COVER
COVER - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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, Suite 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) | 39,254,146 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
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, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 90,067 | $ 121,905 |
Restricted cash | 73 | 80 |
Accounts receivable and contract assets, net | 103,324 | 115,609 |
Other receivables | 4,865 | 4,470 |
Prepaid expenses and other assets | 7,260 | 7,978 |
Total current assets | 205,589 | 250,042 |
Long-term assets: | ||
Property and equipment, net | 3,005 | 5,916 |
Right-of-use assets under operating leases, net | 4,823 | 6,571 |
Intangible assets, net | 43,116 | 53,475 |
Goodwill | 352,721 | 352,721 |
Capitalized software development costs, net | 23,721 | 19,925 |
Other long-term assets, net | 1,941 | 2,586 |
Total assets | 634,916 | 691,236 |
Current liabilities: | ||
Accounts payable | 3,479 | 3,765 |
Accrued liabilities: | ||
Accrued compensation | 11,086 | 10,486 |
Accrued expenses | 9,666 | 21,335 |
Short-Term Debt | 30,000 | 0 |
Partner Share liability | 43,495 | 48,593 |
Consumer Incentive liability | 48,922 | 53,983 |
Deferred revenue | 3,323 | 1,751 |
Current operating lease liabilities | 2,244 | 4,910 |
Current contingent consideration | 27,268 | 104,121 |
Total current liabilities | 179,483 | 248,944 |
Long-term liabilities: | ||
Convertible senior notes, net | 227,139 | 226,047 |
Long-term operating lease liabilities | 2,878 | 4,306 |
Total liabilities | 409,581 | 479,631 |
Stockholders’ equity: | ||
Common stock, $0.0001 par value—100,000 shares authorized, and 33,477 and 38,528 shares issued and outstanding as of December 31, 2022 and September 30, 2023, respectively | 9 | 9 |
Additional paid-in capital | 1,230,458 | 1,182,568 |
Accumulated Other Comprehensive Income (Loss), Net of Tax | 5,304 | 5,598 |
Accumulated deficit | (1,010,436) | (976,570) |
Total stockholders’ equity | 225,335 | 211,605 |
Total liabilities and stockholders’ equity | 634,916 | 691,236 |
Deferred liabilities | $ 81 | $ 334 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 79,005 | $ 72,706 | $ 220,037 | $ 216,039 |
Costs and expenses: | ||||
Partner Share and other third-party costs | 36,144 | 37,563 | 108,698 | 112,996 |
Delivery costs | 7,012 | 9,125 | 20,451 | 23,820 |
Sales and marketing expense | 14,161 | 18,289 | 43,314 | 57,920 |
Research and development expense | 12,430 | 13,762 | 38,841 | 39,634 |
General and administration expense | 15,561 | 19,972 | 44,907 | 61,381 |
Acquisition and integration (benefit) cost | 78 | (1,867) | (8,146) | (4,269) |
(Gain) loss in fair value of contingent consideration | 8,281 | (46,126) | (15,045) | (114,144) |
Goodwill impairment | 0 | 0 | 0 | 83,149 |
Depreciation and amortization expense | 5,990 | 10,468 | 19,765 | 30,695 |
Total costs and expenses | 99,657 | 61,186 | 252,785 | 291,182 |
Operating Income (Loss), Total | (20,652) | 11,520 | (32,748) | (75,143) |
Other expense: | ||||
Interest expense, net | (915) | (580) | (1,497) | (2,406) |
Foreign currency (loss) gain | (2,399) | (4,673) | 379 | (10,882) |
Total other expense | (3,314) | (5,253) | (1,118) | (13,288) |
Income (loss) before income taxes | (23,966) | 6,267 | (33,866) | (88,431) |
Income tax benefit | 0 | 0 | 0 | 1,446 |
Net Income (Loss) Attributable to Parent, Total | (23,966) | 6,267 | (33,866) | (86,985) |
Net Income (Loss) Available to Common Stockholders, Basic, Total | $ (23,966) | $ 6,267 | $ (33,866) | $ (86,985) |
Net loss per share attributable to common stockholders, basic (in USD per share) | $ (0.63) | $ 0.19 | $ (0.95) | $ (2.60) |
Weighted-average common shares outstanding, basic (in shares) | 37,982,000 | 32,950,000 | 35,502,000 | 33,455,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) Attributable to Parent | $ (23,966) | $ 6,267 | $ (33,866) | $ (86,985) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 2,261 | 3,998 | (294) | 9,092 |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent, Total | $ (21,705) | $ 10,265 | $ (34,160) | $ (77,893) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 33,534 | ||||
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) | 23 | ||||
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 | ||||
Common stock purchase consideration for acquisition of Entertainment | 11,937 | ||||
Other comprehensive income (loss) | 9,092 | 9,092 | |||
Net loss | (86,985) | (86,985) | |||
Ending balance (in shares) at Sep. 30, 2022 | 33,043 | ||||
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 | ||||
Issuance of common stock pursuant to the ESPP | 1,503 | 1,503 | |||
Issuance of common stock pursuant to the ESPP (in shares) | 55 | ||||
Beginning balance (in shares) at Jun. 30, 2022 | 32,883 | ||||
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 | ||||
Other comprehensive income (loss) | 3,998 | 3,998 | |||
Net loss | 6,267 | 6,267 | |||
Ending balance (in shares) at Sep. 30, 2022 | 33,043 | ||||
Ending balance at Sep. 30, 2022 | 580,509 | $ 9 | 1,169,213 | 9,578 | (598,291) |
Beginning balance (in shares) at Dec. 31, 2022 | 33,477 | ||||
Beginning balance at Dec. 31, 2022 | 211,605 | $ 9 | 1,182,568 | 5,598 | (976,570) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of common stock options (in shares) | 10 | ||||
Stock Issued During Period, Value, Stock Options Exercised | 54 | 54 | |||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 31,561 | 31,561 | |||
Settlement of restricted stock (in shares) | 2,004 | ||||
Common stock purchase consideration for acquisition of Entertainment | 0 | ||||
Other comprehensive income (loss) | (294) | (294) | |||
Net loss | (33,866) | (33,866) | |||
Ending balance (in shares) at Sep. 30, 2023 | 38,528 | ||||
Ending balance at Sep. 30, 2023 | 225,335 | $ 9 | 1,230,458 | 5,304 | (1,010,436) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Payments for Repurchase of Common Stock | 0 | ||||
Issuance of common stock pursuant to the ESPP | 1,104 | 1,104 | |||
Stock Issued During Period, Value, New Issues | 15,171 | 15,171 | |||
Issuance of common stock pursuant to the ESPP (in shares) | 282 | ||||
Issuance of common stock (in shares) | 2,755 | ||||
Beginning balance (in shares) at Jun. 30, 2023 | 37,088 | ||||
Beginning balance at Jun. 30, 2023 | 236,112 | $ 9 | 1,219,530 | 3,043 | (986,470) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of common stock options (in shares) | 6 | ||||
Stock Issued During Period, Value, Stock Options Exercised | 44 | 44 | |||
APIC, Share-based Payment Arrangement, Increase for Cost Recognition | 10,884 | 10,884 | |||
Settlement of restricted stock (in shares) | 1,434 | ||||
Other comprehensive income (loss) | 2,261 | 2,261 | |||
Net loss | (23,966) | (23,966) | |||
Ending balance (in shares) at Sep. 30, 2023 | 38,528 | ||||
Ending balance at Sep. 30, 2023 | $ 225,335 | $ 9 | $ 1,230,458 | $ 5,304 | $ (1,010,436) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Operating activities | |||||
Net Income (Loss) Attributable to Parent | $ (23,966) | $ 6,267 | $ (33,866) | $ (86,985) | |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | |||||
Credit loss expense | 1,153 | 949 | |||
Depreciation and amortization | 19,765 | 30,695 | |||
Amortization of financing costs charged to interest expense | 1,234 | 1,192 | |||
Amortization of right-of-use assets | 2,807 | 4,230 | |||
Stock-based compensation expense | 29,956 | 32,194 | |||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | 15,044 | 114,144 | |||
Other non-cash expense (income), net | (613) | 10,524 | |||
Change in operating assets and liabilities: | |||||
Accounts receivable | 10,991 | 15,082 | |||
Prepaid expenses and other assets | 1,114 | (456) | |||
Accounts payable | (265) | 111 | |||
Increase (Decrease) in Accrued Liabilities | (10,282) | (5,814) | |||
Partner Share liability | (4,994) | (5,836) | |||
Consumer Incentive liability | (5,075) | (4,248) | |||
Net cash used in operating activities | (3,119) | (40,803) | |||
Investing activities | |||||
Acquisition of property and equipment | (393) | (1,090) | |||
Acquisition of patents | 0 | (73) | |||
Capitalized software development costs | (8,302) | (9,170) | |||
Business acquisitions, net of cash acquired | 0 | (2,274) | |||
Net cash used in investing activities | (8,695) | (12,607) | |||
Financing activities | |||||
Proceeds from Issuance of Debt | 30,000 | 0 | |||
Payment for Contingent Consideration Liability, Financing Activities | 50,050 | 0 | |||
Principal payments of debt | (21) | (24) | |||
Proceeds from issuance of common stock | 55 | 397 | |||
Payments of Stock Issuance Costs | (58) | 0 | |||
Net cash used in financing activities | (20,074) | (39,808) | |||
Effect of exchange rates on cash, cash equivalents and restricted cash | 43 | (1,756) | |||
Net decrease in cash, cash equivalents and restricted cash | (31,845) | (94,974) | |||
Cash, cash equivalents, and restricted cash — Beginning of period | 121,985 | 233,562 | $ 233,562 | ||
Cash, cash equivalents, and restricted cash — End of period | 90,140 | 138,588 | 90,140 | 138,588 | 121,985 |
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet: | |||||
Cash and cash equivalents | 90,067 | 138,514 | 90,067 | 138,514 | 121,905 |
Restricted cash | 73 | 74 | 73 | 74 | |
Total cash, cash equivalents and restricted cash — End of period | 90,140 | 138,588 | 90,140 | 138,588 | 121,985 |
Supplemental schedule of non-cash investing and financing activities: | |||||
Cash paid for interest | 2,958 | 2,358 | |||
Common stock purchase consideration for acquisition of Entertainment | 0 | 11,937 | |||
Payments of Debt Issuance Costs | 0 | 181 | |||
Increase (Decrease) in Income Taxes | 0 | (1,446) | |||
Goodwill impairment | $ 0 | $ 0 | 0 | 83,149 | $ 396,200 |
Payments for Repurchase of Common Stock | $ 0 | $ 40,000 |
OVERVIEW OF BUSINESS AND BASIS
OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2023 | |
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 predominantly 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, and (3) Cardlytics U.K. Limited, a wholly owned and operated subsidiary registered as a private limited company in England and Wales. 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") for the fiscal year ended December 31, 2022. 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. Refer to Note 3 - Business Combinations for further information. Contingent consideration for the acquisition of Bridg As part of our acquisition of Bridg, Inc. ("Bridg") and pursuant to the terms of the Agreement and Plan of Merger dated as of April 12, 2021, as amended (the "Merger Agreement"), we agreed to make two earnout payments – the First Anniversary Payment Amount and the Second Anniversary Payment Amount – based on the First Anniversary ARR and the Second Anniversary ARR of Bridg, respectively. In June 2022, we calculated the First Anniversary ARR and the First Anniversary Payment Amount and provided the calculation to the Stockholder Representative. The Stockholder Representative objected to these calculations, and the dispute over these matters was then referred to an independent accountant, as contemplated by the relevant dispute resolution provision of the Merger Agreement. On April 28, 2023, the independent accountant made its determination of the appropriate amount of the First Anniversary ARR, determining the First Anniversary ARR as determined by the independent accountant to be $23.2 million. Consequently, based on the First Anniversary ARR, we calculated the First Anniversary Payment to be $208.1 million. Pursuant to the Merger Agreement, we were obligated to pay at least 30% of the First Anniversary Payment in cash, and could elect to pay the remainder of the First Anniversary Payment in cash or our common stock, based on a share price of $40.15 per share, or a combination thereof. In the event we chose to pay 30% of the First Anniversary Payment, as determined by the independent accountant, in cash and the remainder in common stock, we would have paid $65.3 million in cash and issued 3,556,717 shares of our common stock to complete the First Anniversary Payment, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. The amount of cash and shares is different than previously reported in our Form 8-K dated May 1, 2023 and our Form 10-Q dated May 4, 2023 – in which we had calculated that $72.6 million in cash and 3,374,383 shares of common stock would be paid in the event we paid the First Anniversary Payment based on the independent accountant’s determination – due to subsequent discussions and agreements reached by the relevant parties related to the amount of the brokerage fees. However, we believe that the independent accountant exceeded its authority with respect to its determination related to one specific contract at issue. As a result, we filed a verified complaint in the Delaware Court of Chancery in May 2023 seeking a declaratory judgment that the portion of the independent accountant's determination related to that one contract be stricken as null and void. Since the lawsuit is pending, we have not made the portion of the First Anniversary Payment related to the one specific contract at issue. After adjusting the First Anniversary ARR to not include the contract for which we believe the independent accountant exceeded its authority, we have determined the First Anniversary ARR to be $20.8 million. Consequently, based on the adjusted First Anniversary ARR, we calculated the First Anniversary Payment to be $160.1 million. Based on this calculation, and due to our decision to pay 30% of the First Anniversary Payment in cash and the remainder in common stock, we calculated that $50.1 million of cash and 2,740,418 shares of our common stock would be needed to complete the First Anniversary Payment of $160.1 million, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. As of September 30, 2023, we have paid $50.1 million in cash and delivered 2,740,418 shares of our common stock related to the First Anniversary Payment, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Solely in connection with the disputed contract at issue in the Delaware court proceeding and included in our current contingent consideration and accrued expenses on our consolidated balance sheet, we are withholding $15.2 million and 816,299 shares of our common stock, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Additionally, we have calculated the Second Anniversary ARR to be less than the First Anniversary ARR, and we have therefore calculated the Second Anniversary Payment to be $0, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Per the terms of the Merger Agreement, we delivered the Second Earnout Statement within thirty days of the end of the Second Earnout Period. We subsequently agreed to extend the Stockholder Representative's review period. In October 2023, we received an Earnout Objection Notice from the Stockholder Representative that alleges a material understatement of the Second Anniversary Payment amount. We are continuing the dispute-resolution process specific to the Second Anniversary Payment outlined in the Merger Agreement. We have not changed our calculation of the contingent consideration related to our acquisition of Bridg as a result of the dispute over the Second Anniversary ARR. Refer to Note 3 - Business Combinations for further information about the Bridg acquisition and related contingent consideration. Restructuring 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 for the nine months ended September 30, 2022 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 closed our Indian office at the end of 2022. 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. Macroeconomic Considerations Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including the changes in inflation, the U.S. Federal Reserve raising interest rates, disruptions in access to bank deposits or lending commitments due to bank failures, the Russia-Ukraine war and the Israel conflict have led to economic uncertainty globally. Historically, during periods of economic uncertainty and downturns, businesses may slow spending on advertising, which may impact our business and our customers’ businesses. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING STANDARDS | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022, 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 is 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, 2023 | |
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. During the three and nine months ended September 30, 2022, we incurred a $1.9 million cost and a $4.3 million of benefit, respectively, primarily in connection with our acquisition of Bridg due to the changes in the estimated brokerage fees and transaction bonuses and accounting for all true-ups and credits related to the acquisition of Bridg. During the three and nine months ended September 30, 2023, we incurred a $0.1 million cost and a $8.1 million benefit, respectively, primarily in connection with our acquisition of Bridg due to the changes in the estimated brokerage fees and transaction bonuses and accounting for all true-ups and credits related to the acquisition of Bridg. These benefits and costs are included in acquisition and integration benefit on our condensed consolidated statements of operations. Acquisition of Bridg 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 an initial fair value of $230.9 million related to additional potential future payments. Under the Merger Agreement, the potential payment to be paid after the determination or agreement of the first payment amount (the "First Anniversary Payment") was to be equal to 20 times the difference between the U.S. annualized recurring revenue ("ARR"), based on revenue in April 2022, and $12.5 million. The potential payment to be paid after the determination or agreement of the second payment amount (the "Second Anniversary Payment") is equal to 15 times the difference between the ARR for customers as of the first anniversary, based on the April 2023 revenue, and the prior ARR at the first anniversary, based on the April 2022 revenue. At least 30% of each of the First Anniversary Payment and the Second Anniversary Payment is required to be paid in cash, with the remainder to be paid in cash or our common stock, at our option. For the portion of the First Anniversary Payment or Second Anniversary Payment in our common stock, the number of shares is determined by dividing the amount of the payment by the trailing 20-day volume-weighted average price ending on the first anniversary date or second anniversary date, as applicable. We also assumed unvested options to purchase Bridg’s common stock and attributed $0.8 million of their fair value to the pre-combination service period. "Management's Discussion and Analysis of Financial Condition and Results of Operations". Refer to Note 9—Fair Value Measurements and Note 1—Overview of Business and Basis of Presentation for further information. On April 28, 2023, the independent accountant made its determination of the appropriate amount of the First Anniversary ARR, determining the First Anniversary ARR to be $23.2 million. Consequently, based on the First Anniversary ARR as determined by the independent accountant, we calculated the First Anniversary Payment to be $208.1 million. Pursuant to the Merger Agreement, we were obligated to pay at least 30% of the First Anniversary Payment in cash, and can elect to pay the remainder of the First Anniversary Payment in cash or our common stock, based on a share price of $40.15 per share, or a combination thereof. In the event we chose to pay 30% of the First Anniversary Payment, as determined by the independent accountant, in cash and the remainder in common stock, we would have paid $65.3 million in cash and issued 3,556,717 shares of our common stock to complete the First Anniversary Payment, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. The amount of cash and shares is different than previously reported in our Form 8-K dated May 1, 2023 and our Form 10-Q dated May 4, 2023 – in which we had calculated that $72.6 million in cash and 3,374,383 shares of common stock would be paid in the event we paid the First Anniversary Payment based on the independent accountant’s determination – due to subsequent discussions and agreements reached by the relevant parties related to the amount of the brokerage fees. However, we believe that the independent accountant exceeded its authority with respect to its determination related to one specific contract at issue. As a result, we filed a verified complaint in the Delaware Court of Chancery in May 2023 seeking a declaratory judgment that the portion of the independent accountant's determination related to that one contract be stricken as null and void. Since the lawsuit is pending, we have not made the portion of the First Anniversary Payment related to the one specific contract at issue. After adjusting the First Anniversary ARR to not include the contract for which we believe the independent accountant exceeded its authority, we have determined the First Anniversary ARR to be $20.8 million. Consequently, based on the adjusted First Anniversary ARR, we calculated the First Anniversary Payment to be $160.1 million. Based on this calculation, and due to our decision to pay 30% of the First Anniversary Payment in cash and the remainder in common stock, we calculated that $50.1 million of cash and 2,740,418 shares of our common stock would be needed to complete the First Anniversary Payment of $160.1 million, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. As of September 30, 2023, we have paid $50.1 million in cash and delivered 2,740,418 shares of our common stock related to the First Anniversary Payment, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Solely in connection with the disputed contract at issue in the Delaware court proceeding and included in our current contingent consideration and accrued expenses on our consolidated balance sheet, we are withholding $15.2 million and 816,299 shares of our common stock, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Additionally, we have calculated the Second Anniversary ARR to be less than the First Anniversary ARR, and we have therefore calculated the Second Anniversary Payment to be $0, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Per the terms of the Merger Agreement, we delivered the Second Earnout Statement within thirty days of the end of the Second Earnout Period. We subsequently agreed to extend the Stockholder Representative's review period. In October 2023, we received an Earnout Objection Notice from the Stockholder Representative that alleges a material understatement of the Second Anniversary Payment amount. We are continuing the dispute-resolution process specific to the Second Anniversary Payment outlined in the Merger Agreement. We have not changed our calculation of the contingent consideration related to our acquisition of Bridg as a result of the dispute over the Second Anniversary ARR 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 The results of Entertainment have been included in the consolidated financial statements since its date of acquisition. For each of the nine months ended September 30, 2022 and 2023, Entertainment's combined revenue included in the consolidated statement of operations was approximately 3% of consolidated revenue. Due to the continued integration of the combined businesses, it was impractical to determine the earnings. 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, 2022. 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 acquisition actually occurred on January 1, 2022 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 (in thousands) Revenue $ 216,060 Net loss $ (85,902) |
GOODWILL AND ACQUIRED INTANGIBL
GOODWILL AND ACQUIRED INTANGIBLES | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND ACQUIRED INTANGIBLES | GOODWILL AND ACQUIRED INTANGIBLES There have been no changes to the carrying amounts of goodwill since December 31, 2022. The carrying amounts of goodwill as of September 30, 2023 are as follows (in thousands): Cardlytics Platform Bridg Platform Consolidated Gross goodwill $ 210,692 $ 538,271 $ 748,963 Accumulated impairments (46,262) (349,980) (396,242) Net goodwill $ 164,430 $ 188,291 $ 352,721 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. We have assessed the triggering events criteria along with related conditions and developments as of September 30, 2023. We have determined that none of the conditions collectively constitute a triggering event. As such, we have determined that it is not more likely than not that the carrying values of our reporting units exceed their respective fair values, and an impairment test was not required as of September 30, 2023. However, future changes in assumptions or market conditions could result in an impairment. As of June 30, 2022, we determined that it was necessary to perform an interim impairment test for goodwill, in which we recognized goodwill impairment of $83.1 million related to the Bridg platform. Subsequently, we performed our annual impairment test as of October 1, 2022 and determined that the carrying value of both the Cardlytics platform in the U.S. and the Bridg platform exceeded their respective fair values, and we recognized an additional goodwill impairment of $313.1 million, resulting in a total impairment of $396.2 million as of December 31, 2022. Acquired intangible assets subject to amortization as of September 30, 2023 were as follows: Gross Carrying Amount (1) Accumulated Amortization Net Weighted Average Remaining Useful Life (in thousands) (in years) Trade name $ 2,315 $ (1,979) $ 336 0.3 Developed technology 64,070 (31,759) 32,311 0.7 Merchant relationships 25,915 (15,521) 10,394 1.1 Total other intangible assets $ 92,300 $ (49,259) $ 43,041 (1) We recorded an impairment of intangible assets in the amount of $56.4 million as of December 31, 2022. Amortization expense of acquired intangibles during the three months ended September 30, 2022 and 2023 was $7.2 million and $3.4 million, respectively. Amortization expense of acquired intangibles during the nine months ended September 30, 2022 and 2023 was $21.6 million and $10.3 million, respectively. Acquired intangible assets subject to amortization as of December 31, 2022 were as follows: Gross Carrying Amount Accumulated Amortization Impairments of Intangible Assets Net Weighted Average Remaining Useful Life (in thousands) (in years) Trade name $ 3,500 $ (1,744) $ (1,185) $ 571 1.4 Developed technology 91,700 (24,882) (27,630) 39,188 3.6 Merchant relationships 40,300 (12,301) (14,385) 13,614 1.7 Partner relationships 2,000 (450) (1,550) — n/a Card-linked subscriber user base 17,000 (5,355) (11,645) — n/a Total other intangible assets $ 154,500 $ (44,732) $ (56,395) $ 53,373 As of September 30, 2023, we expect amortization expense in future periods to be as follows (in thousands): Amount 2023 (remaining three months) 3,423 2024 13,603 2025 13,192 2026 9,674 2027 3,149 Thereafter — Total expected future amortization expense $ 43,041 |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2023 | |
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 FI partners' 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 FI partners' 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 $37.7 million and $37.6 million during the three months ended September 30, 2022 and 2023, respectively. Consumer Incentives totaled $100.3 million and $101.4 million during the nine months ended September 30, 2022 and 2023, 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 and other factors. • 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 and other factors. The following table summarizes revenue from the Cardlytics platform by pricing model (in thousands): Three Months Ended Nine Months Ended 2022 2023 2022 2023 Cost per Served Sale $ 43,436 $ 49,957 $ 128,568 $ 138,664 Cost per Redemption 21,602 20,842 65,333 58,305 Other 2,247 2,265 6,637 5,851 Cardlytics platform revenue $ 67,285 $ 73,064 $ 200,538 $ 202,820 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. The following table summarizes revenue from the Bridg platform (in thousands): Three Months Ended Nine Months Ended 2022 2023 2022 2023 Subscription revenue $ 5,421 $ 5,941 $ 15,471 $ 17,217 Other revenue — — 30 — Bridg platform revenue $ 5,421 $ 5,941 $ 15,501 $ 17,217 The following table summarizes contract balances from the Bridg platform (in thousands): Contract Balance Type Consolidated Balance Sheets Location December 31, 2022 September 30, 2023 Contract assets, current Accounts receivable and contract assets, net $ 28 $ 147 Contract assets, long-term Other long-term assets, net — — Total contract assets $ 28 $ 147 Contract liabilities, current Deferred revenue $ 1,750 $ 3,324 Contract liabilities, long-term Long-term deferred revenue 334 81 Total contract liabilities $ 2,084 $ 3,405 During the nine months ended September 30, 2023, we recognized $1.3 million of revenue related to amounts that were included in deferred revenue as of December 31, 2022. The following information represents the total transaction price for the remaining performance obligations as of September 30, 2023 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, 2023, we had $23.7 million of remaining performance obligations, of which $12.8 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, 2023 | |
Debt Disclosure [Abstract] | |
DEBT AND FINANCING ARRANGEMENTS | DEBT AND FINANCING ARRANGEMENTS Our debt consists of the following (in thousands): December 31, 2022 September 30, 2023 Line of Credit $ — $ 30,000 Convertible senior notes, net 226,047 227,139 Total debt $ 226,047 $ 257,139 Accrued interest is included within accrued expenses in our consolidated balance sheet. We had accrued interest on debt of $0.7 million and less than $0.1 million, respectively, as of December 31, 2022 and September 30, 2023. 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 September 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, 2023, thus the Notes are not convertible at the option of the holders during the quarter ending December 31, 2023. 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 redeem for cash all or any portion of the Notes, at our option, 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 business days; • 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 business day; • failure by us to comply with our 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. Refer to Note 2 - Significant Account Policies and Recent Accounting Standards for further information. The net carrying amount of the liability component of the Notes is as follows (in thousands): December 31, 2022 September 30, 2023 Principal $ 230,000 $ 230,000 Minus: Unamortized issuance costs (3,953) (2,860) Net carrying amount $ 226,047 $ 227,140 Interest expense recognized related to the Notes is as follows (in thousands): Three Months Ended Nine Months Ended 2022 2023 2022 2023 Contractual interest expense (due in cash) $ 575 $ 575 $ 1,725 $ 1,725 Amortization of debt issuance costs 365 365 1,095 1,096 Total interest expense related to the Notes $ 940 $ 940 $ 2,820 $ 2,821 Effective interest rate 1.64 % 1.64 % 1.64 % 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 billings and cash covenants were removed and replaced with a requirement to maintain a minimum level of adjusted contribution and minimum adjusted cash of $25.0 million, which is reduced by eligible accounts receivable in excess of the loan capacity. On November 29, 2022, we amended our 2018 Loan Facility to modify the eligible account receivable to exclude U.K. accounts, reduce the ability to borrow up to 85% of the amount of our eligible accounts receivable to 50% and adjusted the required minimum level of adjusted contribution. On February 16, 2023, we amended our 2018 Loan Facility to remove and replace the former adjusted contribution covenant with a requirement to maintain a minimum level of adjusted EBITDA. On May 3, 2023, we amended our 2018 Loan Facility to modify the covenants related to the maximum amount of cash we are allowed to pay for the First Anniversary Payment and Second Anniversary Payment under the Merger Agreement. During the nine months ended September 30, 2023, we borrowed $30.0 million against our 2018 Line of Credit. Interest on advances bears an interest rate equal to the prime rate of 8.50% as of September 30, 2023. During the nine months ended September 30, 2023, we incurred approximately $1.4 million of interest expense associated with the 2018 Loan Facility. In addition, we are required to pay an unused line fee of 0.15% per annum on the average daily unused amount of the revolving commitment. As of September 30, 2023, we had $4.3 million of unused available borrowings under our 2018 Line of Credit. We believe we are in compliance with all financial covenants as of September 30, 2023. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022, there were 405,830 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 1,673,858 shares on January 1, 2023. On July 18, 2022, our board of directors adopted the Cardlytics, Inc. 2022 Inducement Plan ("2022 Inducement Plan"). Our board of directors 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. On January 18, 2023, our board of directors approved an amendment to the 2022 Inducement Plan to reserve an additional 350,000 shares of our common stock. On July 13, 2023, our board of directors approved an amendment to the 2022 Inducement Plan to reserve an additional 800,000 shares of our common stock. As of September 30, 2023, there were 515,522 shares available under the 2022 Inducement Plan. 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 2022 2023 2022 2023 Delivery costs $ 920 $ 667 $ 2,416 $ 1,800 Sales and marketing expense 1,428 2,683 8,765 9,487 Research and development expense 1,968 3,661 9,419 12,248 General and administration expense 1,451 3,238 11,594 6,421 Total stock-based compensation expense $ 5,767 $ 10,249 $ 32,194 $ 29,956 During the nine months ended September 30, 2022 and 2023, we capitalized $1.0 million and $1.6 million of stock-based compensation expense for software development, respectively. Restricted Stock Units We grant restricted stock units ("RSUs") to certain 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, 2022 5,956 $ 25.43 Granted 3,145 6.57 Vested (2,021) 22.85 Forfeited (920) 33.98 Unvested — September 30, 2023 6,160 $ 32.41 2.19 $ 77,547 Shares expected to vest - September 30, 2023 6,107 During the nine months ended September 30, 2023, we granted 3,145,035 RSUs to employees and non-employee directors, which have vesting periods ranging from vesting immediately to vesting in four years. Subsequent to September 30, 2023, we granted 414,233 RSUs to employees and non-employee directors, which have vesting periods of one to two years. Unamortized stock-based compensation expense related to these RSUs totaled $4.9 million. 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. Twenty-five percent of each respective tranche vested upon the six-month anniversary of the achievement date, and 25% of each respective tranche vested 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, 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 ("2020 PSUs") 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 year ended December 31, 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 reversed the previously recognized cumulative expense associated with the 2020 PSUs since the grant date as a benefit to stock-based compensation during the year ended December 31, 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. Additionally, in April 2021, we granted 10,000 performance-based restricted stock units, which have the same unmet vesting condition as the 2020 PSUs based on a minimum ARPU target over a trailing 12-month period as described above. During the three months ended September 30, 2023, we reassessed the likelihood of achieving the 2021 PSUs performance-based vesting condition and concluded the achievement is no longer probable. As a result of the change in estimate, we have reversed the previously recognized cumulative expense associated with the 2021 PSUs since the grant date as a benefit to stock-based compensation during the three months ended September 30, 2023. In July 2021, we granted 34,344 performance-based restricted stock units ("Bridg PSUs") that 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 an annual run rate 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. During the three months ended September 30, 2023, the compensation committee of our board of directors certified the vesting of shares associated with the 50% attainment of the units based on the achieved annual run rate during the specified period. In September 2021, we granted 6,666 PSUs which have the same unmet vesting condition as the 2020 PSUs, 6,667 PSUs which have the same unmet revenue target vesting condition as the 2021 PSUs and 6,667 PSUs which have the same unmet revenue target vesting condition as the 2021 PSUs as described above. As discussed above, we concluded the achievement of the 2020 PSUs and 2021 PSUs is no longer probable and have reversed the previously recognized cumulative expense in the respective period in which the 2020 PSUs and 2021 PSUs were determined to no longer be achievable. 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. Half 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 billings, and the remaining 50% of the tranche vest six months after this target is achieved. During the year ended December 31, 2022, the compensation committee of our board of directors certified that the first tranche's milestone related to the installation of our Ad Server at our FI partners had been achieved, which resulted in the immediate vesting of the first tranche representing 25% of the grant. In July 2022, we granted 100,990 PSUs which vest on the achievement of specific revenue-based performance metrics. With the exception of the 2020 PSUs, the 2021 PSUs, and any other PSUs tied to these vesting conditions, 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, 2023 | |
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. During the year ended December 31, 2022 we recognized a goodwill impairment of $396.2 million. The fair value of our reporting units was classified in Level 3 of the fair value hierarchy due to the significance of unobservable inputs developed using company-specific information. Refer to Note 4 - Goodwill and Acquired Intangibles for further details. 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, 2022 Level 1 Level 2 Level 3 Total Liabilities: Current contingent consideration $ — $ — $ 104,121 $ 104,121 Total liabilities $ — $ — $ 104,121 $ 104,121 September 30, 2023 Level 1 Level 2 Level 3 Total Liabilities: Current contingent consideration $ — $ — $ 27,268 $ 27,268 Total liabilities $ — $ — $ 27,268 $ 27,268 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 2022 2023 2022 2023 Beginning balance $ 164,277 $ 18,987 $ 232,295 $ 104,121 Decrease due to earnout settlement — — — (61,808) (Gain) loss in fair value of contingent consideration (46,126) 8,281 (114,144) $ (15,045) Ending balance $ 118,151 $ 27,268 $ 118,151 $ 27,268 On April 28, 2023, the independent accountant made its determination of the appropriate amount of the First Anniversary ARR, determining the First Anniversary ARR to be $23.2 million. Consequently, based on the First Anniversary ARR as determined by the independent accountant, we calculated the First Anniversary Payment to be $208.1 million. Pursuant to the Merger Agreement, we were obligated to pay at least 30% of the First Anniversary Payment in cash, and could elect to pay the remainder of the First Anniversary Payment in cash or our common stock, based on a share price of $40.15 per share, or a combination thereof. In the event we chose to pay 30% of the First Anniversary Payment, as determined by the independent accountant, in cash and the remainder in common stock, we would have paid $65.3 million in cash and issued 3,556,717 shares of our common stock to complete the First Anniversary Payment, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. The amount of cash and shares is different than previously reported in our Form 8-K dated May 1, 2023 and our Form 10-Q dated May 4, 2023 – in which we had calculated that $72.6 million in cash and 3,374,383 shares of common stock would be paid in the event we paid the First Anniversary Payment based on the independent accountant’s determination – due to subsequent discussions and agreements reached by the relevant parties related to the amount of the brokerage fees. However, we believe that the independent accountant exceeded its authority with respect to its determination related to one specific contract at issue. As a result, we filed a verified complaint in the Delaware Court of Chancery in May 2023 seeking a declaratory judgment that the portion of the independent accountant's determination related to that one contract be stricken as null and void. Since the lawsuit is pending, we have not made the portion of the First Anniversary Payment related to the one specific contract at issue. After adjusting the First Anniversary ARR to not include the contract for which we believe the independent accountant exceeded its authority, we have determined the First Anniversary ARR to be $20.8 million. Consequently, based on the adjusted First Anniversary ARR, we calculated the First Anniversary Payment to be $160.1 million. Based on this calculation, and due to our decision to pay 30% of the First Anniversary Payment in cash and the remainder in common stock, we calculated that $50.1 million of cash and 2,740,418 shares of our common stock would be needed to complete the First Anniversary Payment of $160.1 million, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. As of September 30, 2023, we have paid $50.1 million in cash and delivered 2,740,418 shares of our common stock related to the First Anniversary Payment, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Solely in connection with the disputed contract at issue in the Delaware court proceeding and included in our current contingent consideration and accrued expenses on our consolidated balance sheet, we are withholding $15.2 million and 816,299 shares of our common stock, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Additionally, we have calculated the Second Anniversary ARR to be less than the First Anniversary ARR, and we have therefore calculated the Second Anniversary Payment to be $0, inclusive of brokerage fees and transaction bonuses and accounting for all true-ups and credits. Per the terms of the Merger Agreement, we delivered the Second Earnout Statement within thirty days of the end of the Second Earnout Period. We subsequently agreed to extend the Stockholder Representative's review period. In October 2023, we received a Earnout Objection Notice from the Stockholder Representative that alleges a material understatement of the Second Anniversary Payment amount. We are continuing the dispute-resolution process specific to the Second Anniversary Payment outlined in the Merger Agreement. We have not changed our calculation of the contingent consideration related to our acquisition of Bridg as a result of the dispute over the Second Anniversary ARR Refer to Note 3 - Business Combinations for further information about the Bridg acquisition and related contingent consideration. The following table summarizes key assumptions used for estimating the fair value of the contingent consideration: December 31, 2022 Revenue volatility 20.0 % Revenue discount rate 8.7 % Weighted average cost of capital 17.0 % Common stock volatility 156.0 % Portion to be paid in cash 30.0 % |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Commitments We had a minimum Partner Share commitment to a certain FI partner totaling $10.0 million over a 12-month period which ended on March 31, 2023. We have accrued $4.5 million for the Partner Share shortfall, included within Partner Share liability on our condensed consolidated balance sheet. We expect to pay this shortfall on a quarterly basis from October 1, 2023 through June 30, 2024. During the nine months ended September 30, 2022 and 2023, we recognized $2.2 million and $1.3 million, respectively, of expected minimum Partner Share commitment shortfalls within Partner Share and other third-party costs on our condensed consolidated statement of operations. Subsequent to September 30, 2023, we paid our first shortfall payment of $1.2 million. Other Commitments We lease property and equipment under non-cancelable operating lease agreements. Refer to Note 6—Leases for further details. In September 2020, we issued convertible senior notes with an aggregate principal amount of $230.0 million bearing an interest rate of 1.00% due in September 2025. Refer to Note 7—Debt and Financing Arrangements for further details. In connection with our acquisition of Bridg, we owed broker fees and transaction bonuses derived from the amount of the First Anniversary Payment and do not expect to owe broker fees or transaction bonuses derived from the amount of the Second Anniversary Payment. Refer to Note 3 - Business Combinations for further details. 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. In January 2023, we renewed our agreement guaranteeing an aggregated spend of $13.5 million over a twelve-month period. Litigation From time to time, we may become involved in legal actions arising in the ordinary course of business including, but not limited to, intellectual property infringement and collection matters. We make assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. We record a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range. If no amount within the range is a better estimate than any other amount, we accrue the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, we disclose the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, we disclose the nature and estimate of the possible loss of the litigation. We do not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material. As part of the acquisition of Bridg, and pursuant to the terms of the Merger Agreement, we agreed to make two earnout payments: a First Anniversary Payment and a Second Anniversary Payment – based on the First Anniversary ARR and the Second Anniversary ARR of Bridg, respectively . In June 2022, we calculated the First Anniversary ARR and the First Anniversary Payment Amount and provided the calculation to the Stockholder Representative. The Stockholder Representative objected to these calculations, and the dispute over these matters was then referred to an independent accountant, as contemplated by the relevant dispute resolution provision of the Merger Agreement. On April 28, 2023, the independent accountant made its determination of the appropriate amount of the First Anniversary ARR, determining the First Anniversary ARR to be $23.2 million. After review of the determination by the independent accountant, we filed a verified complaint in the Delaware Court of Chancery in May 2023 seeking declaratory judgment that a certain portion of the independent accountant's determination related to the First Anniversary ARR be stricken as null and void. Since our complaint has not yet been resolved, we have not made a portion of the First Anniversary Payment, based on the independent accountant's determination of the First Anniversary ARR, as of September 30, 2023. It is possible that the court will not rule in our favor and we will be obligated to pay the full First Anniversary Payment determined by the independent accountant, which could adversely affect our business, results of operations and financial conditions. As of September 30, 2023, the disputed and unpaid portion of the First Anniversary Payment remains accrued for in current contingent consideration and accrued expenses on our consolidated balance sheet. Additionally, we are |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The computations of the numerators and denominators of diluted net income (loss) per share attributable to common stockholders are as follows (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2023 2022 2023 Numerator: Net income (loss) attributable to common stockholders, diluted $ 6,267 $ (23,966) $ (86,985) $ (33,866) Denominator: Weighted-average common shares outstanding, basic 32,950 37,982 33,455 35,502 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 33,269 37,982 33,455 35,502 Net (loss) income per share attributable to common stockholders, diluted $ 0.19 $ (0.63) $ (2.60) $ (0.95) The following securities as of September 30, 2023 have been excluded from the calculation of diluted weighted-average common shares outstanding because the effect is anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2023 2022 2023 Common stock options 396 86 402 86 Convertible Senior Notes 2,701 2,701 2,701 2,701 Unvested restricted stock units 4,824 6,166 5,087 6,166 Common stock issuable pursuant to the ESPP 104 82 154 82 |
SEGMENTS
SEGMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTSAs of September 30, 2023, 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 2022 2023 2022 2023 Cardlytics platform Adjusted contribution $ 29,886 $ 37,053 $ 88,709 $ 94,548 Plus: Partner Share and other third-party costs 37,399 36,011 111,829 108,272 Revenue $ 67,285 $ 73,064 $ 200,538 $ 202,820 Bridg platform Adjusted contribution $ 5,257 $ 5,808 $ 14,334 $ 16,791 Plus: Partner Share and other third-party costs 164 133 1,167 426 Revenue $ 5,421 $ 5,941 $ 15,501 $ 17,217 Total Adjusted contribution $ 35,143 $ 42,861 $ 103,043 $ 111,339 Plus: Partner Share and other third-party costs 37,563 36,144 112,996 108,698 Revenue $ 72,706 $ 79,005 $ 216,039 $ 220,037 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, delivery costs, general and administration and other investments. Adjusted contribution is calculated by taking our total revenue less our Partner Share and other third-party costs. Adjusted contribution does not take into account all costs associated with generating revenue from advertising campaigns, including sales and marketing expenses, research and development expenses, delivery costs, general and administrative expenses and other expenses, which we do not take into consideration when making decisions on how to manage our advertising campaigns. The following table presents a reconciliation of income (loss) before income taxes presented in accordance with GAAP to adjusted contribution (in thousands): Three Months Ended Nine Months Ended 2022 2023 2022 2023 Adjusted contribution $ 35,143 $ 42,861 $ 103,043 $ 111,339 Minus: Delivery costs 9,125 7,012 23,820 20,451 Sales and marketing expense 18,289 14,161 57,920 43,314 Research and development expense 13,762 12,430 39,634 38,841 General and administration expense 19,972 15,561 61,381 44,907 Acquisition and integration (benefit) cost (1,867) 78 (4,269) (8,146) (Gain) loss in fair value of contingent consideration (46,126) 8,281 (114,144) (15,045) Goodwill impairment — — 83,149 — Depreciation and amortization expense 10,468 5,990 30,695 19,765 Total other expense 5,253 3,314 13,288 1,118 Income (loss) before income taxes $ 6,267 $ (23,966) $ (88,431) $ (33,866) The following tables provide geographical information (in thousands): Three Months Ended Nine Months Ended 2022 2023 2022 2023 Revenue: United States $ 67,949 $ 74,798 $ 198,781 $ 208,523 United Kingdom 4,757 4,207 17,258 11,514 Total $ 72,706 $ 79,005 $ 216,039 $ 220,037 December 31, 2022 September 30, 2023 Property and equipment, net: United States $ 4,453 $ 2,843 United Kingdom 1,463 162 Total $ 5,916 $ 3,005 Capital expenditures within the United Kingdom totaled less than $0.2 million and less than $0.1 million during the nine months ended September 30, 2022 and 2023, 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 money market accounts and 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 the nine months ended September 30, 2022 and 2023, our top five marketers accounted for 21% and 19% of our revenue, respectively, with no marketer accounting for over 10%. As of September 30, 2022 and 2023, our top five marketers accounted for 13% and 23% of our accounts receivable, respectively, with no marketer accounting for over 10%. 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 auto-renewal 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 partner as a source of purchase data and online banking customers. During the nine months ended September 30, 2022 and the nine months ended September 30, 2023, respectively, our top three FI partners combined to account for over 85% of the total Partner Share we paid to all partners, with the top FI partner representing over 50% and the second and third largest FI partners 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, 2023 | |
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") for the fiscal year ended December 31, 2022. |
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. Macroeconomic Considerations Unfavorable conditions in the economy both in the United States and abroad may negatively affect the growth of our business and our results of operations. For example, macroeconomic events, including the changes in inflation, the U.S. Federal Reserve raising interest rates, disruptions in access to bank deposits or lending commitments due to bank failures, the Russia-Ukraine war and the Israel conflict have led to economic uncertainty globally. Historically, during periods of economic uncertainty and downturns, businesses may slow spending on advertising, which may impact our business and our customers’ businesses. |
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 is 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. During the year ended December 31, 2022 we recognized a goodwill impairment of $396.2 million. The fair value of our reporting units was classified in Level 3 of the fair value hierarchy due to the significance of unobservable inputs developed using company-specific information. Refer to Note 4 - Goodwill and Acquired Intangibles for further details. 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 | The Cardlytics platform The Cardlytics platform is our proprietary native bank advertising channel that enables marketers to reach consumers through the FI partners' 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 FI partners' 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 $37.7 million and $37.6 million during the three months ended September 30, 2022 and 2023, respectively. Consumer Incentives totaled $100.3 million and $101.4 million during the nine months ended September 30, 2022 and 2023, 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 and other factors. • 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 and other factors. |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | 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 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 |
Business Acquisition, Pro Forma Information | Consequently, actual results will differ from the unaudited pro forma information presented below. Nine Months Ended (in thousands) Revenue $ 216,060 Net loss $ (85,902) |
GOODWILL AND ACQUIRED INTANGI_2
GOODWILL AND ACQUIRED INTANGIBLES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | There have been no changes to the carrying amounts of goodwill since December 31, 2022. The carrying amounts of goodwill as of September 30, 2023 are as follows (in thousands): Cardlytics Platform Bridg Platform Consolidated Gross goodwill $ 210,692 $ 538,271 $ 748,963 Accumulated impairments (46,262) (349,980) (396,242) Net goodwill $ 164,430 $ 188,291 $ 352,721 |
Schedule of Finite-Lived Intangible Assets | Acquired intangible assets subject to amortization as of September 30, 2023 were as follows: Gross Carrying Amount (1) Accumulated Amortization Net Weighted Average Remaining Useful Life (in thousands) (in years) Trade name $ 2,315 $ (1,979) $ 336 0.3 Developed technology 64,070 (31,759) 32,311 0.7 Merchant relationships 25,915 (15,521) 10,394 1.1 Total other intangible assets $ 92,300 $ (49,259) $ 43,041 (1) We recorded an impairment of intangible assets in the amount of $56.4 million as of December 31, 2022. |
Finite-lived Intangible Assets Amortization Expense | As of September 30, 2023, we expect amortization expense in future periods to be as follows (in thousands): Amount 2023 (remaining three months) 3,423 2024 13,603 2025 13,192 2026 9,674 2027 3,149 Thereafter — Total expected future amortization expense $ 43,041 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 2022 2023 2022 2023 Cost per Served Sale $ 43,436 $ 49,957 $ 128,568 $ 138,664 Cost per Redemption 21,602 20,842 65,333 58,305 Other 2,247 2,265 6,637 5,851 Cardlytics platform revenue $ 67,285 $ 73,064 $ 200,538 $ 202,820 The following table summarizes revenue from the Bridg platform (in thousands): Three Months Ended Nine Months Ended 2022 2023 2022 2023 Subscription revenue $ 5,421 $ 5,941 $ 15,471 $ 17,217 Other revenue — — 30 — Bridg platform revenue $ 5,421 $ 5,941 $ 15,501 $ 17,217 |
DEBT AND FINANCING ARRANGEMEN_2
DEBT AND FINANCING ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Convertible Debt | December 31, 2022 September 30, 2023 Principal $ 230,000 $ 230,000 Minus: Unamortized issuance costs (3,953) (2,860) Net carrying amount $ 226,047 $ 227,140 Interest expense recognized related to the Notes is as follows (in thousands): Three Months Ended Nine Months Ended 2022 2023 2022 2023 Contractual interest expense (due in cash) $ 575 $ 575 $ 1,725 $ 1,725 Amortization of debt issuance costs 365 365 1,095 1,096 Total interest expense related to the Notes $ 940 $ 940 $ 2,820 $ 2,821 Effective interest rate 1.64 % 1.64 % 1.64 % 1.64 % |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 2022 2023 2022 2023 Delivery costs $ 920 $ 667 $ 2,416 $ 1,800 Sales and marketing expense 1,428 2,683 8,765 9,487 Research and development expense 1,968 3,661 9,419 12,248 General and administration expense 1,451 3,238 11,594 6,421 Total stock-based compensation expense $ 5,767 $ 10,249 $ 32,194 $ 29,956 |
Summary of RSU activity | We grant restricted stock units ("RSUs") to certain 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, 2022 5,956 $ 25.43 Granted 3,145 6.57 Vested (2,021) 22.85 Forfeited (920) 33.98 Unvested — September 30, 2023 6,160 $ 32.41 2.19 $ 77,547 Shares expected to vest - September 30, 2023 6,107 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2022 Level 1 Level 2 Level 3 Total Liabilities: Current contingent consideration $ — $ — $ 104,121 $ 104,121 Total liabilities $ — $ — $ 104,121 $ 104,121 September 30, 2023 Level 1 Level 2 Level 3 Total Liabilities: Current contingent consideration $ — $ — $ 27,268 $ 27,268 Total liabilities $ — $ — $ 27,268 $ 27,268 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 2022 2023 2022 2023 Beginning balance $ 164,277 $ 18,987 $ 232,295 $ 104,121 Decrease due to earnout settlement — — — (61,808) (Gain) loss in fair value of contingent consideration (46,126) 8,281 (114,144) $ (15,045) Ending balance $ 118,151 $ 27,268 $ 118,151 $ 27,268 |
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: December 31, 2022 Revenue volatility 20.0 % Revenue discount rate 8.7 % Weighted average cost of capital 17.0 % Common stock volatility 156.0 % Portion to be paid in cash 30.0 % |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 2022 2023 2022 2023 Cardlytics platform Adjusted contribution $ 29,886 $ 37,053 $ 88,709 $ 94,548 Plus: Partner Share and other third-party costs 37,399 36,011 111,829 108,272 Revenue $ 67,285 $ 73,064 $ 200,538 $ 202,820 Bridg platform Adjusted contribution $ 5,257 $ 5,808 $ 14,334 $ 16,791 Plus: Partner Share and other third-party costs 164 133 1,167 426 Revenue $ 5,421 $ 5,941 $ 15,501 $ 17,217 Total Adjusted contribution $ 35,143 $ 42,861 $ 103,043 $ 111,339 Plus: Partner Share and other third-party costs 37,563 36,144 112,996 108,698 Revenue $ 72,706 $ 79,005 $ 216,039 $ 220,037 The following table presents a reconciliation of income (loss) before income taxes presented in accordance with GAAP to adjusted contribution (in thousands): Three Months Ended Nine Months Ended 2022 2023 2022 2023 Adjusted contribution $ 35,143 $ 42,861 $ 103,043 $ 111,339 Minus: Delivery costs 9,125 7,012 23,820 20,451 Sales and marketing expense 18,289 14,161 57,920 43,314 Research and development expense 13,762 12,430 39,634 38,841 General and administration expense 19,972 15,561 61,381 44,907 Acquisition and integration (benefit) cost (1,867) 78 (4,269) (8,146) (Gain) loss in fair value of contingent consideration (46,126) 8,281 (114,144) (15,045) Goodwill impairment — — 83,149 — Depreciation and amortization expense 10,468 5,990 30,695 19,765 Total other expense 5,253 3,314 13,288 1,118 Income (loss) before income taxes $ 6,267 $ (23,966) $ (88,431) $ (33,866) |
Schedule of revenue by geographic areas | The following tables provide geographical information (in thousands): Three Months Ended Nine Months Ended 2022 2023 2022 2023 Revenue: United States $ 67,949 $ 74,798 $ 198,781 $ 208,523 United Kingdom 4,757 4,207 17,258 11,514 Total $ 72,706 $ 79,005 $ 216,039 $ 220,037 December 31, 2022 September 30, 2023 Property and equipment, net: United States $ 4,453 $ 2,843 United Kingdom 1,463 162 Total $ 5,916 $ 3,005 |
OVERVIEW OF BUSINESS AND BASI_2
OVERVIEW OF BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Apr. 28, 2023 | Jan. 07, 2022 | May 05, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 0 | $ 11,937 | ||||||
Offering costs | 58 | 0 | ||||||
Depreciation and amortization expense | $ 3,400 | $ 7,200 | 10,300 | 21,600 | ||||
Deferred revenue | 3,405 | 3,405 | $ 2,084 | |||||
Credit loss expense | 1,153 | 949 | ||||||
Payments for Repurchase of Common Stock | 0 | $ 40,000 | ||||||
Right-of-use assets under operating leases, net | 4,823 | 4,823 | 6,571 | |||||
Current operating lease liabilities | 2,244 | 2,244 | 4,910 | |||||
Long-term operating lease liabilities | 2,878 | 2,878 | $ 4,306 | |||||
First Anniversary, Annualized Recurring Revenue, cash paid | $ 50,100 | $ 50,100 | ||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares delivered | 2,740,418 | 2,740,418 | ||||||
Bridg Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase consideration | $ 578,900 | |||||||
First Anniversary ARR | $ 23,200 | 12,500 | $ 20,800 | |||||
Number of shares (in shares) | 3,374,383 | 3,556,717 | ||||||
Stock price (in usd per share) | $ 40.15 | |||||||
Bridg Acquisition | If 30% in Cash and Rest in Shares | ||||||||
Business Acquisition [Line Items] | ||||||||
First Anniversary ARR | $ 72,600 | $ 65,300 | ||||||
Bridg Acquisition | Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Percent of First Anniversary payment amount paid in cash | 30% | 30% | ||||||
Bridg Acquisition | Equity Option | ||||||||
Business Acquisition [Line Items] | ||||||||
Fair value of unvested options to purchase common stock | (800) | |||||||
Bridg Acquisition | Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 230,900 | |||||||
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 | ||||||
May 01, 2023 | Apr. 28, 2023 | Jan. 07, 2022 | May 05, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||||||||
Common stock purchase consideration for acquisition of Entertainment | $ 0 | $ 11,937 | ||||||
Acquisition and integration (benefit) cost | $ 78 | $ (1,867) | (8,146) | $ (4,269) | ||||
Bridg Acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase consideration | $ 578,900 | |||||||
Cash | 350,000 | |||||||
Adjustments and escrows | 2,800 | |||||||
First Anniversary ARR | $ 23,200 | 12,500 | 20,800 | |||||
Bridg Acquisition | Plan | ||||||||
Business Acquisition [Line Items] | ||||||||
First Anniversary ARR | $ 208,100 | $ 160,100 | ||||||
Bridg Acquisition | Minimum | ||||||||
Business Acquisition [Line Items] | ||||||||
Percent of First Anniversary payment amount paid in cash | 30% | 30% | ||||||
Bridg Acquisition | Common Stock | ||||||||
Business Acquisition [Line Items] | ||||||||
Common stock purchase consideration for acquisition of Entertainment | 230,900 | |||||||
Bridg Acquisition | Equity Option | ||||||||
Business Acquisition [Line Items] | ||||||||
Fair value of unvested options to purchase common stock | $ 800 | |||||||
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 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 0 | $ 11,937 | |||
Goodwill | 352,721 | $ 352,721 | |||
Distribution Made to Limited Partner, Cash Distributions Paid | $ 24 | ||||
Proceeds from Limited Partnership Investments | (61) | ||||
Bridg Acquisition | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Consideration Transferred | $ 578,900 | ||||
Goodwill | $ 188,291 | ||||
Bridg Acquisition | Common Stock | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 230,900 | ||||
Bridg Acquisition | Equity Option | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ 800 | ||||
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, 2023 | Dec. 31, 2022 | Jan. 07, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 352,721 | $ 352,721 | |
Bridg Acquisition | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 188,291 | ||
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 | ||
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 Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill | $ 9,800 |
BUSINESS COMBINATIONS - Identif
BUSINESS COMBINATIONS - Identifiable Intangible Assets Acquired (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Jan. 07, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Trade Names [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 months 18 days | 1 year 4 months 24 days | |
Developed Technology Rights [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 8 months 12 days | 3 years 7 months 6 days | |
Merchant Relationships [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 1 year 1 month 6 days | 1 year 8 months 12 days | |
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 $ in Thousands | 3 Months Ended |
Sep. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 216,060 |
Net loss | $ (85,902) |
GOODWILL AND ACQUIRED INTANGI_3
GOODWILL AND ACQUIRED INTANGIBLES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Oct. 01, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Impairment loss | $ 396,242 | $ 396,242 | $ 83,100 | ||
Amortization expense | $ 3,400 | $ 7,200 | $ 10,300 | $ 21,600 |
GOODWILL AND ACQUIRED INTANGI_4
GOODWILL AND ACQUIRED INTANGIBLES - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | Oct. 01, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill, Gross | $ 748,963 | ||
Goodwill, Impaired, Accumulated Impairment Loss | $ (83,100) | (396,242) | |
Goodwill | 352,721 | $ 352,721 | |
Cardlytics Platform | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill, Gross | 210,692 | ||
Goodwill, Impaired, Accumulated Impairment Loss | (46,262) | ||
Goodwill | 164,430 | ||
Bridg Acquisition | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill, Gross | 538,271 | ||
Goodwill, Impaired, Accumulated Impairment Loss | (349,980) | ||
Goodwill | $ 188,291 |
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, 2023 | Dec. 31, 2022 | Oct. 01, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount (1) | $ 92,300 | $ 154,500 | |
Accumulated Amortization | (49,259) | (44,732) | |
Net | 43,041 | 53,373 | |
Goodwill, Impaired, Accumulated Impairment Loss | (396,242) | $ (83,100) | |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount (1) | 2,315 | 3,500 | |
Accumulated Amortization | (1,979) | (1,744) | |
Net | $ 336 | $ 571 | |
Weighted Average Remaining Useful Life | 3 months 18 days | 1 year 4 months 24 days | |
Goodwill, Impaired, Accumulated Impairment Loss | $ (1,185) | ||
Developed Technology Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount (1) | $ 64,070 | 91,700 | |
Accumulated Amortization | (31,759) | (24,882) | |
Net | $ 32,311 | $ 39,188 | |
Weighted Average Remaining Useful Life | 8 months 12 days | 3 years 7 months 6 days | |
Goodwill, Impaired, Accumulated Impairment Loss | $ (27,630) | ||
Merchant Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount (1) | $ 25,915 | 40,300 | |
Accumulated Amortization | (15,521) | (12,301) | |
Net | $ 10,394 | $ 13,614 | |
Weighted Average Remaining Useful Life | 1 year 1 month 6 days | 1 year 8 months 12 days | |
Goodwill, Impaired, Accumulated Impairment Loss | $ (14,385) | ||
Partner Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount (1) | 2,000 | ||
Accumulated Amortization | (450) | ||
Net | 0 | ||
Goodwill, Impaired, Accumulated Impairment Loss | (1,550) | ||
Card-Linked Subscriber User Base [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount (1) | 17,000 | ||
Accumulated Amortization | (5,355) | ||
Net | 0 | ||
Goodwill, Impaired, Accumulated Impairment Loss | $ (11,645) |
GOODWILL AND ACQUIRED INTANGI_6
GOODWILL AND ACQUIRED INTANGIBLES - Amortization expense schedule (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 (remaining three months) | $ 3,423 | |
2024 | 13,603 | |
2025 | 13,192 | |
2026 | 9,674 | |
2027 | 3,149 | |
Thereafter | 0 | |
Net | $ 43,041 | $ 53,373 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Consumer incentives, expense | $ 37.6 | $ 37.7 | $ 101.4 | $ 100.3 |
Remaining performance obligation | 23.7 | 23.7 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | ||||
Disaggregation of Revenue [Line Items] | ||||
Remaining performance obligation | $ 12.8 | $ 12.8 | ||
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customer | $ 73,064 | $ 67,285 | $ 202,820 | $ 200,538 | |
Commodity Contract Asset, Current | 147 | 147 | $ 28 | ||
Deferred revenue | 3,323 | 3,323 | 1,751 | ||
Deferred revenue | 3,405 | 3,405 | 2,084 | ||
Bridg Acquisition | |||||
Disaggregation of Revenue [Line Items] | |||||
Contract with Customer, Asset, after Allowance for Credit Loss, Current | 147 | 147 | 28 | ||
Deferred implementation costs, net | 0 | 0 | 0 | ||
Deferred revenue | 3,324 | 3,324 | 1,750 | ||
Contract with Customer, Liability, Noncurrent | 81 | 81 | $ 334 | ||
Cost per Served Sale | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customer | 49,957 | 43,436 | 138,664 | 128,568 | |
Cost per Redemption | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customer | 20,842 | 21,602 | 58,305 | 65,333 | |
Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customer | 2,265 | 2,247 | 5,851 | 6,637 | |
Subscription revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customer | 5,941 | 5,421 | 17,217 | 15,471 | |
Other revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customer | 0 | 0 | 0 | 30 | |
Bridg platform revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customer | $ 5,941 | $ 5,421 | $ 17,217 | $ 15,501 |
DEBT AND FINANCING ARRANGEMEN_3
DEBT AND FINANCING ARRANGEMENTS - Narrative (Details) | 9 Months Ended | |||
Sep. 22, 2020 USD ($) numberOfDays $ / shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 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 | |||
Unused borrowing capacity | $ 4,300,000 | |||
Maximum borrowing capacity, percentage of accounts receivable | 50% | |||
Debt instrument, interest rate | 1.64% | 1.64% | ||
Debt Instrument, Increase, Accrued Interest | $ 100,000 | $ 700,000 | ||
Cap price (in dollars per share) | $ / shares | $ 128.51 | |||
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 | |||
Lines of credit | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 8.50% | |||
Commitment fee percentage | 0.15% | |||
Revolving Credit Facility | Lines of credit | ||||
Debt Instrument [Line Items] | ||||
Unused borrowing capacity | $ 60,000,000 | $ 50,000,000 |
DEBT AND FINANCING ARRANGEMEN_4
DEBT AND FINANCING ARRANGEMENTS - Net Carrying Amount of Liability Component (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-term Debt, Total | $ 257,139 | $ 226,047 |
2020 Convertible Senior Notes | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 230,000 | 230,000 |
Debt Issuance Costs, Net | 2,860 | 3,953 |
Long-term Debt, Total | $ 227,140 | $ 226,047 |
DEBT AND FINANCING ARRANGEMEN_5
DEBT AND FINANCING ARRANGEMENTS - Interest Expense Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Disclosure [Abstract] | ||||
Contractual interest expense (due in cash) | $ 575 | $ 575 | $ 1,725 | $ 1,725 |
Amortization of debt issuance costs | 365 | 365 | 1,096 | 1,095 |
Total interest expense related to the Notes | $ 940 | $ 940 | $ 2,821 | $ 2,820 |
Debt instrument, interest rate | 1.64% | 1.64% | 1.64% | 1.64% |
DEBT AND FINANCING ARRANGEMEN_6
DEBT AND FINANCING ARRANGEMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Convertible Debt, Noncurrent | $ 227,139 | $ 226,047 |
Long-term Debt, Total | 257,139 | 226,047 |
Long-Term Line of Credit | $ 30,000 | $ 0 |
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. 07, 2023 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, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Oct. 01, 2023 USD ($) | Jun. 30, 2023 shares | Dec. 31, 2022 shares | Dec. 31, 2021 | Sep. 30, 2021 shares | Jan. 01, 2020 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Number of shares authorized (in shares) | 405,830 | |||||||||||||||
Number of shares authorized, annual increase | 5% | |||||||||||||||
Number of additional shares authorized (in shares) | 1,673,858 | |||||||||||||||
Lease obligation incurred | $ | $ 1.6 | $ 1 | ||||||||||||||
Restricted stock units | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Compensation cost not yet recognized | 2 years 2 months 8 days | |||||||||||||||
Granted (in shares) | 3,145,000 | |||||||||||||||
Unvested PSU (in shares) | 6,160,000 | 5,956,000 | ||||||||||||||
Restricted stock units | Share-based Compensation Award, Tranche One | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Granted (in shares) | 3,145,035 | |||||||||||||||
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 | 269,202 | 6,666 | |||||||||||||
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 | 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 | 878,969,000 | 334,771,000 | |||||||||||||
Subsequent Event | Restricted stock units | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Granted (in shares) | 414,233 | |||||||||||||||
Compensation not yet recognized, awards other than options | $ | $ 4.9 |
STOCK-BASED COMPENSATION - Allo
STOCK-BASED COMPENSATION - Allocation of Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 10,249 | $ 5,767 | $ 29,956 | $ 32,194 |
Delivery Costs [Member] | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 667 | 920 | 1,800 | 2,416 |
Sales and marketing expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 2,683 | 1,428 | 9,487 | 8,765 |
Research and development expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | 3,661 | 1,968 | 12,248 | 9,419 |
General and administration expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation expense | $ 3,238 | $ 1,451 | $ 6,421 | $ 11,594 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of RSU Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Shares (in thousands) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 6,107,000 |
Restricted stock units | |
Shares (in thousands) | |
Unvested — Beginning balance (in shares) | 5,956,000 |
Granted (in shares) | 3,145,000 |
Vested (in shares) | (2,021,000) |
Forfeited (in shares) | (920,000) |
Unvested — Ending balance (in shares) | 6,160,000 |
Weighted-Average Grant Date Fair Value | |
Unvested — Beginning balance (in usd per share) | $ / shares | $ 25.43 |
Granted (in usd per share) | $ / shares | 6.57 |
Vested (in usd per share) | $ / shares | 22.85 |
Forfeited (in usd per share) | $ / shares | 33.98 |
Unvested — Ending balance (in usd per share) | $ / shares | $ 32.41 |
Unvested, weighted-average remaining contractual term | 2 years 2 months 8 days |
Unvested, unamortized compensation costs | $ | $ 77,547 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Apr. 28, 2023 | May 05, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |||||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | $ 83,149 | $ 396,200 | ||
Bridg Acquisition | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
First Anniversary ARR | $ 23,200 | $ 12,500 | 20,800 | ||||
Stock price (in usd per share) | $ 40.15 | ||||||
Bridg Acquisition | If 30% in Cash and Rest in Shares | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
First Anniversary ARR | $ 72,600 | $ 65,300 | |||||
Bridg Acquisition | Minimum | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Percent of First Anniversary payment amount paid in cash | 30% | 30% |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Fair Value of Contingent Consideration (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Liabilities: | ||
Current contingent consideration | $ 27,268 | $ 104,121 |
Total liabilities | 27,268 | 104,121 |
Level 1 | ||
Liabilities: | ||
Current contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Liabilities: | ||
Current contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | ||
Liabilities: | ||
Current contingent consideration | 27,268 | 104,121 |
Total liabilities | $ 27,268 | $ 104,121 |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Contingent Consideration Classified as Equity, Fair Value Disclosure | $ 27,268 | $ 118,151 | $ 27,268 | $ 118,151 | $ 18,987 | $ 104,121 | $ 164,277 | $ 232,295 |
Increase (Decrease) in Due to Affiliates, Current | 0 | 0 | (61,808) | 0 | ||||
Fair Value, Liability, Recurring Basis, Still Held, Unrealized Gain (Loss) | $ 8,281 | $ (46,126) | $ (15,045) | $ (114,144) |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of Key Assumptions (Details) - Valuation, Market Approach - Level 3 | Dec. 31, 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 | 0.087 |
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 | 1.560 |
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 - Narrative (Details) $ in Millions | Sep. 30, 2023 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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted-average common shares outstanding, basic (in shares) | 37,982,000 | 32,950,000 | 35,502,000 | 33,455,000 |
Weighted-average common shares outstanding, diluted (in shares) | 37,982,000 | 33,269,000 | 35,502,000 | 33,455,000 |
Net loss per share attributable to common stockholders, diluted (in USD per share) | $ (0.63) | $ 0.19 | $ (0.95) | $ (2.60) |
Net Income (Loss) Available to Common Stockholders, Diluted | $ (23,966) | $ 6,267 | $ (33,866) | $ (86,985) |
Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Plus: Dilutive convertible promissory notes (in shares) | 0 | 6,000 | 0 | 0 |
ESPP | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Plus: Dilutive convertible promissory notes (in shares) | 0 | 50,000 | 0 | 0 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Plus: Dilutive convertible promissory notes (in shares) | 0 | 263,000 | 0 | 0 |
Share-based Payment Arrangement, Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 86,000 | 396,000 | 86,000 | 402,000 |
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 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 6,166,000 | 4,824,000 | 6,166,000 | 5,087,000 |
ESPP | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 82,000 | 104,000 | 82,000 | 154,000 |
SEGMENTS - Narrative (Details)
SEGMENTS - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 3 | |
Capital expenditures | $ 393 | $ 1,090 |
Marketers | Revenue Benchmark | Top Five Marketers | ||
Segment Reporting Information [Line Items] | ||
Concentration risk | 19% | 21% |
Marketers | Accounts Receivable | Top Five Marketers | ||
Segment Reporting Information [Line Items] | ||
Concentration risk | 23% | 13% |
Supplier Concentration Risk | Financial Institution Partner | Largest FI Partner | ||
Segment Reporting Information [Line Items] | ||
Concentration risk | 85% | |
United Kingdom | ||
Segment Reporting Information [Line Items] | ||
Capital expenditures | $ 100 | $ 200 |
SEGMENTS - Revenue by Segment (
SEGMENTS - Revenue by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Adjusted contribution | $ 42,861 | $ 35,143 | $ 111,339 | $ 103,043 |
Plus: FI Share and other third-party costs | 36,144 | 37,563 | 108,698 | 112,996 |
Revenues | 79,005 | 72,706 | 220,037 | 216,039 |
Cardlytics Direct | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted contribution | 37,053 | 29,886 | 94,548 | 88,709 |
Plus: FI Share and other third-party costs | 36,011 | 37,399 | 108,272 | 111,829 |
Revenues | 73,064 | 67,285 | 202,820 | 200,538 |
Bridg Acquisition | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted contribution | 5,808 | 5,257 | 16,791 | 14,334 |
Plus: FI Share and other third-party costs | 133 | 164 | 426 | 1,167 |
Revenues | $ 5,941 | $ 5,421 | $ 17,217 | $ 15,501 |
SEGMENTS - Adjusted Contributio
SEGMENTS - Adjusted Contribution Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting [Abstract] | ||||
Adjusted contribution | $ 42,861 | $ 35,143 | $ 111,339 | $ 103,043 |
Delivery costs | 7,012 | 9,125 | 20,451 | 23,820 |
Sales and marketing expense | 14,161 | 18,289 | 43,314 | 57,920 |
Research and development expense | 12,430 | 13,762 | 38,841 | 39,634 |
General and administration expense | 15,561 | 19,972 | 44,907 | 61,381 |
Acquisition and integration (benefit) cost | 78 | (1,867) | (8,146) | (4,269) |
(Gain) loss in fair value of contingent consideration | 8,281 | (46,126) | (15,045) | (114,144) |
Depreciation and amortization expense | 5,990 | 10,468 | 19,765 | 30,695 |
Total other expense | 3,314 | 5,253 | 1,118 | 13,288 |
Income (loss) before income taxes | $ (23,966) | $ 6,267 | $ (33,866) | $ (88,431) |
SEGMENTS - Geographical Informa
SEGMENTS - Geographical Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 79,005 | $ 72,706 | $ 220,037 | $ 216,039 | |
Property and equipment | 3,005 | 3,005 | $ 5,916 | ||
United States | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 74,798 | 67,949 | 208,523 | 198,781 | |
Property and equipment | 2,843 | 2,843 | 4,453 | ||
United Kingdom | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 4,207 | $ 4,757 | 11,514 | $ 17,258 | |
Property and equipment | $ 162 | $ 162 | $ 1,463 |
Leases, Codification Topic 842
Leases, Codification Topic 842 (Details) $ in Thousands | 9 Months Ended | ||
Apr. 03, 2023 USD ($) ft² | Sep. 30, 2023 USD ($) ft² | Dec. 31, 2022 USD ($) | |
Leases [Abstract] | |||
Right-of-use assets under operating leases, net | $ 4,823 | $ 6,571 | |
Finance Lease, Right-of-Use Asset, after Accumulated Amortization | 20 | 48 | |
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, after Accumulated Depreciation and Amortization | 4,843 | 6,619 | |
Current operating lease liabilities | 2,244 | 4,910 | |
Long-term operating lease liabilities | 2,878 | 4,306 | |
Finance Lease, Liability, Current | 37 | 38 | |
Finance Lease, Liability, Noncurrent | $ 0 | $ 3 | |
Net Rentable Area Leased | ft² | 77,000 | 17,000 | |
Reduction of Minimum Lease Payments | $ 1,900 | ||
Lease, Reduction in Expense | $ 700 |