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): May 2, 2022
(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 May 2, 2022, Cardlytics, Inc. (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2022, 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 May 2, 2022, 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: | May 2, 2022 | By: | /s/ Andrew Christiansen | ||||||||
| Andrew Christiansen | |||||||||||
Chief Financial Officer (Principal Financial and Accounting Officer) | |||||||||||
Exhibit 99.1
Cardlytics Announces First Quarter 2022 Financial Results
Atlanta, GA – May 2, 2022 – Cardlytics, Inc. (NASDAQ: CDLX), a digital advertising platform, today announced financial results for the first quarter ended March 31, 2022. Supplemental information is available on the Investor Relations section of Cardlytics' website at http://ir.cardlytics.com/.
“We had our largest Q1 ever and delivered results above our expectations,” said Lynne Laube, CEO & Co-Founder of Cardlytics. “Our sales team executed against plan despite a difficult macroeconomic environment, and we continue to drive performance related outcomes for our advertising clients.”
“This was a solid quarter and we are pleased with the execution despite issues in the global economy,” 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 enhancing our advertising platform to unlock the massive potential of our channel. We are excited for the rest of 2022 and look forward to continued execution.”
First Quarter 2022 Financial Results
•Revenue was $67.9 million, an increase of 28% year-over-year, compared to $53.2 million in the first quarter of 2021.
•Billings, a non-GAAP metric, was $98.2 million, an increase of 29% year-over-year, compared to $76.3 million in the first quarter of 2021.
•Gross profit was $26.2 million, an increase of 34% year-over-year, compared to $19.5 million in the first quarter of 2021.
•Adjusted contribution, a non-GAAP metric, was $32.8 million, an increase of 35% year-over-year, compared to $24.3 million in the first quarter of 2021.
•Net income attributable to common stockholders was $33.0 million, or $0.91 per diluted share, based on 37.2 million fully diluted weighted-average common shares, compared to a net loss attributable to common stockholders of $(24.9) million, or $(0.85) per diluted share, based on 29.3 million fully diluted weighted-average common shares in the first quarter of 2021.
•Non-GAAP net loss was $(14.2) million, or $(0.38) per diluted share, based on 37.2 million fully diluted weighted-average common shares, compared to non-GAAP net loss of $(9.9) million, or $(0.34) per diluted share, based on 29.3 million fully diluted weighted-average common shares in the first quarter of 2021.
•Adjusted EBITDA, a non-GAAP metric, was a loss of $(10.5) million compared to a loss of $(3.9) million in the first quarter of 2021.
Key Metrics
•Cardlytics MAUs were 178.5 million, an increase of 6%, compared to 168.6 million in the first quarter of 2021.
•Cardlytics ARPU was $0.36, an increase of 13%, compared to $0.32 in the first quarter of 2021.
•Bridg ARR was $14.0 million in the first quarter of 2022.
Definitions of MAUs, ARPU and ARR are included below under the caption “Non-GAAP Measures and Other Performance Metrics.”
Second Quarter 2022 Financial Expectations
Cardlytics anticipates billings, revenue, and adjusted contribution to be in the following ranges (in millions):
| Q2 2022 Guidance | |||||
Billings(1) | $106.0 - $116.0 | ||||
| Revenue | $73.0 - $80.0 | ||||
Adjusted contribution(2) | $36.5 - $40.5 | ||||
(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 first quarter 2022 financial results during a teleconference today, May 2, 2022, 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# 8338158. A replay of the conference call will be available through 8:00 PM ET / 5:00 PM PT on May 9, 2022 at (855) 859-2056 (domestic) or (404) 537-3406 (international). The replay passcode is 8338158. 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 rewards programs that promote customer loyalty and deepen 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, Cardlytics has offices in London, New York, Los Angeles, San Francisco, Austin, Detroit and Visakhapatnam. 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 second quarter of 2022, 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, Bridg and Entertainment 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 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 May 2, 2022 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 platforms 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 income (loss) before income taxes; interest expense, net; depreciation and amortization expense; stock-based compensation expense; foreign currency loss (gain); deferred implementation costs; restructuring costs, acquisition and integration (benefit) 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 as our net loss before stock-based compensation expense; foreign currency loss (gain); acquisition and integration (benefit) 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 income (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, opened an email containing an offer, 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)
| March 31, 2022 | December 31, 2021 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 208,293 | $ | 233,467 | |||||||
| Restricted cash | 92 | 95 | |||||||||
| Accounts receivable and contract assets, net | 96,529 | 111,085 | |||||||||
| Other receivables | 5,717 | 6,097 | |||||||||
| Prepaid expenses and other assets | 8,809 | 7,981 | |||||||||
| Total current assets | 319,440 | 358,725 | |||||||||
| Long-term assets: | |||||||||||
| Property and equipment, net | 9,909 | 11,273 | |||||||||
| Right-of-use assets under operating leases, net | 9,249 | 10,196 | |||||||||
| Intangible assets, net | 128,250 | 125,550 | |||||||||
| Goodwill | 747,578 | 742,516 | |||||||||
| Capitalized software development costs, net | 14,115 | 13,131 | |||||||||
| Other long-term assets, net | 2,638 | 2,406 | |||||||||
| Total assets | $ | 1,231,179 | $ | 1,263,797 | |||||||
| Liabilities and stockholders' equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 3,839 | $ | 4,619 | |||||||
| Accrued liabilities: | |||||||||||
| Accrued compensation | 7,910 | 12,136 | |||||||||
| Accrued expenses | 14,631 | 19,620 | |||||||||
| Partner Share liability | 36,995 | 46,595 | |||||||||
| Consumer Incentive liability | 45,098 | 52,602 | |||||||||
| Deferred revenue | 3,122 | 3,280 | |||||||||
| Current operating lease liabilities | 6,249 | 6,028 | |||||||||
| Current contingent consideration | 128,941 | 182,470 | |||||||||
| Total current liabilities | 246,785 | 327,350 | |||||||||
| Long-term liabilities: | |||||||||||
| Convertible senior notes, net | 224,948 | 184,398 | |||||||||
| Deferred liabilities | 167 | 173 | |||||||||
| Long-term operating lease liabilities | 5,268 | 6,801 | |||||||||
| Long-term contingent consideration | 38,304 | 49,825 | |||||||||
| Other long-term liabilities | 4,037 | 4,550 | |||||||||
| Total liabilities | 519,509 | 573,097 | |||||||||
| Stockholders’ equity: | |||||||||||
Common stock, $0.0001 par value—100,000 shares authorized and 33,790 and 33,534 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively. | 9 | 9 | |||||||||
| Additional paid-in capital | 1,188,076 | 1,212,823 | |||||||||
| Accumulated other comprehensive income | 1,853 | 486 | |||||||||
| Accumulated deficit | (478,268) | (522,618) | |||||||||
| Total stockholders’ equity | 711,670 | 690,700 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,231,179 | $ | 1,263,797 | |||||||
CARDLYTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands, except per share amounts)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Revenue | $ | 67,928 | $ | 53,230 | |||||||
| Costs and expenses: | |||||||||||
| Partner Share and other third-party costs | 35,153 | 29,771 | |||||||||
| Delivery costs | 6,533 | 3,938 | |||||||||
| Sales and marketing expense | 17,648 | 13,202 | |||||||||
| Research and development expense | 12,291 | 6,218 | |||||||||
| General and administration expense | 20,425 | 12,175 | |||||||||
| Acquisition and integration (benefit) costs | (4,599) | 7,030 | |||||||||
| Change in fair value of contingent consideration | (65,050) | — | |||||||||
| Depreciation and amortization expense | 9,871 | 3,065 | |||||||||
| Total costs and expenses | 32,272 | 75,399 | |||||||||
| Operating income (loss) | 35,656 | (22,169) | |||||||||
| Other (expense) income: | |||||||||||
| Interest expense, net | (947) | (3,045) | |||||||||
| Foreign currency (loss) gain | (1,671) | 319 | |||||||||
| Total other expense | (2,618) | (2,726) | |||||||||
| Income (loss) before income taxes | 33,038 | (24,895) | |||||||||
| Income tax benefit | — | — | |||||||||
| Net income (loss) | 33,038 | (24,895) | |||||||||
| Net income (loss) attributable to common stockholders | $ | 33,038 | $ | (24,895) | |||||||
| Net income (loss) per share attributable to common stockholders | |||||||||||
| Basic | $ | 0.98 | $ | (0.85) | |||||||
| Diluted | $ | 0.91 | $ | (0.85) | |||||||
| Weighted-average common shares outstanding | |||||||||||
| Basic | 33,741 | 29,313 | |||||||||
| Diluted | 37,185 | 29,313 | |||||||||
CARDLYTICS, INC.
STOCK-BASED COMPENSATION EXPENSE (UNAUDITED)
(Amounts in thousands)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Delivery costs | $ | 582 | $ | 309 | |||||||
| Sales and marketing | 3,704 | 2,432 | |||||||||
| Research and development | 3,204 | 1,514 | |||||||||
| General and administration | 6,095 | 2,993 | |||||||||
| Total stock-based compensation | $ | 13,585 | $ | 7,248 | |||||||
CARDLYTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in thousands)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Operating activities | |||||||||||
| Net income (loss) | $ | 33,038 | $ | (24,895) | |||||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||||||
| Credit loss expense | 346 | 1,004 | |||||||||
| Depreciation and amortization | 9,871 | 3,065 | |||||||||
| Amortization of financing costs charged to interest expense | 402 | 219 | |||||||||
| Accretion of debt discount and non-cash interest expense | — | 2,321 | |||||||||
| Amortization of right-of-use assets | 1,516 | 1,073 | |||||||||
| Stock-based compensation expense | 13,585 | 7,248 | |||||||||
| Change in fair value of contingent consideration | (65,050) | — | |||||||||
| Other non-cash expense (income), net | 1,574 | (141) | |||||||||
| Deferred implementation costs | — | 882 | |||||||||
| Change in operating assets and liabilities: | |||||||||||
| Accounts receivable | 15,279 | 7,867 | |||||||||
| Prepaid expenses and other assets | (725) | (1,845) | |||||||||
| Accounts payable | (855) | 495 | |||||||||
| Other accrued expenses | (11,569) | 996 | |||||||||
| Partner Share liability | (9,600) | (6,749) | |||||||||
| Consumer Incentive liability | (7,503) | (4,072) | |||||||||
| Net cash used in operating activities | (19,691) | (12,532) | |||||||||
| Investing activities | |||||||||||
| Acquisition of property and equipment | (397) | (1,377) | |||||||||
| Acquisition of patents | (49) | (28) | |||||||||
| Capitalized software development costs | (2,314) | (1,923) | |||||||||
| Business acquisition, net of cash acquired | (2,274) | (148,634) | |||||||||
| Net cash used in investing activities | (5,034) | (151,962) | |||||||||
| Financing activities | |||||||||||
| Principal payments of debt | (13) | (6) | |||||||||
| Proceeds from issuance of common stock | 195 | 484,713 | |||||||||
| Debt issuance costs | — | (42) | |||||||||
| Net cash received from financing activities | 182 | 484,665 | |||||||||
| Effect of exchange rates on cash, cash equivalents and restricted cash | (634) | 139 | |||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (25,177) | 320,310 | |||||||||
| Cash, cash equivalents, and restricted cash — Beginning of period | 233,562 | 293,349 | |||||||||
| Cash, cash equivalents, and restricted cash — End of period | $ | 208,385 | $ | 613,659 | |||||||
CARDLYTICS, INC.
SUMMARY OF GAAP AND NON-GAAP RESULTS (UNAUDITED)
(Dollars in thousands)
| Three Months Ended March 31, | Change | ||||||||||||||||||||||
| 2022 | 2021 | $ | % | ||||||||||||||||||||
Billings(1) | $ | 98,225 | $ | 76,317 | $ | 21,908 | 29 | % | |||||||||||||||
| Consumer Incentives | 30,297 | 23,087 | 7,210 | 31 | |||||||||||||||||||
| Revenue | 67,928 | 53,230 | 14,698 | 28 | |||||||||||||||||||
Adjusted Partner Share and other third-party costs(1) | 35,153 | 28,889 | 6,264 | 22 | |||||||||||||||||||
Adjusted contribution(1) | 32,775 | 24,341 | 8,434 | 35 | |||||||||||||||||||
| Delivery costs | 6,533 | 3,938 | 2,595 | 66 | |||||||||||||||||||
| Deferred implementation costs | — | 882 | (882) | (100) | |||||||||||||||||||
| Gross profit | $ | 26,242 | $ | 19,521 | $ | 6,721 | 34 | % | |||||||||||||||
| Net income (loss) | $ | 33,038 | $ | (24,895) | $ | 57,933 | 233 | % | |||||||||||||||
Adjusted EBITDA(1) | $ | (10,537) | $ | (3,944) | $ | (6,593) | (167) | % | |||||||||||||||
(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 Income (Loss) to Adjusted EBITDA."
CARDLYTICS, INC.
RECONCILIATION OF GAAP REVENUE TO BILLINGS (UNAUDITED)
(Amounts in thousands)
| Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Revenue | $ | 63,983 | $ | 3,945 | $ | 67,928 | $ | 53,230 | $ | — | $ | 53,230 | |||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
| Consumer Incentives | 30,297 | — | 30,297 | 23,087 | — | 23,087 | |||||||||||||||||||||||||||||
| Billings | $ | 94,280 | $ | 3,945 | $ | 98,225 | $ | 76,317 | $ | — | $ | 76,317 | |||||||||||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED CONTRIBUTION (UNAUDITED)
(Amounts in thousands)
| Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Revenue | $ | 63,983 | $ | 3,945 | $ | 67,928 | $ | 53,230 | $ | — | $ | 53,230 | |||||||||||||||||||||||
| Minus: | |||||||||||||||||||||||||||||||||||
| Partner Share and other third-party costs | 35,027 | 126 | 35,153 | 29,771 | — | 29,771 | |||||||||||||||||||||||||||||
Delivery costs(1) | 4,907 | 1,626 | 6,533 | 3,938 | — | 3,938 | |||||||||||||||||||||||||||||
| Gross profit | 24,049 | 2,193 | 26,242 | 19,521 | — | 19,521 | |||||||||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
Delivery costs(1) | 4,907 | 1,626 | 6,533 | 3,938 | — | 3,938 | |||||||||||||||||||||||||||||
Deferred implementation costs(2) | — | — | — | 882 | — | 882 | |||||||||||||||||||||||||||||
| Adjusted contribution | $ | 28,956 | $ | 3,819 | $ | 32,775 | $ | 24,341 | $ | — | $ | 24,341 | |||||||||||||||||||||||
(1)Stock-based compensation expense recognized in consolidated delivery costs totaled $0.6 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively.
(2)Deferred implementation costs is excluded from adjusted Partner Share and other third-party costs as follows (in thousands):
| Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Partner Share and other third-party costs | $ | 35,027 | $ | 126 | $ | 35,153 | $ | 29,771 | $ | — | $ | 29,771 | |||||||||||||||||||||||
| Minus: | |||||||||||||||||||||||||||||||||||
| Deferred implementation costs | — | — | — | 882 | — | 882 | |||||||||||||||||||||||||||||
| Adjusted Partner Share and other third-party costs | $ | 35,027 | $ | 126 | $ | 35,153 | $ | 28,889 | $ | — | $ | 28,889 | |||||||||||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA (UNAUDITED)
(Amounts in thousands)
| Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Net income (loss) | $ | 32,853 | $ | 185 | $ | 33,038 | $ | (24,895) | $ | — | $ | (24,895) | |||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
| Interest expense, net | 947 | — | 947 | 3,045 | — | 3,045 | |||||||||||||||||||||||||||||
| Depreciation and amortization expense | 7,044 | 2,827 | 9,871 | 3,065 | — | 3,065 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | 11,935 | 1,650 | 13,585 | 7,248 | — | 7,248 | |||||||||||||||||||||||||||||
| Foreign currency loss (gain) | 1,671 | — | 1,671 | (319) | — | (319) | |||||||||||||||||||||||||||||
| Deferred implementation costs | — | — | — | 882 | — | 882 | |||||||||||||||||||||||||||||
| Acquisition and integration (benefit) costs | 508 | (5,107) | (4,599) | 7,030 | — | 7,030 | |||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | (65,050) | — | (65,050) | — | — | — | |||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (10,092) | $ | (445) | $ | (10,537) | $ | (3,944) | $ | — | $ | (3,944) | |||||||||||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP NET LOSS
AND NON-GAAP NET LOSS PER SHARE (UNAUDITED)
(Amounts in thousands, except per share amounts)
| Three Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Net income (loss) | $ | 33,038 | $ | (24,895) | |||||||
| Plus: | |||||||||||
| Stock-based compensation expense | 13,585 | 7,248 | |||||||||
| Foreign currency loss (gain) | 1,671 | (319) | |||||||||
| Acquisition and integration (benefit) costs | (4,599) | 7,030 | |||||||||
| Amortization of acquired intangibles | 7,145 | 998 | |||||||||
Change in fair value of contingent consideration | (65,050) | — | |||||||||
| Non-GAAP net loss | $ | (14,210) | $ | (9,938) | |||||||
| Weighted-average number of shares of common stock used in computing non-GAAP net loss per share: | |||||||||||
| GAAP weighted-average common shares outstanding, diluted | 37,185 | 29,313 | |||||||||
| Non-GAAP net loss per share attributable to common stockholders, diluted | $ | (0.38) | $ | (0.34) | |||||||
CARDLYTICS, INC.
RECONCILIATION OF FORECASTED GAAP REVENUE TO BILLINGS (UNAUDITED)
(Amounts in thousands)
| Q2 2022 Guidance | |||||
| Revenue | $73.0 - $80.0 | ||||
| Plus: | |||||
| Consumer Incentives | $33.0 - $36.0 | ||||
| Billings | $106.0 - $116.0 | ||||
Contacts:
Public Relations:
Angie Amberg
Cardlytics, Inc.
aamberg@cardlytics.com
Investor Relations:
Robert Robinson
Corporate Development & IR
ir@cardlytics.com
CARDLYTICS Q1 2022 Earnings Presentation May 2, 2022
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 the potential benefits of our acquisitions of Dosh, Bridg and Entertainment, becoming cash flow positive by the second half of 2023, earnings guidance for the second quarter of 2022, Bridg's future gross margin, the anticipated impact of our strategic initiatives to create shareholder value and 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, Bridg and Entertainment 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 merchant data 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 May 2, 2022. 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 178M+ Monthly Active Users(1) $3.9T+ 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 + Connecting 50% of MAUs to new Ad Server by end of 2022 + Increasing adoption by agency, middle market and SMB clients Drive long-term growth & operating leverage + Upgraded UI / UX for more content and better offer constructs, and engagement solutions to drive engagement and spend Ad Server and Ads Manager adoption + Delivering product-level offers across wider retail to provide advertisers enhanced flexibility and optionality Next-gen customer experience + Scaled product-level offers from leading brands with a friction-free customer experience Product & category offers + Becoming cash flow positive by the second half of 2023 with continued self-funding of growth initiatives Grocery & CPG at scale
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 merchant’s point-of-sale through proprietary technology + Capable of connecting to most point-of-sale systems in the U.S. + Able 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 + Enable product-level offers for partners + Once integrated, Bridg could move to deterministic modeling + Allow measurement of the efficacy of a variety of types of digital campaigns Privacy focused + Built from the ground up to protect consumer privacy and security + Not reliant on cookies or other sources for data ingestion + Personal data never leaves the platform and is never sold Founded: 2010 | HQ: Los Angeles, CA
Bridg Gross Margin Bridg incurs higher expenses during onboarding + Processing of several years’ worth of historical data initially versus steady state processing of data on a daily basis + Implementation costs are also incurred upfront + New data lake and data warehouse costs + Data transfer costs + Custom set-up costs Increases in revenue over time + Clients progress from proof of concept to full user of the platform + Tiered pricing results in gradual revenue increases Margin improvement for company over time as more clients scale beyond proof of concept and data costs normalize Note: Gross margin estimates are for total Bridg platform Q1 22 3+ Year Growth Total Revenue Gross Margin 75.0% 55.6%
Entertainment overview A recognized leader in premium local offers with relationships across thousands of local advertisers and a team with deep experience in the mid-market and small business sectors New offer capabilities Engagement improvement Scalable content acquisition machine + High-value middle market and local business content + Merchants located in nearly every U.S. MSA covering ~95% of the population + Offers available after banks launch the Ad Server and evolve the user experience + Local content at scale improves customer engagement & loyalty + Unique offer designs can drive specific consumer behaviors + Drives meaningful value back to customers + Recognized leading ‘discount offers’ brand + Solely focused on mid-market and small business logos + Management and content acquisition team with nearly 20 years’ experience Founded: 1962 | HQ: Detroit, MI
02 Financial information & operating metrics
Trended consolidated results Q1 Adj. Contribution 34.6% y/y Q1 Revenue 27.6% y/y Q1 Billings 28.7% y/y Revenue Adj. Contribution(1) Billings(1) $20.4 $12.4 $19.7 $29.7 $24.3 $29.6 $31.6 $44.0 $32.8 $45.5 $28.2 $46.1 $67.1 $53.2 $58.9 $65.0 $90.0 $67.9 $67.8 $39.5 $62.1 $94.0 $76.3 $85.3 $98.4 $134.0 $98.2 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22
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
Q1 2022 year-over-year consolidated results Consumer Incentives $23,087 $30,297 Adjusted Partner Share $35,135 $24,341 $32,775 BILLINGS REVENUE ADJ. CONTRIBUTION Adjusted Contribution 28.7% 27.6% 34.6% Q1 2021 Q1 2022 $28,889 Three Months Ended March 31 Change 2021 2022 $ % Billings(1) $76,317 $98,225 $21,908 28.7% Consumer Incentives 23,087 30,297 7,210 31.2% Revenue $53,230 $67,928 $14,698 27.6% Adjusted Partner Share and other third- party costs(1) 28,889 35,153 6,264 21.7% Adjusted contribution(1) $24,341 $32,775 $8,434 34.6% Delivery costs 3,938 6,533 2,595 65.9% Deferred implementation costs 882 - (882) (100.0%) Gross profit $19,521 $26,242 $6,721 34.4% Net (loss) income ($24,895) $33,038 $57,933 232.7% Adjusted EBITDA(1) ($3,944) ($10,537) ($6,593) (167.2%)
Cardlytics platform advertiser spend by industry Advertising spend from agency accounts grew >60% during the first quarter of 2022 compared to the first quarter of 2021. Agency accounts represented >10% of total advertising spend during the first quarter of 2022 compared to >5% during the first quarter of 2021. % Change % of Total Advertiser Spend Three Months Ended March 31, 2022 Three Months Ended March 31, Industry vs 2021 vs 2020 vs 2019 2019 2020 2021 2022 Grocery & Gas < 50% < 5% > 75% > 5% < 15% < 10% < 10% Restaurant < (15)% > 25% > 50% > 25% < 30% > 35% > 25% Retail > 25% > 65% < 20% > 35% > 20% > 25% > 25% Travel & Entertainment > 150% > (25)% < (20)% < 20% > 15% < 5% < 10% Direct to Consumer < 45% > 120% > 275% < 15% < 20% > 25% > 30%
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 days per month in Q1 2022 versus 10 days per month in Q1 2021. 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 Q1 2021 Q1 2022 Q1 2021 Q1 2022 2.41% 2.69% 4.06% 4.57% 6.45% 2.77% 2.10% 3.19% 1.86% 2.24% 2.14% 3.62% 5.97% 2.12% 2.12% 3.49% E-Comm Entertainment Grocery Other Restaurant Retail Subscription Travel 0.34% 0.12% 1.65% 0.29% 4.32% 0.83% 1.22% 0.93% 0.34% 0.40% 0.52% 0.66% 3.05% 1.11% 0.29% 1.63% 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) 140.8 157.2 161.6 163.6 168.6 167.6 170.6 175.4 178.5 $0.32 $0.18 $0.29 $0.41 $0.32 $0.34 $0.36 $0.49 $0.36 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22
03 Appendix
Q1 2022 results Three Months Ended March 31, Change 2022 2021 AMT % Revenue $67,928 $53,230 $14,698 27.6% Billings(1) 98,225 76,317 21,908 28.7% Gross Profit 26,242 19,521 6,721 34.4% Adjusted contribution(1) 32,775 24,341 8,434 34.6% Net income (loss) attributable to common stockholders 33,038 (24,895) 57,933 232.7% Net income (loss) per share (EPS), diluted $0.91 ($0.85) $1.78 209.4% Adjusted EBITDA(1) ($10,537) ($3,944) ($6,593) (167.2%) Adjusted EBITDA margin(1)(2) (15.5%) (7.6%) (8.0%) (105.4%) Non-GAAP net loss(1) ($14,210) ($9,938) ($4,272) (43.0%) Non-GAAP net loss per share(1) ($0.38) ($0.34) ($0.05) (14.7%) Cardlytics MAUs (in millions) 178.5 168.6 9.9 5.9% Cardlytics ARPU $0.36 $0.32 $0.04 12.5% Bridg ARR $14,017 $ - $14,017 NM
Guidance Q2 2022 Guidance Billings(1) $106.0 - $116.0 Revenue $73.0 - $80.0 Adjusted Contribution(1) $36.5 - $40.5
Reconciliation of GAAP revenue to billings Three Months Ended Mar 31, 2020 Jun 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 Cardlytics Platform Revenue $45,509 $28,222 $46,079 $67,082 $53,230 $56,763 $62,075 $86,686 $63,983 Plus: Consumer Incentives 22,267 11,299 16,014 26,883 23,087 26,484 33,464 43,924 30,297 Billings $67,776 $39,521 $62,093 $93,965 $76,317 $83,247 $95,539 $130,610 $94,280 Bridg Platform Revenue - - - - - $2,090 $2,909 $3,363 $3,945 Plus: Consumer Incentives - - - - - - - - - Billings - - - - - $2,090 $2,909 $3,363 $3,945 Consolidated Revenue $45,509 $28,222 $46,079 $67,082 $53,230 $58,853 $64,984 $90,049 $67,928 Plus: Consumer Incentives 22,267 11,299 16,014 26,883 23,087 26,484 33,464 43,924 30,297 Billings $67,776 $39,521 $62,093 $93,965 $76,317 $85,337 $98,448 $133,973 $98,225
Reconciliation of GAAP gross profit to adjusted contribution Three Months Ended Mar 31, 2020 Jun 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022Cardlytics Platform Revenue $45,509 $28,222 $46,079 $67,082 $53,230 $56,763 $62,075 $86,686 $63,986 Minus: Partner Share and other third-party costs 26,138 16,811 27,971 38,388 29,771 29,890 33,929 47,274 35,027 Delivery costs 3,406 3,499 3,498 3,907 3,938 4,837 4,777 4,618 4,907 Gross Profit $15,965 $7,912 $14,610 $24,787 $19,521 $22,036 $23,369 $34,794 $24,049 Plus: Delivery costs 3,406 3,499 3,498 3,907 3,938 4,837 4,777 4,618 4,907 Deferred implementation costs 1,008 991 1,641 958 882 730 731 1,442 - Adjusted contribution $20,379 $12,402 $19,749 $29,652 $24,341 $27,603 $28,877 $40,854 $28,956 Bridg Platform Revenue - - - - - $2,090 $2,909 $3,363 $3,945 Minus: Partner Share and other third-party costs - - - - - 63 161 185 126 Delivery costs - - - - - 911 1,613 1,809 1,626 Gross Profit - - - - - $1,116 $1,135 $1,369 $2,193 Plus: Delivery costs - - - - - 911 1,613 1,809 1,626 Adjusted contribution - - - - - $2,027 $2,748 $3,178 $3,819 Consolidated Revenue $45,509 $28,222 $46,079 $67,082 $53,230 $58,853 $64,984 $90,049 $67,928 Minus: Partner Share and other third-party costs 26,138 16,811 27,971 38,388 29,771 29,953 34,090 47,459 35,153 Delivery costs 3,406 3,499 3,498 3,907 3,938 5,748 6,390 6,427 6,533 Gross Profit $15,965 $7,912 $14,610 $24,787 $19,521 $23,152 $24,504 $36,163 $26,242 Plus: Delivery costs 3,406 3,499 3,498 3,907 3,938 5,748 6,390 6,427 6,533 Deferred implementation costs 1,008 991 1,641 958 882 730 731 1,442 - Adjusted contribution $20,379 $12,402 $19,749 $29,652 $24,341 $29,630 $31,625 $44,032 $32,775
Reconciliation of GAAP partner share and other third-party costs to adjusted partner share and other third-party costs Three Months Ended Mar 31, 2020 Jun 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022Cardlytics Platform Partner Share and other third-party costs $26,138 $16,811 $27,971 $38,388 $29,771 $29,890 $33,929 $47,274 $35,027 Minus: Deferred implementation costs 1,008 991 1,641 958 882 730 731 1,442 - Adjusted Partner Share and other third-party costs $25,130 $15,820 $26,330 $37,430 $28,889 $29,160 $33,198 $45,832 $35,027 Bridg Platform Partner Share and other third-party costs - - - - - $63 $161 $185 $126 Minus: Deferred implementation costs - - - - - - - - - Adjusted Partner Share and other third-party costs - - - - - $63 $161 $185 $126 Consolidated Partner Share and other third-party costs $26,138 $16,811 $27,971 $38,388 $29,771 $29,953 $34,090 $47,459 $35,153 Minus: Deferred implementation costs 1,008 991 1,641 958 882 730 731 1,442 - Adjusted Partner Share and other third-party costs $25,130 $15,820 $26,330 $37,430 $28,889 $29,223 $33,359 $46,017 $35,153
(Amounts in thousands) Reconciliation of GAAP net (loss) income to adjusted EBITDA Three Months Ended Mar 31, 2020 Jun 30, 2020 Sept 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022Cardlytics Platform Net (loss) income ($13,531) ($19,758) ($15,356) ($6,777) ($24,895) ($45,328) ($39,473) ($11,758) $32,853 Plus: Income tax benefit - - - - - - - (2,302) - Interest expense (income), net (284) 10 283 3,039 3,045 3,078 3,192 3,247 947 Depreciation and amortization expense 2,331 1,545 1,933 2,017 3,065 7,092 5,554 6,774 7,044 Stock-based compensation expense 4,126 9,108 11,578 7,584 7,248 13,179 15,627 11,168 11,935 Foreign currency (gain) loss 1,886 8 (1,066) (2,377) (319) - 1,543 43 1,671 Deferred implementation costs 1,008 991 1,641 958 882 730 731 1,442 - Restructuring costs 482 403 391 47 - - 713 - - Acquisition and integration costs - - - - 7,030 14,114 1,620 1,616 508 Change in fair value of contingent consideration - - - - - 1,480 6,261 (6,367) (65,050) Adjusted EBITDA ($3,982) ($7,693) ($596) $4,491 ($3,944) ($5,655) ($4,232) $3,863 ($10,092) Bridg Platform Net (loss) income - - - - - ($1,978) ($5,056) ($76) $185 Plus: Income tax benefit - - - - - - - (5,562) - Depreciation and amortization expense - - - - - 1,741 2,821 2,824 2,827 Stock-based compensation expense - - - - - 158 1,203 1,681 1,650 Acquisition and integration costs (benefit) - - - - - 68 94 (170) (5,107) Adjusted EBITDA - - - - - ($11) ($938) ($1,303) ($445) Consolidated Net (loss) income ($13,531) ($19,758) ($15,356) ($6,777) ($24,895) ($47,306) ($44,529) ($11,834) $33,038 Plus: Income tax benefit - - - - - - - ($7,864) - Interest expense (income), net (284) 10 283 3,039 3,045 3,078 3,193 3,247 947 Depreciation and amortization expense 2,331 1,545 1,933 2,017 3,065 8,833 8,375 9,598 9,871 Stock-based compensation expense 4,126 9,108 11,578 7,584 7,248 13,337 16,830 12,849 13,585 Foreign currency (gain) loss 1,886 8 (1,066) (2,377) (319) - 1,543 43 1,671 Deferred implementation costs 1,008 991 1,641 958 882 730 731 1,442 - Costs associated with financing events - - - - - - - - - Loss on extinguishment of debt - - - - - - - - - Restructuring costs 482 403 391 47 - - 713 - - Acquisition and integration costs (benefit) - - - - 7,030 14,182 1,714 1,446 (4,599) Change in fair value of contingent consideration - - - - - 1,480 6,261 (6,367) (65,050) Adjusted EBITDA ($3,982) ($7,693) ($596) $4,491 ($3,944) ($5,666) ($5,169) $2,560 ($10,537)
Reconciliation of GAAP net income (loss) to non-GAAP net loss and non-GAAP net loss per share Three Months Ended March 31, 2022 2021 Net income (loss) $33,038 ($24,895) Plus: Stock-based compensation expense 13,585 7,248 Foreign currency loss (gain) 1,671 (319) Acquisition and integration (benefit) costs (4,599) 7,030 Amortization of acquired intangibles 7,145 998 Change in fair value of contingent consideration (65,050) - Non-GAAP net loss ($14,210) ($9,938) Weighted-average number of shares of common stock used in computing non-GAAP net loss per share: Weighted-average common shares outstanding, diluted 37,185 29,313 Non-GAAP net loss per share attributable to common stockholders, diluted ($0.38) ($0.34)
Reconciliation of forecasted GAAP revenue to billings Q2 2022 Guidance Revenue $73.0 - $80.0 Plus: Consumer Incentives $33.0 - $36.0 Billings $106.0 - $116.0
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 (loss) income before income taxes; interest expense, net; depreciation and amortization expense; stock-based compensation expense; foreign currency gain (loss); deferred implementation costs; restructuring costs; acquisition and integration costs (benefit); 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, opened an email containing an offer, 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 income (loss) before stock-based compensation expense; foreign currency (gain) loss; acquisition and integration (benefit) 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
