CDLX - Earnings call 3 2023 | Cardlytics, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Q3 2023 Cardlytics, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the call over to your speaker for today, Nick Lynton, Chief Legal and Privacy Officer. Nick, please go ahead.

Nick Lynton

to Third welcome Results XXXX and Call. evening, the Quarter Cardlytics Financial Good

and growth new let that full our and expectations remind contain we the operations, server financial me Before and begin, including ad results everyone expectations partners the our to new based our for our performance and expansion, including quarter forward-looking international on today's to XXXX, current adding beliefs, business, assumptions, our to experience, and U.K. the and fourth about of future year the statements will the transition our payments improvements network, platform our partners earn-out Rippl, user Bridg liquidity. discussion

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

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

DeSieno. Alexis our the Temsamani; on our Karim CFO, us today is CEO, Joining call and

to your the their Following questions. call open we'll prepared remarks,

call the that With let said, turn over to me Karim.

Karim Temsamani

in like to earnings this business. QX When year arrived needed joining for spent year, call, start you that last improve. I context to quarter, thank and some provide finances the our a call. I've our XXXX the to To now evening, Good I'd

to and institution reinvest structure negative teams the priority worse to foundations financial Before cost our the annual relationships. run was My building rate starting business, immediate million EBITDA started, our $XX and were I facing. in adjusted adding than was difficulty our of our with QX XXXX rightsize our

While far. longer have foundations accomplish, business our growth to financial term proud of our our so is We left in think done have place. I banking of the about The teams stronger a our work are we much can much better relationships prospects. now and am

adjusted positive Our expected results XXXX better our We first this match this quarter $X.X and and million. grew adjusted contribution EBITDA our was on note, profitability year-over-year in sentiment. line on line than guidance time metrics were XX% our Of at in with metrics. the top for

for on cash later had also flow our provide Alexis will the positive We more full straight quarter. operating results. financial details since

underlying proposition. solid to Our quarter back points performance our value this financial

We grew convenience buy and year-over-year. who in quarter grocery We gas, than example, success For XX% brands. for competing ROI because brands which succeed more helps saw we them, help us category. this strong this shoppers target deliver

XX% the entertainment, Another which success travel more and that in was quarter grew year-over-year. than saw

of half travel in has budgets. clients entertainment spend softened back year, the still the into leaning consumer While and our in are

high We we teams reward them these contributors our in customers, significant drive to where are new be positive and balanced categories. by aiming were These should Our platform business reinvesting loyalty helps by moving in to and growth is subpar spending and particularly volatile. in forward restaurants environments results retail. our in can these and acquire performance verticals believe

be clients. mentioned customers mixed, underlying quarter, said, the vertical will fundamentals in As engaging activating we loss and That decreased year-over-year saw the a our performance or a previously quarter expect as large saw unique we per of spend Where indicates in were evolve the continue offers X% XX% platform. consumers are offers relevant which there time to increase serving activations, to redemption by we customers activating variation unique over in our in QX, quarter-to-quarter unique with to we increase, with serve consumers. restaurant driven the

mentioned to bank new was sign last one of XXXX. the by end quarter, our we As expectation partner

announce We can't the love. are to that aren't our their stopping U.K. customers excited XXXX save team one money the in on launch they to that the in there. teams the Monzo, And U.K. banks signed help fastest-growing We brands of wait to

least bank next at partner months. U.S. and partner believe the Our will strong, pipeline major few in we over remains we one the set more

amount strategy our do What evolving later to want I move on Investor X planning. provide our over how of color an see In Day expect Let's initiatives. strategic strategic at next initial we the to considerable I years. time a a I spent quarter, the on date,

to supply outside and trusted embedding the into Bridg broadening everything vision large the but pillars: of two, we out This core around connecting U.K.; user three, and vector data it year. to And demand, aligned become Our also and for supply by our for strengthening unique the is with require core growth future and partner. our X the Cardlytics do, further insights scaling internally of broader diversify a liquidity ecosystem; our Rippl strategic reach to the globally engagement a non-FIs most is but business exploration One, externally, measurement driving new last, core to the ecosystem. building access and simultaneously commerce in the while expanding business Casodex importantly, and product and will unlock marketplace merchant

and potential discuss the credibility company, future data core of you. critical could streams. behind reinforce want tap discussing revenue of As I call Cardlytics, a to initiatives while strategic about the builds initiatives of to our I vision. that this of strategy to our the detailed to excited spend wait plan, new into our the can't this do near-term and And and to with elements most many all our realizing move are I'm

discuss let's advertisers. for first, initiatives our and So bank the key partners

AWS, AWS. a our migrate quarter, bank the major the XXXX. banks to closer large still We systems us the all user quarter, last in AWS, like front, major and have data have our U.K. migration, bank of experience U.S. moving to completed expect new middle In all and in completion. nearly by banks the most to XXX% the On

to as to constructive adoption conversations continue partners, we drive possible. soon with as our full to and We want have

bank area focused that saw One ADE. engine significant adoption was ad progress decisioning our or of

recall, ADE you relevancy If the through offer for targeting. monetization drives higher and improved business

overall This of ADE new adopted largest see for of quarter, about our We're adopt ADE. with fully our in X and these we can't increases the all wait excited to engagement banks banks

than ways to baseline provide seeing partners on some to Xx variable our offers spend. and and which scale to our product our engagement provide based Multi-tier on adoption rapid campaigns. continue return objectives in better We advertising incentives ad drive advertisers shown offering and new have performance are

to customer of For saw to membership XX% customer premium with a this basic a example, an us ask came Historically, split increase memberships. purchases. to membership XX% premium

able consumers. multi-tier offers value drive additional Our and for split, advertisers to consumers an were to its XX% its membership premium providing

to Monzo. processors for and to also items onboarding completed key quarter continuing new such make legacy as significantly that data facilitating we Several our including our improvements operations. transitioning lake new expect action, to to interfaces We're were improve publishers the in

transitioning the items are were onboarding in also lake, continuing key legacy to to We to interfaces process time onboard also Monzo. for expect to operations. make new in significantly reduced to that data improvements just made significantly a that from processes publishers Several we have quarter to new such X We've X days. execution, as merchant the weeks facilitating completed improvements improve our our including our

Bridg to Rippl. and Moving

network. seamless footprint flexibility building we For This provide campaigns. retailers we our remind customer data them for we platform product, long-term the resigned believe measure of quarter, us Rippl To user-friendly a contract. is and media great incremental the win drive empower larger can or deliver and that retailer Citi Earlier national will that and to substantial access gain this CDP Rippl, national retail tools their insights, evidence a need. audiences, that to accurately impact large you, launched sophisticated enrichment CDP the valuable in a data to our product sales brand a

in we materializing, the in have progress business. lumpiness platform we for the While transforming the growth expected is solid

profiles live have on and Rippl strong. initial is million feedback We XX the

officer increase growth. hired the our a recently Revenue help for also We business to Chief

announce coming Rippl we in and quarters, strong scale potential expect see big to to for the some wins in XXXX We and beyond.

Let's move the to business. global

updates global do a news, While businesses another of several have update. at Ian role. XX join in I me the built welcoming created around newly Ian have billion-dollar in markets. Cardlytics big the look have be years he experience global Cardlytics, global scratch development. is has Google near plans attracted over I from important business Manager of We're a serve At Monzo and Please to who business will International General and Harrington, global providing expansion leading forward to more with charged future. and in extremely to excited strategic him in our will

our outlook. Moving to

budgets this consumer higher final credit surface, the and driven increase interest in of as charge-offs commitments institutions spend highlighted seeing with given negative than year-over-year, lower largely of with In spending, X.X% are the conversations still normal by our our prices. and partners card around some advertising advertisers, inflation persistent despite seeing that But QX. On is are rates, deposits and this gas elevated solid size looked a cushions higher elevated indicators. trends they we quarter

billings recessionary adjusted our in ground reach execute volatility optimize concerns. on the EBITDA should renewed impact cited will positive also QX the if full our can be of some year and We revenue, that in QX. but appears positive It QX EBITDA adjusted has plan. for still we our Economic to

from navigate and and since We of our reflective business The I trajectory dedication we think and operating team incredible flow profitability a and the predictor remain our great this focused to of our success. on flow highly cash cash XXXX of is future effort our our choppy adjusted QX as EBITDA rightsize of environment.

of many exciting and a sophisticated set, the will audience discussed, platform drive partners over drive analytics coming to are By years. look that few XXXX, in coming different developments And deeper more us variety the ad like will and of completely end and growth broader expect engagement. our targeting, better large we've formats that there the for quarters we new data bank increased with a next reporting

in belief growth has prospect stronger. never are our long-term for in our the and X been our We years, confident strategy next

turn Now financial I to it Alexis our will discuss to results. over

Alexis DeSieno

trajectory. mentioned. you our lead to for joining our of I strengthen to call. beginning I'm planning is and balance focus the and today systems. all our to my helped as our CFO diversify addressing process on our you, evaluating addressable on next Thank be thrilled capital to maintaining that to our also cash earnings I'm days optimize the while teams, spent market sheet. processes Karim. first first revenue room X-year meeting finance my XX structure be steps flow this and a There streams Karim and strategic expand time profitability at in excited I

level are in few to there the providing the and post-cookie a gives business our that in the any and data This trends right and be And other with to space. reach align in with platforms we leader trusted that the compete us have We of our do. positioned intelligent platform landscape, insights, are the strengths.

the near our I of monetization will priorities: have incremental us through First, allow major In revenue X driving deliver to our ultimately and assets, more term, partners. insights which to improvements pricing

to and to make informed to more automation the us across embrace Second, and analytics quickly decisions allow continuing data newly. organization more more

promise deliver importantly, our on to sheet balance allow our and investors. profitability, goals structure. This will most our capital and hyper being and focused and us improving to Third

Now guidance. to and results let's move our

billings, contribution We exceeding had flow $X.X EBITDA our As XXXX QX consistent cash and guidance solid million. operating delivered first our with of and Karim second adjusted at positive positive quarter with $X.X of quarter revenue mentioned, consecutive our EBITDA QX results million third our and adjusted we of guidance. quarter adjusted in

sequential We on are and improvements showing profitability. momentum

financial for to comments incentives I of increased consumer to institutions a My the increased primarily a in due X% mix X% otherwise. our pricing. million, result state in to be to advertisers. million, quarter, Billings unless and new primarily decrease comparisons year-over-year will changes of $XXX.X to due Revenue as sales $XX third

customers accounted to this increased compared X top XX% year. $XX.X to last of contribution for XX% quarter million. Our XX% revenue Adjusted

Geographically, revenue XX%. increased U.S.

a driven by For both were mainly decreased to loss XX% spend of advertisers pricing major last improvements. our the partner brand increased increases top years, year. across revenue due U.K. higher and These XX%. revenue

the auto partner sequential over from the we to Monzo in the U.K., a due enrollment improvement with this to bank begin expect several the is in from QX, launching For signing set continue several next to supply which next another quarters additional months. large and

contract by extension increased driven clients. For of XX%, Bridg, existing revenue

and drive August profiles the adding effects. in term, said, additional sight in added scale and our launched we of near us the Karim As with to to have database XX Rippl which enables million through profiles network line

Adjusted to off calculated contribution year compared grew X ago. margin XX% with XX% XX% revenue of the of

our and first was We Adjusted time are renegotiation as Chase EBITDA seeing the at the high partner as with exceeded of benefits guidance of well product JPMorgan for positive XXXX share in end $X.X for Operating flow million, the of cash and which QX a in quarter. consecutive second profitable better Bridg the quarter million was the $XX.X million for row. positive is was XXXX. than The improvements. $X.X second

lower expenses, million, million be operating we the expected than in While $XX.X the per in still low run $XX stock-based rate excluding compensation, at came quarter. range expect to

an cash on flow profitability annual and in flow and and on moving XXXX. is the EBITDA operating to basis adjusted forward expectation cash focus positive be positive Our our is improving

for anniversary group related submitted believe [indiscernible] However, objecting the earn-out payment in a payment Bridg, contingent our notice we shareholders On the former our to to SRS, the calculations. the second continue QX of the consideration Bridg acquisition representing to

continue are fully $X. position believe to We correct of and our defend prepared to are calculations our

liquidity mind plan long-term and top QX we credit. cash ended for $XX.X on that in is our and debt available unused available However, our structure borrowings $X equivalents, million On under support our to our capital me, of million had with of of time we appropriate believe line. upcoming we the an to balance and sufficient maturities line sheet, still address We cash is

users to We of number changed bank. that definition we cards the want note unique a new to was Also or believe QX this the this ability. that X%. of each during MAUs report $X.XX they we an definition, definition, last accurate on Before that to I our how reflect compared view on $XXX.X guidance, monetization million, of within I MAUs bank more to have new accounts our turn at year. Under regardless is were change region increase based $X.XX ARPU the of

QX Now to turning guidance.

For discussed and causing are macro most dynamics market. the mixed of advertising that have the the we year, and trends results in uncertainty

budgets. have around shown advertisers Our caution renewed

travel million, in between Billings a we've million. adjusted This that $XXX EBITDA However, are between our positive cost by between driven we Despite revenue in continued $XXX result us. structure. of contribution $XX with adjusted on With everyday the Billings spend weakness we spend $X the retail. restaurant mind, EBITDA million million our by and and million expect and done and adjusted are success million more between QX, in million, growth expect seeing trends, primarily and given work positive in is growth and and for of clients $XX mix $X our categories. strong is we $XX partially offset million $XX largest

million per up XX%. spending Advertisers than $X year more are

spend of This comfortable the closed them as in around to grow XXx we their deal proposition we with particularly with of retailers push with around Billings one budgets from clients example, For in a how spend. October XXXX they should of ability is our X the incremental that loyalty United XXXX. in to largest figures can in platform, get States a over our and solid existing drive value our the demonstration

And fourth in years quarter. prior unplanned we materialize to budgets most XXXX, the in holiday saw

Thanksgiving between in of have could the We given so budgets these they our and provide days upside additional large year. this not number forecast, assumed Christmas

close XXXX. full second are will and of consecutive on is we adjusted QX the adjusted EBITDA. track The guidance year we for implies of full positive While quarter EBITDA QX growth our a to Billings midpoint breakeven year mixed, be for

$XX than XXXX. the by Our could teams. incredible over EBITDA are better These achievements annual million adjusted be

long in U.K. bullish added the the on term. supply We've are more Like Karim said, we

to We core our should nearly sign XXXX. partner by all new and bank our our the systems on in expect of business another of banks be middle

profiles adding network Media scale continue are business. should as Bridg We Retail we follow and the to to the revenue

turning hard work growth. these have at We teams are our strategic identified costs on into real initiatives and our

basis. While flow EBITDA are given sustain path an adjusted business, seasonality positive we our and cash we on expect to a of positive some on annual bumpiness operating the

Karim. turn it that, will back over with I And to

Karim Temsamani

As of you rate financial profitability our of QX in The extremely know, we've has the I our on with run XXXX. made progress structure. improved trajectory of happy am our dramatically

speed each We gathering quarter. passing in are

collective to at operations have we to we and from platform feedback told products our are up, starting Our moving the who better are and this is look can exceeding much different banks years. making improvements from pace our in And years. our prior a us recent are far pace than prior back with

and is to course leadership, growth Our forward financial looking promising strategic and a product dedication the us I'm to on setting health future.

Operator

question Your from Peterson Needham. Kyle line Instructions] of the first [Operator comes from

Kyle Peterson

I from on numbers outlook, larger guys the the start sounds guess but feedback billings and or terms in looked of wanted getting chicken a you are little off your to on I lot light. of positive I the pretty revenue. commentary clients, a guess

So other wanted aren't a I clients especially to Or this this that. the side something headwind Is consumer else driving is kind Or what just that of the play of broader here? some some spending is of of more is with see pressure, maybe larger the there funnel? at advertisers? just

Karim Temsamani

the for Kyle, Thanks, question.

know, you the Just company been back right back financial to priority our first, on footing. put to step this Kyle, has as

at obviously, many same the rebuilding While parts time, our of operations.

that demonstrated large to close EBITDA made in situation. going from a breakeven million we've to a run losses I think we've $XX of very progress rate

some your lower we growing will company we we for, to macro forward. still couple we going profitably seeing we're there rates now the that But at back clear believe on So a us of what's can One, on of we're are factors demand mentioned market obviously, of between which with call, also, weakening that and definitely of going do a also some signals. concentrate our declining lower in is really We're additional to revenue in sectors we're that hoped the in seeing on much sectors are revenues high. Interest This given inflation had cost -- for That's in than high-growth definitely internally. of a hearing the some and play. us that delivery that the easy I our better not seeing consider to reasons. some are can allow our consumer much seeing and some you're to sectors. some in cool driver here feedback of the it's lot run sales of teams that. is pointing gist with sort question, lower for is guidance And base. there's of some our points signals to inconsistency that weakness addressing regards that we

to could definitely that quarter. we the help So year guidance like do time provided, we we benefits also internally. I that we then be but say few year wanted a provide at would there to there's holiday around have there's work minute. we're this that in in areas will cautious additional come want the of that The And the last could that us. still longer-than-normal this cycle potentially unplanned that be could sales budget And we hoping

AD our more and to ad continue very that and more continuing see the whole we're winning consistently QX, QX across tech improve And very potential. business. So EBITDA about to We supply. will grow for positive but at formats categories soon see the that that the we year, said, are that future. emulate we We we're large for with future. well ad very monetization we're some are scale possibly that about accounts new overall, We at as see want the be see spending that a and and and growing positive we about to we're us. more us a cautious positive lot We're

not outlook of where QX, we in longer very for to definitely be us but term. So some want good sort

Kyle Peterson

adoption there's could share to of it. some That's of seems qualitative newer guess Got good I or products. might the traction these helpful. follow if quantitative there. any products. on of then on able some like it's And be I some maybe or metrics you the It whether up

of kind all interested there's Or clients? in but that this the with these? new these expansion clients clients are above? some are that are happier wins are of Our of logo using some Or is pure these is existing substitution,

Karim Temsamani

two Yes. mean parts question. your to think I I there's

longer -- adoption that great The our first one for is scale is term. of tech at the benefit us a

and the amortization that So improve mentioned high relevancy so the we call, for in that can targeting. drives ADE business I offer

can and the Now us growth like to that of see yet And talked numbers about last have forward. offers, as different things be ecosystem. well we there's will X talking there there are call, now. obviously, new which with potential clients until fully adoption that some us are about going quarters for few discussions forward. And we multi-tie trialing models, But also clients new enables really of to largest bank our share have product the then And of we I been that further the I've many new benefits these certainly, have adopted we we're to features over ADE, on where see the want no these going definitely that elements pricing of co-offering bring of some

Kyle Peterson

of helpful. up implies see guide the going it's good run squeeze quarter to modeling XX-ish offers that I any in. whether to contribution? margin moved just forward our to of use there Got the Nice seems continue. pipeline? it's Is contribution it. in percent that of run and types kind is if mix Is a makes in and just rate one nicely question That adjusted Or moving like sense or the this kind the maybe models? third more And it's could for anything XQ in rate

Alexis DeSieno

one. this take can I Alexis. is This

adjusted the financial of seeing a to a as well primarily contract you're due shift major institutions. from as benefit renegotiation in contribution our mix bank the is So small

there. does we with of the each So have agreements which changes some different one, do drive

pricing. I as You're also also mix. seeing to that the impact revenue, said in call, And in on improvements so partner changes

state going forward. a do normalized more I QX think So that is

good to And continue. a thing that be so would

Operator

of comes from The Craig-Hallum. Jason Kreyer line from next the question

Jason Kreyer

you just hearing we less What you QX. indicated talk -- you are you get a as are about can Like into wondering getting paused? things those being advertisers? seeing Are future? Karim, the but at little campaigns stable online from get if are seeing get bit are detail any getting they some there. you that short point paused some trying terminated? Or things the Just to get transparency come in term, some are you in indications around may more

Karim Temsamani

Yes. of definitely we're no mentioned that verticals. across verticals the number very Thanks. What call seeing there's a is we're uniformity seeing where various we've well. on There's strong the as growth, as

Some of gas very, categories everyday Travel like grocery, strongly spend is and and doing convenience, year-on-year. also really very growing our are entertainment well.

seeing more particularly time at we industries like and in this are lot there's a the really retail the of you up, budgets expected. softer are see for of and restaurants, We lot normally that that retail, a some instance, year definitely would in caution come other than

drive because around period we for to the of think at looking Some spend. ourselves verticals, how the and the have definitely balance improve ability business. our there's sort opportunities many consumers business further want of consumers we're of get that. that our things is to also this that are we know around a across all of we consistency just in we there's of driven driving and to But definitely We for issues caution that as the ourselves economy by into to more lot retailers

question, your Jason? answer So yes, that does

Jason Kreyer

then expect talk guys you market wanted about approach? or I the you what strengthen if that do for to back bit the we -- little helpful. independently looking if a to there's as view that of that you're a or on if can kind broaden go-to-market lot see just of opportunity to also go-to-market for step very to partnerships Rippl. That's pursue and you And

Karim Temsamani

Yes. level anonymous reminder, which with a profiles, as provides of shopper access part really data. we Rippl Well, so single SKU enrich a to

that that will to and So experience additional they have ability use a shopping an shopper consumers. for have Rippl can advertisers using spend data are to better drive transparent

and to Bridg say our scale. I businesses. we choppiness the and that and customers progress a for Rippl retailers core of said be having our than discussions Rippl the as well. there. making. positive brands. But well obviously, to that we're of to But we're early as in join customers how lot getting feedback product It's very We CPG thrilled of there's lines we're of with new is -- would time the talking having going very expect in that, network are stages with sort We're And longer from many getting both

promising we in a well. hired with just we will have of of scale expect that, We business, XXXX. on pilots discussions Bridg, CRO help for have meaningfully new that Bridg number Rippl and that a And to and who progress, going are we've clients top large us the in contribute and

but that expect very we're about choppiness we the So as prospects, some excited build business.

Jason Kreyer

to gating more take sounds like banks more need does Last just there on interesting opportunity. do really there? Or to get or you one growing that for rapidly? experience? What -- the ADE like which it me. the to offers, is user I factor on wanted just multi-tier maybe tiers time on a the double-click Is more

Karim Temsamani

ability depends have offering or to advertisers their type pricing so and the customers. differentiated it sort of on goals their for have that Yes,

to That's is going us. about multi successful can. be TT multi-tire as to So we're many as offer of We're for it and number not now, going customers of product certainly fast with scale customers. very for be of offers planning -- our relevant right discussions a all we to but our a for having customers,

these up more that things that the having mention though type the is of discussion would products of One also for core opens I of product.

relevant other have. you the that So we now see them up or but the new not they future, on as discussions seeing offers spending you have more sort offer -- multi-tier the tiers, of is rewards with product and to even normal that can have them in right the sell maybe even end for

So it's relevant areas. in many different

our at these that the for that regards again, and network, more can scale, we we data at so do all on that future. the them asking they're and products we as I meaningful you have appreciate in impact provide So to but having numbers, plan certainly scale with to to we see want

Operator

I turn would time, any for over this to like the back now to comments. it speaker At further

to back Karim. you, So

Karim Temsamani

Felicia. Thank much, you close. brings to very a the That call

we positioning mentioned, the and forward soon. remain you future look support, I all you to business for to speaking committed As for to success. your Thank continued

Operator

Thank does today's program. conclude conference. you in your participation This for the

You now may disconnect.

Cardlytics (CDLX) 8 Nov 232023 Q3 Earnings call transcript