Shares of Ibotta Inc (NYSE: IBTA) plunged 15.98% in after-hours trading on Wednesday following the release of its third-quarter 2025 financial results, which revealed a significant decline in revenue and shrinking profit margins.

The company, which operates the largest item-level digital promotions network in North America, reported a 16% year-over-year decrease in total revenue to $83.3 million. This decline was primarily driven by a 15% drop in redemption revenue, which fell to $72.1 million. Despite an increase in the number of redeemers on its platform, Ibotta saw a substantial decrease in redemptions per redeemer, indicating challenges in user engagement and offer attractiveness.

While Ibotta managed to beat analyst expectations with adjusted earnings per share of $0.56, compared to the consensus estimate of $0.00, investors seemed more focused on the company's deteriorating financial performance. The adjusted EBITDA margin contracted significantly to 20% from 37% in the same quarter last year, signaling increased pressure on profitability. The company's guidance for the fourth quarter also disappointed, projecting revenue between $80-$85 million, representing a year-over-year decrease of 16% at the midpoint, and an adjusted EBITDA margin of just 13% at the midpoint.