CDLX - Earnings call transcript Q1 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Cardlytics Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your first speaker today, Nick Lynton.

Nick Lynton

Good evening, and welcome to the Cardlytics First Quarter 2024 Financial Results Call.

Before we begin, let me remind everyone that today's discussion will contain forward-looking statements based on our current assumptions, expectations and beliefs, including expectations regarding our future financial performance and results, including for the second quarter of 2024, our capital structure and various product initiatives and improvements.

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

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

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

Karim Temsamani

concerns and a positive EBITDA focus the partners as needs.Since we in how also last now fully notes are the profitability, a partner. Coupled bank could now par XXXX early around company. year repurchased we prices outstanding made find results products, earnings and rebalanced joining as invested term.As million new thank in new XXXX partner for and we our call, starting cost ensuring these our in XXXX. period with not believe Good for the I work XXXX We also for sheet to have us our tech convertible we in adjusted addressed $XX remove the our fully sustained bank full signed cash in I dispute, we convertible capital Cardlytics. below addressing we to our renegotiated and XXXX progress on path advertisers and resolved structure, call, XXXX. agreements XXXX, of the the until earnings with due growth, our new and capital ourselves the raised execution our QX QX on discussed well you long our we steps significant made evening, our SRS balance confidence We On and and at and call. issued majority have and completed to issues, have transactions highlighted notes a

We have the we XX reality. can confident the past now over growth months, to longer-term slowly the products make rebuilt technology, our foundation of team a the so growth we the I turn and prospects. significant to business am have

the time some transition there full XXXX more take stronger we making finish even to ensure start be the will XXXX. good noise a will are off and the some to performance quarter progress has with us first While along way, necessary momentum.Our we to

growth it customers their the is frequently, important which best of an metric XX% reflects And excluding the our performance outcome banks, our when our adjusted and which bigger is time is contribution that over metrics the Adjusted our grew we billings XXXX, share.Additionally, driven rates mean are on first end line our first out ambitions picture, will which, seasonally view for said all second as top the first billings call.We continue at More bank EBITDA. much business in we engaging significantly. were provide with this term. that of believe in which of Alexis redemptions later our quarter. up from will the But indicating believe growth North further Excluding interest we This higher higher strong the we quarter momentum of in sustained a $X.X we and XX% as can strong the contribution billings achieve business program XXXX more details we the these finished customer Entertainment. revenue have rewards provides longer last Star, quarter. the call, quarter lower our advertisers. also in million adjusted paying for financial sold the by more importantly, from the over Entertainment, we XXXX, history we grew with and money advertisers. after been people keep the performance, Redemptions, quarter as have earnings first positive is quarter,

expand. me Let

partners. market and identity environment. cookieless for card-linked macro business tailwinds offers the for First, We become any stakes becomes benefit our essential as resolution table from

to frequency As customers. are loyalty for is increase data continued looking opposed investments targeting, that the provide precise clear customers unknown to to their customers increasingly their use benefit to look for existing card ever banking businesses insights and and also of with new to pressure partners loyal regulatory more rising It's better sales. traditional retain understand purchase programs, in our who cookies, our measurement and vital in than face retailers costs.Second, rewards from tech reach and important on we customers, that

Decisioning with groundwork at Ad laid or and Engine, ever upgrades innovation agile recent our the before. more have ongoing than Our progress pace for a ADE,

dynamic allow our aligning U.S. currently business campaign driving delighting to [ example, us more are critical is advertisers pricing reporting timely based optimizations, internationally. For provide the on our engagement-centric flexible will ] are a that marketplace, and meet dynamic and offer model building improvements to which These durations, to growth activations. better we pricing campaign

the management in are with our our not better strong support clients. in to investing advertising team expense redemptions XXXX will tech our Investors bumpiness right account see our are more agency but momentum.Third, We short-term are engagement. investments have that we also started teams reinvest and numbers, to but in exit we and only making to confident

make driving technology of Star signs redemptions towards network. upgrades engagement. our seeing ongoing progress to North across of continue We're We and

of to our banks customers in versus QX percentage While ADE. we difference customers QX long point between banks on in saw on go we remained not the as a still have way we a trends discussed consistent aspirations, achieving of redemptions ADE in in XX

within faster, right larger driving more offers are rewards right and a We quickly basket including of more value consumers. offers these incremental more and putting are campaign, consuming sizes we a the result, are and in purchases.As users the front to delivering budgets

we growth not While a as billing the added we potential to levels year-on-year several deliver quality the and unique all that meaningful to cookieless outcomes itself network of for our investments working are adjusted are offer budgets deliver as our our and increasing crucial We towards as reach look leveraging that and which XX% international will the increase scale internationally.Fifth, a path network, keep for similar we capacity investing the the newest keys outcomes, ensures clients By over due benefit onboarding growing campaigns. seeing Bridg they clients believe exclusive redemptions our for need bank their platforms it we is bigger continue, growing Marketers growth Bridg. its quarters, the in including scale to to identity to budget, advertising, grew world. the presence is scale. by future. on next strong advertising we for the is growth our our in Improving consumer establishing new large we signals this trend our capabilities, are measurable will especially will partners.Fourth, resolution expect business and and from and in campaign in Recently, currently contribution value increase most potential to global and partner. from to Scale QX. in significantly we competing actively a few are

indicators needs such against major them network have The as digital on targeted Rippl such retail of and retail launched in technology retail preference audiences using by solution to our specific logical and campaigns areas with data test performance the spend customers front, and shopping and with to retail Rippl, at This Our individual of level market initial Trade ad addressed due total target second demand Desk and the presence campaigns To audiences media rates. DSPs plans campaigns we media to we've continuing pushing increasing XXX means responsible [indiscernible] we the to and to new Bridg's onboarding U.S. these to of growth most the of products our line growth networks and solution, and The averages. media Rippl our data allow platform Rippl to establish enhance individual new million export Rippl initial country. also the strong data into campaign which in Kraft our $XX performance LiveRamp.On higher network, the to the expand further largest segments, the better round market shopper showed already media, will XXXX, notes on on recently prompted million further and one We are media network allow The retailers to growth, expand in use success benchmark not our integrations as and through path more make launch Danone SKU to until addressable is which segmentation.With access retail and our technology. capital of year-end. brands brands working to XX% convertible in would customer for the audience where our for media launched [ retail our future. This demonstrates sight we're targeted a ] performance profiles raise through with the deliver focused

results QX and projected continue give results Our to QX us confidence.

for provide the we and and banks and best tailwinds measurable our for advertisers. us strong of have us, breadth our allows behind depth have offers We that to outcomes scale

We major are platform the underway, rapidly dynamic including marketplace. innovating with developments our

to see and are our beginning are changes. of results drive engagement deeper the We to starting

is of it drive period the We which progress new investments continuing an momentum. are our of to our Rippl, I'll sets hand Bridg to Alexis our with especially over to be country. It also short-term to to us right strong media growth networks retail exit discuss making progress, the and signs largest show longer-term in exciting given business the And financial for Cardlytics.Now, with XXXX results. one is

Alexis DeSieno

Thank you, Karim.

as redemptions, for financial our indicates are which by working, quarter, our improvement to in our with balance pleased material sheet. are initiatives well the driven product that strength as first results the We

third meaningful adjusted and line of in acceleration For performed billings we positive first quarter, consecutive we the from and in delivered saw EBITDA, our quarter QX. with guidance the

restaurant is a our we continued company, which In otherwise. travel December will base.Now, quarter first the turning the in $XX.X our we our winning us, with rebuilding once quarter sold to this back our to billings comments grew the billings to XX% XX% a Entertainment, results, from have re-engineer seasonally drives to cost churn.Our again year-over-year North sales The for which category million, done of excluding a basis, be reducing our incentives everyday XXXX, More came weak see for spending is partner accounts consumer quarter, team. was before QX income consumer category of work key Given million, On also result first quarter growth statement QX, more up a Revenue, but my stated than unless accounts redemptions, our which to share, on million. reached and is spend. Star, this increase. X%. incentives half in after $XXX.X strength were $XX.X comparisons we testament top and up net

ADE, demand. we In the we billings. more at redemptions, As as growth seen line are million, rewards as beyond XX% increased dynamic, accelerates should redemption especially driving leading adjusted to outsized a was believe be good effective short improvements. a getting this refine revenue term, continue ranking percentage We XX% see our due to percentage $XX.X of from as we may to XX% contribution a of about as we targeting engagement top XX% and of feel and XX%.Margin and to up indicator given

revenue.Turning contribution Lloyds. adjusted double-digit at results, increased auto-enrollment more renegotiations, by operating partially About indicator continued for segment between The the X%. driven growth GAAP driven of our business we program redemptions U.K. dollar accelerating. believe our a rather with are leverage to by is show is U.S. are due shift share We mix the with revenue XX%, we which long-term banks. even are while every We to annualized of than June, strong better in half very our keeping briefly partner bill seeing rest to

into no to team and sales customers which means our our U.K. to auto-enrollment longer mentioned, has allowed have we budgets. larger As offers opt program, deliver sell

begin single auto-enrollment, see business existing We by base.Bridg and strong partner, we've impact models, the plan the very per on now primarily a new to we the offset our live. U.S. of do X% partnership of Bridg. result do this year, U.K. albeit newest dynamics similar expect contracts will Notably, existing to customer. of shifting cost double-digit bank redemption our loss the later in revenue a U.K. to expansion which and in leadership benefits U.K. growth of is believe and we the which due grew QX is on The model, larger Monzo, and see a to pricing as redemption business not discussed a to

the to use In invested foundational is revenue business. of elements, metric engineering architecture performance in key design, we go-to-market resourcing. product QX, So including we assess the and this

$X.X profiles was quarter. the EBITDA as the we company's to be to Business came grow than customers.Adjusted are actively onboarding in to history grocers line and the to first scale be continue of relevant believe our million. said, adjusted in with positive $XX.X and expenses million. We EBITDA time operating in expected the have CPG Karim for lower first And database, top a profiles, XXX at million in to we sight the regional we

product investments are sales XXs, growth cash initiatives.Operating given mid-to-low technology, expenses making million. in key organizations operating negative of support However, $XX.X our the normalize flow and should the in in we was

quarter annual of The from receivable. quarter, cash cash a to payments QX, interest flow. $XX.X introduced In was free flow bonus million. seasonally due always we new Last flow free is metric, cash accounts negative and payments, low standpoint first timing a

and to sheet, under of we expect unused the million of cash be line ended QX with had the cash we $XX.X cash flow However, million second free in half we our credit. $XX.X and borrowings available balance equivalents, of positive XXXX.On in

million we January offset million offering of as the the settlement was reminder, paid which a As March. cash in end SRS, with received $XX from our $XX part by of at equity

our on also repaid draw million credit of April. in $XX line the We

addition, other were we transactions September that the XXXX million been issuance million transactions. was be and X%, for of primarily an these par in $XXX.X repayment of $XXX $XXX.X prices value, transaction ARPU Through driven MAUs and of decrease driven net a The In partially The by reduced XX% X% line financials.Lastly, convertible have as of capital the increase at ARPU the below decrease via increase notes million, increase MAUs, now XXXX new million, respectively. reported negative contribution of considered from adjusted of billings revenue $XX first our between have in was million and we to of will and absent to $XXX million of settled outstanding we in $X.XX was our notes the $X on million and redemptions.Turning MAUs $XXX XXXX. positive $XX and QX, our million $XX amount and of QX adjusted between the $X million repurchased and outlook, and million convertible $XX for expect between credit, would current million, $XXX the of quarter, in X EBITDA between convertible $XX million. by QX debt million, due April new

travel Billings are to and clients the are categories, Our more sale line. to continues color billings spending and success to growth, in top guidance driven X% us. excluding larger spend the like additional represents Entertainment.I'd what be of provide on we XX% with everyday in some by the seeing our

new focusing back brands winning on onto the platform getting We lapsed and are brands.

seeing of into expecting larger the these expecting another we are are benefits excluding improved elevated at see is continue guidance. midpoint to XX% Entertainment, and convert our as brands, on budgets Adjusted we pilot based strong campaign With the redemptions of programs of performance.We targeting ranking. growth, contribution quarter

for expect like we the basis be full on flow we double-digit cash increase enter positive full to and support to XXXX. and we both to making in year continue expect stock-based key billings technology, XXXX the a our the As to accelerating compensation dynamic operating sales marketplace as expenses previously with Bridg.We are year growth growth excluding due to teams operating stated, product and initiatives investments of and mid-XXs, in

on North engagement, adjusted for focused consumer it are positive the turn Star, to growth top expect we I'll We continue and line operator redemptions, our and to to questions. EBITDA.Now, year drive full back

Operator

Instructions] from [Operator Kyle comes Our question Peterson at Needham. first

Kyle Peterson

trends of the to timing see surprised you you some throughout on a end reporting just the the was I a to of off, quarter, quarter. of the end of the the guidance. saw given low first towards of little I kind guys Wanted little guess, I closer to billings guess start guys be the

like did the -- you delays saw was whether you it X So March? or guys larger last cancellations that weeks of any in have anything or

Alexis DeSieno

for the we're Thanks growing Yes. on XX% top Look, still contribution the question. and our adjusted line XX%. was

your making less So good our is answer this specifically, tech, is question performance all more that network than of changes to same UX, to of seeing. partners But really historically to and good are on higher probably demand. also which and say pretty quarter and leading to That's QX, all why some which which growth. indicator weak was a a are at the of our a time, pretty from engagement, rewards their lot yes, changes our leading acceleration we're you're making a X% I

And we're bill cases, so, had campaigns that come redemptions. as of in driving said consuming through. in all Karim budgets And But more quickly, can't yet. is higher we few for those demand that we didn't remarks, a some also which his

we're happy positive, expected. the EBITDA we're again, being contribution than out XX% adjusted more even So still with and adjusted we of while paying rewards growth

Kyle Peterson

kind to the to helpful. that going to as redemption a just of go on of the on some to continue should the P&L is that what rates and as kind trying up? in rates to near increase, Just be get percentage mix to the Or a redemption That's the the And follow-up sense we expect of term. pieces redemption of as moving then, with forward? going higher Okay. percentage XQ good a rates. billings, some use guess, Is consumer I proxy incentives is

Alexis DeSieno

North QX, focus main right from the ranges. really guidance the now. it redemptions, is for as to really our see those be expecting can are off. least similar, to And focus Continuing tech initiatives on At Star, we're paying Yes. you

have So new in is to that the the higher other we we've typically bank models contracts, continue certain of will this which convert June. increased accounts than pricing portion excited to that annualize from engagement our is to renegotiation then, of and And seen.

obviously. we'll as in not continue quite that. that So margins, to annualize be may the And similar we but QX, high starts as see growth rate

Operator

Our next at Craig-Hallum. Kreyer question comes from Jason

Jason Kreyer

been tight redemptions I in proportion to Historically, bit in we on a out we're look of a just band model, little pretty this quarter. incentives about. if that want the the at moved the talking has more focus that band. That of

that that quarter leading positive curious the You're redemptions in rethink is I'm so of a moves indicator. need optimistic if forward. ratio at how to the much number billings we going versus redemption and

Alexis DeSieno

Yes.

So, similar to prior. answer

consider I would think I model for as of QX, at billings redemptions a to percentage. similar least,

is to targeting we're of capabilities. this on optimization our So ranking changes making product the really and testament a ADE, better

really changes for people UX may seeing. it but match as making the to so, engagement And the driving engagement. to is up, good this and all terms in a future, widget take us budgets that are those the higher get for bank to our partners the we're moving of It's while

Jason Kreyer

if go more argument and pace, back rapid to a a able pace. you're quickly. fill successful a delivering that? you're pretty I Am It I think seem campaigns wrong about that those campaign on rapid more driving to more a campaigns think times, end to you've to those those talked be seem marketers Okay. you're it after at budgets would easy would And if budgets at consuming of that couple performance,

Alexis DeSieno

low QX, better. Obviously, are how into we our we are now agree. transparency But working had this. We No. models understanding

more on budgets management. I significantly selling try and more in sales think on less to these and we're more team focus to our account of capture investing

budgets team have our add. the for So you know on brands up more we're we more also I in sales to are as opening you to agency and anything engagement general.Karim, in want don't investing capture if

Karim Temsamani

the for This being for It's about. to that a advertisers. it's for obviously the able There's driving No. is our a time in it's very regards good partners. a budgets question, back term, the in clearly, It's thing with talking But more good we're is our good bank positive frames Jason. timing longer and that program. we're more redemptions. And which engagement get driving difference teams here go healthy very program, the to

Jason Kreyer

but On the more like cost at driving a you're redemptions more the driving surface, seems it to redemptions, kind model. you're of greater

that kind So to that's of evolution? issue gain it just part of is struggling a near-term struggling longer-term I'm a I'm an with. or the that of this And understanding is

Karim Temsamani

think more benefits is benefit continuing rev consumers getting share should of I agreements would And longer-term first a ago, from it's It's they I to as the What with a signaling very with evolution. I time. No, have been clearly that say, to From for they call partners additional months basically for since this joined on to period a in what XX well. is better we long our more we it's bank was advertisers. program. low budget with the aligned us and positive consuming further driving The the engagement spending that people for with it much that us much partners, net their to have gains important the us for want, our that drive really program. engagement aligned needs ensure the they're and rates is it banking with engagement come more that were cards aligned more very providing said with for driving for therefore negotiate

think longer to hopefully So a drive going should billings, continue lot redemptions, we term, contributions. in you to that I but grow we're to would more more keep see we adjusted continue as

of going as that a business the to manage we differences but a economics healthy some can going So forward. in see manner whole, that in think the very you're we

Operator

next Our Markets. Street Jacob comes at Capital from Lake question Stephan

Jacob Stephan

business? investments. the kind of some kind Karim, just to could that you of think maybe about just if headcount? those agency kind in help investing Or side help of of the related us Is us directly where Maybe, think of you're about

Karim Temsamani

Yes.

question. mentioned in thanks, Jacob, -- the and the Alexis As for call

in As earlier, several areas which Alexis call mentioned there's in we're business. investing the the in

to just and products our we're areas remarks, to our the we agency service better advertisers. continuing also right retail that we are investing which our and several so continue banks but clients quarter my And can the to and as our about in had tech not We a ensure talked our mentioned service was investments are innovate identified I We and to growth to in invest reinvest. terms product to to which we big account But our we that is what the we And also future more well driver providing the in sales about in be As that in sectors. last the restaurant we needed for can team for invested in teams have in agency think where of us while at our present, team. for going one a area get many accounts. we more management customers. in

So the it's to here investment future. ad gain about, via be headcount able budgets definitely that but you're more we talking to want in agencies mostly a

Jacob Stephan

platform? That's platform. of work then, some just along go? the to Or that done are development talk ready of still kind to helpful. Okay. that is And in maybe of kind How be about Is we the there self-serve far there?

Karim Temsamani

Can you specific? Are sort the platform for automated we which you quarter, book... to last an dashboard or of was for be self-serve talking what longer-term advertisers about plans mentioned more

Jacob Stephan

tech to looking the longer-term the more kind Yes, the enablement in which side, self-serve at more of caters just agency.

Karim Temsamani

Yes.

cover So case. both I'll just in

of the agency why team, year. We'll insights access is, end plan longer. term, customers. the XX% think investing dashboard is That's automated our account book customers, have because year. to which full be about on map to first essentially with obviously, without ability get having to important regards to one, the to not in our by this for to by something ] surface end will we're longer important rollout of we'll side, I take part also overall, the probably automated [ the customers On really a management for of which very the QX, that budgets we and insights it's our road of the reason Self-serve this intervention our also but will

Jacob Stephan

might we expect I customer kind Bridg, customer XXXX? Maybe in we growth the like to switching as over But a restaurant here it. what It the churn. Got think large platform. just some talked quarter, of can you last a about Okay. joining sounds rate new add

Karim Temsamani

restaurant Bridg. clear, regards we regards be we Cardlytics, with in the to just feel With a to large Bridg. Bridg, last was obviously, to long-term product. that time We So, in not the are we customer very have on mentioned reinvesting asset confident

have to that importantly, we've discussed a rebuild we're the which a there of Rippl, several was perspective, from we investing as Bridg lot is technology the over in However, last and quarters, ability ability to media as network the across retail that our the get also not the provide well want, but our only have customers to the landscape. insights customers to target broader

we this. And we're specifically rates so, with infrastructure. growth have large the don't market area on report with that's that making again, want elements don't foundational you We to regards the Rippl, engineering really But we're a right now. we there, very give give the confident that specifically don't I in expanding, to investments regards very this. as an guidance playing we're to on

us significant a you a and We But therefore, line growth specific the We've give number regional XXX scale we expect. now. give the sight have by end year, to have growth. drive won't to million profiles of resourcing onboarded go-to-market the number grocers of that that on the the I rates of we

Operator

Thank further Karim remarks. now I to you. at for this it closing I'm to turn would time. questions showing no back like

Karim Temsamani

everyone, much. today. very to you look discussing you, the on We forward next And for earnings thank Thank call. quarter our second results us joining

Operator

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

disconnect. now may You

Cardlytics (CDLX) 8 May 242024 Q1 Earnings call transcript