管理層發言
Good afternoon, and welcome to Ibotta's Q2 2026 Earnings Conference Call. With us today are Bryan Leach, Founder and CEO; and Matt Puckett, CFO. Today's press release and this call contain forward-looking statements. Forward-looking statements include statements about our future operating results, our guidance for Q3 2026, our ability to grow our revenue, our ability to grow supply and demand on our network, factors contributing to our potential revenue growth, our key initiatives, our partnerships 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 our earnings press release, our 10-Q to be filed this week and our Q2 2026 earnings presentation which are all available on our Investor Relations website at investors.ibotta.com. 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.
Thank you, and good afternoon, everyone. I'm pleased to report that in the second quarter, Ibotta delivered top- and bottom-line financial results that exceeded the high end of our guidance range. And importantly, we've returned to year-over-year revenue growth, a full quarter ahead of our expectations. This positive development was driven primarily by a steady improvement in our advertiser offer supply which continues to benefit from growth in both our core product and our newer capabilities like LiveLift. Our top-line acceleration was led by our redemption revenue growth. In Q2, redemption revenue grew by 10% year-over-year, marking our fastest pace of growth in this core part of our business since the third quarter of 2024. Third-party redemption revenue grew 27% year-over-year. This growth corresponded to the continued growth in our redeemer base. We achieved year-over-year redeemer growth of 21% in the quarter.
This represents our fastest rate of expansion since Q2 of 2025 at a time when our metrics were benefiting from the launch of our Instacart and DoorDash partnerships. What's most exciting about these results is that we're driving this redeemer velocity efficiently across a significantly larger network footprint, which speaks to the continued health in the demand side of our business. Today, we are reporting that we have 20.9 million redeemers. To put this in perspective, just five years ago, we had approximately 2 million redeemers, an increase of more than 10x since then. As you've heard me say before, increased demand for offers alone isn't enough. Until we have the depth of offer supply to match the demand, we can't capitalize fully on the opportunity it presents. There are positive signs on that front, including the fact that we delivered year-over-year growth in our third-party redemptions per redeemer for the first time since the third quarter of 2024.
These results are a direct outcome of stronger execution by our team. With a few quarters now under their belt, it's clear that the new verticalized sales structure and broader revenue organization we put in place beginning in Q3 of last year is working as intended. Our teams are providing customers with an upgraded consultative sales and service motion, spending more time in market strengthening client relationships at all levels and ensuring the level of account management continuity required to unlock deeper advertising budgets. The recovery we're seeing is distributed broadly across our clients. In fact, within our enterprise client base, the majority of accounts that declined in 2025 were back to year-over-year growth in Q2. To share one anecdote to give you a sense of how this commercial inflection is playing out, one of our largest household products partners, a consistent top-20 client for us, was actually an early pioneer who gave us feedback back in 2024 that helped shape the initial concept of LiveLift.
While their overall spend declined in 2025, we doubled down on our in-person engagement across several of their brand teams. We deepened that relationship significantly over the past year. In fact, our leadership team was invited to present at the client's internal marketing event earlier this year. We saw success by effectively multi-threading and engaging with teams across shopper marketing, analytics and sales. This high-touch service motion quickly translated into expanded business. With recent share losses in a key segment, the client has been hyper-focused on driving incremental sales and household penetration. Given these objectives, LiveLift is a strong fit. After running a successful initial LiveLift campaign late last year, they expanded LiveLift in the first half of 2026 across the original brand as well as new brands in different product divisions. As a result of this upgraded execution and LiveLift expansion, our net revenue with this key partner is up 75% year-over-year in the first half of 2026.
This upgraded commercial execution is aided by our seasonal events marketing playbook, which identifies opportunities for clients to leverage retailer-native Ibotta offers during peak retail moments such as back-to-school, Prime Day and Walmart deal days. Since May, a substantial portion of our closed-won deals have directly benefited from this strategic playbook, as brands look to capture outsized market share and maximize visibility during times when consumer volume and engagement are high. From a vertical perspective, our growth this quarter was driven by three core categories: emerging brands, food and health and beauty. In emerging, we're seeing significant budget inflows from challenger brands that are leveraging our network to drive immediate, efficient, net-new household acquisition. In food, which remains an important category and the one most challenged by the current macroeconomic landscape, our performance marketing message is resonating deeply.
Brand managers in this space view value delivery as a core mandate, and we believe they are leaning into our network because we provide scale and efficiency. In health and beauty, our strong growth is consistent with the relatively healthy industry trends for the category. Our performance across each of these categories illustrates how the Ibotta performance network benefits from its diverse content, driving critical volume in more challenged sectors like food, while capturing high-velocity dollars in healthier expanding categories like health and beauty. We also continue to position ourselves as thought leaders in the promotion space. In June, our team was on stage at the Cannes Lions International Festival of Creativity alongside key partners from Kenvue, Grupo Bimbo, DoorDash and Uber. In July, our team appeared with the SVP of Marketing and Insights at Mondelez at the ADWEEK House SportsCenter.
Those sessions demonstrated our commitment to continuously raising the bar when it comes to measurement rigor in our industry. Along with Circana, we recently released a comprehensive meta study and analysis, evaluating 48 different Ibotta campaigns across multiple CPG categories. The data from this independent study showed an average lift of 16.5% in incremental sales and a 17% average increase in new household penetration for the products promoted in our network. Crucially, the study also revealed a 10.9% average sales lift on non-promoted items within the same brand portfolio, demonstrating that our promotions generate a powerful cross-retailer halo effect for a brand's broader catalog. These campaigns exceeded Circana's standard sales lift benchmarks by a factor of 7x, showing the power of our promotions to move the needle for our CPG brand clients. As Circana's SVP of Global Media Enablement and Measurement noted in the release, "For years promotions and media have been evaluated on different standards, limiting marketers' ability to make true investment comparisons.
What this research shows is that when you apply the same methodology used for traditional media, promotions can play a much larger role in driving incremental growth than many organizations currently assume." We believe that stronger execution, coupled with continued investment in innovation and thought leadership, reinforces our position as a trusted partner our clients look to in order to deliver more revenue and grow market share. We continue to focus on making it as easy as possible for our CPG clients to buy campaigns on the Ibotta Performance Network. This, we believe, creates a larger TAM opportunity and unlocks access to even greater offer supply. As it relates to the key automation initiatives I discussed last quarter, we remain on track and have made significant progress against all three work streams. We're building a powerful and intuitive next-generation buying experience for our clients which we believe will also free up our sales force to focus on selling rather than navigating administrative tasks, as well as enabling greater scaling of LiveLift.
At the same time, revenue from LiveLift continues to grow both year-over-year and quarter-over-quarter. Finally, as I alluded to at the top of my comments, we believe the value proposition of the Ibotta Performance Network is resonating on the demand side of the marketplace. Earlier today, we officially welcomed 7‑Eleven, Inc. to the IPN, marking our third major publisher addition this year and significantly expanding our convenience store footprint. Ibotta will serve as the exclusive third-party provider of CPG digital promotions, excluding age-restricted items, to the 7‑Eleven 7NOW and Speedway apps, reaching shoppers across more than 11,500 U.S. store locations. The convenience store channel is strategically vital for many of our largest food and beverage clients, and we are thrilled to bring Ibotta's national offer supply to this broad and important consumer base. Historically, this specific retail channel has lacked access to coordinated digital promotions.
By embedding our digital offers natively into this environment, we're unlocking another high-intent surface for our advertisers, giving them an opportunity to impact consumer consideration and purchase behavior at the convenience-store digital shelf. This addition is also a great example of how our network reinforces itself as several of our key CPG clients actively helped us advocate for and secure this new publisher. In addition to this new signing, we officially launched our native offer experiences at Uber at the tail end of the second quarter, and our integration with Giant Eagle went live in July. Both onboarding processes are progressing smoothly and according to plan. Furthermore, within our existing footprint, we continue to benefit from close collaboration with our publishers; with multiple retail partners, we're expanding how offers are integrated across digital and in-store experiences.
For example, we're working closely with Walmart to help customers more easily discover manufacturer-funded savings throughout the shopper journey, including in stores, thereby reinforcing the retailer's value proposition while creating a more seamless customer experience. Our partners continue to see substantial strategic benefits from these integrations, including deeper digital engagement, greater loyalty and increased basket size. Across the board, our network is strong and growing. Our go-to-market engine upgrades and product roadmap are moving forward on schedule, and our team is delivering against our plans. We look forward to building on this positive momentum throughout the back half of the year. With that, I'll turn the call over to Matt to walk through our financial results and outlook in greater detail.
Thank you, Bryan, and good afternoon, everyone. We are encouraged with the recent performance of the business. These results marked the third quarter in a row that we delivered top- and bottom-line results above the high end of our guidance range. In addition, we achieved an even more important milestone: total company revenue has returned to growth for the first time since the first quarter of 2025. We delivered revenue and adjusted EBITDA that were, respectively, 6% and 58% above the midpoint of the guidance range that we provided on our first quarter earnings call. Now to share the details of our top-line results in the quarter. Revenue was $88.9 million, up 3% versus last year. Within that, redemption revenue was $80.2 million, up 10% year-over-year, driving the stronger-than-anticipated performance in the quarter. As Bryan highlighted, this was the fastest pace of redemption revenue growth since the third quarter of 2024.
During the quarter, we benefited from continued strong go-to-market execution, which led to increased offer supply. Specifically, we had great results this quarter leveraging our seasonal events playbook. The pull forward of Walmart deal days into June this year from July last year represented exactly this type of opportunity and generated more revenue in the quarter than we had projected. In fact, it added approximately two to three points of growth versus our outlook. Finally, LiveLift revenue remains on track relative to our expectations and, as Bryan mentioned, grew both year-over-year and sequentially versus Q1. Third-party publisher redemption revenue was $61.5 million, up 27% versus last year, accelerating meaningfully versus the prior quarter's increase of 12%. Direct-to-consumer redemption revenue was $18.7 million, down 24% year-over-year and similar to Q1's result where, as anticipated, we've continued to see redemption activity shift to our third-party publishers.
Ad and other revenues, which represented 10% of our revenue in the quarter, were $8.7 million, down 32% versus last year. We continue to see pressure on ad revenue as a result of lower direct-to-consumer redeemers, which is being partially offset by growth in data revenue. It is worth noting the year-over-year decline in ad and other revenue in Q2 was significantly larger than both what we reported in Q1 and what we expect to see in the second half of the year. This quarter's comparison to last year was up against a period when CPG ad revenue grew. That was the only quarter in 2025 where that occurred. Turning now to the key performance metrics supporting redemption revenue. Total redeemers were 20.9 million in the quarter, up 21% year-over-year. We again delivered significant growth in third-party redeemers across the IPN, including strong growth with our largest publisher partner highlighting healthy engagement on the demand side of our network.
On top of organic growth with existing publishers, the quarter also benefited from the launch of DoorDash in the second quarter of 2025. Redemptions per redeemer were 4.4%, down 6% versus last year, a comparable result to Q1. The primary driver of this decline was the mix of redeemers, specifically the growth in third-party redeemers, which have a lower redemption frequency as compared to our direct-to-consumer redeemers. Notably, in another indication of improving offer supply, third-party redemptions per redeemer were 3.8%, up 2% year-over-year, representing a return to growth in this metric for the first time since the third quarter of 2024. Redemption revenue per redemption was $0.88, representing a 4% decline versus last year, driven primarily by the mix of redemption activity. Bringing it all together, total redemptions were 91.4 million, up 14% versus last year. This acceleration in growth versus Q1 was driven by 27% redemption growth with our third-party publishers.
Switching to the cost side of our business. Non-GAAP cost of revenue was up $1.1 million or 6% versus a year ago, driven by an increase in both technology and publisher-related costs. This resulted in a Q2 non-GAAP gross margin of 79.3%, down approximately 60 basis points versus last year, but up 170 basis points sequentially versus Q1. This increase versus Q1, coinciding with the step-up in revenue quarter-to-quarter, demonstrates our opportunity to expand gross margins as revenue grows. Non-GAAP operating expenses were up 8% versus last year and were 64.5% of revenue, an increase of approximately 250 basis points year-over-year. Non-GAAP operating expenses were slightly favorable versus our prior expectations as we realized certain timing-related benefits in the quarter. Within that, non-GAAP sales and marketing expenses were up 17% versus the prior year driven by a planned increase in labor and the previously mentioned investment in third-party lift studies, partially offset by lower marketing expenses.
Non-GAAP research and development expenses were unchanged, and lastly, non-GAAP general and administrative expenses, an area of the P&L where we are intent on driving leverage, decreased by 5%, while depreciation and amortization increased by approximately $800,000 or 77%. As planned, our investments in areas related to our transformation, inclusive of both the P&L and what has been capitalized to the balance sheet, increased at a faster pace than our overall costs. This increase in investments was approximately 17% and again was highlighted by higher labor costs in the sales organization, third-party lift studies and other technology-related costs. We delivered Q2 adjusted EBITDA of $16.5 million, representing an adjusted EBITDA margin of 18.6%, non-GAAP net income of $11.7 million and non-GAAP diluted net income per share of $0.46. Our non-GAAP net income excludes $15 million in stock-based compensation and includes a $2.1 million adjustment for income taxes.
We ended the quarter with $148.2 million of cash and cash equivalents. And in Q2, we spent approximately $23 million repurchasing approximately 700,000 shares of our stock at an average price of $32.33. We had 25.8 million fully diluted shares outstanding as of June 30. And as of the end of the quarter, we had $67.3 million remaining under our current share repurchase authorization. And finally, on cash flow, we generated $8.1 million in free cash flow in the quarter. Stepping back and looking at the year-to-date results, we generated $31.3 million in free cash flow in the first half, a decrease of 7% versus last year, but tracking a bit higher than our plans halfway through the year as a result of modestly higher earnings and favorable working capital. Now shifting to Q3 guidance. We currently expect revenue in the range of $86 million to $90 million, representing approximately 6% year-over-year growth at the midpoint.
And we expect Q3 adjusted EBITDA in the range of $12 million to $14 million representing about a 15% adjusted EBITDA margin at the midpoint. With that, let me provide a little more color on the outlook. As both Bryan and I have referenced, we are benefiting from the consistency and effectiveness of our go-to-market execution with our clients and publisher partners. It's showing up in our results with both our core product offerings and with LiveLift. This has been the catalyst for improving revenue trends during the last few quarters, and we are confident that can continue. I do want to highlight that while our guidance implies improving year-over-year growth rates in Q3, we do expect a slight quarter-over-quarter revenue decline at the midpoint. This is a result of the timing of important seasonal promotional events that shifted into Q2, as I referenced in my comments earlier. Regardless, our current expectations for Q2 and Q3 in combination for both revenue and adjusted EBITDA are higher than a quarter ago.
Looking forward, beyond our specific Q3 revenue guidance, we continue to expect a modest sequential increase in revenue quarter-over-quarter into Q4. And factoring that in, we'd expect to exit 2026 with mid-single-digit year-over-year growth. As it relates to our cost outlook, while there was timing affecting our second quarter results, we continue to plan for modest sequential increases in quarterly non-GAAP cost of revenue and operating expenses across the back half of the year. These increases will continue to be squarely in areas that are critical to our transformation and geared toward our largest growth opportunities. With regards to free cash flow, given the strong cash generation in the first half, we now expect full-year free cash flow as a percentage of adjusted EBITDA to be approximately 70% as compared to our expectation of 65% at the start of the year. Lastly, with the healthy balance sheet and strong free cash flow generation, we remain committed to the balanced capital allocation approach we've now consistently deployed across a number of quarters: investing in organic growth and our strategic priorities while also returning cash to shareholders.
We are excited by the renewed traction in our business and the significant gains we've made in the first half both in unlocking more offer supply and continuing to drive growth in redeemers from existing publishers and the addition of new publishers to the IPN. We look forward to making further progress along these vectors and driving even greater value for our CPG partners, retailer publishers and consumers in the coming quarters. With that, operator, let's please open up the line for Q&A.
分析師問答
The operator provided instructions on how to ask a question. Our first question comes from Ron Josey with Citi. Please feel free to ask your question.
This is Jamesmichael Sherman-Lewis on for Ron Josey. Two questions here, if I may. On the steady improvement Ibotta has seen in offer supply, can you unpack the drivers of progress here and whether you're seeing macro improvement amongst CPG advertisers or having more success with this more verticalized sales structure? And then I have a follow-up.
Sure. Thanks, Jamesmichael. Appreciate the question. Yes, as I mentioned in my remarks, we're seeing the benefits of the last year of improved go-to-market execution by our team. That has included the verticalized go-to-market structure, but it's far from a comprehensive list of all the things that we've been doing differently. Our team really deserves a lot of credit for spending more time in the room with our customers, meeting with more people when they visit in person with those customers, maintaining consistency, being more proactive and understanding their business more deeply. Our business-to-business marketing function has allowed us to have reasons to be in touch and ways to help our clients. For example, the Walmart deal days example or the example I gave last quarter relating to SNAP benefits. Those things have meant that in a challenging environment, these CPG companies are increasingly turning to us because they trust our measurement. They trust our team will deliver what we say we're going to deliver. And you're seeing that in the turnaround account by account; accounts that were shrinking are now growing again. We're hearing that we're one of their first phone calls when they face some of these headwinds in the macro. So I think, while there are challenges in their business, clearly they view us as a partner that can help them navigate those challenges right now.
Perfect. Appreciate it. And then on the pickup in new publisher wins — 7‑Eleven, Uber Eats, Giant Eagle, et cetera — curious if you have any update on your expectations for the long-term cadence of new publisher signings. Great to see the recent win rate, but curious if you're potentially expanding further into verticals outside core grocery as well.
Yes. Thank you, Jamesmichael. We are, as you can see, now the leaders in multiple different verticals. So if you look at the mass vertical, we have Walmart; if you look at the dollar vertical, Dollar General and Family Dollar; if you look at last-mile delivery, you have Uber, you have DoorDash, you have Instacart. You look at something like 7‑Eleven, and that's really the anchor tenant in the convenience channel. We also have Shell in that category. And so we're increasingly positioning ourselves as the place where you can put your content natively in the experience of the largest retailers in the country. We'll continue to do that. There are other categories that we haven't penetrated yet that will be a priority. There are other companies within categories that we have that are a priority and we have ongoing conversations with a number of them. In fact, we're finding that our CPG brand partners are some of our biggest advocates and I want to call that out with regard to the 7‑Eleven win. Without naming the client, there were a couple of different clients for whom this was a very strategic channel, very important, and they made their views known as references. And I think that just shows you the kind of network effects in action. We plan to celebrate this, and then we believe there will be a steady stream of additional announcements in the coming quarters.
Our next question comes from Bernard McTernan with Needham.
Great. Bryan, I was hoping you could just dive into the balance of the supply and demand in your marketplace. Growth in the quarter was driven by new supply, obviously, bringing on 7‑Eleven, some more redeemers. Was there a need from a marketplace equilibrium perspective to bring on 7‑Eleven now?
Yes. So I think a couple of things. The first thing is it's true that we did increase overall redeemers. Over the last five years we've grown from 2 million to 20 million in overall redeemers, and it's true that by doing that it's allowed us to stimulate some offer supply. In this category, it's a particularly good example. I mentioned a couple of clients for whom this is a really strategic channel. This is where they sell a lot of their single-serve pack sizes. By bringing this on, it will unlock different budgets that are specific to that channel for us to be able to add more offer content. So that's an example of how one leads to the other. It's also worth noting that this is the first quarter in some time in which we actually increased redemptions per redeemer. That's important because it means that offer supply is growing far enough to exceed the growth in redeemer demand. Thus, you're seeing there's actually more offers per redeemer even with more redeemers.
I think that's a valuable leading indicator and in this instance shows that we're on the right path in terms of rebuilding our offer-supply pipeline. We think that this development with 7‑Eleven will demonstrate even more momentum. We think that will affect the calculus of other publishers and that, in turn, sends a signal to the market that this is the best place to drive incremental sales at scale. Now you can do that across a lot of different formats and channels through a single set of technologies and relationships with one company, and we think that network is more valuable the broader it grows.
Understood. And just as a follow-up, Bryan, you mentioned health and beauty is one of the three drivers in the quarter of strength. I don't think you've mentioned that as a subcategory within CPG before; can you talk to how new it is as a revenue driver for you guys?
Yes. I think it's a category that is expanding and doing well. We've had strength in that category for some time. We put more focus on the category in the last year, and I think that's paying dividends now. And I do want to clarify, Bernie, in response to your first question, that the growth in redemptions-per-redeemer that I alluded to is on the third-party publishers. But I think it's still a valid point because as we add more third-party publishers, we expect to be able to keep up with that on the offer-supply side.
The next question comes from Ken Gawrelski with Wells Fargo.
Appreciate the questions. Two, if I may. First, I want to stay on the supplier side. It seems like from your commentary that you've seen some real progress there with your suppliers. Could you just talk about what's been effective at unlocking some more supply? Are you moving past the traditional trade or promotional budgets and getting into the more traditional digital media side of the budgets? That's question one. The second question is, when you — maybe Bryan stepping back — when you think about the margin profile of the business, looking out maybe one to two years, relative to the path you were on prior to the sales reset and go-to-market reset, how would you contrast the future margin profile of the business relative to that prior trajectory?
Thanks, Ken. I'll take those questions in turn. I'll add a few comments on the second, but then I'll hand it over to Matt to comment in more detail. So with regard to your first question, I think there are a number of different factors. Fundamentally, it's about trust. It's about building deeper relationships so that these brands pick up the phone and call us and say, "I've got a problem this quarter. I need a solution I can turn to that can act very quickly to drive a meaningful amount of market-share change in my favor." I think that we're being able to go into multiple different levels of an organization, something we call multi-threading. So we might be talking to brand leadership, but we're also talking to shopper marketing and trade teams, marketing leadership, revenue growth management and media agencies. We have thousands of brands and hundreds of clients, so there's a wide range of different arrangements that we have.
Broadly speaking, they believe that our measurement is stronger and more credible than it was a year ago. The partnership with Circana has been very validating in terms of a third-party independent. We put out a major study at Cannes, a meta study showing that we were 7x more effective in driving incremental sales lift than the benchmark median. Those validating points create an environment where stigma that may have existed in the promotions category is no longer attaching to Ibotta. I think we are seen as transcending that as performance marketing that's delivering top- and bottom-line growth. The verticalization has paid off, and there's more specialized knowledge among our sellers. So they're going in proactively and saying, we noticed this trend; we think we can help you in this way. I think that is not something that many can do in many cases, and we can do it with the data that we have.
So being seen as a trusted problem solver and having those relationships is the primary unlock that we're seeing. Now we're continuing to work on the things I mentioned last quarter, for example, making it easier to buy on our network and making it easier to sell and spend. That will free sellers to spend more time selling rather than setting up offers and handling quote-to-cash logistics. I believe that will be a further tailwind to developing more and more offer supply. What you're seeing now is the benefit of the last year of sustained commitment, better training, better incentives, alignment and the right people in the right roles. That's what you're seeing primarily right now. On your second question, looking out a year or two relative to the path we were on, I think what's exciting is these trends I've been alluding to will accelerate our ability to capture more offer supply. We are dropping a high percentage of those incremental revenue dollars to our adjusted EBITDA line because our cost profile is relatively fixed or growing more modestly.
We're getting favorable terms broadly with the publishers we're adding; we're not seeing a lot of hit to our margin there. We're pleased with the leverage we're getting as our marketplace grows. I'll defer to Matt for additional detail.
Yes. So I'm probably not going to give you a single number, but I'll give you a couple of data points that could be helpful as you think about this. I would start by saying with consistent and sustainable revenue growth, we'll have the opportunity to deliver strong incremental unit margin and overall margin expansion. We saw that play out in Q2 relative to Q1, where a step-up in revenue translated into dropping a meaningful portion to the bottom line quarter-over-quarter. That gives you a sense that as we see consistent top-line growth, we'll be able to drop more and more EBITDA to the bottom line. If you look at the business today, it's a very healthy business, although margins are lower than they have been historically. We just generated on a trailing 12-month basis a 16% EBITDA margin at a time when the business was declining about 7% on a trailing 12-month basis. So the business is sound even when it had been declining, and we've been investing through that transformation because the opportunity we see in terms of top-line potential and the work to transform the company gives us a lot of confidence in upside over time.
The investments we've made over the last several quarters are the right ones and we think they are paying off already. There is not a significant step change in investments from here; we need to get past and lap the things we've done and we'll see those increases begin to moderate. We're set up really well in terms of where we see potential in the top line and how we see the opportunity to leverage the P&L as we deliver that over time.
Our next question comes from Mark Mahaney with Evercore.
Okay. I may be old school, but the 7‑Eleven deal sounds like a really huge win for you. Could you spend a little bit more time on that: the amount of time it took you to put that deal together, endorsements from your network to get that going, how long it takes to get that fully up and operational across the 7‑Eleven franchise and put this in context with other publishers — less material, equally material, or more material than those two other major publishers that you've announced year-to-date?
Yes. Thank you, Mark. These wins are multiple quarters or some even years in the making. These are conversations that may involve creating new user experiences or sharing a level of data these companies have not shared before, or certainly not with folks in the promotion space. The reason is we have a robust innovative approach to measurement and we're able to put this data into a way of tracking incremental sales that's powerful for bringing content into these channels. We've taken the time to make the case that we need to do this right so we can create an environment where people feel good about the return on their investment and then you're able to pass more value on to the 7‑Eleven shopper. You build relationships with these large companies that have multi-year product road maps and then you have to find your way into those road maps with a business case and negotiate various agreements that surround an evolving partnership — not just commercials, but other dimensions.
This particular partner represents a different realm than loyalty and digital promotions have typically played in. This is the first time they will have such broad access to these kinds of offers, which is exciting for their customers. I think they were made aware that value is the key thing, which bumped up the prominence of this opportunity. The more we partner with companies like Uber, the more companies like 7‑Eleven take a harder look. You start to see these things snowball. In terms of rollout timing, we're looking at the second half of this year to roll this out. Of course, you have 11,500 stores and other parts of their organization included, such as 7NOW and Speedway, which are important. They have begun the process of figuring out how they want to do this, and we work in parallel as we finalize the commercial agreement. That gives us time to make sure we have the conversations we need with our supply partners.
In terms of scale, there are a lot of variables. Consideration is lower in the convenience channel, and people make more impulse purchases; not as many will select offers prior to going into a store the way they would for a grocery trip. However, we know from the deals and the content they have right now that those offers are heavily used and popular and influence purchase decisions in store. Where they choose to place our offers and how they show up in search results will have a big effect on the redemption rate and thus the size of the opportunity. I'm not going to comment on the exact sizing yet, but we'll get a sense in the back half of this year and be able to factor that into our 2027 commentary.
Our next question comes from Nitin Bansal with Bank of America.
It feels like many of the foundational pieces are getting in place. You have completed the go-to-market transformation, are making steady progress on the product front and expanding the publisher network as well. So as we think about the next leg of your growth and specifically LiveLift adoption, is the biggest hurdle customer adoption and educating the market around the new way of winning promotions? Or do you believe the remaining bottlenecks are largely internal and within your control?
Thank you, Nitin. I think both of those are within our control to some extent. On one hand, just because you have a product that delivers profitable revenue doesn't mean the entire market will immediately adopt it; the industry historically has viewed promotions as a risk of subsidizing purchases that are already occurring. That's why the groundwork we've laid with measurement, statistics and validation is critical. We've been training and walking customers through the approach. We had an eight-hour on-site session with a top CPG company focused on measurement and proof; that's starting to change attitudes within finance teams and those who control budgets. Many organizations still allocate resources in an annual way, which is not how you'd leverage machine learning and modern digital capabilities. Instead, you'd set rules and constraints around desired promotion profitability and incremental sales and then configure and adjust promotions dynamically to meet those parameters.
What we're hearing is that if we deliver against those conditions, clients will continue to invest. It's not an old-world annual chunk approach; it's a continuous, performance-based allocation. The second part is product roadmap work we discussed last quarter: making it much more self-service so clients can see the relationship between efficiency and scale and choose where they want to be on that continuum. We want to recommend campaign designs and have clients implement them, building confidence in our algorithms and recommendations. Those interfaces, the program APIs and foundational data models are being improved and we're making good progress. Heading into next year, we expect a next-generation suite of products that grow out of those program APIs and a reimagined streamlined product catalog. There's a lot of behind-the-scenes work to scale. The roadmap is clear, business alignment exists, and what remains is the pace of market adoption. We're not just relying on improved go-to-market execution; we're investing heavily in innovation and are excited to see how the market responds.
Our next question comes from Eric Sheridan with Goldman Sachs.
Maybe building on that last question, Bryan, I understand the desire to get to a point where you're always on and budget is being toggled with relationships on that side. When you think about the end of this year and the budget-setting exercise that the CPG industry generally goes through and the priorities being set, what do you see as the mission-critical pieces of execution you have to put in place to ensure the budgeting cycle coming out of this year and going into next year sets the company up to capture the most incrementalism possible, especially when measuring some of the innovation you guys have introduced into the market?
Yes. Most of our clients still have an annual cycle, though not all at calendar year-end, so it's an ongoing process. The most important things are to continue to have a seat at the table in conversations about clients' strategy and high-level objectives. If we are upstream in understanding what they're trying to achieve, we can fashion proposals that make sense. Part of that is communicating the growth we anticipate in our own network and what the actual opportunity size is for their brands today. For example, they might have two brands participating while nine brands are not — there's an opportunity there. We're already having many 2027 conversations. It's important to get out in front because they're going to lock in budgets. At a recent on-site, a large CPG said: we have annual budgets, but if we genuinely believe you can deliver top- and bottom-line growth, we'll invest regardless of time of year.
We're convincing clients, but more work remains to change the mindset that classifies promotions as marketing expenses to be cut during downturns. We have to show that cutting these programs worsens the bottom line because our promotions are accretive, provable and different from long-term brand investments. Distinguishing ourselves is the substance of our forward conversations. These trusted seller relationships give me confidence we'll have strong partnerships to capitalize on a much higher percentage of our redeemer demand capacity than in the past.
Our next question comes from Andrew Marok with Raymond James.
Maybe one on this revamped event strategy that you've talked about. Obviously, with Q3 coming up we have back-to-school on the calendar. How are you thinking about that in the context of this new event strategy and anything new that you might be trying out around that?
As you know, we've developed expertise over the years, most notably our free Thanksgiving program, which has given away millions of free Thanksgiving meals and been a big driver of usage and awareness. Over the last year we've added a built-out scaffolding around the sales effort and a much more fully loaded revenue organization. Part of that is the B2B marketing division, which is now part of our revenue function. They've identified moments that matter. Sometimes they are calendar-driven — back-to-school, St. Patrick's Day, Dads and Grads, New Year's resolutions — and they prepare insights and proposals specific to each client. Great companies also capitalize when unexpected events come up, like gas-price spikes, food scares, changes to SNAP benefits or other shifts. Being responsive and being the first in a client's inbox with data-driven recommendations — "we're seeing the effect of GLP-1s on your business; here's what we can do for you" — makes our sellers more effective. We provide a kit: data, collateral and a set of actions sellers can take to win. The stronger collaboration among sellers, insights, B2B marketing and product marketing has made the go-to-market much more effective. Making it easier to buy and sell on the network is another important support for sellers, getting them closer to selling, listening and creating solutions versus administering won business.
Our next question comes from Andrew Boone with Citizens.
I wanted to ask on D2C. As supply improves, what should our outlook be as we think about D2C broadly? Is there a point at which its decline should arrest and start to grow again? How are you thinking about that strategically? Also, you mentioned pricing. This quarter there was a step up in third-party revenue per redemption. Is there anything behind that or anything you want to touch on in terms of pricing strategy that happened in this quarter and how we think about that going forward?
I think the pricing point has a lot to do with composition of where redeemer growth and redemptions are coming from. Third-party revenue per redemption was actually flat; the appearance of a step-up is largely a function of mix. On pricing, we've gotten to a place that is client-centric and consistent with delivering highly effective promotions, whether the client objective is profitable revenue growth or maximizing scale. Clients want to know we can charge an amount that doesn't preclude their goals, and we've generally seen that reach a good equilibrium. It's also a more continuous, rational pricing approach and that's been well received, moving away from setup fees and similar structures. Regarding D2C, when offer-supply is strong we have the opportunity to lean into user acquisition and retention initiatives and feel confident about retaining savers within our D2C property. That's why unlocking offer supply is a primary focus.
We are testing new kinds of ad units on the D2C app to try to arrest the decline in ad and other revenue. There may come a point where we have sufficient offer supply and quality that we choose to increase marketing spend on D2C to regrow it. We are focused on ensuring the data asset from the D2C property is not diminished; we had big wins last quarter in turning that trend around and ensuring we have more data from D2C. That data powers LiveLift capabilities and other products. So the first step is increasing offer supply, which is now beginning to happen, and you're seeing double-digit growth in redemption revenue. After that, we'll determine the timeline for reinvesting in D2C.
This concludes the Q&A session of the call. I would now like to turn the call back to management for closing remarks.
Thank you very much for joining us today. We're very pleased with the progress in our business. I'm grateful to our team for their commitment to the actions we've taken over the last year. I think we've pulled forward by a quarter the timeline on which we've returned to growth as a company on the top line. We're really excited to see that inflection and think we can build on this from here. I appreciate the questions, everyone, and we'll see you in November.
Thank you for joining today's session. The call has concluded. You may now disconnect.