Cardlytics(CDLX) - 2025 Q2 - Quarterly Results

Introduction and CEO Commentary 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] - 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] Second Quarter 2025 Financial Results 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 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 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 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 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] About Cardlytics 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] - 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] - Cardlytics also provides identity resolution capabilities through Bridg, converting anonymous shoppers into known and reachable customers[9] Cautionary Language Concerning Forward-Looking Statements 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] - 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] - The company does not undertake any obligation to update or revise forward-looking statements, except as required by law[12] Non-GAAP Measures and Other Performance Metrics 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 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] - 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] - 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] - 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] Definitions of Other Performance Metrics 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] - 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] Condensed Consolidated Financial Statements This section presents the company's condensed consolidated balance sheets, statements of operations, and cash flows for the reported periods Condensed Consolidated Balance Sheets 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 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 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 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 This section provides detailed reconciliations of GAAP financial measures to their corresponding non-GAAP counterparts GAAP Revenue to Billings 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 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 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 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 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 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 This section provides contact information for Cardlytics' public relations and investor relations departments - Public Relations contact: pr@cardlytics.com[37] - Investor Relations contact: ir@cardlytics.com[37]