Ibotta (IBTA) risk factors, FY2024 10-K

Risks Related to our Business

1. 01We have a history of net losses, we anticipate increasing expenses in the future, and we may not be profitable
2. 02these risks and challenges as we encounter them, our business, financial condition, results of operations, and prospects could be materially adversely affected
3. 03We may encounter unforeseen operating expenses, difficulties, complications, delays, and other factors, including as we expand our business, execute on strategic initiatives, and navigate macroeconomic uncertainty, which may result in losses or a failure to generate profitable growth in future periods
4. 04We are also dependent on our publishers to take steps to integrate with the IPN and to maximize and encourage offer redemption, including decisions relating to user experience and design, marketing, and proper maintenance of their technology
5. 05If we fail to maintain or grow offer supply and redemptions on our network, our revenues and business, financial condition, results of operations, and prospects could be materially adversely affected
6. 06Our business, financial condition, results of operations, and prospects could be materially adversely affected if we do not renew, maintain, and expand our relationships with CPG brands or add new CPG brands
7. 07If our CPG brands choose to materially alter the breadth, depth, or parameters of the offers they provide to us for distribution throughout our network, this could cause unforeseen reductions in the number of redemptions
8. 08We may not be able to sustain our revenue growth rate
9. 09For example, our Ad & other revenue have decreased in 2024 compared to 2023 due to a shift in CPG client spend from Ad & other revenue to redemption revenue
10. 10We provide content to publishers indirectly through technology partners and our business, financial condition, results of operations, and prospects could be materially adversely affected if we do not renew, maintain, and expand our relationships with such technology partners
11. 11We expect a number of factors to cause our results of operations to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance
12. 12Macroeconomic conditions, including slower growth or a recession and supply chain disruptions, have previously affected and could continue to adversely affect our business, financial condition, results of operations, and prospects
13. 13A recession or market correction could also decrease marketing spend, particularly in media, and could adversely affect the demand for our solutions, and our business, financial condition, results of operations, and prospects
14. 14Competition presents an ongoing threat to the success of our business
15. 15Our business, financial condition, results of operations, and prospects could be materially adversely affected if we do not renew, maintain, and expand our relationships with retailers
16. 16If we fail to effectively manage our growth, our business, financial condition, results of operations, and prospects could be materially adversely affected
17. 17We have a limited operating history and operate in an evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful
18. 18If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above, as well as those described elsewhere in this “Risk Factors” section, our business, financial condition, results of operations, and prospects could be materially adversely affected
19. 19publishers, CPG brands, retailers, and consumers could be impaired, and our business, financial condition, results of operations, and prospects could be materially adversely affected
20. 20Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense. As a result, our sales and revenue are difficult to predict and may vary substantially from period to period, which may cause our results of operations to fluctuate significantly
21. 21Our business is typically affected by seasonality, which results in fluctuations in our operating results
22. 22Internet search engines drive traffic to our network, and our new consumer growth could decline. If we fail to appear prominently in search results, our business, financial condition, results of operations, and prospects could be materially adversely affected
23. 23Restrictions imposed by our outstanding indebtedness and any future indebtedness may limit our ability to operate our business, to finance our future operations or capital needs, or to engage in acquisitions or other business activities necessary to achieve growth
24. 24An inability to attract and retain highly qualified employees, including as a result of restrictive changes to immigration laws or the varying application of immigration laws, may hamper our growth and cause our revenues to decline, adversely affecting our business
25. 25Failure to deal effectively with fraudulent or other improper transactions could materially adversely affect our business, financial condition, results of operations, and prospects
26. 26If we cannot maintain our Company culture as we grow, our business and competitive position may be harmed
27. 27Operating and growing our business may require additional capital, and if capital is not available to us, our business, financial condition, results of operations, and prospects may suffer
28. 28We are making substantial investments to expand our technologies, tools, and offerings to capitalize on new and unproven business opportunities and expect to increase such investments in the future. These initiatives are risky, and we may never realize any expected benefits from them
29. 29Acquisitions and strategic alliances could distract management and expose us to financial, execution, and operational risks that could materially adversely affect our business, financial condition, results of operations, and prospects
30. 30The effects of health epidemics, including COVID-19, have had, and may in the future have, an adverse impact on our business, operations, and the markets and communities in which we and our partners operate
31. 31Our collection cycles can vary, and we may experience difficulty collecting accounts receivable that could materially adversely affect our business, financial condition, results of operations, and prospects
32. 32We may become involved in litigation that could materially adversely affect us
33. 33An increase in interest rates could materially adversely impact our business
34. 34Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses, including unauthorized use or disclosure of consumer data
35. 35Although we do not currently have any plans to expand our operations outside of the United States, if we attempt and fail to expand effectively in international markets, our business, financial condition, results of operations, and prospects could be materially adversely affected

Risks Related to our Platform

1. 36business, financial condition, results of operations, and prospects could be materially adversely affected
2. 37If our security measures or information we collect and maintain are compromised or publicly exposed, publishers, CPG brands, retailers, and consumers may curtail or stop using our platform, and we could be subject to claims, penalties, and fines
3. 38imposed by publishers, browsers, integrated retailers, or software developers, changes in technology, and new developments in laws, regulations, and industry requirements or standards
4. 39Our business depends on our ability to maintain and scale the network infrastructure necessary to operate our platform, including our websites and mobile apps, and any significant disruption in service could result in a loss of publishers, CPG brands, retailers, and consumers
5. 40We are dependent on technology systems and electronic communications networks that are supplied and managed by third parties, which could result in increased expenses and an inability to prevent or respond to disruptions in our solutions
6. 41We allow our clients and publishers to use application programming interfaces (APIs) with our platform, which could result in outages or security breaches and materially adversely impact our business, financial condition, results of operations, and prospects
7. 42We depend on the interoperability of our platform across third-party apps and services that we do not control

Risks Related to Our Intellectual Property

1. 43We may not be able to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties
2. 44Because patent applications can take years to issue from U.S. Patent and Trademark Office, and are often afforded confidentiality for some period of time, there may currently be pending applications filed by third parties, unknown to us, that later result in issued patents that could cover one or more of our products
3. 45Some of our solutions contain open source software, which may pose particular risks to our proprietary software and solutions
4. 46We may be unable to continue to use the domain names that we use in our business or prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand, trademarks, or service marks
5. 47The use of AIML technologies in our platform and in our business may result in reputational harm or liability and could materially adversely affect our business, financial condition, results of operations, and prospects

Risks Related to Government Regulation, Tax, or Accounting Standards

1. 48standards relating to endorsements and influencer marketing. Many of these laws, regulations, and industry standards are changing, may be subject to differing interpretations, may be inconsistent among countries or conflict with other rules, and may be costly to comply with or inconsistent among jurisdictions
2. 49Changes to federal and state laws, including changing interpretations by relevant authorities, regarding money services businesses and money transmitters could impact our rewards programs and other offerings
3. 50The federal and state “tied-house” laws governing ownership interests in alcoholic beverage manufacturers, wholesalers, and retailers could materially adversely affect our business, financial condition, results of operations, and prospects
4. 51Changes in laws and regulations related to the internet or changes to internet infrastructure may diminish the demand for our solutions, and could materially adversely affect our business, financial condition, results of operations, and prospects
5. 52attract new users may be impaired, our costs may increase, and our business, financial condition, results of operations, and prospects could be materially adversely affected
6. 53If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired
7. 54We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, particularly after we are no longer an “emerging growth company,” which could materially adversely affect our business, financial condition, results of operations, and prospects
8. 55against us, and our business, financial condition, results of operations, and prospects could be materially adversely affected
9. 56Our ability to use our net operating loss carryforwards and certain other tax attributes to offset future taxable income may be limited
10. 57If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be materially adversely affected
11. 58Failure to comply with anti-bribery and anti-corruption laws, anti-money laundering laws, and similar laws could subject us to penalties and other adverse consequences

Risks Related to Ownership of Our Class A Common Stock

1. 59We cannot predict the effect our dual class structure may have on the trading price of our Class A common stock
2. 60The public trading price of our Class A common stock may be volatile, and the value of our Class A common stock may decline
3. 61We have adopted a Share Repurchase Program to repurchase shares of our Class A common stock; however, any future decisions to reduce or discontinue repurchasing our Class A common stock pursuant to the Share Repurchase Program could cause the market price of our Class A common stock to decline
4. 62Although we do not expect to rely on the “controlled company” exemption under the listing standards of the New York Stock Exchange, we expect to have the right to use such exemption, and therefore we could in the future avail ourselves of certain reduced corporate governance requirements
5. 63Future sales of our Class A common stock in the public market could cause the market price of our Class A common stock to decline
6. 64We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A common stock less attractive to investors
7. 65Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the market price of our Class A common stock
8. 66actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock
9. 67Additional issuances of our stock will result in significant dilution to our stockholders
10. 68Natural disasters and other events beyond our control could materially adversely affect our business, financial condition, results of operations, and prospects
11. 69We do not intend to pay dividends on our Class A common stock in the foreseeable future, so any returns will be limited to the value of our Class A common stock