Cardlytics (NasdaqGM:CDLX) Q4 2025 Earnings call March 04, 2026 05:00 PM ET Company ParticipantsAmit Gupta - CEODavid Evans - CFONick Lynton - Chief Legal and Privacy OfficerConference Call ParticipantsJacob Stephan - Senior Research AnalystJason Kreyer - Senior Research AnalystKyle Peterson - Senior AnalystRobert Coolbrith - Internet Equity Research AnalystOperatorEvening, ladies and gentlemen, welcome to the Cardlytics Fourth Quarter Fiscal Year 2025 Earnings Conference Call. At this time, all lines are i ...

Financial Data and Key Metrics Changes - For fiscal year 2025, total billings were $385 million, down 13.3% year-over-year, and revenue was $233 million, down 16.2% year-over-year [15] - Annual Adjusted EBITDA was $10.1 million, up $7.5 million year-over-year, marking the third consecutive year of positive Adjusted EBITDA [15] - In Q4, total billings were $94.1 million, a 19% decrease year-over-year, and revenue was $56.1 million, a 24.2% decrease year-over-year [16] - U.S. revenue, excluding Bridg, was $40.1 million, decreasing 33.5% year-over-year, while U.K. revenue was $10.8 million, increasing 35.1% year-over-year [17] Business Line Data and Key Metrics Changes - The U.K. business saw revenue surge over 35% year-over-year, driven by deepened engagement with advertisers and increased supply [9] - The grocery and convenience sectors showed particular strength, with a leading grocery retailer increasing spend significantly [8] - The fashion and luxury segment increased spend by 70% quarter-over-quarter, reflecting deeper investment from top consumer brands [9] Market Data and Key Metrics Changes - The company experienced pressures in the travel and entertainment and subscription services sectors, while other areas showed growth [9] - The U.K. business accounted for more than 40% of the company's revenue for the quarter, highlighting its strong performance [10] Company Strategy and Development Direction - The company aims to expand its reach by deepening collaborations with bank partners and integrating new publishers into its network [4] - Strategic priorities include driving revenue growth for advertisers through advanced algorithmic capabilities and investing in technology to enhance operational efficiency [4] - The company is focused on long-term growth despite near-term challenges, including the loss of Bank of America as a partner [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute and grow sequentially, despite the challenges posed by the loss of Bank of America and content restrictions from other partners [21] - The company is optimistic about its product relevance and differentiation in the marketplace, with expectations for continued growth in the U.K. [5][22] Other Important Information - The company is transitioning from its legacy data warehouse to a unified data and AI platform, which has improved operational efficiency and reduced costs [11] - The Bridg business is being sold to PAR Technology, which is expected to strengthen the company's balance sheet and improve its path to self-sustainability [14] Q&A Session Summary Question: What factors contributed to the decision to sunset the BofA relationship? - Management indicated that the decision was due to misalignment in program structure, economics, and consumer engagement [41] Question: Can you provide more detail on the potential for adding new card portfolios? - Management confirmed ongoing discussions with bank partners to onboard new segments or portfolios that could increase MQUs and deepen relationships [44] Question: How should we think about cash flow and the return to positive free cash flow? - Management expressed confidence in returning to positive adjusted EBITDA as early as the second quarter, aided by reduced operating expenses from the Bridg exit [54]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company's top-line billings were $385 million, down 13.3% year-over-year, and revenue was $233 million, down 16.2% year-over-year [16] - In Q4, total billings were $94.1 million, a 19% decrease year-over-year, and revenue was $56.1 million, a 24.2% decrease year-over-year [17] - U.S. revenue, excluding Bridg, was $40.1 million, decreasing 33.5% year-over-year, while U.K. revenue was $10.8 million, increasing 35.1% year-over-year [18] - Adjusted EBITDA for the year was $10.1 million, up $7.5 million year-over-year, and Q4 Adjusted EBITDA was positive $8.5 million, an increase of $2.1 million [16][19] Business Line Data and Key Metrics Changes - The company experienced a 70% quarter-over-quarter increase in spend from advertisers in the fashion and luxury segment [10] - The grocery and convenience sectors showed particular strength, with a leading grocery retailer increasing spend significantly [9] - The U.K. business saw Q4 revenue surge over 35% year-over-year, driven by deepened engagement with advertisers [10] Market Data and Key Metrics Changes - The company reported 227 million Monthly Active Users (MAUs) in Q4, an increase of 18% driven by new financial institution partners [20] - Average Contribution Per User (ACPU) was $0.12, down 35% year-over-year due to content restrictions [20] Company Strategy and Development Direction - The company aims to expand its reach by deepening collaborations with bank partners and integrating new publishers into its network [4] - A focus on driving revenue growth for advertisers through advanced algorithmic capabilities and investing in technology to enhance operational efficiency is emphasized [4][12] - The company is transitioning from legacy systems to a unified data and AI platform, which is expected to improve performance and reduce costs [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute and grow sequentially despite near-term challenges, including the loss of Bank of America as a partner [5][21] - The company anticipates a foundational level setting in Q1 2026, with expectations for sequential growth driven by new strategies with banks and advertisers [21] - Management highlighted the importance of operational efficiency and maintaining a focus on core competencies to drive long-term growth [24] Other Important Information - The company concluded its relationship with Bank of America due to misalignment in program structure and future direction [6][14] - The Bridg business is being sold to PAR Technology, which is expected to strengthen the company's balance sheet and improve its path to self-sustainability [14][15] Q&A Session Summary Question: Impact of Bank of America on Q1 guidance - Management indicated that a large majority of the expected decline in Q1 guidance is attributed to the loss of Bank of America, with some impact from content restrictions [27][29] Question: Growth in consumer staples - Management confirmed that grocery stores are a growing customer base, with expectations for similar growth in other consumer staples due to omni-channel capabilities [34][35] Question: Decision behind ending the BofA relationship - Management stated that the decision was based on misalignment in economics and consumer engagement, but acknowledged the tech benefits gained from the termination [43][45] Question: Future of SKU level targeting - Management indicated that SKU level offers are on hold for now due to the exit of the Bridg platform, which was essential for that capability [73][74]

Financial Performance - Cardlytics reported a revenue of $233.3 million for the year ended December 31, 2025, a decrease of 16.2% from $278.3 million in 2024[252]. - Billings for Cardlytics were $385.0 million in 2025, down 13.1% from $443.8 million in 2024[252]. - Adjusted Contribution decreased to $130.3 million in 2025 from $150.5 million in 2024, reflecting a decline of 13.4%[252]. - The net loss for Cardlytics was $103.5 million in 2025, compared to a net loss of $189.3 million in 2024, showing an improvement[252]. - Adjusted Net Loss for 2025 was $17.3 million, compared to $18.9 million in 2024, with Adjusted Net Loss per share improving from $(0.39) to $(0.33)[267]. - Free Cash Flow for 2025 was $(6.5) million, an improvement from $(28.1) million in 2024, with net cash provided by operating activities at $9.3 million[268]. - Adjusted EBITDA for 2025 was $10.1 million, an increase from $2.5 million in 2024, while the net loss decreased from $189.3 million in 2024 to $103.5 million in 2025[266]. User Metrics - Cardlytics Monthly Qualified Users (MQUs) increased by 33.7 million to 224.2 million in 2025, an 18% growth compared to 2024[247]. - Cardlytics Adjusted Contribution per User (ACPU) fell to $0.50 in 2025, a decrease of 25% from $0.67 in 2024[250]. - The company has applied changes to its reporting metrics, ceasing to report Monthly Active Users as of January 1, 2025, due to data limitations from new bank partners[246]. Cost and Expense Management - Sales and marketing expenses are expected to increase in absolute dollars as the company hires new sales representatives and invests in brand enhancement[273]. - Research and development expenses are anticipated to rise as the company focuses on creating new solutions and improving existing ones[274]. - The company expects delivery costs to increase in absolute dollars as technology migrates to the cloud, although they anticipate a decline in delivery costs as a percentage of revenue over time[272]. - Partner Share and other third-party costs decreased by $24.8 million or 19%, from $127.8 million in 2024 to $102.9 million in 2025, representing 44% of revenue[291]. - Total delivery costs decreased by $3.9 million or 13%, from $29.6 million in 2024 to $25.7 million in 2025[292]. - Sales and marketing expenses decreased by $13.2 million or 25%, from $52.6 million in 2024 to $39.5 million in 2025[293]. - Research and development expenses decreased by $9.8 million or 20%, from $49.6 million in 2024 to $39.8 million in 2025[294]. - General and administrative expenses decreased by $9.2 million or 16%, from $56.5 million in 2024 to $47.3 million in 2025[295]. - Stock-based compensation expense decreased by $12.2 million or 30%, from $40.4 million in 2024 to $28.1 million in 2025[297]. Cash Flow and Liquidity - Cardlytics generated $9.3 million in net cash from operating activities in 2025, a significant recovery from a cash outflow of $8.8 million in 2024[252]. - Cash and cash equivalents decreased to $48.7 million in 2025 from $65.6 million in 2024, while working capital increased to $58.9 million from $29.0 million[306]. - Operating activities generated $9.3 million in cash in 2025, despite a net loss of $103.5 million, with $107.1 million attributed to non-cash charges[328]. - Cash, cash equivalents, and restricted cash at the end of 2025 were $48.7 million, down from $65.6 million at the beginning of the year[325]. - Investing activities used $15.3 million in cash in 2025, primarily for technology hardware purchases and internal-use software development costs[331]. - Financing activities resulted in a cash outflow of $11.1 million in 2025, including a $62.0 million principal payment of debt and $5.0 million related to a settlement agreement[333]. Impairment and Goodwill - The impairment of goodwill and intangible assets in 2025 was $49.1 million related to the Cardlytics platform, a decrease of 55% from $131.6 million in 2024[300]. - Goodwill impairment of $49.1 million was recognized for the Cardlytics platform in the U.S. during the three months ended September 30, 2025, due to a decline in fair value[338]. - The carrying value of the Bridg platform exceeded its fair value, resulting in a goodwill impairment of $70.5 million as of October 1, 2023[338]. - An impairment of $9.7 million was recognized for internal-use software development costs associated with the Cardlytics asset group during the year ended December 31, 2025[344]. Strategic Initiatives - The company is in the process of selling its Bridg platform to PAR Technology Corporation for a total consideration of up to $30 million in PAR Common Stock[240]. - The sale of the Bridg platform is subject to customary closing conditions, including the absence of material adverse effects[242]. - The company expects changes in revenue and operating expenses following the pending sale of its Bridg business[285]. - The company entered into an equity distribution agreement allowing for the sale of up to $50.0 million in common stock through "at-the-market" offerings[312]. - The company issued $172.5 million in principal amount of 4.25% Convertible Senior Notes due in 2029, with net proceeds of $166.8 million[313]. Market and Economic Conditions - The decline in fair value for the Cardlytics platform and Bridg platform was attributed to a sustained decline in stock price due to economic slowdown and decreased consumer spending[339]. - The company continues to monitor macroeconomic conditions, which could impact future impairment testing results[342]. - The discount rate used in fair value assessments increased due to a rise in the equity risk premium, partially offset by a decrease in the risk-free rate[335].

"It has been reinvigorating to rejoin the Cardlytics team," said David Evans, CFO of Cardlytics. I continue to believe in the strength and uniqueness of our platform. Leading up to this quarter, the business made several necessary decisions to right size our balance sheet to position the business for self-sustainability going forward. As such, we're taking a very focused, disciplined approach to execution and cost management in 2026" Fourth Quarter 2025 Financial Results Fiscal Year 2025 Financial Results E ...

Core Viewpoint - PAR Technology Corporation has announced the acquisition of Bridg, a shopper intelligence platform, for a purchase price of $27.5 million, with potential adjustments bringing the total to a maximum of $30 million [1] Group 1: Acquisition Details - The acquisition involves substantially all assets of Bridg, which is a division of Cardlytics, Inc. [1] - The structured purchase price is set at $27.5 million, with adjustments possible that could increase the total to $30 million [1]

Core Viewpoint - Cardlytics (CDLX) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Company Performance and Investor Sentiment - The upgrade for Cardlytics indicates an improvement in the company's underlying business, which is expected to drive the stock price higher as investors recognize this positive trend [5][10]. - Over the past three months, the Zacks Consensus Estimate for Cardlytics has increased by 1000%, reflecting a significant positive revision in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Cardlytics' upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Core Viewpoint - Cardlytics Inc. has appointed David Evans as the new Chief Financial Officer, effective January 12, 2026, marking his return to the company in a key leadership role [1] Company Summary - David Evans previously held several executive positions at Cardlytics, including Chief Financial Officer and Chief Administrative Officer [1] - As the Chief Financial Officer, Evans will be responsible for overseeing the finance, accounting, and investor relations functions of Cardlytics [1] - The appointment comes as the company continues to execute its long-term strategies [1]

Core Viewpoint - Cardlytics (CDLX) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive shift in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system reflects changes in a company's earnings potential, which is strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Cardlytics Earnings Outlook - The recent upgrade for Cardlytics suggests an improvement in its underlying business, which is expected to drive the stock price higher as investors recognize this trend [5][10]. - For the fiscal year ending December 2025, Cardlytics is projected to earn -$0.07 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 63.2% over the past three months [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7][9]. - Cardlytics' upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

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