IBTA Q2 Deep Dive: Transformation-Driven Disruption and Strategic Sales Overhaul

Cash-back rewards platform Ibotta (NYSE:IBTA) fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 2.2% year on year to $86.03 million. Next quarter’s revenue guidance of $82 million underwhelmed, coming in 19.3% below analysts’ estimates. Its GAAP profit of $0.08 per share was 57.5% below analysts’ consensus estimates.

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StockStory’s Take

Ibotta’s second quarter results were met with a strongly negative market reaction, largely due to performance that came in below Wall Street expectations. Management attributed the underperformance to short-term disruptions stemming from an ongoing business transformation and reorganization of the sales force. CEO Bryan Leach described the company’s decision to pursue a broader strategic shift as a deliberate move to access larger media budgets and reposition Ibotta within the consumer packaged goods (CPG) promotions industry. He further acknowledged that, while early feedback on the new performance marketing model has been positive, delays in client ramp-up and validation were the primary causes of the revenue shortfall.

Looking forward, Ibotta’s guidance reflects management’s caution about near-term growth as the business transformation continues. Leach emphasized the challenges of navigating client budgeting cycles and noted that major CPG clients are taking longer to commit to larger-scale campaigns, even after favorable pilot results. He expects the impact of the new sales organization and performance marketing capabilities to become more apparent over the next year, stating that, “progressing from initial enthusiasm about a pilot to rolling campaigns on a much larger scale requires navigating complex matrix organizations that can’t always move as quickly as we would like.”

Key Insights from Management’s Remarks

Management pointed to two main factors behind the quarter’s underperformance: delayed client adoption of its new performance marketing model and the disruptive effects of an internal sales reorganization.

• Transformation strategy rollout: Ibotta is shifting from traditional CPG promotions to a performance marketing model that measures campaign effectiveness in real time, aiming to attract larger client budgets and move closer to other digital media standards.
• Client pilot delays: Two large pilot clients, initially expected to drive revenue this quarter, paused new campaigns while awaiting third-party validation of Ibotta’s new measurement approach. Although third-party studies have confirmed positive results, clients have yet to resume spending at scale.
• Sales organization overhaul: The company reorganized its sales structure from a territory-based model to one focused on industry subverticals, reducing account loads and refining quotas. This has caused short-term disruption, including turnover and client handoffs, which management believes impacted revenue continuity.
• Publisher partnerships growth: On the publisher side, Ibotta expanded its offer availability to the majority of DoorDash customers and deepened collaboration with Walmart, which included new in-store integrations designed to improve program awareness and ease of use.
• Executive team expansion: Several key hires joined Ibotta’s leadership, including a new Chief Financial Officer and senior sales executives with backgrounds in digital media and promotions, which management expects will strengthen execution and accelerate transformation.

Drivers of Future Performance

Management expects near-term revenue and EBITDA to remain pressured as the company navigates client adoption cycles, sales team ramp-up, and macroeconomic headwinds.

• Client adoption timing: The speed at which major CPG clients transition from pilot programs to ongoing, larger-scale performance marketing campaigns will be a key determinant of revenue growth. Management noted that these transitions may take up to a year due to internal client budgeting processes and the need for third-party measurement validation.
• Sales team effectiveness: The success of the new sales structure—grouped by industry subverticals and supported by new leadership—will influence Ibotta’s ability to deepen client relationships and reduce disruption from account transitions. Management believes that improved continuity and a more consultative approach should drive better results over time.
• External spending environment: Broader industry trends, including cautious discretionary spending by large CPG clients and macroeconomic uncertainty, present risks to near-term growth. Management acknowledged that clients are demanding rigorous ROI measurement and may delay promotional spending until economic or regulatory conditions stabilize.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be monitoring (1) the pace at which major CPG clients move from pilot programs to rolling out performance marketing campaigns at scale, (2) the effectiveness and stability of Ibotta’s reorganized sales force in driving new business and retaining key accounts, and (3) continued expansion of publisher partnerships and in-store integrations, which could broaden Ibotta’s reach and value proposition. Progress in automating measurement tools and reducing client onboarding friction will also be key indicators of transformation momentum.

Ibotta currently trades at $21.80, down from $34.07 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

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