Conference Transcript - IBTA 2026-09-09

Ron Josie, Analyst — Citi

I guess that's the cue. So, great. Thanks, everybody. Thanks for joining. I'm Ron Josie. I cover the internet sector here at Citi. And excited to have with me Matt Puckett, who's the CFO of Ibotta. I think most people in the room know what Ibotta does. And there's a lot going on at Ibotta, a big turnaround that I think we're starting to see some traction, which is exciting. So as we, you know, as we kick off, you know, Matt, tell us a little bit about what Ibotta does and maybe your background, what and what Ibotta does, and then we'll get through the list of questions that I've prepared here.

Matt Puckett, CFO

Yeah, absolutely. Well, thank you for having me, Ron, and happy to be here. It's great to be in New York in the fall. Always good.

Ron Josie, Analyst — Citi

U.S. Open as well.

Matt Puckett, CFO

U.S.

Ron Josie, Analyst — Citi

Open, yeah. I didn't stay up till 3.30.

Matt Puckett, CFO

But definitely, that was pretty exciting. Yeah, so Ibotta, a digital promotions provider, really kind of the first of its kind, and today work with all of the major CPG companies and leverage the Ibotta Performance Network, which has been a real boon for us as we established that several years ago. It allows us to, we have the app, which is kind of the origin of the company, the Ibotta app, which was able to really be a direct-to-consumer offering, providing digital promotions to consumers on the app that they could redeem across retailers, the spectrum of retailers, but created the Ibotta Performance Network a few years ago. And we're a number of retailers. We're really kind of the white label provider of digital coupons, digital promotions for them, whether it's in the mass space with Walmart or in the grocery space with a number of regional grocers, whether it's in the dollar space, whether it's in last mile delivery, a number of publishers across the network that we can then procure offers. That's kind of the supply of the business for us is budgets from CPG, promotions, the offers that we then serve up on the network to our publisher partners. And then the Ibotta app is, in essence, one of those publishers as well. And so bringing that to bear for consumers that kind of think about working, it's kind of the flywheel, if you will, of the network effect of retailers, where offers are served, CPG, where the budgets are procured, and consumers who benefit from that. And a little bit about, I've been in the company a little over a year. And I came to the company, I kind of describe us as a technology company who sits at that intersection. My background is in retail, in footwear and apparel, actually. And I came into the company thinking, you know, how much can I add strategically to this business, you know, coming in as a very specific mandate from a finance perspective as the company had been public for a little bit. But understanding how retailers think and how really how brands make decisions about marketing spend and the trade-offs across their P&L is something that's been, that I found pretty valuable from my background. And so it's been really good. and happy to be here. That's great.

Ron Josie, Analyst — Citi

No, very helpful. You said something that I wanted to sort of dive a little bit deeper on. The comment was working with most all CPG companies, I think was the comment. Yeah. Could we have said that six months ago?

Matt Puckett, CFO

Yeah, I think you probably could have said that six months ago. Certainly, we're adding CPGs, but the big ones, yes. We're today working with something like 900 clients across 3,000 or north of 3,000 brands.

Ron Josie, Analyst — Citi

It was more the brand comment.

Matt Puckett, CFO

Yeah. So a number of brands are much higher because some of our clients obviously are multi-branded. Many are. We are adding clients for sure. We'd probably call that the emerging part of our business, emerging part of our portfolio. But yeah, six months ago, absolutely. What you would also say, though, is that six months ago, were we as effective at managing those businesses and being a good partner to our clients as what we aspire to be and kind of where we are moving toward today and thus growing with a number of those businesses? No, that wouldn't have been the case. And so while the relationships were there, in some cases, a little more nascent than others or not as optimized and certainly not meeting the full potential. And by no means are we there today. We are making steps along that journey in terms of, I would say, the client penetration, client relationship, and becoming a more strategic partner to them, not just a provider of a commoditized coupon, but much more strategic in what we can do for them. And that's a big part of our journey today and really the future.

Ron Josie, Analyst — Citi

We've been watching and being a part of the Ibotta story for some time now and becoming that strategic partner to your both CPG partners or call it CPG partners and brands, but also with your retailers. Maybe talk a little bit more about becoming that strategic partner. I guess the question here specifically is with the changes in the product, with the ability to add more measurement and sort of efficacy of the product, has that strategic partnership evolved? How much has that strategic partnership evolved? Or are we in the early days of that?

Matt Puckett, CFO

I think it's evolving. We're probably in the early days, in the early innings. I'm a sports guy. I use sports analogies. We're probably in the early innings. That's okay. I would say a You referenced product, the product roadmap, and the product capabilities, and I certainly will talk about that. But I would suggest that what's really, in essence, driving, call it the turnaround that we've begun to see in our business, but in the financials now, there's a period of time we were talking about it more in non-financial, leading indicator kind of metrics. But we're starting to see that now in the financial results. The turnaround that we're seeing is, I would call it more execution-driven from a go-to-market perspective. And this time last year, about the time I joined the company, the company was in dealing with a substantial amount of change, and particularly in the go-to-market. Not so much necessarily in other parts, but clearly in the sales organization, the revenue organization. And maybe we had kind of a sales organization before, and we've kind of built a more holistic revenue organization. And I'll tell you what I mean by that. We were dealing with a lot of transition. Chris Reedy now been in a company a year and a half, a little over a year and a half as CRO, fairly quickly identified opportunity to strengthen what we were doing from a go-to-market perspective. And that included how we're organized against the opportunity from a geographic-focused sales organization to a vertical-focused sales organization, food, beverage, health and beauty, general merchandise, splitting enterprise clients to the bigger opportunity clients from emerging clients, bringing in high-level leaders for parts of that organization that hadn't existed before, elevating our B2B marketing capabilities and actually moving that part of the business into revenue, multi-threading with our clients. So instead of just talking to a procurement specialist or someone who kind of rolls up to a finance organization who's managing budgets in the promotion space more in a commoditized way to having conversations with CMOs and even CEOs and a much more strategic focus of those conversations. All of those things are beginning to show up. And I would suggest there's a lag time. The business was difficult in the back half of the neck last year. It's no secret. We declined double digits. That wasn't necessarily driven by something that was happening then. It was largely driven by actions that were happening late 24, early 25, right, in terms of execution, right, missing opportunities, not being in the right conversations. As we've begun to change and started to execute differently late last year and the early part of this year, we're now beginning to see that show up, actually a little bit quicker than we thought, even in Q2, returning to growth, right?

Ron Josie, Analyst — Citi

That's what I was going to say.

Matt Puckett, CFO

That's been really a really important part of what we're driving. And I think that gives us a lot of confidence in what we're doing. I talked about the runway, the opportunity to do more. And that's even without, at this point, a huge impact from some of the things we're doing on the product side. Now, clearly, our core product is resonating. LiveLift is beginning to show up in the market. And we've got a product roadmap that takes us over the next several quarters and even a couple of years that we're really excited about.

Ron Josie, Analyst — Citi

That is one of the questions that we often get is, we reached revenue growth the quarter, I think, or so before expected. How durable is this revenue growth? So to hear your conversation or your comments around better execution, following up with clients and demand, all that is blocking and tackling that is the right thing to do. But the product's also gotten better. You mentioned the question number one is durability. And the question number two is the product got getting better and then live lift.

Matt Puckett, CFO

Yeah. So yeah, I'll try to take those in order. The durability, we're confident in the opportunity that we're certainly pleased with the progress, but we're not declaring victory at all. And there's a lot of work to do, for sure. But when you think about very specifically durability, it's broad-based what we're seeing in terms of, I'll say, the improving performance, particularly in redemption revenue, which is kind of the core of what we do and really the future. In that business, we grew 3% overall in the most recent quarter. We grew redemption revenue, 10%. So really, really encouraged by that. But it's broad-based. It's not just a couple of big programs or one big win or a handful of clients. It's been broad-based across our client base. A number of those clients were declining last year, particularly in the back half of the year, but for the year. We started to see that turn, and we're seeing some of those clients return to growth. And so that potential, the fact that it's happening in such a broad way gives us confidence. The fact that we still have room to recover some of what we've lost. And the fact that we're looking at these clients in terms of redemption revenue and kind of the underlying health metrics of each of those. And we know in some cases, we've got a lot of penetration opportunity. When we look at where we're optimized, we're closer to optimize in terms of what we think is the right level of opportunity within a particular client. a number of clients are sitting well below that. So we think about that. I would also, you're right, the product is resonating. We've talked about LiveLift, which is maybe the first instance of some of the next generation capabilities and tools that we're bringing to bear. As we developed LiveLift, which to Brian and the team's credit, the realization that that opportunity existed to really lean into more performance-based capabilities, from being able to measure more like performance marketing, measurement being really critical, and kind of the white space that was there. Nobody's playing in that. Our development of that has been really critical.

Ron Josie, Analyst — Citi

Was measurement the number one pushback that you got amongst the CPGs?

Matt Puckett, CFO

I think so. If you talk about the opportunity to, I'll call it grow more significantly, right? I mean, clearly the CPGs were also saying to us, be a better partner, be a more consistent partner. You know, when you come see us, don't have to introduce yourself every time because it's a new face um so clearly the ability to be a better partner that was one which okay that's table stakes that's that's totally like shame on us fix that right and and that's and that's what we what we're doing and and uh to the to the team's credit that's what they've done and um but also really to your point about okay let's table stakes beyond table stakes where's the growth going to come measurement is a linchpin into that, right? Because it's, yeah, I know that I can call you and you can help me move units, for sure. You can do that. But what does that really mean? Is it incremental? Is it subsidized? What's the profit impact? So our ability to, the measurement capabilities, the first-party measurement capabilities that we have and are building are really critical to that. And I would say one of the things that's been kind of confirmatory and also really helpful is the partnership with Serkana, the partnership with ABCS as well, which is that third-party validation of our measurement capabilities. That's probably been, you know, can't quantify it, but, you know, qualitatively, it's probably been in some cases maybe more impactful. I think Brian and Chris would probably both say that in conversations that they're having with CPGs at senior levels and at different levels. I mean, when you have someone who's an advocate for Ibotta inside an organization and they can point to sort of kind of validating what we're what we're saying um that's been that's been really good air cover for them yeah and and specifically they've been talking about at what a 16 percent or so incremental sales lift i mean this is a type of stuff that you can actually yeah household penetrate incremental sales household penetration uh lift on on all the not even the products on promotion but all the products in the catalog That's another number that's part of that study that actually is quite, I think it's 11%, 10, 11%. All of these numbers are multiples of what cercana would typically see, really important. And the other thing that I think is really important, and I don't, I think people get it, but it's really important when we, this work that we're doing with cercana, and we put out a meta study recently, which has the numbers you're quoting. That's kind of what you're pulling from. That's an Ibotta study, not a LiveLift-specific study. So that's looking across about 50 campaigns, some of which are LiveLift, some of which are not. So it suggests that the products, our core product offering, which we've been consistently making better, obviously, as well as something new like LiveLift, it's working. Yeah, so that's been a powerful message. Can you tie this to that from a revenue standpoint? Not necessarily, but I'm pretty confident to say that that's certainly been a factor, a contributing factor that kind of gets lumped in somehow with execution.

Ron Josie, Analyst — Citi

So we have, and that's a great way to sort of segue to the next topic of conversation, because I think we've gotten through execution just now. We've gotten through potentially how we are seeing revenue return to growth, the products getting better, the execution getting better, be a better partner, I think was the comment. Let's talk about the supply side. The CPG could help us understand maybe a bigger picture. How would you characterize the health of the broader CPG industry from an advertising perspective? That was point number one. And then point number two is just offer supply.

Matt Puckett, CFO

So I think the perception is that it's a challenge space, CPG, which is probably not a new statement. uh and that that perception i i certainly wouldn't argue right so i think i think probably the for us the food vertical maybe maybe is most prominent in that um and probably where a lot of that shows up when you think about inflation and some of those things so that's clearly it's clearly challenged um and you know i think you know one of the things probably another proof point for us is we're actually reported the last couple quarters we've seen growth in the in the food vertical. And generally speaking, because of the nature of what we do, both the ability to prove that we can help drive incremental sales and incremental profits, we can be pretty helpful to CPG companies who are trying to figure out ways to grow. Certainly, we can be helpful when they've got objectives they're trying to hit and inventory they need to move because they've they've gotten overstocked those types of things certainly there's a lever there and we take those phone calls as well but um the opportunity to help them you know drive increment incremental is is really important and um and benefiting from us and if you kind of look at the fact that we're seeing this business turn in an environment that you know is arguably pretty challenged i think speaks to kind of the strategic opportunity that we have uh as we continue to kind of prove our point.

Ron Josie, Analyst — Citi

Yeah. I think the ability for your CPGs to rely on you to drive incremental demand is something that is differentiated from Ibotta here. And as we were studying the business and going to the business, the planning cycle around CPG budgets was a little bit different in terms of when ibotta could access the opportunity so my question here is now that we've gotten the execution to your point another proof point you know what what's happening with your relationships how are we on just the but how close are we to the budgeting cycles of these cpg companies that give you the visibility or the the the confidence i guess to see sort of continued strength or recovery of the business. Yeah, great.

Matt Puckett, CFO

You know, clearly being a part of the budgeting cycle in the planning efforts is important. And, you know, this is happening all the time, right? I mean, certainly there are moments where they're snapping the line and they're setting budgets, and we want to make sure we're part of those conversations. And that happens on a calendar basis. In some cases, it happens in the middle of summer. It depends on their calendar. I think a couple things I'd say. One, the fact that I talked about multi-threading. I talked about a much more strategic relationship. I talked about consistency of the relationship, the amount of times we're interacting, how much of that's in person. All of that strengthens the bond, so to speak, which allows us to be closer to front and center when they're having those conversations. We're making sure we're there and we're understood and the opportunity is contemplated as budgets are set. So, you know, that's certainly, you know, really important. That said, the real kind of value proposition of what we're doing is how do we ultimately, because of our capabilities, drive incremental sales and incremental profit that can be understood and measured and planned for and programmed against such that you're not always reliant on setting of budgets. Now, we'll be there in that process, and that's important. And the other thing that comes out of that, and I think we're seeing more and more of this, is what we call preferred partnerships, right? And with our biggest clients having partnerships where there's some level of understanding going in as to what the partnership looks like. What's the pricing structure? What's the volume expectation? These are commitments. It's not a contract, but it gives us a pretty good understanding of what the potential would be, let's say, over the next 12 months or the next six months or the next year and a half. And with the history we have of the clients, the conversations that lead to a preferred partnership gives us pretty good visibility into what we think the potential of the business is for that large bucket of business. That really helps us from a planning standpoint.

Ron Josie, Analyst — Citi

One last question just on the CBD side. Are you seeing more clients come in as preferred partnerships?

Matt Puckett, CFO

Yeah, I think we're seeing more of those, more clients who are converting to a preferred partnership kind of method of working together. And in some cases, we've got clients who have been preferred partners who are increasing their level of commitment.

Ron Josie, Analyst — Citi

That's great. Super helpful. But let's talk about, you know, the publisher side. So, you know, Ibotta's added Uber, Giant Eagle, 7-Eleven, I think this year alone, maybe. And then you're also on DoorDash and Instacart. And Walmart is one of your largest partners. So, in other words, the publisher side is, you know, you're sort of everywhere, which is wonderful. What I wanted to ask is just, you know, talk about as newer publishers get on the platform, I'd love to understand the monetization curve. Like, how does that work when we go live on Uber, for example? You know, what should we, how do you think about that?

Matt Puckett, CFO

Yeah, it varies, I guess, Ron, is maybe the simplest answer. It's nuanced. You know, it will depend, and a lot of it is driven by the publisher. You know, how they want to roll out and how they want to ramp and kind of the gating of that. Sometimes if we're taking over through a process, as we did with Giant Eagle, a program that exists, it's kind of flipped the switch more or less, right? You kind of build the interfaces and you do that and, you know, in you go. Something with Uber where it didn't exist before and we're kind of building the program, it's rolling out in stages. And it happens relatively quick, but it's not an overnight thing. And we've seen, we certainly both have worked, but it gives us some ability to kind of know how to think about the implication of that over time from a planning standpoint, both as it relates to kind of what we think the business is going to ultimately materialize to, but how we then can go out and have conversations with CPGs as it relates to procuring more offer supply. So it does kind of, generally speaking, there's going to be a ramp there in instances where it's more of a quick cutover.

Ron Josie, Analyst — Citi

So Giant Eagle understood. That was maybe a more seamless transition. Let's talk about the digital natives, if you will, the Ubers, the Instacarts. Instacarts may be one of your longer publishers online and DoorDash. So just talk to us about the adoption amongst these. Where are we on each one of these platforms? Yeah.

Matt Puckett, CFO

I mean, I think kind of in a little bit of different places on all, just based on the nature of how long they've been on the network. But generally, we call that kind of last mile delivery. Now with the ad of Uber, we're pretty dominant there with those three partners. So we're really, really pleased with that. I think, first of all, it's an area where you have a really, it's a captive audience. People who are, they're shopping, right? They're in buying mode when they're in this environment, right? And so the conversion from a redemption standpoint is quite high there. So we really like that. I think what we're seeing is good growth from a redeemer standpoint across the first two. You know, Uber is really early, early, early days. And, you know, just like so many of our publishers, the opportunity is, you know, has been somewhat constrained by offer supply.

Ron Josie, Analyst — Citi

Yeah.

Matt Puckett, CFO

But to your point, we're kind of everywhere and consumers operate in that they are they are in the store on the weekend buying their big weekly shopping spree. They're buying a few things online during the week, and they're using multiple platforms to do that. And we want to be able to be where consumers are with the network. And that's kind of what we're after.

Ron Josie, Analyst — Citi

And so we left sort of the largest partner for last to talk about, and that's, I think, Walmart, right? You know, I think with Walmart, we're expanding our relationship, or at least the reach with in-store displays, electronic shelf labels, app integrations. just would love to hear more just about the walmart partnership now yeah how it's expanded over the past i think you're going through a leader they are going through a leadership change and then also these are three questions in one and ultimately newer verticals so one is you know the integration two changes and three uh potential for newer verticals yeah so the partnership is is is great uh it's going well i would say you know just to kind of give some uh kind of quantification we've we talked about um we've been talking about for the last several

Matt Puckett, CFO

quarters uh really in my time and my entire tenure here strong uh redeemer growth right and even in the last quarter i think we reported 21 percent redeemer growth some of which was non-comp door dash wasn't fully comped and you know a little tiny fraction of redeemers from uber probably in the quarter um but we don't grow 21 percent without significant growth from our existing publishers and we don't grow our existing publishers without significant growth from Walmart. And then we certainly haven't disclosed those numbers specifically, but you can do that. You can do that calculus pretty quickly and understand that the business is performing and growing from a Redeemer standpoint there. So it's very healthy. Their online business is growing, so we certainly benefit from that, which has been great. But as they continue to expand And, you know, or make more known to Walmart cash because Walmart consumers don't necessarily know Ibotta. They may, but they don't necessarily know Ibotta. They know Walmart. They know Walmart cash. They know their Walmart wallet that that cash goes into. Obviously, we sit behind all of that. As they, and with us, market that Walmart cash, to your point, you know, ever more doing that more with our partnership. And in some cases, you know, kind of helping to think through the best ways to do that, you know, whether it's Walmart radio or it's in store, that partnership has continued to be really good and growing, right? And the work we're doing to expand the program, I think, is quite useful. And clearly, the opportunity to grow with our business there through greater offer supply, whether that's with our existing business or potentially new verticals, I think is tremendous. So I'm not going to get specific about what new verticals might be because right now we've got so much potential with where we are from a CPG standpoint. There's so much that we think there's a lot of runway. So that's largely our focus. But I feel really good about the partnership and the relationship there, the actual performance of the business. I think both parties feel good about that. So we're in a good place.

Ron Josie, Analyst — Citi

And how do you think about in-store with Walmart?

Matt Puckett, CFO

Yeah, in-store certainly, the ability to use your phone number at checkout and kind of get there, that was a nice ad last year. It's still largely an online-driven business, as most of our business is. But we're seeing that in-store piece of the business grow nicely. It's still relatively small in the scheme of things for their total business. But the more that you go and you see signage in the store that has a call to action, whether it's at the front, whether it's an end cap, hey, Walmart cash, it's part of the program. It's on the TV screens and the electronics section. Those things and then the ability to kind of seamlessly do it at checkout, that's helping for sure. And the potential obviously is great. Great.

Ron Josie, Analyst — Citi

I think we have a few minutes left here, so I wanted to wrap up maybe just talking about the margin framework longer term. Where are we today? But with the return to growth, we are seeing some offset on margin compression here as we return to growth. But just talk about the balance between reinvestment and how you think about incremental margins.

Matt Puckett, CFO

Yeah. So I think, first of all, we believe, I think the overall headline is that as we drive consistent and sustainable top line growth, we will see outsized profit growth. Because the model is such that there's going to be a lot of flow through for incremental revenue. Now, clearly, we've made some investments. And kind of the middle of last year, we started to kind of leaned into some things. One is the sales organization and kind of up-leveling that. And part of it was we went down and we kind of reorganized. There was a period of time where costs were lower. But even beyond that, there's some investment in the sales and marketing organization, which we began to make last year.

Ron Josie, Analyst — Citi

Would you say that's about a six-month lag before you start seeing the benefits?

Matt Puckett, CFO

Yeah, probably about a six-month lag, six- to nine-month lag. I mean, that's kind of normal. And we're starting to start to see the edges of that now, right, which is exciting. um so investments that we began to make last year and investments in the technology part of the organization which we began to make last year some of which obviously are are flowing you know flowing onto the balance sheet and then being amortized right capitalized so i would suggest that most of the things that we needed to do are now in place or really close to in place in terms of the costs are now and we haven't lapped it all yet right so we're beginning to lap some of those things so there's a little bit of period of kind of getting it lapped sure but beyond that i think we feel really good about the level of investment and the level of capability that's in play. And we can drive a lot of growth with the base that we have today. And so as you look forward into the future, we think there's quite a bit of potential with, again, with consistent top-line growth to drive margin expansion, both gross margin and EBITDA margin.

Ron Josie, Analyst — Citi

Do you think we'll get back to the days when the incremental margin was incredibly high and gross margins was higher? Or has the business changed a little bit here?

Matt Puckett, CFO

Yeah, I'm not going to commit to a number, Ron, for sure. What I would say is I think the potential to drive significant margin expansion into the future is there for all the reasons I said.

Ron Josie, Analyst — Citi

And as we think about the milestones going forward, we've now crossed over this hump. We're executing better. CPGs, now we have a preferred partnership and we have more CPGs coming online. The digital native and all your publishers are now several months, if not years, into using the platform. And now it's about getting more supply for them. The business is now in a better spot, it seems. This is me talking. So when we think about the milestones going forward here, what should we be looking for as investors to track continued progress?

Matt Puckett, CFO

Yeah. I agree with your premise. The business is in a better spot. It's all relative, right? So we're better from where we were. We're not by any means where we want to be or where we think we can be. So we're pretty hard graders of ourself in some ways, right? So So I think we feel good about where we are, but we were after a lot more. So as I think about things to watch for, you know, from my view, it's looking for consistency of growth. And probably as you look into next year, do we see accelerating growth, right, from a, you know, from a comp standpoint, that'll be a signal that what we're doing is really working, right? The things that we're working on, both on the sales side, the product side, the ad of the publishers, the consistency of what we're doing, the relationships, the five-wheel effect that happens. If that's accelerating, some acceleration in growth rates, that's a really good signal. I think we've talked about product resonating. The work that we're doing today, that Brian has talked a lot about in terms of setting ourselves up for being able to put out more and more products into the market and some of the foundational work that's happening today from a data standpoint and API layers and AI enablement, those things, if that is manifesting itself into the marketplace, into helping to free up even more offer supply, I think that's another thing that I would say is important and would signal that we're right on track. And then the points I was just making about the ability to expand profitability. As I look into next year, in the next couple of years, that would be my expectation is that we can drive higher profits.

Ron Josie, Analyst — Citi

That's great. You know, I don't know if there's any questions in the audience. We might have time for one. If that maybe we'll wrap up. But that's a great way to wrap up because I think there's a lot of things to look forward to as a business gets back into execution or continues to execute. So anyway, Matt, thank you very much for the time. This has been wonderful.