company's outstanding capital stock, and was represented on the Company’s board of directors. Convertible notes in the principal aggregate amount of $0.1 million were also issued to WS Investment Company LLC (2022A), which is affiliated with Wilson Sonsini and is represented on the Company’s board of directors. Convertible notes in the principal aggregate amount of $0.5 million each were also issued to a then officer of the Company, an immediate family member of an officer and principal owner of the Company, and a trust to which an immediate family member of an officer and principal owner of the Company is a trustee.

Concurrently upon the closing of the IPO, the $75.1 million of convertible notes automatically converted into 1,177,087 shares of Class A common stock. At the time of the closing of the IPO, KDT was no longer represented on the Company’s board of directors. Refer to Note 14 – Subsequent Events for further information.

24

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

13. Commitments and Contingencies

Letter of Credit

The Company has a standby letter of credit with Silicon Valley Bank in the amount of $0.8 million as of March 31, 2024 in conjunction with leased real estate. As of March 31, 2024, no amounts had been drawn, and the Company was in compliance with the covenants under the letter of credit.

Tax Reserves

We conduct operations in many tax jurisdictions. In some of these jurisdictions, non-income-based taxes, such as sales and other indirect taxes, may be assessed on our operations. There is uncertainty and judgement as to the taxability of the Company’s services and what constitutes sufficient presence for a jurisdiction to levy such taxes.

The Company records tax reserves in other current liabilities on the condensed balance sheets when they become probable and the amount can be reasonably estimated. As of March 31, 2024 and December 31, 2023, the Company recorded an estimated tax reserve of $0.1 million and $0.6 million, respectively. Due to the estimates involved in the analysis, the Company expects that the liability will change over time and could exceed the current estimate. The Company may also be subject to examination by the relevant state taxing authorities.

14. Subsequent Events

Initial Public Offering

On April 22, 2024, the Company closed its IPO, in which it issued and sold 2,500,000 shares of Class A common stock at the IPO price. The Company received net proceeds of $197.5 million after deducting underwriting discounts and commissions of $13.2 million and offering costs of approximately $9.3 million. The Selling Stockholders offered an additional 4,060,700 shares of Class A common stock at the IPO price in a secondary offering, for which the Company received no proceeds. In connection with the secondary offering, on April 25, 2024, the underwriters for the IPO exercised their option to purchase an additional 984,105 shares of Class A common stock from the Selling Stockholders at the IPO price less underwriting discounts and commissions, with all proceeds going to the Selling Stockholders.

The following transactions occurred in connection with the IPO:

Capital Stock Conversion

Immediately prior to the effectiveness of the filing of our amended and restated certificate of incorporation (Restated Certificate) filed in connection with the IPO, the Company’s 17,245,954 shares of outstanding redeemable convertible preferred stock automatically converted into an equal number of shares of Class A common stock.

Common Stock Reclassification

In connection with the filing of our Restated Certificate, 9,511,741 shares of common stock were reclassified into an equal number of shares of Class A common stock.

Class B Stock Exchange

Immediately following the effectiveness of the filing of our Restated Certificate and common stock reclassification, 3,668,427 shares of the Company’s Class A common stock outstanding and beneficially owned by Bryan Leach, Chief Executive Officer and President, and certain related entities were exchanged for an equivalent number of shares of the Company’s Class B common stock. Each share of Class B common stock is entitled to 20 votes and is convertible at any time into one share of Class A common stock.

25

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

Convertible Notes Conversion

Concurrently upon closing of the IPO, $75.1 million of convertible notes automatically converted into 1,177,087 shares of Class A common stock. The conversion will be accounted for as a debt extinguishment, resulting in the recognition of a $9.6 million loss on extinguishment that represents the difference between the fair value of the shares issued and the carrying value of the notes and the embedded derivative liability. Prior to the extinguishment, a $1.4 million loss will be recognized from the change in fair value of the embedded derivative liability.

Stock-Based Compensation

In connection with the IPO, stock-based compensation expense associated with certain equity awards were impacted as follows:

Stock Options

Certain stock option awards previously granted to executives of the Company include a liquidity event-based vesting condition satisfied upon the effectiveness of a registration statement on Form S-1 under the Securities Act. The liquidity event-based vesting condition was satisfied on April 17, 2024 in connection with our IPO. We will record a $11.4 million cumulative stock-based compensation expense adjustment using the accelerated attribution method for which the service-based vesting condition had been satisfied.

Anti-Dilution Adjustment to Common Stock Warrant

In accordance with the non-discretionary anti-dilution provision of the Walmart Warrant, concurrently upon closing of the IPO, the number of shares exercisable increased by an amount equal to 12.4% of the total increase of the Company’s fully diluted capitalization since issuance. The Walmart Warrant shares increased by 592,457 shares to a new total of 4,121,034 shares, following the issuance of 1,177,087 shares of our Class A common stock upon the automatic conversion of the convertible notes and after taking into account option and restricted stock unit grants made following the issuance of the Walmart Warrant. The adjustment under the anti-dilution provision represents a modification under ASC 718 and $17.5 million of incremental stock-based compensation expense will be recorded.

Restricted Stock Units

On April 17, 2024, the Company issued 392,625 double-trigger awards to certain executives. As a result of the IPO, the liquidity event condition associated with all double-trigger awards was deemed probable as of the effectiveness of the registration statement on Form S-1 under the Securities Act on April 17, 2024. The Company will record a $2.6 million cumulative stock-based compensation expense adjustment using the accelerated attribution method associated with the double-trigger awards for which a portion of the service period had been satisfied and vested through achievement of the liquidity event condition upon the IPO.

On April 17, 2024, the Company issued a target number of RSUs to the CEO, totaling 125,216 RSUs, subject to both a service condition and a market condition. The market condition associated with the award is based on the performance of the Company’s total shareholder return (TSR) relative to the TSRs of the companies in the Russell 2000 Index during the performance period from the date of grant date through December 31, 2026. A percentage of the target number of RSUs, ranging from zero to 200%, will vest based on the percentile rank of the Company's TSR relative to that of the other companies in the index over the performance period. For purposes of calculating TSR, Company’s starting price will be the IPO price and the starting price for each company in the index will be the period of 60-trading days ending on the award’s grant date, and the ending price for us and for each company in the index will be the average closing price for the period of 60-trading days ending on the last day of the performance period.

26

Ibotta, Inc.

Notes to Condensed Financial Statements

(unaudited)

On April 17, 2024, the Company issued 27,270 RSUs to certain non-employee directors that vest annually over three years.

Equity Incentive Plans

In connection with the IPO, the 2011 Plan was terminated effective immediately prior to the effectiveness of the 2024 Equity Incentive Plan (2024 Plan) with no impact to outstanding awards previously granted. The 2024 Plan became effective on April 17, 2024, the date of the Prospectus. The 2024 Plan provides for the grant of stock options, restricted stock, RSUs, stock appreciation rights, performance units and performance shares to eligible employees, directors, and consultants.

Additionally, the Company’s board of directors adopted and approved the 2024 Employee Stock Purchase Plan (ESPP), and the ESPP became effective on April 17, 2024, the date of the Prospectus. Subject to any limitations contained therein, the ESPP allows eligible employees to contribute (in the form of payroll deductions or otherwise, to the extent permitted by the administrator) an amount established by the administrator from time to time in its discretion to purchase Class A common stock at a discounted price per share. There are 715,000 shares of Class A common stock reserved for issuance under the ESPP.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited annual financial statements and related notes for the year ended December 31, 2023, filed with the Securities and Exchange Commission (SEC) on April 18, 2024, pursuant to Rule 424(b) under the Securities Act of 1933, as amended (Prospectus). The following discussion contains forward-looking statements that reflect our plans, objectives, expectations, intentions, and beliefs, which involve risks and uncertainties. Our actual results may differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” included in Part II, Item 1A. Our historical results are not necessarily indicative of the results that may be expected for any period in the future, and our interim results are not necessarily indicative of the results we expect for the full fiscal year or any other period.

Overview

Ibotta is a technology company that allows consumer packaged goods (CPG) brands to deliver digital promotions to over 200 million consumers through a single, convenient network called the Ibotta Performance Network (IPN). We are pioneers in success-based marketing; we only get paid when our client’s promotion results in a sale, not when a consumer merely views or clicks on the promotion. We have built the largest digital item-level promotions network in the United States by forming strategic relationships with major retailers such as Walmart Inc., a Delaware corporation (Walmart), Dollar General Corporation, a Tennessee corporation (Dollar General), and Family Dollar, a Virginia corporation (Family Dollar), which use our digital offers to power their loyalty programs on a white-label basis. Through the IPN, our clients can also reach millions more consumers on our widely used rewards app digital properties, which include the Ibotta-branded cash back mobile app, website, and browser extension (collectively, Ibotta D2C).

Initial Public Offering

On April 17, 2024, our registration statement on Form S-1 (File No. 333-278172) related to our initial public offering (IPO) was declared effective by the SEC, and our Class A common stock began trading on the New York Stock Exchange (NYSE) on April 18, 2024. Our IPO closed on April 22, 2024. As a result, our condensed financial statements as of March 31, 2024 do not reflect the impact of our IPO. For additional information, see Note 14 – Subsequent Events to our condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Impact of Macroeconomic Conditions

Our business and results of operations are subject to global economic conditions. Our revenue depends on the ability of consumers to buy products that are featured on the IPN. Deteriorating macroeconomic conditions, including slower growth or a recession, inflation, bank failures, supply chain disruption, increases in interest rates, increases to fuel and other energy costs or vehicle costs, geopolitical events, including the potential for new or unforeseen conflicts such as the impact of the Russia and Ukraine conflict and Hamas and Israel conflict, changes in the labor market, or decreases in consumer spending power or confidence, are likely to result in a decline in client spending which could adversely affect the number of offer redemptions.

Management continues to actively monitor the impact of these macroeconomic factors on our financial condition, liquidity, operations, and workforce. For more information on risks associated with macroeconomic conditions, see the risk factor titled “Macroeconomic conditions, including slower growth or a recession and supply chain disruptions, have previously and could continue to adversely affect our business, financial condition, results of operations, and prospects.”

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Financial and Operational Highlights

	Three months ended March 31,
	2024			2023
	(in thousands, except percentages and per redeemer figures)
Redemptions(1)	71,466			43,273
Redeemers(1)	12,487			4,682
Redemptions per redeemer(1)	5.7			9.2
Redemption revenue per redemption(1)	$	0.95		$	0.96
Revenue	$	82,327		$	57,691
Gross profit	$	71,812		$	46,441
Gross margin	87		%	80		%
Net income (loss)	$	9,297		$	(4,283)
Net income (loss) as a percent of revenue	11		%	(7)		%
Adjusted EBITDA(1)	$	22,659		$	2,504
Adjusted EBITDA margin(1)	28		%	4		%

______________

(1)See section “Performance Metrics and Non-GAAP Measures” for more information and a reconciliation to the most directly comparable GAAP financial measure.

Performance Metrics and Non-GAAP Measures

We use the following key performance metrics and non-GAAP measures to help us evaluate our business, identify trends affecting our performance, and make strategic decisions. For more information regarding how we use non-GAAP measures in our business, the limitations of these measures, and a reconciliation of these measures to the most directly comparable GAAP financial measures, refer to the section titled “Non-GAAP Measures.”

Note that certain figures shown within this section may not recalculate due to rounding.

Performance Metrics

The performance metrics below are presented in two categories: direct-to-consumer (D2C) and third-party publishers, which sum to the total metric. The underlying trends and drivers of our D2C business often vary from those of our third-party publisher business. Our D2C business caters to consumers who are focused on savings, irrespective of the retailer. Our third-party publisher business tends to reach consumers who may be more loyal to a specific retailer and are engaging with offers powered by Ibotta’s technology platform. The explanation of the changes in the total metric can be found in the D2C and third-party publishers sections.

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	Three months ended March 31,
	2024		2023
	(in thousands, except per redeemer and per redemption figures)
Redemptions:
Direct-to-consumer redemptions	27,675		31,687
Third-party publisher redemptions	43,791		11,586
Total redemptions	71,466		43,273
Redeemers:
Direct-to-consumer redeemers	1,928		1,948
Third-party publisher redeemers	10,559		2,734
Total redeemers	12,487		4,682
Redemptions per redeemer:
Direct-to-consumer redemptions per redeemer	14.4		16.3
Third-party publisher redemptions per redeemer	4.1		4.2
Total redemptions per redeemer	5.7		9.2
Redemption revenue per redemption:
Direct-to-consumer redemption revenue per redemption	$	1.19	$	1.05
Third-party publisher redemption revenue per redemption	$	0.80	$	0.73
Total redemption revenue per redemption	$	0.95	$	0.96

Redemptions

A redemption is a verified purchase of an item qualifying for an offer by a client on the IPN. The number of redemptions are an indicator of the scale and consumer engagement of our business, as well as the value we bring to our clients and publishers. Generally, redemptions grow as we increase budget with existing clients and/or add new CPG brands as clients. In addition, redemptions grow from adding publishers and redeemers, and/or increasing engagement from existing redeemers.

D2C redemptions are redemptions on any Ibotta D2C property. Third-party publisher redemptions are redemptions on all publishers excluding the Ibotta D2C properties, namely our retailer publishers.

Ibotta D2C redemptions

For the three months ended March 31, 2024 compared to the same period in 2023, D2C redemptions were approximately 27.7 million and 31.7 million, respectively. The year-over-year decrease was driven by a decrease in the offers available.

Third-party publisher redemptions

For the three months ended March 31, 2024 compared to the same period in 2023, our third-party publisher redemptions were approximately 43.8 million and 11.6 million, respectively, primarily driven by the expansion of redemptions through Walmart, which initially launched in the third quarter of 2022 to members of Walmart’s paid membership program, Walmart+, and expanded to all Walmart customers with a Walmart.com account in the third quarter of 2023.

Total redemptions

For the three months ended March 31, 2024 compared to the same period in 2023, total redemptions were 71.5 million and 43.3 million, respectively.

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Redeemers

Redeemers are defined as consumers who have redeemed at least one digital offer within the quarter. If one consumer were to redeem on more than one publisher, they would be counted as a redeemer on each publisher. Redeemers are an indicator of the scale and growth of our business, as the number of redeemers typically drives our revenue and is an indication of our ability to grow redemptions.

D2C redeemers are consumers who have redeemed at least one digital offer on any Ibotta property within the quarter. Third-party publisher redeemers are consumers who have redeemed at least one digital offer on any publisher property that is not an Ibotta property, namely our retailer publishers.

Ibotta D2C redeemers

For the three months ended March 31, 2024 compared to the same period in 2023, D2C redeemers were 1.9 million and 1.9 million, respectively.

Third-party publisher redeemers

For the three months ended March 31, 2024 compared to the same period in 2023, third-party publisher redeemers were approximately 10.6 million and 2.7 million, respectively. These redeemers grow as we add third-party publishers and as these publishers ramp up consumers on their properties. The primary driver of growth the three months ended March 31, 2024 is driven by the expansion of the Walmart program, which initially launched in the third quarter of 2022 to members of Walmart’s paid membership program, Walmart+, and expanded to all Walmart customers with a Walmart.com account in the third quarter of 2023.

Total redeemers

For the three months ended March 31, 2024 compared to the same period in 2023, total redeemers were approximately 12.5 million and 4.7 million, respectively.

Redemptions per redeemer

Redemptions per redeemer are the redemptions divided by the redeemers in that period. This metric is useful as redemptions per redeemer is an indication of our redeemers’ level of engagement with our platform. We aim to grow redemptions from our redeemers by expanding the breadth of offers available and increasing engagement by continuing to improve the consumer experience. In general, redemptions per redeemer are driven by rewards content. For new redeemers, redemption frequency initially increases before stabilizing. Our D2C business caters to consumers who are focused on savings, irrespective of the retailer. Our third-party publisher business tends to reach consumers who may be more loyal to a specific retailer and are engaging with offers powered by Ibotta’s technology platform.

Ibotta D2C redemptions per redeemer

For the three months ended March 31, 2024 compared to the same period in 2023, D2C redemptions per redeemer were approximately 14.4 and 16.3, respectively, due to the quantity and quality of offers available to each D2C redeemer.

Third-party publisher redemptions per redeemer

For the three months ended March 31, 2024 compared to the same period in 2023, third-party publisher redemptions per redeemer were approximately 4.1 and 4.2, respectively.

Total redemptions per redeemer

For the three months ended March 31, 2024 compared to the same period in 2023, total redemptions per redeemer were approximately 5.7 and 9.2, respectively.

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Redemption revenue per redemption

Redemption revenue per redemption is the redemption revenue divided by the number of redemptions. Redemption revenue per redemption is an indication of our fee, which is generally charged as a fixed dollar amount per redemption. In any period, our redemption revenue per redemption can fluctuate based on the category mix of offers being redeemed and the impact of inflation on a product’s MSRP. Category mix can be impacted by factors such as seasonal promotions, including back-to-school items in the third quarter or holiday promotions on grocery and food items in the fourth quarter of each year. Our fee is generally charged as a fixed dollar amount per redemption based on the retail price of the specific item being promoted.

D2C redemption revenue per redemption represents redemption revenue generated from offers on any Ibotta property divided by the redemptions on any Ibotta property in that period. Third-party publisher redemption revenue per redemption represents redemption revenue generated from offers on all publishers other than those on Ibotta properties divided by redemptions on all publishers other than those on Ibotta properties. Refer to “Results of Operations” for the disaggregation of revenue by Ibotta D2C and third-party publisher.

Ibotta D2C redemption revenue per redemption

For the three months ended March 31, 2024 compared to the same period in 2023, D2C redemption revenue per redemption was $1.19 and $1.05, respectively, driven primarily by offer mix.

Third-party publisher redemption revenue per redemption

For the three months ended March 31, 2024 compared to the same period in 2023, third-party publisher redemption revenue per redemption was $0.80 and $0.73, respectively, driven primarily by offer mix.

Total redemption revenue per redemption

For the three months ended March 31, 2024 compared to the same period in 2023, total redemption revenue per redemption was $0.95, and $0.96, respectively.

Non-GAAP Measures

To supplement our condensed financial statements prepared and presented in accordance with U.S. generally accepted accounting policies (GAAP), we use certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA margin.

Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. These non-GAAP measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measures, but are included solely for informational and comparative purposes. Non-GAAP financial measures are subject to limitations and should be read only in conjunction with our condensed financial statements prepared in accordance with GAAP. In light of these limitations, management also reviews the specific items that are excluded from our non-GAAP measures, as well as trends in these items.

Adjusted EBITDA and Adjusted EBITDA Margin

We define Adjusted EBITDA as net income (loss), adjusted to exclude interest expense, net, depreciation and amortization expense, stock-based compensation expense, change in fair value of derivative, loss on equity investment, provision for income taxes, and other expense, net. We define Adjusted EBITDA margin as Adjusted EBITDA as a percent of revenue.

Adjusted EBITDA and Adjusted EBITDA margin are used by our management team as additional measures of our performance for purposes of business decision-making, including managing

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expenditures and developing budgets. Period-over-period comparisons of Adjusted EBITDA and Adjusted EBITDA margin help our management team identify additional trends in our financial results that may not be shown solely by comparisons of net income (loss) and net income (loss) as a percentage of revenue, respectively. In addition, we may use Adjusted EBITDA and Adjusted EBITDA margin in the incentive compensation programs applicable to some of our employees in order to evaluate our performance.

The following table provides a reconciliation of net income (loss) to Adjusted EBITDA and net income (loss) margin to Adjusted EBITDA Margin for each of the periods presented (in thousands, except percentages):

	Three months ended March 31,
	2024			2023
Net income (loss)	$	9,297		$	(4,283)
Interest expense, net	1,805			1,672
Depreciation and amortization (1)	1,909			1,615
Stock-based compensation (2)	4,845			1,829
Change in fair value of derivative	1,700			1,500
Provision for income taxes	3,101			166
Other expense, net (3)	2			5
Adjusted EBITDA	$	22,659		$	2,504
Revenue	$	82,327		$	57,691
Net income (loss) as a percent of revenue	11		%	(7)		%
Adjusted EBITDA margin	28		%	4		%

_______________

(1)Amortization of capitalized software development costs included in cost of revenue for the three months ended March 31, 2024 and 2023 was $0.9 million and $0.9 million, respectively.

(2)Amounts include stock-based compensation expense as follows (in thousands):

	Three months ended March 31,
	2024		2023
Cost of revenue	$	158	$	220
Sales and marketing	3,622		564
Research and development	553		527
General and administrative	512		518
Total stock-based compensation	$	4,845	$	1,829

(3)Other expense, net is comprised of loss (gain) on disposal of assets and penalties.

Breakage Benefit

On our balance sheet, we have 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. We estimate breakage at the time of user redemption and reduce the user redemption liability accordingly.

In 2023, we 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 months ended March 31, 2023, the breakage benefit to revenue

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totaled $1.2 million. There was no breakage benefit associated with the three months ended March 31, 2024. D2C redemption revenue declined 1% period-over-period; excluding the breakage benefit, D2C redemption revenue growth would have been 3%. Revenue growth period-over-period was 43%; excluding the breakage benefit, revenue growth would have been 46%.

Components of Results of Operations

Revenue

We provide a platform to CPG brands to deliver digital promotions to consumers. The majority of our revenues are derived from the fees we charge to clients when consumers redeem offers on the IPN by purchasing promoted products. We also derive revenue from the sale of ad products to customers to promote their offers, as well as from data products.

We expect our redemption revenue to increase as a percentage of revenue for the foreseeable future as we continue to grow the IPN.

Cost of revenue

Cost of revenue consists primarily of personnel-related costs attributable to personnel in our engineering department who maintain our platform, data hosting costs, certain user award costs net of breakage, amortization of platform-related software development costs, revenue share with third-party publishers, software licensing costs, and processing fees. Personnel-related costs include salaries, benefits, stock-based compensation, and bonuses. User award costs net of breakage recorded in cost of revenue are associated with awards earned from gift card purchases and sponsored user awards earned from watching an advertising video. Breakage represents the undistributed earnings of consumers never expected to be cashed out due to inactivity. User award costs also include user awards that are cashed out and subsequently identified as violating our terms of use.

We expect that cost of revenue will increase as we continue to invest in our infrastructure and acquire new publishers and customers.

Operating expenses

Sales and marketing

Sales and marketing expenses consist primarily of personnel-related costs for our sales and marketing departments, self-funded user awards, net of the related breakage, media spend, B2B marketing, common stock warrant expense, software licensing costs, market research, and public relations. Self-funded user awards are awards related to campaigns and other incentive bonuses on our D2C properties that are funded directly by Ibotta as part of our customer acquisition and retention strategy. Personnel-related costs include salaries, bonuses, benefits, taxes, stock-based compensation, and travel.

We expect that sales and marketing may increase for the foreseeable future as we continue to invest in marketing efforts to increase engagement and brand awareness. However, we expect sales and marketing expenses to decrease as a percentage of total revenue over time due to growth in revenue from third-party publishers.

Research and development

Research and development expenses consist primarily of personnel-related costs for our technology departments, software licensing costs, professional fees, and impairment of certain capitalized software development costs. Personnel-related costs include salaries, benefits, bonuses, taxes, stock-based compensation, and travel. We capitalize certain software development costs that are attributable to developing new features and adding incremental functionality to our platform or infrastructure. Costs incurred during the preliminary project stage and post-implementation operation stage are expensed as

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incurred in research and development expenses. In addition, impairment of in-progress software projects for which completion is subsequently determined not to be probable is recorded in research and development expenses.

We expect research and development may increase for the foreseeable future as we focus on further improvements to, and maintenance of, our platform. However, we expect our research and development expenses to decrease as a percentage of total revenue over time, although they may fluctuate as a percentage of total revenue from period to period.

General and administrative

General and administrative expenses consist primarily of personnel-related costs for our administrative departments, software licensing costs, professional fees for external legal, accounting and other consulting services, facilities costs, corporate insurance, taxes and licenses, and bad debt. Personnel-related costs include salaries, benefits, taxes, bonuses, stock-based compensation, and travel.

We expect to increase the size of our general and administrative function to support the growth of our business and may incur additional expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a U.S. securities exchange and costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC. In addition, as a public company, we expect to incur increased expenses such as insurance, investor relations, and professional services. As a result, we expect the dollar amount of our general and administrative expenses to increase for the foreseeable future. However, we expect our general and administrative expenses to decrease as a percentage of total revenue over time, although they may fluctuate as a percentage of total revenue from period to period.

We expect additional operating expenses following the IPO due to stock-based compensation expenses associated with stock awards for which liquidity event-based vesting conditions will be satisfied or probable upon such effectiveness.

Depreciation and amortization

Depreciation and amortization consists of depreciation of property and equipment and amortization of intangible assets, including infrastructure-related software development costs and acquired technology.

Interest expense, net

Interest expense, net consists of interest expense incurred on outstanding debt instruments, net of interest income earned on cash and cash equivalents.

Other expense, net

Other expense, net consists primarily of gains and losses incurred on both the convertible notes derivative liability and disposals of assets and leases and penalties.

Provision for income taxes

Provision for income taxes consists primarily of income taxes related to state jurisdictions in which we conduct business. Due to uncertainty as to the realization of benefits from our deferred tax assets, we have a full valuation allowance reserved against such assets. Based on our assessment of current income and anticipated future earnings, there is a reasonable possibility that we will have sufficient evidence to release the valuation allowance within the next 12 months. However, our judgment regarding future earnings and the exact timing of the valuation allowance release is subject to change due to many factors, including future market conditions and the ability to successfully execute our business plans.

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Results of Operations

The following tables set forth our results of operations in dollars for each of the periods presented (in thousands):

	Three months ended March 31,
	2024		2023
Revenue	$	82,327	$	57,691
Cost of revenue(1)	10,515		11,250
Gross profit	71,812		46,441
Operating expenses(1):
Sales and marketing	28,129		21,602
Research and development	13,641		11,695
General and administrative	13,154		13,334
Depreciation and amortization	983		752
Total operating expenses	55,907		47,383
Income (loss) from operations	15,905		(942)
Interest expense, net	(1,805)		(1,672)
Other expense, net	(1,702)		(1,503)
Income (loss) before provision for income taxes	12,398		(4,117)
Provision for income taxes	(3,101)		(166)
Net income (loss)	$	9,297	$	(4,283)

_______________

(1)Amounts include stock-based compensation expense as follows (in thousands):

	Three months ended March 31,
	2024		2023
Cost of revenue	$	158	$	220
Sales and marketing	3,622		564
Research and development	553		527
General and administrative	512		518
Total stock-based compensation	$	4,845	$	1,829

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Comparison of the three months ended March 31, 2024 and 2023

Revenue

	Three months ended March 31,				Change
	2024		2023		$		%
	(in thousands)
Direct-to-consumer revenue
Redemption revenue	$	32,982	$	33,271	$	(289)	(1)	%
Ad & other revenue	14,338		15,988		(1,650)		(10)	%
Total direct-to-consumer revenue	47,320		49,259		(1,939)		(4)	%
Third-party publishers revenue
Redemption revenue	35,007		8,432		26,575		315	%
Ad & other revenue	—		—		—		—	%
Total third-party publishers revenue	35,007		8,432		26,575		315	%
Total
Redemption revenue	67,989		41,703		26,286		63	%
Ad & other revenue	14,338		15,988		(1,650)		(10)	%
	$	82,327	$	57,691	$	24,636	43	%

Total redemption revenue increased $26.3 million, or 63%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, due to a $26.6 million increase in revenue from third-party publisher properties, partially offset by a $0.3 million decrease in revenue from the Ibotta D2C properties. The increase in revenue from third-party publishers is primarily driven by the expansion of revenue related to Walmart and Dollar General. Walmart initially launched in the third quarter of 2022 to members of Walmart’s paid membership program, Walmart+, and expanded to all Walmart customers with a Walmart.com account in the third quarter of 2023. Dollar General launched in the third quarter of 2023.

Ad & other revenue decreased $1.7 million, or 10%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, due to a shift in CPG client spend from ad products to redemption revenue and the deprecation of our consumer insights business.

Cost of Revenue

	Three months ended March 31,				Change
	2024		2023		$		%
	(in thousands)
Cost of revenue	$	10,515	$	11,250	$	(735)	(7)	%

Cost of revenue decreased $0.7 million, or 7%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, due to a $1.2 million decrease in personnel-related expenses resulting from an increase in capitalized labor, partially offset by a $0.3 million increase in data hosting costs and $0.2 million increase in revenue share.

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Sales and marketing

	Three months ended March 31,				Change
	2024		2023		$		%
	(in thousands)
Sales and marketing	$	28,129	$	21,602	$	6,527	30	%

Sales and marketing increased $6.5 million, or 30%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, due to increases of $3.0 million in stock-based compensation expense related to the common stock purchase warrant that we issued to Walmart on May 17, 2021 (Walmart Warrant), $2.6 million in B2B marketing, and $2.2 million in media spend, partially offset by a $1.3 million decrease in self-funded user awards. The increases in B2B marketing and media spend were driven by campaigns to build company brand awareness, while the decrease in self-funded user awards resulted from a shift in marketing strategy.

Research and development

	Three months ended March 31,				Change
	2024		2023		$		%
	(in thousands)
Research and development	$	13,641	$	11,695	$	1,946	17	%

Research and development increased $1.9 million, or 17%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, due to a $2.0 million increase in personnel-related expenses driven by an increase in headcount to support our growth.

General and administrative

	Three months ended March 31,				Change
	2024		2023		$		%
	(in thousands)
General and administrative	$	13,154	$	13,334	$	(180)	(1)	%

General and administrative decreased $0.2 million, or 1%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, due primarily to a decrease in professional fees, that was largely offset by increases in corporate insurance and personnel-related costs.

Depreciation and amortization

	Three months ended March 31,				Change
	2024		2023		$		%
	(in thousands)
Depreciation and amortization	$	983	$	752	$	231	31	%

Depreciation and amortization increased $0.2 million, or 31%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 due to an increase in capitalized software development costs.

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Interest expense, net

	Three months ended March 31,				Change
	2024		2023		$		%
	(in thousands)
Interest expense, net	$	1,805	$	1,672	$	133	8	%

Interest expense, net, increased $0.1 million, or 8%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, due to an increase in the SOFR interest rate on our outstanding convertible notes, largely offset by an increase in interest income on cash and cash equivalents.

Other expense, net

	Three months ended March 31,				Change
	2024		2023		$		%
	(in thousands)
Other expense, net	$	1,702	$	1,503	$	199	13	%

Other expense, net, increased $0.2 million, or 13%, during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 due to an increase in the fair value adjustment on our convertible notes derivative liability.

Provision for income taxes

	Three months ended March 31,				Change
	2024		2023		$		%
	(in thousands)
Provision for income taxes	$	3,101	$	166	$	2,935	NM(1)

_______________

(1)NM - not meaningful

Provision for income taxes increased $2.9 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 due to profitability in the current year.

Liquidity and Capital Resources

As of March 31, 2024, our principal sources of liquidity included $79.5 million of cash and cash equivalents and $50.0 million of available capacity under a revolving line of credit.

Our primary cash needs are for personnel-related expenses, sales and marketing expenses, user award payables, data hosting costs, and software licensing costs. We believe our existing liquidity will be sufficient to meet our projected operating and capital requirements for at least the next 12 months. Our future cash requirements will depend on many factors, including our pace of growth, the timing and extent of spend to support research and development efforts, the timing of cash collected from clients, the expansion of sales and marketing activities, the introduction of new and enhanced platform offerings, and the continuing market acceptance of the platform. As a result of these and other factors, we may be required to seek additional equity or debt financing. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us, or at all. Further, recent volatility in the global financial markets due to heightened inflation, rising interest rates, and geopolitical events, could

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reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to raise additional capital when desired, our business, financial condition, results of operations, and prospects would be adversely affected.

2021 Credit Facility

On November 3, 2021, we executed the Third Amended and Restated Loan and Security Agreement with Silicon Valley Bank, which consists of a $50.0 million revolving line of credit with a maturity date of November 3, 2025 (as amended, the 2021 Credit Facility). In the event of a public offering, the maturity date of the 2021 Credit Facility will be extended to November 3, 2026. As of March 31, 2024, we had no outstanding borrowings under the 2021 Credit Facility and $50.0 million of unused borrowings available.

Common Stock Warrant

On May 17, 2021, we issued the Walmart Warrant in connection with a multi-year strategic relationship that makes Ibotta the exclusive provider of digital item-level rebate offer content for Walmart U.S. If the shares available for exercise as of March 31, 2024 were fully exercised, the warrants could provide up to $136.1 million in proceeds to us, subject to certain adjustments. However, the exercisability of a portion of the Walmart Warrant is subject to certain performance conditions and we cannot make assurance that any such warrant will be exercised. For further details regarding the Walmart Warrant, see Note 7 - Redeemable Convertible Preferred Stock, Common Stock, Restricted Stock Purchase, and Common Stock Warrant to our condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Cash Flows

The following table summarizes our cash flows for the periods presented:

	Three months ended March 31,
	2024		2023
	(in thousands)
Net cash provided by operating activities	$	19,366	$	2,692
Net cash (used in) provided by investing activities	(2,467)		9,494
Net cash provided by financing activities	9		260
Net change in cash and cash equivalents	$	16,908	$	12,446

Operating Activities

Net cash provided by operating activities increased $16.7 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was largely a result of a $13.6 million increase in net income driven by an increase in revenue, adjusted for a $3.1 million increase in non-cash charges primarily driven by stock-based compensation expense for the Walmart Warrant.

Our collection cycles can vary based on payment practices from our clients, and we are required to pay our third-party publishers within a contractual timeframe, regardless of whether we have collected payment from our client. As a result, timing of cash receipts related to accounts receivable and due to third-party publishers can significantly impact our cash provided by (used in) operating activities for any period.

Investing Activities

Net cash used in investing activities decreased $12.0 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, driven by a $10.5 million decrease in

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maturities of short-term investments and a $1.3 million increase in additions to capitalized software development costs.

Financing Activities

Net cash provided by financing activities decreased $0.3 million during the three months ended March 31, 2024 compared to the three months ended March 31, 2023, driven by a $1.7 million increase in deferred offering costs, partially offset by a $1.5 million increase in proceeds from the exercise of stock options.

Material Cash Requirements

Operating leases

Our operating lease commitments include our corporate offices. As of March 31, 2024, we had noncancellable lease obligations of $2.9 million, of which $1.8 million is payable within 12 months. For additional discussion on our operating leases, refer to Note 10 – Operating Leases to our audited consolidated financial statements included in the Prospectus.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP. In preparing the condensed financial statements, we apply accounting policies and estimates that affect the reported amounts and related disclosures. Inherent in such policies are certain key assumptions and estimates made by management, which we believe best reflect the underlying business and economic events. Our estimates are based on historical experience and various other factors and assumptions that we believe are reasonable under the circumstances. We regularly re-evaluate our estimates used in the preparation of the consolidated financial statements based on our latest assessment of the current and projected business and economic environment. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and actual results could differ materially from the amounts reported based on these estimates.

There have been no material changes to our critical accounting policies and estimates as described in our Prospectus.

Item 4. Mine Safety Disclosures

Not applicable.

Recent Accounting Pronouncements

See Note 2 – Basis of Presentation and Summary of Significant Accounting Policies to our condensed financial statements included in Part I, Item 1, of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and inflation.

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Interest Rate Risk

We are exposed to interest rate risk through fluctuations of interest rates on our cash and cash equivalents and floating rate debt. As of March 31, 2024, we had cash and cash equivalents of $79.5 million, which consists of cash on hand and highly liquid investments in money market instruments. Changes in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations. Our convertible notes and line of credit bear interest at floating interest rates. Accordingly, if we incur debt in the future, including under the 2021 Credit Facility, rising interest rates could increase our borrowing costs.

Inflation Risk

We do not believe that inflation has had a material effect on our business, results of operations, or financial condition. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, financial condition, results of operations, or prospects.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer, principal financial officer, and principal accounting officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer, principal financial officer, and principal accounting officer have concluded that these disclosures controls were effective at a reasonable assurance level as of March 31, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, the effectiveness of any internal control over financial reporting is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in various legal proceedings arising from activities in the normal course of business. We also have received and may in the future receive claims asserting we are or may

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be infringing, misappropriating, or otherwise violating third-party intellectual property rights. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, financial condition, results of operations, and prospects. Defending any legal proceeding is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

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Item 1A. Risk Factors

Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks described below, as well as the other information included in this Quarterly Report on Form 10-Q, including our consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q, before making an investment decision. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations, and growth prospects. In such an event, the market price of our Class A common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations and the market price of our Class A common stock.

Our business is subject to numerous risks and uncertainties. These risks include, but are not limited to, the following:

•We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to continue to be profitable.

•Our business, financial condition, results of operations, and prospects will be adversely affected if we do not renew, maintain, and expand our relationships with existing publishers and add new publishers to the Ibotta Performance Network (IPN), or if our publishers experience (as they have previously) downturns, store closures, or failures of their own businesses, or fail to adopt our additional offerings or fulfillment methods.

•We are also dependent on our publishers to take steps to integrate with the IPN and to maximize and encourage offer redemption, including decisions relating to user experience and design, marketing, and proper maintenance of their technology.

•If we fail to maintain or grow offer redemptions on our network, our revenues and business may be negatively affected.

•Our business, financial condition, results of operations, and prospects will suffer if specific products or groups of products identified by particular names and owned by a company that sells consumer packaged goods, including in the grocery and general merchandise categories (CPG brands (or brands)) do not use our network for digital promotions.

•We may not be able to sustain our revenue growth rate in the future.

•We provide content to publishers indirectly through third-party technology partners and our business, financial condition, results of operations, and prospects will be adversely affected if we do not renew, maintain, and expand our relationships with such third-party technology partners.

•We expect a number of factors to cause our results of operations to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

•Macroeconomic conditions, including slower growth or a recession and supply chain disruptions, have previously affected and could continue to adversely affect our business, financial condition, results of operations, and prospects.

•Competition presents an ongoing threat to the success of our business.

•Our business, financial condition, results of operations, and prospects will suffer if we do not renew, maintain, and expand our relationships with retailers.

•If we fail to effectively manage our growth, our business, financial condition, results of operations, and prospects could be adversely affected.

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•We have a limited operating history and operate in an evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

•We are making substantial investments in our technologies, and if we do not continue to innovate and further develop our platform, our platform developments do not perform, or we are not able to keep pace with technological developments, we may not remain competitive, and our business and results of operations could suffer.

•We have previously identified material weaknesses in our internal controls over financial reporting and if we are unable to maintain effective internal controls or if we identify additional material weaknesses in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect our business, financial condition, results of operations, and prospects.

•The dual class stock structure of our common stock concentrates voting control with Bryan Leach, our Founder, Chief Executive Officer, President, and Chairman of our board of directors, which will generally preclude our stockholders’ ability to influence the outcome of matters submitted to our stockholders for approval, subject to limited exceptions, including the election of our board of directors, the adoption of amendments to our amended and restated certificate of incorporation and amended and restated bylaws (where adopted by stockholders), and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transactions.

•Although we do not expect to rely on the “controlled company” exemption under the listing standards of the New York Stock Exchange, we expect to have the right to use such exemption, and therefore we could in the future avail ourselves of certain reduced corporate governance requirements.

Risks Related to our Business

We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to continue to be profitable.

We have a history of net losses. For example, we incurred a net loss of $54.9 million for the year ended December 31, 2022, and as of December 31, 2023, we had an accumulated deficit of $209.2 million. While we achieved profitability for the fiscal year ended December 31, 2023, we may not be able to continue to be profitable. We expect our costs will increase over time as we expect to invest significant additional funds towards growing our business and operating as a public company. See the risk factor below titled “Operating and growing our business may require additional capital, and if capital is not available to us, our business, financial condition, results of operations, and prospects may suffer.” We have expended and expect to continue to expend substantial financial and other resources on developing our platform, including expanding our solutions, developing or acquiring new platform features and solutions, and increasing our sales and marketing efforts. These efforts may be more costly than we expect and may not result in increased revenue or growth in our business. Any failure to increase our revenue sufficiently to keep pace with our investments and other expenses could prevent us from achieving profitability or positive cash flow on a consistent basis. If we are unable to successfully address these risks and challenges as we encounter them, our business, financial condition, results of operations, and prospects could be adversely affected.

Our ability to maintain profitability is impacted by growth in our network and our ability to drive operational efficiencies in our business. Our efforts to maintain profitability may not succeed due to factors such as evolving consumer behavior trends in shopping, consumer engagement, and retention; our ability to maintain and expand our relationships with publishers, CPG brands, and retailers; our ability to hire and retain highly skilled personnel; unfavorable macroeconomic conditions (such as inflationary pressures); our ability to effectively scale our operations; and the continuing evolution of the industry. Many of these factors are beyond our control.

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Our ability to maintain profitability also depends on our ability to manage our costs. We have expended and expect to continue to expend substantial financial and other resources to:

•increase the engagement and investment levels of publishers, CPG brands, retailers, and consumers;

•increase the number and variety of publishers that participate in the IPN, including retailer publishers;

•grow our sales force, which we expect will increase our sales and marketing expense in the foreseeable future;

•negotiate favorable revenue sharing terms with third-party publishers;

•drive adoption of Ibotta through marketing and incentives and increase awareness through brand campaigns; and

•invest in our operations to continue scaling our business to achieve and sustain long-term efficiencies.

These investments may contribute to net losses in the near term. We may discover that these initiatives are more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these expenses or realize the benefits we anticipate. Certain initiatives may also require incremental investments or recurring expenses and may not be accretive to revenue growth, margin, or profitability for a longer time period, if at all. Many of our efforts to increase revenue and manage operating costs are new and unproven given the unique and evolving complexities of our business and the evolving nature of the industry. Any failure to adequately increase revenue or manage operating costs could prevent us from maintaining profitability. In addition, we may make concessions to publishers, CPG brands, and retailers that are designed to maximize profitability in the long term but may decrease profitability in the short term. As a result, the impact of concessions on our financial results may continue into future periods or have greater impacts than we anticipate. We may also incur higher operating expenses as we implement strategic initiatives, including in response to external pressures such as competition, retailer consolidation, and evolving consumer behavior trends in shopping. For example, we expect that sales and marketing will increase for the foreseeable future, primarily stemming from increased headcount and marketing efforts. Additionally, we may not realize, or there may be limits to, the efficiencies we expect to achieve through our efforts to scale the business, reduce friction in the direct-to-consumer (D2C) shopping experience, customer support, and consumer acquisition and onboarding costs. Our efforts to encourage the growth of loyalty programs on third-party publishers’ apps and websites may cause fewer consumers to use our D2C properties, leading to a loss of revenue and adversely affecting our financial position. We will also face greater compliance costs associated with the increased scope of our business and being a public company.

We may encounter unforeseen operating expenses, difficulties, complications, delays, and other factors, including as we expand our business, execute on strategic initiatives, and navigate macroeconomic uncertainty, which may result in losses or a failure to generate profitable growth in future periods.

As such, due to these factors and others described in this “Risk Factors” section, including the risk factor titled, “We may not be able to sustain our revenue growth rate in the future,” we may not be able to maintain profitability or generate profitable growth in the future. If we are unable to maintain profitability, the value of our business and the trading price of our Class A common stock may be negatively impacted.

Our business, financial condition, results of operations, and prospects will be adversely affected if we do not renew, maintain, and expand our relationships with existing publishers and add new publishers to the IPN, or if our publishers experience (as they have previously) downturns,

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store closures, or failures of their own businesses, or fail to adopt our additional offerings or fulfillment methods.

Our business, financial condition, results of operations, and prospects will be adversely affected if we do not renew, maintain, and expand our relationships with existing publishers and add new publishers to the IPN. We provide offers on a white-label basis to Walmart Inc., a Delaware corporation (Walmart), Dollar General Corporation, a Tennessee corporation (Dollar General), Shell plc, a United Kingdom public limited company (Shell), Exxon Mobil Corporation, a New Jersey corporation (Exxon), The Kroger Co., an Ohio corporation (Kroger), and other retailers. We have invested heavily in the IPN, which matches and distributes offers across a variety of publisher sites. Our contract negotiation process with such publishers can be lengthy, which can contribute to variability in our revenue generation and makes our revenue difficult to forecast. As a result, it is difficult to predict our ability to form new partnerships with publishers, and our revenue could be lower than expected, which would have an adverse effect on our business, financial condition, results of operations, and prospects.

We match and distribute our digital offers through large retailer publishers, grocery retailers, and our D2C properties. If we do not renew, maintain, and expand these relationships or add new publishers, our business will be negatively affected. We rely heavily on our publishers to match and distribute our digital promotions content, with a substantial portion of our white-label redemptions originating from offer selections on their websites and mobile applications. In particular, the Walmart Program Agreement we entered into with Walmart on May 17, 2021 (Walmart Program Agreement) is a multi-year arrangement and automatically renews for successive 24 month periods unless either party provides notice of termination at least 180 days prior to the expiration of the applicable period. The Walmart Program Agreement can be terminated by Walmart with at least 270 days’ notice to us (provided that Walmart cannot replace us during the then-remaining term of the Walmart Program Agreement with a digital offers program created by Walmart or a third party), and may be terminated under certain circumstances, including for material breach by either party. If Walmart terminated or elected not to renew the Walmart Program Agreement with us, our business, financial condition, results of operations, and prospects would be adversely affected.

Publishers may also ask to modify their agreement terms in a cost-prohibitive or strategically detrimental manner when their agreements are up for renewal. Our inability to maintain our relationships with our publishers on terms consistent with or better than those already in place and that are otherwise favorable to us could increase competitive pressure and/or offering pricing, and otherwise adversely affect our business, financial condition, results of operations, and prospects. Retailer consolidation may also result in a decrease in or cessation of engagement with Ibotta, or result in Ibotta receiving less favorable contract terms with the consolidated entity. Publishers have and could in the future also experience downturns, store closures, or failures (including due to macroeconomic pressures) of their own businesses, fail to adopt our additional offerings or fulfillment methods, or cease using Ibotta altogether for many reasons.

We are also dependent on our publishers to take steps to integrate with the IPN and to maximize and encourage offer redemption, including decisions relating to user experience and design, marketing, and proper maintenance of their technology.

We are dependent on publishers to integrate to the IPN since publishers have a significant amount of control over their integration to the IPN, including their user experience and marketing. We are also dependent on publishers’ timelines, and the amount of time, effort, and support provided by publishers and publishers’ third-party service providers to implement the IPN and to maintain their technology to support the IPN after integration, all of which can vary for each publisher. Certain decisions by publishers could result in an unsuccessful integration of a publisher to the IPN, lower user experience, or delay the addition of a publisher to the IPN, which would negatively impact our business, financial condition, results of operations, and prospects.

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We are also highly dependent on our publishers’ efforts to promote their loyalty programs and decisions they make relating to their loyalty programs, and we have limited ability, if any, to control and predict such decisions by publishers. We cannot control, and in many cases cannot predict, the timing of various publisher initiatives, such as the marketing of their loyalty programs, which may have an outsized impact on the number of redemptions occurring on their properties. For example, a failure of publishers to increase awareness and usage of offers on their loyalty programs could result in a reduced number of redemptions on our network.

If we fail to maintain or grow offer redemptions on our network, our revenues and business may be negatively affected.

Both the redeemers and our redeemers’ level of redemptions are critical to our success. As of March 31, 2024, total redeemers were approximately 12.5 million. For clarity, if one consumer were to redeem on more than one publisher, they would be counted as a redeemer on each publisher. We have in the past experienced fluctuations and declines in the pace of growth of redeemers and could in the future be unable to grow or increase the engagement of our redeemers, and as a result our business may suffer. If we are unable to maintain and expand the use by consumers of digital promotions in our network or if we do not do so to a greater extent than our competitors, publishers, CPG brands, and retailers may find that offering digital promotions on our network does not reach consumers with the scale and effectiveness that is compelling to them.

Any number of factors can negatively affect growth in the number of redeemers, redemptions per redeemer, and redemptions on our network, including if:

•our publishers, CPG brands, and retailers reduce, suspend, or terminate their relationship with us;

•we are unable to convince consumers of the value of the IPN and publishers of the value of white-label retailer loyalty programs that leverage our offers and technology;

•our publishers, CPG brands, and retailers do not devote sufficient time, resources, or funds to the promotion of our network and marketing of our digital promotions;

•CPG brands reduce their investment in offers and offer inventory suffers, which could occur for a variety of reasons, including reduced marketing budgets or supply chain disruptions, which have occurred from time to time with our CPG brands;

•we are unable to provide a broad range of valuable offers;

•we are unable to deliver a user-friendly experience to consumers;

•consumers increasingly use competitors’ platforms;

•consumers have difficulty installing, updating, or otherwise accessing our platform as a result of actions by us or third parties;

•there are concerns over consumer data practices, concerns about the nature of content made available on our products and offerings, or concerns related to privacy, security, or other factors;

•we are unable to manage and prioritize offers to ensure consumers are presented with offers that are appropriate, interesting, useful, and relevant to them;

•we adopt terms, policies, or procedures related to areas such as sharing, content, consumer data, or advertising, or we take, or fail to take, actions to enforce our policies, that are perceived negatively by consumers;

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•we undertake initiatives designed to attract and retain consumers, including the use of new technologies such as Artificial Intelligence (AI), that are unsuccessful or discontinued;

•we fail to provide adequate customer service to our publishers, CPG brands, retailers, and consumers; and

•we are unable to keep up with the rapid growth of the IPN, which could exhaust CPG brand offers too quickly, diminish the number of available offers, and reduce value for consumers.

From time to time, certain of these factors have negatively affected our redeemer and redemption growth. We need to ensure that our platform is convenient, rewarding, trustworthy, and personalized, and that we offer the most competitive offers within our ecosystem. If we are unable to successfully address these factors as we encounter them, or if we are unable to maintain or increase our redeemers and redemptions, it could have a material adverse impact on our business, financial condition, results of operations, and prospects.

Our business, financial condition, results of operations, and prospects will suffer if CPG brands do not use our network for digital promotions.

As of December 31, 2023, we have over 850 different clients. The success and scale of our network depend on our strategic relationships with CPG brands. If we are not able to attract consumers, including through third-party publishers’ white-label loyalty programs, CPG brands may not be willing to use our network for digital promotions. If we do not renew, maintain, and expand these relationships or add new CPG brands, we may not be able to grow our redemptions and our business will be negatively affected.

If our CPG brands terminate or reduce their relationships with us, or suspend, limit, or cease their operations or otherwise, our business, financial condition, results of operations, and prospects will suffer. From time to time, our CPG brands have reduced their investments with us. Also, since our contracts with CPG brands are generally less than one year long, there is a risk that CPG brands will not renew their contracts with us, which would also negatively affect our business, potentially materially.

If our CPG brands choose to materially alter the breadth, depth, or targeting parameters of the offers they provide to us for distribution throughout our network, this could cause unforeseen reductions in the number of redemptions.

Further, our revenue may fluctuate due to changes in marketing budgets of CPG brands. CPG brands can change and have changed their spend without notice, which can result in our inability to anticipate or forecast such fluctuations. For example, budget pressures or unspent budgets at the end of a CPG brand’s fiscal year may lead to unexpected reduced or increased spending on our network. In addition, CPG brands and media agencies may determine that other media tactics are more compelling and divert investment to such tactics instead of to digital promotions, leading to fewer offers. Our revenue may also fluctuate because of certain macroeconomic factors. For example, in the first half of 2022, our D2C redemptions per redeemer were negatively impacted due to supply chain constraints that made it difficult for our clients to keep their product on shelves and led to decreased promotions on high frequency purchased products.

CPG brands may also ask to modify their agreement terms in a cost-prohibitive or strategically detrimental manner when their agreements are up for renewal. Our inability to maintain our relationships with CPG brands on terms consistent with or better than those already in place and that are otherwise favorable to us could increase competitive pressure and/or offering pricing, and otherwise adversely affect our business, financial condition, results of operations, and prospects. CPG consolidation may also result in a decrease in or cessation of engagement with Ibotta or result in Ibotta receiving less favorable contract terms with the consolidated entity. CPG brands could also experience downturns or fail, including due to macroeconomic pressures or ceasing use of Ibotta altogether for many reasons. CPG brands have traditionally been slow to adopt new digital offer programs. As a result, we have at times experienced, and may continue to experience, slower adoption and implementation of our products and offerings by our

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current and potential CPG brands. If we lack a sufficient variety and supply of CPG brands or lack access to the most popular CPG brands such that Ibotta becomes less appealing to consumers and CPG brands, our business may be harmed.

We may not be able to sustain our revenue growth rate in the future.

Historically, the growth rate of our business, and as a result, our revenue growth, has varied from quarter to quarter and year to year, and we expect that variability to continue. For the three months ended March 31, 2024, our revenue was $82.3 million. There can be no assurances that our revenue will grow at current rates and you should not rely on the revenue of any prior quarterly or annual period as an indication of our future performance. Our revenue growth rate may decline in future periods.

Our revenue may fluctuate due to changes in the marketing budgets of existing and prospective clients, and the timing of their marketing spend. Our growth also depends on our publishers’ efforts to promote their digital offers programs. Existing and prospective clients can change and have changed their spend without notice, which can result in our inability to anticipate or forecast such fluctuations. For example, budget pressures or unspent budgets at the end of an existing or prospective client’s fiscal year may lead to unexpected reduced or increased spending on our network. It may also fluctuate because of certain macroeconomic factors as further described in the risk factor titled “Macroeconomic conditions, including slower growth or a recession and supply chain disruptions, have previously affected and could continue to adversely affect our business, financial condition, results of operations, and prospects.”

Our business is complex and evolving. We may offer new products and technologies, pricing, service models, and delivery methods to existing and prospective clients. These new capabilities may change the way we generate and/or recognize revenue, which could impact our operating results. In addition, if we shift a greater number of our arrangements with publishers, CPG brands, and retailers to new pricing models and we are not able to deliver on the results, our revenue growth and revenue could be negatively affected.

We believe that our continued revenue growth will depend on our ability to:

•increase and retain the number of publishers, CPG brands, and consumers that participate in the IPN;

•diversify the mix of our redemptions from publishers;

•increase the degree to which publishers market their white-label retailer loyalty programs;

•increase our share of advertisers on promotions and media (collectively, marketing spend) through our network;

•preserve and grow the fees we charge on a per redemption or percentage of total basket basis;

•preserve and grow our ad products and other business;

•provide publishers, CPG brands, retailers, and consumers with high-quality support that meets their needs;

•adapt to changes in marketing goals, strategies, and budgets of advertisers and the timing of their marketing spend;

•preserve and grow the rate of redemptions by consumers of their digital promotions;

•preserve or grow our ad products business as well as our data, media, and consumer insights revenue business;

•increase the number of and retain retailers;

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•expand our business in existing markets and enter new verticals, markets, and geographies;

•anticipate and respond to macroeconomic changes and changes in the markets in which we operate;

•adapt to rapidly evolving trends in the ways CPG brands, retailers, and consumers interact with technology;

•capitalize on the shift from offline to digital marketing and growth in e-commerce;

•deploy, execute, and continue to develop our analytics capabilities;

•expand the number, variety, quality, and relevance of digital promotions available on our network;

•increase the awareness of our brand to build our reputation;

•hire, integrate, train, and retain talented personnel;

•develop a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased usage, as well as the deployment of new features and solutions;

•identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our products and offerings;

•effectively manage the scaling of our operations;

•avoid interruptions or disruptions to our services; and

•compete successfully with existing and new competitors.

If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above, as well as those described elsewhere in this “Risk Factors” section, our business, financial condition, results of operations, and prospects could be adversely affected. Further, because we operate in a rapidly evolving market, any predictions about our future revenue and expenses may not be as accurate as they would be if we had a longer operating history or operated in a more predictable market. We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries. If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could suffer and our business, financial condition, results of operations, and prospects could be adversely affected.

We provide content to publishers indirectly through third-party technology partners and our business, financial condition, results of operations, and prospects will be adversely affected if we do not renew, maintain, and expand our relationships with such third-party technology partners.

In some cases, we provide content to publishers indirectly, via third-party technology partners, as in the cases of Kroger, Shell, and Exxon. We have also entered into an agreement with AppCard, through which Ibotta gained access to the digital audiences of more than 300 small- or medium-sized grocery retailers, as of April 8, 2024. If any of our third-party technology partners terminate or reduce their relationships with us, or suspend, limit, or cease their operations or otherwise, we will not be able to reach certain retailers and our business, financial condition, results of operations, and prospects will suffer.

Our business, financial condition, results of operations, and prospects will be adversely affected if we do not renew, maintain, and expand our relationships with our third-party technology partners. Our ability to deliver offers at-scale is dependent on adding new third-party technology partners and maintaining our existing third-party technology partners. Our contract negotiation process with such third-party technology partners can be lengthy, which can contribute to variability in our revenue generation. As a result, it is

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difficult to predict our ability to form new partnerships with third-party technology partners and our revenue could be lower than expected, which would have an adverse effect on our business, financial condition, results of operations, and prospects.

Third-party technology partners may also ask to modify their agreement terms in a cost-prohibitive or strategically detrimental manner when their agreements are up for renewal. Our inability to maintain our relationships with our third-party technology partners on terms consistent with, or better than, those already in place and that are otherwise favorable to us could increase competitive pressure and/or offering pricing, and otherwise adversely affect our business, financial condition, results of operations, and prospects.

We expect a number of factors to cause our results of operations to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.

Our results of operations have historically varied from period to period, and we expect that our results of operations will continue to vary significantly from quarter to quarter and year to year because of a variety of factors, many of which are outside of our control. As a result, comparing our results of operations on a period-to-period basis may not be meaningful. In addition to other risk factors described elsewhere in this “Risk Factors” section, factors that may contribute to the variability of our quarterly and annual results include:

•our ability to attract and retain publishers, CPG brands, and retailers that use our network and convert their activity into sales;

•the mix of our redemptions among our publishers;

•the mix of redemptions among different CPG brands, which have different fee arrangements;

•our ability to accurately forecast revenue and appropriately plan expenses;

•our ability to respond favorably to existing or new competitors in our market;

•increases in publisher concentration;

•our ability to expand into new CPG brand verticals and new third-party publisher verticals;

•increases in marketing, sales, and other operating expenses, including those that are incurred to acquire and retain new publishers, CPG brands, consumers, and retailers;

•the percent of our fee that we share with our publishers;

•the impact of worldwide economic conditions, including inflation, rising interest rates, supply chain disruptions, geopolitical events, such as the conflicts involving Russia and Ukraine and Hamas and Israel, and the resulting effect on consumer spending and consumer confidence;

•the impact of inflation on redemption revenue;

•the quality and quantity of offers available;

•fluctuations in transaction costs associated with processing consumer cash outs;

•evolving fee arrangements with publishers and CPG brands;

•the seasonality of our business;

•our ability to maintain an adequate rate of growth and effectively manage that growth;

•our ability to maintain and increase traffic to our network;

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