CDLX - Earnings call transcript Q4 2023

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Operator

Good day and thank you for standing by. Welcome to Cardlytics Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note that today's conference is being recorded.I will now hand the conference over to your speaker host Nick Lynton, Chief Legal and Privacy Officer. Please go ahead.

Nick Lynton

Good evening and welcome to the Cardlytics fourth quarter and full year 2023 financial results call.

future me based that expectations quarter on including regarding let contain discussion and of begin, results, expectations statements and product forward-looking our our improvements. XXXX we and remind the initiatives today's everyone will beliefs, including various Before for performance and first financial current assumptions,

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

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

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

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

Karim Temsamani

glad last we our only foundation results annual on our signed right to SRS and add as continue and business.With call. contracts XXXX addressing resolved we significant difficult SRS are QX growth, the dispute efforts but to a a we we on for XXXX, expenses fully details not the to adjusted Alexis execution we we started leadership teams. a sizing needs. cost Thank growth you, and finances, presenting XXXX the with delighted X-K structure year the exclude great in and as teams. progress large hour. to the We adjusted our earnings these focus joining whole. made and off later time operational as to company. we for and for partner our cost we financially, our also entertainment, the and SRS filed us renegotiating million. a the product, am performance to financial start the call.Aside first of Nick. hires a the QX I the sold have partner fundamental XXXX a for position All and made evening well since XX% improve including would is can from structure, you we now I'm sales challenge banking in just a our is capital as on within making we EBITDA. first rebalanced, that to new provide across will Good QX. billings per good ended expecting our year I our resolved which are that dispute, thank In we're when XX% finished further positive like also key dispute changes reflect EBITDA year $X.X with This positive with our tech, in

are Our U.S. in advertisers driving platform. to sales back U.K. the the teams growth bringing and stronger and

partner U.S. bank promising the in has with additional to we team partner bank our discussions mentioned, just the in U.K. continue a and the I have US signed As large and new banks

provide experience that progress. and bank continuing our of improve Our more for to launch partners well as our the on more product their engineering options products as and me new customers, teams provide are specifics advertisers.Let

for the tech part adoption creating and is a these about obsess continue outcomes. We we of banking foundational customers to our create outcomes partners,

more relevant are bank great new surface the us and provides new customers more technology All roll out and new engagement, Our offers to content for products these network to better, drivers ability growth. the quickly. run

make to continue on to engine progress in banks ADE real yet Bank almost over of or have with adopt migrated and the have time, offer interface our to AWS segmentation by ADE driver audience with allowing AWS. enhance adoption, remaining us we for tech ads banks that We ability traffic time XX% who relevance be are partners improve AWS.We've on targeting. not are and now powerful in to our on decision the dynamic network a and that mentioned will improvements with discussions

on XX% So the far, XX% now of network we of our are already is third network version ADE. with our of on version. ADE, on our latest

ADE, customers on they focus their have a on continue banks, our continue platform. whole and as are that redemptions increase trend have redemptions the a X% this network. best versions our increase the banks pillars for redemptions, in those on seen to provide to redemptions numbers.A on of our we across we the because saw confident to and will We key outcome January redemption to X engagement, in XX% ADE impact subsequent drive because best to with view increase For ADE of way as engagement focused we our improve advertisers we compared and NorthStar, increase driving is more the

content The and first is key pillar insights.

solution being improve on in-demand ourselves on the to the a aiming quality, large well-known variety quality content continuously and network. We brands. of advertising for high pride are We

number in subset existing that of from left strengths types. We or are return seeing data advertisers competitive had scanned growth card are our resides retailers advertisers analysis business focus a seeing network.The on insights. of and Most previously our a additionally our our limited of from

making across insights the cards our scope differentiated. geographies, provides data most and highly channels, comprehensive Our

beginning this. end across will cases market offer process activity, be our we their provide data.We're a transactions plan customer benchmarks. pull just over dashboard let This a against snapshot for for summary We'll self teams to dashboard visualize their this growth data performance growing a with centric exposing will by served brands.Lastly, view time. new list the customer of of customer affinity, historically, benchmarks. However, We a This them showing insights, industry brand deliver advertisers give that been of automated use fixing of the to competitor will an that it's manual will XXXX of category. a and the we set different churn is showcasing and revenue, advertisers

We As largest offers. we will a we a had productize our time.The we time also free highlight to with tools major a offer receipt this more up wanted test success recently highly customizable giving and analytics to provide will from is to we insights second U.S. differentiated pillar bank and reduce to of offering actionable the level highly budgets and these is with enable team churn insights, merchants nuanced for our key us partners. that over believe advertisers campaigns increase and optimize did airline. custom, I

product growth As a experiencing cash the expected us the months, the the ticket In a a as reminder, XX% renewal of our their months. offers we the to core airline's this one initiatives with to reward discover in advertisers or allow delight, testing is for campaign the that customers.The targeted the following season.To days This back for for period higher placements and close wanted call easier for offers they and tailored demand were more widget, airline receipt specific case, low within and for run booking example banks, than category time use. alerts. making departed and several product new is With level are the to pillar a in are later key campaign delighting client out softer targeted of entry different third were buttons, of points the how a item. that just driving to offers are promote flights purchases

ability are the program. increase engagement a where volumes these have low of already at with shown All we to strong

those example, rate.The and higher of fourth offers placing featured the offers activation At key customers an item offering as our started activation is to each create bank. our typical statements, creations tech saw differentiated of enables an line increased such differentiated offers, offering rate X As size for offers. when us that proximity bank Xx network and was pillar the we on than transaction partners in bank for

We are experience. and also offer relying of on customization enrichment the

leading source of we back fantastic rewards Game unique decisioning advertisers. the advertisers platform For example, content rich, to to targeted platforms.With these increase needs with of with event target differentiated pole best-in-class The engine, across game bank deep big up we the and building the a Bowl party all we in of with data, experience, with the targeting highly flexible a a multiple bank's X that This a top insights. deals the partners. Big pillars week are merchant user for four cash of first tier featured understanding bank called existing to of where APIs, launched with mind, with customers a a supply initiatives our cardholders is platform engagement and unique XXXX and will tent Super events their leverage many of

of All to the hosted flexible.Moving fully is cloud Bridg. this and in

the is understand by for better and First party and serve them their party the expanding data helping continues leading retailers, cookie entertainment first QSRs free and marketing un-reaching the Bridg world foundation to to of data. businesses, their customers

sophisticated inventory the their management delivering our of food targeted data. restaurant media data promotions.Rippl, building we large loyal user seamless CPGs incremental gain their analyzing a recently them by launched, insights, to the audiences, and and we to grocers A substantial fastest partnership For customers footprint with helping drive tools a grow brands enhance strategies are instance, allows and by growing campaigns. one in valuable access fast flexibility hyper empower of purchasing retail, accurately friendly measure impact and that network the that national them to provides other sales

leading few from the confidence business. who dedicate the this million the cost platform.This which rebalanced, will this national With and joined translates time to to should onto running strategy the have of we we Wegmans actively now platform, rates that can leading loaded Over our and campaigns being footprint CPGs XX sparked structure Eagle a around expect us our great Giant higher to including last retailers, started our growth from returning has profiles interest several Rippl gives pay-off. have months, test

progress a audience large and results will of deeper growth.In that formats analytics as will a do are and transformation reporting broader give working us we're we drive last midst QX of data to ad banking a just that can and that partner, adding quarter, a spur increased towards sophisticated confidence variety better said new addition QX in set, projected more targeting, this and engagement. I we Our the and

to past core that needed over discuss in move growth it long-term hand financial results. to prospects to we belief to I'll As strengthen.Now, the the Alexis business, our our transformation happen our continues in

Alexis DeSieno

Thank you, Karim.

generated a we echo QX, acceleration most half with half million nearly the the versus Before billings, Cardlytics, EBITDA I than on year, $X.X million growth the year. prior the for we X% year versus year. turnaround $XXX.X the In about Karim's to million $XXX.X XXXX, the since was contribution in year alone. the second and million million both time and of of at a generated want XXXX. to at in representing as prior at in XX% $XXX.X sentiments XX% Adjusted moving first for Adjusted the growth XXXX growth positive with growth XXXX occurring in better X% second was representing of revenue, $XX

our the EBITDA exceeding As consecutive contribution our positive drive performed changes cost on adjusted or positive with strategically to with operating guidance line quarter in to consecutive expectations. will in EBITDA. and quarter and We to and results. of third revenue made consistent of our QX flow adjusted expected second adjusted billings Karim future.Let's our than had mentioned, we've positive EBITDA enable adjusted that fundamental structure our and better invest us We cash QX move

sizing to in stated success million, for momentum top right show in increase after travel. year-over-year well everyday as quarter due driving X% be otherwise. comparisons in In billings to fourth a reached comments spend, as continue unless our QX, line will We business.My the $XXX.X continued

our driven million, restaurant a category benefit partially of by of Our the sales pay $XX.X up slightly million. related off. are as was QX revenue $X.X one-time turned team to in efforts positive X%, Revenue rebuilding beginning

compared customer This at continue quarters contract growth new expanding Lloyds several revenue our customers enrollment restaurant Bridg these and for due of a to accounted an to new a sales revenue longer double-digit revenue our to leadership. to contract, and program. allowed customers of started X%. has which as as a offers, large the means we implementation see auto five result expect and We as top its our U.K. the land to X-year of this and into have opt sequential sell to showed deliver The new grew budgets.We increased XX% for U.K. Our no to of time growth initiatives resigned and existing the in existing XX% continued customers.Geographically, last improvement quarter year the very platform. joining team in XX% first U.S. expand in QX larger and well customers X%. strong

XX as We in cash renegotiation. off the was XX% have in $X.X of will to mentioned, now million, the consecutive at Adjusted we of history. expected third lower XX% to of in was than profiles for calculated compared profitable the to due partially previously expenses quarter. the guidance increased and be with soon Cardlytics of share is $XX.X exceeded have Business database and $XX partner ago. relevant Adjusted believe largest to benefit end CPG million third customers.Adjusted the growth a for million positive over contribution million revenue contribution X high margin our row.Operating came scale we and EBITDA XX% the million the year to quarter flow Bridg positive at the $XX.X operating in

to February, sheet, On the $XX.X extension ended confirmed line year This balance on by cash from reflect our of not of completed cash of to and receivable, we of XXXX. under amendment borrow to previously.We the the we line we had million in borrowings April our line of credit, equivalents which credit. $XX.X maturity allows XX% eligible QX the which available our also up million our us to unused and in of does with XX% credit now up X accounts

paid we plans. end settlement long-term of our issued our the We we February. available X.X is our SRS million sufficient believe January at $XX shares reminder, of and million part a as in to liquidity As support with that

the However, our steps to of credit balance many sheet. is improve line taking one we to our amendment of are

adjusted our marketing that, lead expect top to spending Despite million, double-digit for due million, we we $XXX time QX, our $XX between in added respectively.Before budgets midpoint would for were $XX which to the of is this were and new given XX-K, cash adjusted was habits, X% $XXX I a are and than flow. ARPU to weak million, cash EBITDA, is seasonally million free free would and million the range nearly is MAUs between turn for quarter, are QX to in million be was an $X.XX million a and fourth X% and you, remind positive line consumer in Lastly, At business. note and $X million. period generated non-GAAP I we metric measure In to $XX in cash free growth year, increase useful million QX, funds QX. want EBITDA better contribution expecting which guidance, invest the XXXX. billings and that million to believe adjusted We $XX QX.For flow be in revenue decreased $XX to $X of of negative we first the for breakeven most clients. between that flow we between $XXX the $X.X To the available million our negative

sale to additional in of entertainment, on from categories. in everyday represents XX% the our are and Excluding a provide acceleration QX.I'd guidance success like line. the meaningful driven we and XX% continued what the being travel by Billings growth some color seeing are to top fund billings

from is spend continuing us. our brands are largest new our on see to winning lux continue focus spending with and growth we existing and on majority back platform of The us with to their increasing getting clients more brands. the We accounts to

foundation X restaurants adjusted seeing with for was built and are good next return few positive momentum platform as back the future instrumental quarters.XXXX we In EBITDA. the of clients over the year major fact, an growth on the in we

implies Our QX goals. shows further making are progress towards and our we long-term guidance acceleration

on As we to XXXX, and look continue capital forward the we to we progress expect momentum expect make structure. to our

so.For be able cash double-digit we about and flow leverage excited is about XXXX, have continued addition and moving provide and annual operating we new XXXX partner launch billings to are operating bank growth year our large expectation to details basis. to We are positive a the for do of forward an will when more the on expect fiscal

our We growth line remarks. consumer to it are focused back closing drive turn engagement, EBITDA.Now redemptions I'll continue and on NorthStar adjusted to Karim top and for

Karim Temsamani

passing Alexis. have in trajectory upward. continues our we of financials each Thank additional the you, With progress The quarter, delivered business.

We the prospects. long-term I like I'd have business the signed for for our is you excited partner investors several a new and large our to well thank your our about to bank like their dedication transformation underway. support. platform the XXXX I'd of for and last thank years. Cardlytics Thank their am teams patience over and to

Operator

first our Peterson Kyle of with Needham. And Instructions] from [Operator line the coming question

Kyle Peterson

both news timing I us ramp want the contribution, any the on this with any sizable want for in keep of us or the require that our think models to you see mind color in give [indiscernible], partner to terms but in on year? of revenue about as the start upfront if billings and could we CapEx just expenses guys also off new to FI the will

Karim Temsamani

for no to market. Happy we to in obviously, and can of And in the more we take as timing. can't chime into as With referenced front talk need anything you launch, major account. Kyle. can more the you with up tell will soon what expenses, as to We Alexis about there's we regards to that to talk the expenses have timing the well, regards X-K start outside

Alexis DeSieno

Yes, the this agreement. any will I of to many made time. partners, other year bank does from of that. material I'll our implementation take Like comments not add full signing include just The impact

So we'll and keep launch dates on you other information. posted

Kyle Peterson

have business? guys thinking are near-term kind I but guess priorities some just or you good Obviously, credibility longer-term is done cash. order and liquidity on the the guys you cash regards follow-up in the it's structure, about a structure of with but of expense to whether other a the liquidity just job, extended, then really And for

Alexis DeSieno

So priority our it on obviously, for capital It's us structure. rightsizing to a address in stages. we're focused we needed and

First, the we needed to business. improve

reaccelerated cost protected SRS. to resolve right the Nothing structure. So, addressed. needed and our sized a without we've being happen And we that next shareholders these we revenue in would way

extend done. we and these amount giving both increase borrow of can further flexibility. us is the to allowed have this that the us So And revolver

And working in forward. of can.Does terms you although about talk in confident answer keep a clear in can't path and I'm hard we steps, our next we're as place. question? I And again, we'll on So updated have this specific debt, your that strategy we

Kyle Peterson

good very that's Yes, color.

Operator

Thank you. the And of with Stephan Lake Markets. our next line from coming question Street Jacob Capital

Jacob Stephan

on on the Congrats guidance there. the the partner new quarter, win

guidance growth, much on thoughts from well? to to from increased -- that you're is growth about of billings on driven upside spend? -- here. is kind the your I'd of as Or that being of that's engagement touching Just get how mid-teens the you're thinking like how the customer the increased guiding by coming

Alexis DeSieno

We're let at QX, I'll to going to in chime is in positive time the reiterate that taking really be want at and exciting. to we're the mid-point of Sure for revenue and Karim that adjusted EBITDA reaccelerate first range. I steps the the we're top confident end. the breakeven or which

against paying and initiatives our are our we're So really off executing plan.

product, business inventory digit. is our our international increasing get to we're And great new content our teams tech-in growing and double on churn. investing banks, And reduce in so focused improving with

quarter. very these but of time, excited for are So initiatives some and the in the confident taking guide

Jacob Stephan

multi-tier airline could this kind about client process the base. on with Maybe good you the it rolling your you are to of talk of in like you've of out sounds had where But programs. maybe kind just broader offers Maybe partner. touching the success

Karim Temsamani

Yes, I'm take that, Jacob. to happy

a still that and So to a that's tests we're clients has use obviously, and with ramp these continuing interested of are we're with of it up time doing that any relevant number sort case.

discussions benefit we are market whole bank's have But clients, the only about when network. sales the of new a allow we range positive normal have not the update sizing but will view the network. the product and our of for the this also the customers, they teams advertisers to across the importantly, across have that the We initiatives those of offerings of

some to allows adopting discussion platform. to about the even clients So a if it them, are more not us have bringing budgets

to benefits initiatives there are there. So several these

Operator

Kreyer coming And question you. our from line Thank next of Craig-Hallum. the with Jason

Jason Kreyer

recently seen then offers. the coming in a like about I'm can into just of that some nice curious, And past. you and talk coming kind the are in uptick We've and have logos include vendors -- just terms to of left names new that offer, the of pretty those platform back bigger

And changed right appears driving do curious is just getting what's to audience larger with what what marketers? where or you're now, them you so what's different think be

Karim Temsamani

been stress I larger Yes, our marketers have mean that always focus. want I to

of those platform, because So at last to years, these to changes what the couple with strides were lost make going of in we of and strategy we're some continuing because but customers customers. these not the now some that we of the those of clients performance happened back had -- of of see

teams sales customers our right changes call I investing the with we've many those our stronger in about changes have couple did of because at allow of now, seen activity customers. we have and of that level. and essentially teams us made a to have also we some we're not last in it the the talked sales relationship that And we fixed lost we And the

to having before doors to Now risk we to offers and initiatives improving want we open can level talk benefits about, there's plenty product showcase the also And do. new that enable that to customers us we great now more obviously, mentioned customers. that

and pay is I'm our to I'm forward confident see moving growth And very continue this very So to strategy to keen off. accelerating. that really starting

Jason Kreyer

a about getting migrate you working think then certainly And in some that points ADE, like offers. of to causing is not last the that -- you've mean, is partners all talking do this providing and on been validation seems better it FI right quarters way? couple to I the quicker What

Karim Temsamani

on a So again, the GE. now vast is network majority our of

larger it's require partners, we our of minimal. bit at amount of XX% each was for What required and but very partners, because look. non-cloud just are a made stack a it promising we So that and changes discussions the for to essentially little haven't a these to to just time yet tech from very on-premise, solution of have we're larger but move takes network there's is paid not subsequent GE, which the these then to pleased on that's with lift improvements we work mostly old that partners with

hopefully move. So discussions, will the for can to as as the to with those positive again, soon market banks we update timing we regards

Jason Kreyer

then X please And on me, last for just one Discovery.

I think we've been talked seems areas like it in much the consumer past activation. offers about at how or historically in volatility application. some around And they're their consumer least FIs as has different moved of hasn't uptake in

influence So rates? change think talk things can can if behavior increase about or of an activation accessibility in that what consumer terms you can you curious I'm inside maybe and you application discovery of those just

Karim Temsamani

to of see a with that's for placements great partners the can haven't discuss and now, we different really playbooks, bank the discussions than call, is discussions really how earlier only we question. mean I had Xx are seeing statement, those a normal And to to we're regard for bank activation Yes, of using level a types the we're that I some data our mentioned different what offers. we but customer instance, basically surface that you also working again, different the these the Not in in an offers past rigids the proper the in the bank are playbook right seeing, line as where having activation creating for with and the network. item transactions and higher a we're places provide have on customers we're in ability them.

and them and is go this with with partners their implementing on back work to more bank we platform. regards can see we also So them to tell what it then

banks feel that data that's what that on sort structure we really have us basing our So discussions now than rather much should be discussions. better those we're of much, allowing we and view have much on more doing to confident right the of

Operator

for queue remarks. the no this will showing Karim the And over I I'm at you. on questions turn time. closing to Q&A Temsamani call Thank Mr. now back further any

Karim Temsamani

you our Thank concludes This call. very much.

to Thank I As remain future discussion. committed for your look the business our support forward I next continued and mentioned, success. we for positioning you to

Operator

gentlemen, conclude for and you participation. conference today. your does Ladies that Thank for our

You may now disconnect.

Cardlytics (CDLX) 14 Mar 242023 Q4 Earnings call transcript