UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2023
(Exact Name of Registrant as Specified in its Charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||
| (Address of principal executive offices, including zip code) | |||||||||||
| (Registrant's telephone, including area code) | |||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On November 8, 2023, Cardlytics, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2023, as well as information regarding a conference call to discuss these financial results and the Company’s recent corporate highlights. The Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information included in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, regardless of any general incorporation language in such filing.
ITEM 7.01 OTHER EVENTS
On November 8, 2023, the Company is also posting a slide presentation on its website, which the Company will reference during the conference call described above.
A copy of the slide presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K. The information in this Item 7.01 and Exhibit 99.2 hereto shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act, or the Exchange Act, regardless of any general incorporation language in such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
| Exhibit | Exhibit Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | The cover page from Cardlytics, Inc.’s Form 8-K filed on November 8, 2023, formatted in Inline XBRL. | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Cardlytics, Inc. | |||||||||||
| Date: | November 8, 2023 | By: | /s/ Alexis DeSieno | ||||||||
| Alexis DeSieno | |||||||||||
Chief Financial Officer (Principal Financial and Accounting Officer) | |||||||||||
Exhibit 99.1
Cardlytics Announces Third Quarter 2023 Financial Results
Atlanta, GA – November 8, 2023 – Cardlytics, Inc. (NASDAQ: CDLX), a digital advertising platform, today announced financial results for the third quarter ended September 30, 2023. Supplemental information is available on the Investor Relations section of Cardlytics' website at http://ir.cardlytics.com/.
"We are gathering speed with each passing quarter - our platform is starting to look different and the collective improvements we are making to our product and operations are far exceeding our pace from prior years," said Karim Temsamani, Chief Executive Officer. "Our dedication to product leadership, financial health, and strategic growth is setting us on a promising course, and I am looking forward to the future."
"Cardlytics is positioned to be the leader in providing trusted and intelligent business insights, and there are few other platforms that have the level of data and reach that we do," said Alexis DeSieno, Chief Financial Officer. "We are on a path to sustain positive operating cash flow and adjusted EBITDA on an annual basis, while continuing to focus on profitability and improving our balance sheet and capital structure."
Third Quarter 2023 Financial Results
•Revenue was $79.0 million, an increase of 9% year-over-year, compared to $72.7 million in the third quarter of 2022.
•Billings, a non-GAAP metric, was $116.4 million, an increase of 5% year-over-year, compared to $110.4 million in the third quarter of 2022.
•Gross profit was $35.8 million, an increase of 38% year-over-year, compared to $26.0 million in the third quarter of 2022.
•Adjusted contribution, a non-GAAP metric, was $42.9 million, an increase of 22% year-over-year, compared to $35.1 million in the third quarter of 2022.
•Net loss attributable to common stockholders was $(24.0) million, or $(0.63) per diluted share, based on 38.0 million fully diluted weighted-average common shares, compared to a net income attributable to common stockholders of $6.3 million, or $0.19 per diluted share, based on 33.3 million fully diluted weighted-average common shares in the third quarter of 2022.
•Non-GAAP net loss was $0.3 million, or $0.01 per diluted share, based on 38.0 million fully diluted weighted-average common shares, compared to non-GAAP net loss of $(16.5) million, or $(0.50) per diluted share, based on 33.3 million fully diluted weighted-average common shares in the third quarter of 2022.
•Adjusted EBITDA, a non-GAAP metric, was a gain of $3.9 million compared to a loss of $(12.7) million in the third quarter of 2022.
Key Metrics
•Cardlytics MAUs were 162.5 million, an increase of 4% year-over-year, compared to 156.2 million in the third quarter of 2022.
•Cardlytics ARPU was $0.49 compared to $0.47 in the third quarter of 2022.
Definitions of MAUs and ARPU are included below under the caption “Non-GAAP Measures and Other Performance Metrics."
Fourth Quarter 2023 Financial Expectations
Cardlytics anticipates billings, revenue, adjusted contribution and adjusted EBITDA to be in the following ranges (in millions):
| Q4 2023 Guidance | |||||
Billings(1) | $122.0 - $133.0 | ||||
| Revenue | $82.0 - $90.0 | ||||
Adjusted contribution(2) | $44.0 - $50.0 | ||||
Adjusted EBITDA(2) | $4.0 - $8.0 | ||||
(1)A reconciliation of billings to GAAP revenue on a forward-looking basis is presented below under the heading "Reconciliation of Forecasted GAAP Revenue to Billings."
(2)A reconciliation of adjusted contribution to GAAP gross profit and a reconciliation of adjusted EBITDA to net loss on a forward-looking basis is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the items excluded from this non-GAAP measure.
Earnings Teleconference Information
Cardlytics will discuss its third quarter 2023 financial results during a teleconference today, November 8, 2023, at 5:00 PM ET / 2:00 PM PT. A live dial-in will be available after registering at http://ir.cardlytics.com/. Shortly after the conclusion of the call, a replay of this conference call will be available through 8:00 PM ET on November 16, 2023 on the Cardlytics Investor Relations website at http://ir.cardlytics.com/. Following the completion of the call, a recorded replay of the webcast will be available on Cardlytics’ website.
About Cardlytics
Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in Menlo Park, New York, Los Angeles, and London. Learn more at www.cardlytics.com.
Cautionary Language Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, our financial guidance for the fourth quarter of 2023. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," or variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control.
Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: risks related to unfavorable conditions in the global economy and the industries that we serve; risks related to the fact that our quarterly operating results have fluctuated and may continue to vary from period to period; our ability to sustain our revenue growth and billings; risks related to the integration of Dosh, Bridg and Entertainment with our company; potential payments under the Merger Agreement with Bridg; risks related to our substantial dependence on our Cardlytics platform; risks related to our substantial dependence on JPMorgan Chase Bank, National Association (“Chase”), Bank of America, National Association ("Bank of America"), Wells Fargo Bank, National Association (“Wells Fargo”) and a limited number of other financial institution (“FI”) partners; risks related to our ability to maintain relationships with Chase, Wells Fargo and Bank of America; the amount and timing of budgets by marketers, which are affected by budget cycles, economic conditions and other factors, including the impact of the macroeconomic events; our ability to generate sufficient revenue to offset contractual commitments to FIs; our ability to attract new partners, including FI partners, and maintain relationships with bank processors and digital banking providers; our ability to maintain relationships with marketers; our ability to adapt to changing market conditions, including our ability to adapt to changes in consumer habits, negotiate fee arrangements with new and existing partners and retailers, and develop and launch new services and features; and other risks detailed in the “Risk Factors” section of our Form 10-Q filed with the Securities and Exchange Commission on November 8, 2023 and in subsequent periodic reports that we file with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results.
The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
Non-GAAP Measures and Other Performance Metrics
To supplement the financial measures presented in our press release and related conference call or webcast in accordance with generally accepted accounting principles in the United States (“GAAP”), we also present the following non-GAAP measures of financial performance: billings, adjusted contribution, adjusted EBITDA, non-GAAP net loss and non-GAAP net loss per share as well as certain other performance metrics, such as monthly active users (“MAUs”) and average revenue per user (“ARPU”).
A “non-GAAP financial measure” refers to a numerical measure of our historical or future financial performance or financial position that is included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in our financial statements. We provide certain non-GAAP measures as additional information relating to our operating results as a complement to results provided in accordance with GAAP. The non-GAAP financial information presented herein should be considered in conjunction with, and not as a substitute for or superior to, the financial information presented in accordance with GAAP and should not be considered a measure of liquidity. There are significant limitations associated with the use of non-GAAP financial measures. Further, these measures may differ from the non-GAAP information, even where similarly titled, used by other companies and therefore should not be used to compare our performance to that of other companies.
We have presented billings, adjusted contribution, adjusted EBITDA, non-GAAP net loss and non-GAAP net loss per share as non-GAAP financial measures in this press release. Billings represents the gross amount billed to customers and marketers for advertising campaigns in order to generate revenue. Cardlytics platform billings is recognized gross of both Consumer Incentives and Partner Share. Cardlytics platform GAAP revenue is recognized net of Consumer Incentives and gross of Partner Share. Bridg platform billings is the same as Bridg platform GAAP revenue. We define adjusted contribution as a measure by which revenue generated from our marketers exceeds the cost to obtain the purchase data and the digital advertising space from our partners. Adjusted contribution demonstrates how incremental marketing spend on our platforms generates incremental amounts to support our sales and marketing, research and development, 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. We define adjusted EBITDA as our net loss before income taxes; interest expense, net; depreciation and amortization expense; stock-based compensation expense; foreign currency gain (loss); acquisition and integration cost (benefit); loss (gain) in fair value of contingent consideration; goodwill impairment and restructuring and reduction of force. We define non-GAAP net loss as our net loss before stock-based compensation expense; foreign currency (gain) loss; acquisition and integration (benefit) cost; amortization of acquired intangibles; and loss (gain) in fair value of contingent consideration. Notably, any impacts related to minimum Partner Share commitments in connection with agreements with certain partners are not added back to net income in order to calculate adjusted EBITDA, adjusted contribution and non-GAAP net loss. We define non-GAAP net loss per share as non-GAAP net loss divided by weighted-average common shares outstanding, diluted.
We believe the use of non-GAAP financial measures, as a supplement to GAAP measures, is useful to investors in that they eliminate items that are either not part of our core operations or do not require a cash outlay, such as stock-based compensation expense. Management uses these non-GAAP financial measures when evaluating operating performance and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures help indicate underlying trends in the business, are important in comparing current results with prior period results and are useful to investors and financial analysts in assessing operating performance.
We define MAUs as targetable customers that have logged in and visited online or mobile applications containing offers, opened an email containing an offer, or redeemed an offer from the Cardlytics platform during a monthly period. We then calculate a monthly average of these MAUs for the periods presented. We believe that MAUs is an indicator of the Cardlytics platform's ability to drive engagement and is reflective of the marketing base that we offer to marketers. As of September 30, 2023, we are reporting only the total number of unique targetable customers within each FI, which we have applied to our reporting for current and prior periods in this Form 10-Q. We define ARPU as the total revenue generated in the applicable period calculated in accordance with GAAP, divided by the average number of MAUs in the applicable period.
CARDLYTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Amounts in thousands, except par value amounts)
| September 30, 2023 | December 31, 2022 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 90,067 | $ | 121,905 | |||||||
| Restricted cash | 73 | 80 | |||||||||
| Accounts receivable and contract assets, net | 103,324 | 115,609 | |||||||||
| Other receivables | 4,865 | 4,470 | |||||||||
| Prepaid expenses and other assets | 7,260 | 7,978 | |||||||||
| Total current assets | 205,589 | 250,042 | |||||||||
| Long-term assets: | |||||||||||
| Property and equipment, net | 3,005 | 5,916 | |||||||||
| Right-of-use assets under operating leases, net | 4,823 | 6,571 | |||||||||
| Intangible assets, net | 43,116 | 53,475 | |||||||||
| Goodwill | 352,721 | 352,721 | |||||||||
| Capitalized software development costs, net | 23,721 | 19,925 | |||||||||
| Other long-term assets, net | 1,941 | 2,586 | |||||||||
| Total assets | $ | 634,916 | $ | 691,236 | |||||||
| Liabilities and stockholders' equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 3,479 | $ | 3,765 | |||||||
| Accrued liabilities: | |||||||||||
| Accrued compensation | 11,086 | 10,486 | |||||||||
| Accrued expenses | 9,666 | 21,335 | |||||||||
| Short-term debt | 30,000 | — | |||||||||
| Partner Share liability | 43,495 | 48,593 | |||||||||
| Consumer Incentive liability | 48,922 | 53,983 | |||||||||
| Deferred revenue | 3,323 | 1,751 | |||||||||
| Current operating lease liabilities | 2,244 | 4,910 | |||||||||
| Current contingent consideration | 27,268 | 104,121 | |||||||||
| Total current liabilities | 179,483 | 248,944 | |||||||||
| Long-term liabilities: | |||||||||||
| Convertible senior notes, net | 227,139 | 226,047 | |||||||||
| Deferred liabilities | 81 | 334 | |||||||||
| Long-term operating lease liabilities | 2,878 | 4,306 | |||||||||
| Total liabilities | 409,581 | 479,631 | |||||||||
| Stockholders’ equity: | |||||||||||
Common stock, $0.0001 par value—100,000 shares authorized and 38,528 and 33,477 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively. | 9 | 9 | |||||||||
| Additional paid-in capital | 1,230,458 | 1,182,568 | |||||||||
| Accumulated other comprehensive income | 5,304 | 5,598 | |||||||||
| Accumulated deficit | (1,010,436) | (976,570) | |||||||||
| Total stockholders’ equity | 225,335 | 211,605 | |||||||||
| Total liabilities and stockholders’ equity | $ | 634,916 | $ | 691,236 | |||||||
CARDLYTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Revenue | $ | 79,005 | $ | 72,706 | $ | 220,037 | $ | 216,039 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Partner Share and other third-party costs | 36,144 | 37,563 | 108,698 | 112,996 | |||||||||||||||||||
| Delivery costs | 7,012 | 9,125 | 20,451 | 23,820 | |||||||||||||||||||
| Sales and marketing expense | 14,161 | 18,289 | 43,314 | 57,920 | |||||||||||||||||||
| Research and development expense | 12,430 | 13,762 | 38,841 | 39,634 | |||||||||||||||||||
| General and administration expense | 15,561 | 19,972 | 44,907 | 61,381 | |||||||||||||||||||
| Acquisition and integration cost (benefit) | 78 | (1,867) | (8,146) | (4,269) | |||||||||||||||||||
| Loss (gain) in fair value of contingent consideration | 8,281 | (46,126) | (15,045) | (114,144) | |||||||||||||||||||
| Goodwill impairment | — | — | — | 83,149 | |||||||||||||||||||
| Depreciation and amortization expense | 5,990 | 10,468 | 19,765 | 30,695 | |||||||||||||||||||
| Total costs and expenses | 99,657 | 61,186 | 252,785 | 291,182 | |||||||||||||||||||
| Operating (loss) income | (20,652) | 11,520 | (32,748) | (75,143) | |||||||||||||||||||
| Other expense: | |||||||||||||||||||||||
| Interest expense, net | (915) | (580) | (1,497) | (2,406) | |||||||||||||||||||
| Foreign currency (gain) loss | (2,399) | (4,673) | 379 | (10,882) | |||||||||||||||||||
| Total other expense | (3,314) | (5,253) | (1,118) | (13,288) | |||||||||||||||||||
| (Loss) income before income taxes | (23,966) | 6,267 | (33,866) | (88,431) | |||||||||||||||||||
| Income tax benefit | — | — | — | 1,446 | |||||||||||||||||||
| Net (loss) income | (23,966) | 6,267 | (33,866) | (86,985) | |||||||||||||||||||
| Net (loss) income attributable to common stockholders | $ | (23,966) | $ | 6,267 | $ | (33,866) | $ | (86,985) | |||||||||||||||
| Net (loss) income per share attributable to common stockholders, basic and diluted | $ | (0.63) | $ | 0.19 | $ | (0.95) | $ | (2.60) | |||||||||||||||
| Weighted-average common shares outstanding, basic and diluted | 37,982 | 32,950 | 35,502 | 33,455 | |||||||||||||||||||
CARDLYTICS, INC.
STOCK-BASED COMPENSATION EXPENSE (UNAUDITED)
(Amounts in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Delivery costs | $ | 667 | $ | 920 | $ | 1,800 | $ | 2,416 | |||||||||||||||
| Sales and marketing | 2,683 | 1,428 | 9,487 | 8,765 | |||||||||||||||||||
| Research and development | 3,661 | 1,968 | 12,248 | 9,419 | |||||||||||||||||||
| General and administration | 3,238 | 1,451 | 6,421 | 11,594 | |||||||||||||||||||
| Total stock-based compensation | $ | 10,249 | $ | 5,767 | $ | 29,956 | $ | 32,194 | |||||||||||||||
CARDLYTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in thousands)
| Nine Months Ended September 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| Operating activities | |||||||||||
| Net loss | $ | (33,866) | $ | (86,985) | |||||||
| Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
| Credit loss expense | 1,153 | 949 | |||||||||
| Depreciation and amortization | 19,765 | 30,695 | |||||||||
| Amortization of financing costs charged to interest expense | 1,234 | 1,192 | |||||||||
| Amortization of right-of-use assets | 2,807 | 4,230 | |||||||||
| Stock-based compensation expense | 29,956 | 32,194 | |||||||||
| Goodwill impairment | — | 83,149 | |||||||||
| Gain in fair value of contingent consideration | (15,044) | (114,144) | |||||||||
| Other non-cash (income) expense, net | (613) | 10,524 | |||||||||
| Income tax benefit | — | (1,446) | |||||||||
| Change in operating assets and liabilities: | |||||||||||
| Accounts receivable | 10,991 | 15,082 | |||||||||
| Prepaid expenses and other assets | 1,114 | (456) | |||||||||
| Accounts payable | (265) | 111 | |||||||||
| Other accrued expenses | (10,282) | (5,814) | |||||||||
| Partner Share liability | (4,994) | (5,836) | |||||||||
| Consumer Incentive liability | (5,075) | (4,248) | |||||||||
| Net cash used in operating activities | (3,119) | (40,803) | |||||||||
| Investing activities | |||||||||||
| Acquisition of property and equipment | (393) | (1,090) | |||||||||
| Acquisition of patents | — | (73) | |||||||||
| Capitalized software development costs | (8,302) | (9,170) | |||||||||
| Business acquisitions, net of cash acquired | — | (2,274) | |||||||||
| Net cash used in investing activities | (8,695) | (12,607) | |||||||||
| Financing activities | |||||||||||
| Proceeds from issuance of debt | 30,000 | — | |||||||||
| Settlement of contingent consideration | (50,050) | — | |||||||||
| Principal payments of debt | (21) | (24) | |||||||||
| Proceeds from issuance of common stock | 55 | 397 | |||||||||
| Repurchase of common stock | — | (40,000) | |||||||||
| Deferred debt costs | (58) | — | |||||||||
| Deferred equity issuance costs | — | (181) | |||||||||
| Net cash used in financing activities | (20,074) | (39,808) | |||||||||
| Effect of exchange rates on cash, cash equivalents and restricted cash | 43 | (1,756) | |||||||||
| Net decrease in cash, cash equivalents and restricted cash | (31,845) | (94,974) | |||||||||
| Cash, cash equivalents, and restricted cash — Beginning of period | 121,985 | 233,562 | |||||||||
| Cash, cash equivalents, and restricted cash — End of period | $ | 90,140 | $ | 138,588 | |||||||
CARDLYTICS, INC.
SUMMARY OF GAAP AND NON-GAAP RESULTS (UNAUDITED)
(Dollars in thousands)
| Three Months Ended September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2022 | $ | % | 2023 | 2022 | $ | % | ||||||||||||||||||||||||||||||||||||||||
Billings(1) | $ | 116,430 | $ | 110,392 | $ | 6,038 | 5 | % | $ | 321,480 | $ | 316,361 | $ | 5,119 | 2 | % | |||||||||||||||||||||||||||||||
| Consumer Incentives | 37,425 | 37,686 | (261) | (1) | 101,443 | 100,322 | 1,121 | 1 | |||||||||||||||||||||||||||||||||||||||
| Revenue | 79,005 | 72,706 | 6,299 | 9 | 220,037 | 216,039 | 3,998 | 2 | |||||||||||||||||||||||||||||||||||||||
Partner Share and other third-party costs(1) | 36,144 | 37,563 | (1,419) | (4) | 108,698 | 112,996 | (4,298) | (4) | |||||||||||||||||||||||||||||||||||||||
Adjusted contribution(1) | 42,861 | 35,143 | 7,718 | 22 | 111,339 | 103,043 | 8,296 | 8 | |||||||||||||||||||||||||||||||||||||||
| Delivery costs | 7,012 | 9,125 | (2,113) | (23) | 20,451 | 23,820 | (3,369) | (14) | |||||||||||||||||||||||||||||||||||||||
| Gross profit | $ | 35,849 | $ | 26,018 | $ | 9,831 | 38 | % | $ | 90,888 | $ | 79,223 | $ | 11,665 | 15 | % | |||||||||||||||||||||||||||||||
| Net (loss) income | $ | (23,966) | $ | 6,267 | $ | (30,233) | n/a | $ | (33,866) | $ | (86,985) | $ | 53,119 | (61) | % | ||||||||||||||||||||||||||||||||
Adjusted EBITDA(1) | $ | 3,946 | $ | (12,708) | $ | 16,654 | n/a | $ | (6,218) | $ | (39,030) | $ | 32,812 | (84) | % | ||||||||||||||||||||||||||||||||
(1)Billings, adjusted contribution and adjusted EBITDA are non-GAAP measures. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are presented below under the headings "Reconciliation of GAAP Revenue to Billings," "Reconciliation of GAAP Gross Profit to Adjusted Contribution" and "Reconciliation of GAAP Net Loss to Adjusted EBITDA."
CARDLYTICS, INC.
RECONCILIATION OF GAAP REVENUE TO BILLINGS (UNAUDITED)
(Amounts in thousands)
| Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Revenue | $ | 73,064 | $ | 5,941 | $ | 79,005 | $ | 67,285 | $ | 5,421 | $ | 72,706 | |||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
| Consumer Incentives | 37,425 | — | 37,425 | 37,686 | — | 37,686 | |||||||||||||||||||||||||||||
| Billings | $ | 110,489 | $ | 5,941 | $ | 116,430 | $ | 104,971 | $ | 5,421 | $ | 110,392 | |||||||||||||||||||||||
| Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Revenue | $ | 202,820 | $ | 17,217 | $ | 220,037 | $ | 200,538 | $ | 15,501 | $ | 216,039 | |||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
| Consumer Incentives | 101,443 | — | 101,443 | 100,319 | — | 100,319 | |||||||||||||||||||||||||||||
| Billings | $ | 304,263 | $ | 17,217 | $ | 321,480 | $ | 300,857 | $ | 15,501 | $ | 316,358 | |||||||||||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF GAAP GROSS PROFIT TO ADJUSTED CONTRIBUTION (UNAUDITED)
(Amounts in thousands)
| Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Revenue | $ | 73,064 | $ | 5,941 | $ | 79,005 | $ | 67,285 | $ | 5,421 | $ | 72,706 | |||||||||||||||||||||||
| Minus: | |||||||||||||||||||||||||||||||||||
| Partner Share and other third-party costs | 36,011 | 133 | 36,144 | 37,399 | 164 | 37,563 | |||||||||||||||||||||||||||||
Delivery costs(1) | 5,510 | 1,502 | 7,012 | 7,623 | 1,502 | 9,125 | |||||||||||||||||||||||||||||
| Gross profit | 31,543 | 4,306 | 35,849 | 22,263 | 3,755 | 26,018 | |||||||||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
Delivery costs(1) | 5,510 | 1,502 | 7,012 | 7,623 | 1,502 | 9,125 | |||||||||||||||||||||||||||||
| Adjusted contribution | $ | 37,053 | $ | 5,808 | $ | 42,861 | $ | 29,886 | $ | 5,257 | $ | 35,143 | |||||||||||||||||||||||
(1)Stock-based compensation expense recognized in consolidated delivery costs totaled $0.7 million and $0.9 million for the three months ended September 30, 2023 and 2022, respectively.
| Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Revenue | $ | 202,820 | $ | 17,217 | $ | 220,037 | $ | 200,538 | $ | 15,501 | $ | 216,039 | |||||||||||||||||||||||
| Minus: | |||||||||||||||||||||||||||||||||||
| Partner Share and other third-party costs | 108,272 | 426 | 108,698 | 111,829 | 1,167 | 112,996 | |||||||||||||||||||||||||||||
Delivery costs(1) | 15,420 | 5,031 | 20,451 | 18,841 | 4,979 | 23,820 | |||||||||||||||||||||||||||||
| Gross profit | 79,128 | 11,760 | 90,888 | 69,868 | 9,355 | 79,223 | |||||||||||||||||||||||||||||
| Plus: | |||||||||||||||||||||||||||||||||||
Delivery costs(1) | 15,420 | 5,031 | 20,451 | 18,841 | 4,979 | 23,820 | |||||||||||||||||||||||||||||
| Adjusted contribution | $ | 94,548 | $ | 16,791 | $ | 111,339 | $ | 88,709 | $ | 14,334 | $ | 103,043 | |||||||||||||||||||||||
(1)Stock-based compensation expense recognized in consolidated delivery costs totaled $2.4 million and $1.8 million for the nine months ended September 30, 2022 and 2023, respectively.
CARDLYTICS, INC.
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA (UNAUDITED)
(Amounts in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Net (loss) income | $ | (23,966) | $ | 6,267 | $ | (33,866) | $ | (86,985) | |||||||||||||||
| Plus: | |||||||||||||||||||||||
| Income tax benefit | — | — | — | (1,446) | |||||||||||||||||||
| Interest expense, net | 915 | 580 | 1,497 | 2,406 | |||||||||||||||||||
| Depreciation and amortization | 5,990 | 10,468 | 19,765 | 30,695 | |||||||||||||||||||
| Stock-based compensation expense | 10,249 | 5,767 | 29,956 | 32,194 | |||||||||||||||||||
| Foreign currency loss (gain) | 2,399 | 4,673 | (379) | 10,882 | |||||||||||||||||||
| Acquisition and integration cost (benefit) | 78 | (1,867) | (8,146) | (4,269) | |||||||||||||||||||
| Loss (gain) in fair value of contingent consideration | 8,281 | (46,126) | (15,045) | (114,144) | |||||||||||||||||||
| Goodwill impairment | — | — | — | 83,149 | |||||||||||||||||||
| Restructuring and reduction of force | — | 7,530 | — | 8,488 | |||||||||||||||||||
| Adjusted EBITDA | $ | 3,946 | $ | (12,708) | $ | (6,218) | $ | (39,030) | |||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF ADJUSTED CONTRIBUTION TO ADJUSTED EBITDA (UNAUDITED)
(Amounts in thousands)
| Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Adjusted Contribution | $ | 37,053 | $ | 5,808 | $ | 42,861 | $ | 29,886 | $ | 5,257 | $ | 35,143 | |||||||||||||||||||||||
| Minus: | |||||||||||||||||||||||||||||||||||
| Delivery costs | 5,510 | 1,502 | 7,012 | 7,623 | 1,502 | 9,125 | |||||||||||||||||||||||||||||
| Sales and marketing expense | 12,041 | 2,120 | 14,161 | 16,529 | 1,760 | 18,289 | |||||||||||||||||||||||||||||
| Research and development expense | 11,046 | 1,384 | 12,430 | 11,682 | 2,080 | 13,762 | |||||||||||||||||||||||||||||
| General and administration expense | 14,874 | 687 | 15,561 | 19,558 | 414 | 19,972 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | (9,127) | (1,122) | (10,249) | (5,302) | (465) | (5,767) | |||||||||||||||||||||||||||||
| Restructuring and reduction of force | — | — | — | (7,530) | — | (7,530) | |||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 2,709 | $ | 1,237 | $ | 3,946 | $ | (12,674) | $ | (34) | $ | (12,708) | |||||||||||||||||||||||
| Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||
| Cardlytics Platform | Bridg Platform | Consolidated | Cardlytics Platform | Bridg Platform | Consolidated | ||||||||||||||||||||||||||||||
| Adjusted Contribution | $ | 94,548 | $ | 16,791 | $ | 111,339 | $ | 88,709 | $ | 14,334 | $ | 103,043 | |||||||||||||||||||||||
| Minus: | |||||||||||||||||||||||||||||||||||
| Delivery costs | 15,420 | 5,031 | 20,451 | 18,841 | 4,979 | 23,820 | |||||||||||||||||||||||||||||
| Sales and marketing expense | 36,422 | 6,892 | 43,314 | 53,345 | 4,575 | 57,920 | |||||||||||||||||||||||||||||
| Research and development expense | 34,772 | 4,069 | 38,841 | 34,577 | 5,057 | 39,634 | |||||||||||||||||||||||||||||
| General and administration expense | 43,321 | 1,586 | 44,907 | 59,999 | 1,382 | 61,381 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | (27,835) | (2,121) | (29,956) | (31,181) | (1,013) | (32,194) | |||||||||||||||||||||||||||||
| Restructuring and reduction of force | — | — | — | (8,488) | — | (8,488) | |||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | (7,552) | $ | 1,334 | $ | (6,218) | $ | (38,384) | $ | (646) | $ | (39,030) | |||||||||||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET (LOSS) INCOME
AND NON-GAAP NET INCOME (LOSS) PER SHARE (UNAUDITED)
(Amounts in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| Net (loss) income | $ | (23,966) | $ | 6,267 | $ | (33,866) | $ | (86,985) | |||||||||||||||
| Plus: | |||||||||||||||||||||||
| Stock-based compensation expense | 10,249 | 5,767 | 29,956 | 32,194 | |||||||||||||||||||
| Foreign currency loss (gain) | 2,399 | 4,673 | (379) | 10,882 | |||||||||||||||||||
| Acquisition and integration cost (benefit) | (78) | (1,867) | 8,146 | (4,269) | |||||||||||||||||||
| Amortization of acquired intangibles | 3,433 | 7,207 | 10,331 | 21,560 | |||||||||||||||||||
(Gain) loss in fair value of contingent consideration | 8,281 | (46,126) | (15,045) | (114,144) | |||||||||||||||||||
| Goodwill impairment | — | — | — | 83,149 | |||||||||||||||||||
| Restructuring and reduction of force | — | 7,530 | — | 8,488 | |||||||||||||||||||
| Income tax benefit | — | — | — | (1,446) | |||||||||||||||||||
| Non-GAAP net income (loss) | $ | 318 | $ | (16,549) | $ | (857) | $ | (50,571) | |||||||||||||||
| Weighted-average number of shares of common stock used in computing non-GAAP net income (loss) per share: | |||||||||||||||||||||||
| Non-GAAP weighted-average common shares outstanding, diluted | 37,982 | 33,269 | 35,502 | 33,455 | |||||||||||||||||||
| Non-GAAP net income (loss) per share attributable to common stockholders, diluted | $ | 0.01 | $ | (0.50) | $ | (0.02) | $ | (1.51) | |||||||||||||||
CARDLYTICS, INC.
RECONCILIATION OF FORECASTED GAAP REVENUE TO BILLINGS (UNAUDITED)
(Amounts in thousands)
| Q4 2023 | |||||
| Revenue | $82.0 - $90.0 | ||||
| Plus: | |||||
| Consumer Incentives | $40.0 - $43.0 | ||||
| Billings | $122.0 - $133.0 | ||||
Contacts:
Public Relations:
Robert Robinson
pr@cardlytics.com
Investor Relations:
Robert Robinson
ir@cardlytics.com
CARDLYTICS Q3 2023 Earnings Presentation November 8, 2023
Disclaimer This presentation includes forward-looking statements. All statements contained in this presentation other than statements of historical facts, including statements regarding expectations about future financial performance or results of Cardlytics, Inc. (“Cardlytics,” “we,” “us,” or “our), earnings guidance for the fourth quarter of 2023, the short- and long-term success of our product initiatives and the opportunity for billings growth and future ARPU expansion for our platform following increases in MAUs, are forward looking statements. The words “anticipate”,” believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. The future events and trends discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: risks related to unfavorable conditions in the global economy and the industries that we serve; our quarterly operating results have fluctuated and may continue to vary from period to period; our ability to sustain our revenue growth and billings; risks related to the integration of Dosh, Bridg and Entertainment with our company; potential payments under the Merger Agreement with Bridg; risks related to our substantial dependence on our Cardlytics platform; risks related to our substantial dependence on JPMorgan Chase Bank, National Association (“Chase”), Bank of America, National Association ("Bank of America"), Wells Fargo Bank, National Association (“Wells Fargo”) and a limited number of other financial institution (“FI”) partners; risks related to our ability to maintain relationships with Chase, Wells Fargo and Bank of America; the amount and timing of budgets by marketers, which are affected by budget cycles, economic conditions and other factors, including the impact of the COVID-19 pandemic; our ability to generate sufficient revenue to offset contractual commitments to FIs; our ability to attract new partners, including FI partners, and maintain relationships with bank processors and digital banking providers; our ability to maintain relationships with marketers; our ability to adapt to changing market conditions, including our ability to adapt to changes in consumer habits, negotiate fee arrangements with new and existing partners and retailers, and develop and launch new services and features; and other risks detailed in the “Risk Factors” section of our Form 10-Q filed with the Securities and Exchange Commission on November 8, 2023. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after the date of this presentation to conform these statements to actual results or revised expectations, except as required by law. In addition to U.S. GAAP financial information, this presentation includes billings, adjusted contribution, adjusted partner share and other third-party costs, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net loss and non-GAAP net loss per share, each of which is a non-GAAP financial measure. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. Reconciliations of billings, adjusted contribution, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net loss and non-GAAP net loss per share to the most directly comparable GAAP measures are included in the appendix to this presentation. Please see appendix for definitions.
Company overview
We power a native ad platform in our partners’ digital channels.
Cardlytics provides a scaled solution based on purchase intelligence 162M+ Monthly Active Users(1) $3.9T+ in Annual Spend(2) 1 in 2 U.S. Purchase Transactions(3) Distinctive benefits for marketers + Reach valuable banking customers + Operate in a brand-safe, privacy-protected, trusted digital channel + Market to the most valuable customers based on their actual spending + Drive in-store and online traffic + Closed-loop solution measures marketing results to the penny
Financial information & operating metrics
Trended consolidated results Q3 Adj. Contribution 22.0% y/y Q3 Revenue 8.7% y/y Q3 Billings 5.5% y/y Revenue Adj. Contribution(1) Billings(1) $107.7 $110.4 $126.1 $109.4 $116.4
Billings and adjusted contribution best reflect performance Billings Total in aggregate paid by marketers Consumer incentive Set by CDLX to achieve marketing objectives; can fluctuate based on desired outcome Enhanced consumer incentive Additional Consumer Incentives funded by our partners GAAP revenue Recognized as revenue; to be split between CDLX & our partners Partner share Portion of revenue shared with our partners Adjusted contribution Amount retained by CDLX; net of partner share
Q3 2023 year-over-year consolidated results Three Months Ended September 30, Change 2022 2023 $ % Billings(1) $110,392 $116,430 $6,038 5.5% Consumer Incentives 37,686 37,425 (261) (0.7%) Revenue $72,706 $79,005 $6,299 8.7% Partner Share and other third-party costs 37,563 36,144 (1,419) (3.8%) Adjusted contribution(1) $35,143 $42,861 $7,718 22.0% Delivery costs 9,125 7,012 (2,113) (23.2%) Gross profit $26,018 $35,849 $9,831 37.8% Net loss $6,267 ($23,966) ($30,233) (482.4%) Adjusted EBITDA(1) ($12,708) $3,946 $16,654 131.1% Adjusted Contribution Margin 48.3% 54.3% 5.9% 12.2% Adjusted EBITDA margin (17.5%) 5.0% 22.5% (128.6%)
Q3 2023 year-over-year reportable segments Three Months Ended September 30, Change 2022 2023 $ % Cardlytics platform Revenue $ 67,285 $ 73,064 $ 5,779 8.6% Minus: Partner Share and other third-party costs 37,399 36,011 (1,388) (3.7%) Adjusted contribution $ 29,886 $ 37,053 $ 7,167 24.0% Bridg platform Revenue $ 5,421 $ 5,941 $ 520 9.6% Minus: Partner Share and other third-party costs 164 133 (31) (18.9%) Adjusted contribution $ 5,257 $ 5,808 $ 551 10.5% Total Revenue $ 72,706 $ 79,005 $ 6,299 8.7% Minus: Partner Share and other third-party costs 37,563 36,144 (1,419) (3.8%) Adjusted contribution $ 35,143 $ 42,861 $ 7,718 22.0%
Cardlytics platform advertiser spend by industry Industry % Change % of Advertiser Spend Three Months Ended September 30, Three Months Ended September 30, vs 2022 vs 2021 2023 2022 2021 Grocery & Gas > 65% < (20%) > 10% > 5% < 15% Restaurant < (35%) < (20%) < 20% < 30% > 25% Retail > (20%) < (10%) < 25% < 30% < 30% Travel & Entertainment > 20% < 145% < 15% < 10% > 5% Other n/a n/a > 5% > 0% > 0% DTC > 0% > 5% > 25% < 25% > 25%
Historical MAU and ARPU Cardlytics Monthly Active Users(1) Cardlytics Average Revenue Per User(1) Prior to September 30, 2023, we reported total number of unique targetable accounts and customers within each FI. As of September 30, 2023, we are reporting only the total number of unique targetable customers within each FI, which we have applied to our reporting for current and prior periods. 152.6 152.5 156.2 156.9 158.1 160.0 162.5 178.5 179.9 184.7 182.7 188.8 188.1 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 New MAU Definition Old MAU Definition
Appendix
Q3 2023 results Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 % 2023 2022 % Revenue $79,005 $72,706 8.7% $220,036 $216,039 1.9% Billings(1) 116,430 110,392 5.5% 321,480 316,361 1.6% Gross Profit 35,849 26,018 37.8% 90,888 79,223 14.7% Adjusted contribution(1) 42,861 35,143 22.0% 111,338 103,043 8.1% Net (loss) income attributable to common stockholders (23,966) 6,267 n/a (33,866) (86,985) (61.1%) Net loss per share (EPS), diluted ($0.63) $0.19 n/a ($0.95) ($2.60) (63.5%) Adjusted EBITDA(1) $3,946 ($12,708) n/a ($6,218) ($39,030) (84.1%) Adjusted EBITDA margin(1)(2) 5.0% (17.5%) n/a (2.8%) (18.1%) (84.4%) Non-GAAP net income (loss)(1) $318 ($16,549) n/a ($857) ($50,571) (98.3%) Non-GAAP net income (loss) per share(1) $0.01 ($0.50) n/a ($0.02) ($1.51) n/a Cardlytics MAUs (in millions) 162.5 156.2 4.0% 160.2 153.8 4.2% Cardlytics ARPU $0.49 $0.47 4.3% $1.37 $1.40 (2.14%)
Guidance Q4 2023 Guidance Billings(1) $122.0 - $133.0 Revenue $82.0 - $90.0 Adjusted Contribution(1) $44.0 - $50.0 Adjusted EBITDA(1) $4.0 - $8.0
Reconciliation of GAAP revenue to billings Three Months Ended Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sept 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Sept 30, 2023 Cardlytics Platform Revenue $53,230 $56,763 $62,075 $86,686 $63,983 $69,270 $67,285 $76,647 $59,030 $70,726 $73,064 Plus: Consumer Incentives 23,087 26,484 33,464 43,924 30,297 32,339 37,686 43,613 31,295 32,723 37,425 Billings $76,317 $83,247 $95,539 $130,610 $94,280 $101,609 $104,971 $120,260 $90,325 $103,449 $110,489 Bridg Platform Revenue - $2,090 $2,909 $3,363 $3,945 $6,135 $5,421 $5,856 $5,301 $5,975 $5,941 Plus: Consumer Incentives - - - - - - - - - - 0 Billings - $2,090 $2,909 $3,363 $3,945 $6,135 $5,421 $5,856 $5,301 $5,975 $5,941 Consolidated Revenue $53,230 $58,853 $64,984 $90,049 $67,928 $75,405 $72,706 $82,503 $64,331 $76,701 $79,005 Plus: Consumer Incentives 23,087 26,484 33,464 43,924 30,297 32,339 37,686 43,613 31,295 32,723 37,425 Billings $76,317 $85,337 $98,448 $133,973 $98,225 $107,744 $110,392 $126,116 $95,626 $109,424 $116,430
Reconciliation of GAAP gross profit to adjusted contribution Three Months Ended Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sept 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Sept 30, 2023Cardlytics Platform Revenue $53,230 $56,763 $62,075 $86,686 $63,983 $69,270 $67,285 $76,647 $59,030 $70,726 $73,064 Minus: Partner Share and other third-party costs 29,771 29,890 33,929 47,274 35,027 39,403 37,399 42,375 33,175 39,086 36,011 Delivery costs 3,938 4,837 4,777 4,618 4,907 6,311 7,623 5,271 4,693 5,217 5,510 Gross Profit $19,521 $22,036 $23,369 $34,794 $24,049 $23,556 $22,263 $29,001 $21,162 $26,423 $31,543 Plus: Delivery costs 3,938 4,837 4,777 4,618 4,907 6,311 7,623 5,271 4,693 5,217 5,510 Deferred implementation costs 882 730 731 1,442 - - - - - - - Adjusted contribution $24,341 $27,603 $28,877 $40,854 $28,956 $29,867 $29,886 $34,272 $25,855 $31,640 $37,053 Bridg Platform Revenue - $2,090 $2,909 $3,363 $3,945 $6,135 $5,421 $5,856 $5,301 $5,975 $5,941 Minus: Partner Share and other third-party costs - 63 161 185 126 877 164 136 209 84 133 Delivery costs - 911 1,613 1,809 1,626 1,851 1,502 1,312 1,731 1,798 1,502 Gross Profit - $1,116 $1,135 $1,369 $2,193 $3,407 $3,755 $4,408 $3,361 $4,093 $4,306 Plus: Delivery costs - 911 1,613 1,809 1,626 1,851 1,502 1,312 1,731 1,798 1,502 Adjusted contribution - $2,027 $2,748 $3,178 $3,819 $5,258 $5,257 $5,720 $5,092 $5,891 $5,808 Consolidated Revenue $53,230 $58,853 $64,984 $90,049 $67,928 $75,405 $72,706 $82,503 $64,331 $76,701 $79,005 Minus: Partner Share and other third-party costs 29,771 29,953 34,090 47,459 35,153 40,280 37,563 42,511 33,384 39,170 36,144 Delivery costs 3,938 5,748 6,390 6,427 6,533 8,162 9,125 6,583 6,424 7,015 7,012 Gross Profit $19,521 $23,152 $24,504 $36,163 $26,242 $26,963 $26,018 $33,409 $24,523 $30,516 $35,849 Plus: Delivery costs 3,938 5,748 6,390 6,427 6,533 8,162 9,125 6,583 6,424 7,015 7,012 Deferred implementation costs 882 730 731 1,442 - - - - - - - Adjusted contribution $24,341 $29,630 $31,625 $44,032 $32,775 $35,125 $35,143 $39,992 $30,947 $37,531 $42,861
Reconciliation of GAAP partner share and other third-party costs to adjusted partner share and other third-party costs Three Months Ended Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sept 30, 2022 Dec 31, 2022 Mar 31, 2023 Mar 31, 2023 Jun 30, 2023 Sept 30, 2023 Cardlytics Platform Partner Share and other third-party costs $29,771 $29,890 $33,929 $47,274 $35,027 $39,403 $37,399 $42,375 $33,175 $39,086 $39,086 $36,011 Minus: Deferred implementation costs 882 730 731 1,442 - - - - - - - - Adjusted Partner Share and other third-party costs $28,889 $29,160 $33,198 $45,832 $35,027 $39,403 $37,399 $42,375 $33,175 $39,086 $39,086 $36,011 Bridg Platform Partner Share and other third-party costs - $63 $161 $185 $126 $877 $164 $136 $209 $84 $84 $133 Minus: Deferred implementation costs - - - - - - - - - - - - Adjusted Partner Share and other third-party costs - $63 $161 $185 $126 $877 $164 $136 $209 $84 $84 $133 Consolidated Partner Share and other third-party costs $29,771 $29,953 $34,090 $47,459 $35,153 $40,280 $37,563 $42,511 $33,384 $39,170 $39,170 $36,144 Minus: Deferred implementation costs 882 730 731 1,442 - - - - - - - - Adjusted Partner Share and other third-party costs $28,889 $29,223 $33,359 $46,017 $35,153 $40,280 $37,563 $42,511 $33,384 $39,170 $39,170 $36,144
(Amounts in thousands) Reconciliation of GAAP net (loss) income to adjusted EBITDA Three Months Ended Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sept 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Sept 30, 2023 Net (loss) income ($24,895) ($47,306) ($44,529) ($11,834) $33,038 ($126,290) $6,267 ($378,279) $13,608 ($23,508) ($23,966) Plus: Income tax benefit - - - (7,864) - (1,446) - - - - - Interest expense, net 3,045 3,078 3,193 3,247 947 879 580 150 8 574 915 Depreciation and amortization expense 3,065 8,833 8,375 9,598 9,871 10,356 10,468 6,849 6,575 7,200 5,990 Stock-based compensation expense 7,248 13,337 16,830 12,849 13,585 12,842 5,767 12,492 7,968 11,739 10,249 Foreign currency (gain) loss (319) - 1,543 43 1,671 4,538 4,673 (4,506) (1,389) (1,389) 2,399 Deferred implementation costs 882 730 731 1,442 - - - - - - - Acquisition and integration costs (benefit) 7,030 14,182 1,714 1,446 (4,599) 2,197 (1,867) 1,395 1,723 (9,947) 78 (Gain) loss in fair value of contingent consideration - 1,480 6,261 (6,367) (65,050) (2,968) (46,126) (14,030) (34,584) 11,258 8,281 Impairment of goodwill and intangible assets - - - - - 83,149 - 370,139 - - - Restructuring and reduction of force - - 713 - - 958 7,530 (347) - - - Adjusted EBITDA ($3,944) ($5,666) ($5,169) $2,560 ($10,537) ($15,785) ($12,708) ($6,137) ($6,091) ($4,073) $3,946
Reconciliation of adjusted contribution to adjusted EBITDA (Amounts in thousands) Three Months Ended Mar 31, 2021 Jun 30, 2021 Sept 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sept 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Sept 30, 2023 Cardlytics Platform Adjusted Contribution $24,341 $27,603 $28,877 $40,854 $28,956 $29,867 $29,886 $34,272 $25,855 $31,640 $37,053 Minus: Delivery costs 3,938 4,837 4,777 4,618 4,907 6,311 7,623 5,271 4,693 5,217 5,510 Sales and marketing expense 13,202 16,665 15,469 17,435 16,384 20,908 16,529 14,484 11,547 12,834 12,041 Research and development expense 6,218 8,481 10,163 10,531 11,313 11,936 11,682 13,002 10,327 13,399 11,046 General and administration expense 12,175 16,454 19,039 15,708 19,391 21,232 19,558 19,070 13,330 15,117 14,874 Stock-based compensation expense (7,248) (13,179) (15,627) (11,169) (12,382) (13,944) (5,302) (12,309) (8,103) (10,605) (9,127) Restructuring and reduction of force - - (713) - - (958) (7,530) 347 - - - Adjusted EBITDA ($3,944) ($5,656) ($4,231) $3,731 ($10,657) ($15,618) ($12,674) ($5,593) ($5,939) ($4,322) $2,709 Bridg Platform Adjusted Contribution - $2,027 $2,748 $3,178 $3,819 $5,258 $5,257 $5,720 $5,092 $5,891 $5,808 Minus: Delivery costs - 911 1,613 1,809 1,626 1,851 1,502 1,312 1,731 1,798 1,502 Sales and marketing expense - 398 1,264 1,564 1,264 1,075 1,760 2,341 2,401 2,371 2,120 Research and development expense - 453 978 1,280 978 1,645 2,080 1,799 1,237 1,448 1,384 General and administration expense - 434 1,034 1,376 1,034 (248) 414 995 (260) 1,159 687 Stock-based compensation expense - (158) (1,203) (1,681) (1,203) 1,102 (465) (183) 135 (1,134) (1,122) Restructuring and reduction of force - - - - - - - - - - - Adjusted EBITDA - ($11) ($938) ($1,170) $120 ($167) ($34) ($544) ($152) $249 $1,237 Consolidated Adjusted Contribution $24,341 $29,630 $31,625 $44,032 $32,775 $35,125 $35,143 $39,992 $30,947 $37,531 $42,861 Minus: Delivery costs 3,938 5,748 6,390 6,427 6,533 8,162 9,125 6,583 6,424 7,015 7,012 Sales and marketing expense 13,202 17,063 16,733 18,998 17,648 21,983 18,289 16,825 13,948 15,205 14,161 Research and development expense 6,218 8,934 11,141 11,811 12,291 13,581 13,762 14,801 11,564 14,847 12,430 General and administration expense 12,175 16,888 20,073 17,085 20,425 20,984 19,972 20,065 13,070 16,276 15,561 Stock-based compensation expense (7,248) (13,337) (16,830) (12,849) (13,585) (12,842) (5,767) (12,492) (7,968) (11,739) (10,249) Restructuring and reduction of force - - (713) - - (958) (7,530) 347 - - - Adjusted EBITDA ($3,944) ($5,666) ($5,169) $2,560 ($10,537) ($15,785) ($12,708) ($6,137) ($6,091) ($4,073) $3,946
Reconciliation of GAAP net (loss) income to non-GAAP net income (loss) and non-GAAP net income (loss) per share Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net (loss) income ($23,966) $6,267 ($33,866) ($86,985) Plus: Stock-based compensation expense 10,249 5,767 29,956 32,194 Foreign currency (gain) loss 2,399 4,673 (379) 10,882 Acquisition and integration (benefit) cost (78) (1,867) 8,146 (4,269) Amortization of acquired intangibles 3,433 7,207 10,331 21,560 Loss (gain) in fair value of contingent consideration 8,281 (46,126) (15,045) (114,144) Goodwill impairment - - - 83,149 Restructuring and reduction of force - 7,530 - 8,488 Income tax benefit - - - (1,446) Non-GAAP net income (loss) $318 ($16,549) ($857) ($50,571) Weighted-average number of shares of common stock used in computing non-GAAP net income (loss) per share: Weighted-average common shares outstanding, diluted 37,982 33,269 35,502 33,455 Non-GAAP net income (loss) per share attributable to common stockholders, diluted $0.01 ($0.50) ($0.02) ($1.51)
Reconciliation of forecasted GAAP revenue to billings Q4 2023 Guidance Revenue $82.0 - $90.0 Plus: Consumer Incentives $40.0 - $43.0 Billings $122.0 - $133.0
Definitions Adjusted contribution: We define adjusted contribution measures of the degree by which revenue generated from our marketers exceeds the cost to obtain the purchase data and the digital advertising space from our partners. Adjusted contribution demonstrates how incremental marketing on our platform 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 exclusive of deferred implementation costs, which is a non-cash cost. Adjusted contribution does not take into account all costs associated with generating revenue from advertising campaigns, including sales and marketing expenses, research and development expenses, 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. Adjusted EBITDA: We define adjusted EBITDA as our Net (loss) income before income taxes; interest expense, net; depreciation and amortization expense; stock-based compensation expense; foreign currency gain (loss); deferred implementation costs; restructuring and reduction of force; acquisition and integration cost (benefit); Impairment of goodwill and intangible assets; and gain (loss) in fair value of contingent considerations. Cardlytics ARPU: We define ARPU as the total Cardlytics platform revenue generated in the applicable period calculated in accordance with GAAP, divided by the average number of MAUs in the applicable period. Billings: Billings represents the gross amount billed to customers and marketers for advertising campaigns in order to generate revenue. Cardlytics platform billings is recognized gross of both Consumer Incentives and Partner Share. Cardlytics platform GAAP revenue is recognized net of Consumer Incentives and gross of Partner Share. Bridg platform billings is the same as Bridg platform GAAP revenue. Cardlytics MAUs: We define MAUs as targetable customers that have logged in and visited online or mobile applications containing offers, opened an email containing an offer, or redeemed an offer from the Cardlytics platform during a monthly period. We then calculate a monthly average of these MAUs for the periods presented. We believe that MAUs is an indicator of the Cardlytics platform's ability to drive engagement and is reflective of the marketing base that we offer to marketers. As of September 30, 2023, we are reporting only the total number of unique targetable customers within each FI, which we have applied to our reporting for current and prior periods. Non-GAAP net loss: We define non-GAAP net loss as our net loss before stock-based compensation expense; foreign currency loss (gain); acquisition and integration (benefit) cost; amortization of acquired intangibles; and Loss (gain) in fair value of contingent considerations. Notably, any impacts related to minimum Partner Share commitments in connection with agreements with certain Partners are not added back to net loss in order to calculate adjusted EBITDA. Non-GAAP net loss per share: We define non-GAAP net loss per share as non-GAAP net loss divided by GAAP weighted-average common shares outstanding, diluted.
Industry and account definitions Segment Segment Constituents Grocery & Gas Convenience, Grocery Other Business Services, Financial Institutions, Gyms/Fitness, Home/ Maintenance, Online Education/ Distance Learning, Other Services, Salon/Spa Restaurant Banquet/Caterers, Bars/Night Clubs/Taverns, Fast Food/ Quick Serve, Full Service Restaurants, Quick Serve Light Fares Retail Accessories, Apparel, Auto Services and Products, Beauty Products/Cosmetics, Books/ Magazine, Child/ Infant Care, Drug Store/Pharmacy, General/Multi-Line, Home & Garden, Office Supplies, Other Retail, Pets, Shoes & Athletic Footwear, Specialty Gifts, Sporting & Outdoor Goods Travel & Entertainment Airlines, Car Rental, Cruise Lines, Gas Stations, Hotels/Lodging, Other Travel, Parking Services, Personal Transportation, Tour Operators/Agencies, Travel Aggregators and Agencies DTC Direct to consumer
