Good afternoon, and welcome to Ibotta’s Q2 2025 Earnings Conference Call. With us today are Bryan Leach, Founder and CEO; and Valerie Shepphard, Interim CFO. Today's press release and this call may contain forward-looking statements. Forward-looking statements include statements about our future operating results, our guidance for Q3 2025, our ability to grow our revenue, factors contributing to our potential revenue growth and the capabilities of our offerings and technology, all of which are subject to inherent risks, uncertainties and changes. These statements reflect our current expectations and are based on the information currently available to us, and our actual results could differ materially. For more information, please refer to the risk factors in our recent SEC filings. In addition, our discussion today will include references to certain supplemental non-GAAP financial measures and should be considered in addition to and not as a substitute for our GAAP results. Reconciliations to the most comparable GAAP measures are available in today's earnings press release and our 10-Q, which are available on our Investor Relations website at investors.ibada.com. Also, during the call today, we'll be referring to the slide deck posted on our website. Unless otherwise noted, revenue and adjusted EBITDA comparisons to prior periods are provided on a year-over-year basis. With that, I'll turn it over to Bryan.

Thanks, Sean, and good afternoon, everyone. Thank you for joining us to discuss our second quarter results. I'm pleased to welcome our new Chief Financial Officer, Matt Puckett. Matt most recently served as CFO of VF Corporation, a multibillion-dollar public company that is a global leader in apparel and footwear. Over his 23-year tenure at VF, Matt held multiple operating CFO roles, led a global finance team of over 1,000 professionals and oversaw Investor Relations, capital allocation, M&A and strategic planning. He brings deep expertise in stakeholder management, Board and Investor Relations and aligning financial strategy with business objectives. Matt will officially start with Ibotta on August 25. I'd also like to take this opportunity to thank our Interim CFO and Board member, Valerie Shepppard. Valerie stepped in earlier this year when we needed her, and she's done a terrific job leading our finance team during a time of transition. We're grateful that she will be returning to the positions of Lead Independent Director and Chair of our Audit Committee. Turning to our most recent financial performance. We reported revenue below the guidance range we provided on our first quarter earnings call, while adjusted EBITDA was in the lower half of the range. We are also guiding to third quarter results that are significantly below our prior expectations. These disappointing results can be explained by short-term headwinds, but I think it's important to first pan back and provide context on the broader transformation we are undertaking. At the end of the day, those short- term headwinds are almost all related to that transformation. At Ibotta, we face a classic innovator's dilemma. Should we focus on preserving our status as a leader in the CPG promotions industry by making relatively small refinements to our product offerings and going to market in…

Thank you, Bryan, and good afternoon, everyone. I would also like to welcome Matt Puckett to our team. In summary, we delivered revenue and adjusted EBITDA that were 4% and 8% below the midpoint of the guidance range we provided on our first quarter earnings call. Redemption revenue underperformed our expectations, while operating expenses were slightly lower than forecasted. Let's break down our revenue results in more detail. Revenue in the second quarter was $86 million, a decline of 2% year-over-year. Within that, redemption revenue was $73.2 million, down 1% year-over-year. Third-party publisher redemption revenue was $48.6 million, up 17% year-over-year, while D2C redemption revenue was $24.7 million, down 24% year-over-year. Ad and other revenues, which now represents 15% of our revenue, were $12.8 million, down 8% year-over-year. Turning to our key performance metrics. Total redeemers were 17.3 million in the quarter, up 27% year-over-year. We saw healthy growth in third-party redeemers across the IPN on a year-over-year basis, highlighting the continued strength of the demand side of our network. Growth was driven by the launch of Instacart during the fourth quarter of 2024, the launch of offers to the majority of DoorDash customers in the second quarter and like-for-like growth at our existing publishers. Redemptions per redeemer were 4.6, down 21% year-over-year, driven by the quantity and quality of offers available to each redeemer as well as the growth in third-party redeemers, which have a lower redemption frequency as compared to our D2C redeemers. Redemptions per redeemer on our third-party publishers were down 15% year-over-year in comparison. Redemption revenue per redemption was $0.91, down 1% year-over-year, primarily reflecting a mix shift toward third-party redemptions. On our third-party publishers, this metric was up 4% by comparison. As a reminder, redemption revenue per redemption can vary quarter-to-quarter based on seasonal patterns…

[Operator Instructions] Our first question will come from Ron Josey with Citi.

Bryan, I wanted to understand maybe a little bit more on just the rollout of CPID and I would love to hear the better results of the third-party data provider suggested were coming in better than your results. Talk to us more about what they were seeing and sort of what this means going forward. And then on the 6 new pilots that I think you mentioned are coming on here in the back half, how do they compare to the pilots that you were seeing earlier on in the year as CPID continues to evolve?

Thanks, Ron. I appreciate those questions. Let me quickly address them. On the rollout of CPID and the results that we've seen, the big breakthrough here is the ability to measure statistically the difference between an exposed and an unexposed audience in the same time period. That's been the gold standard for media measurement for years. It's never been provided in the promotions industry, and it's also never been provided in near real time. That is -- so what we've done is gone to these third-party companies that do the media list studies and said, we'd like to replicate that approach with digital promotions. And they've used their own data, their entirely independent panel of data. They have used their own methodology with their own statisticians. And what they're doing is saying there is a statistically significant lift. And therefore, we can say that the promotions are causing a significant amount of incremental sales. They then break that out by net new households gained, buy rate increases, basket size increases. And again, totally independent of the analysis that we're providing, they can then calculate a total incremental sales and a CPI. And what we're seeing when you look at that is that those are more favorable, thus suggesting that Ibotta is conservative. And we've seen that now consistently across a number of studies with this provider that I alluded to. On the question of the 6 new pilots and how they compare, I would say that we have a mix of smaller emerging, faster-moving companies and some of the largest CPG companies in the world, which is new from the last time we spoke. And the conversations that we've had, particularly with the larger companies are now breaking out of conversations with the promotions team. And for the first time ever, we are talking to the people who manage multibillion-dollar sales organizations and the P&L. They're simply unfamiliar with Ibotta entirely. And when we presented our new capabilities to them, it's been met with real enthusiasm leading to pilots that are slated to go out. So I think that we'll have to see how those perform. And keep in mind, we have 2,200 brands and hundreds of almost 1,000 clients, 800 or so clients. So we have a long way to go to roll this out more broadly, but we continue to choose partners we think we can gain the most valuable feedback and where the size of the prize is material.

Our next question will come from Eric Sheridan with Goldman Sachs.

When -- maybe it's a 2-partner. When you think towards the remainder of this year, how should we be thinking about the pieces of this strategy that still need to be put in place to execute as you move out of 2025 and into 2026, sort of paraphrase as the things inside your control? And then second, when you think about that timing or duration narrative of the things inside your control, how much are they aligned against budget decisions that tend to be very lumpy and concentrated around the November to February time frame when people are sort of setting 1-year forward budget priorities, just so we can align up the typical cadence of marketing spend with the things inside your control on the strategic side?

Thanks, Eric. The remainder of the year, what needs to be done, I think you can group this into 3 broad categories. First, we need to consolidate the benefits of our sales execution, including our reorganization. We've completed the reorganization, but there are still unfilled positions that need to be filled. People need to be trained in these new go-to-market approaches and new products. That remains, I think, something that's within our control and can be done by the end of this year. Second, you have the implementation of the new go-to-market. And that is something that we need to broaden the aperture beyond the small number of clients that have been pitched on this new capability. And to do that, we're going to gain learnings. And honestly, it's unclear how long it's going to take for us to dial that. It could be that, that goes very smoothly, and we're able to be in a position at the end of the year where that is largely how we're going to continue to go to market in 2026 or maybe that we gain learnings and need to modify that, but that's largely within our control. And then there are some product and tools challenges that we need to resolve. So it's one thing to be able to create these calculations, predicted incremental sales and CPIs. It's another to be able to do that at the full scale of our entire business in an automated fashion so that you don't need manual calculations that take time so that they are able to be done in flight so that all of the reporting can be automated, so our sellers aren't spending time and our client analytics team isn't spending time doing that instead of selling and mastering the businesses of our clients.…

Our next question will come from Mark Mahaney with Evercore.

Okay. Let's see here. Hopefully, you can hear me. I want to go back to some of the original relationships you had, particularly Walmart and just give us a sense of how those -- the retention you've had with those, the rollouts you've had in terms of the loyalty programs with them and just some of the core things that we looked at when we first looked at Ibotta how those are faring.

Thanks, Mark. The publisher side of our business is a real bright spot, especially with our existing publishers, we've picked up steam and gained momentum in terms of the tightness of our collaboration and the efforts they're making to increase awareness and decrease friction in terms of using the programs that feature our digital manufacturer offers. With Walmart, for example, we've been collaborating ever more closely across the board, ranging from how they communicate with their customers at every touch point digitally and in the store beyond just search results. You'll now see that there are certain display ads that have a reference to a relevant digital manufacturer offer that wasn't true before. They're badging other forms of digital media with something that indicates that there's a digital manufacturer offer. We're collaborating with them on routine communications that can notify people of personalized savings, decreasing friction in using the phone number instead of the app, putting it on the self-checkout, thinking through how we can be helpful with other strategic priorities of theirs, which will make these bubble up much more in the store. That's been a real commitment that's been noticeable from Walmart. I think we've hit a major milestone in how much Walmart cash has been earned. I think it's clearly helping them drive loyalty online and in-store, and they're leaning into it more. So I'm very pleased with how that's going. I think with regard to the adoption of it, it continues to grow very nicely and be cited as a bright spot in the shopping experience at Walmart. With regard to other publishers, we continue to see those roll out and grow and contribute to the redeemer base. Broadly, the third- party redeemers are growing nicely. Of course, D2C is not growing as much. And that is, we think, purely a function of the low number of redemptions per redeem. And when that inventory of offers increases again, we've seen that be very resilient. But I think the pipeline of publishers is also strong. I have nothing to announce right now, except to say that we have terrific momentum, we believe, internally. And that is not our problem right now. We feel like the scale of our network is unparalleled. There is not another tool that you can use to drive more incremental sales if you were a CPG brand manager full stop. We are out in front and widening that lead. What we need to do is unlock offer supply. And I think that's why the focus of my remarks was there. But it is true that this has been a bright spot.

Our next question will come from Ken Gawrelski with Wells Fargo.

Maybe kind of following up on a couple of these questions. Could you just talk about the environment more broadly away from the CBIT side, but more of the traditional IPN, -- what are you hearing from the supply side, not the publisher side, but the supply side on promotions? Can you talk a little bit about the environment? Are you seeing reticence among some of those to increase supply? My understanding is over the past years, there have been times where you would see new budgets come in for the back half at a midyear point. I'd just be curious as to see about that. And then the second thing is maybe back -- and this kind of circles around to your investment levels and the marketing. How do you think about the right level of investment? How should we think about the right level of investment over the next, say, 12 to 18 months to get the -- to get everything you need to kind of validate the CBIT approach and really drive market adoption there?

Yes, those are the right questions for sure, Ken. Thank you. I think on the first one, the environment, I didn't spend much time on that in my remarks, but it's true that the macro is not helping us right now. There are a few of our larger clients who have taken an approach of pausing on promotional spend in the back half, taking a wait-and-see approach, having to do with the economic climate, the tariffs, the political climate, in some cases, sort of food regulation on the horizon. I think that they also face just difficult growth trajectories, a lot of these CPG companies, and there have been efforts to be really careful on the bottom line of their business by cutting and pausing costs. And I think traditionally, promotions have been seen as a discretionary cost. We hope to convince them, and we are convincing them that, in fact, we are one of the best ways to inflect top and bottom line growth and that they should lean in now more than ever into our platform. But at a time when they are pulling back on discretionary spending, they're demanding more rigor and more credibility and measurement and clear ROI. And so I think that we started this journey late last summer, and I think it's good that we did because we're now kind of closing in on a year of real aggressive R&D, and we find ourselves being able to respond to all the things that we're hearing on the supply side with direct new fresh products that address those concerns. So typically, when someone says, I can't give you a multiple of what I've given you in the past, their explanation is that they don't believe that the promotion is delivering profitable revenue growth, may fear…

Our next question will come from Chris Kuntarich with UBS.

I just want to touch on general merchandise here for a second. Anything that you're seeing here that would indicate that this part of the client base is reacting differently to the current environment versus your CPG brands? And same question, just as it relates to the CPI offering, are they requiring a similar amount of pilot period and third-party testing? That would be it for me.

Thanks, Chris. I think that's one where the impact of tariffs has been more pronounced, where there's more exposure to international supply chains than you would see in the American food fast-moving consumer goods brands. And so if anything, those -- some of those trends I alluded to creating some broader reticence about discretionary spend are a little bit more pronounced. That said, we have taken this CPDI, what we call now the performance marketing product. We've taken the performance marketing product out to a number of general merchandise brands and had a very positive reception to that. What we need to go and further validate is how that will perform when they run a larger number of pilots. There are many categories where we haven't run pilots yet. You have to have a certain amount of data in order to make the CPID real-time measurement work and be statistically significant. And the more purchase cycles there are, the more you have the opportunity to benefit from a follow-on purchase that is not on offer. So for instance, if you're doing an offer on a Barbie Dreamhouse, you can't count on someone coming and buying necessarily another Barbie Dreamhouse, but do they come back and buy other Barbie products that aren't on sale and how much does that contribute to the overall value of the program relative to the cost and so forth. So there are some real unknowns there in terms of how this model is going to map on to different formats. I would say, broadly speaking, though, we continue to be excited about general merchandise. This is an industry that has never really had promotions at all, digital promotions. And so to bring them something that's this innovative as their first exposure to the category is just creating even more excitement about giving it a try. And I think one of the things that's increasing our credibility is no longer are we sending a recap deck afterwards where they find out weeks after the campaign, whether it worked or not, they can see on a regular basis how it's going, just the way they would if they were buying on -- the Trade Desk or Facebook or Twitter, and they can make changes and optimizations while that's happening. And that has been a source of, I think, significant excitement as well from both general merchandise and more broadly.

Our next question will come from Bernie McTernan with Needham.

Two for me. Maybe just to start, Bryan, just interested if you had any knee-jerk reactions on Amazon moving to free same-day delivery on perishable items for grocery, what it means for the category more broadly and impacts on Ibotta potentially? And then second, also in your prepared remarks, Bryan, you mentioned how you would have beat consensus in the quarter had it not been those 2 accounts that stopped spending in the second half of the second quarter. I mean does that imply that the CI clients were on track to spend like a high single-digit millions of dollars in the quarter?

Thanks, Bernie. Never any flies on you. I appreciate those questions. With regard to the first one, yes, look, I think the whole industry regards same-day delivery and speedy delivery as kind of table stakes at this point. I know Walmart has made great strides in the number of products that you can get within 20 minutes. It's pretty remarkable. I think that we are a totally omnichannel solution. And so we don't -- we're actually excited as the industry moves more toward e-commerce and sort of buy ahead, pick up in store, we're integrated into those user experiences. So I think that's broadly positive for us. And as we get more marketplaces that do that kind of same-day delivery, like DoorDash and Instacart, we think that perhaps the other ones that are out there will see the benefit of what we offer and will be a big part of the consumer adoption of things like free same-day delivery. On the second question, yes, we missed by a low single-digits percentage. I said we would have been ahead of consensus. You can do the math on that. And what I can tell you is that we wouldn't have provided that in our guidance unless we had an extremely high degree of conviction that it was going to be in there. And sometimes after you provide guidance, the circumstances change in ways that are really hard to anticipate. And that sounds extremely lame and unimpressive, but that is what happened. And so having learned our lesson on that and feeling chagrined about that, we're going to take a more conservative approach with regard to the current quarter and the fourth quarter.

Our next question will come from Andrew Boone with JMP Securities.

I wanted to go back to your answer for Ron's question and really double-click in terms of measurement and automating processes with third parties. Can you help us specifically understand what you need to do there to unlock incrementality measurement that's more automated? And then what kind of time line should we expect before that really gets mature and fully implemented across your guys' processes? And then, Bryan, just going back to some of your comments earlier, it sounds like there may be a 6, 9, maybe even a year-long lag in terms of kind of the comfort of a CPG brand. If I kind of extrapolate that across the model and kind of this transition, should we not expect growth to really start to reaccelerate for this to get going until 2027? Is that fair? Or is it sooner than that?

Yes. That's great. Thanks, Andrew. Let's start with your first cluster of questions regarding measurement automation. I want to distinguish between 2 topics: the measurement that we provide through Ibotta’s tools, which is allowing you to have essentially a free rolling lift study. That is something that is very far along the path. We are providing that to several clients now on a regular basis with sort of a color coded, how is it going and optimization opportunities. But to do that at the scale of all of our clients will require us to continue to develop some things on our road map in the back half of this year. We're hopeful that we can offer that to all of our clients heading into 2026. With regard to what I think you're asking about is sort of the third-party measurement side and how can we speed that up or automate that A lot of that is very front-loaded effort, reaching out to them, explaining that the promotions industry has never been treated as media, has never had a third-party lift study, describing the financial opportunity that might exist, making sure they understand the data assets we have, going through a process that allows them to basically tailor what they do and what's industry standard. They can apply it in their unique approach and data sets to the circumstance of Ibotta. That has taken time, a business development time line. Once that's in place, you do a few studies, you work out some kinks and then it should be something that is a matter of weeks to generate a study. Obviously, we would ultimately like to get that down to where somebody could generate a study in a day or even mid-campaign rather than having to wait until after the campaign…

Our last question will come from Andrew Marok with Raymond James.

On the CPI framework, so with some of these budgets that you might have had maybe being a little bit knock loose in the transition, do you have a sense of where they're going? Are CPGs maybe allocating them to other performance channels requiring a win back at some point? Or are they just kind of being parked in the meantime?

Thanks, Andrew. I think it's a combination. There are certainly situations where these budgets are being parked. And we're being told, listen, it's not you, it's us. we have a freeze on all discretionary spend for the near term. And sometimes they'll unfreeze that, and we'll see significant investment. This third quarter last year, we had some quite exceptional heavy investments that created a very hard comp for us. So if you look at -- we had these chicken wars that happened in the third quarter of last year, where the leading providers of chicken products decided to really invest millions of dollars in that quarter. We had another one of our top 5 clients spend about 50% more than they typically would in a quarter. So there is lumpiness and sometimes that benefits you. You'll recall last third quarter last year, we guided down and then beat by like $7 million or $8 million because in the second half of the third quarter, that happened. So one of the reasons why we're transitioning our business model is to address the desire for much greater predictability and forecastability the more people are investing on a rolling basis, the more we have a really clear understanding of what we can expect in a given -- in a future quarter. There are, though, I don't want to shy away from and own the fact that there are situations where we could have won business and did not because we didn't have a person manning the account. We didn't have our best foot forward in an RFP. And look, a lot of this happened in November, December, and we didn't really realize until now the effect that might have on the knock-on effect of that of getting the up for grabs dollars that…

This concludes the Q&A section of the call. I would now like to turn the call back to Bryan Leach for closing remarks.

Thank you very much to everybody for participating on today's call. We'll continue to be as transparent as we possibly can regarding the transformation of our business. We're super excited about the future of Ibotta. We have a lot of conviction that we're on the right track. I'm incredibly proud of our team that has had the courage to lean into this paradigm shift. And I think that is ultimately what's going to separate our company from the other companies that have not had success breaking out of this category. The things we're doing and trying now and bringing to market have never been done and tried and brought to market before. The responses are really clear and consistent. And as an entrepreneur and founder who's been doing this for now nearly 13.5, 14 years, I believe that we're seeing something that is going to be a much more strategically valuable asset and tool and partner for America's leading CPG brands and emerging brands. Thank you very much, and we appreciate your time and attention.

Thank you for joining today's session. The call has now concluded.