Company: IBTA
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001628280-25-008240
Chunk: 21

Company: Ibotta, Inc.
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 21
---
 forfeitures, under the accelerated attribution method when performance conditions are considered probable of being achieved. The fair value of RSUs with only service or performance conditions is equal to the fair value of the underlying common stock at the date of grant. For RSUs with market-based conditions, the Company determines the grant date fair value utilizing a Monte Carlo simulation, which incorporates the probability of achievement of the market-based condition. The fair value of stock options and ESPP awards is estimated on the grant date using the Black-Scholes option-pricing model. The Company’s use of the valuation models requires the input of subjective assumptions. The assumptions used in the Company’s valuation models represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. These assumptions and estimates are as follows:•Expected Dividend Rate. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid dividends and does not expect to do so in the foreseeable future, and as such, the dividend yield has been estimated to be zero.•Expected Volatility. The expected volatility is determined with reference to historical stock volatilities of comparable guideline public companies over a period equivalent to the expected term of the award, as the Company does not have an extensive trading history for its common stock. •Expected Term. The expected term is the period of time for which the award is expected to be outstanding, assuming that it vests. We estimate the expected term for stock options using the simplified method, calculated as the midpoint between the requisite service period and the contractual term of the award. The simplified approach is applied as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. For ESPP awards, the expected term is the time period from the grant date to the respective purchase dates included within each offering period.•Risk-Free Interest Rate. The risk-free rate is determined based on the U.S. Treasury Yield Curve with respect to the stock options' expected term.•Fair Value of Common Stock. Prior to the IPO, as the Company’s common stock was not yet publicly traded, the Company engaged a valuation specialist to estimate the fair value of its common stock. Subsequent to the IPO, the fair value of common stock is based on the closing price of the Company’s common stock. Income TaxesThe Company accounts for income taxes using the asset and liability method, under which, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the consolidated financial statement carrying amounts and