COVER
COVER - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38386 | |
Entity Registrant Name | CARDLYTICS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-3039436 | |
Entity Address, Address Line One | 675 Ponce de Leon Ave. NE, Ste 6000 | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30308 | |
City Area Code | (888) | |
Local Phone Number | 792-5802 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | CDLX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 33,165,847 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001666071 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 138,514 | $ 233,467 |
Restricted cash | 74 | 95 |
Accounts receivable and contract assets, net | 97,168 | 111,085 |
Other receivables | 4,675 | 6,097 |
Prepaid expenses and other assets | 8,697 | 7,981 |
Total current assets | 249,128 | 358,725 |
Long-term assets: | ||
Property and equipment, net | 7,103 | 11,273 |
Right-of-use assets under operating leases, net | 9,276 | 10,196 |
Intangible assets, net | 113,878 | 125,550 |
Goodwill | 665,813 | 742,516 |
Capitalized software development costs, net | 18,377 | 13,131 |
Deferred implementation costs, net | 0 | 0 |
Other long-term assets, net | 2,737 | 2,406 |
Total assets | 1,066,312 | 1,263,797 |
Current liabilities: | ||
Accounts payable | 4,768 | 4,619 |
Accrued liabilities: | ||
Accrued compensation | 12,940 | 12,136 |
Accrued expenses | 20,556 | 19,620 |
Partner Share liability | 41,051 | 46,595 |
Consumer Incentive liability | 48,353 | 52,602 |
Deferred revenue | 3,004 | 3,280 |
Current operating lease liabilities | 6,088 | 6,028 |
Current contingent consideration | 118,151 | 182,470 |
Total current liabilities | 254,911 | 327,350 |
Long-term liabilities: | ||
Convertible senior notes, net | 225,678 | 184,398 |
Long-term operating lease liabilities | 5,135 | 6,801 |
Long-term contingent consideration | 0 | 49,825 |
Other long-term liabilities | 21 | 4,550 |
Total liabilities | 485,803 | 573,097 |
Stockholders’ equity: | ||
Common stock, $0.0001 par value—100,000 shares authorized, and 33,534 and 33,043 shares issued and outstanding as of December 31, 2021 and September 30, 2022, respectively | 9 | 9 |
Additional paid-in capital | 1,169,213 | 1,212,823 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | 9,578 | 486 |
Accumulated deficit | (598,291) | (522,618) |
Total stockholders’ equity | 580,509 | 690,700 |
Total liabilities and stockholders’ equity | 1,066,312 | 1,263,797 |
Deferred liabilities | $ 58 | $ 173 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) | Sep. 30, 2021 shares |
Statement of Financial Position [Abstract] | |
Common stock, shares issued (in shares) | 3,850,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 72,706 | $ 64,984 | $ 216,039 | $ 177,067 |
Costs and expenses: | ||||
Partner Share and other third-party costs | 37,563 | 34,090 | 112,996 | 93,814 |
Delivery costs | 9,125 | 6,390 | 23,820 | 16,076 |
Sales and marketing expense | 18,289 | 16,733 | 57,920 | 46,998 |
Research and development expense | 13,762 | 11,141 | 39,634 | 26,293 |
General and administration expense | 19,972 | 20,073 | 61,381 | 49,136 |
Acquisition and integration costs (benefit) | (1,867) | 1,714 | (4,269) | 22,926 |
Change in fair value of contingent consideration | (46,126) | 6,261 | (114,144) | 7,741 |
Goodwill impairment | 0 | 0 | 83,149 | 0 |
Depreciation and amortization expense | 10,468 | 8,375 | 30,695 | 20,273 |
Total costs and expenses | 61,186 | 104,777 | 291,182 | 283,257 |
Operating Income (Loss), Total | 11,520 | (39,793) | (75,143) | (106,190) |
Other expense: | ||||
Interest expense, net | (580) | (3,193) | (2,406) | (9,316) |
Foreign currency loss | (4,673) | (1,543) | (10,882) | (1,224) |
Total other expense | (5,253) | (4,736) | (13,288) | (10,540) |
(Loss) income before income taxes | 6,267 | (44,529) | (88,431) | (116,730) |
Income tax benefit | 0 | 0 | 1,446 | 0 |
Net Income (Loss) Attributable to Parent, Total | 6,267 | (44,529) | (86,985) | (116,730) |
Net Income (Loss) Available to Common Stockholders, Basic, Total | $ 6,267 | $ (44,529) | $ (86,985) | $ (116,730) |
Net loss per share attributable to common stockholders, basic (in USD per share) | $ 0.19 | $ (1.35) | $ (2.60) | $ (3.67) |
Net loss per share attributable to common stockholders, diluted (in USD per share) | $ 0.19 | $ (1.35) | $ (2.60) | $ (3.67) |
Weighted-average common shares outstanding, basic (in shares) | 32,950,000 | 33,101,000 | 33,455,000 | 31,802,000 |
Weighted-average common shares outstanding, diluted (in shares) | 33,269,000 | 33,101,000 | 33,455,000 | 31,802,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) Attributable to Parent | $ 6,267 | $ (44,529) | $ (86,985) | $ (116,730) |
Other comprehensive income: | ||||
Foreign currency translation adjustments | 3,998 | 1,267 | 9,092 | 807 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent, Total | $ 10,265 | $ (43,262) | $ (77,893) | $ (115,923) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Dosh Holdings, Inc. | Bridg Acquisition | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2020 | 27,861,000 | ||||||
Beginning balance at Dec. 31, 2020 | $ 157,192 | $ 8 | $ 551,429 | $ (192) | $ (394,053) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of common stock options (in shares) | 113,000 | ||||||
Stock Issued During Period, Value, Stock Options Exercised | 1,930 | 1,930 | |||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 37,952 | 37,952 | |||||
Settlement of restricted stock (in shares) | 393,000 | ||||||
Common stock purchase consideration for the acquisition of Dosh | 117,349 | 117,349 | |||||
Value of shares of common stock | 3,593 | 3,593 | |||||
Issuance of common stock pursuant to the ESPP (in shares) | 21,000 | ||||||
Issuance of common stock pursuant to the ESPP | 1,637 | 1,637 | |||||
Other comprehensive income (loss) | 807 | 807 | |||||
Net loss | (116,730) | (116,730) | |||||
Ending balance (in shares) at Sep. 30, 2021 | 33,154,000 | ||||||
Ending balance at Sep. 30, 2021 | 688,620 | $ 8 | 1,198,780 | 615 | (510,783) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Payments for Repurchase of Common Stock | 0 | $ 916 | |||||
Beginning balance (in shares) at Jun. 30, 2021 | 33,023,000 | ||||||
Beginning balance at Jun. 30, 2021 | 714,392 | $ 8 | 1,181,290 | (652) | (466,254) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of common stock options (in shares) | 29,000 | ||||||
Stock Issued During Period, Value, Stock Options Exercised | 474 | 474 | |||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 17,016 | 17,016 | |||||
Settlement of restricted stock (in shares) | 90,000 | ||||||
Common stock purchase consideration for the acquisition of Dosh | 0 | 0 | |||||
Other comprehensive income (loss) | 1,267 | 1,267 | |||||
Net loss | (44,529) | (44,529) | |||||
Ending balance (in shares) at Sep. 30, 2021 | 33,154,000 | ||||||
Ending balance at Sep. 30, 2021 | 688,620 | $ 8 | 1,198,780 | 615 | (510,783) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Payments for Repurchase of Common Stock | $ 12 | ||||||
Common Stock, Value, Outstanding | 484,049 | ||||||
Beginning balance (in shares) at Dec. 31, 2021 | 33,534,000 | ||||||
Beginning balance at Dec. 31, 2021 | 690,700 | $ 9 | 1,212,823 | 486 | (522,618) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of common stock options (in shares) | 5,000 | 2,000 | 23,000 | ||||
Stock Issued During Period, Value, Stock Options Exercised | 417 | 417 | |||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 33,950 | 33,950 | |||||
Settlement of restricted stock (in shares) | 664,000 | ||||||
Value of shares of common stock | 11,937 | ||||||
Issuance of common stock pursuant to the ESPP (in shares) | 55,000 | ||||||
Issuance of common stock pursuant to the ESPP | 1,503 | 1,503 | |||||
Stock Repurchased and Retired During Period, Value | (40,000) | (40,000) | |||||
Stock Repurchased and Retired During Period, Shares | (1,406,000) | ||||||
Other comprehensive income (loss) | 9,092 | 9,092 | |||||
Net loss | (86,985) | (86,985) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 33,043,000 | ||||||
Ending balance at Sep. 30, 2022 | 580,509 | $ 9 | 1,169,213 | 9,578 | (598,291) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Payments for Repurchase of Common Stock | 40,000 | ||||||
Beginning balance (in shares) at Jun. 30, 2022 | 32,883,000 | ||||||
Beginning balance at Jun. 30, 2022 | 564,157 | $ 9 | 1,163,126 | 5,580 | (604,558) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 6,087 | 6,087 | |||||
Settlement of restricted stock (in shares) | 160,000 | ||||||
Other comprehensive income (loss) | 3,998 | 3,998 | |||||
Net loss | 6,267 | 6,267 | |||||
Ending balance (in shares) at Sep. 30, 2022 | 33,043,000 | ||||||
Ending balance at Sep. 30, 2022 | $ 580,509 | $ 9 | $ 1,169,213 | $ 9,578 | $ (598,291) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating activities | ||
Net Income (Loss) Attributable to Parent | $ (86,985) | $ (116,730) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | ||
Credit loss expense | 949 | 1,440 |
Depreciation and amortization | 30,695 | 20,273 |
Amortization of financing costs charged to interest expense | 1,192 | 701 |
Accretion of debt discount and non-cash interest expense | 0 | 7,078 |
Amortization of right-of-use assets | 4,230 | 3,770 |
Stock-based compensation expense | 32,194 | 37,415 |
Goodwill impairment | 83,149 | 0 |
Change in fair value of contingent consideration | (114,144) | 7,741 |
Other non-cash expense, net | 10,524 | 1,275 |
Increase (Decrease) in Income Taxes | (1,446) | 0 |
Deferred implementation costs | 0 | 2,343 |
Change in operating assets and liabilities: | ||
Accounts receivable | 15,082 | (757) |
Prepaid expenses and other assets | (456) | (1,296) |
Accounts payable | 111 | 42 |
Increase (Decrease) in Accrued Liabilities | (5,814) | (2,626) |
Partner Share liability | (5,836) | (2,171) |
Consumer Incentive liability | (4,248) | 3,534 |
Net cash used in operating activities | (40,803) | (37,968) |
Investing activities | ||
Acquisition of property and equipment | (1,090) | (2,145) |
Acquisition of patents | (73) | (68) |
Capitalized software development costs | (9,170) | (6,937) |
Business acquisitions, net of cash acquired | (2,274) | (494,131) |
Net cash used in investing activities | (12,607) | (503,281) |
Financing activities | ||
Principal payments of debt | (24) | 0 |
Proceeds from issuance of common stock | 397 | 486,163 |
Payments of Stock Issuance Costs | 0 | (190) |
Payments for Repurchase of Common Stock | 40,000 | 0 |
Debt issuance costs | (181) | (200) |
Net cash received provided by (used in) financing activities | (39,808) | 485,773 |
Payments for Repurchase of Common Stock | 40,000 | 0 |
Effect of exchange rates on cash, cash equivalents and restricted cash | (1,756) | (393) |
Net decrease in cash, cash equivalents and restricted cash | (94,974) | (55,869) |
Cash, cash equivalents, and restricted cash — Beginning of period | 233,562 | 293,349 |
Cash, cash equivalents, and restricted cash — End of period | 138,588 | 237,480 |
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet: | ||
Cash and cash equivalents | 138,514 | 237,372 |
Restricted cash | 74 | 108 |
Total cash, cash equivalents and restricted cash — End of period | 138,588 | 237,480 |
Supplemental schedule of non-cash investing and financing activities: | ||
Cash paid for interest | 2,358 | 2,308 |
Common stock purchase consideration for the acquisition of Dosh | 0 | 117,354 |
Value of shares of common stock | 11,937 | 3,593 |
Amounts accrued for property and equipment and capitalized software development costs | 0 | 1,016 |
Deferred Policy Acquisition Costs, Amortization Expense, Excluding Accrued Interest | $ 0 | $ 462 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - Parenthetical - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Cash Flows [Abstract] | ||
Value of shares of common stock | $ 11,937 | $ 3,593 |
Deferred Policy Acquisition Costs, Amortization Expense, Excluding Accrued Interest | $ 0 | $ 462 |
OVERVIEW OF BUSINESS AND BASIS
OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION | OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION Cardlytics, Inc. (“we,” “our,” “us,” the “Company,” or “Cardlytics”) is a Delaware corporation and was formed on June 26, 2008. We operate an advertising platform within our own and our partners' digital channels, which includes online, mobile applications, email, and various real-time notifications (the "Cardlytics platform"). We also operate a customer data platform that utilizes point-of-sale data, including product-level purchase data, to enable marketers, in a privacy-protective manner, to perform analytics and targeted loyalty marketing and to measure the impact of their marketing (the "Bridg platform"). The partners for the Cardlytics platform are predominantly financial institutions ("FI partners") that provide us with access to their anonymized purchase data and digital banking customers. The partners for the Bridg platform are merchants that provide us with access to their point-of-sale data, including product-level purchase data. By applying advanced analytics to the purchase data we receive, we make it actionable, helping marketers reach potential buyers at scale, and measure the true sales impact of their marketing spend. We have strong relationships with leading marketers across a variety of industries, including retail, restaurant, travel and entertainment, direct-to-consumer, and grocery and gas. Using our purchase intelligence, we present customers with offers to save money at a time when they are thinking of their finances. We also operate through (1) Dosh Holdings, LLC, a wholly owned and operated subsidiary in the United States, (2) HSP EPI Acquisition, LLC ("Entertainment"), a wholly owned and operated subsidiary in the United States, (3) Cardlytics UK Limited, a wholly owned and operated subsidiary registered as a private limited company in England and Wales, and (4) Cardlytics Services India Private Limited, a wholly owned and operated subsidiary registered as a private limited company in India. Unaudited Interim Results The accompanying unaudited interim condensed consolidated financial statements and information have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all normal and recurring adjustments considered necessary to present fairly the financial position, results of operations, and cash flows for the periods presented. The results for interim periods presented are not necessarily indicative of the results to be expected for the full year due to the seasonality of our business, which has been historically impacted by higher consumer spending during the fourth quarter. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included on our Annual Report on Form 10-K ("Annual Report") and Form 10-K/A for the fiscal year ended December 31, 2021. Stock Repurchases On May 11, 2022, our Board of Directors authorized a stock repurchase program to repurchase up to $40.0 million of our common stock. From May 11, 2022 to June 30, 2022, we paid $40.0 million to repurchase 1,405,655 shares of our common stock at an average purchase price of $28.44 per share and immediately canceled the repurchased shares. Restructuring and Reduction of Force During the nine months ended September 30, 2022, we initiated a strategic reduction of our forces in our U.S., U.K., and India operations, including the planned closure of our Indian office. We also began a strategic shift within our organization to migrate certain data and applications to a cloud computing environment. As part of these initiatives, we recognized severance and medical benefit costs of $8.5 million. These charges are reflected on our condensed consolidated statement of operations as follows: $2.0 million in delivery costs, $1.9 million in sales and marketing expense, $1.5 million in research and development expense and $3.1 million in general and administrative expense. We recognize these costs when the extent of our actions are determined and the costs can be estimated. We plan to close our Indian office by the end of 2022. As of September 30, 2022 , the remaining cost that have been incurred related to our restructuring and reduction of force but not yet paid are $5.2 million . During the nine months ended September 30, 2021, we recognized $0.8 million in severance and medical benefits related to our integration efforts following our acquisitions. These charges are reflected on our condensed consolidated statement of operations within acquisition and integration costs. Additionally, during the nine months ended September 30, 2021, we recognized $0.7 million of severance and medical benefits charges related to internal restructuring. These charges are reflected on our condensed consolidated statement of operations as follows: $0.1 million in delivery costs, $0.3 million in sales and marketing expense, and $0.3 million in research and development expense. We recognize these costs when the extent of our actions are determined and the costs can be estimated. Acquisitions On January 7, 2022, we purchased Entertainment for $13.0 million in equity at an agreed-upon price of $66.52 per share, subject to $1.1 million of fair value adjustments based on the acquisition close date, and $2.3 million in cash, subject to $0.4 million of adjustments, for an acquisition date fair value of $14.6 million. On May 5, 2021, we completed the acquisition of Bridg for purchase consideration of $578.9 million. The purchase consideration consisted of a $350.0 million cash purchase price, subject to $2.8 million of adjustments and escrows, and contingent consideration with a fair value of $230.9 million at the time of the acquisition related to additional potential future payments. At least 30% of the potential future payments will be in cash, with the remainder to be paid in cash or our common stock, at our option. On March 5, 2021, we completed the acquisition of Dosh for purchase consideration of $277.6 million in a combination of cash and common stock. The total purchase consideration consisted of a $150.0 million cash purchase price, subject to $6.6 million of adjustments and escrows, and $125.0 million of shares of our common stock at an agreed-upon price of $136.33 per share, subject to $7.6 million of fair value adjustments based upon our close date, for an acquisition date fair value of $117.4 million. Refer to Note 3 - Business Combinations for further information. Public Offering of Common Stock On March 5, 2021, we closed a public equity offering in which we sold 3,850,000 shares of common stock at a public offering price of $130.00 per share for total gross proceeds of $500.5 million. We received total net proceeds of $484.0 million after deducting underwriting discounts and commissions of $16.3 million and offering costs of $0.2 million. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Significant items subject to such estimates and assumptions include revenue recognition, internal-use software development costs, stock-based compensation, allowance for doubtful accounts, valuation of acquired intangible assets, valuation of contingent consideration for Bridg, goodwill impairment, income tax including valuation allowance and contingencies. We base our estimates on historical experience and on assumptions that we believe are reasonable. Changes in facts or circumstances may cause us to change our assumptions and estimates in future periods and it is possible that actual results could differ from our current or revised future estimates. Leases We have various non-cancellable operating and finance leases for our office spaces, data centers and operational assets with lease periods expiring between 2022 and 2025. Lease assets and liabilities, net, are as follows (in thousands): Lease Type Consolidated Balance Sheets Location December 31, 2021 September 30, 2022 Operating lease assets Right-of-use assets under operating leases, net $ 10,196 $ 9,276 Finance lease assets Property and equipment, net 86 57 Total lease assets 10,282 9,333 Operating lease liabilities, current Current operating lease liabilities 6,028 6,088 Operating lease liabilities, long-term Long-term operating lease liabilities 6,801 5,135 Finance lease liabilities, current Accrued expenses 36 37 Finance lease liabilities, long-term Other long-term liabilities 50 21 Total lease liabilities $ 12,915 $ 11,281 Impacts of COVID-19 Pandemic The COVID-19 pandemic resulted in a global slowdown of economic activity that disrupted supply and demand for a broad variety of goods and services and consumer discretionary spending, and increased inflationary pressure, including spending by consumers with our marketers. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. Actual results could differ from those estimates and any such differences may be material to our financial statements. Due to continuing uncertainty regarding the severity and duration of the impacts of COVID-19 on the global economy, we will continue to monitor this situation and the potential impacts to our business. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS | SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS Significant Accounting Policies There have been no changes to our significant accounting policies, other than the standards adopted below. These unaudited interim condensed consolidated financial statements have been prepared on a basis consistent with that used to prepare our audited annual consolidated financial statements for the year ended December 31, 2021, and include, in the opinion of management, all adjustments, consisting of normal recurring items, necessary for the fair statement of the condensed consolidated financial statements. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion Options (“Subtopic 470-20”) and Derivatives and Hedging—Contracts in Entity’s Own Equity (“Subtopic 815-40”) , which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. ASU 2020-06 also improves and amends the related Earnings Per Share guidance for both Subtopics. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP, as it removes the requirement to bifurcate our Convertible Senior Notes (the "Notes") into a separate liability and equity component. As a result, it more closely aligns the effective interest rate with the coupon rate of the Notes. ASU 2020-06 is effective for annual reporting periods beginning after December 15, 2021. On January 1, 2022, we adopted this standard using the modified retrospective method which allowed for a cumulative-effect adjustment to the opening balance sheet without restating prior periods. As we did not elect the fair value option in the process, the Notes, net of issuance costs, are accounted for as a single liability measured at amortized cost. Upon adoption, we recorded a decrease in accumulated deficit of $11.3 million, an increase to convertible senior notes, net of $40.1 million and a decrease to additional paid in capital of $51.4 million. Refer to Note 6, “Debt and Financing Arrangements” for further information about the Notes. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which require an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with Topic 606, at fair value on the acquisition date. ASU 2020-08 will be effective for annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted, including adoption in an interim period. On January 1, 2022 we early adopted this standard with no material impact to our financial statements. |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Our acquisitions were accounted for as business combinations and the total purchase consideration of each was allocated to the net tangible and intangible assets and liabilities acquired based on their fair values on the acquisition dates with the remaining amounts recorded as goodwill. The values assigned to the assets acquired and liabilities assumed are based on preliminary estimates of fair value available as of the date of this Quarterly Report on Form 10-Q may be adjusted during the measurement period for each acquisition of up to 12 months from the dates of acquisition as further information becomes available. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. During the three and nine months ended September 30, 2021 we incurred $1.7 million and $22.9 million of costs in connection with our acquisitions, respectively. During the three and nine months ended September 30, 2022 we incurred $1.9 million and $4.3 million of benefit in connection with our acquisitions, respectively. The benefit was due to a reduction of the estimated brokerage fee related to our reduced estimate of contingent consideration related to our Bridg acquisition. These costs (benefits) are included in acquisition and integration costs (benefit) on our condensed consolidated statements of operations and primarily represent legal, accounting and broker fees. The results of Entertainment have been included in the consolidated financial statements since its date of acquisition. For the three and nine months ended September 30, 2022, Entertainment's combined revenue included in the consolidated statement of operations was approximately 3% of consolidated revenue, respectively. Due to the continued integration of the combined businesses, it was impractical to determine the earnings. For the acquisitions of Dosh, Bridg and Entertainment, as applicable, the estimated fair values of merchant relationships, partner relationships, and the card-linked subscriber base were determined using the replacement cost method and lost profits, as applicable, which required us to estimate the costs to recreate an asset of equivalent utility at prices available at the time of the valuation analysis and the lost profits over the period of time to recreate the asset. Trade names were valued using the "relief-from-royalty" approach. This method assumes that trademarks and trade names have value to the extent that their owner is relieved of the obligation to pay royalties for the benefits received from them. This method required us to estimate the future revenues for the related brands, the appropriate royalty rates and the weighted-average costs of capital. Developed technology for Entertainment was valued using the replacement cost method, which required us to estimate the costs to recreate an asset of equivalent utility at prices available at the time of the valuation analysis. Developed technology for Dosh and Bridg was valued using the excess earnings method, an income approach. Under the excess earnings method, the fair value of an intangible asset is equal to the present value of the asset’s projected incremental after-tax cash flows (excess earnings) remaining after deducting the market rates of return on the estimated value of contributory assets (contributory charge) over its remaining useful life. Acquisition of Entertainment On January 7, 2022, we completed the acquisition of Entertainment for purchase consideration of $14.6 million, as presented below (in thousands): January 7, 2022 Fair value of common stock transferred $ 11,937 Cash paid to extinguish acquiree debt 2,053 Cash paid to settle pre-acquisition liabilities and acquiree deal-related costs 624 Cash paid to membership interest holders 24 Cash receivable from membership interest holders pursuant to finalization of net working capital (61) Total purchase consideration $ 14,577 The following table presents the preliminary purchase consideration allocation recorded on our condensed consolidated balance sheet as of the acquisition date (in thousands): January 7, 2022 Cash and cash equivalents $ 376 Accounts receivable and other assets 1,259 Intangible assets 9,800 Goodwill 5,002 Accounts payable and other liabilities (1,860) Total purchase consideration $ 14,577 The goodwill was primarily attributed to the value of future synergies created with our current and future offerings. Goodwill is not expected to be deductible for income tax purposes. The following table presents the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (dollars in thousands): Fair Value Useful life (in years) Trade name $ 800 3.0 Developed technology 700 3.0 Merchant relationships 8,300 4.0 Acquisition of Bridg On May 5, 2021, we completed the acquisition of Bridg for purchase consideration of $578.9 million, as presented below (in thousands): May 5, 2021 Cash paid to common and preferred stockholders, warrant holders and vested option holders $ 337,166 Cash paid to extinguish acquiree debt 1,949 Cash paid to settle pre-acquisition liabilities and acquiree deal-related costs 8,012 Fair value of contingent consideration 230,921 Fair value of assumed options attributable to pre-combination service 841 Total purchase consideration $ 578,889 The following table presents the purchase consideration allocation recorded on our condensed consolidated balance sheet as of the acquisition date (in thousands): May 5, 2021 Cash and cash equivalents $ 1,630 Accounts receivable and other assets 1,989 Intangible assets 64,700 Goodwill 538,271 Accounts payable and other liabilities (20,694) Deferred tax liabilities (7,007) Total purchase consideration $ 578,889 The goodwill was primarily attributed to the value of future growth expected for the Bridg platform and of synergies created with our current and future offerings. Goodwill is not expected to be deductible for income tax purposes. As a part of this acquisition, we have agreed to make a First Anniversary Payment equal to 20 times the annualized recurring revenue, ("ARR"), based on the month preceding the anniversary, less $12.5 million, and a Second Anniversary Payment equal to 15 times the ARR for customers as of the first anniversary based on the month preceding the second anniversary, less the prior ARR at the first anniversary. The Second Anniversary Payment is subject to a specified cap. We have agreed to pay at least 30% of the First Anniversary Payment and the Second Anniversary Payment in cash, with the remainder to be paid in cash or our common stock, at our option. As of September 30, 2022, the expected brokerage fee of the First Anniversary Payment is $6.9 million and the fair value of the brokerage fee of the Second Anniversary Payment is $4.6 million, reflected in accrued expenses on our condensed consolidated balance sheet. As of September 30, 2022, the First Anniversary Payment has not been made and an agreement regarding the amount of the First Anniversary Payment has not been reached. Per the terms of the Agreement and Plan of Merger, we delivered the First Earnout Statement within thirty days of the end of the First Earnout Period. We subsequently agreed to extend the Stockholder Representative's review period. During the third quarter, we received a Earnout Objection Notice from the Stockholder Representative that alleges a material understatement of the First Anniversary Payment amount. We are continuing the dispute-resolution process specific to the First Anniversary Payment outlined in the Agreement and Plan of Merger, which was filed with the Securities and Exchange Commission as Exhibit 10.3 to our Quarterly Report on Form 10-Q on August 3, 2021. The following table presents the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (dollars in thousands): Fair Value Useful life (in years) Trade name $ 200 2.0 Developed technology 53,500 6.0 Merchant relationships 11,000 5.0 Acquisition of Dosh On March 5, 2021, we completed our acquisition of Dosh for purchase consideration of $277.6 million, as presented below (in thousands): March 5, 2021 Cash paid to common and preferred stockholders, warrant holders and vested option holders $ 136,626 Cash paid to extinguish acquiree debt 16,574 Cash paid to settle pre-acquisition liabilities and acquiree deal-related costs 3,463 Fair value of common stock transferred 117,354 Fair value of assumed options attributable to pre-combination service 3,593 Total purchase consideration $ 277,610 The following table presents the purchase consideration allocation recorded on our condensed consolidated balance sheet as of the acquisition date (in thousands): March 5, 2021 Cash and cash equivalents $ 7,323 Accounts receivable and other assets 6,146 Intangible assets 80,000 Goodwill 205,690 Accounts payable and other liabilities (4,146) Consumer Incentive liability (15,101) Deferred tax liabilities (2,302) Total purchase consideration $ 277,610 The goodwill was primarily attributed to the value of synergies created with the Company’s current and future offerings and of future growth expected from the labor force of Dosh. Goodwill is not expected to be deductible for income tax purposes. The following table presents the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition (dollars in thousands): Fair Value Useful life (in years) Trade name $ 2,500 3.0 Developed technology 37,500 6.0 Merchant relationships 21,000 5.0 Partner relationships 2,000 7.0 Card-linked subscriber user base $ 17,000 5.0 Pro forma consolidated results of operations The following unaudited pro forma financial information presents combined results of operations for the period presented as if the acquisition of Entertainment had been completed on January 1, 2021 and the acquisitions of Dosh and Bridg had been completed on January 1, 2020. The pro forma information includes adjustments to depreciation expense for property and equipment acquired, to amortize expense for the intangible assets acquired, and to eliminate the acquisition transaction expenses recognized in the period. The pro forma financial information is for informational purposes only and is not necessarily indicative of the consolidated results of operations of the combined business had the acquisitions actually occurred on January 1, 2021 and January 1, 2020, respectively, or the results of future operations of the combined business. For instance, planned or expected operational synergies following the acquisition are not reflected in the pro forma information. Consequently, actual results will differ from the unaudited pro forma information presented below. Nine Months Ended September 30, 2021 2022 (in thousands) Revenue $ 191,992 $ 216,060 Net loss $ (130,998) $ (85,902) |
GOODWILL AND ACQUIRED INTANGIBL
GOODWILL AND ACQUIRED INTANGIBLES | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND ACQUIRED INTANGIBLES | GOODWILL AND ACQUIRED INTANGIBLES The changes in the carrying amount of goodwill for the nine months ended September 30, 2022 are as follows (in thousands): Cardlytics Platform Bridg Platform Consolidated Balance as of December 31, 2021 $ 205,690 $ 536,826 $ 742,516 Goodwill additions due to acquisition of Entertainment 5,062 — 5,062 Measurement period adjustments (61) 1,445 1,384 Goodwill impairments — (83,149) (83,149) Balance as of September 30, 2022 $ 210,691 $ 455,122 $ 665,813 Goodwill is tested annually for impairment, unless certain triggering events require an interim impairment analysis, including macroeconomic conditions, industry and market considerations, costs factors, overall financial performance, and other relevant entity-specific events and changes. These considerations are evaluated holistically to assess whether it is more likely than not that a reporting unit's carrying value exceeds its fair value. Our reporting units consist of the Cardlytics platform in the U.S., the Cardlytics platform in the U.K. and the Bridg platform . There is no goodwill recorded within the Cardlytics platform in the U.K., and it is not evaluated further as a result. As a result of the sustained decline in our stock price, we determined that it was necessary to perform an interim impairment test for goodwill as of June 30, 2022. The Cardlytics platform in the U.S., which is a combination of legacy and acquired businesses has $210.7 million of goodwill and as of June 30, 2022, had a fair value that exceeded its carrying value by approximately 40%. As a result of our impairment test, we determined that the carrying value of the Bridg platform, which is comprised entirely of an acquired business, exceeded its fair value, and consequently, we recognized a goodwill impairment of $83.1 million, with $455.1 million of goodwill remaining . As a result, the Bridg platform reporting unit had a fair value that is equal to carrying value as of the June 30, 2022 valuation date. We performed an evaluation as of September 30, 2022 to determine whether it was more likely than not that the fair values of our reporting units are less than their carrying values. As of September 30, 2022, we determined that it was not more likely than not that the fair values of our reporting units are less than their carrying values. However, due to the low amount of cushion at the most recent impairment test date of June 30, 2022, future changes in assumptions or market conditions could result in an impairment. The most significant assumptions utilized in the determination of the estimated fair of the Bridg platform and the Cardlytics platform in the U.S. are the net revenues and earnings growth rates (including residual growth rates) and discount rate. The residual growth rate represents the expected rate at which the reporting unit is expected to grow beyond the shorter-term business planning period. The residual growth rate utilized in our fair value estimates is consistent with the reporting unit operating plans, and approximates expected long term growth rates. The residual growth rate is dependent on overall market growth rates, the competitive environment, inflation, and business activities that impact customer conversion. As a result, the residual growth rate could be adversely impacted by a sustained deceleration in customer activity, an increased competitive environment or other macro-economic factors that impact the business decisions of the customers of the Bridg platform and the Cardlytics platform in the U.S. The discount rate, which is consistent with a weighted average cost of capital that is likely to be expected by a market participant, is based upon industry required rates of return, including consideration of both debt and equity components of the capital structure. Our discount rate may be impacted by adverse changes in the macroeconomic environment and volatility in the equity and debt markets. We performed certain restructuring and reduction in force actions as discussed in Note 1—Overview of Business and Basis of Presentation . Further, management is currently undergoing its annual strategic budgeting process for future years, the ultimate cashflows of which will impact our goodwill annual test as of our testing date of October 1, 2022. While management can and has implemented strategies to address these events, changes in operating plans or adverse changes in the future could reduce the underlying cash flows used to estimate fair values and could result in a decline in fair value that would trigger future impairment charges of the reporting units' goodwill. Acquired intangible assets subject to amortization as of September 30, 2022 were as follows: Cost Accumulated Amortization Net Weighted Average Remaining Useful Life (in thousands) (in years) Trade name $ 3,500 $ (1,651) $ 1,849 1.7 Developed technology 91,700 (22,589) 69,111 4.5 Merchant relationships 40,300 (11,227) 29,073 3.4 Partner relationships 2,000 (450) 1,550 5.4 Card-linked subscriber user base 17,000 (5,355) 11,645 3.4 Total other intangible assets $ 154,500 $ (41,272) $ 113,228 Amortization expense of acquired intangibles during the three and nine months ended September 30, 2022 was $7.2 million and $21.6 million, respectively. Acquired intangible assets subject to amortization as of December 31, 2021 were as follows: Cost Accumulated Amortization Net Weighted Average Remaining Useful Life (in thousands) (in years) Trade name $ 2,700 $ (753) $ 1,947 2.1 Developed technology 91,000 (11,026) 79,974 5.3 Merchant relationships 32,000 (4,900) 27,100 4.2 Partner relationships 2,000 (235) 1,765 6.2 Card-linked subscriber user base 17,000 (2,798) 14,202 4.2 Total other intangible assets $ 144,700 $ (19,712) $ 124,988 As of September 30, 2022, we expect amortization expense in future periods to be as follows (in thousands): Amount 2022 (remainder of year) $ 7,172 2023 28,695 2024 27,976 2025 27,336 2026 17,596 Thereafter 4,453 Total expected future amortization expense $ 113,228 |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The Cardlytics Platform The Cardlytics platform is our proprietary native bank advertising channel that enables marketers to reach consumers through the FIs' trusted and frequently visited digital banking channels. Working with the marketer, we design a campaign that targets customers based on their purchase history. The consumer is offered an incentive to make a purchase from the marketer within a specified period. We use a portion of the fees that we collect from marketers to provide these consumer incentives to our FIs’ customers after they make qualifying purchases ("Consumer Incentives"). Leveraging our powerful purchase intelligence platform, we are able to create compelling Consumer Incentives that have the potential to increase return on advertising spend for marketers and measure the effectiveness of the advertising. Consumer Incentives totaled $33.4 million and $37.7 million during the three months ended September 30, 2021 and 2022, respectively, and totaled $83.0 million and $100.3 million during the nine months ended September 30, 2021 and 2022, respectively. We pay certain partners a negotiated and fixed percentage of our billings to marketers less any Consumer Incentives that we pay to partners’ customers and certain third-party data costs ("Partner Share"). Revenue on our consolidated statements of operation is presented net of Consumer Incentives and gross of Partner Share. We price our advertising campaigns predominantly in two ways: (1) Cost per Served Sale (“CPS”), and (2) Cost per Redemption (“CPR”). • CPS. Our primary pricing model is CPS, which we created to meet the media-buying preferences of marketers. We generate revenue by charging a percentage of all purchases from the marketer by consumers who (1) are served marketing, and (2) subsequently make a purchase from the marketer during the campaign period, regardless of whether consumers select the marketing and thereby becomes eligible to earn the applicable Consumer Incentive. We set CPS rates for marketers based on our expectation of the marketer’s return on advertising spend for the relevant campaign. Additionally, we set the amount of the Consumer Incentives payable for each campaign based on our estimation of our ability to drive incremental sales for the marketer. • CPR. Under our CPR pricing model, marketers generally specify and fund the Consumer Incentive and pay us a separate negotiated, fixed marketing fee for each purchase that we generate. We generally generate revenue if the consumer (1) is served marketing, (2) selects the marketing and thereby becomes eligible to earn the applicable Consumer Incentive, and (3) makes a qualifying purchase from the marketer during the campaign period. We set the CPR fee for marketers based on our estimation of the marketers’ return on spend for the relevant campaign. The following table summarizes revenue from the Cardlytics platform by pricing model (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Cost per Served Sale $ 41,494 $ 43,436 $ 116,969 $ 128,568 Cost per Redemption 20,220 21,602 53,980 65,333 Other 361 2,247 1,119 6,637 Cardlytics platform revenue $ 62,075 $ 67,285 $ 172,068 $ 200,538 The Bridg platform The Bridg platform generates revenue through the sale of subscriptions to our cloud-based customer-data platform and the delivery of professional services, such as implementation, onboarding, data analytics and technical support in connection with each subscription. We recognize subscription revenue on a ratable basis over the contract term beginning on the date that our service is made available to the customer. For non-recurring services or transactional based fees dependent on system usage, revenue is recognized as services are delivered. Our subscription contracts are generally 6 to 36 months in duration and are generally billed in advance on a monthly, quarterly or annual basis. The following table summarizes revenue from the Bridg platform (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Subscription revenue $ 2,845 $ 5,421 $ 4,844 $ 15,471 Other revenue 64 — 155 30 Bridg platform revenue (1) $ 2,909 $ 5,421 $ 4,999 $ 15,501 (1) Bridg was acquired May 5, 2021, Refer to Note 3 - Business Combinations for more information. The following table summarizes contract balances from the Bridg platform (in thousands): Contract Balance Type Consolidated Balance Sheets Location December 31, 2021 September 30, 2022 Contract assets, current Accounts receivable and contract assets, net $ 52 $ 44 Contract assets, long-term Other long-term assets, net 26 9 Total contract assets $ 78 $ 53 Contract liabilities, current Deferred revenue $ 1,627 $ 1,305 Contract liabilities, long-term Long-term deferred revenue 173 58 Total contract liabilities $ 1,800 $ 1,363 During the nine months ended September 30, 2022, we recognized $1.1 million of revenue related to amounts that were included in deferred revenue as of December 31, 2021. The following information represents the total transaction price for the remaining performance obligations as of September 30, 2022 related to contracts expected to be recognized over future periods. This includes deferred revenue on our consolidated balance sheets and contracted amounts that will be invoiced and recognized as revenue in future periods. As of September 30, 2022, we had $23.3 million of remaining performance obligations, of which $16.3 million is expected to be recognized in the next twelve months, with the remaining amount recognized thereafter. The remaining performance obligations exclude future transaction revenue of variable consideration that are allocated to wholly unsatisfied distinct services that form part of a single performance obligation and meets certain variable allocation criteria. |
DEBT AND FINANCING ARRANGEMENTS
DEBT AND FINANCING ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT AND FINANCING ARRANGEMENTS | DEBT AND FINANCING ARRANGEMENTS 2020 Convertible Senior Notes On September 22, 2020, we issued convertible senior notes with an aggregate principal amount of $230.0 million bearing an interest rate of 1.00% due in 2025 (the “Notes”), including the exercise in full of the initial purchasers’ option to purchase up to an additional $30.0 million principal amount of the Notes. The Notes were issued pursuant to an indenture, dated September 22, 2020 (the “Indenture”), between us and U.S. Bank National Association, as trustee. The net proceeds from this offering were $222.7 million, after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by us. We used $26.5 million of the net proceeds to pay the cost of the capped call transactions described below. The Notes are general senior, unsecured obligations and will mature on September 15, 2025, unless earlier converted, redeemed or repurchased. The Notes bear interest at a rate of 1.00% per year, payable semiannually in arrears on March 15 and September 15 of each year, which began on March 15, 2021. The Notes are convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding June 15, 2025, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2020 (and only during such calendar quarter), if the last reported sale price of our common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the Notes on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Indenture) per $1,000 principal amount of the Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of common stock and the conversion rate for the Notes on each such trading day; (3) if we call such Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events as set forth in the Indenture. The closing trading price of our common stock was not in excess of 130% of the conversion price for more than 20 trading days during the preceding 30 consecutive trading days as of September 30, 2022, thus the Notes are not convertible at the option of the holders during the quarter ending December 31, 2022. The Notes may be convertible thereafter if one or more of the conversion conditions is satisfied during future measurement periods. On or after June 15, 2025 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the Notes may convert all or any portion of their Notes at any time, regardless of the foregoing circumstances. Upon conversion, we may satisfy our conversion obligation by paying and/or delivering, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at our election, in the manner and subject to the terms and conditions provided in the Indenture. We currently intend to settle the principal amount of the Notes with cash. The conversion rate for the Notes will initially be 11.7457 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $85.14 per share of common stock. The conversion rate for the Notes is subject to adjustment under certain circumstances in accordance with the terms of the Indenture. In addition, following certain corporate events that occur prior to the maturity date of the Notes or if we deliver a notice of redemption in respect of the Notes, we will, in certain circumstances, increase the conversion rate of the Notes for a holder who elects to convert its Notes in connection with such a corporate event or convert its notes called for redemption during the related redemption period (as defined in the Indenture), as the case may be. We may not redeem the Notes prior to September 20, 2023. We may redeem for cash all or any portion of the Notes, at our option, on or after September 20, 2023 and prior to the 36th scheduled trading day immediately preceding the maturity date, if the last reported sale price of our common stock has been at least 130% of the conversion price for the Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes. If we elect to redeem less than all of the Notes, at least $75.0 million aggregate principal amount of Notes must be outstanding and not subject to redemption as of the relevant redemption notice date. If we undergo a Fundamental Change (as defined in the Indenture), then, except as set forth in the Indenture, holders may require, subject to certain exceptions, us to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Indenture includes customary covenants and sets forth certain events of default after which the Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving us after which the Notes become automatically due and payable. The following events are considered “events of default” under the Indenture: • default in any payment of interest on any Note when due and payable and the default continues for a period of 30 days; • default in the payment of principal of any Note when due and payable at its stated maturity, upon optional redemption, upon any required repurchase, upon declaration of acceleration or otherwise; • failure by us to comply with our obligation to convert the Notes in accordance with the Indenture upon exercise of a holder’s conversion right, and such failure continues for three • failure by us to give a fundamental change notice, notice of a make-whole fundamental change or notice of a specified corporate event, in each case when due and such failure continues for one • failure by us to comply with its obligations in respect of any consolidation, merger or sale of assets; • failure by us to comply with any of our other agreements in the Notes or the Indenture for 60 days after written notice of such failure from the trustee or the holders of at least 25% in principal amount of the Notes then outstanding; • default by us or any of our significant subsidiaries (as defined in the Indenture) with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $35,000,000 (or its foreign currency equivalent), in the aggregate of us and/or any such significant subsidiary, whether such indebtedness now exists or shall hereafter be created, (i) resulting in such indebtedness becoming or being declared due and payable prior to its stated maturity date or (ii) constituting a failure to pay the principal of any such indebtedness when due and payable (after the expiration of all applicable grace periods) at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, and in the cases of clauses (i) and (ii), such acceleration shall not have been rescinded or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness is not paid or discharged, as the case may be, within 30 days after written notice to us by the trustee or to us and the trustee by holders of at least 25% in aggregate principal amount of the Notes then outstanding in accordance with the Indenture; and • certain events of bankruptcy, insolvency or reorganization of us or any of our significant subsidiaries. If certain bankruptcy and insolvency-related events of default with respect to us occur, the principal of, and accrued and unpaid interest on, all of the then outstanding Notes shall automatically become due and payable. If an event of default with respect to the Notes, other than certain bankruptcy and insolvency-related events of default with respect to us, occurs and is continuing, the trustee by notice to us or the holders of at least 25% in principal amount of the outstanding Notes by notice to us and the trustee, may, and the trustee at the request of such holders shall, declare the principal of, and accrued and unpaid interest on, all of the then-outstanding Notes to be due and payable. Notwithstanding the foregoing, the Indenture provides that, to the extent we so elect, the sole remedy for an event of default relating to certain failures by us to comply with certain reporting covenants in the Indenture will, for the first 365 days after the occurrence of such event of default, consist exclusively of the right to receive additional interest on the Notes at a rate equal to 0.25% per annum of the principal amount of the Notes outstanding for each day during the first 180 days after the occurrence of such an event of default and 0.50% per annum of the principal amount of the Notes outstanding from the 181st day to, and including, the 365th day following the occurrence of such event of default, as long as such event of default is continuing (in addition to any additional interest that may accrue as a result of a registration default (as set forth in the Indenture). The Indenture provides that we shall not consolidate with or merge with or into, or sell, convey, transfer or lease all or substantially all of the consolidated properties and assets of our subsidiaries, taken as a whole, to, another person (other than any such sale, conveyance, transfer or lease to one or more of our direct or indirect wholly owned subsidiaries), unless: (i) the resulting, surviving or transferee person (if not us) is a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and such corporation (if not us) expressly assumes by supplemental indenture all of our obligations under the Notes and the Indenture; and (ii) immediately after giving effect to such transaction, no default or event of default has occurred and is continuing under the Indenture. The Notes were historically accounted for in accordance with FASB ASC Subtopic 470-20, Debt with Conversion and Other Options . Pursuant to ASC Subtopic 470-20, issuers of certain convertible debt instruments, such as the Notes, that have a net settlement feature and may be settled wholly or partially in cash upon conversion are required to separately account for the liability (debt) and equity (conversion option) components of the instrument. The carrying amount of the liability component of the instrument was computed using a discount rate of 6.50%, which was determined by estimating the fair value of a similar liability without the conversion option. The amount of the equity component is then calculated by deducting the fair value of the liability component from the principal amount of the instrument. The difference between the principal amount and the liability component represents a debt discount that is amortized to interest expense over the respective term of the Notes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the issuance costs related to the Notes, the allocation of issuance costs incurred between the liability and equity components was based on their relative values. On January 1, 2022, we adopted ASU 2020-06, Debt—Debt with Conversion Options (“Subtopic 470-20”) and Derivatives and Hedging—Contracts in Entity’s Own Equity (“Subtopic 815-40”) , which removes the requirement to bifurcate the Notes into a separate liability and equity component, using the modified retrospective method which allowed for a cumulative-effect adjustment to the opening balance sheet without restating prior periods. As we did not elect the fair value option in the process, the Notes, net of issuance costs, are accounted for as a single liability measured at amortized cost. Upon adoption, we recorded a decrease in accumulated deficit of $11.3 million, an increase to convertible senior notes of $40.2 million and a decrease to additional paid in capital of $51.5 million. The net carrying amount of the liability component of the Notes was as follows (in thousands), giving effect to the adoption of ASU 2020-06 on January 1, 2022: December 31, 2021 September 30, 2022 Principal $ 230,000 $ 230,000 Minus: Unamortized debt discount (41,098) — Minus: Unamortized issuance costs (4,504) (4,321) Net carrying amount of the liability component $ 184,398 $ 225,679 Prior to the adoption of ASU 2020-06, the net carrying amount of the equity component of the Notes was as follows (in thousands): December 31, 2021 Proceeds allocated to the conversion options (debt discount) $ 53,096 Minus: Issuance costs (1,680) Net carrying amount of the equity component $ 51,416 Interest expense recognized related to the Notes is as follows (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Contractual interest expense (due in cash) $ 575 $ 575 $ 1,725 $ 1,725 Amortization of debt discount 2,398 — 7,078 — Amortization of debt issuance costs 222 365 644 1,095 Total interest expense related to the Notes $ 3,195 $ 940 $ 9,447 $ 2,820 Effective interest rate 5.56 % 1.64 % 5.48 % 1.64 % Capped Call Transactions In connection with the issuance of the Notes, we entered into privately negotiated capped call transactions (the "Capped Calls") with an affiliate of one of the initial Note purchasers and certain other financial institutions. The Capped Calls are intended to reduce potential dilution to our common stock upon any conversion of Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be. The Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The cost of $26.5 million incurred to purchase the Capped Calls was recorded as a reduction to additional paid-in capital in the accompanying condensed consolidated balance sheet. The Capped Calls each have an initial strike price of $85.14 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have an initial cap price of $128.51 per share, subject to certain adjustments. 2018 Loan Facility In April 2022, we amended our loan facility with Pacific Western Bank (the "2018 Loan Facility") to increase the capacity of our asset-backed revolving line of credit (the "2018 Line of Credit") from $50.0 million to $60.0 million with an option to increase to $75.0 million upon syndication. This amendment also extended the maturity date of the 2018 Loan Facility from December 31, 2022 to April 29, 2024. As part of this amendment, the former cash covenant, as described below, was removed and was replaced with a requirement to maintain a minimum level of adjusted contribution and a minimum adjusted cash of $25.0 million, which is reduced by eligible accounts receivable in excess of the loan capacity. In December 2020, we amended our 2018 Loan Facility to increase the capacity of our 2018 Line of Credit from $40.0 million to $50.0 million. This amendment also extended the maturity date of the 2018 Loan Facility from May 14, 2021 to December 31, 2022. Effective with the December 2020 amendment, we had a requirement to maintain a cash to funded senior debt ratio under the 2018 Line of Credit of 1.25:1.00. We have made no borrowings or repayments on the 2018 Line of Credit during the nine months ended September 30, 2022. As of September 30, 2022, we had no outstanding borrowings on our 2018 Line of Credit and had $60.0 million of unused borrowings available. Under the terms of the 2018 Line of Credit, we are able to borrow up to the lesser of $60.0 million or 85% of the amount of our eligible accounts receivable. Interest on advances bears an interest rate equal to the prime rate or 6.25% as of September 30, 2022. In addition, we are required to pay an unused line fee of 0.15% per annum on the average daily unused amount of the $60.0 million revolving commitment. We believe that we are compliant with all financial covenants as of September 30, 2022. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATIONOur 2018 Equity Incentive Plan ("2018 Plan") became effective in February 2018. Prior to the 2018 Plan, we granted awards under our 2008 Stock Plan ("2008 Plan"). Any awards granted under the 2008 Plan remain subject to the terms of our 2008 Plan and applicable award agreements, and shares subject to awards granted under our 2008 Plan that are forfeited, canceled or expired prior to vesting become available for use under our 2018 Plan. As of December 31, 2021, there were 2,033,227 shares of our common stock reserved for issuance under our 2018 Plan. The number of shares of our common stock reserved for issuance under our 2018 Plan will automatically increase on January 1 of each year through 2028 by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year or a lesser number of shares determined by our board of directors. Accordingly, the number of shares of our common stock reserved for issuance under our 2018 Plan increased by 1,676,682 shares on January 1, 2022. On July 18, 2022, our Board adopted the Cardlytics, Inc. 2022 Inducement Plan ("2022 Inducement Plan"). Our Board also adopted a form of stock option grant notice and agreement and a form of restricted stock unit grant notice and agreement for use with the 2022 Inducement Plan. We reserved a total of 1,500,000 shares of our Common Stock under the 2022 Inducement Plan. We granted 1,345,261 restricted stock units under the 2022 Inducement Plan as a material inducement to employment to our newly hired Chief Executive Officer on September 1, 2022. The following table summarizes the allocation of stock-based compensation in the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Delivery costs $ 552 $ 920 $ 1,382 $ 2,416 Sales and marketing expense 3,841 1,428 9,928 8,765 Research and development expense 3,170 1,968 7,132 9,419 General and administration expense 9,267 1,451 18,973 11,594 Total stock-based compensation expense $ 16,830 $ 5,767 $ 37,415 $ 32,194 During the nine months ended September 30, 2021 and 2022, we capitalized $0.5 million and $1.0 million of stock-based compensation expense for software development, respectively. The decrease from year over year is primarily driven by the reversal of expense associated with the 2020 PSUs, which we believe are no longer likely to vest, and award forfeitures associated with our reduction of force. Common Stock Options Options to purchase shares of common stock generally vest over four years and expire 10 years following the date of grant. The following table summarizes changes in common stock options: Shares Weighted-Average Exercise Price Weighted Average Contractual Life (in years) Aggregate Intrinsic Value (1) Options outstanding — December 31, 2021 406 $ 25.17 Exercised (16) 23.77 $ 335 Forfeited (9) 24.52 Options outstanding and exercisable — September 30, 2022 381 $ 25.25 3.88 $ 10 (1) For options exercised during the period, the aggregate intrinsic value represents the total pre-tax intrinsic value received by option holders based on the closing price of our common stock as reported on the Nasdaq Global Market on the exercise date. For options outstanding and exercisable at September 30, 2022, the aggregate intrinsic value represents the total pre-tax intrinsic value based on the $9.40 per share closing price of our common stock as reported on the Nasdaq Global Market on September 30, 2022, that would have been received by option holders had all in-the-money options been exercised on that date. As of September 30, 2022, all options were fully vested, and there is no unamortized stock-based compensation expense. Common Stock Options from Bridg Acquisition In connection with the acquisition of Bridg, each unvested option to purchase shares of Bridg common stock outstanding as of the acquisition date was converted to unvested options to purchase shares of our common stock. These awards were granted under the Ecinity, Inc. 2012 Equity Incentive Plan ("Bridg Plan") and were separately registered with the Securities and Exchange Commission on Form S-8 on August 3, 2021. The maximum aggregate number of shares of our common stock that may be issued upon exercise of these awards is 21,797 shares, and we do not expect to grant any additional awards under the Bridg Plan. The converted awards retain the same terms and conditions as the awards granted by Bridg prior to the acquisition. The awards have remaining vesting periods ranging from less than one year to four years. The following table summarizes changes in common stock options from the Bridg acquisition: Shares Weighted-Average Exercise Price Weighted Average Contractual Life (in years) Aggregate Intrinsic Value (1) Options outstanding — December 31, 2021 18 $ 8.45 Exercised (2) 8.61 86 Forfeited (11) 8.37 Options outstanding — September 30, 2022 3 8.67 8.60 3 Exercisable — September 30, 2022 3 $ 8.72 (1) For options exercised during the period, the aggregate intrinsic value represents the total pre-tax intrinsic value received by option holders based on the closing price of our common stock as reported on the Nasdaq Global Market on the exercise date. For options outstanding and exercisable at September 30, 2022, the aggregate intrinsic value represents the total pre-tax intrinsic value based on the $9.40 per share closing price of our common stock as reported on the Nasdaq Global Market on September 30, 2022, that would have been received by option holders had all in-the-money options been exercised on that date. The total fair value of options vested during the nine months ended September 30, 2022 was $0.1 million. As of September 30, 2022, unamortized stock-based compensation expense related to unvested common stock options was less than $0.1 million, and the weighted-average period over which such stock-based compensation expense will be recognized was 1.7 years. Common Stock Options from Dosh Acquisition In connection with the acquisition of Dosh, each unvested option to purchase shares of Dosh common stock outstanding as of the acquisition date was converted to unvested options to purchase shares of our common stock. These awards were granted under the Dosh Holdings, Inc. 2017 Stock Incentive Plan ("Dosh Plan") and were separately registered with the Securities and Exchange Commission on Form S-8 on April 9, 2021. The maximum aggregate number of shares of our common stock that may be issued upon exercise of these awards is 104,098 shares, and we do not expect to grant any additional awards under the Dosh Plan. The converted awards retain the same terms and conditions as the awards granted by Dosh prior to the acquisition. The awards have remaining vesting periods ranging from less than one year to four years. The following table summarizes changes in common stock options from the Dosh acquisition: Shares Weighted-Average Exercise Price Weighted Average Contractual Life (in years) Aggregate Intrinsic Value (1) Options outstanding — December 31, 2021 30 $ 3.06 Exercised (5) 3.06 $ 229 Forfeited (7) 3.06 Options outstanding — September 30, 2022 18 3.06 8.22 $ 112 Exercisable — September 30, 2022 8 $ 3.06 (1) For options exercised during the period, the aggregate intrinsic value represents the total pre-tax intrinsic value received by option holders based on the closing price of our common stock as reported on the Nasdaq Global Market on the exercise date. For options outstanding and exercisable at September 30, 2022, the aggregate intrinsic value represents the total pre-tax intrinsic value based on the $9.40 per share closing price of our common stock as reported on the Nasdaq Global Market on September 30, 2022, that would have been received by option holders had all in-the-money options been exercised on that date. The total fair value of options vested during the nine months ended September 30, 2022 was $0.7 million. As of September 30, 2022, unamortized stock-based compensation expense related to unvested common stock options was $1.0 million, and the weighted-average period over which such stock-based compensation expense will be recognized was 1.6 years. Restricted Stock Units We grant restricted stock units ("RSUs") to employees and our non-employee directors. The following table summarizes changes in RSUs, inclusive of performance-based RSUs: Shares Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (in years) Unamortized Compensation Costs Unvested — December 31, 2021 2,294 $ 60.58 Granted 4,260 31.81 Vested (681) 53.13 Forfeited (786) 67.52 Unvested — September 30, 2022 5,087 $ 36.41 3.03 $ 138,807 Shares expected to vest - September 30, 2022 4,490 During the nine months ended September 30, 2022, we granted 2,519,507 RSUs to employees and executives, which have vesting periods ranging from immediately vesting to four years. We also granted 1,345,261 RSUs to our newly hired Chief Executive Officer, which have a four year vesting period. Subsequent to September 30, 2022, we granted 1,870,151 RSUs to employees and executives, which have vesting periods of two Performance-based RSUs In April 2019, we granted 1,252,500 performance-based restricted stock units (“2019 PSUs”). The 2019 PSUs are composed of four equal tranches, each of which have an independent performance-based vesting condition. The vesting criteria for the four tranches are as follows: • a minimum growth rate in adjusted contribution over a trailing 12-month period ("Adjusted Contribution target"), • a minimum number of advertisers that are billed above a specified amount over a trailing 12-month period ("Number of Advertisers target"), • a minimum cumulative adjusted EBITDA target over a trailing 12-month period ("Adjusted EBITDA target"), and • a minimum trailing 30-day average closing price of our common stock ("Stock Price target"). Adjusted EBITDA and adjusted contribution are performance metrics defined within Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations." The compensation committee of our board of directors certified the attainment of the Stock Price target, Adjusted EBITDA target, Number of Advertisers target and Adjusted Contribution target in August 2019, November 2019, October 2021 and December 2021, respectively, resulting in a vesting of 50% of each respective tranche upon the certifications. 25% of each respective tranche has vested or will vest upon the six month anniversary of the achievement date, and 25% of each respective tranche has vested or will vest upon the 12 month anniversary of the achievement date, subject to the continued service of the participant. In April 2020, we granted 476,608 performance-based restricted stock units ("2020 PSUs"), of which 443,276 units have a performance-based vesting condition based on a minimum average revenue per user ("ARPU") target over a trailing 12-month period and 33,332 units have the same performance-based vesting conditions as the 2019 PSUs described above that were unmet at the time. ARPU is a performance metric defined within Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations." The ARPU vesting condition must be achieved within four years of the grant date. Upon the vesting event, 50% of the award vests immediately, 25% of the award vests six months after achievement date and 25% of the award vests 12 months after the achievement date. During the three months ended September 30, 2022, we reassessed the likelihood of achieving the 2020 PSUs performance-based vesting condition and concluded the achievement is no longer probable. As a result of the change in estimate, we have recognized the cumulative expense associated with the 2020 PSUs from the grant date through June 30, 2022 as a benefit to stock-based compensation during the three months ended September 30, 2022. In April 2021, we granted 110,236 performance-based restricted stock units ("2021 PSUs") consisting of two tranches. The first tranche consists of 55,118 units that have a performance-based vesting condition based on a minimum revenue target over a trailing 12-month period. The units in this first tranche fully vest upon achievement. The second tranche consists of 55,118 units with a performance-based vesting condition based on a different minimum revenue target over a trailing 12-month period. Half of the units in the second tranche vest upon achievement and the remaining units vest six months after the achievement date, subject to continued service. Each performance-based vesting condition within the two tranches must be achieved within four years of the grant date and are subject to certification by the compensation committee of our board of directors. In July 2021, we granted 34,344 performance-based restricted stock units ("Bridg PSUs") which have performance-based vesting conditions based on the achievement of a minimum ARR target by the first anniversary of the Bridg acquisition. Vesting is tied to the percentage of the ARR target achieved during the specified period with 50% of the units vesting between 80% - 99.999% achievement and 100% of the units vesting upon 100% achievement. If these percentages are not met, no Bridg PSUs will vest. In September 2021, we granted 6,666 PSUs which have the same unmet vesting condition of the 2020 PSUs, 6,667 PSUs which have the same unmet revenue target vesting condition of the 2021 PSUs and 6,667 PSUs which have the same unmet different revenue target vesting condition of the 2021 PSUs as described above. In March 2022 and August 2022, we granted 269,202 and 25,248 performance-based restricted stock units ("2022 PSUs"), respectively, consisting of three tranches. The first two tranches each represent 25% of the grant, and each vest upon the achievement of certain milestones related to the installation of our Ad Server at our FI Partners. 50% of the third tranche vests upon the achievement of a certain number of advertisers purchasing both the Cardlytics and Bridg platforms at a target incremental billings amount over 2021, and the remaining 50% of the tranche vests six months after this target is achieved. In July 2022, we granted 100,990 PSUs which vest on the achievement of specific revenue-based performance metrics ("2022 Bridg PSUs"). With the exception of the 2020 PSUs, we believe that the achievement of all of the above referenced performance-based vesting conditions are probable before the awards' respective expiration dates. Employee Stock Purchase Plan Our 2018 Employee Stock Purchase Plan ("2018 ESPP") enables eligible employees to purchase shares of our common stock at a discount. Purchases are accomplished through participation in discrete offering periods. On each purchase date, participating employees purchase our common stock at a price per share equal to 85% of the lesser of the fair market value of our common stock on the first trading day of the offering period or the date of purchase. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS We record the fair value of assets and liabilities in accordance with ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition to defining fair value, ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. • Level 3 - unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value. Contingent consideration for the acquisition of Bridg The contingent consideration for the acquisition of Bridg is composed of the First Anniversary Payment and the Second Anniversary Payment. The fair value of contingent consideration in connection with the Bridg acquisition is as follows (in thousands): December 31, 2021 Level 1 Level 2 Level 3 Total Liabilities: Current contingent consideration $ — $ — $ 182,470 $ 182,470 Long-term contingent consideration — — 49,825 49,825 Total liabilities $ — $ — $ 232,295 $ 232,295 September 30, 2022 Level 1 Level 2 Level 3 Total Liabilities: Current contingent consideration $ — $ — $ 118,151 $ 118,151 Total liabilities $ — $ — $ 118,151 $ 118,151 The following table shows a reconciliation of the beginning and ending fair value measurements of our contingent consideration, which we have valued using level 3 inputs: Three Months Ended Nine Months Ended 2021 2022 2021 2022 Beginning balance $ 232,401 $ 164,277 $ — $ 232,295 Increase due to acquisition — — 230,921 — Unrealized loss (gain) due to change in fair value 6,261 (46,126) 7,741 $ (114,144) Ending balance $ 238,662 $ 118,151 $ 238,662 $ 118,151 We have determined the First Anniversary Payment to be $126.4 million. The fair value of the First Anniversary Payment is $62.9 million, which reflects the impact of a $63.5 million mark-to-market reduction in fair value of the 2,064,147 shares of our common stock that we expect to issue to satisfy 70% of the First Anniversary Payment to Bridg shareholders at an agreed-upon volume-weighted average price of $40.15 per share. These shares have been revalued based on the $9.40 per share closing price of our common stock as reported on the Nasdaq Global Market on September 30, 2022. As of September 30, 2022, the expected brokerage fee of the First Anniversary Payment is $6.9 million, reflected in accrued expenses on our condensed consolidated balance sheet. As of September 30, 2022, the First Anniversary Payment has not been settled. Refer to Note 3 - Business Combinations for further discussion. We have estimated the Second Anniversary Payment to be $69.5 million, and the fair value of the Second Anniversary Payment is $55.2 million. In order to determine the fair value of the Second Anniversary Payment, equal to 15 times the ARR of the month preceding the second anniversary, less the First Anniversary ARR, we simulated forecasted revenue using a revenue volatility assumption from comparable market data. We then determined the appropriate discount rate for the assumed cash component and used a Monte Carlo simulation for the assumed stock component. The assumptions used in preparing this model includes estimates such as revenue volatility, revenue discount rate, weighted average cost of capital, and our common stock volatility. As of September 30, 2022, the expected brokerage fee of the Second Anniversary Payment is $5.2 million, and the discounted fair value of $4.6 million is reflected in accrued expenses on our condensed consolidated balance sheet. The following table summarizes key assumptions used for estimating the fair value of the contingent consideration: September 30, 2022 Revenue volatility 20.0 % Revenue discount rate 8.2 % Weighted average cost of capital 17.0 % Common stock volatility 94.0 % Portion to be paid in cash 30.0 % |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Implementation Costs Agreements with certain partners have historically required us to fund the development of specific enhancements, pay for certain implementation fees, or make milestone payments upon the deployment of our solution. Amounts paid to our partners are included in deferred implementation costs, net on our condensed consolidated balance sheets the earlier of when paid or earned and are amortized over the remaining term of the related contractual arrangements. Amortization is included in Partner Share and other third-party costs on our condensed consolidated statements of operations and is presented in deferred implementation costs on our condensed consolidated statement of cash flows. The following table summarizes changes in deferred implementation costs (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Beginning balance $ 2,173 $ — $ 3,785 $ — Amortization (731) — (2,343) — Ending balance $ 1,442 $ — $ 1,442 $ — We have minimum Partner Share commitment to a certain FI partner totaling $10.0 million over a 12-month period which began on April 1, 2022. To the extent that this commitment is expected to exceed the amount of Partner Share otherwise payable to such FI partner in the absence of such commitment, we accrue any expected shortfall over the commitment period. We accrued for zero and $2.2 million of expected minimum Partner Share commitment shortfalls as of December 31, 2021 and September 30, 2022, respectively. Other Commitments In March 2022, we entered into a cloud hosting arrangement guaranteeing an aggregate spend of $7.2 million over the first twelve months of the arrangement. Litigation |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The computations of the numerators and denominators of diluted net (loss) income per share attributable to common stockholders are as follows (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Numerator: Net (loss) income attributable to common stockholders, diluted $ (44,529) $ 6,267 $ (116,730) $ (86,985) Denominator: Weighted-average common shares outstanding, basic 33,101 32,950 31,802 33,455 Plus: dilutive effect of assumed conversion of restricted stock units — 263 — — Plus: dilutive effect of assumed conversion of common stock options — 6 — — Plus: dilutive effect of assumed issuance of common stock pursuant to the ESPP — 50 — — Weighted-average common shares outstanding, diluted 33,101 33,269 31,802 33,455 Net (loss) income per share attributable to common stockholders, diluted $ (1.35) $ 0.19 $ (3.67) $ (2.60) The following securities as of September 30, 2022 have been excluded from the calculation of diluted weighted-average common shares outstanding because the effect is anti-dilutive (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Common stock options 484 396 484 402 Convertible Senior Notes 2,701 2,701 2,701 2,701 Unvested restricted stock units 2,548 4,824 2,548 5,087 Common stock issuable pursuant to the ESPP 19 104 19 154 |
SEGMENTS
SEGMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTSAs of September 30, 2022, we have three operating segments: the Cardlytics platform in the U.S., the Cardlytics platform in the U.K. and the Bridg platform, as determined by the information that our Chief Executive Officer, who we consider our chief operating decision-maker ("CODM"), uses to make strategic goals and operating decisions. Our Cardlytics platform operating segments in the U.S. and U.K. represent our proprietary advertising channels and are aggregated into one reportable segment given their similar economic characteristics, nature of service, types of customers and method of distribution. Subsequent to the acquisition of Bridg, our CODM began reviewing Bridg's revenue and operating expenses. Therefore, we consider the Bridg platform to be a separate operating segment. Our CODM allocates resources to, and evaluates the performance of, our operating segments based on revenue and adjusted contribution. Our CODM does not review assets by operating segment for the purposes of evaluating performance or allocating resources. The following tables provide information regarding the Cardlytics platform and the Bridg platform reportable segments (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Cardlytics platform Adjusted contribution $ 28,877 $ 29,886 $ 80,821 $ 88,709 Plus: Adjusted Partner Share and other third-party costs (1) 33,198 37,399 91,247 111,829 Revenue $ 62,075 $ 67,285 $ 172,068 $ 200,538 Bridg platform Adjusted contribution $ 2,748 $ 5,257 $ 4,775 $ 14,334 Plus: Adjusted Partner Share and other third-party costs (1) 161 164 224 1,167 Revenue $ 2,909 $ 5,421 $ 4,999 $ 15,501 Total Adjusted contribution $ 31,625 $ 35,143 $ 85,596 $ 103,043 Plus: Adjusted Partner Share and other third-party costs (1) 33,359 37,563 91,471 112,996 Revenue $ 64,984 $ 72,706 $ 177,067 $ 216,039 (1) Adjusted Partner Share and other third-party costs presented above represents GAAP Partner Share and other third-party data costs less deferred implementation costs, which is detailed below in our reconciliation of GAAP (loss) income before income taxes to adjusted contribution. Adjusted Contribution Adjusted contribution measures the degree by which revenue generated from our marketers exceeds the cost to obtain the purchase data and the digital advertising space from our partners. Adjusted contribution demonstrates how incremental marketing spend on our platforms generates incremental amounts to support our sales and marketing, research and development, general and administration and other investments. Adjusted contribution is calculated by taking our total revenue less our Partner Share and other third-party costs exclusive of deferred implementation costs, which is a non-cash cost. Adjusted contribution does not take into account all costs associated with generating revenue from advertising campaigns, including sales and marketing expenses, research and development expenses, general and administrative expenses and other expenses, which we do not take into consideration when making decisions on how to manage our advertising campaigns. The following table presents a reconciliation of (loss) income before income taxes presented in accordance with GAAP to adjusted contribution (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Adjusted contribution $ 31,625 $ 35,143 $ 85,596 $ 103,043 Minus: Deferred implementation costs (1) 731 — 2,343 — Delivery costs 6,390 9,125 16,076 23,820 Sales and marketing expense 16,733 18,289 46,998 57,920 Research and development expense 11,141 13,762 26,293 39,634 General and administration expense 20,073 19,972 49,136 61,381 Acquisition and integration costs (benefit) 1,714 (1,867) 22,926 (4,269) Change in fair value of contingent consideration 6,261 (46,126) 7,741 (114,144) Goodwill impairment — — — 83,149 Depreciation and amortization expense 8,375 10,468 20,273 30,695 Total other expense 4,736 5,253 10,540 13,288 (Loss) income before income taxes $ (44,529) $ 6,267 $ (116,730) $ (88,431) (1) Deferred implementation costs is excluded from adjusted Partner Share and other third-party costs, which is shown above in our reconciliation of GAAP revenue to adjusted contribution. The following tables provide geographical information (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Revenue: United States $ 60,168 $ 67,949 $ 163,430 $ 198,781 United Kingdom 4,816 4,757 13,637 17,258 Total $ 64,984 $ 72,706 $ 177,067 $ 216,039 December 31, 2021 September 30, 2022 Property and equipment, net: United States $ 7,750 $ 5,116 United Kingdom 3,423 1,882 India 100 105 Total $ 11,273 $ 7,103 Capital expenditures within the United Kingdom and India totaled $0.7 million and less than $0.2 million during the nine months ended September 30, 2021 and 2022, respectively. Concentrations of Risk Cash and Cash Equivalents Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. A significant portion of our cash and cash equivalents are held in fully FDIC-insured demand deposit accounts that distribute funds, and credit risk, over a vast number of financial institutions. Our remaining cash and cash equivalents are held with six financial institutions, which we believe are of high credit quality. Marketers Our revenue and accounts receivable are diversified among a large number of marketers segregated by both geography and industry. During each of the nine months ended September 30, 2021 and 2022, our top five marketers accounted for 33% and 21% of our revenue, respectively, with one marketer accounting for over 10% during nine months ended September 30, 2021 . As of September 30, 2021 and 2022, our top five marketers accounted for 28% and 13% of our accounts receivable, respectively, with one marketer representing over 10% as of September 30, 2021. FI Partners Our business is substantially dependent on a limited number of FI partners. We require participation from our FI partners in the Cardlytics platform and access to their purchase data in order to offer our solutions to marketers and their agencies. We must have FI partners with a sufficient number of customers and levels of customer engagement to ensure that we have robust purchase data and marketing space to support a broad array of incentive programs for marketers. Our agreements with a substantial majority of our FI partners have terms of three to seven years but are generally terminable by the FI partner on 90 days or less prior notice. The agreements generally have autorenewal provisions that allow for the agreements to extend past their originally contemplated end date, unless terminated earlier in accordance with the terms of the agreement. If an FI partner terminates its agreement with us, we would lose that FI as a source of purchase data and online banking customers. During the nine months ended September 30, 2021, our top two FI partners combined to account for over 75% of the total Partner Share we paid to all partners, with each representing over 30%. During the nine months ended September 30, 2022, our top three FI partners combined to account for over 75% of the total Partner Share we paid to all partners, with the top two FI partners each representing over 20% and third largest FI partner representing over 10% of Partner Share. No other partner accounted for over 10% of Partner Share during these periods. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Unaudited Interim Results | Unaudited Interim Results The accompanying unaudited interim condensed consolidated financial statements and information have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all normal and recurring adjustments considered necessary to present fairly the financial position, results of operations, and cash flows for the periods presented. The results for interim periods presented are not necessarily indicative of the results to be expected for the full year due to the seasonality of our business, which has been historically impacted by higher consumer spending during the fourth quarter. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included on our Annual Report on Form 10-K ("Annual Report") and Form 10-K/A for the fiscal year ended December 31, 2021. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Significant items subject to such estimates and assumptions include revenue recognition, internal-use software development costs, stock-based compensation, allowance for doubtful accounts, valuation of acquired intangible assets, valuation of contingent consideration for Bridg, goodwill impairment, income tax including valuation allowance and contingencies. We base our estimates on historical experience and on assumptions that we believe are reasonable. Changes in facts or circumstances may cause us to change our assumptions and estimates in future periods and it is possible that actual results could differ from our current or revised future estimates. |
Internal-Use Software Development Costs | Leases We have various non-cancellable operating and finance leases for our office spaces, data centers and operational assets with lease periods expiring between 2022 and 2025. Lease assets and liabilities, net, are as follows (in thousands): Lease Type Consolidated Balance Sheets Location December 31, 2021 September 30, 2022 Operating lease assets Right-of-use assets under operating leases, net $ 10,196 $ 9,276 Finance lease assets Property and equipment, net 86 57 Total lease assets 10,282 9,333 Operating lease liabilities, current Current operating lease liabilities 6,028 6,088 Operating lease liabilities, long-term Long-term operating lease liabilities 6,801 5,135 Finance lease liabilities, current Accrued expenses 36 37 Finance lease liabilities, long-term Other long-term liabilities 50 21 Total lease liabilities $ 12,915 $ 11,281 |
Recently Adopted And Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion Options (“Subtopic 470-20”) and Derivatives and Hedging—Contracts in Entity’s Own Equity (“Subtopic 815-40”) , which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. ASU 2020-06 also improves and amends the related Earnings Per Share guidance for both Subtopics. The ASU is part of the FASB's simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP, as it removes the requirement to bifurcate our Convertible Senior Notes (the "Notes") into a separate liability and equity component. As a result, it more closely aligns the effective interest rate with the coupon rate of the Notes. ASU 2020-06 is effective for annual reporting periods beginning after December 15, 2021. On January 1, 2022, we adopted this standard using the modified retrospective method which allowed for a cumulative-effect adjustment to the opening balance sheet without restating prior periods. As we did not elect the fair value option in the process, the Notes, net of issuance costs, are accounted for as a single liability measured at amortized cost. Upon adoption, we recorded a decrease in accumulated deficit of $11.3 million, an increase to convertible senior notes, net of $40.1 million and a decrease to additional paid in capital of $51.4 million. Refer to Note 6, “Debt and Financing Arrangements” for further information about the Notes. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which require an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts that are accounted for in accordance with Topic 606, at fair value on the acquisition date. ASU 2020-08 will be effective for annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments is permitted, including adoption in an interim period. On January 1, 2022 we early adopted this standard with no material impact to our financial statements. |
Fair Value Measurements | We record the fair value of assets and liabilities in accordance with ASC 820, Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition to defining fair value, ASC 820 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. • Level 3 - unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability at fair value. |
Revenue | Consumer Incentives totaled $33.4 million and $37.7 million during the three months ended September 30, 2021 and 2022, respectively, and totaled $83.0 million and $100.3 million during the nine months ended September 30, 2021 and 2022, respectively. We pay certain partners a negotiated and fixed percentage of our billings to marketers less any Consumer Incentives that we pay to partners’ customers and certain third-party data costs ("Partner Share"). Revenue on our consolidated statements of operation is presented net of Consumer Incentives and gross of Partner Share. We price our advertising campaigns predominantly in two ways: (1) Cost per Served Sale (“CPS”), and (2) Cost per Redemption (“CPR”). • CPS. Our primary pricing model is CPS, which we created to meet the media-buying preferences of marketers. We generate revenue by charging a percentage of all purchases from the marketer by consumers who (1) are served marketing, and (2) subsequently make a purchase from the marketer during the campaign period, regardless of whether consumers select the marketing and thereby becomes eligible to earn the applicable Consumer Incentive. We set CPS rates for marketers based on our expectation of the marketer’s return on advertising spend for the relevant campaign. Additionally, we set the amount of the Consumer Incentives payable for each campaign based on our estimation of our ability to drive incremental sales for the marketer. • CPR. Under our CPR pricing model, marketers generally specify and fund the Consumer Incentive and pay us a separate negotiated, fixed marketing fee for each purchase that we generate. We generally generate revenue if the consumer (1) is served marketing, (2) selects the marketing and thereby becomes eligible to earn the applicable Consumer Incentive, and (3) makes a qualifying purchase from the marketer during the campaign period. We set the CPR fee for marketers based on our estimation of the marketers’ return on spend for the relevant campaign. |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Business Acquisition, Pro Forma Information | Consequently, actual results will differ from the unaudited pro forma information presented below. Nine Months Ended September 30, 2021 2022 (in thousands) Revenue $ 191,992 $ 216,060 Net loss $ (130,998) $ (85,902) |
GOODWILL AND ACQUIRED INTANGI_2
GOODWILL AND ACQUIRED INTANGIBLES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the nine months ended September 30, 2022 are as follows (in thousands): Cardlytics Platform Bridg Platform Consolidated Balance as of December 31, 2021 $ 205,690 $ 536,826 $ 742,516 Goodwill additions due to acquisition of Entertainment 5,062 — 5,062 Measurement period adjustments (61) 1,445 1,384 Goodwill impairments — (83,149) (83,149) Balance as of September 30, 2022 $ 210,691 $ 455,122 $ 665,813 |
Schedule of Finite-Lived Intangible Assets | Acquired intangible assets subject to amortization as of September 30, 2022 were as follows: Cost Accumulated Amortization Net Weighted Average Remaining Useful Life (in thousands) (in years) Trade name $ 3,500 $ (1,651) $ 1,849 1.7 Developed technology 91,700 (22,589) 69,111 4.5 Merchant relationships 40,300 (11,227) 29,073 3.4 Partner relationships 2,000 (450) 1,550 5.4 Card-linked subscriber user base 17,000 (5,355) 11,645 3.4 Total other intangible assets $ 154,500 $ (41,272) $ 113,228 |
Finite-lived Intangible Assets Amortization Expense | As of September 30, 2022, we expect amortization expense in future periods to be as follows (in thousands): Amount 2022 (remainder of year) $ 7,172 2023 28,695 2024 27,976 2025 27,336 2026 17,596 Thereafter 4,453 Total expected future amortization expense $ 113,228 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes revenue from the Cardlytics platform by pricing model (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Cost per Served Sale $ 41,494 $ 43,436 $ 116,969 $ 128,568 Cost per Redemption 20,220 21,602 53,980 65,333 Other 361 2,247 1,119 6,637 Cardlytics platform revenue $ 62,075 $ 67,285 $ 172,068 $ 200,538 The following table summarizes revenue from the Bridg platform (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Subscription revenue $ 2,845 $ 5,421 $ 4,844 $ 15,471 Other revenue 64 — 155 30 Bridg platform revenue (1) $ 2,909 $ 5,421 $ 4,999 $ 15,501 (1) Bridg was acquired May 5, 2021, Refer to Note 3 - Business Combinations for more information. |
DEBT AND FINANCING ARRANGEMEN_2
DEBT AND FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The net carrying amount of the liability component of the Notes was as follows (in thousands), giving effect to the adoption of ASU 2020-06 on January 1, 2022: December 31, 2021 September 30, 2022 Principal $ 230,000 $ 230,000 Minus: Unamortized debt discount (41,098) — Minus: Unamortized issuance costs (4,504) (4,321) Net carrying amount of the liability component $ 184,398 $ 225,679 Prior to the adoption of ASU 2020-06, the net carrying amount of the equity component of the Notes was as follows (in thousands): December 31, 2021 Proceeds allocated to the conversion options (debt discount) $ 53,096 Minus: Issuance costs (1,680) Net carrying amount of the equity component $ 51,416 Interest expense recognized related to the Notes is as follows (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Contractual interest expense (due in cash) $ 575 $ 575 $ 1,725 $ 1,725 Amortization of debt discount 2,398 — 7,078 — Amortization of debt issuance costs 222 365 644 1,095 Total interest expense related to the Notes $ 3,195 $ 940 $ 9,447 $ 2,820 Effective interest rate 5.56 % 1.64 % 5.48 % 1.64 % |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Allocation of recognized period costs | The following table summarizes the allocation of stock-based compensation in the condensed consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Delivery costs $ 552 $ 920 $ 1,382 $ 2,416 Sales and marketing expense 3,841 1,428 9,928 8,765 Research and development expense 3,170 1,968 7,132 9,419 General and administration expense 9,267 1,451 18,973 11,594 Total stock-based compensation expense $ 16,830 $ 5,767 $ 37,415 $ 32,194 |
Summary of common stock option activity | Options to purchase shares of common stock generally vest over four years and expire 10 years following the date of grant. The following table summarizes changes in common stock options: Shares Weighted-Average Exercise Price Weighted Average Contractual Life (in years) Aggregate Intrinsic Value (1) Options outstanding — December 31, 2021 406 $ 25.17 Exercised (16) 23.77 $ 335 Forfeited (9) 24.52 Options outstanding and exercisable — September 30, 2022 381 $ 25.25 3.88 $ 10 (1) For options exercised during the period, the aggregate intrinsic value represents the total pre-tax intrinsic value received by option holders based on the closing price of our common stock as reported on the Nasdaq Global Market on the exercise date. For options outstanding and exercisable at September 30, 2022, the aggregate intrinsic value represents the total pre-tax intrinsic value based on the $9.40 per share closing price of our common stock as reported on the Nasdaq Global Market on September 30, 2022, that would have been received by option holders had all in-the-money options been exercised on that date. The following table summarizes changes in common stock options from the Bridg acquisition: Shares Weighted-Average Exercise Price Weighted Average Contractual Life (in years) Aggregate Intrinsic Value (1) Options outstanding — December 31, 2021 18 $ 8.45 Exercised (2) 8.61 86 Forfeited (11) 8.37 Options outstanding — September 30, 2022 3 8.67 8.60 3 Exercisable — September 30, 2022 3 $ 8.72 (1) For options exercised during the period, the aggregate intrinsic value represents the total pre-tax intrinsic value received by option holders based on the closing price of our common stock as reported on the Nasdaq Global Market on the exercise date. For options outstanding and exercisable at September 30, 2022, the aggregate intrinsic value represents the total pre-tax intrinsic value based on the $9.40 per share closing price of our common stock as reported on the Nasdaq Global Market on September 30, 2022, that would have been received by option holders had all in-the-money options been exercised on that date. The following table summarizes changes in common stock options from the Dosh acquisition: Shares Weighted-Average Exercise Price Weighted Average Contractual Life (in years) Aggregate Intrinsic Value (1) Options outstanding — December 31, 2021 30 $ 3.06 Exercised (5) 3.06 $ 229 Forfeited (7) 3.06 Options outstanding — September 30, 2022 18 3.06 8.22 $ 112 Exercisable — September 30, 2022 8 $ 3.06 (1) For options exercised during the period, the aggregate intrinsic value represents the total pre-tax intrinsic value received by option holders based on the closing price of our common stock as reported on the Nasdaq Global Market on the exercise date. For options outstanding and exercisable at September 30, 2022, the aggregate intrinsic value represents the total pre-tax intrinsic value based on the $9.40 per share closing price of our common stock as reported on the Nasdaq Global Market on September 30, 2022, that would have been received by option holders had all in-the-money options been exercised on that date. |
Summary of RSU activity | We grant restricted stock units ("RSUs") to employees and our non-employee directors. The following table summarizes changes in RSUs, inclusive of performance-based RSUs: Shares Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (in years) Unamortized Compensation Costs Unvested — December 31, 2021 2,294 $ 60.58 Granted 4,260 31.81 Vested (681) 53.13 Forfeited (786) 67.52 Unvested — September 30, 2022 5,087 $ 36.41 3.03 $ 138,807 Shares expected to vest - September 30, 2022 4,490 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Contingent Consideration | The fair value of contingent consideration in connection with the Bridg acquisition is as follows (in thousands): December 31, 2021 Level 1 Level 2 Level 3 Total Liabilities: Current contingent consideration $ — $ — $ 182,470 $ 182,470 Long-term contingent consideration — — 49,825 49,825 Total liabilities $ — $ — $ 232,295 $ 232,295 September 30, 2022 Level 1 Level 2 Level 3 Total Liabilities: Current contingent consideration $ — $ — $ 118,151 $ 118,151 Total liabilities $ — $ — $ 118,151 $ 118,151 The following table shows a reconciliation of the beginning and ending fair value measurements of our contingent consideration, which we have valued using level 3 inputs: Three Months Ended Nine Months Ended 2021 2022 2021 2022 Beginning balance $ 232,401 $ 164,277 $ — $ 232,295 Increase due to acquisition — — 230,921 — Unrealized loss (gain) due to change in fair value 6,261 (46,126) 7,741 $ (114,144) Ending balance $ 238,662 $ 118,151 $ 238,662 $ 118,151 |
Schedule of Assumptions used for Estimating Fair Value of Contingent Consideration | The following table summarizes key assumptions used for estimating the fair value of the contingent consideration: September 30, 2022 Revenue volatility 20.0 % Revenue discount rate 8.2 % Weighted average cost of capital 17.0 % Common stock volatility 94.0 % Portion to be paid in cash 30.0 % |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Deferred FI implementation costs | The following table summarizes changes in deferred implementation costs (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Beginning balance $ 2,173 $ — $ 3,785 $ — Amortization (731) — (2,343) — Ending balance $ 1,442 $ — $ 1,442 $ — |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The following tables provide information regarding the Cardlytics platform and the Bridg platform reportable segments (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Cardlytics platform Adjusted contribution $ 28,877 $ 29,886 $ 80,821 $ 88,709 Plus: Adjusted Partner Share and other third-party costs (1) 33,198 37,399 91,247 111,829 Revenue $ 62,075 $ 67,285 $ 172,068 $ 200,538 Bridg platform Adjusted contribution $ 2,748 $ 5,257 $ 4,775 $ 14,334 Plus: Adjusted Partner Share and other third-party costs (1) 161 164 224 1,167 Revenue $ 2,909 $ 5,421 $ 4,999 $ 15,501 Total Adjusted contribution $ 31,625 $ 35,143 $ 85,596 $ 103,043 Plus: Adjusted Partner Share and other third-party costs (1) 33,359 37,563 91,471 112,996 Revenue $ 64,984 $ 72,706 $ 177,067 $ 216,039 (1) Adjusted Partner Share and other third-party costs presented above represents GAAP Partner Share and other third-party data costs less deferred implementation costs, which is detailed below in our reconciliation of GAAP (loss) income before income taxes to adjusted contribution. The following table presents a reconciliation of (loss) income before income taxes presented in accordance with GAAP to adjusted contribution (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Adjusted contribution $ 31,625 $ 35,143 $ 85,596 $ 103,043 Minus: Deferred implementation costs (1) 731 — 2,343 — Delivery costs 6,390 9,125 16,076 23,820 Sales and marketing expense 16,733 18,289 46,998 57,920 Research and development expense 11,141 13,762 26,293 39,634 General and administration expense 20,073 19,972 49,136 61,381 Acquisition and integration costs (benefit) 1,714 (1,867) 22,926 (4,269) Change in fair value of contingent consideration 6,261 (46,126) 7,741 (114,144) Goodwill impairment — — — 83,149 Depreciation and amortization expense 8,375 10,468 20,273 30,695 Total other expense 4,736 5,253 10,540 13,288 (Loss) income before income taxes $ (44,529) $ 6,267 $ (116,730) $ (88,431) (1) Deferred implementation costs is excluded from adjusted Partner Share and other third-party costs, which is shown above in our reconciliation of GAAP revenue to adjusted contribution. |
Schedule of revenue by geographic areas | The following tables provide geographical information (in thousands): Three Months Ended Nine Months Ended 2021 2022 2021 2022 Revenue: United States $ 60,168 $ 67,949 $ 163,430 $ 198,781 United Kingdom 4,816 4,757 13,637 17,258 Total $ 64,984 $ 72,706 $ 177,067 $ 216,039 December 31, 2021 September 30, 2022 Property and equipment, net: United States $ 7,750 $ 5,116 United Kingdom 3,423 1,882 India 100 105 Total $ 11,273 $ 7,103 |
OVERVIEW OF BUSINESS AND BASI_2
OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Jan. 07, 2022 | May 05, 2021 | Mar. 05, 2021 | Jun. 09, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | May 11, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 11,937 | $ 3,593 | |||||||
Severance costs | 8,500 | ||||||||
Restructuring charges | 800 | ||||||||
Offering costs | 0 | 190 | |||||||
Depreciation and amortization expense | $ 7,200 | ||||||||
Deferred revenue | 1,363 | 1,363 | $ 1,800 | ||||||
Credit loss expense | 949 | 1,440 | |||||||
Payments for Repurchase of Common Stock | $ 40,000 | 40,000 | 0 | ||||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 1,405,655 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Per Share Weighted Average Price of Shares Purchased | $ 28.44 | ||||||||
Right-of-use assets under operating leases, net | 9,276 | 9,276 | 9,276 | 10,196 | |||||
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | 57 | 86 | |||||||
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | 9,333 | 10,282 | |||||||
Current operating lease liabilities | 6,088 | 6,088 | 6,088 | 6,028 | |||||
Long-term operating lease liabilities | $ 5,135 | 5,135 | 5,135 | 6,801 | |||||
Finance Lease, Liability, Current | 37 | 36 | |||||||
Finance Lease, Liability, Noncurrent | 21 | 50 | |||||||
Capital Leases, Lessee Balance Sheet, Assets by Major Class, Accumulated Depreciation | 11,281 | $ 12,915 | |||||||
Selling and Marketing Expense [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Severance costs | 1,900 | ||||||||
Restructuring charges | 300 | ||||||||
General and Administrative Expense [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Severance costs | 3,100 | ||||||||
Research and Development Expense [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Severance costs | 1,500 | ||||||||
Restructuring charges | 300 | ||||||||
Delivery Costs [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Severance costs | $ 2,000 | ||||||||
Restructuring charges | $ 100 | ||||||||
Public Equity Offering | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of shares issued | 3,850,000 | ||||||||
Share price (in USD per share) | $ 130 | ||||||||
Total net proceeds | $ 484,000 | ||||||||
Underwriting discounts and commissions | 16,300 | ||||||||
Offering costs | 200 | ||||||||
Bridg Acquisition | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase consideration | $ 578,889 | ||||||||
Bridg Acquisition | Equity Option | |||||||||
Business Acquisition [Line Items] | |||||||||
Fair value of unvested options to purchase common stock | (841) | ||||||||
Bridg Acquisition | Common Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 230,921 | ||||||||
Dosh Holdings, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase consideration | 277,610 | ||||||||
Dosh Holdings, Inc. | Equity Option | |||||||||
Business Acquisition [Line Items] | |||||||||
Fair value of unvested options to purchase common stock | (3,593) | ||||||||
Proceeds from issuance initial public offering | 500,500 | ||||||||
Dosh Holdings, Inc. | Common Stock | |||||||||
Business Acquisition [Line Items] | |||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 117,354 | ||||||||
Entertainment Acquisition | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase consideration | $ 14,577 | ||||||||
Business Acquisition, Transaction Costs | $ 13,000 | ||||||||
Share price (in USD per share) | $ 66.52 | ||||||||
Escrow Deposit | $ 1,100 | ||||||||
Payments for (Proceeds from) Investments | 2,300 | ||||||||
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value | $ 14,600 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Jan. 07, 2022 | May 05, 2021 | Mar. 05, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | |||||||
Acquisition and integration costs (benefit) | $ (1,867) | $ 1,714 | $ (4,269) | $ 22,926 | |||
Percentage of consolidated revenue | 3% | ||||||
Bridg Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Purchase consideration | $ 578,889 | ||||||
Dosh Holdings, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Purchase consideration | $ 277,610 | ||||||
Entertainment Acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Purchase consideration | $ 14,577 |
BUSINESS COMBINATIONS - Schedul
BUSINESS COMBINATIONS - Schedule of Business Acquisitions (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Jan. 07, 2022 | May 05, 2021 | Mar. 05, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 11,937 | $ 3,593 | ||||
Goodwill | 665,813 | $ 742,516 | ||||
Goodwill additions due to acquisition of Entertainment | 5,062 | |||||
Dosh Holdings, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Payments To Acquire Businesses, Stockholders, Warrant Holders, And Vested Option Holders | $ 136,626 | |||||
Payments To Acquire Businesses, Acquiree Debt | 16,574 | |||||
Payments To Acquire Businesses, Pre-Acquisition Liabilities And Deal-Related Costs | 3,463 | |||||
Business Combination, Consideration Transferred | 277,610 | |||||
Goodwill | 205,690 | |||||
Dosh Holdings, Inc. | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 117,354 | |||||
Dosh Holdings, Inc. | Equity Option | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ 3,593 | |||||
Bridg Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Payments To Acquire Businesses, Stockholders, Warrant Holders, And Vested Option Holders | $ 337,166 | |||||
Payments To Acquire Businesses, Acquiree Debt | 1,949 | |||||
Payments To Acquire Businesses, Pre-Acquisition Liabilities And Deal-Related Costs | 8,012 | |||||
Business Combination, Consideration Transferred | 578,889 | |||||
Goodwill | 538,271 | 455,122 | $ 536,826 | |||
Goodwill additions due to acquisition of Entertainment | $ 0 | |||||
Bridg Acquisition | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 230,921 | |||||
Bridg Acquisition | Equity Option | ||||||
Business Acquisition [Line Items] | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ 841 | |||||
Entertainment Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Payments To Acquire Businesses, Stockholders, Warrant Holders, And Vested Option Holders | $ 11,937 | |||||
Payments To Acquire Businesses, Acquiree Debt | 2,053 | |||||
Payments To Acquire Businesses, Pre-Acquisition Liabilities And Deal-Related Costs | 624 | |||||
Business Combination, Consideration Transferred | 14,577 | |||||
Goodwill | $ 5,002 |
BUSINESS COMBINATIONS - Assets
BUSINESS COMBINATIONS - Assets and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 07, 2022 | Dec. 31, 2021 | May 05, 2021 | Mar. 05, 2021 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 665,813 | $ 742,516 | |||
Bridg Acquisition | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | $ 1,630 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 1,989 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 64,700 | ||||
Goodwill | $ 455,122 | $ 536,826 | 538,271 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (20,694) | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | (7,007) | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total | $ 578,889 | ||||
Dosh Holdings, Inc. | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | $ 7,323 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 6,146 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 80,000 | ||||
Goodwill | 205,690 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (4,146) | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities | (2,302) | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other | (15,101) | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total | $ 277,610 | ||||
Entertainment Acquisition | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | $ 376 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 1,259 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | 9,800 | ||||
Goodwill | 5,002 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (1,860) | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total | $ 14,577 |
BUSINESS COMBINATIONS - Identif
BUSINESS COMBINATIONS - Identifiable Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Jan. 07, 2022 | May 05, 2021 | Mar. 05, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Trade Names [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 1 year 8 months 12 days | 2 years 1 month 6 days | |||
Developed Technology Rights [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years 6 months | 5 years 3 months 18 days | |||
Merchant Relationships [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years 4 months 24 days | 4 years 2 months 12 days | |||
Partner Relationships [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years 4 months 24 days | 6 years 2 months 12 days | |||
Card-Linked Subscriber User Base [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years 4 months 24 days | 4 years 2 months 12 days | |||
Bridg Acquisition | Trade Names [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 200 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years | ||||
Bridg Acquisition | Developed Technology Rights [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 53,500 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years | ||||
Bridg Acquisition | Merchant Relationships [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 11,000 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years | ||||
Dosh Holdings, Inc. | Trade Names [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 2,500 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | ||||
Dosh Holdings, Inc. | Developed Technology Rights [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 37,500 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 years | ||||
Dosh Holdings, Inc. | Merchant Relationships [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 21,000 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years | ||||
Dosh Holdings, Inc. | Partner Relationships [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 2,000 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years | ||||
Dosh Holdings, Inc. | Card-Linked Subscriber User Base [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 17,000 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 5 years | ||||
Entertainment Acquisition | Trade Names [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 800 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | ||||
Entertainment Acquisition | Developed Technology Rights [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 700 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | ||||
Entertainment Acquisition | Merchant Relationships [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Finite-lived Intangible Assets Acquired | $ 8,300 | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 4 years |
BUSINESS COMBINATIONS - Pro For
BUSINESS COMBINATIONS - Pro Forma Consolidated Results of Operations (Details) - Bridge And Dosh Holdings Acquisitions - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||
Revenue | $ 216,060 | $ 191,992 |
Net loss | $ (85,902) | $ (130,998) |
GOODWILL AND ACQUIRED INTANGI_3
GOODWILL AND ACQUIRED INTANGIBLES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization expense | $ (7,200) | ||||
Finite-Lived Intangible Assets, Accumulated Amortization | 41,272 | $ 41,272 | $ 19,712 | ||
Goodwill impairment | $ 0 | $ 0 | $ 83,149 | $ 0 |
GOODWILL AND ACQUIRED INTANGI_4
GOODWILL AND ACQUIRED INTANGIBLES - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | May 05, 2021 | |
Goodwill [Roll Forward] | ||
Balance as of December 31, 2021 | $ 742,516 | |
Goodwill additions due to acquisition of Entertainment | 5,062 | |
Balance as of September 30, 2022 | 665,813 | |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 665,813 | |
Goodwill additions due to acquisition of Entertainment | 5,062 | |
Bridg Acquisition | ||
Goodwill [Roll Forward] | ||
Balance as of December 31, 2021 | 536,826 | |
Goodwill additions due to acquisition of Entertainment | 0 | |
Balance as of September 30, 2022 | 455,122 | |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 455,122 | $ 538,271 |
Goodwill additions due to acquisition of Entertainment | 0 | |
cardlytics platform | ||
Goodwill [Roll Forward] | ||
Balance as of December 31, 2021 | 205,690 | |
Goodwill additions due to acquisition of Entertainment | 5,062 | |
Balance as of September 30, 2022 | 210,691 | |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 210,691 | |
Goodwill additions due to acquisition of Entertainment | $ 5,062 |
GOODWILL AND ACQUIRED INTANGI_5
GOODWILL AND ACQUIRED INTANGIBLES - Other Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 154,500 | $ 144,700 |
Accumulated Amortization | (41,272) | (19,712) |
Net | 113,228 | 124,988 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 3,500 | 2,700 |
Accumulated Amortization | (1,651) | (753) |
Net | $ 1,849 | $ 1,947 |
Weighted Average Remaining Useful Life | 1 year 8 months 12 days | 2 years 1 month 6 days |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 91,700 | $ 91,000 |
Accumulated Amortization | (22,589) | (11,026) |
Net | $ 69,111 | $ 79,974 |
Weighted Average Remaining Useful Life | 4 years 6 months | 5 years 3 months 18 days |
Merchant Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 40,300 | $ 32,000 |
Accumulated Amortization | (11,227) | (4,900) |
Net | $ 29,073 | $ 27,100 |
Weighted Average Remaining Useful Life | 3 years 4 months 24 days | 4 years 2 months 12 days |
Partner Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 2,000 | $ 2,000 |
Accumulated Amortization | (450) | (235) |
Net | $ 1,550 | $ 1,765 |
Weighted Average Remaining Useful Life | 5 years 4 months 24 days | 6 years 2 months 12 days |
Card-Linked Subscriber User Base [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 17,000 | $ 17,000 |
Accumulated Amortization | (5,355) | (2,798) |
Net | $ 11,645 | $ 14,202 |
Weighted Average Remaining Useful Life | 3 years 4 months 24 days | 4 years 2 months 12 days |
GOODWILL AND ACQUIRED INTANGI_6
GOODWILL AND ACQUIRED INTANGIBLES - Amortization expense schedule (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 (remainder of year) | $ 7,172 | |
2023 | 28,695 | |
2024 | 27,976 | |
2025 | 27,336 | |
2026 | 17,596 | |
Thereafter | 4,453 | |
Net | $ 113,228 | $ 124,988 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Consumer incentives, expense | $ 37.7 | $ 33.4 | $ 100.3 | $ 83 |
Remaining performance obligation | 23.3 | $ 23.3 | ||
Minimum | ||||
Disaggregation of Revenue [Line Items] | ||||
Subscription term | 6 months | |||
Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Subscription term | 36 months | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligation | $ 16.3 | $ 16.3 | ||
Expected timing of satisfaction | 12 months | 12 months |
REVENUE - Summary of Revenue (D
REVENUE - Summary of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||||||
Revenue from contract with customer | $ 67,285 | $ 62,075 | $ 200,538 | $ 172,068 | ||||
Deferred implementation costs, net | 0 | 1,442 | 0 | 1,442 | $ 0 | $ 0 | $ 2,173 | $ 3,785 |
Commodity Contract Asset, Current | 53 | 53 | 78 | |||||
Deferred revenue | 3,004 | 3,004 | 3,280 | |||||
Deferred revenue | 1,363 | 1,363 | 1,800 | |||||
Bridg Acquisition | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Contract with Customer, Asset, after Allowance for Credit Loss, Current | 44 | 44 | 52 | |||||
Deferred implementation costs, net | 9 | 9 | 26 | |||||
Deferred revenue | 1,305 | 1,305 | 1,627 | |||||
Contract with Customer, Liability, Noncurrent | 58 | 58 | $ 173 | |||||
Cost per Served Sale | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenue from contract with customer | 43,436 | 41,494 | 128,568 | 116,969 | ||||
Cost per Redemption | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenue from contract with customer | 21,602 | 20,220 | 65,333 | 53,980 | ||||
Other | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenue from contract with customer | 2,247 | 361 | 6,637 | 1,119 | ||||
Subscription revenue | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenue from contract with customer | 5,421 | 2,845 | 15,471 | 4,844 | ||||
Other revenue | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenue from contract with customer | 0 | 64 | 30 | 155 | ||||
Bridg platform revenue(1) | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Revenue from contract with customer | $ 5,421 | $ 2,909 | $ 15,501 | $ 4,999 |
DEBT AND FINANCING ARRANGEMEN_3
DEBT AND FINANCING ARRANGEMENTS - Narrative (Details) | 9 Months Ended | ||||
Sep. 22, 2020 USD ($) numberOfDays $ / shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 | Dec. 31, 2020 USD ($) | Nov. 30, 2020 USD ($) | |
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 230,000,000 | ||||
Stated percentage | 1% | ||||
Proceeds from issuance of convertible senior notes, net of issuance costs paid of $6,900 | $ 222,700,000 | ||||
Adjustments to additional paid in capital, issuance of capped calls | $ 26,500,000 | ||||
Threshold consecutive trading days | numberOfDays | 10,000 | ||||
Threshold percentage of stock price trigger | 98% | ||||
Conversion ratio | 11.7457 | ||||
Conversion price (in dollars per share) | $ / shares | $ 85,140 | ||||
Redemption period, days before maturity date | 36 days | ||||
Redemption price, percentage | 100% | ||||
Threshold principal outstanding amount for partial redemption | $ 75,000,000 | ||||
Required compliance period, period after written notice | 60 days | ||||
Percentage of holders to require written notice of noncompliance | 25% | 25% | |||
Amount of other debt called due | $ 35,000,000 | ||||
Covenant noncompliance, period of additional interest | 365 days | ||||
Liability component, discount rate | 6.50% | ||||
Strike price (in dollars per share) | $ / shares | $ 85.14 | ||||
Cap price (in dollars per share) | $ / shares | $ 128.51 | ||||
Outstanding borrowings | $ 0 | ||||
Unused borrowing capacity | $ 60,000,000 | ||||
Maximum borrowing capacity, percentage of accounts receivable | 85% | ||||
Debt instrument, interest rate | 1.64% | 5.56% | |||
Debt Covenant Noncompliance, Scenario One | |||||
Debt Instrument [Line Items] | |||||
Covenant noncompliance, period of additional interest | 180 years | ||||
Covenant noncompliance, additional interest, stated percentage | 0.25% | ||||
Debt Covenant Noncompliance, Scenario Two | |||||
Debt Instrument [Line Items] | |||||
Covenant noncompliance, additional interest, stated percentage | 0.50% | ||||
Debt Covenant Noncompliance, Scenario Two | Minimum | |||||
Debt Instrument [Line Items] | |||||
Covenant noncompliance, period of additional interest | 181 days | ||||
Debt Covenant Noncompliance, Scenario Two | Maximum | |||||
Debt Instrument [Line Items] | |||||
Covenant noncompliance, period of additional interest | 365 days | ||||
Debt Conversion Scenario One | |||||
Debt Instrument [Line Items] | |||||
Threshold trading days | numberOfDays | 20,000 | ||||
Threshold consecutive trading days | numberOfDays | 30,000 | ||||
Threshold percentage of stock price trigger | 130% | ||||
Debt Conversion Scenario Two | |||||
Debt Instrument [Line Items] | |||||
Threshold trading days | numberOfDays | 5,000 | ||||
Debt Conversion Scenario Three | |||||
Debt Instrument [Line Items] | |||||
Threshold trading days | numberOfDays | 20 | ||||
Threshold consecutive trading days | numberOfDays | 30 | ||||
Threshold percentage of stock price trigger | 130% | ||||
Convertible Senior Notes, Additional Principal Option | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, face amount | $ 30,000,000 | ||||
Senior Notes | 2020 Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Obligation to convert, period of failed compliance | 3 days | ||||
Notice of change, period of failed compliance | 1 day | ||||
Lines of credit | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 6.25% | ||||
Commitment fee percentage | 0.15% | ||||
Revolving Credit Facility | Lines of credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 50,000,000 | $ 40,000,000 | |||
Cast to funded senior debt ratio | 1.25 | ||||
Unused borrowing capacity | $ 60,000,000 |
DEBT AND FINANCING ARRANGEMEN_4
DEBT AND FINANCING ARRANGEMENTS - Net Carrying Amount of Liability Component (Details) - 2020 Convertible Senior Notes - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 230,000 | $ 230,000 |
Debt Instrument, Unamortized Discount | 0 | 41,098 |
Debt Issuance Costs, Net | 4,321 | 4,504 |
Long-term Debt, Total | $ 225,679 | $ 184,398 |
DEBT AND FINANCING ARRANGEMEN_5
DEBT AND FINANCING ARRANGEMENTS - Net Carrying Amount of Equity Component (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |
Debt Instrument, Convertible, Carrying Amount of Equity Component | $ 53,096 |
Debt issuance costs | (1,680) |
adjustments to additional paid in capital, equity component of convertible debt, subsequent adjustments | $ 51,416 |
DEBT AND FINANCING ARRANGEMEN_6
DEBT AND FINANCING ARRANGEMENTS - Interest Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Disclosure [Abstract] | ||||
Contractual interest expense (due in cash) | $ 575 | $ 575 | $ 1,725 | $ 1,725 |
Amortization of debt discount | 0 | 2,398 | 0 | 7,078 |
Amortization of debt issuance costs | 365 | 222 | 1,095 | 644 |
Total interest expense related to the Notes | $ 940 | $ 3,195 | $ 2,820 | $ 9,447 |
Debt instrument, interest rate | 1.64% | 5.56% | 1.64% | 5.56% |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ in Millions | 1 Months Ended | 9 Months Ended | ||||||||||||
Jan. 01, 2021 shares | Feb. 08, 2018 | Nov. 01, 2022 USD ($) shares | Mar. 31, 2022 | Jul. 31, 2021 shares | Apr. 30, 2021 tranche shares | Apr. 30, 2020 user shares | Apr. 30, 2019 tranche shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) shares | Jun. 30, 2022 shares | Dec. 31, 2021 shares | Dec. 31, 2020 | Jan. 01, 2020 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of shares authorized (in shares) | 2,033,227 | |||||||||||||
Number of shares authorized, annual increase | 5% | |||||||||||||
Number of additional shares authorized (in shares) | 1,676,682 | |||||||||||||
Lease obligation incurred | $ | $ 1 | $ 0.5 | ||||||||||||
Award vesting period | 4 years | |||||||||||||
Expiration period | 10 years | |||||||||||||
Bridg Acquisition | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of shares authorized (in shares) | 21,797 | |||||||||||||
Options vested in period, fair value | $ | $ 0.1 | |||||||||||||
Compensation not yet recognized | $ | $ 0.1 | |||||||||||||
Compensation cost not yet recognized | 1 year 8 months 12 days | |||||||||||||
Dosh Holdings, Inc. | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of shares authorized (in shares) | 104,098 | |||||||||||||
Options vested in period, fair value | $ | $ 0.7 | |||||||||||||
Compensation not yet recognized | $ | $ 1 | |||||||||||||
Minimum | Bridg Acquisition | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 1 year | |||||||||||||
Minimum | Dosh Holdings, Inc. | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 1 year | |||||||||||||
Maximum | Bridg Acquisition | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 4 years | |||||||||||||
Maximum | Dosh Holdings, Inc. | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 4 years | |||||||||||||
Restricted stock units | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Compensation cost not yet recognized | 3 years 10 days | |||||||||||||
Granted (in shares) | 4,260,000 | |||||||||||||
Unvested PSU (in shares) | 5,087,000 | 2,294,000 | ||||||||||||
Restricted stock units | Share-based Compensation Award, Tranche One | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Granted (in shares) | 2,519,507 | |||||||||||||
Restricted stock units | Share-based Compensation Award, Tranche One | Maximum | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 4 years | |||||||||||||
Performance Shares | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Unvested PSU (in shares) | 1,252,500 | |||||||||||||
Number of vesting tranches | tranche | 4 | |||||||||||||
Minimum growth rate period | 12 months | |||||||||||||
Advertiser billing period | 12 months | |||||||||||||
EBITDA target period | 12 months | |||||||||||||
Stock closing price period | 30 days | |||||||||||||
Performance Shares | 2020 PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Unvested PSU (in shares) | 476,608 | 6,666 | 269,202 | |||||||||||
ARPU vesting condition period | 4 years | |||||||||||||
Performance Shares | 2021 PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Unvested PSU (in shares) | 110,236 | 6,667 | ||||||||||||
Number of vesting tranches | tranche | 2 | |||||||||||||
ARPU vesting condition period | 4 years | |||||||||||||
Performance Shares | Bridg PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Unvested PSU (in shares) | 34,344 | |||||||||||||
Performance Shares | Share-based Compensation Award, Tranche One | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting rights, percentage | 25% | |||||||||||||
Performance Shares | Share-based Compensation Award, Tranche One | 2020 PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 12 months | 12 months | ||||||||||||
Unvested PSU (in shares) | 443,276 | |||||||||||||
Performance conditions | user | 0.50 | |||||||||||||
Performance Shares | Share-based Compensation Award, Tranche One | 2021 PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 12 months | |||||||||||||
Unvested PSU (in shares) | 55,118 | |||||||||||||
Performance Shares | Share-based Compensation Award, Tranche One | Bridg PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting rights, percentage | 50% | |||||||||||||
Performance Shares | Share-based Compensation Award, Tranche One | Minimum | Bridg PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Achievement percentage | 80% | |||||||||||||
Performance Shares | Share-based Compensation Award, Tranche One | Maximum | Bridg PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Achievement percentage | 99.999% | |||||||||||||
Performance Shares | Share-based Compensation Award, Tranche Two | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting rights, percentage | 50% | |||||||||||||
Performance Shares | Share-based Compensation Award, Tranche Two | 2020 PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 6 months | |||||||||||||
Unvested PSU (in shares) | 33,332 | |||||||||||||
Performance conditions | user | 0.25 | |||||||||||||
Performance Shares | Share-based Compensation Award, Tranche Two | 2021 PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 6 months | |||||||||||||
Unvested PSU (in shares) | 55,118 | |||||||||||||
Performance Shares | Share-based Compensation Award, Tranche Two | Bridg PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting rights, percentage | 100% | |||||||||||||
Achievement percentage | 100% | |||||||||||||
Performance Shares | Share-based Payment Arrangement, Tranche Three | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting rights, percentage | 50% | |||||||||||||
Performance Shares | Share-based Payment Arrangement, Tranche Three | 2020 PSUs | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 12 months | |||||||||||||
Performance conditions | user | 0.25 | |||||||||||||
ESPP | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Number of shares authorized, annual increase | 1% | |||||||||||||
ESPP, purchase price percentage | 85% | |||||||||||||
ESPP, number of shares authorized, annual increase (in shares) | 500,000 | 711,255,000 | 335,336,000 | |||||||||||
Subsequent Event | Restricted stock units | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Granted (in shares) | 1,870,151 | |||||||||||||
Compensation not yet recognized, awards other than options | $ | $ 17.2 | |||||||||||||
Subsequent Event | Restricted stock units | Minimum | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 2 years | |||||||||||||
Subsequent Event | Restricted stock units | Maximum | ||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||
Award vesting period | 4 years |
STOCK-BASED COMPENSATION - Allo
STOCK-BASED COMPENSATION - Allocation of Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 5,767 | $ 16,830 | $ 32,194 | $ 37,415 |
Delivery Costs [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 920 | 552 | 2,416 | 1,382 |
Sales and marketing expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 1,428 | 3,841 | 8,765 | 9,928 |
Research and development expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 1,968 | 3,170 | 9,419 | 7,132 |
General and administration expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 1,451 | $ 9,267 | $ 11,594 | $ 18,973 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Common Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
Stock Option Activity, Additional Disclosure | ||
Monthly average closing price, common stock, threshold | $ 9.40 | |
Bridg Acquisition | ||
Shares (in thousands) | ||
Beginning balance (in shares) | 18 | 18 |
Exercised (in shares) | (2) | |
Forfeited (in shares) | (11) | |
Ending balance (in shares) | 3 | |
Exercisable at end of period (in shares) | 3 | |
Weighted-Average Exercise Price | ||
Beginning balance (in usd per share) | $ 8.45 | $ 8.45 |
Exercised (in usd per share) | 8.61 | |
Forfeited (in usd per share) | $ 8.37 | |
Ending balance (in usd per share) | 8.67 | |
Exercisable at end of period (in usd per share) | $ 8.72 | |
Stock Option Activity, Additional Disclosure | ||
Options outstanding, weighted average contractual life | 8 years 7 months 6 days | |
Exercised, aggregate intrinsic value | $ 86 | |
Options outstanding, aggregate intrinsic value | $ 3 | |
Dosh Holdings, Inc. | ||
Shares (in thousands) | ||
Beginning balance (in shares) | 30 | 30 |
Exercised (in shares) | (5) | |
Forfeited (in shares) | (7) | |
Ending balance (in shares) | 18 | |
Exercisable at end of period (in shares) | 8 | |
Weighted-Average Exercise Price | ||
Beginning balance (in usd per share) | $ 3.06 | $ 3.06 |
Exercised (in usd per share) | 3.06 | |
Forfeited (in usd per share) | 3.06 | |
Ending balance (in usd per share) | 3.06 | |
Exercisable at end of period (in usd per share) | $ 3.06 | |
Stock Option Activity, Additional Disclosure | ||
Exercisable, weighted average contractual life | 8 years 2 months 19 days | |
Exercised, aggregate intrinsic value | $ 229 | |
Exercisable, aggregate intrinsic value | $ 112 | |
Share-based Payment Arrangement, Option [Member] | ||
Shares (in thousands) | ||
Beginning balance (in shares) | 406 | 406 |
Exercised (in shares) | (16) | |
Forfeited (in shares) | (9) | |
Ending balance (in shares) | 381 | |
Exercisable at end of period (in shares) | 381 | |
Weighted-Average Exercise Price | ||
Beginning balance (in usd per share) | $ 25.17 | $ 25.17 |
Exercised (in usd per share) | 23.77 | |
Forfeited (in usd per share) | 24.52 | |
Ending balance (in usd per share) | 25.25 | |
Exercisable at end of period (in usd per share) | $ 25.25 | |
Stock Option Activity, Additional Disclosure | ||
Exercisable, weighted average contractual life | 3 years 10 months 17 days | |
Exercised, aggregate intrinsic value | $ 335 | |
Options outstanding, aggregate intrinsic value | 10 | |
Exercisable, aggregate intrinsic value | $ 10 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of RSU Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Shares (in thousands) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 4,490,000 |
Restricted stock units | |
Shares (in thousands) | |
Unvested — Beginning balance (in shares) | 2,294,000 |
Granted (in shares) | 4,260,000 |
Vested (in shares) | (681,000) |
Forfeited (in shares) | (786,000) |
Unvested — Ending balance (in shares) | 5,087,000 |
Weighted-Average Grant Date Fair Value | |
Unvested — Beginning balance (in usd per share) | $ / shares | $ 60.58 |
Granted (in usd per share) | $ / shares | 31.81 |
Vested (in usd per share) | $ / shares | 53.13 |
Forfeited (in usd per share) | $ / shares | 67.52 |
Unvested — Ending balance (in usd per share) | $ / shares | $ 36.41 |
Unvested, weighted-average remaining contractual term | 3 years 10 days |
Unvested, unamortized compensation costs | $ | $ 138,807 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Fair Value of Contingent Consideration (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Liabilities: | ||
Current contingent consideration | $ 118,151 | $ 182,470 |
Long-term contingent consideration | 49,825 | |
Total liabilities | 118,151 | 232,295 |
Level 1 | ||
Liabilities: | ||
Current contingent consideration | 0 | 0 |
Long-term contingent consideration | 0 | |
Total liabilities | 0 | 0 |
Level 2 | ||
Liabilities: | ||
Current contingent consideration | 0 | 0 |
Long-term contingent consideration | 0 | |
Total liabilities | 0 | 0 |
Level 3 | ||
Liabilities: | ||
Current contingent consideration | 118,151 | 182,470 |
Long-term contingent consideration | 49,825 | |
Total liabilities | $ 118,151 | $ 232,295 |
FAIR VALUE MEASUREMENTS - Recon
FAIR VALUE MEASUREMENTS - Reconciliation of Beginning and Ending Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Contingent Consideration Classified as Equity, Fair Value Disclosure | $ 118,151 | $ 238,662 | $ 118,151 | $ 238,662 | $ 164,277 | $ 232,295 | $ 232,401 | $ 0 |
Asset Acquisition, Consideration Transferred, Contingent Consideration | 0 | 0 | 0 | 230,921 | ||||
Fair Value, Liability, Recurring Basis, Still Held, Unrealized Gain (Loss) | $ (46,126) | $ 6,261 | $ (114,144) | $ 7,741 |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Key Assumptions (Details) - Valuation, Market Approach - Level 3 | Sep. 30, 2022 |
Revenue volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration measurement input | 0.200 |
Revenue discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration measurement input | 0.082 |
Weighted average cost of capital | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration measurement input | 0.170 |
Common stock volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration measurement input | 0.940 |
Portion to be paid in cash | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration measurement input | 0.300 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Deferred FI Implementation Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Deferred Financial Institution Costs [Roll Forward] | ||||
Beginning balance | $ 0 | $ 2,173 | $ 0 | $ 3,785 |
Amortization | 0 | (731) | 0 | (2,343) |
Ending balance | $ 0 | $ 1,442 | $ 0 | $ 1,442 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Financial Institution Share Commitment | |
Loss Contingencies [Line Items] | |
FI share commitment | $ 10 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of dilutive shares (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Net Income (Loss) Available to Common Stockholders, Diluted | $ 6,267 | $ (44,529) | $ (86,985) | $ (116,730) |
Weighted-average common shares outstanding, basic (in shares) | 32,950,000 | 33,101,000 | 33,455,000 | 31,802,000 |
Weighted-average common shares outstanding, diluted (in shares) | 33,269,000 | 33,101,000 | 33,455,000 | 31,802,000 |
Net loss per share attributable to common stockholders, diluted (in USD per share) | $ 0.19 | $ (1.35) | $ (2.60) | $ (3.67) |
Restricted Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Plus: Dilutive convertible promissory notes (in shares) | 263,000 | 0 | 0 | 0 |
Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Plus: Dilutive convertible promissory notes (in shares) | 6,000 | 0 | 0 | 0 |
ESPP | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Plus: Dilutive convertible promissory notes (in shares) | 50,000 | 0 | 0 | 0 |
EARNINGS PER SHARE - Schedule_2
EARNINGS PER SHARE - Schedule of antidilutive securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 396,000 | 484,000 | 402,000 | 484,000 |
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 4,824,000 | 2,548,000 | 5,087,000 | 2,548,000 |
Employee Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 104,000 | 19,000 | 154,000 | 19,000 |
Senior Notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 2,701,000 | 2,701,000 | 2,701,000 | 2,701,000 |
SEGMENTS - Narrative (Details)
SEGMENTS - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Capital expenditures | $ 1,090 | $ 2,145 | ||
Marketers | Revenue Benchmark | Top Five Marketers | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk | 21% | 33% | ||
Marketers | Accounts Receivable | Top Five Marketers | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk | 13% | 28% | ||
Marketers | Accounts Receivable | Largest Marketers | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk | 10% | 10% | ||
Supplier Concentration Risk | Financial Institution Partner | Largest FI Partner | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk | 75% | |||
Supplier Concentration Risk | Financial Institution Partner | Bank Of America, National Association | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk | 10% | |||
Supplier Concentration Risk | Financial Institution Partner | JP Morgan Chase Bank, National Association | ||||
Segment Reporting Information [Line Items] | ||||
Concentration risk | 10% | |||
United Kingdom | ||||
Segment Reporting Information [Line Items] | ||||
Capital expenditures | $ 200 | $ 700 |
SEGMENTS - Revenue by Segment (
SEGMENTS - Revenue by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Adjusted contribution | $ 35,143 | $ 31,625 | $ 103,043 | $ 85,596 |
Plus: FI Share and other third-party costs | 37,563 | 33,359 | 112,996 | 91,471 |
Revenues | 72,706 | 64,984 | 216,039 | 177,067 |
Cardlytics Direct | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted contribution | 29,886 | 28,877 | 88,709 | 80,821 |
Plus: FI Share and other third-party costs | 37,399 | 33,198 | 111,829 | 91,247 |
Revenues | 67,285 | 62,075 | 200,538 | 172,068 |
Bridg Acquisition | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted contribution | 5,257 | 2,748 | 14,334 | 4,775 |
Plus: FI Share and other third-party costs | 164 | 161 | 1,167 | 224 |
Revenues | $ 5,421 | $ 2,909 | $ 15,501 | $ 4,999 |
SEGMENTS - Adjusted Contributio
SEGMENTS - Adjusted Contribution Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting [Abstract] | ||||
Adjusted contribution | $ 35,143 | $ 31,625 | $ 103,043 | $ 85,596 |
Deferred implementation costs | 0 | 731 | 0 | 2,343 |
Delivery costs | 9,125 | 6,390 | 23,820 | 16,076 |
Sales and marketing expense | 18,289 | 16,733 | 57,920 | 46,998 |
Research and development expense | 13,762 | 11,141 | 39,634 | 26,293 |
General and administration expense | 19,972 | 20,073 | 61,381 | 49,136 |
Acquisition and integration costs (benefit) | (1,867) | 1,714 | (4,269) | 22,926 |
Change in fair value of contingent consideration | (46,126) | 6,261 | (114,144) | 7,741 |
Depreciation and amortization expense | 10,468 | 8,375 | 30,695 | 20,273 |
Total other expense | 5,253 | 4,736 | 13,288 | 10,540 |
(Loss) income before income taxes | 6,267 | (44,529) | (88,431) | (116,730) |
Goodwill impairment | $ 0 | $ 0 | $ 83,149 | $ 0 |
SEGMENTS - Geographical Informa
SEGMENTS - Geographical Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 72,706 | $ 64,984 | $ 216,039 | $ 177,067 | |
Property and equipment | 7,103 | 7,103 | $ 11,273 | ||
United States | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 67,949 | 60,168 | 198,781 | 163,430 | |
Property and equipment | 5,116 | 5,116 | 7,750 | ||
United Kingdom | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 4,757 | $ 4,816 | 17,258 | $ 13,637 | |
Property and equipment | 1,882 | 1,882 | 3,423 | ||
India | |||||
Segment Reporting Information [Line Items] | |||||
Property and equipment | $ 105 | $ 105 | $ 100 |