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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-27 · 204 added, 255 removed, 330 unchanged (58% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included in Item 8.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included in Item 8.

Financial Statements and Supplementary Data to this Annual Report on Form 10-K.

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The following discusses our financial condition and the results of operations as of and for the year ended December 31, 2025 compared to the year ended December 31, 2024.

For a discussion of our financial condition and the results of operations as of and for the year ended December 31, 2023 compared to the year ended December 31, 2022, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within our final prospectus dated April 17, 2024, filed with the SEC pursuant to Rule 424(b)(4) (Prospectus) under the Securities Act.

For a discussion of our financial condition and the results of operations as of and for the year ended December 31, 2024 compared to the year ended December 31, 2023, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27, 2025, which is incorporated herein by reference.

Ibotta’s mission is to Make Every Purchase Rewarding.

We accomplish this mission by delivering digital promotions to clients through the Ibotta Performance Network (IPN).

Through the IPN, we source

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digital promotions from our clients, primarily consumer packaged goods (CPG) brands, and distribute these promotions to consumers via our network of publishers, enabled by our technology platform.

We accomplish this mission by delivering digital promotions to consumers through the Ibotta Performance Network (IPN).

We source digital promotions from our clients, which are primarily consumer packaged goods (CPG) brands, and distribute these promotions to consumers via our network of publishers, which is enabled by our technology platform.

We have strategic relationships with Walmart Inc.

(Walmart), Dollar General Corporation (Dollar General), Family Dollar, a subsidiary of Dollar Tree, Inc.

(Walmart), Dollar General Corporation (Dollar General), Family Dollar Stores, Inc.

(Family Dollar), Maplebear, Inc.

(Instacart), and DoorDash, Inc.

(announced in January 2025 but not yet launched) among others, who are third-party publishers on the IPN and use our digital offers to power their loyalty programs on a white-label basis.

We also host offers on Ibotta’s direct-to-consumer properties, which include the Ibotta-branded cash back mobile app, website, and browser extension (collectively, Ibotta D2C, which is part of the IPN).

Within Ibotta D2C, we also partner with affiliate networks to allow consumers to earn cash back on a percentage of their total basket spend at certain retailers.

As of December 31, 2024, we had over 830 clients, representing over 2,600 CPG brands, to source exclusive digital offers.

Most of our offers cover products in non-discretionary categories, such as grocery, but we continue to grow our general merchandise categories, such as toys, clothing, beauty, electronics, pet, home goods, and sporting goods.

(DoorDash), among others, who are third-party publishers on the IPN and use our content to power their digital offer programs on a white-label basis.

We also host offers on Ibotta’s direct-to-consumer properties, which include the Ibotta-branded cash back mobile app, website, and browser extension (collectively, direct-to-consumer (D2C), which is part of the IPN).

Within D2C, we also partner with affiliate networks to access offers from certain retailer advertisers so consumers can earn cash back on a percentage of their total basket spend at those retailers.

In 2025, we introduced LiveLift™, a set of capabilities designed to help brands drive incremental sales at scale in a more cost-efficient manner.

LiveLift™ enables more sophisticated projections and profitability metrics, including incremental sales and CPID, to help our clients achieve the desired scale or efficiency for their promotions.

We also have partnerships with Circana and ABCS Insights, which allow our clients to obtain third-party validation of the impact of their digital promotion campaigns via sales lift studies.

As of December 31, 2025, we worked with over 900 clients, representing over 3,100 CPG brands, to source exclusive digital offers.

Most of our offers cover products in non-discretionary categories, such as grocery, but we also source offers for general merchandise categories, such as toys, clothing, beauty, electronics, pet, and home goods.

Initial Public Offering

On April 22, 2024, we closed our initial public offering (IPO), in which we issued and sold 2,500,000 shares of our Class A common stock at $88.00 per share (IPO price).

On April 22, 2024, we closed our initial public offering (IPO), in which we issued and sold 2,500,000 shares of our Class A common stock at $88.00 per share.

We received net proceeds of $198.0 million after deducting underwriting discounts and commissions of $13.2 million and offering costs of approximately $8.8 million.

Certain selling stockholders (Selling Stockholders) offered an additional 4,060,700 shares of our Class A common stock at the IPO price in a secondary offering, for which we 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 our 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.

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Impact of Macroeconomic Conditions

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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, changes in the U.S.

presidential administration, bank failures, supply chain disruption, increases in interest rates, increases to fuel and other energy costs or vehicle costs, a potential U.S.

federal government shutdown, geopolitical events, including escalating tariff and non-tariff trade measures imposed by the U.S., Mexico, China, Canada and other countries, the potential for new or unforeseen conflicts, changes in the labor market, or decreases in consumer spending power or confidence, could lower promotional budgets and result in a decline in client spending which could adversely affect the number of offer redemptions on our network.

Deteriorating macroeconomic conditions could lower promotional budgets and result in a decline in client spending, which could adversely affect the number of offer redemptions on our network.

Management continues to actively monitor the impact of these macroeconomic factors on our financial condition, liquidity, operations, and workforce.

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Our current and future financial performance is primarily driven by the following factors:

Ability to source offers.

Securing offers from our CPG clients is critical to the ongoing success of the IPN.

We seek to grow the number of offers on the IPN.

We also focus on deepening each offer budget which allows that offer to remain active longer before reaching its budget cap, as well as broadening each offer’s parameters by including as many qualifying products as possible and imposing as few restrictions on offer distribution as possible, consistent with the marketing objectives the client has for any given campaign.

These quantitative and qualitative dimensions of our offer inventory are highly

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correlated to our ability to attract and retain publishers and redeemers.

As we add publishers, we reach a larger, more engaged audience, and as a result, we typically see higher redemptions.

Increasing the number of offers on our platform is often the result of expanding budgets with existing clients and adding new clients or additional brands within an existing client’s portfolio.

Winning more publishers presents more opportunities to increase our share of marketing budgets from more CPG brands.

We may also expand our offer inventory by continuing to penetrate general merchandise categories such as toys, clothing, beauty, electronics, pet, home goods, and sporting goods.

We increase the number and quality of offers on the IPN through the efforts of our client-focused sales teams and business-to-business focused marketing.

Ability to grow redeemers.

Ability to add offer supply.

Securing offers from clients is critical to the ongoing success of the IPN.

We seek to grow the quantity and quality of offers on the IPN by deepening offer budgets and broadening offer parameters to include more qualifying products and fewer restrictions on offer distribution, consistent with the client’s marketing objectives.

These quantitative and qualitative dimensions of our offer inventory are highly correlated to our ability to attract and retain publishers and redeemers.

We may also expand our offer inventory by continuing to penetrate general merchandise categories.

We increase the quantity and quality of offers on the IPN through the efforts of our client-focused sales teams and business-to-business marketing.

Ability to grow our audience.

Our relevance and value to clients depends on our ability to reach a growing audience of consumers who have the potential to become redeemers.

Growing our consumer base, whether on our third-party publishers or D2C properties, is dependent on our ability to provide an attractive set of offers within our ecosystem and support seamless redemption experiences.

Our ability to deliver offers at-scale will continue to depend on maintaining and growing usage of offers within our existing publishers and adding new publishers to the IPN.

For example, we added Walmart as a retailer publisher in August 2022.

More recently, we formed strategic partnerships with other major retailers, such as Dollar General, Family Dollar, Instacart, and DoorDash.

We have been able to foster and develop multi-year relationships with our retailer publishers, and we intend to further grow our audience by growing redeemers on existing third-party publisher properties, adding new third-party publishers in retail and grocery, and expanding into new categories of publishers.

Growing our consumer base, whether on our third-party publisher or D2C properties, depends on our ability to provide an attractive set of offers within our ecosystem and support seamless redemption experiences.

Our ability to deliver offers at-scale will continue to depend on maintaining and growing redemptions at existing publishers and adding new publishers to the IPN.

We have been able to foster and develop multi-year relationships with our retailer publishers, such as Walmart, Dollar General, Family Dollar, Instacart, and DoorDash.

We intend to further grow our audience by growing redeemers at existing third-party publishers, adding new third-party publishers in retail and grocery, and expanding into new categories of publishers.

Ability to enhance the IPN through innovation.

We will continue to invest in technology to further develop and accelerate the growth of the IPN for CPG brands, retailers, publishers, and consumers.

We will continue to invest in technology to further develop and accelerate the growth of the IPN for clients, retailers, publishers, and consumers.

We have invested and expect to continue to invest in expanding our technologies, tools, and offerings to capitalize on new and unproven business opportunities.

For example, we are in the process of shifting the performance metric by which our clients can track their campaigns.

We are also building a campaign manager product through which our clients can set up, measure, and optimize their campaigns with us, and we plan to use AI to recommend and optimize campaign configurations rather than having our sales team manually set parameters with our clients.

For example, in 2025, we introduced LiveLift™, a set of capabilities that enables more sophisticated projections and profitability metrics, including incremental sales and CPID, to help our clients achieve the desired scale or efficiency for their promotions.

We plan to continue rolling out LiveLift™ to our client base, allowing for increased frequency of campaign measurement and greater optimization capabilities.

We plan to continue to use AI/ML to recommend and optimize campaign configurations rather than having our sales team manually set parameters with our clients.

As the data generated from the IPN grows, we believe Ibotta will generate more valuable insights about purchase behavior and market trends, and will be able to further enhance our tools and technologies.

We intend to enable clients to continue to leverage our AI/ML-powered tools to run success-based marketing programs that achieve our clients’ goals.

These investments and initiatives may negatively impact our short-term financial results.

As the data generated by the IPN grows, we believe Ibotta will generate more valuable insights about purchase behavior and market trends, and may be able to automatically optimize recommendations for consumers as well as campaigns for clients based on real-time data from across the network.

We intend to enable CPG brands to leverage our Artificial Intelligence (AI)-powered tools to run success-based marketing programs that achieve their specific goals.

CPG brands may also be able to create digital offer campaigns programmatically via other buying platforms.

Our results of operations vary from quarter to quarter, largely due to the seasonal nature of our clients’ marketing spending.

Our clients tend to devote a significant portion of their marketing budgets to the fourth quarter of the calendar year to coincide with consumer holiday spending and reduce their marketing budgets in the first quarter of the calendar year.

At the same time, certain of our clients’ budgets may deplete over the course of the year.

We have historically experienced heightened consumer activity during holidays, which results in higher redemptions on a relative basis.

We typically see high redemption volume in the second half of the year where a larger number of offers being redeemed have lower redemption revenue per redemption.

We believe seasonality may continue to impact our quarterly results going forward.

At the same time, certain of

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our clients’ budgets may deplete over the course of the year.

We have historically experienced heightened consumer activity during holidays, which resulted in higher redemptions on a relative basis.

We typically see high redemption volume in the second half of the year where a larger number of offers being redeemed have lower redemption revenue per redemption.

Although during the year ended December 31, 2025, we did not see the same seasonality we have historically seen, we expect seasonality may continue to impact our quarterly results going forward.

Financial and Operational Highlights

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Redeemers (1)

18,249 14,673

Redemptions per redeemer (1)

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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 budgets with existing clients and/or add new CPG brands as clients.

The number of redemptions is 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 change as budgets increase or decrease with existing clients and/or as we add or lose 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

D2C redemptions are redemptions on any D2C property.

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

D2C redemptions

In 2025 and 2024, D2C redemptions were approximately 85.0 million and 116.1 million, respectively.

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In 2025 and 2024, our third-party publisher redemptions were approximately 255.8 million and 228.0 million, respectively.

This growth was primarily driven by the expansion of the Walmart program, which

This growth was driven primarily by the launch of new publishers, namely

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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 September 2023.

In addition, Dollar General launched in the third quarter of 2023, Family Dollar launched in the second quarter of 2024, and Instacart launched in the fourth quarter of 2024.

Instacart and DoorDash, partially offset by modest declines at existing third-party publishers.

The decline in existing third-party publisher redemptions is due to a decrease in the quantity and quality of offers available to each third-party publisher redeemer.

Total redemptions

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If one consumer were to redeem on more than one publisher, they would be counted as a redeemer on each publisher.

Annual redeemers are calculated as the average redeemers of the last four quarters.

Year-to-date redeemers are calculated as the average of current year quarter-to-date redeemers.

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 year.

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

D2C redeemers

In 2025 and 2024, D2C redeemers were 1.6 million and 1.9 million, respectively.

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These redeemers grow as we add third-party publishers and as these publishers ramp up consumers on their properties.

This growth was primarily 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 September 2023.

In addition, Dollar General launched in the third quarter of 2023, Family Dollar launched in the second quarter of 2024, and Instacart launched in the fourth quarter of 2024.

This growth was driven primarily by the launch of new partners, namely Instacart and DoorDash, and growth at certain existing third-party publishers.

Total redeemers

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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.

This metric is useful as redemptions per redeemer is an indication of our redeemers’ level of engagement with our platform and network.

We aim to grow redemptions from our redeemers by expanding the breadth and depth of offers available and increasing engagement by continuing to improve the consumer experience.

In general, redemptions per redeemer are driven by offer supply and the growth in offer supply relative to the growth of redeemers.

In general, redemptions per redeemer are driven by the quantity and quality of offer supply and the growth in offer supply relative to the growth in redeemers.

For new redeemers, redemption frequency initially increases before stabilizing.

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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

Third-party publisher redeemers tend to have a lower redemption frequency as compared to D2C redeemers.

D2C redemptions per redeemer

In 2025 and 2024, D2C redemptions per redeemer were approximately 52.1 and 62.3, 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 the redemption revenue divided by the number of redemptions in that period.

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 manufacturer’s suggested retail price (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.

In any period, our redemption revenue per redemption can fluctuate based on the product category mix of offers being redeemed and the impact of inflation on a product’s manufacturer’s suggested retail price (MSRP) .

Product 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.

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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 the Results of Operations section below for the disaggregation of revenue by Ibotta D2C and third-party publisher.

Ibotta D2C redemption revenue per redemption

Refer to the Results of Operations section below for the disaggregation of revenue by D2C and third-party publisher.

D2C redemption revenue per redemption

In 2025 and 2024, D2C redemption revenue per redemption was $1.11 and $1.11, respectively.

This change was driven primarily by the one-time breakage benefit of $13.5 million incurred during the year ended December 31, 2023, partially offset by offer mix.

See the Breakage Benefit section below for more details.

Third-party publisher redemption revenue per redemption

In 2025 and 2024, third-party publisher redemption revenue per redemption was $0.79 and $0.79, respectively.

This change was driven primarily by offer mix.

Total redemption revenue per redemption

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Non-GAAP Measures

To supplement our consolidated 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.

To supplement our financial statements prepared and presented in accordance with U.S.

generally accepted accounting principles (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.

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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 consolidated financial statements prepared in accordance with GAAP.

Non-GAAP financial measures are subject to limitations and should be read only in conjunction with our 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.

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Adjusted EBITDA and Adjusted EBITDA Margin

We define Adjusted EBITDA as n et i ncome (loss), adjusted to exclude interest (income) expense, net, depreciation and amortization expense, stock-based compensation expense, change in fair value of derivative, loss on debt extinguishment, provision for (benefit from) income taxes, and other expense, net .

Adjusted EBITDA is earnings before interest income, net, provision for (benefit from) income taxes, and depreciation and amortization expense, and excludes stock-based compensation expense, change in fair value of derivative, loss on debt extinguishment, restructuring charges, and other expense, net .

We define Adjusted EBITDA margin a s Adjusted EBITDA as a percent of revenue.

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

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 and net income 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 n et income (loss) to Adjusted EBITDA and n et income (loss) as a percentage of revenue to Adjusted EBITDA margin for each of the periods presented (in thousands, except percentages):

The following table provides a reconciliation of n et income to Adjusted EBITDA and n et income as a percentage of revenue to Adjusted EBITDA margin for each of the periods presented (in thousands, except percentages):

Year ended December 31,

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Add (deduct):

Interest (income) expense, net

Interest income, net

(10,781) (9,414)

Provision for (benefit from) income taxes

6,272 (44,246)

Depreciation and amortization (1)

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Loss on debt extinguishment — 9,686

Provision for (benefit from) for income taxes

(44,246) 5,934

Restructuring charges

Other expense, net (3)

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(1) A mortization of capitalized software development costs included in cost of revenue during the years ended December 31, 2025 and 2024 was $4.4 million and $4.1 million , respectively.

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

(2) Amounts include stock-based compensation expense, inclusive of common stock warrant expense within sales and marketing, as follows (in thousands):

Year ended December 31,

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Total stock-based compensation $ 52,906 $ 76,216

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

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

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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.

In 2023, the breakage benefit to revenue totaled $13.5 million.

There was no breakage benefit in 2024.

Components of Results of Operations

We provide a platform to CPG brands to deliver digital promotions to consumers.

We provide a platform to clients 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 clients to promote their offers, as well as from data products.

We expect our redemption revenue to increase as a percentage of revenue as we continue to grow the IPN and ad and other revenue to continue to decrease as a percentage of revenue.

We also derive revenue from the sale of ad products to clients to promote their offers, as well as from the sale of data products.

We expect our redemption revenue to increase as a percentage of total revenue as we continue to grow the IPN and conversely ad and other revenue to decrease as a percentage of total revenue.

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, revenue share with third-party publishers, amortization of platform-related software development costs, certain user award costs net of breakage, 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.

Cost of revenue consists primarily of revenue share and related minimum commitments with certain third-party publishers, personnel-related costs attributable to personnel in certain of our engineering departments who maintain our platform, data hosting costs, amortization of platform-related software development costs, certain reward costs net of breakage, software licensing costs, and processing fees.

Personnel-related costs include salaries, stock-based compensation, benefits, and bonuses.

Reward costs net of breakage recorded in cost of revenue are associated with cash back earned from gift card purchases and sponsored rewards earned from watching an advertising video.

Breakage represents the undistributed earnings of D2C consumers that is not 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 cost of revenue to increase as we continue to invest in our infrastructure and acquire new publishers and clients.

Reward costs also include rewards that are cashed out and subsequently identified as violating our terms of use.

We expect cost of revenue to increase as we continue to invest in our platform, acquire new publishers, and grow revenue.

Operating expenses

Sales and marketing

Sales and marketing expenses consist primarily of personnel-related costs for our sales and marketing departments, common stock warrant expense, self-funded user awards, net of the related breakage, media spend, B2B marketing, software licensing costs, market research, and public relations.

Personnel-related costs include salaries, stock-based compensation, bonuses, benefits, taxes, and travel.

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.

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, although they may fluctuate as a percentage of total revenue from period to period.

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Sales and marketing expenses consist primarily of personnel-related costs for our sales and marketing departments, self-funded rewards, net of the related breakage, media spend, business-to-business (B2B) marketing, common stock warrant expense, software licensing costs, market research, public relations, and professional fees.

Personnel-related costs include salaries, bonuses, stock-based compensation, benefits, taxes, travel, and restructuring charges.

Self-funded rewards 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.

We expect sales and marketing expenses to increase as we continue to invest in our sales function, as well as B2B marketing and third-party measurement studies.

However, these expenses may fluctuate as a percentage of total revenue from period to period.

Research and development

Research and development expenses consist primarily of personnel-related costs for our technology departments, software licensing costs, impairment of capitalized software development costs, and professional fees.

Personnel-related costs include salaries, stock-based compensation, benefits, taxes, bonuses, and travel.

Research and development expenses consist primarily of personnel-related costs for our technology departments, software licensing costs, professional fees, impairment of capitalized software development costs, and market research.

Personnel-related costs include salaries, stock-based compensation, benefits, taxes, bonuses, restructuring charges, 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 incurred in research and development expenses.

Costs incurred during the preliminary project stage are recorded in research and development.

Costs incurred during the post-implementation stage are recorded in research and development or cost of revenue, depending on the nature of the project.

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 to increase 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.

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We expect research and development expenses to remain relatively flat as we anticipate increased capitalization related to software development projects.

However, these expenses 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, bad debt, and taxes and licenses.

Personnel-related costs include stock-based compensation, salaries, benefits, bonuses, taxes, and travel.

We expect to increase the size of our general and administrative function to support the growth of our business, including increased facilities costs, and expect to continue to incur additional expenses as a result of operating as a public company.

In addition, as a public company, we expect to continue 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.

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.

General and administrative expenses consist primarily of personnel-related costs for our administrative departments, professional fees for external legal, accounting, and other consulting services, software licensing costs, facilities costs, corporate insurance, bad debt, taxes, licenses, and other fees, and company events.

Personnel-related costs include stock-based compensation, salaries, benefits, bonuses, taxes, recruiting fees, travel, and restructuring charges.

We expect general and administrative expenses to increase to support the growth of our business.

However, these expenses may fluctuate as a percentage of total revenue from period to period.

Depreciation and amortization

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

Interest income (expense), net

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

We expect depreciation to increase as we invest in the development of our infrastructure-related software and as a result of the increase in depreciation related to our new corporate headquarters.

Interest income, net

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

Loss on debt extinguishment

Loss on debt extinguishment consists of the loss incurred upon the conversion of the convertible notes into shares of our Class A common stock concurrently upon the closing of the IPO.

Other expense, net

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

Benefit from (provision for) income taxes

The benefit from (provision for) income taxes consists primarily of income taxes related to federal and state jurisdictions in which we conduct business, with the exception of the fourth quarter of 2024 when we released our valuation allowance on our deferred tax assets.

Other expense, net consists of losses on the convertible notes derivative liability, penalties, and gains and losses on the disposal of assets.

(Provision for) benefit from income taxes

The (provision for) benefit from income taxes consists primarily of income taxes related to federal and state jurisdictions in which we conduct business, with the exception of 2024 when we released our valuation allowance on our deferred tax assets.

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Results of Operations

The following tables set forth our results of operations in dollars and as a percentage of total revenue for each of the periods presented:

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

Year ended December 31,

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Total operating expenses 272,175 289,208

Income from operations 27,925 55,999

Interest income (expense), net 9,414 (6,884)

(Loss) income from operations (841) 27,925

Interest income, net 10,781 9,414

Loss on debt extinguishment — (9,686)

Other expense, net (93) (3,157)

Income before benefit from (provision for) income taxes 24,496 44,051

Benefit from (provision for) income taxes 44,246 (5,934)

Income before (provision for) benefit from income taxes 9,847 24,496

(Provision for) benefit from income taxes (6,272) 44,246

Net income $ 3,575 $ 68,742

_______________

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

(1) Amounts include stock-based compensation expense, inclusive of common stock warrant expense within sales and marketing, as follows (in thousands):

Year ended December 31,

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Comparison of the year ended December 31, 2024 and 2023

Comparison of the years ended December 31, 2025 and 2024

Year ended December 31, Change

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Total revenue $ 342,389 $ 367,254 $ (24,865) (7) %

Total redemption revenue increased $64.9 million, or 27%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, due to a $100.1 million increase in revenue from third-party publishers, partially offset by a $35.1 million decrease in revenue from the Ibotta D2C properties.

The increase in third-party publishers revenue was primarily driven by the expansion of revenue related to Walmart, Dollar General, Family Dollar, and Instacart.

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 September 2023.

Dollar General launched in the third quarter of 2023, Family Dollar launched in the second quarter of 2024, and Instacart launched in the fourth quarter of 2024.

The decrease in D2C redemption revenue was driven by the one-time breakage benefit of $13.5 million incurred during the year ended December 31, 2023, as well as a decrease in Ibotta D2C redemptions driven by the quantity and quality of offers available to each D2C redeemer.

Ad & other revenue decreased $17.7 million, or 23%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, due to a shift in CPG client spend from ad & other revenue to redemption revenue and the deprecation of our consumer insights business.

Total redemption revenue decreased $11.6 million, or 4%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due to a $33.8 million decrease in revenue from D2C properties, partially offset by a $22.2 million increase in revenue from third-party publishers.

The decrease in D2C redemption revenue was driven primarily by a decrease in the quantity and quality of offers available to each D2C redeemer.

The increase in third-party publisher redemption revenue was primarily driven by the launch of new partners, namely Instacart and DoorDash.

Ad & other revenue decreased $13.3 million, or 23%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, driven by reduced client spend on D2C ad products.

Cost of Revenue

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$ 71,055 $ 50,121 $ 20,934 42 %

Cost of revenue increased $6.1 million, or 14%, during the year ended December 31, 2024, compared to the year ended December 31, 2023.

Cost of revenue as a percentage of revenue was unchanged during the year ended December 31, 2024, compared to the year ended December 31, 2023.

The primary drivers of cost increases were the addition of new publishers and data hosting costs.

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Cost of revenue increased $20.9 million, or 42%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due primarily to the addition of new publishers.

Sales and marketing

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$ 118,935 $ 139,214 $ (20,279) (15) %

Sales and marketing increased $24.5 million, or 21%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, due to increases of $23.7 million in stock-based compensation, $5.2 million in B2B marketing, $1.7 million in media spend, and $1.0 million in other personnel-related costs, partially offset by a decrease of $7.2 million in self-funded user awards.

The increase in stock-based compensation was comprised of $16.1 million related to the Walmart Warrant and $7.4 million related to equity awards for which expense recognition commenced after the IPO.

The increases in B2B marketing and media spend were driven by campaigns to build company brand awareness, and the decrease in self-funded user awards resulted from a shift in marketing strategy.

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Sales and marketing decreased $20.3 million, or 15%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due to decreases of $20.4 million in stock-based compensation expense, $2.1 million in media spend, $2.1 million in self-funded rewards, and $1.6 million in B2B marketing.

The decrease in stock-based compensation was driven by decreases of $20.5 million related to the Walmart Warrant for additional shares granted upon the closing of the IPO in 2024 under the Walmart Warrant’s anti-dilution provision, $1.9 million related to equity awards with a liquidity event-based vesting condition that was satisfied in connection with the IPO in 2024, and $1.4 million related to the departure of sales executives, partially offset by an increase of $3.5 million in recurring equity compensation.

The decreases in media spend, self-funded rewards, and B2B marketing resulted from a shift in marketing strategy.

These decreases were partially offset by increases of $5.4 million in personnel-related costs and $0.5 million in professional fees.

The increase in personnel-related costs was primarily driven by $1.5 million of restructuring charges and the remainder by increases in sales bonus, average salary, and benefits expenses.

Research and development

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$ 61,082 $ 63,271 $ (2,189) (3) %

Research and development increased $13.3 million, or 27%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, due to increases of $7.1 million in stock-based compensation related to equity awards for which expense recognition commenced after the IPO and $5.0 million in other personnel-related costs driven by an increase in headcount.

Research and development decreased $2.2 million, or 3%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due to decreases of $2.7 million in personnel-related costs, excluding stock-based compensation, and $0.7 million in software licensing costs, partially offset by an increase of $0.9 million in stock-based compensation expense.

The decrease in personnel-related costs, excluding stock-based compensation, was primarily related to higher capitalization due to increased investment in our platform, capabilities, and infrastructure, partially offset by $0.7 million of restructuring charges during the year ended December 31, 2025.

The increase in stock-based compensation was driven by a $4.4 million increase in recurring equity compensation, partially offset by decreases of $1.6 million related to equity awards with a liquidity event-based vesting condition that was satisfied in connection with the IPO in 2024 and $1.8 million related to a reallocation of resources and related personnel costs to cost of revenue due to continued investment in our platform, capabilities, and infrastructure.

General and administrative

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$ 88,244 $ 82,739 $ 5,505 7 %

General and administrative increased $31.1 million, or 60%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to increases of $24.0 million in stock-based compensation related to equity awards for which expense recognition commenced upon IPO, $3.9 million in other personnel-related costs, and $3.3 million in ongoing public company costs.

The increase in other personnel-related costs includes $1.5 million related to one-time IPO costs, with the remaining increase driven by an increase in headcount.

General and administrative increased $5.5 million, or 7%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due to increases of $5.8 million in professional fees largely attributable to legal matters, $2.3 million in facilities costs due to the commencement of a new office space lease in the first quarter of 2025, $1.6 million in software licensing costs, and $0.7 million in bad debt expense.

These increases were partially offset by a $5.0 million decrease in stock-based compensation expense driven by decreases of $8.3 million related to equity awards with a liquidity event-based vesting condition that was satisfied in connection with the IPO in 2024 and $1.6 million from the reversal of previously recognized expense for unvested equity awards related to the departure of the Company’s former chief financial officer in March 2025, partially offset by a $4.9 million increase in recurring equity compensation.

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$ 3,914 $ 3,984 $ (70) (2) %

Depreciation and amortization increased $0.3 million, or 9%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily driven by an increase in capitalized software.

Interest income (expense), net

Depreciation and amortization did not change meaningfully during the year ended December 31, 2025, compared to the year ended December 31, 2024.

Interest income, net

Year ended December 31, Change

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(in thousands, except percentages)

Interest income (expense), net

Interest income, net

$ 10,781 $ 9,414 $ 1,367 15 %

Interest income, net, increased $16.3 million, or 237%, during the year ended December 31, 2024, compared to the year ended December 31, 2023, due to an increase in interest earned on cash and cash equivalents largely driven by the IPO proceeds and a decrease in interest expense resulting from the extinguishment of the convertible notes.

Loss on debt extinguishment

Interest income, net, increased $1.4 million, or 15%, during the year ended December 31, 2025, compared to the year ended December 31, 2024, due to a $3.1 million decrease in interest expense resulting from the extinguishment of the convertible notes upon IPO in 2024, partially offset by a $1.8 million decrease in interest income driven by decreases in interest rates and cash and cash equivalents.

Loss on extinguishment of debt

Year ended December 31, Change

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Loss on extinguishment of debt

$ 9,686 $ — $ 9,686 NM (1)

$ — $ 9,686 $ (9,686) (100) %

(1) NM - not meaningful

Loss on extinguishment of debt increased $9.7 million during the year ended December 31, 2024, compared to the year ended December 31, 2023, due to the conversion of the convertible notes into shares of our Class A common stock concurrently upon the closing of the IPO.

Loss on extinguishment of debt decreased $9.7 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the conversion of the convertible notes into shares of our Class A common stock concurrently upon the closing of the IPO in 2024.

Other expense, net

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$ 93 $ 3,157 $ (3,064) (97) %

Other expense, net, decreased $1.9 million , or 38% , during the year ended December 31, 2024, compared to the year ended December 31, 2023, due to a $1.9 million decrease in the loss on the convertible notes derivative liability, which was settled in connection with the IPO.

Other expense, net, decreased $3.1 million , or 97% , during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a $3.1 million decrease in the loss on the convertible notes derivative liability, which was settled in connection with the IPO in 2024.

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Benefit from (provision for) income taxes

(Provision for) benefit from income taxes

Year ended December 31, Change

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(in thousands, except percentages)

Benefit from (provision for) income taxes $ 44,246 $ (5,934) $ 50,180 NM (1)

_______________

(1) NM - not meaningful

Benefit from income taxes increased $50.2 million during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to the release of our $58.6 million valuation allowance recorded against our deferred tax assets, partially offset by the impact of non-deductible items, including certain stock-based compensation and executive compensation costs.

See Note 13 - Income Ta xes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional information.

(Provision for) benefit from income taxes $ (6,272) $ 44,246 $ (50,518) (114) %

The provision for income taxes increased $50.5 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the tax benefit from the 2024 valuation allowance release, as well as the impact of non-deductible items including certain executive compensation costs, stock-based compensation, and the tax expenses related to uncertain tax positions.

Liquidity and Capital Resources

As of December 31, 2024, our principal sources of liquidity included $349.7 million of cash, cash equivalents, and restricted cash and $99.0 million of available capacity under a revolving line of credit.

On April 22, 2024, we closed our IPO and received net proceeds of $198.0 million after deducting underwriting discounts and commissions of $13.2 million and offering costs of approximately $8.8 million.

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, the continuing market acceptance of the platform, and the volume and timing of our share repurchases.

As of December 31, 2025, our principal sources of liquidity included $186.6 million of cash and cash equivalents and $99.0 million of available capacity under a revolving line of credit.

Our primary cash needs are for personnel-related expenses, sales and marketing expenses, reward and revenue share and related minimum commitments, data hosting costs, and software licensing costs.

We believe our existing liquidity and cash flows from operating activities 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 volume and timing of our share repurchases.

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, volatility in the global financial markets due to the change in the U.S.

presidential administration, heightened inflation, rising interest rates, a potential government shutdown, and geopolitical events, could reduce our ability to access capital and negatively affect our liquidity in the future.

Further, our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in Part I, Item 1A.

“Risk Factors” of this Annual Report on Form 10-K.

If we are unable to raise additional capital when desired, our business, financial condition, results of operations, and prospects would be adversely affected.

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As of December 31, 2025, we had no outstanding borrowings under the 2024 Credit Facility and availability of $99.0 million, which is net of a $1.0 million outstanding letter of credit related to an office space lease.

For further details regarding credit agreements, see Note 6 - Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

For further details regarding the credit agreement, see Note 6 - Long-Term Debt to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Common Stock Warrant

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If the shares available for exercise as of December 31, 2025 were fully exercised, the warrants could provide up to $245.6 million in proceeds to us.

However, the exercisability of a portion of the Walmart

However, the exercisability of a portion of the Walmart Warrant is subject to certain performance conditions and forfeiture features, and there can be no assurance that any such warrant will be exercised.

For further details regarding the Walmart Warrant, see Note 9 - Stockholders' Equity to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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Warrant is subject to certain performance conditions and forfeiture features, and we cannot make assurance that any such warrant will be exercised.

For further details regarding the Walmart Warrant, see Note 9 - Redeemable Convertible Preferred Stock and Stockholders' Equity to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Share Repurchase Program

On August 22, 2024, we announced that our board of directors approved a share repurchase program, with authorization to purchase up to an aggregate of $100.0 million of the Company’s Class A common stock (Share Repurchase Program).

In August 2024, the Company’s board of directors approved a share repurchase program, with authorization to purchase up to an aggregate of $100.0 million of the Company’s Class A common stock (Share Repurchase Program).

In both March 2025 and June 2025, the board of directors approved an additional $100 million, bringing the total authorization to $300.0 million.

The Share Repurchase Program has no expiration date.

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The timing and actual number of shares repurchased may depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.

During the year ended December 31, 2024 , we repurchased 518,683 shares of our Class A common stock for an aggregate repurchase amount of $31.3 million , inclusive of broker commissions and legal costs.

During the year ended December 31, 2025, the Company repurchased 6,869,660 of its Class A common stock for an aggregate repurchase amount of $236.3 million.

The repurchase amount includes immaterial broker commissions and the 1% excise tax on net share repurchases imposed by the Inflation Reduction Act of 2022.

Repurchases are reflected as treasury stock on the balance sheets on a trade-date basis .

As of December 31, 2025, $34.9 million remains available and authorized for repurchase under the Share Repurchase Program.

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Net cash provided by operating activities $ 95,274 $ 115,917

Net cash (used in) provided by investing activities (10,201) 19,672

Net cash provided by financing activities 181,383 2,385

Net cash used in investing activities (34,303) (10,201)

Net cash (used in) provided by financing activities (224,049) 181,383

Net change in cash, cash equivalents, and restricted cash $ (163,078) $ 287,099

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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 vary from period to period and significantly impact our cash provided by operating activities for any period.

Net cash provided by operating activities increased $93.2 million during the year ended December 31, 2024 compared to the year ended December 31, 2023.

The increase was the result of a $30.6 million increase in net income and a $63.7 million increase in non-cash charges, partially offset by $1.2 million increase in net cash outflows as a result of changes in operating assets and liabilities.

The increase in net income was largely driven by the release of our valuation allowance and an increase in revenue, partially offset be an increase in non-cash charges as a result of the IPO, including accelerated stock-based compensation and losses on the extinguishment of the convertible notes and

As a result, timing of cash receipts related to accounts receivable and due to third-party publishers can vary from period to period and impact both positively or negatively our cash provided by operating activities for any period.

Net cash provided by operating activities decreased $20.6 million during the year ended December 31, 2025 compared to the year ended December 31, 2024.

The decrease was the result of a $65.2 million decrease in net income offset by a $20.7 million increase in non-cash charges and a $23.8 million increase in net cash inflows from changes in operating assets and liabilities.

The increase in non-cash charges was primarily driven by the deferred income tax benefit in 2024 from the release of our valuation allowance, partially offset by non-cash charges incurred in 2024 in connection with the IPO, including accelerated stock-based compensation expense, common stock warrant expense, and losses on the extinguishment of the convertible notes and derivative liability.

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derivative liability.

The increase in net cash outflows from changes in operating assets and liabilities was primarily due to a $79.4 million increase in other current and long-term assets due the release of our valuation allowance recorded against our deferred tax assets and an increase in prepaid expenses, a $39.9 million decrease in liabilities due to third-party publishers related to the timing of third-party publishers joining the IPN, and a $11.6 million decrease in accrued expenses driven primarily by the timing of payroll.

These cash outflows were partially offset by cash inflows from a $110.1 million decrease in accounts receivable driven by a larger increase in gross billings in 2023 as compared to 2024, a $16.2 million increase in other current and long-term liabilities driven by an increase in uncertain tax positions, and a $3.4 million increase in the user redemption liability.

The increase in net cash inflows from changes in operating assets and liabilities was primarily due to cash inflows of $21.1 million from other current and long-term assets and liabilities, $5.8 million from accounts receivable due to the timing of client payments, $5.1 million from accrued expenses primarily due to accrued excise taxes on share repurchases, $2.0 million from the user redemption liability, and $1.3 million from accounts payable.

The increase in net cash inflows from other current and long-term assets and liabilities was primarily driven by the collection of the majority of the lease incentive receivable in 2025, a decrease in prepaid expenses, and a decrease in deferred tax assets as a result of the One Big Beautiful Bill Act enacted in 2025.

These net cash inflows were partially offset by cash outflows of $7.2 million from liabilities due to third-party publishers driven by the timing and ramp up of new publishers and $4.4 million from deferred revenue.

Investing Activities

Net cash used in investing activities increased $29.9 million during the year ended December 31, 2024 compared to the year ended December 31, 2023, driven by a $27.9 million decrease in maturities of short-term investments and a $1.7 million increase in additions to capitalized software development costs.

Net cash used in investing activities increased $24.1 million during the year ended December 31, 2025 compared to the year ended December 31, 2024, driven by a $19.4 million increase in additions to property and equipment related to leasehold improvements and furniture and fixtures for our new headquarters space and a $4.7 million increase in additions to capitalized software development costs.

Financing Activities

Net cash provided by financing activities increased $179.0 million during the year ended December 31, 2024 compared to the year ended December 31, 2023, driven by $200.7 million of net IPO proceeds and a $13.2 million increase in proceeds from stock option exercises and the ESPP, partially offset by $31.3 million in purchases of treasury stock and $3.3 million of taxes paid related to the net share settlement of equity awards.

Net cash used in financing activities increased $405.4 million during the year ended December 31, 2025 compared to the year ended December 31, 2024, driven by $200.7 million of net IPO proceeds in 2024, a $201.7 million increase in purchases of treasury stock, and a decrease of $3.9 million in proceeds from the exercise of stock options and employee stock purchase plan.

Material Cash Requirements

Operating Leases

Our operating lease commitments include our corporate office space.

As of December 31, 2024, we had noncancellable lease obligations of $1.5 million, all of which is payable within 12 months.

In addition, as of December 31, 2024, the Company had executed a new office space lease that had not yet commenced, with minimum lease payments of approximately $22.8 million over a term of approximately 11 years anticipated to commence during fiscal year 2025.

For additional discussion on our operating leases, refer to Note 8 – Operating Leases to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Our operating lease commitments primarily include our corporate office space.

As of December 31, 2025, we had non-cancellable lease obligations of $36.8 million, of which $2.0 million is payable within 12 months, and the remainder thereafter.

For additional discussion on our operating leases, refer to Note 8 – Operating Leases to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Purchase Commitments

The Company has non-cancelable purchase obligations which relate to minimum commitments with certain third-party publishers and other contractual commitments primarily with software as a service providers and marketing vendors in the ordinary course of business.

As of December 31, 2024, we had fixed noncancellable purchase obligations of $171.1 million through 2029.

For additional discussion on these contractual commitments, refer to Note 16 – Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

The Company has non-cancellable purchase obligations that relate to minimum commitments with certain third-party publishers and other contractual commitments primarily with software as a service providers in the ordinary course of business.

As of December 31, 2025, we had fixed non-cancellable purchase obligations of $138.9 million, of which $38.4 million is payable within 12 months, and the remainder thereafter.

For additional discussion on these contractual commitments, refer to Note 16 – Commitments and Contingencies to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

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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 consolidated financial statements, we apply accounting policies and estimates that affect the reported amounts and related disclosures.

Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.

In preparing the 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

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subject to an inherent degree of uncertainty and actual results could differ materially from the amounts reported based on these estimates.

Our significant accounting policies are described in Note 2 - Basis of Presentation and Significant Accounting Pol icies to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, and of these, management believes the following accounting policies involve a greater degree of judgment and complexity and are therefore the most critical in determining the amounts reported in our consolidated financial statements.

We regularly re-evaluate our estimates used in the preparation of the 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 may involve reliance on complex IT systems.

Actual results could differ materially from the amounts reported based on these estimates.

Our significant accounting policies are described in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies to our financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, and of these, management believes the following accounting policies involve a greater degree of judgment and complexity and are therefore the most critical in determining the amounts reported in our financial statements.

Revenue Recognition

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers .

We primarily derive revenues from the set-up and redemption of cash back rewards and digital media services on the IPN.

Revenue is recognized when, or as, control of the promised goods or services is transferred to our clients, in an amount that represents the consideration we expect to be entitled to in exchange for those goods or services.

The following is a description of principal activities from which we generate our revenue:

Revenue is recognized when, or as, control of the promised goods or services is transferred to the customer, in an amount that represents the consideration the Company expects to be entitled to in exchange for those goods or services.

As multiple parties are often involved in our revenue transactions, including clients and retailers, judgment is required in determining whether we are the principal or agent.

We are the principal and present revenue on a gross basis if we control the goods or services before they are transferred to the end customer, or we are the agent and present revenue on a net basis if we arrange for other parties to provide the goods or services to the end customer.

Redemption revenue

Consumers earn rewards on the IPN through loyalty account linking, receipt upload, or purchasing a gift card.

As a result of the cash back reward being both client determined and funded, the cash back reward is passed through to the consumer.

The Company's clients promote their products and services to consumers through rewards offered on the IPN.

Consumers redeem offers to earn a reward through account linking or receipt upload on D2C properties or through integrations with third-party publisher properties.

The reward is funded by the client and passed through to the consumer.

We earn a fee per redemption in the period in which the redemption occurs.

We may also charge setup fees, which are deferred and recognized over the respective promotion period.

Penalties or early terminations are recognized as revenue as the associated event occurs.

We recognize revenues from redemptions net of consumer cash back rewards as we act as the agent in the transaction.

Redemption campaigns are available on both Ibotta D2C and third-party publisher properties.

We also contract with third-party gift card providers to facilitate the delivery of digital gift card codes and recognize revenue gross of user award but net of the cost of the gift card, at a point in time when the exchange occurs.

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.

We recognize revenues from redemptions net of rewards as we believe we act as the agent in the transaction.

We also contract with third-party gift card providers to facilitate the delivery of digital gift cards and recognize revenue gross of reward but net of the cost of the gift card, at a point in time when the exchange occurs.

Ad & other revenue

Our clients may also run advertisements (banners, tiles, newsletters, feature placements, etc.) on Ibotta D2C properties to promote their redemption campaigns.

Our clients may also run advertisements (banners, tiles, newsletters, feature placements, etc.) on D2C properties to promote their redemption campaigns.

When a consumer clicks on an advertisement, they are linked directly to the associated campaign.

Ad products are billed and revenue is recognized as the marketing services are performed.

Ad products run in conjunction with the associated redemption campaign, either over the entire redemption campaign life or some portion of it.

We recognize revenue from client run advertisements on a gross basis as we act as the principal in the transaction.

We also offer audience targeting and data licensing services to clients, which are primarily billed as a flat fee amount.

Data revenue is recognized as it is delivered and on a gross basis as we act as the principal in the transaction.

Ad product revenue is recognized as the marketing services are performed.

Ad products often run in conjunction with an associated redemption campaign, either over the entire redemption campaign life or some portion of it.

We recognize revenue from client run advertisements on a gross basis as we believe we act as the principal in the transaction.

We also offer data licensing and audience targeting services.

Data revenue is recognized as it is delivered and on a gross basis as we believe we act as the principal in the transaction.

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Stock-Based Compensation

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The fair value of RSUs with only service or performance conditions is equal to the fair value of the underlying common stock at the date of grant.

For RSUs with market-based conditions, we determine the

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grant date fair value utilizing a Monte Carlo simulation, which incorporates the probability of achievement of the market-based condition.

For RSUs with market-based conditions, we determine the grant date fair value utilizing a Monte Carlo simulation, which incorporates the probability of achievement of the market-based condition.

The fair value of stock options and ESPP awards is estimated on the grant date using the Black-Scholes option-pricing model.

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• Expected Volatility.

The expected volatility is determined with reference to historical stock volatilities of comparable guideline public companies over a period equivalent to the expected term of the award as we do not have an extensive trading history for our common stock.

The expected volatility is determined with reference to historical stock volatilities of comparable guideline public companies and our own common stock over a period equivalent to the expected term of the award, as we lack sufficient trading history to rely solely on our own common stock.

• Expected Term.

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As we continue to accumulate additional data related to our common stock, we may have refinements to our estimates, which could materially impact our future stock-based compensation expense.

Common Stock Valuations

Prior to our IPO, the fair value of our common stock underlying our stock-based compensation awards has historically been determined by our board of directors, with input from management and corroboration from an independent third-party valuation specialist, in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held- Company Equity Securities Issued as Compensation .

In the absence of a public trading market, our board of directors exercised significant judgment and considered numerous objective and subjective factors to determine the fair value of our common stock as of the date of each grant, including the following factors:

• contemporaneous valuations performed by third-party valuation firms;

• the nature of the business, including its history;

• the economic outlook in general and of the specific industry at the date of the valuation;

• our book value and financial condition;

• our earnings capacity;

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• the existence or lack of goodwill, or other intangible assets;

• sales of stock and the size of the block to be valued;

• the market prices of stocks of corporations engaged in the same or similar lines of business as the Company and whose stocks are activity traded in a free and open market, either on an exchange or over-the-counter;

• the prices of convertible preferred stock sold by us to third-party investors in arms-length transactions;

• the lack of marketability of our common stock;

• the likelihood of achieving a liquidity event, such as an initial public offering or a merger or acquisition of our business given prevailing market conditions.

In valuing our common stock, the board of directors used the income and market approach valuation methods.

The income approach values a company by estimating future cash flows that could potentially be taken out of the business without impairing future operations and profitability.

These forecasted annual cash flows plus the terminal value are discounted to their present value to estimate the value.

The discount rate is a rate of return which provides potential investors a sufficient return on their investment.

The market approach estimates value by comparing the subject company to similar firms whose stocks are publicly-traded.

A group of comparable publicly-traded companies are selected and market multiples are developed using each company’s stock price and other financial data.

An estimate of value for the subject business is completed by applying selected market multiples to the subject company’s financial results.

After completing the income and market approaches, the enterprise value is allocated to our common stock using the Option Pricing Model, or OPM.

Under this method, the common and preferred stock are treated as a series of call options on the enterprise’s value, with the exercise price reflecting a series of “break points” and where the different securities are allocated their respective value based on the specific characteristics and value participation features.

The value of the common stock is then based on the allocation of the call options according to the specific facts and circumstances specific to our capital structure.

The common stock is modeled as a call option that gives its owner the right, but not the obligation, to buy the underlying enterprise value at a predetermined or exercise price.

In the model, the exercise price is based on a comparison with the enterprise value rather than, as in the case of a “regular” call option, a comparison with a per share price.

Thus, the value of the common stock is considered to be a call option with a claim on the enterprise at an exercise price equal to the remaining value immediately after the preferred stock is liquidated.

The OPM often uses the Black-Scholes Option Pricing Model to price the call option.

After the value of the common stock is determined and allocated to the various classes of shares, a discount for lack of marketability, or DLOM, is applied to arrive at the fair value of the common stock.

A DLOM is meant to account for the lack of marketability of a stock that is not traded on public exchanges.

Application of these valuation approaches involves the use of estimates, judgment, and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses, and future cash flows, discount rates, market multiples, the selection of comparable companies, and the probability of possible future events.

Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations as of each valuation date and may have a material impact on the valuation of our common stock.

For valuations after the completion of our IPO, the fair value of our Class A common stock is determined by using the closing price of our Class A common stock as listed on the New York Stock Exchange on the date of grant.

The Company accounts for income taxes using the asset and liability method, under which, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using

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enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

We recognize deferred tax assets to the extent that these assets are more likely than not to be realized.

In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and our results of operations.

We recognize the tax effects of an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.

The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized.

Due to uncertainties in any tax audit outcome, our estimates of the ultimate settlement of our unrecognized tax positions may change and the actual tax benefits may differ significantly from the estimates.

Although we believe our assumptions, judgments, and estimates are reasonable, changes in tax laws, our interpretation of tax laws, the resolution of any tax audits, and differences between estimated and actual taxable income could significantly impact the amounts provided for income taxes in our financial statements.

Recent Accounting Pronouncements

See Note 2 – Basis of Presentation and Summary of Significant Accounting Policies in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information.

Emerging Growth Company Status

We are an “emerging growth company” as defined in the Jumpstart Our Business Act of 2012 and have elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards.

This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen to not take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

See Note 2 – Basis of Presentation and Summary of Significant Accounting Policies in the notes to our financial statements included elsewhere in this Annual Report on Form 10-K for more information.

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What changed 10-K

Item 7. Management’s Discussion and Analysis