Key Points
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Ibotta posted a strong third quarter after 18 months of stagnation.
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The company appeared to cut prices on its marketing services and saw a big rebound in demand.
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The effects of the 2025 cuts to social programs may also be waning.
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Shares of Ibotta, Inc. (NYSE:IBTA) rallied as much as 32.6% on Tuesday, before retreating to 24.6% as of 1:39 p.m. EDT.
Ibotta reported its third-quarter earnings last night that came in better than expected and signaled a turnaround in the business after a nearly two-year revenue slump.
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Ibotta’s revenue accelerates
Ibotta operates a marketing platform for discounts on consumer packaged goods, which major retailers then use to advertise to their customers.
In the third quarter, Ibotta grew revenue by 17.4% to $97.8 million, with adjusted (non-GAAP) earnings per share up 10.7% to $0.62. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was up another 43% to $23.8 million.
Those were exciting numbers for Ibotta, and marked a big acceleration from the prior quarter’s mere 3% growth.
Ibotta’s revenue had been stagnating since the beginning of 2025, as economic worries and cuts to government assistance programs squeezed consumer budgets. Of note, Ibotta’s retailer customers include Walmart (NASDAQ:WMT) and Dollar General (NYSE:DG), which serve lower-income customers.
However, it appears management’s decision to lower its take rate per redemption spurred a big uplift in volumes, propelling revenue and EBITDA higher. Additionally, Ibotta has repurchased a significant amount of stock over the past year and a half, with its share count down about 20% from just one year ago, despite retaining a substantial net cash balance on the balance sheet.
Image source: Getty Images.
Ibotta is getting back toward IPO levels
Ibotta had been a strong grower when it went public in 2024 at $88 per share, before the revenue growth disappointment of 2025 led to a huge stock crash. However, the stock price decline also enabled management to repurchase a large amount of stock, using cash raised in the IPO.
Ibotta is an interesting small-cap stock to track; however, shares aren’t nearly as cheap as they were at the beginning of the year. While the stock is still about 30% below its IPO price, the company’s valuation has returned to a fairer level after this year’s 183% gain.
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Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dollar General, Ibotta, and Walmart. The Motley Fool has a disclosure policy.
