Core Viewpoint - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - AGM Group Holdings Inc. (AGMH) increased by 185% to $6.36 [3] - AlphaVest Acquisition Corp (ATMV) rose by 77% to $26.80 [3] - Brera Holdings PLC (BREA) saw a 20% increase to $30.00 [3] - Asset Entities Inc. (ASST) gained 18% to $4.54 [3] - 22nd Century Group, Inc. (XXII) also increased by 18% to $2.08 [3] - Millennium Group International Holdings Limited (MGIH) rose by 16% to $2.84 [3] - Robo.ai Inc. (AIIO) increased by 11% to $2.17 [3] - Butterfly Network, Inc. (BFLY) saw a 10% rise to $2.10 [3] - GrafTech International Ltd. (EAF) increased by 9% to $13.91 [3] - Cardlytics, Inc. (CDLX) rose by 8% to $2.99 [3] Premarket Losers - ECD Automotive Design, Inc. (ECDA) decreased by 14% to $3.70 [4] - Champions Oncology, Inc. (CSBR) fell by 8% to $6.11 [4] - Beam Global (BEEM) saw an 8% decline to $2.79 [4] - Fathom Holdings Inc. (FTHM) decreased by 8% to $2.19 [4] - Ventyx Biosciences, Inc. (VTYX) fell by 7% to $2.20 [4] - SciSparc Ltd. (SPRC) decreased by 6% to $4.35 [4] - Lightwave Logic, Inc. (LWLG) fell by 6% to $3.45 [4] - Jasper Therapeutics, Inc. (JSPR) decreased by 6% to $2.43 [4] - StableX Technologies, Inc. (SBLX) fell by 5% to $5.67 [4] - Galecto, Inc. (GLTO) decreased by 5% to $2.70 [4]

Core Insights - Cardlytics reported a quarterly loss of $0.13 per share, better than the Zacks Consensus Estimate of a loss of $0.16, and an improvement from a loss of $0.15 per share a year ago, resulting in an earnings surprise of +18.75% [1] - The company generated revenues of $63.25 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.86% and down from $69.64 million year-over-year [2] - Cardlytics shares have declined approximately 50.4% year-to-date, contrasting with the S&P 500's gain of 7.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.09 on revenues of $70.3 million, and for the current fiscal year, it is -$0.46 on revenues of $275.2 million [7] - The estimate revisions trend for Cardlytics was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Technology Services industry, to which Cardlytics belongs, is currently ranked in the top 41% of over 250 Zacks industries, suggesting that companies in the top half tend to outperform those in the bottom half by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - In Q2 2025, total billings were $104 million, a 5.7% decrease year over year [25] - Revenue decreased by 9.2% to $63.2 million, driven by a decrease in billings [26] - Adjusted EBITDA was positive $2.7 million, an increase of $5 million year over year [29] - Operating cash flow was positive $1.2 million, while free cash flow was negative $3.4 million, which was $3 million less than the prior year [29] Business Line Data and Key Metrics Changes - U.S. revenue, excluding Bridge, decreased by 13% due to lower billings and pricing pressure [27] - U.K. revenue grew by 29%, driven by higher billings and increased supply [27] - Bridge revenue decreased by 8% due to the loss of a major account in previous quarters [27] Market Data and Key Metrics Changes - The U.K. business showed strong growth with the highest billings quarter in history, driven by categories like everyday spend and subscription services [13] - Advertiser churn was mostly concentrated in mid to small-sized brands, which have been more susceptible to budget reductions [14] Company Strategy and Development Direction - The company is focused on increasing and diversifying its supply by growing partnerships with financial institutions and merchants from other verticals [5] - A shift to engagement-based pricing is being implemented, which is expected to help advertisers see the platform as a performance media ad format [10] - The company is committed to ensuring sustainable business and a path to profitability despite challenges [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant limitations due to content restrictions imposed by the largest financial institution partner, which could impact user engagement and advertiser effectiveness [9] - The company is optimistic about the potential for growth in the U.K. market and is focused on reinforcing relationships with top advertisers [15][36] - Management emphasized the importance of diversifying supply and demand to mitigate risks associated with the largest FI partner's restrictions [33] Other Important Information - The company ended Q2 with $46.7 million in cash and cash equivalents and drew $50 million on its line of credit [29] - Monthly qualified users (MQUs) increased by 19% to 224.5 million, driven by the ramp-up of new FI partners [30] Q&A Session Summary Question: Can you elaborate on the Q3 outlook regarding the billings decrease and content restrictions? - Management indicated that the content restrictions are broader than anticipated and are impacting billings significantly [42][43] Question: What is the status of the line of credit drawn? - The $50 million drawn from the line of credit is intended to repay notes due in September, maintaining a comfortable cash balance [44][45] Question: How is the company leveraging AI throughout the platform? - The company is exploring AI applications in development, analytics, and customer insights, although some initiatives may slow down due to recent changes [56][57] Question: What traction has been seen with local offers? - The company has invested in geo-targeted offers, leading to increased traction in everyday spend and QSRs [60][61] Question: Can you discuss the impact of MQUs and the nature of the restrictions? - The broader set of bank partners represents over 50% of MQUs, and the restrictions are limiting brands' ability to utilize the platform effectively [68][70]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents Cardlytics' unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including balance sheets, operations, comprehensive loss, equity, cash flows, and notes [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Presents unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (Amounts in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | **Assets** | | | | Cash and cash equivalents | $46,745 | $65,594 | | Accounts receivable and contract assets, net | $93,189 | $103,252 | | Total current assets | $150,400 | $177,983 | | Total assets | $361,134 | $392,711 | | **Liabilities** | | | | Partner Share liability | $27,196 | $32,479 | | Consumer Incentive liability | $35,996 | $45,513 | | Total current liabilities | $129,149 | $148,955 | | Convertible senior notes, net | $168,289 | $167,729 | | Total liabilities | $302,428 | $322,718 | | **Stockholders' Equity** | | | | Total stockholders' equity | $58,706 | $69,993 | [Condensed Consolidated Statements of Operations (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) Presents unaudited condensed consolidated statements of operations for Q2 and H1 2025 and 2024 Condensed Consolidated Statements of Operations (Amounts in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $63,249 | $69,636 | $125,147 | $137,244 | | Total costs and expenses | $76,038 | $85,448 | $152,015 | $175,882 | | Operating Loss | $(12,789) | $(15,812) | $(26,868) | $(38,638) | | Total other income | $3,506 | $11,555 | $4,303 | $10,106 | | Net Loss | $(9,283) | $(4,257) | $(22,565) | $(28,532) | | Net Loss per share, basic and diluted | $(0.18) | $(0.09) | $(0.43) | $(0.62) | | Weighted-average common shares outstanding, basic and diluted | 52,750 | 49,056 | 52,309 | 46,168 | [Condensed Consolidated Statements of Comprehensive Loss (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20(Unaudited)) Presents unaudited condensed consolidated statements of comprehensive loss for Q2 and H1 2025 and 2024 Condensed Consolidated Statements of Comprehensive Loss (Amounts in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Loss | $(9,283) | $(4,257) | $(22,565) | $(28,532) | | Foreign currency translation adjustments | $(4,874) | $(94) | $(7,229) | $486 | | Total Comprehensive Loss | $(14,157) | $(4,351) | $(29,794) | $(28,046) | [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20(Unaudited)) Presents unaudited condensed consolidated statements of stockholders' equity for H1 2025 and 2024 Changes in Stockholders' Equity (Six Months Ended June 30, 2025, Amounts in thousands) | Metric | Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total | | :----------------------------------- | :----- | :------------------ | :------------------------- | :------------------------------------------ | :------------------ | :------ | | Balance – December 31, 2024 | 51,257 | $10 | $1,366,958 | $3,601 | $(1,300,576) | $69,993 | | Stock-based compensation | — | — | $18,060 | — | — | $18,060 | | Issuance of common stock (2018 ESPP) | 263 | — | $447 | — | — | $447 | | Other comprehensive loss | — | — | — | $(7,229) | — | $(7,229) | | Net Loss | — | — | — | — | $(22,565) | $(22,565) | | Balance – June 30, 2025 | 52,994 | $10 | $1,385,465 | $(3,628) | $(1,323,141) | $58,706 | Changes in Stockholders' Equity (Six Months Ended June 30, 2024, Amounts in thousands) | Metric | Shares | Common Stock Amount | Additional Paid-In Capital | Other Comprehensive Income | Accumulated Deficit | Total | | :----------------------------------- | :----- | :------------------ | :------------------------- | :------------------------- | :------------------ | :------ | | Balance – December 31, 2023 | 39,728 | $9 | $1,243,594 | $2,467 | $(1,111,272) | $134,798 | | Stock-based compensation | — | — | $26,099 | — | — | $26,099 | | Issuance of common stock (Settlement Agreement) | 3,592 | — | $27,451 | — | — | $27,451 | | Issuance of common stock (ATM Offering Program) | 3,908 | — | $48,151 | — | — | $48,151 | | Other comprehensive income | — | — | — | $486 | — | $486 | | Net Loss | — | — | — | — | $(28,532) | $(28,532) | | Balance – June 30, 2024 | 49,402 | $9 | $1,346,876 | $2,953 | $(1,139,804) | $210,034 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Presents unaudited condensed consolidated statements of cash flows for H1 2025 and 2024 Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, Amounts in thousands) | Activity | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | Net cash used in operating activities | $(5,481) | $(13,188) | | Net cash used in investing activities | $(8,561) | $(9,403) | | Net cash (used in) provided by financing activities | $(5,093) | $2,034 | | Effect of exchange rates on cash and cash equivalents | $286 | $(25) | | Net decrease in cash and cash equivalents | $(18,849) | $(20,582) | | Cash and cash equivalents — End of period | $46,745 | $71,248 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed notes to the unaudited condensed consolidated financial statements [1. OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION](index=11&type=section&id=1.%20OVERVIEW%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) Cardlytics operates a commerce media platform, with recent corporate events including a new equity plan and debt issuance - Cardlytics operates a commerce media platform comprising the Cardlytics platform (financial media network with FI partners) and the Bridg platform (identity resolution platform with merchant data partners)[25](index=25&type=chunk) - The **2025 Equity Incentive Plan** was approved, allowing for the issuance of up to **15,722,908 shares** of common stock[29](index=29&type=chunk) - A reduction in force during Q2 2025 incurred approximately **$1.5 million** in one-time costs[30](index=30&type=chunk) - The Dosh app was decommissioned on February 28, 2025, resulting in a **$5.2 million** gain on disposal or divestiture[34](index=34&type=chunk) - The company issued **$172.5 million** in 4.25% Convertible Senior Notes due 2029 on April 1, 2024[31](index=31&type=chunk) - Contingent consideration for the Bridg acquisition was settled, with the final cash payments made in January and June 2025[38](index=38&type=chunk)[99](index=99&type=chunk) [2. SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS](index=13&type=section&id=2.%20SIGNIFICANT%20ACCOUNTING%20POLICIES%20AND%20RECENT%20ACCOUNTING%20STANDARDS) Accounting policies are consistent, with ASU 2023-07 adopted and future ASUs under assessment - No changes to significant accounting policies other than the adoption of ASU 2023-07, Segment Reporting, which required additional disclosure in the Segment Footnote[42](index=42&type=chunk)[45](index=45&type=chunk) - Assessing the impact of ASU 2024-03 (Disaggregation of Income Statement Expenses) effective for fiscal years starting after December 15, 2026[43](index=43&type=chunk) - Assessing the impact of ASU 2023-09 (Improvement to Income Tax Disclosures) effective for annual periods beginning with fiscal year ending December 31, 2025[44](index=44&type=chunk) [3. GOODWILL AND ACQUIRED INTANGIBLES](index=13&type=section&id=3.%20GOODWILL%20AND%20ACQUIRED%20INTANGIBLES) Goodwill unchanged with no impairment; acquired intangibles net carrying amount was $8.462 million - Goodwill carrying amounts remained unchanged at **$159.429 million** since December 31, 2024, with no impairment triggering events identified as of June 30, 2025[47](index=47&type=chunk) - The Cardlytics platform in the U.S. is susceptible to future impairment risk due to potential changes in assumptions or market conditions[47](index=47&type=chunk) Acquired Intangible Assets Subject to Amortization (Amounts in thousands) | Asset Type | Gross Carrying Amount | Accumulated Amortization | Net | Weighted-Average Remaining Useful Life (in years) | | :----------------------- | :-------------------- | :----------------------- | :---- | :---------------------------------------- | | Developed technology | $49,873 | $(43,249) | $6,624 | 2.0 | | Merchant relationships | $21,930 | $(20,092) | $1,838 | 0.9 | | Total | $71,803 | $(63,341) | $8,462 | | Expected Future Amortization Expense (Amounts in thousands) | Period | Amount | | :----------------------- | :----- | | 2025 (remaining six months) | $2,910 | | 2026 | $4,348 | | 2027 | $1,204 | | Total | $8,462 | [4. REVENUE](index=15&type=section&id=4.%20REVENUE) Cardlytics and Bridg platform revenues decreased, with $25.1 million in remaining performance obligations Cardlytics Platform Revenue by Pricing Model (Amounts in thousands) | Pricing Model | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Served based pricing | $21,397 | $40,506 | $46,308 | $80,537 | | Engagement based pricing | $35,893 | $21,447 | $66,572 | $42,954 | | Other Revenue | $751 | $2,049 | $1,596 | $2,744 | | Total Cardlytics Platform Revenue | $58,041 | $64,002 | $114,476 | $126,235 | Bridg Platform Revenue (Amounts in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Bridg Platform Revenue | $5,208 | $5,634 | $10,671 | $11,009 | - As of June 30, 2025, the company had **$25.1 million** of remaining performance obligations, with **$11.9 million** expected to be recognized in the next twelve months[57](index=57&type=chunk) [5. LEASES](index=17&type=section&id=5.%20LEASES) The company holds operating and finance leases, with total lease liabilities of $6.114 million Lease Assets and Liabilities (Amounts in thousands) | Lease Type | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Operating lease assets | $4,633 | $6,341 | | Operating lease liabilities, current | $1,199 | $2,025 | | Operating lease liabilities, long-term | $4,915 | $6,034 | | Total lease liabilities | $6,114 | $8,059 | [6. DEBT AND FINANCING ARRANGEMENTS](index=17&type=section&id=6.%20DEBT%20AND%20FINANCING%20ARRANGEMENTS) Total debt was $214.298 million, primarily from 2024 Convertible Senior Notes, with the 2018 Line of Credit extended Total Debt (Amounts in thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | 2024 Convertible Senior Notes, net | $168,289 | $167,729 | | 2020 Convertible Senior Notes, net | $46,009 | $45,863 | | Total debt | $214,298 | $213,592 | - The **2024 Convertible Senior Notes**, with a principal amount of **$172.5 million** and a 4.25% interest rate, were issued on April 1, 2024, and mature on April 1, 2029[60](index=60&type=chunk)[61](index=61&type=chunk) - Approximately **$183.9 million** of the 2020 Convertible Senior Notes were repurchased in April 2024, resulting in a **$13.0 million** gain on debt extinguishment; the remaining **$46.1 million** is due September 15, 2025[66](index=66&type=chunk)[193](index=193&type=chunk) - The 2018 Loan Facility was amended in April 2025, extending its maturity date to April 15, 2028; as of June 30, 2025, **$60.0 million** of unused available borrowings remained, with **$50.0 million** drawn on August 5, 2025[77](index=77&type=chunk)[78](index=78&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk) [7. STOCK-BASED COMPENSATION](index=20&type=section&id=7.%20STOCK-BASED%20COMPENSATION) Stock-based compensation decreased due to forfeitures; new equity plans approved and RSUs granted Total Stock-Based Compensation Expense (Amounts in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total stock-based compensation expense | $7,501 | $12,644 | $16,195 | $23,629 | | Change YoY (3 months) | $(5,143) | | | | | Change YoY (6 months) | | | $(7,434) | | - The **2025 Equity Incentive Plan** was approved, reserving **15,722,908 shares** for issuance; as of June 30, 2025, **8,972,500 shares** were reserved under the 2025 Plan[79](index=79&type=chunk)[80](index=80&type=chunk) - The 2022 Inducement Plan was amended in November 2024 to reserve an additional **2,500,000 shares**, with **2,545,749 shares** available as of June 30, 2025[81](index=81&type=chunk) - During the six months ended June 30, 2025, **4,969,380 RSUs** were granted; unamortized stock-based compensation expense related to RSUs totaled **$26.740 million** as of June 30, 2025[83](index=83&type=chunk) [8. FAIR VALUE MEASUREMENTS](index=23&type=section&id=8.%20FAIR%20VALUE%20MEASUREMENTS) Fair value measurements are categorized, with Bridg acquisition contingent consideration fully settled - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[96](index=96&type=chunk) Cash Equivalents at Fair Value (Amounts in thousands) | Asset Type | June 30, 2025 | December 31, 2024 | | :----------------- | :------------ | :------------------ | | Money market funds | $24,499 | $32,332 | | US Treasury Bills | $2,993 | $13,450 | | Total | $27,492 | $45,782 | Reconciliation of Contingent Consideration Fair Value (Amounts in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Beginning balance | $— | $43,560 | | Decrease due to earnout settlement | $— | $(45,114) | | Change in fair value of contingent consideration | $— | $5,817 | | Reclassification due to fixed payments | $— | $(4,263) | | Ending balance | $— | $— | - Contingent consideration for the Bridg acquisition was fully settled by June 30, 2025, with no further payments due[99](index=99&type=chunk) [9. COMMITMENTS AND CONTINGENCIES](index=24&type=section&id=9.%20COMMITMENTS%20AND%20CONTINGENCIES) Commitments include leases, notes, and cloud hosting; no material adverse legal proceedings are expected - The company has non-cancelable operating lease agreements[100](index=100&type=chunk) - Commitments include the 2020 Convertible Senior Notes (**$46.1 million** due September 2025) and 2024 Convertible Senior Notes (**$172.5 million** due April 2029)[100](index=100&type=chunk) - A cloud hosting agreement renewed in January 2024 guarantees aggregate spend of **$17.0 million** each year over a three-year period[101](index=101&type=chunk) - No current legal proceedings are expected to have a material adverse effect on the business[103](index=103&type=chunk) [10. EARNINGS PER SHARE](index=24&type=section&id=10.%20EARNINGS%20PER%20SHARE) Diluted net loss per share equals basic due to anti-dilutive effects of potentially dilutive items - Diluted net loss per share equals basic net loss per share due to anti-dilutive effects of potentially dilutive items[104](index=104&type=chunk) Anti-Dilutive Securities (Amounts in thousands) | Security Type | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------ | | Common stock options | 49 | 58 | | 2020 Convertible Senior Notes | 541 | 541 | | 2024 Convertible Senior Notes | 9,573 | 9,573 | | Unvested restricted stock units | 7,265 | 5,997 | | Common stock issuable pursuant to the 2018 ESPP | 232 | 69 | [11. SEGMENTS](index=25&type=section&id=11.%20SEGMENTS) Cardlytics operates two reportable segments, with Adjusted Contribution decreasing and concentration risks with FI partners - Cardlytics has three operating segments: Cardlytics platform in the U.S., Cardlytics platform in the U.K., and the Bridg platform, aggregated into two reportable segments[105](index=105&type=chunk) Adjusted Contribution by Segment (Amounts in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cardlytics platform | $31,320 | $31,137 | $58,651 | $62,958 | | Bridg platform | $4,826 | $5,241 | $9,943 | $10,485 | | Total Adjusted Contribution | $36,146 | $36,378 | $68,594 | $73,443 | Revenue by Geography (Amounts in thousands) | Geography | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $56,086 | $64,086 | $112,475 | $126,620 | | United Kingdom | $7,163 | $5,550 | $12,672 | $10,624 | | Total | $63,249 | $69,636 | $125,147 | $137,244 | - The top three FI partners accounted for over **80% of total Partner Share** in H1 2025 and over **90%** in H1 2024, with the top FI partner representing over **50%**[114](index=114&type=chunk)[231](index=231&type=chunk) - Bank of America issued a non-renewal notice for its agreements, effective July 31, 2025, with a request to continue operations through January 27, 2026[115](index=115&type=chunk)[235](index=235&type=chunk) - The Master Agreement with JPMorgan Chase Bank was extended until November 18, 2028, with reduced Supplier Billings Share starting January 1, 2026[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes Cardlytics' financial condition and results, covering revenue, costs, operating loss, non-GAAP measures, and liquidity [Overview](index=28&type=section&id=Overview) Cardlytics operates a commerce media platform, with revenue reported net of Consumer Incentives and gross of Partner Share - Cardlytics operates a commerce media platform with the Cardlytics platform (financial media network) and Bridg platform (identity resolution)[120](index=120&type=chunk) - Revenue is reported net of Consumer Incentives and gross of Partner Share, with Partner Share costs included in 'Partner Share and other third-party costs'[121](index=121&type=chunk)[122](index=122&type=chunk) - Investments by partners to enhance Consumer Incentives positively impact platform engagement but negatively impact GAAP Revenue[123](index=123&type=chunk) [Non-GAAP Measures and Other Performance Metrics](index=29&type=section&id=Non-GAAP%20Measures%20and%20Other%20Performance%20Metrics) Key metrics include MQUs and ACPU; Billings decreased, while Adjusted EBITDA improved in Q2 2025 Key Performance Metrics (in thousands except ACPU amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cardlytics MQUs | 224,464 | 188,816 | 219,677 | 190,011 | | Cardlytics ACPU | $0.14 | $0.16 | $0.27 | $0.33 | - Cardlytics MQUs increased by **35.6 million (19%)** during the three months ended June 30, 2025, primarily due to organic growth and new FI partners[127](index=127&type=chunk) - Cardlytics ACPU decreased by **$0.02 (13%)** for the three months ended June 30, 2025, and **$0.06 (22%)** for the six months ended June 30, 2025[129](index=129&type=chunk) Key Financial Metrics (Including Non-GAAP Metrics, Amounts in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Billings | $104,048 | $110,389 | $201,627 | $215,606 | | Adjusted Contribution | $36,146 | $36,378 | $68,594 | $73,443 | | Adjusted EBITDA | $2,703 | $(2,285) | $(1,681) | $(2,059) | | Adjusted Net Loss | $(7,008) | $(7,590) | $(18,059) | $(11,644) | | Free Cash Flow | $(3,431) | $(428) | $(14,242) | $(22,793) | - Billings decreased by **$6.3 million (6%)** for the three months and **$14.0 million (6%)** for the six months ended June 30, 2025, primarily due to decreased net sales to existing marketers[140](index=140&type=chunk)[141](index=141&type=chunk) - Billings are expected to decrease in the near term due to restrictions from the largest FI partner on publishing offers for certain marketers[142](index=142&type=chunk) [Components of Results of Operations](index=33&type=section&id=Components%20of%20Results%20of%20Operations) Details revenue and expense components, with expectations for various costs to decline as a percentage of revenue - Revenue from the Cardlytics platform is recognized net of Consumer Incentives and gross of Partner Share, while Bridg platform revenue is from subscriptions and professional services[148](index=148&type=chunk) - Partner Share and other third-party costs are expected to fluctuate with revenue[150](index=150&type=chunk) - Delivery, sales and marketing, research and development, and general and administrative expenses are expected to decline as a percentage of revenue over time[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - Acquisition, integration, and divestiture costs include diligence, legal, advisory, and employee-related expenses[155](index=155&type=chunk) - Changes in contingent consideration reflect fair value adjustments for earnout payments related to the Bridg acquisition[156](index=156&type=chunk) - Loss (gain) on disposal or divestiture includes the gain from decommissioning the Dosh app[157](index=157&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Revenue and Partner Share costs decreased; total costs declined due to workforce reduction; interest expense increased Revenue Performance (Amounts in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Billings | $104,048 | $110,389 | $(6,341) | (6)% | | Consumer Incentives | $40,799 | $40,753 | $46 | —% | | Revenue | $63,249 | $69,636 | $(6,387) | (9)% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Billings | $201,627 | $215,606 | $(13,979) | (6)% | | Consumer Incentives | $76,480 | $78,362 | $(1,882) | (2)% | | Revenue | $125,147 | $137,244 | $(12,097) | (9)% | Partner Share and Other Third-Party Costs (Amounts in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Partner Share and other third-party costs | $27,103 | $33,258 | $(6,155) | (19)% | | Period | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Partner Share and other third-party costs | $56,553 | $63,801 | $(7,248) | (11)% | - Total stock-based compensation expense decreased by **$5.1 million (41%)** in Q2 2025 and **$7.4 million (31%)** in H1 2025, primarily due to higher forfeitures from a reduction in headcount[173](index=173&type=chunk)[174](index=174&type=chunk) - Interest expense, net, increased by **$0.4 million** in Q2 2025 and **$1.4 million** in H1 2025, mainly due to decreased average cash balances and increased interest on 2024 Convertible Senior Notes[182](index=182&type=chunk) - Foreign currency gain was **$5.4 million** in Q2 2025 (vs. **$0.1 million** gain in Q2 2024) and **$8.1 million** in H1 2025 (vs. **$0.5 million** loss in H1 2024), driven by British pound fluctuations[183](index=183&type=chunk)[184](index=184&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Cardlytics had $46.745 million in cash, significant accumulated losses, and sufficient liquidity for the next 12 months Liquidity Summary (Amounts in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :------------------ | | Cash and cash equivalents | $46,745 | $65,594 | | Working capital | $21,251 | $29,028 | | Accounts receivable and contract assets, net | $93,189 | $103,252 | | Unused available borrowings (2018 Line of Credit) | $60,000 | $60,000 | - Accumulated net losses since inception totaled **$1.323 billion** as of June 30, 2025[190](index=190&type=chunk) - The remaining **$46.1 million** principal of the 2020 Convertible Senior Notes is due on September 15, 2025[193](index=193&type=chunk) - A cloud hosting agreement guarantees **$17.0 million** annual spend over three years[194](index=194&type=chunk) - The 2024 Convertible Senior Notes offering generated **$166.8 million** net proceeds, used partly to repurchase 2020 Notes[197](index=197&type=chunk) - On August 5, 2025, **$50.0 million** was borrowed against the 2018 Line of Credit, leaving **$10.0 million** unused[189](index=189&type=chunk)[202](index=202&type=chunk) Cash Flow Summary (Six Months Ended June 30, Amounts in thousands) | Activity | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | Net cash used in operating activities | $(5,481) | $(13,188) | | Net cash used in investing activities | $(8,561) | $(9,403) | | Net cash (used in) provided by financing activities | $(5,093) | $2,034 | [Critical Accounting Estimates](index=44&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates involve capitalized software, equity awards, goodwill impairment, and deferred tax assets, requiring significant judgment - Critical accounting estimates include capitalized software development costs, valuation of equity awards and stock-based compensation, goodwill and acquired intangible asset impairment, and valuation allowance for deferred tax assets[212](index=212&type=chunk) - No material changes to critical accounting policies and estimates from the 2024 Annual Report on Form 10-K, except for the adoption of ASU 2020-06[213](index=213&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Cardlytics is exposed to market risks from interest rate fluctuations on variable-rate debt and foreign exchange rate changes - Market risk exposure is primarily due to fluctuations in interest rates and foreign exchange rates[214](index=214&type=chunk) - The 2018 Line of Credit has a variable interest rate (prime rate plus 0.125%); a **10% increase** in the prime rate could result in a **$0.5 million** annual increase in interest expense if the maximum amount was outstanding[215](index=215&type=chunk) - Foreign currency risk from U.K. operations: a **10% lower British pound value** could decrease H1 2025 revenue by **$1.1 million** and operating expenses by **$0.9 million**[216](index=216&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[217](index=217&type=chunk) - No material changes in internal control over financial reporting occurred during the period[218](index=218&type=chunk) [PART II. OTHER INFORMATION](index=44&type=section&id=PART%20II.%20OTHER%20INFORMATION) Provides additional information including legal proceedings, risk factors, equity sales, other information, and exhibits [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) No current legal proceedings are expected to materially affect Cardlytics' business, though litigation can incur costs and divert management resources - No current legal proceedings are expected to have a material adverse effect on the business, operating results, financial condition, or cash flows[103](index=103&type=chunk)[220](index=220&type=chunk) - Litigation can adversely impact the company due to defense and settlement costs and diversion of management resources[103](index=103&type=chunk)[220](index=220&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) Outlines significant risks to Cardlytics' business, including industry challenges, indebtedness, regulatory matters, and common stock ownership [Risks Related to our Business and Industry](index=45&type=section&id=Risks%20Related%20to%20our%20Business%20and%20Industry) Cardlytics faces risks from economic conditions, volatile operating results, dependence on key FI partners, cybersecurity threats, and a history of losses - Unfavorable global economic conditions, including inflation and tariffs, could limit business growth and negatively affect operating results by reducing marketing spending[222](index=222&type=chunk)[223](index=223&type=chunk) - Quarterly operating results are subject to significant fluctuations due to factors like marketer and partner attraction/retention, revenue mix, FI partner decisions (e.g., increasing Consumer Incentives, restricting offers), and macroeconomic events[225](index=225&type=chunk)[226](index=226&type=chunk) - Revenue decreased **9.2%** and billings decreased **5.7%** during the six months ended June 30, 2025, indicating potential difficulty in sustaining growth[227](index=227&type=chunk) - Substantial dependence on Chase, Bank of America, and Wells Fargo, with top three FI partners accounting for over **80% of Partner Share** in H1 2025[230](index=230&type=chunk)[231](index=231&type=chunk) - Bank of America issued a non-renewal notice for its services agreements, effective July 31, 2025, with a request for continued operations through January 27, 2026[235](index=235&type=chunk) - The largest FI partner has restricted the company from publishing offers for certain marketers, which is expected to significantly decrease marketing budgets for those advertisers[234](index=234&type=chunk) - An actual or perceived breach of security could lead to operational disruptions, reputational harm, loss of revenue, regulatory actions, and litigation[241](index=241&type=chunk)[251](index=251&type=chunk) - The company has a history of losses and may not achieve net income in the future, with an accumulated deficit of **$1.3 billion** as of June 30, 2025[264](index=264&type=chunk) [Risks Related to our Indebtedness](index=60&type=section&id=Risks%20Related%20to%20our%20Indebtedness) Risks include insufficient cash flow to service debt, potential repurchase requirements, debt reclassification, and restrictive covenants from future debt - Servicing debt (2020 and 2024 Convertible Senior Notes, 2018 Line of Credit) requires significant cash flow, which the business may not generate[300](index=300&type=chunk)[301](index=301&type=chunk) - Noteholders can require repurchase upon a fundamental change or conversion, potentially necessitating cash payments that could adversely affect liquidity[302](index=302&type=chunk) - The conditional conversion feature of the Notes, if triggered, could reclassify outstanding principal as a current liability, materially reducing net working capital[304](index=304&type=chunk) - Indebtedness could make the company more vulnerable to economic changes, limit borrowing capacity, and make acquisitions less attractive[303](index=303&type=chunk) [Risks Related to Regulatory and Intellectual Property Matters](index=62&type=section&id=Risks%20Related%20to%20Regulatory%20and%20Intellectual%20Property%20Matters) Subject to evolving data privacy laws, challenges in targeted advertising, and IP protection and infringement risks - Subject to stringent and evolving U.S. and foreign privacy and data security laws (e.g., CCPA, CPRA, EU GDPR, U.K. GDPR), leading to potential regulatory investigations, litigation, fines, and business disruptions[308](index=308&type=chunk)[309](index=309&type=chunk)[312](index=312&type=chunk)[314](index=314&type=chunk) - The regulatory framework for online services and data privacy is rapidly evolving and uncertain, with conflicting obligations across jurisdictions[311](index=311&type=chunk) - Delivering targeted advertising is becoming increasingly difficult due to changes in third-party platforms, new laws, and consumer resistance to data collection[319](index=319&type=chunk) - Failure to protect proprietary technology and intellectual property rights (patents, trademarks, trade secrets) could substantially harm the business[322](index=322&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - Assertions of infringement by third parties, whether correct or not, could result in significant costs, damages, or the need for costly licensing agreements[327](index=327&type=chunk)[329](index=329&type=chunk) - Use of open-source software could require public disclosure of proprietary code or lead to litigation[331](index=331&type=chunk) [Risks Related to Ownership of Our Common Stock](index=67&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Stock price volatility, no dividends, anti-takeover provisions, and future stock sales pose risks to investors - The market price of common stock has been highly volatile, ranging from **$1.22 to $161.47** since IPO, and is likely to continue fluctuating[334](index=334&type=chunk) - The company does not intend to pay dividends, so investor returns depend on stock price appreciation[336](index=336&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could make an acquisition more difficult and limit stockholder influence on management[337](index=337&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk) - Future sales of common stock in the public market could depress the share price[345](index=345&type=chunk) - If securities or industry analysts cease coverage or publish negative reports, stock price and trading volume could decline[347](index=347&type=chunk) [General Risk Factors](index=68&type=section&id=General%20Risk%20Factors) Business disruptions from disasters, market liquidity, accounting changes, and litigation or activism are general risks - Natural or man-made disasters, pandemics, or other similar events could significantly disrupt business operations, especially with centralized facilities in Atlanta, GA; Menlo Park, CA; and New York, NY[342](index=342&type=chunk) - An active trading market for common stock may not be sustained, making it difficult for investors to sell shares[343](index=343&type=chunk) - Changes in accounting principles generally accepted in the U.S. could adversely affect reported financial results[348](index=348&type=chunk) - Securities litigation or stockholder activism could negatively affect business, incur significant expenses, and divert management attention[349](index=349&type=chunk)[350](index=350&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No purchases of equity securities by the issuer or issuances of unregistered securities occurred - No purchases of equity securities by the issuer during the period[351](index=351&type=chunk) - No recent issuances of unregistered securities during the period[352](index=352&type=chunk) [Item 5. Other Information](index=70&type=section&id=Item%205.%20Other%20Information) Cardlytics borrowed $50.0 million against its 2018 Line of Credit on August 5, 2025 - On August 5, 2025, Cardlytics borrowed **$50.0 million** against the 2018 Line of Credit, leaving **$10.0 million** of unused available borrowings[353](index=353&type=chunk) [Item 6. Exhibits](index=71&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed or incorporated by reference into the Quarterly Report on Form 10-Q - Exhibits include the 2025 Equity Incentive Plan, amendments to the Loan and Security Agreement, amended offer and separation pay agreements, and certifications of principal executive and financial officers[355](index=355&type=chunk) [Signatures](index=72&type=section&id=Signatures) The report is signed by the CEO and CFO on August 6, 2025 - The report is signed by Amit Gupta, CEO, and Alexis DeSieno, CFO, on August 6, 2025[360](index=360&type=chunk)

[Introduction and CEO Commentary](index=1&type=section&id=Introduction%20and%20CEO%20Commentary) Cardlytics announced Q2 2025 financial results, with the CEO emphasizing diversification and network reinforcement for long-term profitable growth - Cardlytics announced its financial results for the second quarter ended June 30, 2025[2](index=2&type=chunk) - CEO Amit Gupta stated that the company is navigating headwinds by doubling down on diversification efforts and reinforcing network capabilities to position for long-term profitable growth[3](index=3&type=chunk) [Second Quarter 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) Cardlytics reported Q2 2025 financial results, including revenue decline, increased net loss, but positive Adjusted EBITDA and growth in Monthly Qualified Users [Key Metrics Overview](index=1&type=section&id=Key%20Metrics%20Overview) Cardlytics reported a 9% year-over-year decrease in revenue to $63.2 million for Q2 2025, alongside a significant increase in net loss. However, Adjusted EBITDA turned positive, reaching $2.7 million from a negative $2.3 million in Q2 2024, and Monthly Qualified Users (MQUs) grew by 19% Q2 2025 Key Financial and Operational Metrics (YoY Change) | Metric | Q2 2025 | Q2 2024 | Change % | | :-------------------------------- | :---------- | :---------- | :--------- | | Revenue | $63.2 million | $69.6 million | (9)% | | Billings (non-GAAP) | $104.0 million | $110.4 million | (6)% | | Adjusted Contribution (non-GAAP) | $36.1 million | $36.4 million | (1)% | | Net Loss | $(9.3) million | $(4.3) million | 118% | | Net Loss per diluted share | $(0.18) | $(0.09) | 100% | | Adjusted EBITDA (non-GAAP) | $2.7 million | $(2.3) million | na | | Adjusted Net Loss (non-GAAP) | $(7.0) million | $(7.6) million | (8)% | | Net cash used in operating activities | $1.2 million | $4.4 million | (73)% | | Free Cash Flow (non-GAAP) | $(3.4) million | $(0.4) million | (750)% | | Monthly Qualified Users (MQUs) | 224.5 million | 188.8 million | 19% | | Adjusted Contribution per User (ACPU) | $0.14 | $0.16 | (12.5)% | [Summary of GAAP and Non-GAAP Results](index=2&type=section&id=Summary%20of%20GAAP%20and%20Non-GAAP%20Results) The detailed summary table confirms the year-over-year declines in revenue and billings, while highlighting a positive shift in Adjusted EBITDA and an increase in Gross Profit Summary of GAAP and Non-GAAP Results (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change % | | :-------------------------- | :--------------------- | :--------------------- | :--------- | | Billings (non-GAAP) | $104,048 | $110,389 | (6)% | | Revenue | $63,249 | $69,636 | (9)% | | Partner Share and other third-party costs | $27,103 | $33,258 | (19)% | | Adjusted Contribution (non-GAAP) | $36,146 | $36,378 | (1)% | | Delivery costs | $6,883 | $7,661 | (10)% | | Gross Profit | $29,263 | $28,717 | 2% | | Net Loss | $(9,283) | $(4,257) | 118% | | Adjusted EBITDA (non-GAAP) | $2,703 | $(2,285) | na | | Adjusted Contribution % of Billings | 34.7 % | 33.0 % | | | Adjusted Contribution % of Revenue | 57.1 % | 52.2 % | | | Adjusted EBITDA % of Billings | 2.6 % | (2.1)% | | | Adjusted EBITDA % of Revenue | 4.3 % | (3.3)% | | [Third Quarter 2025 Financial Expectations](index=2&type=section&id=Third%20Quarter%202025%20Financial%20Expectations) Cardlytics provides financial guidance for Q3 2025, forecasting ranges for Billings, Revenue, Adjusted Contribution, and Adjusted EBITDA Q3 2025 Financial Guidance (YoY Change) | Metric | Q3 2025 Guidance (in millions) | YoY Change | | :---------------------- | :----------------------------- | :---------------- | | Billings (non-GAAP) | $87.0 - $95.0 | (22%) - (15%) | | Revenue | $52.2 - $58.2 | (22%) - (13%) | | Adjusted Contribution | $30.3 - $34.3 | (17%) - (6%) | | Adjusted EBITDA | ($2.3) - $2.7 | ($0.5) - $4.5 | [Earnings Teleconference Information](index=2&type=section&id=Earnings%20Teleconference%20Information) Cardlytics will host a live audio webcast to discuss its Q2 2025 financial results on August 6, 2025 - Cardlytics will discuss its second quarter 2025 financial results during a live audio webcast on August 6, 2025, at 5:00 PM ET / 2:00 PM PT[8](index=8&type=chunk) [About Cardlytics](index=3&type=section&id=About%20Cardlytics) Cardlytics operates as a commerce media platform leveraging first-party purchase data to enhance customer loyalty and provide identity resolution - Cardlytics (NASDAQ: CDLX) is a commerce media platform powered by publishers' first-party purchase data, aiming to make commerce smarter and more rewarding[9](index=9&type=chunk) - The company offers solutions to help advertisers and publishers grow customer loyalty, with visibility into approximately half of all card-based transactions in the U.S. and a quarter in the U.K[9](index=9&type=chunk) - Cardlytics also provides identity resolution capabilities through Bridg, converting anonymous shoppers into known and reachable customers[9](index=9&type=chunk) [Cautionary Language Concerning Forward-Looking Statements](index=3&type=section&id=Cautionary%20Language%20Concerning%20Forward-Looking%20Statements) This section outlines the inherent risks and uncertainties associated with forward-looking statements, including strategic initiatives and financial guidance - The press release contains forward-looking statements subject to risks and uncertainties, including those related to strategic initiatives and Q3 2025 financial guidance[10](index=10&type=chunk) - Actual results could differ materially due to factors such as unfavorable global economic conditions, dependence on the Cardlytics platform and key financial institution partners (JPMorgan Chase, Bank of America, Wells Fargo, American Express), and competitive market risks[11](index=11&type=chunk) - The company does not undertake any obligation to update or revise forward-looking statements, except as required by law[12](index=12&type=chunk) [Non-GAAP Measures and Other Performance Metrics](index=3&type=section&id=Non-GAAP%20Measures%20and%20Other%20Performance%20Metrics) This section defines and explains the company's key non-GAAP financial measures and performance metrics used for evaluating business operations [Definitions of Non-GAAP Financial Measures](index=3&type=section&id=Definitions%20of%20Non-GAAP%20Financial%20Measures) This section defines key non-GAAP financial measures used by Cardlytics, including Billings, Adjusted Contribution, Adjusted EBITDA, Adjusted Net Loss, Adjusted Net Loss per share, and Free Cash Flow, explaining their calculation and management's rationale for their use in evaluating performance - Billings represents the gross amount billed to customers and marketers for services to generate revenue[15](index=15&type=chunk) - Adjusted Contribution measures the degree by which Revenue generated from marketers exceeds the cost to obtain purchase data and digital advertising space from partners, calculated as total Revenue less Partner Share and other third-party costs[15](index=15&type=chunk) - Adjusted EBITDA represents Net Loss before interest expense, depreciation and amortization, stock-based compensation, foreign currency (gain) loss, gain on debt extinguishment, acquisition costs, and other specific items[15](index=15&type=chunk) - Free Cash Flow is defined as net cash provided by (used in) operating activities, plus acquisition of property and equipment and capitalized software development costs[15](index=15&type=chunk) [Definitions of Other Performance Metrics](index=4&type=section&id=Definitions%20of%20Other%20Performance%20Metrics) This section defines Monthly Qualified Users (MQUs) as targetable customers with recent transactions whose data was shared, and Adjusted Contribution Per User (ACPU) as Adjusted Contribution divided by average MQUs, highlighting their importance in measuring platform engagement and efficiency - Monthly Qualified Users (MQUs) are defined as targetable customers who have made a transaction using their account with an FI Partner or non-FI Partner in a given month, excluding pilot supply during ramp-up, and whose transaction data was shared with Cardlytics[17](index=17&type=chunk) - Adjusted Contribution Per User (ACPU) is defined as the Cardlytics platform Adjusted Contribution generated in the applicable period, divided by Cardlytics average MQUs in the applicable period, measuring the platform's efficiency in converting marketer budgets into customer engagement value[17](index=17&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated balance sheets, statements of operations, and cash flows for the reported periods [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to $361.1 million from $392.7 million at December 31, 2024, primarily driven by a reduction in cash and cash equivalents and accounts receivable. Total liabilities also decreased, leading to a lower total stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :-------------- | :------------------ | :------- | | Cash and cash equivalents | $46,745 | $65,594 | $(18,849) | | Accounts receivable and contract assets, net | $93,189 | $103,252 | $(10,063) | | Total current assets | $150,400 | $177,983 | $(27,583) | | Total assets | $361,134 | $392,711 | $(31,577) | | Total current liabilities | $129,149 | $148,955 | $(19,806) | | Total liabilities | $302,428 | $322,718 | $(20,290) | | Total stockholders' equity | $58,706 | $69,993 | $(11,287) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, Cardlytics reported a net loss of $(9.3) million on revenue of $63.2 million, compared to a net loss of $(4.3) million on revenue of $69.6 million in the prior year period. Total costs and expenses decreased, but a significant foreign currency gain partially offset the operating loss Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------------- | :---------- | :---------- | :-------------- | :-------------- | | Revenue | $63,249 | $69,636 | $125,147 | $137,244 | | Total costs and expenses | $76,038 | $85,448 | $152,015 | $175,882 | | Operating Loss | $(12,789) | $(15,812) | $(26,868) | $(38,638) | | Foreign currency gain (loss) | $5,449 | $99 | $8,076 | $(531) | | Gain on debt extinguishment | — | $13,017 | — | $13,017 | | Net Loss | $(9,283) | $(4,257) | $(22,565) | $(28,532) | | Net Loss per share, basic and diluted | $(0.18) | $(0.09) | $(0.43) | $(0.62) | [Stock-Based Compensation Expense](index=6&type=section&id=Stock-Based%20Compensation%20Expense) Total stock-based compensation expense for the three months ended June 30, 2025, was $7.5 million, a decrease from $12.6 million in the same period of 2024, with reductions across all categories including delivery, sales and marketing, R&D, and G&A Stock-Based Compensation Expense (in thousands) | Expense Category | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------- | :---------- | :---------- | :-------------- | :-------------- | | Delivery costs | $464 | $721 | $1,001 | $1,364 | | Sales and marketing expense | $1,072 | $2,903 | $3,150 | $6,044 | | Research and development expense | $3,165 | $4,633 | $5,939 | $8,583 | | General and administrative expense | $2,800 | $4,387 | $6,105 | $7,638 | | **Total stock-based compensation expense** | **$7,501** | **$12,644** | **$16,195** | **$23,629** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities decreased to $(5.5) million from $(13.2) million in the prior year, primarily due to lower net loss and changes in operating assets and liabilities. Investing activities also used less cash, while financing activities resulted in a net cash outflow compared to an inflow in 2024 Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | 6 Months 2025 | 6 Months 2024 | | :-------------------------------- | :-------------- | :-------------- | | Net cash used in operating activities | $(5,481) | $(13,188) | | Net cash used in investing activities | $(8,561) | $(9,403) | | Net cash (used in) provided by financing activities | $(5,093) | $2,034 | | Net decrease in cash and cash equivalents | $(18,849) | $(20,582) | | Cash and cash equivalents — End of period | $46,745 | $71,248 | [Reconciliation of Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of GAAP financial measures to their corresponding non-GAAP counterparts [GAAP Revenue to Billings](index=8&type=section&id=GAAP%20Revenue%20to%20Billings) For Q2 2025, consolidated Billings were $104.0 million, derived by adding $40.8 million in Consumer Incentives to GAAP Revenue of $63.2 million. Both consolidated and Cardlytics platform Billings saw year-over-year decreases Reconciliation of GAAP Revenue to Billings (in thousands) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------- | :---------- | :---------- | :-------------- | :-------------- | | Consolidated Revenue | $63,249 | $69,636 | $125,147 | $137,244 | | Plus: Consumer Incentives | $40,799 | $40,753 | $76,480 | $78,362 | | **Consolidated Billings** | **$104,048** | **$110,389** | **$201,627** | **$215,606** | | Cardlytics platform Billings | $98,840 | $104,755 | $190,956 | $204,597 | | Bridg platform Billings | $5,208 | $5,634 | $10,671 | $11,009 | [GAAP Gross Profit to Adjusted Contribution](index=8&type=section&id=GAAP%20Gross%20Profit%20to%20Adjusted%20Contribution) Adjusted Contribution for Q2 2025 was $36.1 million, a slight decrease from $36.4 million in Q2 2024, calculated by adding delivery costs back to GAAP Gross Profit Reconciliation of GAAP Gross Profit to Adjusted Contribution (in thousands) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------- | :---------- | :---------- | :-------------- | :-------------- | | Revenue | $63,249 | $69,636 | $125,147 | $137,244 | | Minus: Partner Share and other third-party costs | $27,103 | $33,258 | $56,553 | $63,801 | | Minus: Delivery costs | $6,883 | $7,661 | $14,171 | $13,834 | | Gross Profit | $29,263 | $28,717 | $54,423 | $59,609 | | Plus: Delivery costs | $6,883 | $7,661 | $14,171 | $13,834 | | **Adjusted Contribution** | **$36,146** | **$36,378** | **$68,594** | **$73,443** | [GAAP Net Loss to Adjusted EBITDA](index=9&type=section&id=GAAP%20Net%20Loss%20to%20Adjusted%20EBITDA) Cardlytics achieved a positive Adjusted EBITDA of $2.7 million in Q2 2025, a significant improvement from a negative $(2.3) million in Q2 2024, primarily due to lower stock-based compensation and a foreign currency gain, despite an increased net loss Reconciliation of GAAP Net Loss to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------- | :---------- | :---------- | :-------------- | :-------------- | | Net Loss | $(9,283) | $(4,257) | $(22,565) | $(28,532) | | Plus: Interest expense, net | $1,943 | $1,561 | $3,773 | $2,380 | | Plus: Depreciation and amortization | $6,275 | $6,529 | $12,566 | $12,779 | | Plus: Stock-based compensation expense | $7,501 | $12,644 | $16,195 | $23,629 | | Plus: Foreign currency (gain) loss | $(5,449) | $(99) | $(8,076) | $531 | | Plus: Gain on debt extinguishment | — | $(13,017) | — | $(13,017) | | Plus: Reduction in force | $1,474 | — | $1,474 | — | | **Adjusted EBITDA** | **$2,703** | **$(2,285)** | **$(1,681)** | **$(2,059)** | [GAAP Net Loss to Adjusted Net Loss and Adjusted Net Loss Per Share](index=9&type=section&id=GAAP%20Net%20Loss%20to%20Adjusted%20Net%20Loss%20and%20Adjusted%20Net%20Loss%20Per%20Share) Adjusted Net Loss for Q2 2025 improved to $(7.0) million, or $(0.13) per diluted share, compared to $(7.6) million, or $(0.15) per diluted share, in Q2 2024, primarily due to adjustments for stock-based compensation and foreign currency gains Reconciliation of GAAP Net Loss to Adjusted Net Loss (in thousands) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------------- | :---------- | :---------- | :-------------- | :-------------- | | Net Loss | $(9,283) | $(4,257) | $(22,565) | $(28,532) | | Plus: Stock-based compensation expense | $7,501 | $12,644 | $16,195 | $23,629 | | Plus: Foreign currency (gain) loss | $(5,449) | $(99) | $(8,076) | $531 | | Plus: Gain on debt extinguishment | — | $(13,017) | — | $(13,017) | | Plus: Amortization of acquired intangibles | $1,455 | $2,785 | $2,909 | $5,574 | | Plus: Reduction in force | $(1,474) | — | $(1,474) | — | | **Adjusted Net Loss** | **$(7,008)** | **$(7,590)** | **$(18,059)** | **$(11,644)** | | Weighted-average common shares outstanding, diluted | 52,750 | 49,056 | 52,309 | 46,168 | | Adjusted Net Loss per share, diluted | $(0.13) | $(0.15) | $(0.35) | $(0.25) | [Net Cash Used in Operating Activities to Free Cash Flow](index=10&type=section&id=Net%20Cash%20Used%20in%20Operating%20Activities%20to%20Free%20Cash%20Flow) Free Cash Flow for Q2 2025 was $(3.4) million, a significant decrease from $(0.4) million in Q2 2024, primarily due to higher net cash used in operating activities and continued investments in property, equipment, and capitalized software Reconciliation of Net Cash Used in Operating Activities to Free Cash Flow (in thousands) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------------- | :---------- | :---------- | :-------------- | :-------------- | | Net cash used in operating activities | $1,227 | $4,430 | $(5,481) | $(13,188) | | Plus: Acquisition of property and equipment | $(322) | $(281) | $(441) | $(932) | | Plus: Capitalized software development costs | $(4,336) | $(4,577) | $(8,320) | $(8,673) | | **Free Cash Flow** | **$(3,431)** | **$(428)** | **$(14,242)** | **$(22,793)** | [Forecasted GAAP Revenue to Billings](index=10&type=section&id=Forecasted%20GAAP%20Revenue%20to%20Billings) For Q3 2025, forecasted Billings are expected to range from $87.0 million to $95.0 million, which includes estimated Consumer Incentives of $28.8 million to $42.8 million added to GAAP Revenue guidance of $52.2 million to $58.2 million Reconciliation of Forecasted GAAP Revenue to Billings (Q3 2025 Guidance, in thousands) | Metric | Q3 2025 Guidance | | :-------------------------- | :--------------- | | Revenue | $52.2 - $58.2 | | Plus: Consumer Incentives | $28.8 - $42.8 | | **Billings** | **$87.0 - $95.0** | [Contacts](index=10&type=section&id=Contacts) This section provides contact information for Cardlytics' public relations and investor relations departments - Public Relations contact: pr@cardlytics.com[37](index=37&type=chunk) - Investor Relations contact: ir@cardlytics.com[37](index=37&type=chunk)

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Cardlytics (CDLX) Analysis - Cardlytics (CDLX) has shown a four-week price change of 10.7%, indicating strong recent price momentum and growing investor interest [4] - Over the past 12 weeks, CDLX has gained 32.9%, demonstrating its ability to deliver positive returns over a longer timeframe [5] - CDLX has a beta of 1.21, suggesting it moves 21% more than the market in either direction, indicating fast-paced momentum [5] - The stock has a Momentum Score of B, suggesting it is an opportune time to invest in CDLX to capitalize on its momentum [6] - CDLX has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [7] - The stock is trading at a Price-to-Sales ratio of 0.36, indicating it is undervalued, as investors pay only 36 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides CDLX, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Group 1 - Moretus Research provides high-quality equity research focused on U.S. public markets, aiming to deliver clarity, conviction, and alpha for serious investors [1] - The research framework identifies companies with durable business models, mispriced cash flow potential, and intelligent capital allocation, emphasizing a structured and repeatable approach [1] - Valuation methods are based on sector-relevant multiples tailored to each company's business model and capital structure, prioritizing comparability, simplicity, and relevance [1] Group 2 - Research coverage focuses on underappreciated companies experiencing structural changes or temporary dislocations, where disciplined analysis can yield asymmetric returns [1] - Moretus Research aims to elevate the standard for independent investment research by providing professional-grade insights and actionable valuation [1]

Group 1 - Cardlytics reported a quarterly loss of $0.21 per share, better than the Zacks Consensus Estimate of a loss of $0.27, and compared to a loss of $0.09 per share a year ago, indicating an earnings surprise of 22.22% [1] - The company posted revenues of $61.9 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 7.46%, although this represents a decline from year-ago revenues of $67.61 million [2] - Cardlytics shares have declined approximately 42.1% since the beginning of the year, contrasting with the S&P 500's decline of 4.7% [3] Group 2 - The earnings outlook for Cardlytics is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend for estimate revisions for Cardlytics is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.16 on revenues of $67.9 million, and -$0.58 on revenues of $274.9 million for the current fiscal year [7] Group 3 - The Technology Services industry, to which Cardlytics belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8] - Another company in the same industry, Inspired Entertainment, is expected to report a quarterly loss of $0.14 per share, reflecting a significant year-over-year change of -600% [9]

Financial Data and Key Metrics Changes - In Q1 2025, total billings were $97.6 million, a 7.3% decrease year-over-year, but above guidance due to pipeline wins in the U.S. and improved delivery [28][27] - Revenue decreased 8.4% to $61.9 million, driven by lower top-line billings and a mix of advertisers [31][27] - Adjusted EBITDA was negative $4.4 million, a decline of $4.6 million year-over-year [31] - Free cash flow improved by $11.6 million from the prior year, reaching negative $10.8 million [31] Business Line Data and Key Metrics Changes - U.S. revenue excluding Bridge decreased 10.9% due to lower billings [30] - In the UK, revenue grew by 8.6%, driven by higher billings and increased supply [30] - Bridge revenue increased 1.6% due to new client wins with two major retailers [31] Market Data and Key Metrics Changes - Consumer incentives decreased by 5.1% to $35.7 million [31] - The travel category saw a decline due to budget cuts from key accounts, while everyday spend and specialty retail categories showed strength, with specialty retail growing by 52% [28][27] Company Strategy and Development Direction - The company is focused on "platformizing" its business to become a differentiated commerce media platform, enhancing its ecosystem and data capabilities [9][10] - The introduction of the Cardlytics Rewards platform (CRP) aims to expand partnerships beyond financial institutions, allowing any merchant with digital properties to become a publisher partner [12][13] - The company is investing in technology to ease integration processes for partners, aiming for quicker onboarding [13] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is macroeconomic uncertainty, consumer spending remains strong, particularly in everyday categories [5][6] - The company expects continued caution among advertisers, leading to delays in ad spending commitments [37] - For Q2 2025, the company anticipates billings between $100 million and $108 million, reflecting a year-over-year decrease of 9% to 2% [36] Other Important Information - The company introduced a new metric, monthly qualified users (MQUs), which increased by 12% to 214.9 million in Q1 [32][33] - Adjusted contribution per MQU (ACPU) was down 24% year-over-year, reflecting the monetization challenges with the new large FI partner [35] Q&A Session Summary Question: Can you elaborate on the opportunity presented by the non-FI side of the business? - Management highlighted that the Cardlytics Rewards platform allows for redefining partnerships and expanding the publisher ecosystem, with potential for strong growth [49][50] Question: How does consumer spending compare to last year? - Management indicated that consumer spending remains strong, particularly in everyday categories, with some signs of front-running purchases ahead of tariffs [56][58] Question: What are the economics for Cardlytics with new partners? - Management stated that the platform is moving towards engagement-based pricing, with positive economics expected for both Cardlytics and its publisher partners [62][63] Question: How is the company assessing its billing space amid macro uncertainty? - Management noted that certain categories, like restaurants and retail, tend to perform better in downturns, and they are working closely with advertisers to navigate the environment [72] Question: Can you provide details on the mechanics of the Cardlytics Rewards platform? - Management explained that the CRP expands publishing supply from banks to non-bank merchants, enhancing consumer engagement and value [74]

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company reported decreased Q1 2025 revenue of $61.9 million but an improved net loss of $(13.3) million [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets decreased to $369.1 million and stockholders' equity declined to $64.1 million as of March 31, 2025 Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $156,829 | $177,983 | | **Total assets** | $369,073 | $392,711 | | **Total current liabilities** | $131,851 | $148,955 | | **Total liabilities** | $304,983 | $322,718 | | **Total stockholders' equity** | $64,090 | $69,993 | [Condensed Consolidated Statements of Operations (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) Q1 2025 revenue fell to $61.9 million, while the net loss improved to $(13.3) million from $(24.3) million YoY Statement of Operations Highlights (in thousands, except per share amounts) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Revenue** | $61,898 | $67,608 | | **Total costs and expenses** | $75,977 | $90,434 | | **Operating Loss** | $(14,079) | $(22,826) | | **Net Loss** | $(13,282) | $(24,275) | | **Net Loss per share, basic and diluted** | $(0.26) | $(0.56) | [Condensed Consolidated Statements of Comprehensive Loss (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20(Unaudited)) Total comprehensive loss for Q1 2025 improved to $(15.6) million, including a $(2.4) million foreign currency loss Comprehensive Loss (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net Loss** | $(13,282) | $(24,275) | | **Foreign currency translation adjustments** | $(2,355) | $580 | | **Total Comprehensive Loss** | $(15,637) | $(23,695) | [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) Stockholders' equity decreased by $5.9 million to $64.1 million in Q1 2025, driven by the quarterly net loss - Total stockholders' equity decreased by **$5.9 million** during Q1 2025, from $69,993 thousand to $64,090 thousand[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Net cash used in operations improved to $(6.7) million, while cash and equivalents ended the quarter at $52.0 million Cash Flow Summary (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(6,706) | $(17,617) | | **Net cash used in investing activities** | $(3,903) | $(4,747) | | **Net cash (used in) provided by financing activities** | $(3,034) | $28,321 | | **Net (decrease) increase in cash** | $(13,548) | $5,936 | | **Cash and cash equivalents — End of period** | $52,046 | $97,766 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Key disclosures include a gain from the Dosh app decommissioning and the non-renewal notice from Bank of America - The Dosh app was decommissioned on February 28, 2025, resulting in a **gain on disposal of $5.4 million** from the derecognition of the associated wallet liability[29](index=29&type=chunk) - On January 25, 2024, the company settled outstanding disputes related to the Bridg acquisition, agreeing to pay **$25.0 million in cash and issue 3.6 million shares** of common stock[33](index=33&type=chunk) - The top three FI partners accounted for **over 80% of total Partner Share** in Q1 2025; the company received a non-renewal notice from Bank of America, effective July 31, 2025[112](index=112&type=chunk)[113](index=113&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses an 8% revenue decline, an improved net loss, and sufficient liquidity despite key partner risks [Non-GAAP Measures and Other Performance Metrics](index=27&type=section&id=Non-GAAP%20Measures%20and%20Other%20Performance%20Metrics) Key non-GAAP metrics show a 7% decrease in Billings and a decline in Adjusted EBITDA to negative $(4.4) million Key Performance Metrics | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Cardlytics MQUs (in thousands) | 214,891 | 191,206 | 12% | | Cardlytics ACPU | $0.13 | $0.17 | (24)% | Key Financial Metrics (Non-GAAP, in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Billings | $97,579 | $105,216 | | Adjusted Contribution | $32,448 | $37,065 | | Adjusted EBITDA | $(4,384) | $226 | | Free Cash Flow | $(10,809) | $(22,364) | [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Revenue decreased 8% YoY due to lower Billings, while operating loss improved due to reduced expenses and a one-time gain - Revenue decreased by **$5.7 million (8%) YoY**, primarily due to a $7.6 million decrease in Billings[157](index=157&type=chunk) - Stock-based compensation expense decreased by **$2.3 million (21%) YoY**, primarily due to higher forfeitures related to executive departures[164](index=164&type=chunk) - A **gain of $5.4 million** was realized in Q1 2025 from the decommissioning of the Dosh app[166](index=166&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q1 with $52.0 million in cash and believes its liquidity is sufficient for the next 12 months Liquidity Position (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $52,046 | $65,594 | | Working capital | $24,978 | $29,028 | | Unused available borrowings | $60,000 | $60,000 | - In April 2024, the company issued **$172.5 million of 4.25% Convertible Senior Notes due 2029** and used the proceeds to repurchase $183.9 million of its 2020 Convertible Senior Notes[180](index=180&type=chunk) - The company has a commitment to spend **$17.0 million each year for three years** with a cloud hosting provider, starting in January 2024[177](index=177&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations on its credit line and foreign currency exchange risk - Interest rate risk is tied to the variable-rate 2018 Line of Credit; a **10% increase in the prime rate** would result in a $0.5 million annual increase in interest expense if fully drawn[199](index=199&type=chunk) - Foreign currency risk arises from UK operations; a **10% weakening of the British pound** in Q1 2025 would have decreased revenue by $0.6 million and operating expenses by $1.3 million[200](index=200&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's principal officers concluded that disclosure controls and procedures were effective as of March 31, 2025 - Management, including the CEO and CFO, concluded that the company's **disclosure controls and procedures were effective** as of March 31, 2025[201](index=201&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) A securities class action lawsuit was voluntarily dismissed without prejudice by the plaintiff in March 2025 - A securities class action lawsuit filed in January 2025 was **voluntarily dismissed by the plaintiff without prejudice** in March 2025, meaning similar claims could be refiled in the future[204](index=204&type=chunk)[205](index=205&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from FI partner dependency, economic conditions, debt, and data privacy regulations [Risks Related to our Business and Industry](index=43&type=section&id=Risks%20Related%20to%20our%20Business%20and%20Industry) Major risks include heavy reliance on a few FI partners, the non-renewal by Bank of America, and economic sensitivity - The company is **substantially dependent on Chase, Bank of America, and Wells Fargo**; in April 2025, it received a non-renewal notice from Bank of America for agreements expiring July 31, 2025[217](index=217&type=chunk)[218](index=218&type=chunk)[220](index=220&type=chunk) - **Unfavorable economic conditions**, such as inflation and tariffs, could limit business growth and negatively affect operating results by causing marketers to reduce spending[208](index=208&type=chunk) - The loss of one or more of its top five marketers, who accounted for **19% of revenue in Q1 2025**, could adversely impact the business as there are no material long-term commitments[241](index=241&type=chunk)[242](index=242&type=chunk) [Risks Related to our Indebtedness](index=57&type=section&id=Risks%20Related%20to%20our%20Indebtedness) The company's ability to service its significant debt obligations, including its convertible notes, is a key risk - Servicing debt requires significant cash, and the company **may not have sufficient cash flow** from its business to pay its indebtedness, including the 2020 and 2024 Convertible Senior Notes[285](index=285&type=chunk) - Holders of the Notes can require the company to repurchase them upon a 'fundamental change,' and the company **may not have enough available cash** or be able to obtain financing to do so[287](index=287&type=chunk) [Risks Related to Regulatory and Intellectual Property Matters](index=59&type=section&id=Risks%20Related%20to%20Regulatory%20and%20Intellectual%20Property%20Matters) The business is subject to complex data privacy laws like CCPA and GDPR and risks related to protecting its IP - The company is subject to complex and evolving data privacy laws like the CCPA and GDPR; non-compliance could lead to **significant fines (up to 4% of annual global revenue under GDPR)**[293](index=293&type=chunk)[297](index=297&type=chunk)[300](index=300&type=chunk) - **Failure to protect proprietary technology** and intellectual property rights could harm the business, as legal protections provide only limited coverage[308](index=308&type=chunk) [Risks Related to Ownership of our Common Stock](index=64&type=section&id=Risks%20Related%20to%20Ownership%20of%20our%20Common%20Stock) The company's common stock price is highly volatile, and no dividends are expected in the foreseeable future - The market price of the common stock has been **highly volatile**, with an intraday price range from $1.22 to $161.47 since its IPO in February 2018[320](index=320&type=chunk) - The company **does not intend to pay dividends** in the foreseeable future, so returns on investment depend solely on stock price appreciation[322](index=322&type=chunk) - **Anti-takeover provisions** in the company's charter and under Delaware law may delay or prevent a change in control or changes in management[323](index=323&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales or issuer repurchases of equity securities occurred during the quarter ended March 31, 2025 - There were **no unregistered sales of equity securities or issuer repurchases** during the quarter[337](index=337&type=chunk)[338](index=338&type=chunk) [Item 5. Other Information](index=66&type=section&id=Item%205.%20Other%20Information) There was no information to be reported under this item for the quarter - None[339](index=339&type=chunk) [Item 6. Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including agreement amendments and officer certifications - The exhibits filed with the report include amendments to the Loan and Security Agreement, officer certifications required by the Sarbanes-Oxley Act, and XBRL data[341](index=341&type=chunk)