CDLX - Earnings call transcript Q1 2021

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Operator

Greetings, and welcome to the Cardlytics Q1 2021 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I would now like to turn the conference over to your host, Kirk Somers, Chief Legal and Privacy Officer. sir. you, Thank

begin. You may

Kirk Somers

and results welcome quarter evening, Cardlytics to financial call. XXXX Good first

begin, our the of everyone technology position the assumptions, of and Before of will me financial average COVID-XX in launch financial let we remind including revenue anticipated results, statements new including about benefits and our on the performance beliefs, our or Holdings, or contain and and that based stabilization sufficiency our momentum and current cash Bridg expectations business improvements our economy guidance the the expectations Inc. active continued structure, future forward-looking Dosh user economy discussion of banks, as key the experience, new ARPU of launch and impact monthly on XXXX, capital of for the of infrastructure, the full-year MAUs a priorities, the and users, per whole, Bank, XXXX, potential our and in closing functionality the year-over-year long-term Inc. buy including in in to economy, acquisition second of quarter user, ability U.S. the growth to growth, increase the achieve return including additional our or today's the

the Commission. today periodic call actual the and the one available Securities year supplemental discuss that in week. specific SEC. the for the for For we provided financial filed discussion, a that discussion GAAP call, our reconciliations will ended Exchange available this press and and of a differ and could is results performance. Today's cause has March that XXXX, subsequent materially refer X-K in will the be the we quarter been factors of are the webcast, file measures Risk the XX-Q with during via replay of and Also release issued non-GAAP information company's our to to XX, please today's from reports with Factors section financial

described results first just Investor section information Please all posted a our our been can Cardlytics website. also find that the on note quarter of Relations has the website. to You I've of Relations to Investor presentation supplemental

the leadership team, Lynne is on including Christiansen. Laube; us CEO Co-Founder, CFO, and call Andy Joining and Cardlytics today

we'll let turn your call prepared the Lynne. to call to open me the Lynne? With that, remarks, over questions. their Following

Lynne Laube

Thanks, Kirk. for And Dosh the joining on a strong call. everyone to in had XXXX thank first earnings expectations us you contributions year and quarter billings to with even from We our March. adding revenue before QX exceeding start total conference

Our results reflect business. the our continued in positive trajectory

from impacts experiencing still COVID. we're While

seeing by are in we're momentum the We US. encouraged the

to and U.S our by business However, pandemic UK related continue travel the be and significantly impacted lockdown.

moving recent to acquisitions. results, I'd like our address our briefly to Before

We making solid are organizations. integrating and two on combining progress Dosh the

Bridg few transformational its acquisition I pleased for acquisition We're on our has reiterate strategic market. come unique in believe May. with pleased data we in or points say the light. already both to and that investors. expect to want and are CDT the customer potential the to team be to the position given a platform We We acquisitions the technology to thesis seeing our capabilities the and are close also Bridg acquisition

and expect to We data offers provide few product will Dosh to Cardlytics first CPGs, utilize from Bridg once integrated the allow and grocers level retail. acquisitions wider

new Second, very industries. a partners provide with Dosh results with accelerate non-FI the already. platform progress and We're the And experience lightweight the next finally and generation from features. engagement pleased neo-bank consumer consumer early in attract to

increase $XX.X QX year-over-year. million, $XX.X Total quarter. XX% net highlights XX% billings let's XX% turn of of Total which Now first from contribution and was million, up $XX.X consumer was the were revenue, up year-over-year. adjusted billings from some is equal million, XXXX, to an to incentive

to many vertical be of reflect we're in Our in measured billings, results pleased sector. to BXC by across growth delivered continues billings the this have major largest year-over-year verticals. QX growth our and industry

retail of importance e-comm by XX% growth our annual positive the we restaurant couple stories in want both that client advertising our to to advertisers. despite addition, success of vertical. billing I in retail on world, our the platform in of the one we're secured strong the the same saw highlight We our XXXX. for cut with specialty almost and verticals, contract and fact a growth by year-over-year largest to first of platforms In encouraged budgets drive return the

COVID. proved client momentum we're switchers XXXX the by given resulted share But results in meaningful overall, Additionally, we of client specialty second positive seeing Then on-track the our exited wallet, encouraged deliver targeting began in and ongoing retail large half believe of a lost Travel these delivered annual signing channel of impacts the a client remain experiencing that, we and we're muted strong we in agreement. a results XXXX. our XXXX. remains This in the to ROI.

first grew the base up mainly Fargo. due MAU of the quarter, year-over-year, in $XXX million XX% over to to Our Wells launch approximately

mid low We quarters. expect that single-digits in eventually will core CDLX MAU future to in stabilize growth the

iterative We server proud course and to launching and enable experience. will with faster that, taking the Bank, offers user overtime. a enables module. our evaluating Bank experience quarters. iterations The ARPUs over their robust U.S. the impact new to announce of of that ad built with We're Together U.S. server, and more are with the Dosh richer next have SDK MAUs to API ad newly has on launched functionality few deployment, both approach an we're integrations any continuously user

about order and drive on engagement. One and educating program, adoption works to consumer of offers the in modules initial how it focused our is the

large we our half new large technology the the of half network committed server scale banks to Into this of of of be new enable other ad speed, deploying infrastructure and in portion second first engagement. one will has a will migrating Additionally, the be XXXX. over to our and XXXX,

Curve. based announce our we've to partnership. We're Andy? about UK this also Andy, excited I of want the launched potential with turn it that, first I Before program rewards over to FinTech

Andy Christiansen

you, with We results were QX, Thank extremely in year-over-year our Lynne. our return marked which growth. pleased to

of the Dosh our exceed results including existing Our expectations. business

into our results, be Before QX, in the the cash in to discuss cash compared offering the equity to end ended liquidity and million our equivalents, cash the $XXX end our where position at $XXX acquisition Dosh which we of at Bridg. diving wanted million of expect includes close of following with further and I QX We and XXXX. to

on expect close which later over forma cash a after basis, expect month. acquisition, the $XXX to to we We pro Bridg have million this

million addition, loan this undrawn XX time. remains at In facility, our a

following extremely liquidity balance remains deal. Our sheet strong the Bridg

we evaluating additional raise no funds. immediate need structure, see always While we are to our capital

account COVID-XX We’ll environment Now from partial performance. UK from district landed high turning our QX seasonal in the before acquisition. QX decline at expectations the and to Dosh the usual These limitations contribution travel. taking ongoing to QX. results continued the into saw QX of challenging came lockdowns strong the month the end and despite to

also the clients As our we number mentioned earlier, the in channel we of of verticals. onset the since saw encouraging strength industry is in growing What's several pandemic.

budgets, new long-term made pivot While our we most the health those of small for of And QX are platform. of reflects a increase in advertisers in the the will XXXX. accounts relatively

QX year of from norms believe XXXX. a this XX% days million excluding with more overtime Dosh platform the to we the of billing to million sizes. of will service us year-over-year historical XX% $XX.X $XX.X a give which $X.X trend the our and guidance. in over all with end billings self at XX%. accelerate quarter, $XX solution Billings As onboard is additional mentioned capabilities at And billings increase in were our the last increase scalable million, budgets before, of million totaled line of new our high XX totaled the expected margins as Revenue in advertisers

revenue $X.X was which the was revenue year-over-year, UK of totaled dollars additional of down XX%. XX% near our Dosh, guidance. from our revenue $XX.X however, million revenue increased Excluding high U.S end the million,

meaningfully the Our just pandemic as continued in the spread April. impacted UK lockdowns by to slow COVID-XX variants of implemented to unwind to new started business

UK several of was QX organization in stock to capabilities. new a leaders million and in contracts million an increase other R&D costs. unwind XX% loss of $X.X and Dosh back was don't of increase on the contribution our lower $X.X contributed pressure anticipates to $X product going revenue in significantly that UK it's party the forward. a We outpace Adjusted to of XXXX, and place million, and on EBITDA continue a compared and in near-term. in bring year-over-year. reflect for excluding carefully development level the worth Dosh a in sales noting investments year-over-year loss expect across of to adjusted partnership, contribution third continued growth million, to basis, But half expenses expenses, of today, We made $XX.X the Adjusted our expect results analytical increase within compensation operating XXXX

quarter. QX a that expect larger our the also Dosh reflected as investment a of those in We in generate adjusted full XX costs and worth is current we are It's during include acquisition costs to from excluded quarter, EBITDA. noting loss EBITDA for

future, the We of continue to and integration Dosh the costs expect acquisition in as we and additional acquisition close integrate Bridg.

earlier, year-over-year log launch million growth the This Wells U.S will the Dosh and by organic several check and was As accelerated launched. were over Fargo once driven Lynne XX% U.S acquisition. end from MAUs mentioned to fully Bank to similar on million. add $XXX

with ARPU during as Dosh year. prior quarter the continued the throughout We $X.XX new also first online growth was from consistent expect come XXXX. partners

year, expect MAU and grow outstanding the and basis million million of XX.X to ARPU outstanding March. last compared XXXX year-over-year on at to million the which stabilized new had We of sequential million was end quarter Weighted the XX.X we our of XX.X end We to shares the throughout shares of to revenue. average at reflects increase sale QX continue QX as rest million during of compared XXXX. in XX.X the our shares during X.X

the our in does Also, to UK to a Bridg, guidance wider occur. has be uncertainty continued and when turning uneven guidance bit Dosh, of travel and in usual, closed. includes than our yet may include not an entertainment remains recovery what range not expected Now rebound while the will which of the guidance, due results

We between adjusted $XX and QX of of million $XX and expect contribution million. million, between between million revenue and $XX million $XX billings million $XX $XX and or in

million and ranges and expect $XXX.X million, $XXX and will $XXX million of and we next Dosh, million contribution incorporate billings year, of from $XXX full Again, between the at Bridg's million include revenue $XXX.X For these and million. contributions quarter. between $XXX adjusted between

lot bring the to meaningful Dosh, these shareholder ahead resources XXXX, about we companies realize value. investments of and we that potential, are us In order work we to full are we very of sufficient Cardlytics, While create in thoughtfully have and excited collective of Bridg. potential have a together making sure and

for years is these has come also acquisitions Our back that, legacy not future momentum, for And sustain over but and to momentum will business to avenues and new Lynne. strong growth. it lot of that up will turn only open with I'll a

Lynne Laube

a year. With Thanks, plan Andy. rest integration up our the for to was of forward open I'll on great looking We're executing for to QX questions. call XXXX. and your the start acquisition that,

Operator

Instructions]. [Operator

Raymond Aaron proceed from question. of Our comes line Kessler first your question with James. Please with

Aaron Kessler

updates the platform. Any self-serve on

to including new of the feedback on what think to at or think there? that what's efforts of best some out on Bank, begin finally you then the quickly U.S. started guidance there. I could Dosh? you change you organic roll of you. kind impact Thank kind change conversion platform, of maybe how full a get FY for a would the for year, And large May do platform and at monetization, one and versus rates that expect kind on the

Lynne Laube

Aaron. Hey,

I'll yes, take So, the first. question Bank U.S.

our new they quarters. the with rolled -- are rolled with ad is out fully be out user new that They going over fully multiple not to with are stream server. coming that So,

that modules where So, call, on And in going modules modules them. overtime, that still helping use the they very rollout different of focused as offer be to are multiple rolling to educate to more these got try kinds they're first But based variety them we of customers that of [indiscernible] on are modules. different experience little what sort different in use more they focused incorporate API on how we out over kinds module, of you're bit of are now a from will that's they are and modules the deploy and to talked scratch is find our more contents, customers a the overtime. the on about quarters, then they features across the that program based seeing program train how wider

So, I bang. that's apologize. question. forgot second on I your

Aaron Kessler

well. Just based kind self-serve the platform of on as

Lynne Laube

well. incredibly every everything to I about talk multiple but go mean, if self-serve continues being rollout to agencies. It you with time, try now

growing year, so to QX of at numbers see this to agencies and results. be We billings in looking starting how XXXX committed it's are giving you'll you able from by actual

Aaron Kessler

without that? some And kind you estimates how are we these Dosh from should for of think about

Andy Christiansen

increase the Dosh big is that sure to Our want a certainly from quarters understands to in I make of of attributed gain that we it do everyone portion we're a to year, the the certainly acquisition. guidance, confidence of might lot had three give a going in be nice well. quite going doing bit we're more QX trajectory, business is core quite on the that a and and strengths to But us

mentioned, I there's comfortable be bit may I still still UK, a in And think little they're in now at There But giving some a a does small amount where to a on track the risk core bit lastly to how strength that of just though, UK, will the that I in core relate all we're from for us their feel full pretty to going I there's pause, they're of business. be emerging some right, lockdown. this So, the year. amount little the like of uneven the as of be. are pieces think business there with and

So, largely it Dosh. is

Aaron Kessler

has maybe So, share to about just the count the year? for that remainder of finally, think

Andy Christiansen

in obviously, through without share so, count needing QX raise I to jump funds need going the share offerings. here to definitely we we foreseeable for there's additional the be future, funds counts, million the X.X Share think sale any any in don't significant that had, was

think So, a increase. fairly it's muted I

are Now, in It's much equity have based shares uncertain. the last less awards several with over timing if there. the we're years hit issuing that the for really will recall you performance been that remain does those some [indiscernible] of executives, that talking little offerings we've which bit about out a

later some see the we'll lumpiness perhaps. in So, year

Operator

Please line the Jason Kreyer from comes of with question with next question. Our your Craig-Hallum. proceed

Jason Kreyer

is Just from being really than or a with a consumer different consumer just a server, Or in anything changes point perspective, experience regards Bank Fargo Wells platform to modules this ad the really rollout? the Chase a like the U.S consumer experiencing Bank experience those consumer? U.S in, new though it is at or

Lynne Laube

platform, experience. focused exclusively The initial are the new to is they platform, are new those chosen of driven, API's for their a deployment on new take of API's platform only have the few the And they education. API almost the on

perspective that from very So is different.

now, anything see actual that content terms in similar. that very, going of these the in in look of like very modules. different they're banks will to But the of other we education You terms display the and ultra overtime, content hope types to right

neighborhood significantly discussed X the we've in of it's X to and will. get you before ultimately, somewhere think to million truly offer contracts but to MAUs. U.S of going this not scale It's I the of different Bank, if offer types properties, be enough million

year, type deployment which this means, that same and new QX to channel. able advertising and to the of the it the of change looks other banks. as focused that perspective, scale we'll content they a of types start and and kinds the educating meaningful they'll imagery really the server experiences. the next from experiences different going to And be into offer large when the offer multiple of we're different as some So, to doing half be in That's quarters. incorporates very going search be thing helps? committing real have discussed, Does other into QX constructs banks I of on ad we're But drive year, to this different we've consumer of there's back richer really got in on so the focused that's than

Jason Kreyer

I out help. straightening you. that kind for That It does me. was of appreciate

couple follow-up As the weeks can of the a if volatility over lapping the of what But you're follow-ups any maybe or you cadence here. just on a last give X weeks, from color to seen some pandemic. X you've

know you any trended started in that. one So, you've that on travel. specific guess to resurgence and had just there or on things of seen have I perspective I that. have guys how any advertising then commentary or as don't some wondering if see vertical not, travel. I have in kind We lap

Lynne Laube

Andy didn't of but saw three then of we January in that weeks. increase the it guide much in of end February, we really of that's I'll consumer throw I'll well, saw March, in of in sort because to why our and March. and in as see of last -- comment strong spend at it we the was over came high our was We

materially hope categories. haven't much it So, back of as would it changing as pick back we lot picked still travel is a it was are anything up We fairly that up seen seeing in in two in add? QX, nice very, March. April. weeks a you travel But other of in last recovery But saw still would for the in on verticals the very lot suppressed. Andy, you

Andy Christiansen

right. That's

see in rebound starting to in terms are as the we're We for. not travel. not it's looking It's slight nearly meaningful. But a of uptick

Lynne Laube

looking the be for. not droids May the you, force you're Andy. Either with

Operator

comes next Wells your from proceed from of Tim question with Our Fargo. Willi the Please question. line

Tim Willi

quick Andy, housekeeping and have a I the couple two about business.

post Just make go forward expense redemption paydown interest be quarter and should is XXX,XXX of on everything? convertible to about it – around sure, and a offering post that right a

Andy Christiansen

X% paying on We're that.

right. X.X per that's year. million about So that on

Tim Willi

I perfect. Okay, noticed And the was, quarter. then in backs the this other one add

statement on or some to part sort really to a that one-time of going charge. intangible, numbers right? not predict that's it hard a go-forward $XXX,XXX acquisition treatment, think with is of you I the the I basis, know income of that month Dosh one back of is that for sort to about to kind merger of charge accounting of sort along was think XXX,XXX be add the amortized those, way

Andy Christiansen

the amortization quarter It'll the intangibles forward. absolutely right, going be it's You're under the former.

partial just it's or XX days amortization month on a right, of intangibles. those you're So,

Tim Willi

EBITDA the models? And to of free you sure for the net to just that will back adjustments add assuming I'm as want in adjusted make income,

Andy Christiansen

We calculation. added back discrete loss non-GAAP add as amortization we press EBITDA We as adjusted in net depreciation that add in discussed in release. backs already our our our

reflected there there. as well. difference add is it [indiscernible] see don't So a that We you'd so

Tim Willi

of about that customers but Okay. in should how then maybe of a lockdowns the year shelved exact can about I the banking how remember U.S market ultimately, course everybody verbiage how has And how sort back North are made, people of, UK last once like curious to I that for something strategy sort onto the any then continue to again. that's U.S? so as maybe been back get bit how will industry the little at UK we feel going just put their come I their progress about three or culturally out play America? which run and it is, the by of I'm had that going them And does rise. thoughts quickly, shouldn't Do about, get in comes think to platform we've what's bring U.S what to versus mean, going and appreciate on to sort back to looked you retain restrictions talked their And words about there Is out seen the UK. with back you're play of, going think, together there business, Europe. you the the I understand sort I the and we then like UK, the and your guess

Lynne Laube

don't and I good have the answer. exact I that a know question, It's

you a with Here's the of of to describe a as return us, [Indiscernible] the that say as almost quarter as the that's for we and element strategy return U.S I fully now return we're still muted, strategy, would fully verticals, strategy. multi covering retain what strategy I most have rise, right, would little part know, but just the full-year. in that of But we're traveled, a been

back about there retail is I people how most because only that rise, be will hypothesis. quick argue cautiously when I go advantage UK. in a the think would up up optimistic I that's will or So, am impacts very it than of have anything through but they UK in nothing hopefully, they just or see time accelerated, that so that sort thinking the with period, That tell return vaccinated back opening of open will like and that fundamentally something this very the different retain different

Operator

Morgan. with Our Please from question your [Operator proceed next question. Anmuth instructions] comes Doug with J.P.

Unidentified Analyst

the retain a be that the category within you're rise that The you have up to any think first your And now And any just To think I anything going things like then the Or consumer the within back changed will are marketers be in how had and forward? expecting reversion and core going strategy. behaviors talk follow sustainable. but other some behavior advertise follow-up, open? a we do that about out speaker U.S marketers post RR levels? had XXXX and Are within as well, or should a you of customers there's learn, about one, auction of part world you category pre-pandemic that you immigration the the and as is like retain you have you to like of to the family? if rise curious

Lynne Laube

three CP call So, on to be it, is with like you. which R the three, may as the you'd like force strategy,

I guys, got apologies. sorry, no that just think I

fair drive think in a of that. really the powerful good and of just very, rise I direct-to-consumer think products say channel both in think the the terms to types it's those demand being direct-to-consumer for become very vertical, I a vertical, consumer to I it's just

here that I think is stay. absolutely to

buying don't I massive say, I seen start vertical, I it to back we've categories, online in-store those backwards seen was start grocery. to to remarkable gone every if think have to beauty, they're all seen will it verticals the clearly the a in-store more obviously other spend in confidence of they're height it's online has say say less, online there, meaning and purchases. in have not that back that component that now an know, shipped of doesn't demand go I here is But the which and two an going exact to ship ads we other and shift for grocery, thing exception the can in-store mix, with it going to pre-pandemic. back. with we it's to the just those

and be ever retail, that our just go But I to is I spend the it don't that quite for going traditional think determined, to think of verticals, more restaurant back many before. So, to level consumer was not it it's it's before, some be, give going to XX% sense? Does XX%, if going not stay or XX%, XX% directional was to at make numbers. to at you

Operator

And our have closing end like reached with And floor I the we management that, to the turn of to question-and-answer would remarks. session. back for

Lynne Laube

your you and look to thank were forward everyone, investors of with Well, the many over next continued for to days. it. we Appreciate time. conversations questions Hopefully couple able answer we

Operator

This today's teleconference. concludes

You for may time. wonderful day. and your this you lines have Thank now at your disconnect participation a

Cardlytics (CDLX) 5 May 212021 Q1 Earnings call transcript