Shares of Ibotta Inc (IBTA) plunged 24.14% on Wednesday following the release of the company's second-quarter 2025 financial results and disappointing third-quarter guidance. The sharp decline reflects investor concerns over the digital promotions platform's revenue performance and future outlook.

For the second quarter, Ibotta reported revenue of $86 million, representing a 2% year-over-year decline and falling short of the analyst consensus estimate of $90.49 million. Despite the revenue miss, the company managed to post an adjusted earnings per share (EPS) of $0.49, surpassing analyst expectations of $0.41. However, this still marks a decrease from the $0.68 per share reported in the same period last year.

The most significant factor contributing to the stock's plunge appears to be Ibotta's weak guidance for the third quarter of 2025. The company projects Q3 revenue between $79.0 million and $85.0 million, which represents a year-over-year decrease of 17% at the midpoint. This outlook falls considerably short of the consensus estimate of $101.8 million, raising concerns about Ibotta's growth trajectory. Additionally, the company expects Q3 Adjusted EBITDA to be between $9.5 million and $13.5 million, with a margin of 14% at the midpoint, indicating further margin compression.

While Ibotta highlighted some positive developments, including a 27% year-over-year growth in quarterly redeemers on the Ibotta Performance Network and the expansion of its digital offers to the majority of DoorDash customers, these gains were overshadowed by the continued decline in its direct-to-consumer business. The company reported that direct-to-consumer revenue fell 19%, offsetting the 17% growth in third-party publisher revenue.

As Ibotta continues to navigate challenging market conditions and shifts its focus towards performance-driven, always-on promotions for brands, investors will be closely watching how the company's strategic initiatives and recent leadership changes translate into financial performance in the coming quarters. The market's severe reaction to the earnings report suggests that many investors are reassessing their expectations for Ibotta's near-term growth prospects.