UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2021
(Exact Name of Registrant as Specified in its Charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
| (Address of principal executive offices, including zip code) | |||||||||||
| (Registrant's telephone, including area code) | |||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On November 2, 2021, Cardlytics, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2021, as well as information regarding a conference call to discuss these financial results and the Company’s recent corporate highlights. The Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information included in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
ITEM 7.01 OTHER EVENTS
On November 2, 2021, the Company is also posting a slide presentation on its website, which the Company will reference during the conference call described above.
A copy of the slide presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The information in this Item 7.01 and Exhibit 99.2 hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing..
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
| Exhibit | Exhibit Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Cardlytics, Inc. | |||||||||||
| Date: | November 2, 2021 | By: | /s/ Andrew Christiansen | ||||||||
| Andrew Christiansen | |||||||||||
Chief Financial Officer (Principal Financial and Accounting Officer) | |||||||||||
Exhibit 99.1
Cardlytics Announces Third Quarter 2021 Financial Results
Atlanta, GA – November 2, 2021 – Cardlytics, Inc. (NASDAQ: CDLX), a digital advertising platform, today announced financial results for the third quarter ended September 30, 2021. Supplemental information is available on the Investor Relations section of Cardlytics' website at http://ir.cardlytics.com/.
“We had a solid quarter and delivered results above our guidance,” said Lynne Laube, CEO & Co-Founder of Cardlytics. “Execution remains our primary focus, and we have the team and resources to achieve our financial goals, be a strategic partner for our banks and continue our progress on our product and technology initiatives.”
“We saw the core business strengthen through the quarter as we achieved sequential billings growth each month,” said Andy Christiansen, CFO of Cardlytics. “We remain focused on the things we can control — developing and maintaining strong relationships with all of our partners and developing a technology platform that will unlock the massive potential of our channel.”
Third Quarter 2021 Financial Results
•Revenue was $65.0 million, an increase of 41% year-over-year, compared to $46.1 million in the third quarter of 2020.
•Billings, a non-GAAP metric, was $98.4 million, an increase of 59% year-over-year, compared to $62.1 million in the third quarter of 2020.
•Gross profit was $24.5 million, an increase of 68% year-over-year, compared to $14.6 million in the third quarter of 2020.
•Adjusted contribution, a non-GAAP metric, was $31.6 million, an increase of 60% year-over-year, compared to $19.7 million in the third quarter of 2020.
•Net loss attributable to common stockholders was $(44.5) million, or $(1.35) per diluted share, based on 33.1 million weighted-average common shares outstanding, compared to a net loss attributable to common stockholders of $(15.4) million, or $(0.56) per diluted share, based on 27.3 million weighted-average common shares outstanding in the third quarter of 2020.
•Non-GAAP net loss was $(11.0) million, or $(0.33) per diluted share, based on 33.1 million weighted-average common shares outstanding, compared to a non-GAAP net loss of $(4.5) million, or $(0.16) per diluted share, based on 27.3 million weighted-average common shares outstanding in the third quarter of 2020.
•Adjusted EBITDA, a non-GAAP metric, was a loss of $(5.2) million compared to a loss of $(0.6) million in the third quarter of 2020.
Key Metrics
•Cardlytics MAUs were 170.6 million, an increase of 6%, compared to 161.6 million in the third quarter of 2020.
•Cardlytics ARPU was $0.36, an increase of 24%, compared to $0.29 in the third quarter of 2020.
•Bridg ARR was $12.7 million in the third quarter of 2021.
Definitions of MAUs, ARPU and ARR are included below under the caption “Non-GAAP Measures and Other Performance Metrics.”
Fourth Quarter 2021 Financial Expectations
Cardlytics anticipates billings, revenue, and adjusted contribution to be in the following ranges (in millions):
| Q4 2021 Guidance | FY 2021 Guidance | ||||||||||
Billings(1) | $105.0 - $120.0 | $365.1 - $380.1 | |||||||||
| Revenue | $70.0 - $80.0 | $247.1 - $257.1 | |||||||||
Adjusted contribution(2) | $33.0 - $38.0 | $118.6 - $123.6 | |||||||||
(1)A reconciliation of billings to GAAP revenue on a forward-looking basis is presented below under the heading "Reconciliation of Forecasted GAAP Revenue to Billings."
(2)A reconciliation of adjusted contribution to GAAP gross profit on a forward-looking basis is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the items excluded from this non-GAAP measure.
Earnings Teleconference Information
Cardlytics will discuss its third quarter 2021 financial results during a teleconference today, November 2, 2021, at 5:00 PM ET / 2:00 PM PT. The conference call can be accessed at (866) 385-4179 (domestic) or (210) 874-7775 (international), conference ID# 2781489. A replay of the conference call will be available through 8:00 PM ET / 5:00 PM PT on November 9, 2021 at (855) 859-2056 (domestic) or (404) 537-3406 (international). The replay passcode is 2781489. The call will also be broadcast simultaneously at http://ir.cardlytics.com/. Following the completion of the call, a recorded replay of the webcast will be available on Cardlytics’ website.
About Cardlytics
Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, we have offices in London, New York, San Francisco, Austin and Visakhapatnam. In March 2021, we acquired Dosh, a transaction-based advertising platform, and in May 2021 we acquired Bridg, a customer data platform. Learn more at www.cardlytics.com.
Cautionary Language Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, our financial guidance for the fourth quarter of 2021 and full year of 2021, future growth and achievement of long-range goals. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," or variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control.
Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: risks related to the uncertain impacts that COVID-19 may have on our business, financial condition, results of operations; unfavorable conditions in the global economy and the industries that we serve; our quarterly operating results have fluctuated and may continue to vary from period to period; our ability to sustain our revenue growth and billings; risks related to the integration of Dosh and Bridg with our company; risks related to our substantial dependence on our Cardlytics platform; risks related to our substantial dependence on JPMorgan Chase Bank, National Association (“Chase”), Bank of America, National Association ("Bank of America") and a limited number of other financial institution (“FI”) partners; risks related to our ability to maintain relationships with Chase, Wells Fargo and Bank of America; the amount and timing of budgets by marketers, which are affected by budget cycles, economic conditions and other factors, including the impact of the COVID-19 pandemic; our ability to generate sufficient revenue to offset contractual commitments to FIs; our ability to attract new partners, including FI partners, and maintain relationships with bank processors and digital banking providers; our ability to maintain relationships with marketers; our ability to adapt to changing market conditions, including our ability to adapt to changes in consumer habits, negotiate fee arrangements with new and existing partners and retailers, and develop and launch new services and features; and other risks detailed in the “Risk Factors” section of our Form 10-Q filed with the Securities and Exchange Commission on November 2, 2021 and in subsequent periodic reports that we file with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results.
The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
Non-GAAP Measures and Other Performance Metrics
To supplement the financial measures presented in our press release and related conference call or webcast in accordance with generally accepted accounting principles in the United States (“GAAP”), we also present the following non-GAAP measures of financial performance: billings, adjusted contribution, adjusted EBITDA, adjusted Partner Share and other third party costs, non-GAAP net loss and non-GAAP net loss per share as well as certain other performance metrics, such as monthly active users (“MAUs”), average revenue per user (“ARPU”) and annualized recurring revenue ("ARR").
A “non-GAAP financial measure” refers to a numerical measure of our historical or future financial performance or financial position that is included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in our financial statements. We provide certain non-GAAP measures as additional information relating to our operating results as a complement to results provided in accordance with GAAP. The non-GAAP financial information presented herein should be considered in conjunction with, and not as a substitute for or superior to, the financial information presented in accordance with GAAP and should not be considered a measure of liquidity. There are significant limitations associated with the use of non-GAAP financial measures. Further, these measures may differ from the non-GAAP information, even where similarly titled, used by other companies and therefore should not be used to compare our performance to that of other companies.
We have presented billings, adjusted contribution, adjusted EBITDA, adjusted Partner Share and other third-party costs, non-GAAP net loss and non-GAAP net loss per share as non-GAAP financial measures in this press release. Billings represents the gross amount billed to customers and marketers for advertising campaigns in order to generate revenue. Cardlytics platform billings is recognized gross of both Consumer Incentives and Partner Share. Cardlytics platform GAAP revenue is recognized net of Consumer Incentives and gross of Partner Share. Bridg platform billings is the same as Bridg platform GAAP revenue. We define adjusted contribution as a measure by which revenue generated from our marketers exceeds the cost to obtain the purchase data and the digital advertising space from our partners. Adjusted contribution demonstrates how incremental marketing spend on our platform generates incremental amounts to support our sales and marketing, research and development, general and administration and other investments. Adjusted contribution is calculated by taking our total revenue less our Partner Share and other third-party costs exclusive of deferred implementation costs, which is a non-cash cost. Adjusted contribution does not take into account all costs associated with generating revenue from advertising campaigns, including sales and marketing expenses, research and development expenses, general and administrative expenses and other expenses, which we do not take into consideration when making decisions on how to manage our advertising campaigns. We define adjusted EBITDA as our net loss before income tax benefit; interest expense, net; depreciation and amortization expense; stock-based compensation expense; foreign currency loss (gain); deferred implementation costs; restructuring costs, acquisition and integration costs and change in fair value of contingent consideration. We define adjusted Partner Share and other third-party costs as our Partner Share and other third-party costs excluding non-cash equity expense and amortization of deferred implementation costs. We define non-GAAP net loss income as our net loss before stock-based compensation expense; foreign currency loss (gain); acquisition and integration costs; amortization of acquired intangibles; change in fair value of contingent consideration; and restructuring costs. Notably, any impacts related to minimum Partner Share commitments in connection with agreements with certain partners are not added back to net loss in order to calculate adjusted EBITDA, adjusted contribution and non-GAAP net loss. We define non-GAAP net loss per share as non-GAAP net loss divided by weighted-average common shares outstanding, basic and diluted.
We believe the use of non-GAAP financial measures, as a supplement to GAAP measures, is useful to investors in that they eliminate items that are either not part of our core operations or do not require a cash outlay, such as stock-based compensation expense. Management uses these non-GAAP financial measures when evaluating operating performance and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures help indicate underlying trends in the business, are important in comparing current results with prior period results and are useful to investors and financial analysts in assessing operating performance.
We define MAUs as targetable customers or accounts that have logged in and visited online or mobile applications containing offers from, opened an email containing offers from, or redeemed an offer from the Cardlytics platform during a monthly period. We then calculate a monthly average of these MAUs for the periods presented. We define ARPU as the total revenue generated in the applicable period calculated in accordance with GAAP, divided by the average number of MAUs in the applicable period. We define ARR as the annualized GAAP revenue of the final month in the period presented for the Bridg platform. ARR should not be considered in isolation from, or as an alternative to, revenue prepared in accordance with GAAP. We believe that ARR is an indicator of the Bridg platform’s ability to generate future revenue from existing clients
CARDLYTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Amounts in thousands, except par value amounts)
| September 30, 2021 | December 31, 2020 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 237,372 | $ | 293,239 | |||||||
| Restricted cash | 108 | 110 | |||||||||
| Accounts receivable, net | 83,841 | 81,249 | |||||||||
| Other receivables | 6,450 | 5,306 | |||||||||
| Prepaid expenses and other assets | 7,761 | 5,687 | |||||||||
| Total current assets | 335,532 | 385,591 | |||||||||
| Long-term assets: | |||||||||||
| Property and equipment, net | 12,367 | 13,865 | |||||||||
| Right-of-use assets under operating leases, net | 11,299 | 10,764 | |||||||||
| Intangible assets, net | 130,692 | 447 | |||||||||
| Goodwill | 718,952 | — | |||||||||
| Capitalized software development costs, net | 11,734 | 6,299 | |||||||||
| Deferred implementation costs, net | 1,442 | 3,785 | |||||||||
| Other long-term assets, net | 2,563 | 1,786 | |||||||||
| Total assets | $ | 1,224,581 | $ | 422,537 | |||||||
| Liabilities and stockholders' equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 3,806 | $ | 1,363 | |||||||
| Accrued liabilities: | |||||||||||
| Accrued compensation | 10,705 | 7,582 | |||||||||
| Accrued expenses | 6,054 | 5,502 | |||||||||
| Partner Share liability | 35,285 | 37,457 | |||||||||
| Consumer Incentive liability | 42,925 | 24,290 | |||||||||
| Deferred revenue | 2,627 | 349 | |||||||||
| Current operating lease liabilities | 5,589 | 4,718 | |||||||||
| Current finance lease liabilities | 35 | 13 | |||||||||
| Current contingent consideration | 167,430 | — | |||||||||
| Total current liabilities | 274,456 | 81,274 | |||||||||
| Long-term liabilities: | |||||||||||
| Convertible senior notes, net | 181,733 | 174,011 | |||||||||
| Long-term operating lease liabilities | 7,800 | 9,381 | |||||||||
| Long-term finance lease liabilities | 61 | — | |||||||||
| Long-term contingent consideration | 71,232 | — | |||||||||
| Other long-term liabilities | 679 | 679 | |||||||||
| Total liabilities | 535,961 | 265,345 | |||||||||
| Stockholders’ equity: | |||||||||||
Common stock, $0.0001 par value—100,000 shares authorized and 33,154 and 27,861 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively. | 8 | 8 | |||||||||
| Additional paid-in capital | 1,198,780 | 551,429 | |||||||||
| Accumulated other comprehensive income (loss) | 615 | (192) | |||||||||
| Accumulated deficit | (510,783) | (394,053) | |||||||||
| Total stockholders’ equity | 688,620 | 157,192 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,224,581 | $ | 422,537 | |||||||
CARDLYTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Revenue | $ | 64,984 | $ | 46,079 | $ | 177,067 | $ | 119,810 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Partner Share and other third-party costs | 34,090 | 27,971 | 93,814 | 70,920 | |||||||||||||||||||
| Delivery costs | 6,390 | 3,498 | 16,076 | 10,403 | |||||||||||||||||||
| Sales and marketing expense | 16,733 | 11,432 | 46,998 | 32,805 | |||||||||||||||||||
| Research and development expense | 11,141 | 4,627 | 26,293 | 12,444 | |||||||||||||||||||
| General and administration expense | 20,073 | 12,757 | 49,136 | 35,235 | |||||||||||||||||||
| Acquisition and integration costs | 1,714 | — | 22,926 | — | |||||||||||||||||||
| Change in fair value of contingent consideration | 6,261 | — | 7,741 | — | |||||||||||||||||||
| Depreciation and amortization expense | 8,375 | 1,933 | 20,273 | 5,809 | |||||||||||||||||||
| Total costs and expenses | 104,777 | 62,218 | 283,257 | 167,616 | |||||||||||||||||||
| Operating loss | (39,793) | (16,139) | (106,190) | (47,806) | |||||||||||||||||||
| Other (expense) income: | |||||||||||||||||||||||
| Interest expense, net | (3,193) | (283) | (9,316) | (9) | |||||||||||||||||||
| Foreign currency (loss) gain | (1,543) | 1,066 | (1,224) | (830) | |||||||||||||||||||
| Total other (expense) income | (4,736) | 783 | (10,540) | (839) | |||||||||||||||||||
| Loss before income taxes | (44,529) | (15,356) | (116,730) | (48,645) | |||||||||||||||||||
| Income tax benefit | — | — | — | — | |||||||||||||||||||
| Net loss | (44,529) | (15,356) | (116,730) | (48,645) | |||||||||||||||||||
| Net loss attributable to common stockholders | $ | (44,529) | $ | (15,356) | $ | (116,730) | $ | (48,645) | |||||||||||||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | (1.35) | $ | (0.56) | $ | (3.67) | $ | (1.80) | |||||||||||||||
| Weighted-average common shares outstanding, basic and diluted | 33,101 | 27,343 | 31,802 | 27,048 | |||||||||||||||||||
CARDLYTICS, INC.
STOCK-BASED COMPENSATION EXPENSE (UNAUDITED)
(Amounts in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Delivery costs | $ | 552 | $ | 365 | $ | 1,382 | $ | 897 | |||||||||||||||
| Sales and marketing | 3,841 | 3,791 | 9,928 | 7,627 | |||||||||||||||||||
| Research and development | 3,170 | 1,510 | 7,132 | 3,514 | |||||||||||||||||||
| General and administration | 9,267 | 5,912 | 18,973 | 12,773 | |||||||||||||||||||
| Total stock-based compensation | $ | 16,830 | $ | 11,578 | $ | 37,415 | $ | 24,811 | |||||||||||||||
CARDLYTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in thousands)
| Nine Months Ended September 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| Operating activities | |||||||||||
| Net loss | $ | (116,730) | $ | (48,645) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Credit loss expense | 1,440 | 1,281 | |||||||||
| Depreciation and amortization | 20,273 | 5,809 | |||||||||
| Amortization of financing costs charged to interest expense | 701 | 290 | |||||||||
| Accretion of debt discount and non-cash interest expense | 7,078 | — | |||||||||
| Amortization of right-of-use assets | 3,770 | 2,639 | |||||||||
| Stock-based compensation expense | 37,415 | 24,811 | |||||||||
| Change in fair value of contingent consideration | 7,741 | — | |||||||||
| Other non-cash expense, net | 1,275 | 1,166 | |||||||||
| Deferred implementation costs | 2,343 | 3,640 | |||||||||
| Change in operating assets and liabilities: | |||||||||||
| Accounts receivable | (757) | 25,010 | |||||||||
| Prepaid expenses and other assets | (1,296) | (1,412) | |||||||||
| Accounts payable | 42 | 115 | |||||||||
| Other accrued expenses | (2,626) | (6,871) | |||||||||
| Partner Share liability | (2,171) | (15,479) | |||||||||
| Consumer Incentive liability | 3,534 | (5,568) | |||||||||
| Net cash used in operating activities | (37,968) | (13,214) | |||||||||
| Investing activities | |||||||||||
| Acquisition of property and equipment | (2,145) | (2,691) | |||||||||
| Acquisition of patents | (68) | (50) | |||||||||
| Capitalized software development costs | (6,937) | (3,519) | |||||||||
| Business acquisition, net of cash acquired | (494,131) | — | |||||||||
| Net cash used in investing activities | (503,281) | (6,260) | |||||||||
| Financing activities | |||||||||||
| Principal payments of debt | — | (17) | |||||||||
Proceeds from issuance of convertible senior notes, net of issuance costs paid of $6,900 | — | 223,100 | |||||||||
| Purchase of capped calls related to convertible senior notes | — | (26,450) | |||||||||
| Proceeds from issuance of common stock | 486,163 | 6,380 | |||||||||
| Deferred equity issuance costs | (190) | — | |||||||||
| Debt issuance costs | (200) | — | |||||||||
| Net cash received from financing activities | 485,773 | 203,013 | |||||||||
| Effect of exchange rates on cash, cash equivalents and restricted cash | (393) | (378) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (55,869) | 183,161 | |||||||||
| Cash, cash equivalents, and restricted cash — Beginning of period | 293,349 | 104,587 | |||||||||
| Cash, cash equivalents, and restricted cash — End of period | $ | 237,480 | $ | 287,748 | |||||||
CARDLYTICS, INC.
SUMMARY OF GAAP AND NON-GAAP RESULTS (UNAUDITED)
(Dollars in thousands)
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
Billings(1) | $ | 98,448 | $ | 62,093 | $ | 36,355 | 59 | % | $ | 260,102 | $ | 169,390 | $ | 90,712 | 54 | % | |||||||||||||||||||||||||||||||
| Consumer Incentives | 33,464 | 16,014 | 17,450 | 109 | 83,035 | 49,580 | 33,455 | 67 | |||||||||||||||||||||||||||||||||||||||
| Revenue | 64,984 | 46,079 | 18,905 | 41 | 177,067 | 119,810 | 57,257 | 48 | |||||||||||||||||||||||||||||||||||||||
Adjusted Partner Share and other third-party costs(1) | 33,359 | 26,330 | 7,029 | 27 | 91,471 | 67,280 | 24,191 | 36 | |||||||||||||||||||||||||||||||||||||||
Adjusted contribution(1) | 31,625 | 19,749 | 11,876 | 60 | 85,596 | 52,530 | 33,066 | 63 | |||||||||||||||||||||||||||||||||||||||
| Delivery costs | 6,390 | 3,498 | 2,892 | 83 | 16,076 | 10,403 | 5,673 | 55 | |||||||||||||||||||||||||||||||||||||||
| Deferred implementation costs | 731 | 1,641 | (910) | (55) | 2,343 | 3,640 | (1,297) | (36) | |||||||||||||||||||||||||||||||||||||||
| Gross profit | $ | 24,504 | $ | 14,610 | $ | 9,894 | 68 | % | $ | 67,177 | $ | 38,487 | $ | 28,690 | 75 | % | |||||||||||||||||||||||||||||||
| Net loss | $ | (44,529) | $ | (15,356) | $ | (29,173) | 190 | % | $ | (116,730) | $ | (48,645) | $ | (68,085) | 140 | % | |||||||||||||||||||||||||||||||
Adjusted EBITDA(1) | $ | (5,169) | $ | (596) | $ | (4,573) | 767 | % | $ | (14,779) | $ | (12,273) | $ | (2,506) | 20 | % | |||||||||||||||||||||||||||||||
(1)Billings, adjusted Partner Share and other third-party costs, adjusted contribution and adjusted EBITDA are non-GAAP measures. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are presented below under the headings "Reconciliation of GAAP Revenue to Billings", "Reconciliation of GAAP Gross Profit to Adjusted Contribution" and "Reconciliation of GAAP Net Loss to Adjusted EBITDA."
CARDLYTICS, INC.
RECONCILIATION OF GAAP REVENUE TO BILLINGS (UNAUDITED)
(Amounts in thousands)
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Revenue | $ | 62,075 | $ | 2,909 | $ | 64,984 | $ | 46,079 | $ | — | $ | 46,079 | |||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
| Consumer Incentives | 33,464 | — | 33,464 | 16,014 | — | 16,014 | |||||||||||||||||||||||||||||
| Billings | $ | 95,539 | $ | 2,909 | $ | 98,448 | $ | 62,093 | $ | — | $ | 62,093 | |||||||||||||||||||||||
| Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Revenue | $ | 172,068 | $ | 4,999 | $ | 177,067 | $ | 119,810 | $ | — | $ | 119,810 | |||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
| Consumer Incentives | 83,035 | — | 83,035 | 49,580 | — | 49,580 | |||||||||||||||||||||||||||||
| Billings | $ | 255,103 | $ | 4,999 | $ | 260,102 | $ | 169,390 | $ | — | $ | 169,390 | |||||||||||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED CONTRIBUTION (UNAUDITED)
(Amounts in thousands)
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Revenue | $ | 62,075 | $ | 2,909 | $ | 64,984 | $ | 46,079 | $ | — | $ | 46,079 | |||||||||||||||||||||||
| Minus: | |||||||||||||||||||||||||||||||||||
| Partner Share and other third-party costs | 33,929 | 161 | 34,090 | 27,971 | — | 27,971 | |||||||||||||||||||||||||||||
Delivery costs(1) | 4,777 | 1,613 | 6,390 | 3,498 | — | 3,498 | |||||||||||||||||||||||||||||
| Gross profit | 23,369 | 1,135 | 24,504 | 14,610 | — | 14,610 | |||||||||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
Delivery costs(1) | 4,777 | 1,613 | 6,390 | 3,498 | — | 3,498 | |||||||||||||||||||||||||||||
Deferred implementation costs(2) | 731 | — | 731 | 1,641 | — | 1,641 | |||||||||||||||||||||||||||||
| Adjusted contribution | $ | 28,877 | $ | 2,748 | $ | 31,625 | $ | 19,749 | $ | — | $ | 19,749 | |||||||||||||||||||||||
(1)Stock-based compensation expense recognized in consolidated delivery costs totaled $0.6 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively.
(2)Deferred implementation costs is excluded from adjusted Partner Share and other third-party costs as follows (in thousands):
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Partner Share and other third-party costs | $ | 33,929 | $ | 161 | $ | 34,090 | $ | 27,971 | $ | — | $ | 27,971 | |||||||||||||||||||||||
| Minus: | |||||||||||||||||||||||||||||||||||
| Deferred implementation costs | 731 | — | 731 | 1,641 | — | 1,641 | |||||||||||||||||||||||||||||
| Adjusted Partner Share and other third-party costs | $ | 33,198 | $ | 161 | $ | 33,359 | $ | 26,330 | $ | — | $ | 26,330 | |||||||||||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED CONTRIBUTION (UNAUDITED)
(Amounts in thousands)
| Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Revenue | $ | 172,068 | $ | 4,999 | $ | 177,067 | $ | 119,810 | $ | — | $ | 119,810 | |||||||||||||||||||||||
| Minus: | |||||||||||||||||||||||||||||||||||
| Partner Share and other third-party costs | 93,590 | 224 | 93,814 | 70,920 | — | 70,920 | |||||||||||||||||||||||||||||
Delivery costs(1) | 13,552 | 2,524 | 16,076 | 10,403 | — | 10,403 | |||||||||||||||||||||||||||||
| Gross profit | 64,926 | 2,251 | 67,177 | 38,487 | — | 38,487 | |||||||||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
Delivery costs(1) | 13,552 | 2,524 | 16,076 | 10,403 | — | 10,403 | |||||||||||||||||||||||||||||
Deferred implementation costs(2) | 2,343 | — | 2,343 | 3,640 | — | 3,640 | |||||||||||||||||||||||||||||
| Adjusted contribution | $ | 80,821 | $ | 4,775 | $ | 85,596 | $ | 52,530 | $ | — | $ | 52,530 | |||||||||||||||||||||||
(1)Stock-based compensation expense recognized in consolidated delivery costs totaled $1.4 million and $0.9 million for the nine months ended September 30, 2021 and 2020, respectively.
(2)Deferred implementation costs is excluded from adjusted Partner Share and other third-party costs as follows (in thousands):
| Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Partner Share and other third-party costs | $ | 93,590 | $ | 224 | $ | 93,814 | $ | 70,920 | $ | — | $ | 70,920 | |||||||||||||||||||||||
| Minus: | |||||||||||||||||||||||||||||||||||
| Deferred implementation costs | 2,343 | — | 2,343 | 3,640 | — | 3,640 | |||||||||||||||||||||||||||||
| Adjusted Partner Share and other third-party costs | $ | 91,247 | $ | 224 | $ | 91,471 | $ | 67,280 | $ | — | $ | 67,280 | |||||||||||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
(Amounts in thousands)
| Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Net loss | $ | (39,473) | $ | (5,056) | $ | (44,529) | $ | (15,356) | $ | — | $ | (15,356) | |||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
| Interest expense, net | 3,193 | — | 3,193 | 283 | — | 283 | |||||||||||||||||||||||||||||
| Depreciation and amortization expense | 5,554 | 2,821 | 8,375 | 1,933 | — | 1,933 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | 15,627 | 1,203 | 16,830 | 11,578 | — | 11,578 | |||||||||||||||||||||||||||||
| Foreign currency loss (gain) | 1,543 | — | 1,543 | (1,066) | — | (1,066) | |||||||||||||||||||||||||||||
| Deferred implementation costs | 731 | — | 731 | 1,641 | — | 1,641 | |||||||||||||||||||||||||||||
| Restructuring costs | 713 | — | 713 | 391 | — | 391 | |||||||||||||||||||||||||||||
| Acquisition and integration costs | 1,620 | 94 | 1,714 | — | — | — | |||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | 6,261 | — | 6,261 | — | — | — | |||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (4,231) | $ | (938) | $ | (5,169) | $ | (596) | $ | — | $ | — | $ | — | $ | (596) | |||||||||||||||||||
| Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Net loss | $ | (109,696) | $ | (7,034) | $ | (116,730) | $ | (48,645) | $ | — | $ | (48,645) | |||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
| Interest expense, net | 9,316 | — | 9,316 | 8 | — | 8 | |||||||||||||||||||||||||||||
| Depreciation and amortization expense | 15,712 | 4,561 | 20,273 | 5,809 | — | 5,809 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | 36,054 | 1,361 | 37,415 | 24,811 | — | 24,811 | |||||||||||||||||||||||||||||
| Foreign currency loss | 1,224 | — | 1,224 | 828 | — | 828 | |||||||||||||||||||||||||||||
| Deferred implementation costs | 2,343 | — | 2,343 | 3,640 | — | 3,640 | |||||||||||||||||||||||||||||
| Restructuring costs | 713 | — | 713 | 1,276 | — | 1,276 | |||||||||||||||||||||||||||||
| Acquisition and integration costs | 22,765 | 161 | 22,926 | — | — | — | |||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | 7,741 | — | 7,741 | — | — | — | |||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (13,828) | $ | (951) | $ | (14,779) | $ | (12,273) | $ | — | $ | (12,273) | |||||||||||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP NET LOSS
AND NON-GAAP NET LOSS PER SHARE (UNAUDITED)
(Amounts in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| Net loss | $ | (44,529) | $ | (15,356) | $ | (116,730) | $ | (48,645) | |||||||||||||||
| Plus: | |||||||||||||||||||||||
| Stock-based compensation expense | 16,830 | 11,578 | 37,415 | 24,811 | |||||||||||||||||||
| Foreign currency loss (gain) | 1,543 | (1,066) | 1,224 | 828 | |||||||||||||||||||
| Acquisition and integration costs | 1,714 | — | 22,926 | — | |||||||||||||||||||
| Amortization of acquired intangibles | 6,497 | — | 13,009 | — | |||||||||||||||||||
Change in fair value of contingent consideration | 6,261 | — | 7,741 | — | |||||||||||||||||||
| Restructuring costs | 713 | 391 | 713 | 1,276 | |||||||||||||||||||
| Non-GAAP net loss | $ | (10,971) | $ | (4,453) | $ | (33,702) | $ | (21,730) | |||||||||||||||
| Weighted-average number of shares of common stock used in computing non-GAAP net loss per share: | |||||||||||||||||||||||
| GAAP weighted-average common shares outstanding, diluted | 33,101 | 27,343 | 31,802 | 27,048 | |||||||||||||||||||
| Non-GAAP net loss per share attributable to common stockholders, diluted | $ | (0.33) | $ | (0.16) | $ | (1.06) | $ | (0.80) | |||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF FORECASTED GAAP REVENUE TO BILLINGS (UNAUDITED)
(Amounts in thousands)
| Q4 2021 Guidance | FY 2021 Guidance | ||||||||||
| Revenue | $70.0 - $80.0 | $247.1 - $257.1 | |||||||||
| Plus: | |||||||||||
| Consumer Incentives | $35.0 - $40.0 | $118.0 - $123.0 | |||||||||
| Billings | $105.0 - $120.0 | $365.1 - $380.1 | |||||||||
Contacts:
Public Relations:
Angie Amberg
Cardlytics, Inc.
aamberg@cardlytics.com
Investor Relations:
Robert Robinson
Corporate Development & IR
(256) 653-2097
ir@cardlytics.com
CARDLYTICS Q3 2021 Earnings Presentation November 2, 2021
Disclaimer This presentation includes forward-looking statements. All statements contained in this presentation other than statements of historical facts, including statements regarding expectations about future financial performance or results of Cardlytics, Inc. (“Cardlytics,” “we,” “us,” or “our) including our financial guidance for the three and twelve months ending December 31, 2021, the potential benefits of our acquisitions of Dosh and Bridg, the anticipated impact of our strategic initiatives to create shareholder value, growth in MAUs and ARPU are forward looking statements. The words “anticipate,” believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. The future events and trends discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: risks related to the uncertain impacts that COVID-19 may have on our business, financial condition, results of operations; unfavorable conditions in the global economy and the industries that we serve; our quarterly operating results have fluctuated and may continue to vary from period to period; our ability sustain our revenue and billings growth; risks related the integration of Dosh and Bridg with our company; risks related to our substantial dependence on our Cardlytics platform product; risks related to our substantial dependence on JPMorgan Chase Bank, National Association (“Chase”), Bank of America, National Association (“Bank of America”), Wells Fargo Bank, National Association (“Wells Fargo”) and a limited number of other financial institution (“FI”) partners; risks related to our ability to maintain relationships with Chase, Bank of America and Wells Fargo; the amount and timing of budgets by marketers, which are affected by budget cycles, economic conditions and other factors, including the impact of the COVID-19 pandemic; our ability to generate sufficient revenue to offset contractual commitments to FIs; our ability to attract new partners, which include FI partners, and maintain relationships with bank processors and digital banking providers; our ability to maintain relationships with marketers; our ability to adapt to changing market conditions, including our ability to adapt to changes in consumer habits, negotiate fee arrangements with new and existing partners and retailers, and develop and launch new services and features; and other risks detailed in the “Risk Factors” section of our Form 10-Q filed with the Securities and Exchange Commission on November 2, 2021. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after the date of this presentation to conform these statements to actual results or revised expectations, except as required by law. In addition to U.S. GAAP financial information, this presentation includes billings, adjusted contribution, adjusted Partner Share and other third-party costs, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net loss and non-GAAP net loss per share, each of which is a non-GAAP financial measure. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. Reconciliations of billings, adjusted contribution, adjusted Partner Share and other third-party costs, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net loss and non-GAAP net loss per share to the most directly comparable GAAP measures are included in the appendix to this presentation. Please see appendix for definitions.
01 Company overview
© 2021 Cardlytics 4 We power a native ad platform in our partners’ digital channels.
Cardlytics provides a scaled solution based on purchase intelligence 170M+ Monthly Active Users(1) $3.5T+ in Annual Spend(2) 1 IN 2 U.S. Purchase Transactions(3) Distinctive benefits for marketers + Reach valuable banking customers + Operate in a brand-safe, privacy-protected, trusted digital channel + Market to the most valuable customers based on their actual spending + Drive in-store and online traffic + Closed-loop solution measures marketing results to the penny
Cardlytics is focused on five strategic initiatives to create shareholder value + Continued expansion of MAUs and advertising budgets while realizing the value of our operating investments Drive long-term growth & operating leverage + Provide a solution for SMBs and agenciesSelf-service portal + Scaled product-level offers from leading brands with a friction-free customer experience Grocery & CPG at scale + Product-level offers across wider retail to provide advertisers enhanced flexibility and optionality Product & category offers + Upgraded UI / UX for more content and better offer constructs and engagement solutions to drive engagement and spend Next gen customer experience
Dosh overview Converting high-value customers on behalf of new advertiser and fintech partners while helping more consumers save money Innovative platform Partnerships with long-term potential New advertising solutions + Dosh’s technology complements Cardlytics’ product and technology roadmap + Modern, efficient platform that can quickly integrate with neo-banks, fintechs, smaller banks, and consumer-facing organizations + Dosh brings partnerships with multiple neo-banks and fintech players, including Venmo, Betterment and Ellevest + Increased exposure with millennial and younger consumer audiences + Potential to enable new content desired by existing partners, such as travel and local offers + Unique ways for advertisers to connect directly with consumers Customer engagement + A test and learn DTC app to better understand engagement and drive advertiser ROI + Results utilized by partners to drive faster scaled deployments Founded: 2016 | HQ: Austin, TX
Bridg overview A customer data platform working with leading retailers to help them understand and reach customers using product-level insights Product-level Insights that differentiate from CDP peers Partnerships with leading businesses Potential new advertising solutions + Access to SKU and UPC data through its client relationships + Connects to all of a merchant’s customers point-of-sale through proprietary technology + Capable of connecting to most point of sale systems in the U.S. + Ability to ingest, clean and categorize product-level data to create usable insights + Strong relationships in the restaurant vertical + Expansion into retail and grocery with several key contracts signed in 2020 and 2021 + Ability to target on other digital media platforms, including Cardlytics + Potential to enable product-level offers for partners + Once integrated, Bridg could move to deterministic modeling + Possibility for measurement business Privacy focused + Built from the ground up to protect consumer privacy and security + Not reliant on cookies or other sources for data ingestion + Data never leaves the platform and is never sold Founded: 2010 | HQ: Los Angeles, CA
02 Financial information & operating metrics
$17.6 $21.8 $24.7 $31.0 $20.4 $12.4 $19.7 $29.7 $24.3 $29.6 $31.6 $36.0 $48.7 $56.4 $69.3 $45.5 $28.2 $46.1 $67.1 $53.2 $58.9 $65.0 $58.6 $73.8 $82.8 $100.9 $67.8 $39.5 $62.1 $94.0 $76.3 $85.3 $98.4 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Trended consolidated results Q3 Adj. Contribution 60.1% y/y Q3 Revenue 41.0% y/y Q3 Billings 58.5% y/y Revenue Adj. Contribution(1) Billings(1)
Billings and adjusted contribution best reflect performance Billings Total in aggregate paid by marketers Consumer incentive Set by CDLX to achieve marketing objectives; can fluctuate based on desired outcome Enhanced consumer incentive Additional Consumer Incentives funded by our Partners GAAP revenue Recognized as Revenue; to be split between CDLX & our Partners Partner share Portion of Revenue shared with our Partners Adjusted contribution Amount retained by CDLX; net of Partner Share
Q3 2021 year-over-year consolidated results Consumer Incentives $16,014 $33,464 Adjusted Partner Share $33,359 $19,749 $31,625 BILLINGS REVENUE ADJ. CONTRIBUTION Adjusted Contribution 58.5% 41.0% 60.1% Q3 2020 Q3 2021 $26,330 Three Months Ended September 30 Change 2020 2021 $ % Billings(1) $62,093 $98,448 $36,355 58.5% Consumer Incentives 16,014 33,464 17,450 109.0% Revenue $46,079 $64,984 $18,905 41.0% Adjusted Partner Share and other third-party costs(1) 26,330 33,359 7,029 26.7% Adjusted contribution(1) $19,749 $31,625 $11,876 60.1% Delivery costs 3,498 6,390 2,892 82.7% Deferred implementation costs 1,641 731 (910) (55.5%) Gross profit $14,610 $24,504 $9,894 67.7% Net loss ($15,356) ($44,529) ($29,173) 190.0% Adjusted EBITDA(1) ($596) ($5,169) ($4,573) 767.3%
Cardlytics platform advertiser spend by industry Advertising spend from agency accounts grew >150% during the third quarter of 2021 compared to the third quarter of 2020. Agency accounts represented <10% of total advertising spend during the third quarter of 2021 compared to >5% during the third quarter of 2020. % Change % of Total Advertiser Spend Three Months Ended September 30, 2021 Three Months Ended September 30, Industry vs 2020 vs 2019 2019 2020 2021 Grocery & Gas > 45% > 75% < 10% > 10% > 10% Restaurant > 40% > 20% > 25% > 30% < 30% Retail > 105% > 0% > 30% < 20% > 25% Travel & Entertainment < (5)% < (70)% > 20% < 10% < 5% Direct to Consumer > 45% > 115% < 15% > 30% > 25%
Cardlytics platform engagement metrics(1) There may be variation in future quarters due to factors such as global economic events, bank launches, new advertisers with significant spend, and growth in nascent or new verticals. Monthly log-in days(2) show that MAUs logged in 10.4 days per month in Q3 2021 versus 11 days per month in Q3 2020. Offer activation rates(2) show higher rates for small-ticket, volume- heavy offers versus large-ticket and subscription offers. Campaign spend ratios(2) show Cardlytics currently targets a small proportion of total MAU spend. + As budgets increase and more advertisers come onto the platform, more spend from MAUs can be targeted with offers. + There remains considerable room to target larger audiences in light of existing MAU engagement levels. Campaign Spend Ratios by Industry Offer Activation Rates by Industry Q3 2020 Q3 2021 Q3 2020 Q3 2021 3.28% 1.96% 3.57% 2.65% 6.51% 2.73% 2.12% 2.82% 1.97% 2.10% 3.66% 2.73% 7.30% 2.76% 2.83% 5.25% E-Comm Entertainment Grocery Other Restaurant Retail Subscription Travel 0.63% 0.07% 0.70% 0.14% 3.18% 0.78% 0.43% 2.42% 0.43% 0.50% 0.90% 0.03% 3.47% 1.19% 1.83% 2.24% E-Comm Entertainment Grocery Other Restaurant Retail Subscription Travel
Significant MAU increase precedes opportunity for expected billings growth and future ARPU expansion for the Cardlytics platform ARPU(1)MAUs(1) 108.5 120.1 128.3 133.4 140.8 157.2 161.6 163.6 168.5 167.6 170.6 $0.33 $0.40 $0.44 $0.52 $0.32 $0.18 $0.29 $0.41 $0.32 $0.34 $0.36 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21
03 Appendix
Q3 2021 results Three Months Ended September 30, Change Nine Months Ended Change September 30, 2021 2020 AMT % 2021 2020 AMT % Revenue $64,984 $46,079 $18,905 41.0% $177,067 $119,810 $57,257 47.8% Billings(1) 98,448 62,093 36,355 58.5% 260,102 169,390 90,712 53.6% Gross Profit 24,504 14,610 9,894 67.7% 67,177 38,487 28,690 74.5% Adjusted contribution(1) 31,625 19,749 11,876 60.1% 85,596 52,530 33,066 62.9% Net loss attributable to common stockholders (44,529) (15,356) (29,173) 190.0% (116,730) (48,645) (68,085) 140.0% Net loss per share (EPS) ($1.35) ($0.56) ($0.79) 141.1% ($3.67) ($1.80) ($1.87) 103.9% Adjusted EBITDA(1) ($5,169) ($596) ($4,573) 767.3% ($14,779) ($12,273) ($2,506) 20.4% Adjusted EBITDA margin(1)(2) (8.0%) (1.3%) (6.7%) 515.0% (8.3%) (10.2%) 1.9% (18.6%) Non-GAAP net loss(1) ($10,971) ($4,453) ($6,518) 146.4% ($33,702) ($21,730) ($11,972) 55.1% Non-GAAP net loss per share(1) ($0.33) ($0.16) ($0.17) 106.3% ($1.06) ($0.80) ($0.26) 32.5% Cardlytics MAUs (in millions) 170.6 161.6 9.0 5.6% 167.5 153.2 14.3 9.3% Cardlytics ARPU $0.36 $0.29 $0.07 24.1% $1.03 $0.78 $0.25 32.1% Bridg ARR $12,734 $ - $12,734 NM $12,734 $ - $12,734 NM
Guidance Q4 2021 Guidance FY 2021 Guidance Billings(1) $105.0 - $120.0 $365.1 - $380.1 Revenue $70.0 - $80.0 $247.1 - $257.1 Adjusted Contribution(1) $33.0 - $38.0 $118.6 - $123.6
Three Months Ended Mar 31, 2019 Jun 30, 2019 Sept 30, 2019 Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Cardlytics Platform Revenue $35,988 $48,730 $56,419 $69,293 $45,509 $28,222 $46,079 $67,082 $53,230 $56,763 $62,075 Plus: Consumer Incentives 22,562 25,046 26,373 31,642 22,267 11,299 16,014 26,883 23,087 26,484 33,464 Billings $58,550 $73,776 $82,792 $100,935 $67,776 $39,521 $62,093 $93,965 $76,317 $83,247 $95,539 Bridg Platform Revenue - - - - - - - - - $2,090 $2,909 Plus: Consumer Incentives - - - - - - - - - - - Billings - - - - - - - - - $2,090 $2,909 Consolidated Revenue $35,988 $48,730 $56,419 $69,293 $45,509 $28,222 $46,079 $67,082 $53,230 $58,853 $64,984 Plus: Consumer Incentives 22,562 25,046 26,373 31,642 22,267 11,299 16,014 26,883 23,087 26,484 33,464 Billings $58,550 $73,776 $82,792 $100,935 $67,776 $39,521 $62,093 $93,965 $76,317 $85,337 $98,448 Reconciliation of GAAP revenue to billings
Reconciliation of GAAP gross profit to adjusted contribution Three Months Ended Mar 31, 2019 Jun 30, 2019 Sept 30, 2019 Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sept 30, 2021Cardlytics Platform Revenue $35,988 $48,730 $56,419 $69,293 $45,509 $28,222 $46,079 $67,082 $53,230 $56,763 $62,075 Minus: Partner Share and other third-party costs 19,004 27,620 32,470 38,986 26,138 16,811 27,971 38,388 29,771 29,890 33,929 Delivery costs 3,246 3,370 3,070 3,207 3,406 3,499 3,498 3,907 3,938 4,837 4,777 Gross Profit $13,738 $17,740 $20,879 $27,100 $15,965 $7,912 $14,610 $24,787 $19,521 $22,036 $23,369 Plus: Delivery costs 3,246 3,370 3,070 3,207 3,406 3,499 3,498 3,907 3,938 4,837 4,777 Deferred implementation costs 653 731 789 696 1,008 991 1,641 958 882 730 731 Adjusted contribution $17,637 $21,841 $24,738 $31,003 $20,379 $12,402 $19,749 $29,652 $24,341 $27,603 $28,877 Bridg Platform Revenue - - - - - - - - - - $2,090 $2,909 Minus: Partner Share and other third-party costs - - - - - - - - - - 63 161 Delivery costs - - - - - - - - - - 911 1,613 Gross Profit - - - - - - - - - - $1,116 $1,135 Plus: Delivery costs - - - - - - - - - - 911 1,613 Adjusted contribution - - - - - - - - - - $2,027 $2,748 Consolidated Revenue $35,988 $48,730 $56,419 $69,293 $45,509 $28,222 $46,079 $67,082 $53,230 $58,853 $64,984 Minus: Partner Share and other third-party costs 19,004 27,620 32,470 38,986 26,138 16,811 27,971 38,388 29,771 29,953 34,090 Delivery costs 3,246 3,370 3,070 3,207 3,406 3,499 3,498 3,907 3,938 5,748 6,390 Gross Profit $13,738 $17,740 $20,879 $27,100 $15,965 $7,912 $14,610 $24,787 $19,521 $23,152 $24,504 Plus: Delivery costs 3,246 3,370 3,070 3,207 3,406 3,499 3,498 3,907 3,938 5,748 6,390 Deferred implementation costs 653 731 789 696 1,008 991 1,641 958 882 730 731 Adjusted contribution $17,637 $21,841 $24,738 $31,003 $20,379 $12,402 $19,749 $29,652 $24,341 $29,630 $31,625
Reconciliation of GAAP partner share and other third-party costs to adjusted partner share and other third-party costs Three Months Ended Mar 31, 2019 Jun 30, 2019 Sept 30, 2019 Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sept 30, 2021Cardlytics Platform Partner Share and other third-party costs $19,004 $27,620 $32,470 $38,986 $26,138 $16,811 $27,971 $38,388 $29,771 $29,890 $33,929 Minus: Deferred implementation costs 653 731 789 696 1,008 991 1,641 958 882 730 731 Adjusted Partner Share and other third-party costs $18,351 $26,889 $31,681 $38,290 $25,130 $15,820 $26,330 $37,430 $28,889 $29,160 $33,198 Bridg Platform Partner Share and other third-party costs - - - - - - - - - $63 $161 Minus: Deferred implementation costs - - - - - - - - - - - Adjusted Partner Share and other third-party costs - - - - - - - - - $63 $161 Consolidated Partner Share and other third-party costs $19,004 $27,620 $32,470 $38,986 $26,138 $16,811 $27,971 $38,388 $29,771 $29,953 $34,090 Minus: Deferred implementation costs 653 731 789 696 1,008 991 1,641 958 882 730 731 Adjusted Partner Share and other third-party costs $18,351 $26,889 $31,681 $38,290 $25,130 $15,820 $26,330 $37,430 $28,889 $29,223 $33,359
Three Months Ended Mar 31, 2019 Jun 30, 2019 Sept 30, 2019 Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sept 30, 2021Cardlytics Platform Net (loss) income ($6,314) ($6,510) ($7,747) $3,427 ($13,531) ($19,758) ($15,356) ($6,777) ($24,895) ($45,328) ($39,473) Plus: Income tax benefit - - - - - - - - - - - Interest expense (income), net 304 338 218 (312) (284) 10 283 3,039 3,045 3,078 3,192 Depreciation and amortization expense 961 1,053 1,167 1,354 2,331 1,545 1,933 2,017 3,065 7,092 5,554 Stock-based compensation expense 1,708 3,072 7,486 3,585 4,126 9,108 11,578 7,584 7,248 13,179 15,627 Foreign currency (gain) loss (491) 667 903 (1,859) 1,886 8 (1,066) (2,377) (319) - 1,543 Deferred implementation costs 653 731 789 696 1,008 991 1,641 958 882 730 731 Costs associated with financing events - - 123 - - - - - - - - Loss on extinguishment of debt - 23 28 - - - - - - - - Restructuring costs - - - - - 482 403 391 47 - - 713 Acquisition and integration costs - - - - - - - - 7,030 14,114 1,620 Change in fair value of contingent consideration - - - - - - - - - 1,480 6,261 Adjusted EBITDA ($3,179) ($626) $2,967 $6,891 ($3,982) ($7,693) ($596) $4,491 ($3,944) ($5,655) ($4,231) Bridg Platform Net (loss) income - - - - - - - - - ($1,978) ($5,056) Plus: Depreciation and amortization expense - - - - - - - - - 1,741 2,821 Stock-based compensation expense - - - - - - - - - 158 1,203 Acquisition and integration costs - - - - - - - - - 68 94 Adjusted EBITDA - - - - - - - - - ($11) ($938) Consolidated Net (loss) income ($6,314) ($6,510) ($7,747) $3,427 ($13,531) ($19,758) ($15,356) ($6,777) ($24,895) ($47,306) ($44,529) Plus: Income tax benefit - - - - - - - - - - - Interest expense (income), net 304 338 218 (312) (284) 10 283 3,039 3,045 3,078 3,193 Depreciation and amortization expense 961 1,053 1,167 1,354 2,331 1,545 1,933 2,017 3,065 8,833 8,375 Stock-based compensation expense 1,708 3,072 7,486 3,585 4,126 9,108 11,578 7,584 7,248 13,337 16,830 Foreign currency (gain) loss (491) 667 903 (1,859) 1,886 8 (1,066) (2,377) (319) - 1,543 Deferred implementation costs 653 731 789 696 1,008 991 1,641 958 882 730 731 Costs associated with financing events - - 123 - - - - - - - - Loss on extinguishment of debt - 23 28 - - - - - - - - Restructuring costs - - - - - 482 403 391 47 - - 713 Acquisition and integration costs - - - - - - - - 7,030 14,182 1,714 Change in fair value of contingent consideration - - - - - - - - - 1,480 6,261 Adjusted EBITDA ($3,179) ($626) $2,967 $6,891 ($3,982) ($7,693) ($596) $4,491 ($3,944) ($5,666) ($5,169) Reconciliation of GAAP net (loss) income to adjusted EBITDA
Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Net loss ($44,529) ($15,356) ($116,730) ($48,645) Plus: Stock-based compensation expense 16,830 11,578 37,415 24,811 Foreign currency loss (gain) 1,543 (1,066) 1,224 828 Acquisition and integration costs 1,714 - 22,926 - Amortization of acquired intantibles 6,497 - 13,009 - Change in fair value of contingent consideration 6,261 - 7,741 - Restructuring costs 713 391 713 1276 Non-GAAP net loss ($10,971) ($4,453) ($33,702) ($21,730) Weighted-average number of shares of common stock used in computing non-GAAP net loss per share: Weighted-average common shares outstanding, diluted 33,101 27,343 31,802 27,048 Non-GAAP net loss per share attributable to common stockholders, diluted ($0.33) ($0.16) ($1.06) ($0.80) Reconciliation of GAAP net loss to non-GAAP net loss and non-GAAP net loss per share
Reconciliation of forecasted GAAP revenue to billings Q4 2021 Guidance FY 2021 Guidance Revenue $70.0 - $80.0 $247.1 - $257.1 Plus: Consumer Incentives $35.0 - $40.0 $118.0 - $123.0 Billings $105.0 - $120.0 $365.1 - $380.1
Definitions Adjusted contribution: We define adjusted contribution measures of the degree by which revenue generated from our marketers exceeds the cost to obtain the purchase data and the digital advertising space from our partners. Adjusted contribution demonstrates how incremental marketing spend on our platform generates incremental amounts to support our sales and marketing, research and development, general and administration and other investments. Adjusted contribution is calculated by taking our total revenue less our Partner Share and other third-party costs exclusive of deferred implementation costs, which is a non-cash cost. Adjusted contribution does not take into account all costs associated with generating revenue from advertising campaigns, including sales and marketing expenses, research and development expenses, general and administrative expenses and other expenses, which we do not take into consideration when making decisions on how to manage our advertising campaigns. Adjusted EBITDA: We define adjusted EBITDA as our net loss before income tax benefit; interest expense, net; depreciation and amortization expense; stock-based compensation expense; foreign currency gain (loss); deferred implementation costs; restructuring costs; acquisition and integration costs; and change in fair value of contingent considerations. Bridg ARR: We define ARR as the annualized GAAP revenue of the final month in the period presented for the Bridg platform. ARR should not be considered in isolation from, or as an alternative to, revenue prepared in accordance with GAAP. We believe that ARR is an indicator of the Bridg platform’s ability to generate future revenue from existing clients. Cardlytics ARPU: We define ARPU as the total Cardlytics platform revenue generated in the applicable period calculated in accordance with GAAP, divided by the average number of MAUs in the applicable period. Billings: Billings represents the gross amount billed to customers and marketers for advertising campaigns in order to generate revenue. Cardlytics platform billings is recognized gross of both Consumer Incentives and Partner Share. Cardlytics platform GAAP revenue is recognized net of Consumer Incentives and gross of Partner Share. Bridg platform billings is the same as Bridg platform GAAP revenue. Campaign spend ratio: We define campaign spend ratio as the amount of spend from MAUs that is associated with the campaigns in which they were targeted with offers divided by the total amount of spend from MAUs in the industries in which MAUs were targeted with offers during the applicable period. Cardlytics MAUs: We define MAUs as targetable customers or accounts that have logged in and visited online or mobile applications containing offers from, opened an email containing offers from, or redeemed an offer from the Cardlytics platform during a monthly period. We then calculate a monthly average of these MAUs for the periods presented. Monthly log-in days: We define monthly log-in days as the number of days in which MAUs logged in and visited the online or mobile banking applications of, or opened an email containing our offers from, our partners during a monthly period. We then calculate an average of the monthly log-in days for the periods presented. Non-GAAP net loss: We define non-GAAP net loss as our net loss income before stock-based compensation expense; foreign currency (gain) loss; acquisition and integration costs; amortization of acquired intangibles; change in fair value of contingent considerations; and restructuring costs. Notably, any impacts related to minimum Partner Share commitments in connection with agreements with certain Partners are not added back to net loss in order to calculate adjusted EBITDA. Non-GAAP net loss per share: We define non-GAAP net loss per share as non-GAAP net loss divided by GAAP weighted-average common shares outstanding, diluted. Offer activation rate: We define offer activation rate as the total number of offers activated by MAUs divided by the total number of offers served to MAUs in the applicable period.
Industry and account definitions Segment Segment Constituents DTC Direct to consumer Entertainment Amusement Parks, Cinema/Video, Concerts/Theater, Gaming, Golf, Miscellaneous Recreation Services, Museums/Parks, Radio, Sporting & Sporting Venues/Other, Ticket Providers Grocery Convenience, Grocery Other Business Services, Financial Institutions, Gyms/Fitness, Home/ Maintenance, Online Education/ Distance Learning, Other Services, Salon/Spa Restaurant Banquet/Caterers, Bars/Night Clubs/Taverns, Fast Food/ Quick Serve, Full Service Restaurants, Quick Serve Light Fares Retail Accessories, Apparel, Auto Services and Products, Beauty Products/Cosmetics, Books/ Magazine, Child/ Infant Care, Drug Store/Pharmacy, General/Multi-Line, Home & Garden, Office Supplies, Other Retail, Pets, Shoes & Athletic Footwear, Specialty Gifts, Sporting & Outdoor Goods Subscription Bundled, Insurance/Real Estate, Internet, Phone, Professional Services, Television Travel Airlines, Car Rental, Cruise Lines, Gas Stations, Hotels/Lodging, Other Travel, Parking Services, Personal Transportation, Tour Operators/Agencies, Travel Aggregators and Agencies Exclusions Antique/Pawn, Charitable and Social Service Organizations, Courier/Freight/Storage, Gambling, Government, Lifestyle/ Social, Medical Services, Other Educational, Schools Merchants on the Cardlytics platform in which we interact with an advertising agency that we believe holds significant influence over the decision-making process as it relates to the design and management of advertising campaigns Agency Accounts
