0001666071-23-000073 | 10-Q | XBRL Viewer

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 139,194	$ 121,905
Restricted cash	82	80
Accounts receivable and contract assets, net	93,707	115,609
Other receivables	5,143	4,470
Prepaid expenses and other assets	8,261	7,978
Total current assets	246,387	250,042
Long-term assets:
Property and equipment, net	4,755	5,916
Right-of-use assets under operating leases, net	7,295	6,571
Intangible assets, net	50,006	53,475
Goodwill	352,721	352,721
Capitalized software development costs, net	20,811	19,925
Other long-term assets, net	2,621	2,586
Total assets	684,596	691,236
Current liabilities:
Accounts payable	2,073	3,765
Accrued liabilities:
Accrued compensation	7,457	10,486
Accrued expenses	21,990	21,335
Partner Share liability	38,950	48,593
Consumer Incentive liability	43,354	53,983
Deferred revenue	2,769	1,751
Current operating lease liabilities	4,713	4,910
Current contingent consideration	69,537	104,121
Total current liabilities	190,843	248,944
Long-term liabilities:
Convertible senior notes, net	226,407	226,047
Long-term operating lease liabilities	4,933	4,306
Total liabilities	452,276	479,631
Stockholders’ equity:
Common stock, $0.0001 par value—100,000 shares authorized, and 33,477 and 33,671 shares issued and outstanding as of December 31, 2022 and March 31, 2023, respectively	9	9
Additional paid-in capital	1,190,949	1,182,568
Accumulated Other Comprehensive Income (Loss), Net of Tax	4,324	5,598
Accumulated deficit	(962,962)	(976,570)
Total stockholders’ equity	232,320	211,605
Total liabilities and stockholders’ equity	684,596	691,236
Deferred liabilities	93	334
Long-Term Line of Credit	$ 30,000	$ 0

BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands			3 Months Ended
	Jan. 07, 2022	May 05, 2021	Mar. 31, 2023	Mar. 31, 2022
Business Acquisition [Line Items]
Common stock purchase consideration for acquisition of Entertainment			$ 0	$ 11,937
Acquisition and integration (benefit) cost			$ 1,723	$ (4,599)
Bridg Acquisition
Business Acquisition [Line Items]
Purchase consideration		$ 578,900
Cash		350,000
Adjustments and escrows		2,800
First Anniversary ARR		12,500
Bridg Acquisition \| Minimum
Business Acquisition [Line Items]
Percent of First Anniversary payment amount paid in cash			30.00%
Bridg Acquisition \| Common Stock
Business Acquisition [Line Items]
Common stock purchase consideration for acquisition of Entertainment		230,900
Bridg Acquisition \| Equity Option
Business Acquisition [Line Items]
Fair value of unvested options to purchase common stock		$ 800
Entertainment Acquisition
Business Acquisition [Line Items]
Purchase consideration	$ 14,577

GOODWILL AND ACQUIRED INTANGIBLES - Amortization expense schedule (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
2023 (remaining nine months)	$ 10,278
2024	13,269
2025	11,808
2026	9,673
2027	4,888
Thereafter	0
Net	$ 49,916	$ 53,373

STOCK-BASED COMPENSATION - Narrative (Details) $ in Millions			1 Months Ended						3 Months Ended
	Jan. 01, 2021 shares	Feb. 08, 2018	May 02, 2023 USD ($) shares	Mar. 31, 2022	Jul. 31, 2021 shares	Apr. 30, 2021 tranche shares	Apr. 30, 2020 user shares	Apr. 30, 2019 tranche shares	Mar. 31, 2023 USD ($) shares	Mar. 31, 2022 USD ($)	Dec. 31, 2022 shares	Dec. 31, 2021	Sep. 30, 2021 shares	Jan. 01, 2020 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)											405,830
Number of shares authorized, annual increase									5.00%
Number of additional shares authorized (in shares)	1,673,858
Lease obligation incurred \| $									$ 0.4	$ 0.2
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost not yet recognized									2 years 9 months
Granted (in shares)									533,000
Unvested PSU (in shares)									5,974,000		5,956,000
Restricted stock units \| Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)									533,308
Restricted stock units \| Share-based Compensation Award, Tranche One \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period									4 years
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested PSU (in shares)								1,252,500
Number of vesting tranches \| tranche								4
Minimum growth rate period								12 months
Advertiser billing period								12 months
EBITDA target period								12 months
Stock closing price period								30 days
Performance Shares \| 2020 PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested PSU (in shares)							476,608				269,202		6,666
ARPU vesting condition period							4 years
Performance Shares \| 2021 PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested PSU (in shares)						110,236							6,667
Number of vesting tranches \| tranche						2
ARPU vesting condition period						4 years
Performance Shares \| Bridg PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested PSU (in shares)					34,344
Performance Shares \| Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage				25.00%
Performance Shares \| Share-based Compensation Award, Tranche One \| 2020 PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period						12 months	12 months
Unvested PSU (in shares)							443,276
Performance conditions \| user							0.50
Performance Shares \| Share-based Compensation Award, Tranche One \| 2021 PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period						12 months
Unvested PSU (in shares)						55,118
Performance Shares \| Share-based Compensation Award, Tranche One \| Bridg PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage					50.00%
Performance Shares \| Share-based Compensation Award, Tranche One \| Minimum \| Bridg PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Achievement percentage					80.00%
Performance Shares \| Share-based Compensation Award, Tranche One \| Maximum \| Bridg PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Achievement percentage					99.999%
Performance Shares \| Share-based Compensation Award, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage				50.00%
Performance Shares \| Share-based Compensation Award, Tranche Two \| 2020 PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period							6 months
Unvested PSU (in shares)							33,332
Performance conditions \| user							0.25
Performance Shares \| Share-based Compensation Award, Tranche Two \| 2021 PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period						6 months
Unvested PSU (in shares)						55,118
Performance Shares \| Share-based Compensation Award, Tranche Two \| Bridg PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage					100.00%
Achievement percentage					100.00%
Performance Shares \| Share-based Payment Arrangement, Tranche Three
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights, percentage				50.00%
Performance Shares \| Share-based Payment Arrangement, Tranche Three \| 2020 PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period							12 months
Performance conditions \| user							0.25
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized, annual increase												1.00%
ESPP, purchase price percentage		85.00%
ESPP, number of shares authorized, annual increase (in shares)									500,000		878,969,000			334,771,000
Subsequent Event \| Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			1,995,000
Compensation not yet recognized, awards other than options \| $			$ 9.8

DEBT AND FINANCING ARRANGEMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Convertible Debt, Noncurrent	$ 226,407	$ 226,047
Long-term Debt, Total	256,407	226,047
Long-Term Line of Credit	$ 30,000	$ 0

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

COVER - shares	3 Months Ended
COVER - shares	Mar. 31, 2023	Apr. 30, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-38386
Entity Registrant Name	CARDLYTICS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-3039436
Entity Address, Address Line One	675 Ponce de Leon Ave. NE, Ste 6000
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30308
City Area Code	(888)
Local Phone Number	792-5802
Title of 12(b) Security	Common Stock
Trading Symbol	CDLX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		33,908,198
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001666071
Current Fiscal Year End Date	--12-31

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net Income (Loss) Attributable to Parent	$ 13,608	$ 33,038
Other comprehensive income:
Foreign currency translation adjustments	(1,274)	1,367
Comprehensive Income (Loss), Net of Tax, Attributable to Parent, Total	$ 12,334	$ 34,405

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

SEGMENTS - Revenue by Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information [Line Items]
Adjusted contribution	$ 30,947	$ 32,775
Plus: FI Share and other third-party costs	33,384	35,153
Revenues	64,331	67,928
Cardlytics Direct
Segment Reporting Information [Line Items]
Adjusted contribution	25,855	28,956
Plus: FI Share and other third-party costs	33,175	35,027
Revenues	59,030	63,983
Bridg Acquisition
Segment Reporting Information [Line Items]
Adjusted contribution	5,092	3,819
Plus: FI Share and other third-party costs	209	126
Revenues	$ 5,301	$ 3,945

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

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+ Details

BUSINESS COMBINATIONS - Schedule of Business Acquisitions (Details) - USD ($) $ in Thousands			3 Months Ended
	Jan. 07, 2022	May 05, 2021	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Business Acquisition [Line Items]
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable			$ 0	$ 11,937
Goodwill			352,721		$ 352,721
Distribution Made to Limited Partner, Cash Distributions Paid	$ 24
Proceeds from Limited Partnership Investments	(61)
Bridg Acquisition
Business Acquisition [Line Items]
Business Combination, Consideration Transferred		$ 578,900
Goodwill			$ 188,291
Bridg Acquisition \| Common Stock
Business Acquisition [Line Items]
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable		230,900
Bridg Acquisition \| Equity Option
Business Acquisition [Line Items]
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned		$ 800
Entertainment Acquisition
Business Acquisition [Line Items]
Payments To Acquire Businesses, Stockholders, Warrant Holders, And Vested Option Holders	11,937
Payments To Acquire Businesses, Acquiree Debt	2,053
Payments To Acquire Businesses, Pre-Acquisition Liabilities And Deal-Related Costs	624
Business Combination, Consideration Transferred	14,577
Goodwill	$ 5,002

EARNINGS PER SHARE - Schedule of dilutive shares (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net Income (Loss) Available to Common Stockholders, Diluted	$ 14,548	$ 33,978
Weighted-average common shares outstanding, basic (in shares)	33,595,000	33,741,000
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities	2,701,000	2,701,000
Weighted-average common shares outstanding, diluted (in shares)	36,727,000	37,185,000
Net loss per share attributable to common stockholders, diluted (in USD per share)	$ 0.40	$ 0.91
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Plus: Dilutive convertible promissory notes (in shares)	144,000	512,000
Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Plus: Dilutive convertible promissory notes (in shares)	2,000	208,000
ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Plus: Dilutive convertible promissory notes (in shares)	285,000	23,000

DEBT AND FINANCING ARRANGEMENTS - Narrative (Details)		3 Months Ended
DEBT AND FINANCING ARRANGEMENTS - Narrative (Details)	Sep. 22, 2020 USD ($) numberOfDays $ / shares	Mar. 31, 2023 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Debt Instrument [Line Items]
Debt instrument, face amount	$ 230,000,000
Stated percentage	1.00%
Proceeds from issuance of convertible senior notes, net of issuance costs paid of $6,900	$ 222,700,000
Adjustments to additional paid in capital, issuance of capped calls	$ 26,500,000
Threshold consecutive trading days \| numberOfDays	10,000
Threshold percentage of stock price trigger	98.00%
Conversion ratio	11.7457
Conversion price (in dollars per share) \| $ / shares	$ 85,140
Redemption period, days before maturity date	36 days
Redemption price, percentage	100.00%
Threshold principal outstanding amount for partial redemption		$ 75,000,000
Required compliance period, period after written notice	60 days
Percentage of holders to require written notice of noncompliance	25.00%	25.00%
Amount of other debt called due	$ 35,000,000
Covenant noncompliance, period of additional interest		365 days
Liability component, discount rate		6.50%
Strike price (in dollars per share) \| $ / shares	$ 85.14
Unused borrowing capacity		$ 5,500,000
Maximum borrowing capacity, percentage of accounts receivable		50.00%
Debt instrument, interest rate		1.64%	1.64%
Debt Instrument, Increase, Accrued Interest		$ 100,000	$ 700,000
Cap price (in dollars per share) \| $ / shares	$ 128.51
Debt Covenant Noncompliance, Scenario One
Debt Instrument [Line Items]
Covenant noncompliance, period of additional interest		180 years
Covenant noncompliance, additional interest, stated percentage		0.25%
Debt Covenant Noncompliance, Scenario Two
Debt Instrument [Line Items]
Covenant noncompliance, additional interest, stated percentage		0.50%
Debt Covenant Noncompliance, Scenario Two \| Minimum
Debt Instrument [Line Items]
Covenant noncompliance, period of additional interest		181 days
Debt Covenant Noncompliance, Scenario Two \| Maximum
Debt Instrument [Line Items]
Covenant noncompliance, period of additional interest		365 days
Debt Conversion Scenario One
Debt Instrument [Line Items]
Threshold trading days \| numberOfDays	20,000
Threshold consecutive trading days \| numberOfDays	30,000
Threshold percentage of stock price trigger	130.00%
Debt Conversion Scenario Two
Debt Instrument [Line Items]
Threshold trading days \| numberOfDays	5,000
Debt Conversion Scenario Three
Debt Instrument [Line Items]
Threshold trading days \| numberOfDays	20
Threshold consecutive trading days \| numberOfDays	30
Threshold percentage of stock price trigger	130.00%
Convertible Senior Notes, Additional Principal Option
Debt Instrument [Line Items]
Debt instrument, face amount	$ 30,000,000
Lines of credit
Debt Instrument [Line Items]
Debt instrument, interest rate		8.00%
Commitment fee percentage		0.15%
Revolving Credit Facility \| Lines of credit
Debt Instrument [Line Items]
Unused borrowing capacity		$ 60,000,000		$ 50,000,000

COMMITMENTS AND CONTINGENCIES	3 Months Ended
COMMITMENTS AND CONTINGENCIES	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Commitments We had a minimum Partner Share commitment to a certain FI partner totaling $10.0 million over a 12-month period which ended on March 31, 2023. As of March 31, 2023, we accrued $4.5 million for an expected minimum Partner Share shortfall, included within Partner Share liability on our condensed consolidated balance sheet. We expect to pay this shortfall on a quarterly basis from September 30, 2023 through June 30, 2024. During the three months ended March 31, 2022 and 2023, we recognized zero and $1.3 million, respectively, of expected minimum Partner Share commitment shortfalls within Partner Share and other third-party costs on our condensed consolidated statement of operations. Other Commitments We lease property and equipment under non-cancelable operating lease agreements. Refer to Note 1—Overview of Business and Basis of Presentation for further details. In September 2020, we issued convertible senior notes with an aggregate principal amount of $230.0 million bearing an interest rate of 1.00% due in 2025. Refer to Note 6—Debt and Financing Arrangements for further details. In connection with our acquisition of Bridg, we will owe broker fees and transaction bonuses derived from the amount of the First Anniversary Payment and the Second Anniversary Payment, if any. Refer to Note 3 - Business Combinations and Note 12—Subsequent events for further details. In March 2022, we entered into a cloud hosting arrangement guaranteeing an aggregate spend of $7.2 million over the first twelve months of the arrangement. In January 2023, we renewed our agreement guaranteeing an aggregated spend of $13.5 million over a twelve month period. Litigation From time to time, we may become involved in legal actions arising in the ordinary course of business including, but not limited to, intellectual property infringement and collection matters. We make assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. We record a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range. If no amount within the range is a better estimate than any other amount, we accrue the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, we disclose the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, we disclose the nature and estimate of the possible loss of the litigation. We do not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Allocation of recognized period costs

The following table summarizes the allocation of stock-based compensation in the condensed consolidated statements of operations (in thousands):


	Three Months Ended March 31,
	2022		2023
Delivery costs	$	582	$	568
Sales and marketing expense	3,704		3,053
Research and development expense	3,204		4,085
General and administration expense	6,095		262
Total stock-based compensation expense	$	13,585	$	7,968

Summary of RSU activity

We grant restricted stock units ("RSUs") to employees and our non-employee directors. The following table summarizes changes in RSUs, inclusive of performance-based RSUs:


	Shares (in thousands)	Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in years)	Unamortized Compensation Costs (in thousands)
Unvested — December 31, 2022	5,956	$	25.43
Granted	533	5.86
Vested	(179)	48.30
Forfeited	(336)	47.44
Unvested — March 31, 2023	5,974	$	21.90	2.75	$	95,767,329
Shares expected to vest - March 31, 2023	5,887

DEBT AND FINANCING ARRANGEMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Convertible Debt


	December 31, 2022		March 31, 2023
Principal	$	230,000	$	230,000

Minus: Unamortized issuance costs	(3,953)		(3,593)
Net carrying amount	$	226,047	$	226,407

Interest expense recognized related to the Notes is as follows (in thousands):


	Three Months Ended March 31,
	2022			2023
Contractual interest expense (due in cash)	$	575		$	575

Amortization of debt issuance costs	365			365
Total interest expense related to the Notes	$	940		$	940
Effective interest rate	1.64		%	1.64		%

DEBT AND FINANCING ARRANGEMENTS - Interest Expense Recognized (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Debt Disclosure [Abstract]
Contractual interest expense (due in cash)	$ 575	$ 575
Amortization of debt issuance costs	365	365
Total interest expense related to the Notes	$ 940	$ 940
Debt instrument, interest rate	1.64%	1.64%

SEGMENTS - Geographical Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Segment Reporting Information [Line Items]
Revenues	$ 64,331	$ 67,928
Property and equipment	4,755		$ 5,916
United States
Segment Reporting Information [Line Items]
Revenues	61,081	61,653
Property and equipment	3,936		4,453
United Kingdom
Segment Reporting Information [Line Items]
Revenues	3,250	$ 6,275
Property and equipment	$ 819		$ 1,463

- Definition

+ References

+ Details

SEGMENTS

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

SEGMENTS

As of March 31, 2023, we have three operating segments: the Cardlytics platform in the U.S., the Cardlytics platform in the U.K. and the Bridg platform, as determined by the information that our Chief Executive Officer, who we consider our chief operating decision maker ("CODM"), uses to make strategic goals and operating decisions. Our Cardlytics platform operating segments in the U.S. and U.K. represent our proprietary advertising channels and are aggregated into one reportable segment given their similar economic characteristics, nature of service, types of customers and method of distribution. Subsequent to the acquisition of Bridg, our CODM began reviewing Bridg's revenue and operating expenses. Therefore, we consider the Bridg platform to be a separate operating segment. Our CODM allocates resources to, and evaluates the performance of, our operating segments based on revenue and adjusted contribution. Our CODM does not review assets by operating segment for the purposes of evaluating performance or allocating resources.

The following tables provide information regarding the Cardlytics platform and the Bridg platform reportable segments (in thousands):


	Three Months Ended March 31,
	2022		2023
Cardlytics platform
Adjusted contribution	$	28,956	$	25,855
Plus: Partner Share and other third-party costs	35,027		33,175
Revenue	$	63,983	$	59,030
Bridg platform
Adjusted contribution	$	3,819	$	5,092
Plus: Partner Share and other third-party costs	126		209
Revenue	$	3,945	$	5,301
Total
Adjusted contribution	$	32,775	$	30,947
Plus: Partner Share and other third-party costs	35,153		33,384
Revenue	$	67,928	$	64,331

Adjusted Contribution

Adjusted contribution measures 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 platforms generates incremental amounts to support our sales and marketing, research and development, delivery costs, general and administration and other investments. Adjusted contribution is calculated by taking our total revenue less our Partner Share and other third-party costs. 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, delivery costs, general and administrative expenses and other expenses, which we do not take into consideration when making decisions on how to manage our advertising campaigns.

The following table presents a reconciliation of income before income taxes presented in accordance with GAAP to adjusted contribution (in thousands):


	Three Months Ended March 31,
	2022		2023
Adjusted contribution	$	32,775	$	30,947
Minus:


Delivery costs	6,533		6,424
Sales and marketing expense	17,648		13,948
Research and development expense	12,291		11,564
General and administration expense	20,425		13,070
Acquisition and integration (benefit) cost	(4,599)		1,723
Change in fair value of contingent consideration	(65,050)		(34,584)

Depreciation and amortization expense	9,871		6,575
Total other expense (income)	2,618		(1,381)
Income before income taxes	$	33,038	$	13,608

The following tables provide geographical information (in thousands):


	Three Months Ended March 31,
	2022		2023
Revenue:
United States	$	61,653	$	61,081
United Kingdom	6,275		3,250
Total	$	67,928	$	64,331


	December 31, 2022		March 31, 2023
Property and equipment, net:
United States	$	4,453	$	3,936
United Kingdom	1,463		819

Total	$	5,916	$	4,755

Capital expenditures within the United Kingdom totaled $0.1 million and less than $0.1 million during the three months ended March 31, 2022 and 2023, respectively.

Concentrations of Risk

Cash and Cash Equivalents

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. A significant portion of our cash and cash equivalents are held in fully FDIC-insured money market accounts and demand deposit accounts that distribute funds, and credit risk, over a vast number of financial institutions. Our remaining cash and cash equivalents are held with six financial institutions, which we believe are of high credit quality.

Marketers

Our revenue and accounts receivable are diversified among a large number of marketers segregated by both geography and industry. During the three months ended March 31, 2022 and 2023, our top five marketers accounted for 25% and 16% of our revenue, respectively, with one marketer accounting for over 10% during three months ended March 31, 2022 and no marketer accounting for over 10% during the three months ended March 31, 2023. As of March 31, 2022 and 2023, our top five marketers accounted for 23% and 17% of our accounts receivable, respectively, with one marketer representing over 10% as of March 31, 2022, and no marketer accounting for over 10% as of March 31, 2023.

FI Partners

Our business is substantially dependent on a limited number of FI partners. We require participation from our FI partners in the Cardlytics platform and access to their purchase data in order to offer our solutions to marketers and their agencies. We must have FI partners with a sufficient number of customers and levels of customer engagement to ensure that we have robust purchase data and marketing space to support a broad array of incentive programs for marketers. Our agreements with a substantial majority of our FI partners have terms of three to seven years but are generally terminable by the FI partner on 90 days or less prior notice. The agreements generally have auto-renewal provisions that allow for the agreements to extend past their originally contemplated end date, unless terminated earlier in accordance with the terms of the agreement. If an FI partner terminates its agreement with us, we would lose that FI as a source of purchase data and online banking customers.

During the three months ended March 31, 2022, our top two FI partners combined to account for over 75% of the total Partner Share we paid to all partners, with each representing over 20%. During the three months ended March 31, 2023, our top three FI partners combined to account for over 70% of the total Partner Share we paid to all partners, with the top two FI partners each representing over 20% and third largest FI partner representing over 10% of Partner Share. No other partner accounted for over 10% of Partner Share during these periods.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

The computations of the numerators and denominators of diluted net income per share attributable to common stockholders are as follows (in thousands, except per share amounts):


	Three Months Ended March 31,
	2022		2023
Numerator:


Net income attributable to common stockholders, diluted	$	33,978	$	14,548

Denominator:
Weighted-average common shares outstanding, basic	33,741		33,595
Plus: dilutive effect of assumed conversion of Convertible Senior Notes	2,701		2,701
Plus: dilutive effect of assumed conversion of restricted stock units	512		144
Plus: dilutive effect of assumed conversion of common stock options	208		2
Plus: dilutive effect of assumed issuance of common stock pursuant to the ESPP	23		285
Weighted-average common shares outstanding, diluted	37,185		36,727

Net income per share attributable to common stockholders, diluted	$	0.91	$	0.40

OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION	3 Months Ended
OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION	OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION Cardlytics, Inc. (“we,” “our,” “us,” the “Company,” or “Cardlytics”) is a Delaware corporation and was formed on June 26, 2008. We operate an advertising platform within our own and our partners' digital channels, which includes online, mobile applications, email, and various real-time notifications (the "Cardlytics platform"). We also operate a customer data platform that utilizes point-of-sale data, including product-level purchase data, to enable marketers, in a privacy-protective manner, to perform analytics and targeted loyalty marketing and to measure the impact of their marketing (the "Bridg platform"). The partners for the Cardlytics platform are predominantly financial institutions ("FI partners") that provide us with access to their anonymized purchase data and digital banking customers. The partners for the Bridg platform are predominantly merchants that provide us with access to their point-of-sale data, including product-level purchase data. By applying advanced analytics to the purchase data we receive, we make it actionable, helping marketers reach potential buyers at scale, and measure the true sales impact of their marketing spend. We have strong relationships with leading marketers across a variety of industries, including retail, restaurant, travel and entertainment, direct-to-consumer, and grocery and gas. Using our purchase intelligence, we present customers with offers to save money at a time when they are thinking of their finances. We also operate through (1) Dosh Holdings LLC, a wholly owned and operated subsidiary in the United States, (2) HSP EPI Acquisition, LLC ("Entertainment"), a wholly owned and operated subsidiary in the United States, and (3) Cardlytics UK Limited, a wholly owned and operated subsidiary registered as a private limited company in England and Wales. Unaudited Interim Results The accompanying unaudited interim condensed consolidated financial statements and information have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all normal and recurring adjustments considered necessary to present fairly the financial position, results of operations, and cash flows for the periods presented. The results for interim periods presented are not necessarily indicative of the results to be expected for the full year due to the seasonality of our business, which has been historically impacted by higher consumer spending during the fourth quarter. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included on our Annual Report on Form 10-K ("Annual Report") for the fiscal year ended December 31, 2022. Acquisitions On January 7, 2022, we purchased Entertainment for $13.0 million in equity at an agreed-upon price of $66.52 per share, subject to $1.1 million of fair value adjustments based on the acquisition close date, and $2.3 million in cash, subject to $0.4 million of adjustments, for an acquisition date fair value of $14.6 million. Refer to Note 3 - Business Combinations for further information. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Significant items subject to such estimates and assumptions include revenue recognition, internal-use software development costs, stock-based compensation, allowance for doubtful accounts, valuation of acquired intangible assets, valuation of contingent consideration for Bridg, goodwill impairment, income tax including valuation allowance and contingencies. We base our estimates on historical experience and on assumptions that we believe are reasonable. Changes in facts or circumstances may cause us to change our assumptions and estimates in future periods and it is possible that actual results could differ from our current or revised future estimates. Macroeconomic Considerations Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including the COVID-19 pandemic, rising inflation, the U.S. Federal Reserve raising interest rates, disruptions in access to bank deposits or lending commitments due to bank failures and the Russia-Ukraine war have led to economic uncertainty globally. Historically, during periods of economic uncertainty and downturns, businesses may slow spending on advertising, which may impact our business and our customers’ businesses. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition and operating results, see the section titled “Risk Factors.”

BUSINESS COMBINATIONS - Assets and Liabilities Assumed (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Jan. 07, 2022
Business Acquisition [Line Items]
Goodwill	$ 352,721	$ 352,721
Bridg Acquisition
Business Acquisition [Line Items]
Goodwill	$ 188,291
Entertainment Acquisition
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents			$ 376
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables			1,259
Goodwill			5,002
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable			(1,860)
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total			14,577
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill			$ 9,800

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

GOODWILL AND ACQUIRED INTANGIBLES - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Impairment loss	$ 396,242		$ 313,100	$ 83,100
Amortization expense	$ (3,500)	$ (7,100)

GOODWILL AND ACQUIRED INTANGIBLES - Other Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2023	Jun. 30, 2022	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount (1)	$ 92,300		$ 154,500
Accumulated Amortization	(42,384)		(44,732)
Net	49,916		53,373
Goodwill, Impaired, Accumulated Impairment Loss	(396,242)	$ (83,100)	(313,100)
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount (1)	2,315		3,500
Accumulated Amortization	(1,836)		(1,744)
Net	$ 479		571
Weighted Average Remaining Useful Life	7 months 6 days	1 year 4 months 24 days
Goodwill, Impaired, Accumulated Impairment Loss			(1,185)
Developed Technology Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount (1)	$ 64,070		91,700
Accumulated Amortization	(27,174)		(24,882)
Net	$ 36,896		39,188
Weighted Average Remaining Useful Life	1 year	3 years 7 months 6 days
Goodwill, Impaired, Accumulated Impairment Loss			(27,630)
Merchant Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount (1)	$ 25,915		40,300
Accumulated Amortization	(13,374)		(12,301)
Net	$ 12,541		13,614
Weighted Average Remaining Useful Life	1 year 3 months 18 days	1 year 8 months 12 days
Goodwill, Impaired, Accumulated Impairment Loss			(14,385)
Partner Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount (1)			2,000
Accumulated Amortization			(450)
Net			0
Weighted Average Remaining Useful Life		0 years
Goodwill, Impaired, Accumulated Impairment Loss			(1,550)
Card-Linked Subscriber User Base [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount (1)			17,000
Accumulated Amortization			(5,355)
Net			0
Weighted Average Remaining Useful Life		0 years
Goodwill, Impaired, Accumulated Impairment Loss			$ (11,645)

GOODWILL AND ACQUIRED INTANGIBLES

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND ACQUIRED INTANGIBLES

There have been no changes to the carrying amounts of goodwill since December 31, 2022. The carrying amounts of goodwill for the three months ended March 31, 2023 are as follows (in thousands):


	Cardlytics Platform		Bridg Platform		Consolidated
Gross goodwill	$	210,692	$	538,271	$	748,963
Accumulated impairments	(46,262)		(349,980)		(396,242)
Net goodwill	$	164,430	$	188,291	$	352,721

Goodwill is tested annually for impairment, unless certain triggering events require an interim impairment analysis, including macroeconomic conditions, industry and market considerations, costs factors, overall financial performance and other relevant entity-specific events and changes. These considerations are evaluated holistically to assess whether it is more likely than not that a reporting unit's carrying value exceeds its fair value. Our reporting units consist of the Cardlytics platform in the U.S., the Cardlytics platform in the U.K. and the Bridg platform. There is no goodwill recorded within the Cardlytics platform in the U.K.

We have assessed the triggering events criteria along with related conditions and developments as of March 31, 2023. We have determined that none of the conditions collectively constitute a triggering event. As such, we have determined that it is not more likely than not that the carrying values of our reporting units exceed their respective fair values, and an impairment test was not required as of March 31, 2023.

As of June 30, 2022 we determined that it was necessary to perform an interim impairment test for goodwill, in which we recognized goodwill impairment of $83.1 million related to the Bridg platform.

Subsequently, we performed our annual impairment test as of October 1, 2022 and determined that the carrying value of both the Cardlytics platform in the U.S. and the Bridg platform exceeded their respective fair values, and we recognized goodwill impairment of $313.1 million as of December 31, 2022.

Acquired intangible assets subject to amortization as of March 31, 2023 were as follows:


	Gross Carrying Amount (1)		Accumulated Amortization		Net		Weighted Average Remaining Useful Life
	(in thousands)						(in years)
Trade name	$	2,315	$	(1,836)	$	479	0.6
Developed technology	64,070		(27,174)		36,896		1.0
Merchant relationships	25,915		(13,374)		12,541		1.3


Total other intangible assets	$	92,300	$	(42,384)	$	49,916

(1)We recorded an impairment of intangible assets in the amount of $56.4 million as of December 31, 2022.

Amortization expense of acquired intangibles during the three months ended March 31, 2022 and 2023 was $7.1 million and $3.5 million, respectively.

Acquired intangible assets subject to amortization as of December 31, 2022 were as follows:


	Gross Carrying Amount		Accumulated Amortization		Impairments of Intangible Assets		Net		Weighted Average Remaining Useful Life
	(in thousands)								(in years)
Trade name	$	3,500	$	(1,744)	$	(1,185)	$	571	1.4
Developed technology	91,700		(24,882)		(27,630)		39,188		3.6
Merchant relationships	40,300		(12,301)		(14,385)		13,614		1.7
Partner relationships	2,000		(450)		(1,550)		—		0.0
Card-linked subscriber user base	17,000		(5,355)		(11,645)		—		0.0
Total other intangible assets	$	154,500	$	(44,732)	$	(56,395)	$	53,373

As of March 31, 2023, we expect amortization expense in future periods to be as follows (in thousands):


	Amount
2023 (remaining nine months)	10,278
2024	13,269
2025	11,808
2026	9,673
2027	4,888
Thereafter	—
Total expected future amortization expense	$	49,916

FAIR VALUE MEASUREMENTS - Schedule of Key Assumptions (Details) - Valuation, Market Approach - Level 3	Dec. 31, 2022
Revenue volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input	0.200
Revenue discount rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input	0.087
Weighted average cost of capital
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input	0.170
Common stock volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input	1.560
Portion to be paid in cash
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Contingent consideration measurement input	0.300

SEGMENTS - Adjusted Contribution Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting [Abstract]
Adjusted contribution	$ 30,947	$ 32,775
Delivery costs	6,424	6,533
Sales and marketing expense	13,948	17,648
Research and development expense	11,564	12,291
General and administration expense	13,070	20,425
Acquisition and integration (benefit) cost	1,723	(4,599)
Change in fair value of contingent consideration	(34,584)	(65,050)
Depreciation and amortization expense	6,575	9,871
Total other expense (income)	(1,381)	2,618
Income before income taxes	$ 13,608	$ 33,038

FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($)					3 Months Ended	12 Months Ended
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($)	May 01, 2023	Apr. 28, 2023	Mar. 31, 2023	May 05, 2021	Mar. 31, 2023	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Goodwill impairment						$ 396,200,000
Bridg Acquisition
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
First Anniversary ARR				$ 12,500,000
Number of shares (in shares)			3,374,383
Mark-to-market, fair value			$ 124,100,000		$ 124,100,000
Contingent consideration, fair value			$ 69,500,000		$ 69,500,000
Stock price (in usd per share)			$ 40.15		$ 40.15
Second Anniversary, ARR			$ 0
Bridg Acquisition \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Percent of First Anniversary payment amount paid in cash					30.00%
Subsequent Event \| Bridg Acquisition
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
First Anniversary ARR		$ 23,200,000
First Anniversary, payment	$ 208,100,000
Contingent consideration	193,600,000
Brokerage fees and transaction bonuses	$ 14,500,000
Number of shares (in shares)		3,374,383
Stock price (in usd per share)		$ 40.15
Second Anniversary, ARR		$ 0
Subsequent Event \| Bridg Acquisition \| If 30% in Cash and Rest in Shares
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
First Anniversary ARR		$ 72,600,000
Subsequent Event \| Bridg Acquisition \| Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Percent of First Anniversary payment amount paid in cash		30.00%

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2021		33,534
Beginning balance at Dec. 31, 2021	$ 690,700	$ 9	$ 1,212,823	$ 486	$ (522,618)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of common stock options (in shares)		12
Stock Issued During Period, Value, Stock Options Exercised	195		195
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	14,538		14,538
Settlement of restricted stock (in shares)		71
Common stock purchase consideration for the acquisition of Dosh	11,937		11,937
Common stock purchase consideration for acquisition of Entertainment	11,937
Other comprehensive income (loss)	1,367			1,367
Net loss	33,038				33,038
Ending balance (in shares) at Mar. 31, 2022		33,790
Ending balance at Mar. 31, 2022	711,670	$ 9	1,188,076	1,853	(478,268)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Payments for Repurchase of Common Stock		$ 173
Beginning balance (in shares) at Dec. 31, 2022		33,477
Beginning balance at Dec. 31, 2022	211,605	$ 9	1,182,568	5,598	(976,570)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
APIC, Share-based Payment Arrangement, Increase for Cost Recognition	8,381		8,381
Settlement of restricted stock (in shares)		168
Common stock purchase consideration for acquisition of Entertainment	0
Other comprehensive income (loss)	(1,274)			(1,274)
Net loss	13,608				13,608
Ending balance (in shares) at Mar. 31, 2023		33,645
Ending balance at Mar. 31, 2023	$ 232,320	$ 9	$ 1,190,949	$ 4,324	$ (962,962)

GOODWILL AND ACQUIRED INTANGIBLES (Tables)

3 Months Ended

Mar. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

There have been no changes to the carrying amounts of goodwill since December 31, 2022. The carrying amounts of goodwill for the three months ended March 31, 2023 are as follows (in thousands):


	Cardlytics Platform		Bridg Platform		Consolidated
Gross goodwill	$	210,692	$	538,271	$	748,963
Accumulated impairments	(46,262)		(349,980)		(396,242)
Net goodwill	$	164,430	$	188,291	$	352,721

Schedule of Finite-Lived Intangible Assets

Acquired intangible assets subject to amortization as of March 31, 2023 were as follows:


	Gross Carrying Amount (1)		Accumulated Amortization		Net		Weighted Average Remaining Useful Life
	(in thousands)						(in years)
Trade name	$	2,315	$	(1,836)	$	479	0.6
Developed technology	64,070		(27,174)		36,896		1.0
Merchant relationships	25,915		(13,374)		12,541		1.3


Total other intangible assets	$	92,300	$	(42,384)	$	49,916

(1)We recorded an impairment of intangible assets in the amount of $56.4 million as of December 31, 2022.

Finite-lived Intangible Assets Amortization Expense

As of March 31, 2023, we expect amortization expense in future periods to be as follows (in thousands):


	Amount
2023 (remaining nine months)	10,278
2024	13,269
2025	11,808
2026	9,673
2027	4,888
Thereafter	—
Total expected future amortization expense	$	49,916

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

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-Name Accounting Standards Codification
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+ Details

STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

Our 2018 Equity Incentive Plan ("2018 Plan") became effective in February 2018. Prior to the 2018 Plan, we granted awards under our 2008 Stock Plan ("2008 Plan"). Any awards granted under the 2008 Plan remain subject to the terms of our 2008 Plan and applicable award agreements, and shares subject to awards granted under our 2008 Plan that are forfeited, canceled or expired prior to vesting become available for use under our 2018 Plan. As of December 31, 2022, there were 405,830 shares of our common stock reserved for issuance under our 2018 Plan. The number of shares of our common stock reserved for issuance under our 2018 Plan will automatically increase on January 1 of each year through 2028 by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year or a lesser number of shares determined by our board of directors. Accordingly, the number of shares of our common stock reserved for issuance under our 2018 Plan increased by 1,673,858 shares on January 1, 2023.

On July 18, 2022, our Board adopted the Cardlytics, Inc. 2022 Inducement Plan ("2022 Inducement Plan"). Our Board also adopted a form of stock option grant notice and agreement and a form of restricted stock unit grant notice and agreement for use with the 2022 Inducement Plan. We reserved a total of 1,500,000 shares of our Common Stock under the 2022 Inducement Plan. On January 18, 2023, our Board approved an amendment to the 2022 Inducement Plan to reserve an additional 350,000 shares of our common stock. As of March 31, 2023, there were 154,739 shares available under the 2022 Inducement Plan.

The following table summarizes the allocation of stock-based compensation in the condensed consolidated statements of operations (in thousands):


	Three Months Ended March 31,
	2022		2023
Delivery costs	$	582	$	568
Sales and marketing expense	3,704		3,053
Research and development expense	3,204		4,085
General and administration expense	6,095		262
Total stock-based compensation expense	$	13,585	$	7,968

During the three months ended March 31, 2022 and 2023, we capitalized $0.2 million and $0.4 million of stock-based compensation expense for software development, respectively.

Restricted Stock Units

We grant restricted stock units ("RSUs") to employees and our non-employee directors. The following table summarizes changes in RSUs, inclusive of performance-based RSUs:


	Shares (in thousands)	Weighted-Average Grant Date Fair Value		Weighted-Average Remaining Contractual Term (in years)	Unamortized Compensation Costs (in thousands)
Unvested — December 31, 2022	5,956	$	25.43
Granted	533	5.86
Vested	(179)	48.30
Forfeited	(336)	47.44
Unvested — March 31, 2023	5,974	$	21.90	2.75	$	95,767,329
Shares expected to vest - March 31, 2023	5,887

During the three months ended March 31, 2023, we granted 533,308 RSUs to employees and executives, which have vesting periods ranging from vesting immediately to vesting in four years.

Subsequent to March 31, 2023, we granted 1,995,000 RSUs to employees and executives, which have vesting periods of one year. Unamortized stock-based compensation expense related to these RSUs totaled $9.8 million.

Performance-based RSUs

In April 2019, we granted 1,252,500 performance-based restricted stock units (“2019 PSUs”). The 2019 PSUs are composed of four equal tranches, each of which have an independent performance-based vesting condition. The vesting criteria for the four tranches are as follows:

•a minimum growth rate in adjusted contribution over a trailing 12-month period ("Adjusted Contribution target"),

•a minimum number of advertisers that are billed above a specified amount over a trailing 12-month period ("Number of Advertisers target"),

•a minimum cumulative adjusted EBITDA target over a trailing 12-month period ("Adjusted EBITDA target"), and

•a minimum trailing 30-day average closing price of our common stock ("Stock Price target").

Adjusted EBITDA and adjusted contribution are performance metrics defined within Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations." The compensation committee of our board of directors certified the attainment of the Stock Price target, Adjusted EBITDA target, Number of Advertisers target and Adjusted Contribution target in August 2019, November 2019, October 2021 and December 2021, respectively, resulting in a vesting of 50% of each respective tranche upon the certifications. 25% of each respective tranche has vested or will vest upon the six month anniversary of the achievement date, and 25% of each respective tranche has vested or will vest upon the 12 month anniversary of the achievement date, subject to the continued service of the participant.

In April 2020, we granted 476,608 performance-based restricted stock units ("2020 PSUs"), of which 443,276 units have a performance-based vesting condition based on a minimum average revenue per user ("ARPU") target over a trailing 12-month period and 33,332 units have the same performance-based vesting conditions as the 2019 PSUs described above that were unmet at the time. ARPU is a performance metric defined within Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations." The ARPU vesting condition must be achieved within four years of the grant date. Upon the vesting event, 50% of the award vests immediately, 25% of the award vests six months after achievement date and 25% of the award vests 12 months after the achievement date. During the year ended December 31, 2022, we reassessed the likelihood of achieving the 2020 PSUs performance-based vesting condition and concluded the achievement is no longer probable. As a result of the change in estimate, we have recognized the cumulative expense associated with the 2020 PSUs since the grant date as a benefit to stock-based compensation during the year ended December 31, 2022.

In April 2021, we granted 110,236 performance-based restricted stock units ("2021 PSUs") consisting of two tranches. The first tranche consists of 55,118 units that have a performance-based vesting condition based on a minimum revenue target over a trailing 12-month period. The units in this first tranche fully vest upon achievement. The second tranche consists of 55,118 units with a performance-based vesting condition based on a different minimum revenue target over a trailing 12-month period. Half of the units in the second tranche vest upon achievement and the remaining units vest six months after the achievement date, subject to continued service. Each performance-based vesting condition within the two tranches must be achieved within four years of the grant date and are subject to certification by the compensation committee of our board of directors. Additionally, in April 2021,

we granted 10,000 performance-based restricted stock units, which have the same unmet vesting condition as the 2020 PSUs based on a minimum ARPU target over a trailing 12-month period as described above.

In July 2021, we granted 34,344 performance-based restricted stock units ("Bridg PSUs") which have performance-based vesting conditions based on the achievement of a minimum ARR target by the first anniversary of the Bridg acquisition. Vesting is tied to the percentage of an annual run rate target achieved during the specified period with 50% of the units vesting between 80% - 99.999% achievement and 100% of the units vesting upon 100% achievement. If these percentages are not met, no Bridg PSUs will vest.

In September 2021, we granted 6,666 PSUs which have the same unmet vesting condition as the 2020 PSUs, 6,667 PSUs which have the same unmet revenue target vesting condition as the 2021 PSUs and 6,667 PSUs which have the same unmet revenue target vesting condition as the 2021 PSUs as described above.

In March 2022 and August 2022, we granted 269,202 and 25,248 performance-based restricted stock units ("2022 PSUs"), respectively, consisting of three tranches. The first two tranches each represent 25% of the grant, and each vest upon the achievement of certain milestones related to the installation of our Ad Server at our FI Partners. 50% of the third tranche vests upon the achievement of a certain number of advertisers purchasing both the Cardlytics and Bridg platforms at a target incremental billings amount over 2021 billings, and the remaining 50% of the tranche vest six months after this target is achieved.

In July 2022, we granted 100,990 PSUs which vest on the achievement of specific revenue-based performance metrics ("2022 Bridg PSUs").

With the exception of the 2020 PSUs, we believe that the achievement of all of the above referenced performance-based vesting conditions are probable before the awards' respective expiration dates.

Employee Stock Purchase Plan

Our 2018 Employee Stock Purchase Plan ("2018 ESPP") enables eligible employees to purchase shares of our common stock at a discount. Purchases are accomplished through participation in discrete offering periods. On each purchase date, participating employees purchase our common stock at a price per share equal to 85% of the lesser of the fair market value of our common stock on the first trading day of the offering period or the date of purchase.

As of December 31, 2022, 878,969 shares of common stock were reserved for issuance pursuant to our 2018 ESPP. Additionally, the number of shares of our common stock reserved for issuance under our 2018 ESPP will automatically increase on January 1 of each year, which began on January 1, 2019 and will continue through and including January 1, 2026, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, (ii) 500,000 shares of our common stock or (iii) such lesser number of shares of common stock as determined by our board of directors. Accordingly, the number of shares of our common stock reserved for issuance under our 2018 ESPP increased by 334,771 shares on January 1, 2023. Shares subject to purchase rights granted under our 2018 ESPP that terminate without having been issued in full will not reduce the number of shares available for issuance under our 2018 ESPP.

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Contingent Consideration

The fair value of contingent consideration in connection with the Bridg acquisition is as follows (in thousands):


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Liabilities:
Current contingent consideration	$	—	$	—	$	104,121	$	104,121

Total liabilities	$	—	$	—	$	104,121	$	104,121


	March 31, 2023
	Level 1		Level 2		Level 3		Total
Liabilities:
Current contingent consideration	$	—	$	—	$	69,537	$	69,537

Total liabilities	$	—	$	—	$	69,537	$	69,537

The following table shows a reconciliation of the beginning and ending fair value measurements of our contingent consideration, which we have valued using level 3 inputs:


	Three Months Ended March 31,
	2022		2023
Beginning balance	$	232,295	$	104,121

Change in fair value of contingent consideration	(65,050)		(34,584)
Ending balance	$	167,245	$	69,537

Schedule of Assumptions used for Estimating Fair Value of Contingent Consideration

The following table summarizes key assumptions used for estimating the fair value of the contingent consideration:


	December 31, 2022
Revenue volatility	20.0	%
Revenue discount rate	8.7	%
Weighted average cost of capital	17.0	%
Common stock volatility	156.0	%
Portion to be paid in cash	30.0	%

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

FAIR VALUE MEASUREMENTS - Schedule of Fair Value of Contingent Consideration (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Liabilities:
Current contingent consideration	$ 69,537	$ 104,121
Total liabilities	69,537	104,121
Level 1
Liabilities:
Current contingent consideration	0	0
Total liabilities	0	0
Level 2
Liabilities:
Current contingent consideration	0	0
Total liabilities	0	0
Level 3
Liabilities:
Current contingent consideration	69,537	104,121
Total liabilities	$ 69,537	$ 104,121

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating activities
Net Income (Loss) Attributable to Parent	$ 13,608	$ 33,038
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]
Credit loss expense (gain)	(246)	346
Depreciation and amortization	6,575	9,871
Amortization of financing costs charged to interest expense	407	402
Amortization of right-of-use assets	1,235	1,516
Stock-based compensation expense	7,968	13,585
Change in fair value of contingent consideration	(34,584)	(65,050)
Other non-cash expense (income), net	(905)	1,574
Change in operating assets and liabilities:
Accounts receivable	21,405	15,279
Prepaid expenses and other assets	(369)	(725)
Accounts payable	(1,691)	(855)
Increase (Decrease) in Accrued Liabilities	(3,136)	(11,569)
Partner Share liability	(9,701)	(9,600)
Consumer Incentive liability	(10,630)	(7,503)
Net cash used in operating activities	(10,064)	(19,691)
Investing activities
Acquisition of property and equipment	(360)	(397)
Acquisition of patents	0	(49)
Capitalized software development costs	(2,442)	(2,314)
Business acquisitions, net of cash acquired	0	(2,274)
Net cash used in investing activities	(2,802)	(5,034)
Financing activities
Proceeds from Issuance of Debt	30,000	0
Principal payments of debt	(4)	(13)
Proceeds from issuance of common stock	0	195
Payments of Stock Issuance Costs	(15)	0
Net cash provided by financing activities	29,981	182
Effect of exchange rates on cash, cash equivalents and restricted cash	176	(634)
Net (decrease) increase in cash, cash equivalents and restricted cash	17,291	(25,177)
Cash, cash equivalents, and restricted cash — Beginning of period	121,985	233,562
Cash, cash equivalents, and restricted cash — End of period	139,276	208,385
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:
Cash and cash equivalents	139,194	208,293
Restricted cash	82	92
Total cash, cash equivalents and restricted cash — End of period	139,276	208,385
Supplemental schedule of non-cash investing and financing activities:
Cash paid for interest	1,268	1,169
Common stock purchase consideration for acquisition of Entertainment	0	11,937
Amounts accrued for property and equipment and capitalized software development costs	$ 0	$ 29

FAIR VALUE MEASUREMENTS - Reconciliation of Beginning and Ending Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent Consideration Classified as Equity, Fair Value Disclosure	$ 69,537	$ 167,245	$ 104,121	$ 232,295
Fair Value, Liability, Recurring Basis, Still Held, Unrealized Gain (Loss)	$ (34,584)	$ (65,050)

SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS	SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS Significant Accounting Policies There have been no changes to our significant accounting policies, other than the standards adopted below. These unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare our audited annual consolidated financial statements for the year ended December 31, 2022, and include, in the opinion of management, all adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion Options (“Subtopic 470-20”) and Derivatives and Hedging—Contracts in Entity’s Own Equity (“Subtopic 815-40”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. ASU 2020-06 also improves and amends the related Earnings Per Share guidance for both Subtopics. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP, as it removes the requirement to bifurcate our Convertible Senior Notes (the "Notes") into a separate liability and equity component. As a result, it more closely aligns the effective interest rate with the coupon rate of the Notes. ASU 2020-06 is effective for annual reporting periods beginning after December 15, 2021. On January 1, 2022, we adopted this standard using the modified retrospective method which allowed for a cumulative-effect adjustment to the opening balance sheet without restating prior periods. As we did not elect the fair value option in the process, the Notes, net of issuance costs, are accounted for as a single liability measured at amortized cost. Upon adoption, we recorded a decrease in accumulated deficit of $11.3 million, an increase to convertible senior notes, net of $40.1 million and a decrease to additional paid in capital of $51.4 million. Refer to Note 6, “Debt and Financing Arrangements” for further information about the Notes. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which require an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with Topic 606, at fair value on the acquisition date. ASU 2020-08 is effective for annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted, including adoption in an interim period. On January 1, 2022 we early adopted this standard with no material impact to our financial statements.

FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

We record the fair value of assets and liabilities in accordance with ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.

In addition to defining fair value, ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety.

During the year ended December 31, 2022 we recognized a goodwill impairment of $396.2 million. The fair value of our reporting units was classified in Level 3 of the fair value hierarchy due to the significance of unobservable inputs developed using company-specific information. Refer to Note 4 - Goodwill and Acquired Intangibles for further details.

These levels are:

•Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities.

•Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

•Level 3 - unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value.

Contingent consideration for the acquisition of Bridg

The contingent consideration for the acquisition of Bridg is composed of the First Anniversary Payment and the Second Anniversary Payment. The fair value of contingent consideration in connection with the Bridg acquisition is as follows (in thousands):


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Liabilities:
Current contingent consideration	$	—	$	—	$	104,121	$	104,121

Total liabilities	$	—	$	—	$	104,121	$	104,121


	March 31, 2023
	Level 1		Level 2		Level 3		Total
Liabilities:
Current contingent consideration	$	—	$	—	$	69,537	$	69,537

Total liabilities	$	—	$	—	$	69,537	$	69,537

The following table shows a reconciliation of the beginning and ending fair value measurements of our contingent consideration, which we have valued using level 3 inputs:


	Three Months Ended March 31,
	2022		2023
Beginning balance	$	232,295	$	104,121

Change in fair value of contingent consideration	(65,050)		(34,584)
Ending balance	$	167,245	$	69,537

On April 28, 2023, an independent accountant, who was tasked with resolving the dispute between the parties, made its determination of the appropriate amount of the First Anniversary ARR, determining the First Anniversary ARR to be $23.2 million. Consequently, based on the First Anniversary ARR as calculated by the independent accountant, we calculated the First Anniversary Payment to be $208.1 million, inclusive of (i) $193.6 million of contingent consideration and (ii) $14.5 million of brokerage fees and transaction bonuses, which is included in accrued expenses on our condensed consolidated balance sheets. In the event we choose to pay 30% of the First Anniversary Payment, as determined by the independent accountant, in cash and the remainder in its common stock, we would pay $72.6 million in cash and deliver 3,374,383 shares of our common stock to complete the First Anniversary Payment, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. As of March 31, 2023, the fair value of the contingent consideration related to the First Anniversary Payment is $69.5 million, which reflects the impact of a $124.1 million mark-to-market reduction in fair value of the 3,374,383 shares of our common stock that we expect to issue to satisfy 70% of the contingent consideration to Bridg stockholders at an agreed-upon volume-weighted average price of $40.15 per share. These shares have been revalued based on $3.39 per share closing price of our common stock as reported on the Nasdaq Global Market on March 31, 2023. As of March 31, 2023, the First Anniversary Payment has not been paid.

As a result of the independent accountant's determination, we have estimated the Second Anniversary ARR to be less than our First Anniversary ARR and thus our Second Anniversary Payment to be $0, inclusive of contingent consideration as well as brokerage fees and transaction bonuses and accounting for all true-ups and credits. Refer to Note 12—Subsequent events for further information.

The following table summarizes key assumptions used for estimating the fair value of the contingent consideration:


	December 31, 2022
Revenue volatility	20.0	%
Revenue discount rate	8.7	%
Weighted average cost of capital	17.0	%
Common stock volatility	156.0	%
Portion to be paid in cash	30.0	%

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

SUBSEQUENT EVENTS	3 Months Ended
SUBSEQUENT EVENTS	Mar. 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS Contingent consideration for the acquisition of Bridg As previously disclosed, as part of the acquisition of Bridg and pursuant to the terms of the Merger Agreement, we agreed to make two earnout payments – a First Anniversary Payment and a Second Anniversary Payment – based on the First Anniversary ARR and the Second Anniversary ARR of Bridg, respectively. In June 2022, the Company calculated the First Anniversary ARR and the First Anniversary Payment and provided the calculation to the Bridg stockholder representative. The Bridg stockholder representative objected to these calculations, and the dispute over these matters was then referred to an independent accountant, as contemplated by the relevant dispute resolution provision of the Merger Agreement. On April 28, 2023, the independent accountant made its determination of the appropriate amount of the First Anniversary ARR, determining the First Anniversary ARR to be $23.2 million. Consequently, based on the First Anniversary ARR as calculated by the independent accountant, the Company calculated the First Anniversary Payment to be $208.1 million, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. We must pay at least 30% of the First Anniversary Payment in cash, and can elect to pay the remainder of the First Anniversary Payment in cash or our common stock, based on a share price of $40.15 per share, or a combination thereof. In the event we choose to pay 30% of the First Anniversary Payment, as determined by the independent accountant, in cash and the remainder in its common stock, we would pay $72.6 million in cash and deliver 3,374,383 shares of our common stock to complete the First Anniversary Payment , inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Additionally, we now estimate the Second Anniversary ARR to be less than the First Anniversary ARR, and thus the Second Anniversary Payment to be $0, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Amended Lease Agreement On April 3, 2023, we amended the lease terms of our office located in Atlanta, Georgia. The amended lease agreement provides for our relocation to a different unit in the same building, reducing the square footage of our office from approximately 77,000 to 17,000. As part of the amended lease agreement, the Company will receive a discount on its current space through the remainder of 2023, which will result in a reduction of minimum lease payments of $0.4 million and a reduction in expense of $0.2 million in 2023. The amended lease agreement contemplates that our use of the new space will commence on January 1, 2024, which is when the control and right of use for this lease asset will occur. Additional future reductions in minimum lease payments and lease expense in the new lease total $1.9 million and $0.7 million, respectively, through the term of our original lease agreement, which was set to terminate on April 2025. The amended lease agreement will terminate on January 1, 2032, and we have the option to renew for an additional five-year period.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Revenue	$ 64,331	$ 67,928
Costs and expenses:
Partner Share and other third-party costs	33,384	35,153
Delivery costs	6,424	6,533
Sales and marketing expense	13,948	17,648
Research and development expense	11,564	12,291
General and administration expense	13,070	20,425
Acquisition and integration (benefit) cost	1,723	(4,599)
Change in fair value of contingent consideration	(34,584)	(65,050)
Depreciation and amortization expense	6,575	9,871
Total costs and expenses	52,104	32,272
Operating Income (Loss), Total	12,227	35,656
Other expense (income):
Interest expense, net	(8)	(947)
Foreign currency (loss) gain	1,389	(1,671)
Total other (expense) income	1,381	(2,618)
Income before income taxes	13,608	33,038
Income tax benefit	0	0
Net Income (Loss) Attributable to Parent, Total	13,608	33,038
Net Income (Loss) Available to Common Stockholders, Basic, Total	$ 13,608	$ 33,038
Net loss per share attributable to common stockholders, basic (in USD per share)	$ 0.41	$ 0.98
Net loss per share attributable to common stockholders, diluted (in USD per share)	$ 0.40	$ 0.91
Weighted-average common shares outstanding, basic (in shares)	33,595,000	33,741,000
Weighted-average common shares outstanding, diluted (in shares)	36,727,000	37,185,000

BUSINESS COMBINATIONS - Pro Forma Consolidated Results of Operations (Details) - Bridge And Dosh Holdings Acquisitions $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Business Acquisition [Line Items]
Revenue	$ 67,949
Net income	$ 32,766

DEBT AND FINANCING ARRANGEMENTS - Net Carrying Amount of Liability Component (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Long-term Debt, Total	$ 256,407	$ 226,047
2020 Convertible Senior Notes
Debt Instrument [Line Items]
Long-term Debt, Gross	230,000	230,000
Debt Issuance Costs, Net	3,593	3,953
Long-term Debt, Total	$ 226,407	$ 226,047

- Definition

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

+ References + Details

STOCK-BASED COMPENSATION - Allocation of Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 7,968	$ 13,585
Delivery Costs [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	568	582
Sales and marketing expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	3,053	3,704
Research and development expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	4,085	3,204
General and administration expense
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 262	$ 6,095

SEGMENTS (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of segment reporting information

The following tables provide information regarding the Cardlytics platform and the Bridg platform reportable segments (in thousands):


	Three Months Ended March 31,
	2022		2023
Cardlytics platform
Adjusted contribution	$	28,956	$	25,855
Plus: Partner Share and other third-party costs	35,027		33,175
Revenue	$	63,983	$	59,030
Bridg platform
Adjusted contribution	$	3,819	$	5,092
Plus: Partner Share and other third-party costs	126		209
Revenue	$	3,945	$	5,301
Total
Adjusted contribution	$	32,775	$	30,947
Plus: Partner Share and other third-party costs	35,153		33,384
Revenue	$	67,928	$	64,331

The following table presents a reconciliation of income before income taxes presented in accordance with GAAP to adjusted contribution (in thousands):


	Three Months Ended March 31,
	2022		2023
Adjusted contribution	$	32,775	$	30,947
Minus:


Delivery costs	6,533		6,424
Sales and marketing expense	17,648		13,948
Research and development expense	12,291		11,564
General and administration expense	20,425		13,070
Acquisition and integration (benefit) cost	(4,599)		1,723
Change in fair value of contingent consideration	(65,050)		(34,584)

Depreciation and amortization expense	9,871		6,575
Total other expense (income)	2,618		(1,381)
Income before income taxes	$	33,038	$	13,608

Schedule of revenue by geographic areas

The following tables provide geographical information (in thousands):


	Three Months Ended March 31,
	2022		2023
Revenue:
United States	$	61,653	$	61,081
United Kingdom	6,275		3,250
Total	$	67,928	$	64,331


	December 31, 2022		March 31, 2023
Property and equipment, net:
United States	$	4,453	$	3,936
United Kingdom	1,463		819

Total	$	5,916	$	4,755

SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS (Policies)	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Unaudited Interim Results	Unaudited Interim Results The accompanying unaudited interim condensed consolidated financial statements and information have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all normal and recurring adjustments considered necessary to present fairly the financial position, results of operations, and cash flows for the periods presented. The results for interim periods presented are not necessarily indicative of the results to be expected for the full year due to the seasonality of our business, which has been historically impacted by higher consumer spending during the fourth quarter. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included on our Annual Report on Form 10-K ("Annual Report") for the fiscal year ended December 31, 2022.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Significant items subject to such estimates and assumptions include revenue recognition, internal-use software development costs, stock-based compensation, allowance for doubtful accounts, valuation of acquired intangible assets, valuation of contingent consideration for Bridg, goodwill impairment, income tax including valuation allowance and contingencies. We base our estimates on historical experience and on assumptions that we believe are reasonable. Changes in facts or circumstances may cause us to change our assumptions and estimates in future periods and it is possible that actual results could differ from our current or revised future estimates. Macroeconomic Considerations Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including the COVID-19 pandemic, rising inflation, the U.S. Federal Reserve raising interest rates, disruptions in access to bank deposits or lending commitments due to bank failures and the Russia-Ukraine war have led to economic uncertainty globally. Historically, during periods of economic uncertainty and downturns, businesses may slow spending on advertising, which may impact our business and our customers’ businesses. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition and operating results, see the section titled “Risk Factors.”
Recently Adopted And Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion Options (“Subtopic 470-20”) and Derivatives and Hedging—Contracts in Entity’s Own Equity (“Subtopic 815-40”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. ASU 2020-06 also improves and amends the related Earnings Per Share guidance for both Subtopics. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP, as it removes the requirement to bifurcate our Convertible Senior Notes (the "Notes") into a separate liability and equity component. As a result, it more closely aligns the effective interest rate with the coupon rate of the Notes. ASU 2020-06 is effective for annual reporting periods beginning after December 15, 2021. On January 1, 2022, we adopted this standard using the modified retrospective method which allowed for a cumulative-effect adjustment to the opening balance sheet without restating prior periods. As we did not elect the fair value option in the process, the Notes, net of issuance costs, are accounted for as a single liability measured at amortized cost. Upon adoption, we recorded a decrease in accumulated deficit of $11.3 million, an increase to convertible senior notes, net of $40.1 million and a decrease to additional paid in capital of $51.4 million. Refer to Note 6, “Debt and Financing Arrangements” for further information about the Notes. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which require an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with Topic 606, at fair value on the acquisition date. ASU 2020-08 is effective for annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted, including adoption in an interim period. On January 1, 2022 we early adopted this standard with no material impact to our financial statements.
Fair Value Measurements	We record the fair value of assets and liabilities in accordance with ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition to defining fair value, ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. During the year ended December 31, 2022 we recognized a goodwill impairment of $396.2 million. The fair value of our reporting units was classified in Level 3 of the fair value hierarchy due to the significance of unobservable inputs developed using company-specific information. Refer to Note 4 - Goodwill and Acquired Intangibles for further details. These levels are: •Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities. •Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. •Level 3 - unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value.
Revenue	The Cardlytics platform The Cardlytics platform is our proprietary native bank advertising channel that enables marketers to reach consumers through the FIs' trusted and frequently visited digital banking channels. Working with the marketer, we design a campaign that targets customers based on their purchase history. The consumer is offered an incentive to make a purchase from the marketer within a specified period. We use a portion of the fees that we collect from marketers to provide these consumer incentives to our FIs’ customers after they make qualifying purchases ("Consumer Incentives"). Leveraging our powerful purchase intelligence platform, we are able to create compelling Consumer Incentives that have the potential to increase return on advertising spend for marketers and measure the effectiveness of the advertising. Consumer Incentives totaled $30.3 million and $31.3 million during the three months ended March 31, 2022 and 2023, respectively. We pay certain partners a negotiated and fixed percentage of our billings to marketers less any Consumer Incentives that we pay to partners’ customers and certain third-party data costs ("Partner Share"). Revenue on our consolidated statements of operation is presented net of Consumer Incentives and gross of Partner Share. We price our advertising campaigns predominantly in two ways: (1) Cost per Served Sale (“CPS”), and (2) Cost per Redemption (“CPR”). •CPS. Our primary pricing model is CPS, which we created to meet the media-buying preferences of marketers. We generate revenue by charging a percentage of all purchases from the marketer by consumers who (1) are served marketing, and (2) subsequently make a purchase from the marketer during the campaign period, regardless of whether consumers select the marketing and thereby becomes eligible to earn the applicable Consumer Incentive. We set CPS rates for marketers based on our expectation of the marketer’s return on advertising spend for the relevant campaign. Additionally, we set the amount of the Consumer Incentives payable for each campaign based on our estimation of our ability to drive incremental sales for the marketer. •CPR. Under our CPR pricing model, marketers generally specify and fund the Consumer Incentive and pay us a separate negotiated, fixed marketing fee for each purchase that we generate. We generally generate revenue if the consumer (1) is served marketing, (2) selects the marketing and thereby becomes eligible to earn the applicable Consumer Incentive, and (3) makes a qualifying purchase from the marketer during the campaign period. We set the CPR fee for marketers based on our estimation of the marketers’ return on spend for the relevant campaign.

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 17
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130561-203045

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

REVENUE

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

REVENUE

The Cardlytics platform

The Cardlytics platform is our proprietary native bank advertising channel that enables marketers to reach consumers through the FIs' trusted and frequently visited digital banking channels. Working with the marketer, we design a campaign that targets customers based on their purchase history. The consumer is offered an incentive to make a purchase from the marketer within a specified period. We use a portion of the fees that we collect from marketers to provide these consumer incentives to our FIs’ customers after they make qualifying purchases ("Consumer Incentives"). Leveraging our powerful purchase intelligence platform, we are able to create compelling Consumer Incentives that have the potential to increase return on advertising spend for marketers and measure the effectiveness of the advertising. Consumer Incentives totaled $30.3 million and $31.3 million during the three months ended March 31, 2022 and 2023, respectively. We pay certain partners a negotiated and fixed percentage of our billings to marketers less any Consumer Incentives that we pay to partners’ customers and certain third-party data costs ("Partner Share"). Revenue on our consolidated statements of operation is presented net of Consumer Incentives and gross of Partner Share.

We price our advertising campaigns predominantly in two ways: (1) Cost per Served Sale (“CPS”), and (2) Cost per Redemption (“CPR”).

•CPS. Our primary pricing model is CPS, which we created to meet the media-buying preferences of marketers. We generate revenue by charging a percentage of all purchases from the marketer by consumers who (1) are served marketing, and (2) subsequently make a purchase from the marketer during the campaign period, regardless of whether consumers select the marketing and thereby becomes eligible to earn the applicable Consumer Incentive. We set CPS rates for marketers based on our expectation of the marketer’s return on advertising spend for the relevant campaign. Additionally, we set the amount of the Consumer Incentives payable for each campaign based on our estimation of our ability to drive incremental sales for the marketer.

•CPR. Under our CPR pricing model, marketers generally specify and fund the Consumer Incentive and pay us a separate negotiated, fixed marketing fee for each purchase that we generate. We generally generate revenue if the consumer (1) is served marketing, (2) selects the marketing and thereby becomes eligible to earn the applicable Consumer Incentive, and (3) makes a qualifying purchase from the marketer during the campaign period. We set the CPR fee for marketers based on our estimation of the marketers’ return on spend for the relevant campaign.

The following table summarizes revenue from the Cardlytics platform by pricing model (in thousands):


	Three Months Ended March 31,
	2022		2023
Cost per Served Sale	$	38,715	$	39,270
Cost per Redemption	23,019		17,935
Other	2,249		1,825
Cardlytics platform revenue	$	63,983	$	59,030

The Bridg platform

The Bridg platform generates revenue through the sale of subscriptions to our cloud-based customer-data platform and the delivery of professional services, such as implementation, onboarding, data analytics and technical support in connection with each subscription. We recognize subscription revenue on a ratable basis over the contract term beginning on the date that our service is made available to the customer. For non-recurring services or transactional based fees dependent on system usage, revenue is recognized as services are delivered. Our subscription contracts are generally 6 to 36 months in duration and are generally billed in advance on a monthly, quarterly or annual basis.

The following table summarizes revenue from the Bridg platform (in thousands):


	Three Months Ended March 31,
	2022		2023
Subscription revenue	$	3,915	$	5,301
Other revenue	30		—
Bridg platform revenue	$	3,945	$	5,301

The following table summarizes contract balances from the Bridg platform (in thousands):


Contract Balance Type	Consolidated Balance Sheets Location	December 31, 2022		March 31, 2023
Contract assets, current	Accounts receivable and contract assets, net	$	28	$	391
Contract assets, long-term	Other long-term assets, net	—		—
Total contract assets		$	28	$	391

Contract liabilities, current	Deferred revenue	$	1,750	$	2,768
Contract liabilities, long-term	Long-term deferred revenue	334		92
Total contract liabilities		$	2,084	$	2,860

During the three months ended March 31, 2023, we recognized $0.8 million of revenue related to amounts that were included in deferred revenue as of December 31, 2022.

The following information represents the total transaction price for the remaining performance obligations as of March 31, 2023 related to contracts expected to be recognized over future periods. This includes deferred revenue on our consolidated balance sheets and contracted amounts that will be invoiced and recognized as revenue in future periods. As of March 31, 2023, we had $15.6 million of remaining performance obligations, of which $14.1 million is expected to be recognized in the next twelve months, with the remaining amount recognized thereafter. The remaining performance obligations exclude future transaction revenue of variable consideration that are allocated to wholly unsatisfied distinct services that form part of a single performance obligation and meets certain variable allocation criteria.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

SUBSEQUENT EVENTS (Details)						3 Months Ended
SUBSEQUENT EVENTS (Details)	May 01, 2023 USD ($)	Apr. 28, 2023 USD ($) $ / shares shares	Apr. 03, 2023 USD ($) ft²	Mar. 31, 2023 USD ($) $ / shares shares	May 05, 2021 USD ($) payment	Mar. 31, 2023 $ / shares	Apr. 02, 2023 ft²
Bridg Acquisition
Subsequent Event [Line Items]
Number of earnout payments \| payment					2
First Anniversary ARR					$ 12,500,000
Stock price (in usd per share) \| $ / shares				$ 40.15		$ 40.15
Number of shares (in shares) \| shares				3,374,383
Second Anniversary, ARR				$ 0
Bridg Acquisition \| Minimum
Subsequent Event [Line Items]
Percent of First Anniversary payment amount paid in cash						30.00%
Subsequent Event
Subsequent Event [Line Items]
Net Rentable Area Leased \| ft²			17,000				77,000
Reduction of Minimum Lease Payments			$ 400,000
Lease, Reduction in Expense			200,000
Subsequent Event \| After Commence on January 1, 2024
Subsequent Event [Line Items]
Reduction of Minimum Lease Payments			1,900,000
Lease, Reduction in Expense			$ 700,000
Subsequent Event \| Bridg Acquisition
Subsequent Event [Line Items]
First Anniversary ARR		$ 23,200,000
Stock price (in usd per share) \| $ / shares		$ 40.15
Number of shares (in shares) \| shares		3,374,383
Second Anniversary, ARR		$ 0
Subsequent Event \| Bridg Acquisition \| If 30% in Cash and Rest in Shares
Subsequent Event [Line Items]
First Anniversary ARR		$ 72,600,000
Subsequent Event \| Bridg Acquisition \| Minimum
Subsequent Event [Line Items]
Percent of First Anniversary payment amount paid in cash		30.00%
Subsequent Event \| Bridg Acquisition \| Plan
Subsequent Event [Line Items]
First Anniversary ARR	$ 208,100,000

REVENUE (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table summarizes revenue from the Cardlytics platform by pricing model (in thousands):


	Three Months Ended March 31,
	2022		2023
Cost per Served Sale	$	38,715	$	39,270
Cost per Redemption	23,019		17,935
Other	2,249		1,825
Cardlytics platform revenue	$	63,983	$	59,030

The

The following table summarizes revenue from the Bridg platform (in thousands):


	Three Months Ended March 31,
	2022		2023
Subscription revenue	$	3,915	$	5,301
Other revenue	30		—
Bridg platform revenue	$	3,945	$	5,301

BUSINESS COMBINATIONS - Identifiable Intangible Assets Acquired (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
	Jan. 07, 2022	Mar. 31, 2023	Jun. 30, 2022
Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		7 months 6 days	1 year 4 months 24 days
Developed Technology Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		1 year	3 years 7 months 6 days
Merchant Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		1 year 3 months 18 days	1 year 8 months 12 days
Partner Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			0 years
Card-Linked Subscriber User Base [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life			0 years
Entertainment Acquisition \| Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 800
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	3 years
Entertainment Acquisition \| Developed Technology Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 700
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	3 years
Entertainment Acquisition \| Merchant Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 8,300
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	4 years

GOODWILL AND ACQUIRED INTANGIBLES - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022
Finite-Lived Intangible Assets [Line Items]
Goodwill, Gross	$ 748,963
Impairment loss	396,242	$ 313,100	$ 83,100
Goodwill	352,721	$ 352,721
Cardlytics Platform
Finite-Lived Intangible Assets [Line Items]
Goodwill, Gross	210,692
Impairment loss	46,262
Goodwill	164,430
Bridg Acquisition
Finite-Lived Intangible Assets [Line Items]
Goodwill, Gross	538,271
Impairment loss	349,980
Goodwill	$ 188,291

- Definition

+ References + Details

COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions	Mar. 31, 2023 USD ($)
Financial Institution Share Commitment
Loss Contingencies [Line Items]
FI share commitment	$ 10.0

REVENUE - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
REVENUE - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Consumer incentives, expense	$ 31.3	$ 30.3
Remaining performance obligation	$ 15.6
Minimum
Disaggregation of Revenue [Line Items]
Subscription term	6 months
Maximum
Disaggregation of Revenue [Line Items]
Subscription term	36 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01
Disaggregation of Revenue [Line Items]
Remaining performance obligation	$ 14.1
Expected timing of satisfaction	12 months

DEBT AND FINANCING ARRANGEMENTS

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

DEBT AND FINANCING ARRANGEMENTS

Our debt consists of the following (in thousands):


	December 31, 2022		March 31, 2023
Line of Credit	$	—	$	30,000
Convertible senior notes, net	226,047		226,407
Total debt	$	226,047	$	256,407

Accrued interest is included within accrued expenses in our consolidated balance sheet. We had accrued interest on debt of $0.7 million and $0.1 million as of December 31, 2022 and March 31, 2023, respectively.

2020 Convertible Senior Notes

On September 22, 2020, we issued convertible senior notes with an aggregate principal amount of $230.0 million bearing an interest rate of 1.00% due in 2025 (the “Notes”), including the exercise in full of the initial purchasers’ option to purchase up to an additional $30.0 million principal amount of the Notes. The Notes were issued pursuant to an indenture, dated September 22, 2020 (the “Indenture”), between us and U.S. Bank National Association, as trustee.

The net proceeds from this offering were $222.7 million, after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by us. We used $26.5 million of the net proceeds to pay the cost of the capped call transactions described below.

The Notes are general senior, unsecured obligations and will mature on September 15, 2025, unless earlier converted, redeemed or repurchased. The Notes bear interest at a rate of 1.00% per year, payable semiannually in arrears on March 15 and September 15 of each year, which began on March 15, 2021. The Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding June 15, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2020 (and only during such calendar quarter), if the last reported sale price of our common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Notes on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of the Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of common stock and the conversion rate for the Notes on each such trading day; (3) if we call such Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events as set forth in the Indenture. The closing trading price of our common stock was not in excess of 130% of the conversion price for more than 20 trading days during the preceding 30 consecutive trading days as of March 31, 2023, thus the Notes are not convertible at the option of the holders during the quarter ending June 30, 2023. The Notes may be convertible thereafter if one or more of the conversion conditions is satisfied during future measurement periods. On or after June 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Notes may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances. Upon conversion, we may satisfy our conversion obligation by paying and/or delivering, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at our election, in the manner and subject to the terms and conditions provided in the Indenture. We currently intend to settle the principal amount of the Notes with cash.

The conversion rate for the Notes will initially be 11.7457 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $85.14 per share of common stock. The conversion rate for the Notes is subject to adjustment under certain circumstances in accordance with the terms of the Indenture. In addition, following certain corporate events that occur prior to the maturity date of the Notes or if we deliver a notice of redemption in respect of the Notes, we will, in certain circumstances, increase the conversion rate of the Notes for a holder who elects to convert its Notes in connection with such a corporate event or convert its notes called for redemption during the related redemption period (as defined in the Indenture), as the case may be.

We may not redeem the Notes prior to September 20, 2023. We may redeem for cash all or any portion of the Notes, at our option, on or after September 20, 2023 and prior to the 36th scheduled trading day immediately preceding the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price for the Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes. If we elect to redeem less than all of the Notes, at least $75.0 million aggregate principal amount of Notes must be outstanding and not subject to redemption as of the relevant redemption notice date.

If we undergo a Fundamental Change (as defined in the Indenture), then, except as set forth in the Indenture, holders may require, subject to certain exceptions, us to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The Indenture includes customary covenants and sets forth certain events of default after which the Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving us after which the Notes become automatically due and payable. The following events are considered “events of default” under the Indenture:

•default in any payment of interest on any Note when due and payable and the default continues for a period of 30 days;

•default in the payment of principal of any Note when due and payable at its stated maturity, upon optional redemption, upon any required repurchase, upon declaration of acceleration or otherwise;

•failure by us to comply with our obligation to convert the Notes in accordance with the Indenture upon exercise of a holder’s conversion right, and such failure continues for three business days;

•failure by us to give a fundamental change notice, notice of a make-whole fundamental change or notice of a specified corporate event, in each case when due and such failure continues for one business day;

•failure by us to comply with its obligations in respect of any consolidation, merger or sale of assets;

•failure by us to comply with any of our other agreements in the Notes or the Indenture for 60 days after written notice of such failure from the trustee or the holders of at least 25% in principal amount of the Notes then outstanding;

•default by us or any of our significant subsidiaries (as defined in the Indenture) with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $35,000,000 (or its foreign currency equivalent), in the aggregate of us and/or any such significant subsidiary, whether such indebtedness now exists or shall hereafter be created, (i) resulting in such indebtedness becoming or being declared due and payable prior to its stated maturity date or (ii) constituting a failure to pay the principal of any such indebtedness when due and payable (after the expiration of all applicable grace periods) at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, and in the cases of clauses (i) and (ii), such acceleration shall not have been rescinded or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness is not paid or discharged, as the case may be, within 30 days after written notice to us by the trustee or to us and the trustee by holders of at least 25% in aggregate principal amount of the Notes then outstanding in accordance with the Indenture; and

•certain events of bankruptcy, insolvency or reorganization of us or any of our significant subsidiaries.

If certain bankruptcy and insolvency-related events of default with respect to us occur, the principal of, and accrued and unpaid interest on, all of the then outstanding Notes shall automatically become due and payable. If an event of default with respect to the Notes, other than certain bankruptcy and insolvency-related events of default with respect to us, occurs and is continuing, the trustee by notice to us or the holders of at least 25% in principal amount of the outstanding Notes by notice to us and the trustee, may, and the trustee at the request of such holders shall, declare the principal of, and accrued and unpaid interest on, all of the then-outstanding Notes to be due and payable. Notwithstanding the foregoing, the Indenture provides that, to the extent we so elect, the sole remedy for an event of default relating to certain failures by us to comply with certain reporting covenants in the Indenture will, for the first 365 days after the occurrence of such event of default, consist exclusively of the right to receive additional interest on the Notes at a rate equal to 0.25% per annum of the principal amount of the Notes outstanding for each day during the first 180 days after the occurrence of such an event of default and 0.50% per annum of the principal amount of the Notes outstanding from the 181st day to, and including, the 365th day following the occurrence of such event of default, as long as such event of default is continuing (in addition to any additional interest that may accrue as a result of a registration default (as set forth in the Indenture).

The Indenture provides that we shall not consolidate with or merge with or into, or sell, convey, transfer or lease all or substantially all of the consolidated properties and assets of our subsidiaries, taken as a whole, to, another person (other than any such sale, conveyance, transfer or lease to one or more of our direct or indirect wholly owned subsidiaries), unless: (i) the resulting, surviving or transferee person (if not us) is a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and such corporation (if not us) expressly assumes by supplemental indenture all of our obligations under the Notes and the Indenture; and (ii) immediately after giving effect to such transaction, no default or event of default has occurred and is continuing under the Indenture.

The Notes were historically accounted for in accordance with FASB ASC Subtopic 470-20, Debt with Conversion and Other Options. Pursuant to ASC Subtopic 470-20, issuers of certain convertible debt instruments, such as the Notes, that have a net settlement feature and may be settled wholly or partially in cash upon conversion are required to separately account for the liability (debt) and equity (conversion option) components of the instrument. The carrying amount of the liability component of the instrument was computed using a discount rate of 6.50%, which was determined by estimating the fair value of a similar liability without the conversion option. The amount of the equity component is then calculated by deducting the fair value of the liability component from the principal amount of the instrument. The difference between the principal amount and the liability component represents a debt discount that is amortized to interest expense over the respective term of the Notes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the issuance costs related to the Notes, the allocation of issuance costs incurred between the liability and equity components was based on their relative values.

The net carrying amount of the liability component of the Notes is as follows (in thousands):


	December 31, 2022		March 31, 2023
Principal	$	230,000	$	230,000

Minus: Unamortized issuance costs	(3,953)		(3,593)
Net carrying amount	$	226,047	$	226,407

Interest expense recognized related to the Notes is as follows (in thousands):


	Three Months Ended March 31,
	2022			2023
Contractual interest expense (due in cash)	$	575		$	575

Amortization of debt issuance costs	365			365
Total interest expense related to the Notes	$	940		$	940
Effective interest rate	1.64		%	1.64		%

Capped Call Transactions

In connection with the issuance of the Notes, we entered into privately negotiated capped call transactions (the "Capped Calls") with an affiliate of one of the initial Note purchasers and certain other financial institutions. The Capped Calls are intended to reduce potential dilution to our common stock upon any conversion of Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be. The Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The cost of $26.5 million incurred to purchase the Capped Calls was recorded as a reduction to additional paid-in capital in the accompanying condensed consolidated balance sheet.

The Capped Calls each have an initial strike price of $85.14 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have an initial cap price of $128.51 per share, subject to certain adjustments.

2018 Loan Facility

In April 2022, we amended our loan facility with Pacific Western Bank (the "2018 Loan Facility") to increase the capacity of our asset-backed revolving line of credit (the "2018 Line of Credit") from $50.0 million to $60.0 million with an option to increase to $75.0 million upon syndication. This amendment also extended the maturity date of the 2018 Loan Facility from December 31, 2022 to April 29, 2024. As part of this amendment, the former billings and cash covenants were removed and replaced with a requirement to maintain a minimum level of adjusted contribution and minimum adjusted cash of $25.0 million, which is reduced by eligible accounts receivable in excess of the loan capacity. On November 29, 2022, we amended our 2018 Loan Facility to modify the eligible account receivable to exclude UK accounts, reduce the ability to borrow up to 85% of the amount of our eligible accounts receivable to 50% and adjusted the required minimum level of adjusted contribution. On February 16, 2023, we amended our 2018 Loan Facility to remove and replace the former adjusted contribution covenant with a requirement to maintain a minimum level of adjusted EBITDA. On May 3, 2023, we amended our 2018 Loan Facility to modify the covenants related to the maximum amount of cash we are allowed to pay for the First Anniversary Payment and Second Anniversary Payment under the Bridg Merger Agreement.

During the three months ended March 31, 2023, we borrowed $30.0 million against our 2018 Line of Credit. Interest on advances bears an interest rate equal to the prime rate of 8.00% as of March 31, 2023. During the three months ended March 31, 2023, we incurred approximately $0.1 million of interest expense associated with the 2018 Loan Facility. In addition, we are required to pay an unused line fee of 0.15% per annum on the average daily unused amount of the revolving commitment. As of March 31, 2023, we had $5.5 million of unused available borrowings under our 2018 Line of Credit. We believe we are in compliance with all financial covenants as of March 31, 2023.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

REVENUE - Summary of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 59,030	$ 63,983
Commodity Contract Asset, Current	391		$ 28
Deferred revenue	2,769		1,751
Deferred revenue	2,860		2,084
Bridg Acquisition
Disaggregation of Revenue [Line Items]
Contract with Customer, Asset, after Allowance for Credit Loss, Current	391		28
Deferred implementation costs, net	0		0
Deferred revenue	2,768		1,750
Contract with Customer, Liability, Noncurrent	92		$ 334
Cost per Served Sale
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	39,270	38,715
Cost per Redemption
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	17,935	23,019
Other
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	1,825	2,249
Subscription revenue
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	5,301	3,915
Other revenue
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	0	30
Bridg platform revenue
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 5,301	$ 3,945

BUSINESS COMBINATIONS

3 Months Ended

Mar. 31, 2023

Business Combinations [Abstract]

BUSINESS COMBINATIONS

Acquisition of Bridg

On May 5, 2021, we completed the acquisition of Bridg for purchase consideration of $578.9 million. The purchase consideration consisted of a $350.0 million cash purchase price, subject to $2.8 million of adjustments and escrows, and contingent consideration with an initial fair value of $230.9 million related to additional potential future payments. Under the Merger Agreement, the potential payment to be paid within approximately 2 business days of the determination or agreement of the first payment amount (the "First Anniversary Payment") is to be equal to 20 times the difference between the U.S. annualized recurring revenue ("ARR"), based on revenue in April 2022, and $12.5 million. The potential payment to be paid within approximately 2 business days of the determination of the second payment amount (the “Second Anniversary Payment”) will be equal to 15 times the difference between the ARR for customers as of the first anniversary, based on the April 2023 revenue, and the prior ARR at the first anniversary. At least 30% of each of the First Anniversary Payment and the Second Anniversary Payment will be paid in cash, with the remainder to be paid in cash or our common stock, at our option. If we choose to pay a portion of the First Anniversary Payment or Second Anniversary Payment in our common stock, the number of shares will be determined by dividing the amount of the payment by the trailing 20-day volume-weighted average price ending on the first anniversary date or second anniversary date, as applicable. We also assumed unvested options to purchase Bridg’s common stock and attributed $0.8 million of their fair value to the pre-combination service period. ARR is a performance metric defined within Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations". Refer to Note 8—Fair Value Measurements and Note 12—Subsequent events for further information.

As of March 31, 2023, the First Anniversary Payment has not been made. Per the terms of the Merger Agreement, we delivered the First Earnout Statement within 30 days of the first anniversary of the acquisition. We subsequently agreed to extend the Bridg stockholder representative's review period. During the third quarter of 2022, we received an objection from the Bridg stockholder representative that alleges a material understatement of the First Anniversary Payment amount. We followed the dispute resolution process specific to the First Anniversary Payment outlined in the Merger Agreement and referred the matter to an independent accountant. On April 28, 2023, the independent accountant made its determination of the appropriate amount of ARR at the first anniversary and as a result the Company was able to calculate the amount of the First Anniversary Payment. Refer to Note 12—Subsequent events for further information.

During the three months ended March 31, 2022 and 2023, we incurred a $4.6 million benefit and a $1.7 million of expense, respectively, in connection with our acquisition of Bridg due to the changes in the estimated brokerage fees and transaction bonuses and accounting for all true-ups and credits related to the acquisition of Bridg. These benefits and costs are included in acquisition and integration benefit (cost) on our condensed consolidated statements of operations.

Acquisition of Entertainment

On January 7, 2022, we completed the acquisition of Entertainment for purchase consideration of $14.6 million, as presented below (in thousands):


	January 7, 2022
Fair value of common stock transferred	$	11,937
Cash paid to extinguish acquiree debt	2,053
Cash paid to settle pre-acquisition liabilities and acquiree deal-related costs	624
Cash paid to membership interest holders	24
Cash receivable from membership interest holders pursuant to finalization of net working capital	(61)
Total purchase consideration	$	14,577

The following table presents the preliminary purchase consideration allocation recorded on our condensed consolidated balance sheet as of the acquisition date (in thousands):


	January 7, 2022
Cash and cash equivalents	$	376
Accounts receivable and other assets	1,259
Intangible assets	9,800
Goodwill	5,002
Accounts payable and other liabilities	(1,860)
Total purchase consideration	$	14,577

The goodwill was primarily attributed to the value of future synergies created with our current and future offerings. Goodwill is not expected to be deductible for income tax purposes.

The following table presents the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (dollars in thousands):


	Fair Value		Useful life (in years)
Trade name	$	800	3.0
Developed technology	700		3.0
Merchant relationships	8,300		4.0

The results of Entertainment have been included in the consolidated financial statements since its date of acquisition. For each of the three months ended March 31, 2022 and 2023, Entertainment's combined revenue included in the consolidated statement of operations was approximately 3% of consolidated revenue. Due to the continued integration of the combined businesses, it was impractical to determine the earnings.

Pro forma consolidated results of operations

The following unaudited pro forma financial information presents combined results of operations for the period presented as if the acquisition of Entertainment had been completed on January 1, 2022. The pro forma information includes adjustments to depreciation expense for property and equipment acquired, to amortize expense for the intangible assets acquired and to eliminate the acquisition transaction expenses recognized in the period. The pro forma financial information is for informational purposes only and is not necessarily indicative of the consolidated results of operations of the combined business had the acquisition actually occurred on January 1, 2022 or the results of future operations of the combined business. For instance, planned or expected operational synergies following the acquisition are not reflected in the pro forma information. Consequently, actual results will differ from the unaudited pro forma information presented below.


	Three Months Ended March 31, 2022
	(in thousands)
Revenue	$	67,949
Net income	$	32,766

OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) $ / shares in Units, $ in Thousands			3 Months Ended
	Jan. 07, 2022	May 05, 2021	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Business Acquisition [Line Items]
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable			$ 0	$ 11,937
Offering costs			15	0
Depreciation and amortization expense			3,500	7,100
Deferred revenue			2,860		$ 2,084
Credit loss expense (gain)			(246)	$ 346
Right-of-use assets under operating leases, net			7,295		6,571
Current operating lease liabilities			4,713		4,910
Long-term operating lease liabilities			$ 4,933		$ 4,306
Bridg Acquisition
Business Acquisition [Line Items]
Purchase consideration		$ 578,900
Bridg Acquisition \| Equity Option
Business Acquisition [Line Items]
Fair value of unvested options to purchase common stock		(800)
Bridg Acquisition \| Common Stock
Business Acquisition [Line Items]
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable		$ 230,900
Entertainment Acquisition
Business Acquisition [Line Items]
Purchase consideration	$ 14,577
Business Acquisition, Transaction Costs	$ 13,000
Share price (in USD per share)	$ 66.52
Escrow Deposit	$ 1,100
Payments for (Proceeds from) Investments	2,300
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value	$ 14,600

STOCK-BASED COMPENSATION - Summary of RSU Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) $ / shares shares
Shares (in thousands)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	5,887,000
Restricted stock units
Shares (in thousands)
Unvested — Beginning balance (in shares)	5,956,000
Granted (in shares)	533,000
Vested (in shares)	(179,000)
Forfeited (in shares)	(336,000)
Unvested — Ending balance (in shares)	5,974,000
Weighted-Average Grant Date Fair Value
Unvested — Beginning balance (in usd per share) \| $ / shares	$ 25.43
Granted (in usd per share) \| $ / shares	5.86
Vested (in usd per share) \| $ / shares	48.30
Forfeited (in usd per share) \| $ / shares	47.44
Unvested — Ending balance (in usd per share) \| $ / shares	$ 21.90
Unvested, weighted-average remaining contractual term	2 years 9 months
Unvested, unamortized compensation costs \| $	$ 95,767,329

BUSINESS COMBINATIONS (Tables)

3 Months Ended

Mar. 31, 2023

Business Combinations [Abstract]

Schedule of Business Acquisitions

On January 7, 2022, we completed the acquisition of Entertainment for purchase consideration of $14.6 million, as presented below (in thousands):


	January 7, 2022
Fair value of common stock transferred	$	11,937
Cash paid to extinguish acquiree debt	2,053
Cash paid to settle pre-acquisition liabilities and acquiree deal-related costs	624
Cash paid to membership interest holders	24
Cash receivable from membership interest holders pursuant to finalization of net working capital	(61)
Total purchase consideration	$	14,577

The following table presents the preliminary purchase consideration allocation recorded on our condensed consolidated balance sheet as of the acquisition date (in thousands):


	January 7, 2022
Cash and cash equivalents	$	376
Accounts receivable and other assets	1,259
Intangible assets	9,800
Goodwill	5,002
Accounts payable and other liabilities	(1,860)
Total purchase consideration	$	14,577

The following table presents the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (dollars in thousands):


	Fair Value		Useful life (in years)
Trade name	$	800	3.0
Developed technology	700		3.0
Merchant relationships	8,300		4.0

Business Acquisition, Pro Forma Information

Consequently, actual results will differ from the unaudited pro forma information presented below.


	Three Months Ended March 31, 2022
	(in thousands)
Revenue	$	67,949
Net income	$	32,766

SEGMENTS - Narrative (Details) $ in Thousands	3 Months Ended
SEGMENTS - Narrative (Details) $ in Thousands	Mar. 31, 2023 USD ($) segment	Mar. 31, 2022 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments \| segment	3
Capital expenditures	$ 360	$ 397
Marketers \| Revenue Benchmark \| Top Five Marketers
Segment Reporting Information [Line Items]
Concentration risk	16.00%	25.00%
Marketers \| Accounts Receivable \| Top Five Marketers
Segment Reporting Information [Line Items]
Concentration risk	17.00%	23.00%
Marketers \| Accounts Receivable \| Largest Marketers
Segment Reporting Information [Line Items]
Concentration risk	10.00%	10.00%
Supplier Concentration Risk \| Financial Institution Partner \| Largest FI Partner
Segment Reporting Information [Line Items]
Concentration risk	70.00%	75.00%
Supplier Concentration Risk \| Financial Institution Partner \| Bank Of America, National Association
Segment Reporting Information [Line Items]
Concentration risk		10.00%
Supplier Concentration Risk \| Financial Institution Partner \| JP Morgan Chase Bank, National Association
Segment Reporting Information [Line Items]
Concentration risk		10.00%
United Kingdom
Segment Reporting Information [Line Items]
Capital expenditures	$ 100	$ 100