Earnings call transcript: Cardlytics beats EPS expectations in Q2 2025

Cardlytics Inc. reported its second-quarter 2025 earnings, revealing an earnings per share (EPS) of -$0.13, which exceeded analyst expectations of -$0.39. Despite a revenue miss, with actual figures at $63.2 million versus a forecast of $64.06 million, the company’s stock saw a 4.35% decline in aftermarket trading. According to InvestingPro data, the stock has experienced significant volatility, with a 13.7% decline in the past week alone. The market reaction reflects investor concerns over declining revenues, despite the positive EPS surprise. Two analysts have recently revised their earnings estimates upward for the upcoming period, suggesting potential improvement ahead.

Key Takeaways

• Cardlytics reported a better-than-expected EPS, beating forecasts by 66.67%.
• Revenue fell short of expectations, contributing to a 4.35% drop in stock price.
• The company launched a new rewards platform and expanded its Bridge platform.
• Operating expenses were reduced by $5.2 million, highlighting cost management efforts.
• The UK market showed strong growth, with a 29% increase in revenue.

Company Performance

Cardlytics demonstrated resilience in Q2 2025 by managing to beat EPS expectations despite a challenging revenue environment. InvestingPro analysis indicates the company maintains a current ratio of 1.19, showing its ability to meet short-term obligations. The company’s strategic focus on cost management and innovation, such as the launch of the Cardlytics Rewards platform and enhancements to its Insights portal, helped offset some of the revenue pressures. For deeper insights into Cardlytics’ financial health and future prospects, InvestingPro offers exclusive access to detailed research reports and additional ProTips. While the overall market conditions remain challenging, particularly in travel and restaurant sectors, Cardlytics saw strong performance in grocery, gas, and retail categories.

Financial Highlights

• Revenue: $63.2 million, a 9.2% decrease year-over-year.
• EPS: -$0.13, surpassing the forecasted -$0.39.
• Adjusted EBITDA: Positive $2.7 million.
• Cash and cash equivalents: $46.7 million.
• Operating cash flow: Positive $1.2 million.

Earnings vs. Forecast

Cardlytics’ EPS of -$0.13 significantly exceeded the forecast of -$0.39, marking a 66.67% surprise. However, revenue fell short by 1.34%, coming in at $63.2 million against the expected $64.06 million. This mixed result reflects the company’s ongoing challenges in revenue generation, despite effective cost management and strategic initiatives.

Market Reaction

The company’s stock price declined by 4.35% in aftermarket trading, closing at $1.68. This movement reflects investor concerns about the revenue miss and the broader market conditions impacting Cardlytics’ key sectors. InvestingPro data shows the stock has fallen 74.5% over the past year, with a market capitalization now at $92.4 million. The stock remains within its 52-week range of $1.22 to $7.72, indicating room for recovery if revenue trends improve. InvestingPro’s Fair Value analysis suggests the stock is currently undervalued, though investors should note the company’s weak overall financial health score of 1.55 out of 5.

Outlook & Guidance

For the third quarter, Cardlytics anticipates billings between $87 million and $95 million, with revenue expected to range from $52.2 million to $58.2 million. The company aims for breakeven adjusted EBITDA, focusing on diversifying supply and demand and continuing investment in technology and product development.

Executive Commentary

CEO Amit Gupta expressed confidence in navigating current challenges, stating, "We remain confident in our ability to navigate the headwinds and focus on our strategy to grow and diversify our platform." CFO Alexis Tisiano highlighted the company’s focus on profitability, noting, "Despite top line weakness, we are keeping more of every dollar we make."

Risks and Challenges

• Revenue decline: Continued weakness in key sectors like travel and restaurants could pressure revenues.
• Market competition: Competitors’ struggles with multi-unit chain offerings present both a challenge and an opportunity.
• Economic conditions: Broader macroeconomic pressures could impact consumer spending and advertiser budgets.
• Operational adjustments: Recent staff reductions and reorganization may affect short-term operational efficiency.
• Financial constraints: Drawing $50 million on a credit line highlights potential liquidity concerns.

Q&A

During the earnings call, analysts questioned the impact of a major financial institution restricting content and the company’s plans for AI integration. Cardlytics is actively exploring AI in engineering and analytics and expanding local offers and geo-targeted content to mitigate these challenges.

Full transcript - Cardlytics Inc (CDLX) Q2 2025:

Conference Operator: Good afternoon, ladies and gentlemen, and welcome to the Second Quarter twenty twenty Earnings Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded on Wednesday, 08/06/2025.

I would now like to turn the conference over to Nick Linton. Please go ahead.

Nick Linton, Investor Relations, Cardlytics: Good evening, and welcome to the Cardlytics second quarter twenty twenty five 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 2025, our capital structure, increasing our supply, the growth of new partners, advertiser churn and operational and product initiatives. For a discussion of the specific risk factors that could cause our actual results to differ materially from today’s discussion, please refer to the Risk Factors section of our 10 Q for the quarter ended 06/30/2025, which has been filed with the SEC. Also during this call, we will discuss non GAAP measures of our performance. GAAP financial reconciliations and supplemental financial information are provided in the press release issued today, you which can find on the Investor Relations section of the Cardlytics website.

Today’s call is available via webcast, and a replay will also be available on our website. On the call today, we have CEO, Amit Gupta and CFO, Alexis Tisiano. Following their prepared remarks, we’ll open it up for your questions. With that, I’ll hand the call over to Amit.

Amit Gupta, CEO, Cardlytics: Good evening, and thank you for joining our second quarter twenty twenty five earnings call. Q2 marked another quarter of steady progress against our strategy. As I look back over the past years since stepping into the CEO role, we significantly improved the product and tech challenges facing us over past several quarters, diversified our ecosystem and set a foundation for growth. With the work we’ve accomplished, we are now deepening our efforts in key areas that will be most critical for the next stage of our business. I’d like to share details on the progress we’ve made last quarter to advance our four business pillars.

First, increasing and diversifying our supply to meet consumers where they are. Our publisher base is what makes our network unique and growing and diversifying this foundation continues to be a top priority for us. We’re focused on growing our partnerships with both financial institutions and merchants from other verticals. We are pleased with the early progress with our newest bank partners, and we have a robust pipeline of prospective FI and non FI partners in S.

And U. K. We are not only focused on adding more publishers with large user bases, but also working with our bank partners to maximize user engagement with our offers. When our partners are fully committed to our shared goal of maximizing value for consumers, we see a substantial difference in results. As an example, we’ve been working with a top five bank partner who has been investing in their program and increasing their marketing and merchandising activities around cash back offers.

And through these efforts, this partner is seeing a significant lift across key metrics, including a 92% increase in activations and a 48% increase in redemptions year over year. We plan to continue these efforts with several bank partners who are interested in working with us to increase engagement and bring more demand. Now turning to the retail side of our CLO network. On our last call, we announced the launch of the Cardlytics Rewards platform, which strategically diversifies our publisher base beyond FIs. We are now collecting data from our pilot, making refinements to the platform and optimizing for the best consumer experience.

In parallel, we are progressing many active conversations with leading merchants in The U. S. And UK. We look forward to sharing more partner updates in due time. While we continue our efforts to expand our supply, we are also working through a notable change with our largest FI partner.

This partner, who built their program with our offers over the last several years, has recently decided to restrict a large amount of content from running on their channels starting July 1. While we expected some level of this, we did not anticipate brand restrictions at this scale. The implications are that this partner’s users will likely receive significantly less content and less value. We have also heard from numerous advertisers that they are equally concerned about the negative impacts to the efficacy of their programs if restricted from running on the trusted and proven Cardlytics platform. This change is posing significant limitations for our business.

Despite our attempts to find a better path forward for us and their customers, we are now focused on mitigating the impact of this bank’s decision. First, we will continue to invest in efforts to meet consumers where they are, and we expect to increase and diversify our supply. Second, we are improving our relevancy and targeting tools, which we expect will allow us to shift our content to other publishers that are focused on leveraging the Cardlytics platform to deliver value to consumers. Third, our shift to engagement based pricing is helping advertisers see our platform as a real performance media ad format. Four, we are working with our advertisers to blend PBC reporting, incrementality results and readings for a more comprehensive view of performance, which we believe will continue to position Cardlytics as a trusted and immeasurable growth channel.

For clarity, the restrictions imposed by this bank are unique to this partner, as no other FI partner of ours has imposed restrictions of any similar magnitude nor do we expect them to. In fact, our other bank partners are leaning into our platform to deliver more value to their users and are growing their share on our network. We are committed to ensuring that our business is sustainable and on a path to profitability. Alexis will discuss more about the financial impact these changes will have. We believe that our network capabilities are a real market differentiator that cannot be easily replicated.

Competitors have generally not been successful in capturing budgets from advertisers with multiunit chains or more sophisticated CLO needs. We hear this time and time again from our advertisers that only Cardlytics has the scale and ability to run the type of novel app formats that they want. Since these restrictions were imposed, we’ve seen negligible churn with our restricted brands. The vast majority of them have stayed on our platform so far. Now moving on to our second pillar, strengthening and growing advertiser demand.

In light of supply limitations, doubling down on demand is of utmost importance. Our UK business continued to show strong growth with the highest billings quarter in history, driven by strength in categories like everyday spend, subscription services and retail. We signed over 20 new logos, about half of which are top 150 brands in The UK, and we are focused on growing these accounts and securing longer term commitments. With more pressures on performance, we are helping our advertisers demonstrate results and working closely with them to develop longer term CLO strategies. In The U.

S, we also saw increased performance expectations from our advertisers. Advertiser churn was mostly concentrated in mid to small sized brands, which have been more susceptible to budget reductions. We saw strength in everyday spend and specialty retail consistent with trends from the previous quarter. Travel and restaurant categories experienced softness in the first half of the year as we’ve seen across the industry. We are encouraged by signing new top tier brands in The U.

S. As well, including a leading rideshare player, top retailers and national restaurant chains. These enterprise accounts are where we see the highest potential for growth and scaling in the second half of this year. In the light of the changes with our largest FI partner, we are focused on reinforcing our relationship with our top advertisers and ensuring their content is effectively delivered across our spectrum of publishers. We have reorganized our sales organization under our new Chief Business Officer and are accelerating our go to market efforts with intensity.

We have been seeing success with our vertical focus go to market initiatives, and we will enhance and expand on this strategy. We are also leading with proven performance, which remains a true differentiator in the market against our competitors. And while we diversify our supply, we are also adding new demand to our network. We expect to attract new brands and verticals to fuel our growth strategy with CRP. Furthermore, by aligning U.

S. And U. K. Under one leader, we are able to work with leading brands and support their marketing spend across these markets contiguously. Our third pillar, maximizing the performance of our network.

We are seeing the benefits of our focused efforts to stabilize and optimize our platform over the past few quarters. Our network is performing effectively and efficiently, bringing more confidence to our partners and advertisers. As recently announced, we launched new dashboards within the Cardlytics insights portal to bring the full power of our network data to our advertisers. The new dashboards are focused on customer insights, which have historically been generated by our analytics team rather than self serve and in real time. With the Insights portal, our advertisers can access market data and customer intelligence on demand whenever they need them.

One client noted, we are sharing these insights internally to highlight Cardlytics not just as a media partner, but a partner that provides real value to our business through data. Lastly, we continue to make progress with the migration to engagement based pricing models, which are now implemented for 79% of our advertisers. In Q2, 96% of our new business ran on engagement based pricing, reinforcing the fact that this pricing model is aligned with what our advertisers are looking for as it provides lower funnel signals that are valuable to them. Engagement based pricing has also helped us compress deal cycles aligned with internal brand measurement models, and we believe it will make us more resistant to churn over time. And our final pillar, accelerating our growth in Bridge.

Last quarter, we saw strong and steady client interest for our identity resolution capability, including a long term renewal with a high end beauty brand. We also signed a new partnership with a popular restaurant chain that is using our advanced analytics and business intelligence for deeper customer insights. For Ripple, we’re encouraged by the positive trends that helped us more than double our revenue quarter over quarter. We recently welcomed Hy Vee Red Media to Ripple as our newest partner, which will further expand our current scale of over 140,000,000 unique shopper profiles. Building on our efforts to scale supply over the past year, we are now continuing to focus on the demand side.

In Q2, there has been strong traction with the adoption of our Ripple Audiences across different platforms. In fact, we’re seeing 10% growth week over week on Trade Desk alone. We are continuing to work with new and existing platform partners to accelerate this momentum and drive broader adoption and more revenue diversification. On our last call, I shared that we launched a pilot for CPG offers with one of our large retail clients and bank partners. I am pleased to report that initial results from this pilot are encouraging.

Not only did we validate the feasibility of connecting our Bridge and Cardlytics data, the pilot demonstrated a positive impact on both shopper behavior and basket size. Among redeemers, we saw a 30% increase in the rate of baskets containing the specific product, as well as a 2% increase in basket size for transactions containing the product and a 13% increase for all other transactions. Overall, we continue to move forward, taking a deliberate and thoughtful approach to growing our business. There are undoubtedly challenges that we did not anticipate a year ago, but we believe that over the medium term, the strategic shifts we initiated earlier this year will position us for profitable growth. We are operating efficiently and effectively and we believe these shifts will ensure that we continue to deliver on our promise to our partners, advertisers, consumers and investors.

I’ll now turn it over to Alexis to discuss the financials.

Alexis Tisiano, CFO, Cardlytics: Thank you, Amit. In the second quarter, we delivered results above the midpoint of our guidance for most metrics and we surpassed the high end of our guidance for adjusted EBITDA. My comments will be year over year comparisons to the 2024 unless stated otherwise. In Q2, our total billings were $104,000,000 a 5.7% decrease. We achieved our billings guidance by continuing to expand billings with many of our top accounts in the grocery and gas category, which grew 41%.

We also had success in the retail category, growing our largest retail advertiser by $2,800,000 in billings year over year. We continue to see weakness in the travel category, which declined across a few key accounts. On new business, we are encouraged by the high quality of brands and momentum with 45 total new logos signed in Q2 and a strong potential to scale. Consumer incentives of $40,800,000 were flat to prior year and revenue decreased 9.2% to $63,200,000 driven by a decrease in billings. Our revenue to billings margin was 2.3 lower than prior year due to pressures on advertiser performance.

Looking at our segment revenue results. Our U. S. Revenue, excluding Bridge, decreased 13% due to lower billings and pricing pressure as previously discussed. In The U.

K, we saw 29% revenue growth, driven by higher billings and increased supply. We grew billings with all of our top five clients in the quarter and launched a new advertiser whose billings were in the top five. Bridge revenue decreased 8% due to the loss of a major account in previous quarters. Adjusted contribution was $36,100,000 down 0.6% from the prior year. However, we expanded our margin as a percentage of revenue to 57.1%, an increase of five points due to a more favorable partner mix.

This margin is the highest we have experienced to date, driven primarily by growth of our newest bank partners. Adjusted EBITDA was positive $2,700,000 an increase of $5,000,000 Total adjusted operating expenses, excluding stock based compensation, came in at $33,400,000 a reduction of $5,200,000 primarily due to our previously discussed reduction in staff and a reduction to incentive compensation. In Q2, operating cash flow was positive $1,200,000 Free cash flow was negative $3,400,000 which was $3,000,000 less than the prior year due to interest on our 2029 convertible notes and severance payments that was partially offset by improved working capital. Free cash flow improved from the prior quarter by 7,400,000 On the balance sheet, we ended Q2 with $46,700,000 in cash and cash equivalents. This week, we drew $50,000,000 on our line of credit, leaving us with $10,000,000 of unused available borrowings.

We have 106,700,000 of liquidity, including the undrawn amount, or $81,700,000 after accounting for our minimum cash covenant of $25,000,000 As previously shared, we plan to use the funds to pay for our upcoming 2025 convertible maturity as well as to give us extra flexibility as we navigate the upcoming quarters while keeping our cash on hand at a comfortable level. Lastly, in Q2, we paid the final $2,000,000 of our settlement with SRS, fully closing this matter. As a reminder, last quarter we introduced monthly qualified users or MQUs to drive consistent reporting across our FI and non FI publisher partners. In the second quarter, we had 224,500,000 MQUs, an increase of 19%, driven by full ramp of our newest FI partners. Excluding these partners, MQUs would have been up 1%.

ACPU reflects how efficiently we convert advertiser budgets to value that the company can retain. In the second quarter, ACPU was $0.14 down 15% year over year as the MPU base of our newest large SI partner has not yet been fully monetized. ACPU expanded 10% in the second quarter versus the prior quarter. Now turning to our outlook for Q3. Our expectations reflect the change with our largest FI partner, which Amit explained earlier.

For Q3, we expect billings between 87,000,000 and $95,000,000 revenue between $52,200,000 and $58,200,000 adjusted contribution between $30,300,000 and $34,300,000 and adjusted EBITDA between negative $2,300,000 and positive $2,700,000 Our billings guidance represents a negative 15% to negative 22% decrease year over year. Despite this top line weakness, we still expect adjusted EBITDA to be breakeven, and we further expect to have the highest contribution as a percentage of billings and revenue to date. The primary driver of our expected billings decrease is a result of the content restrictions and reduced supply available to specific brands. As Amit mentioned, our largest FI partner is restricting certain content from running on its channels starting on July 1. While this option has always existed for the terms of our agreement, this is the largest restriction we have experienced.

We are discussing this change with our advertising partners and working to shift as much of this volume as possible to other channels. We are still learning how to optimize projections and targeting based on these changes. While we are undertaking a range of actions to help mitigate this as Amit discussed, we expect to see some impact to our results, which you will see reflected in our guide. We are still in the early days of this optimization and are modeling conservatively. This change underscores the importance of our diversification strategy across banks and nonbanks as well as continuing to diversify our demand.

While we navigate the impacts of the expected reduction in billings, we are prudently slowing the pace of some of our investments and focus on overall expense management. We continue to make progress with our newest large financial institution partner. We had twice as many unique advertisers live with this partner in Q2 than in Q1. We expect this momentum to continue and are pleased to see engagement rates similar to our most established partners and in some cases higher AOVs and redemption values for certain premium types of advertisers that do well with this unique demographic. We continue to believe there is significant upside as engagement deepens.

We are encouraged by our recent run rate in billings, which is now similar to one of our top five U. S. Banks, and we believe there continues to be upside as this partner scales. Our newest digital banking partner also helps to expand our reach with a different demographic and supports long term diversification. Consistent with our last call, we are not assuming any material financial impact in 2025 from either Cardlytics Rewards platform or CPG offers.

Lastly, The UK continues to be a bright spot as we expect continued strong positive growth in Q3, driven by a healthy pipeline of quality advertisers and continued supply growth. Revenue as a percentage of billings is expected to be in the low 60% range for Q3 as well as for the full year. We have made strategic decisions to drive incremental performance in billings. We expect adjusted contribution as a percentage of revenue to be in the mid to high 50% range. This continues to be among the highest we have seen and reflects our improved economics with our new and ramping bank partners.

Despite top line weakness, we are keeping more of every dollar we make, and we remain focused on driving profitability. We continue to expect this metric to improve sequentially as we diversify our supply. Our adjusted EBITDA guidance is a reflection of our reset operational cost base following the reduction in staff that we completed in May. We continue to hire in our lower cost technology hub, so we can continue to invest in key product areas. Operating expenses are expected to be sustained at or below $33,000,000 per quarter for the remainder of the year, excluding stock based compensation.

Given the changes to our top line, we remain committed to driving operational efficiency, and we will make further Given changes as needed. As we stated last quarter, we believe we have sufficient liquidity to satisfy all of our financial obligations, including the repayment of our outstanding convertible note. Given our expected top line results, we are further narrowing our focus and slowing investments until we can show sustained improvement. I’ll now turn it back to Amit for closing remarks.

Amit Gupta, CEO, Cardlytics: Thank you, Alexis. We remain confident in our ability to navigate the headwinds and focus on our strategy to grow and diversify our platform. We have made meaningful progress on our turnaround over the past year, and we are committed to delivering continued success despite the challenging near term dynamics. Before moving on to Q and A, I want to thank our teams for their effort and commitment, our partners and advertisers for the opportunity to serve them and our investors for their patience. I’ll now turn it over to the operator to begin Q and A.

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star two. If you’re using a speakerphone, please lift the handset before pressing any keys.

Your first question comes from Jacob Stefan of Lake Street. Your line is already open.

Jacob Stefan, Analyst, Lake Street: Hey, appreciate you taking my questions. Maybe just first starting on the kind of Q3 outlook, the billings decrease. Help me understand a little bit better on the content restrictions. Is this mostly brands that the your FI partner is already doing business with and Cardlytics platform may be competing with them? Or maybe just kinda help us think through this and their decision.

Amit Gupta, CEO, Cardlytics: Yeah. Thank you, Jacob. Thank you for the question. So this is goes broader than the restriction is broader than the brands that the FI partner is currently engaged with or the content you see. We were obviously not expecting this level of content restriction.

It’s gotten it is beyond that what our expectation was, and that’s why it’s reflected in the guide. But, you know, we are actively working with our bank partners and advertisers to make sure we minimize the impact of this.

Jacob Stefan, Analyst, Lake Street: Okay. And maybe you could just kinda talk a little bit more on the the credit line. It sounds like you guys are you know, drew $50,000,000 of that in Q3 here. Has the debt paydown already occurred? Or is that going to be prior to Q3 end?

Will that be in Q4?

Alexis Tisiano, CFO, Cardlytics: Thanks. No. So we we drew the line of credit yesterday for $50,000,000. The intent is to pay that at maturity for the the notes that are due in September, so certainly not waiting until q four. That’s consistent with what we said in the past.

Right? We we’ve always intended to draw the line to to repay our notes and also have have main maintained an operating cash balance between 40 and 50,000,000. So all of this is consistent with what I said in terms of using it to pay the debt and maintaining a comfortable cash balance and then giving us sufficient flexibility to to navigate the near term headwinds that we’re experiencing.

Jacob Stefan, Analyst, Lake Street: Got it. And sorry. Just maybe back to the outlook. If I could ask in a different way. You know, the the concern from advertisers versus what your your kind of FI partner is restricting content?

You know, how much of the the billings decrease sequentially is kind of from each bucket there? I I think in the past you had said, you know, billing should grow sequentially throughout the remainder of the year, but, you know, the shortfall there, what’s kind of in each bucket?

Alexis Tisiano, CFO, Cardlytics: Yeah. I’ll take that. So we did not anticipate this when I made the comment about sequential billings growth. I would say a large portion of this decrease is due to the the supply chains that we’re seeing. This partner represents a large portion of our network in terms of billings.

That’s actually disproportionate to the number of MQUs that it has. So we do believe we can shift some of this volume to other partners. We’re only a few weeks into to the change, and so still learning how much we actually can shift. So I do think there there is room to to do better than what I’ve guided, but, you know, being conservative and still learning on on how we expect this volume to shift. So I would say majority is is related to this partner.

You know, we learn we’re still learning this over the next couple of weeks. Ahmed, do want to add anything?

Amit Gupta, CEO, Cardlytics: Yeah. No, I think that’s exactly right. You know, this is an unexpected change. But at the same time, I think what Alexis said I’ll underscore, you know, our bank partner’s initial response and our advertising partner’s initial response has been very much a lead in response. And so that’s what, you know, that’s what we’re engaging with them on.

Jacob Stefan, Analyst, Lake Street: Okay. Thanks. I appreciate all the color.

Conference Operator: Your next question comes from Luke Orton of Northland Capital Markets. Your line is already open.

Ben, Analyst, Northland Capital Markets: Hi, thank you. This is Ben on for Luke. Last quarter you announced the Cardlytics reports platform to diversify with non bank partners. Just wondering how that initial digital sports partnership has been going and how the build out of platform is going, or if there’s any other updates on new partners.

Amit Gupta, CEO, Cardlytics: Thank you, Luke. So we completed the pilot of that we mentioned in the previous quarter and are now collecting data and the initial market feedback so we can optimize customer experience. Even though it was a pilot, but we saw very positive and promising rates of customer linking their cards and redeeming offers. So based on the initial results, we believe that there is a large potential for us to grow this part of the platform. And obviously, now we’re focused on iterating and scaling this area.

We’re also very encouraged by the interest we’re seeing with the long pipeline of prospective partners, both across US and UK, that we’re engaged with. So active conversations with the pipelines of several leading brands across verticals, including telecom, rideshare, and fintech. And as soon as we have updates that we can share, we’ll bring it back to you. But we’re pretty positively it’s very promising that the initial pilot has gone well.

Ben, Analyst, Northland Capital Markets: Thank you. That’s great color. And then also, how is Cardlytics leveraging AI throughout the platform? And what areas of the business do you think can benefit the most from that adoption, either internally or externally, with partners and customers?

Amit Gupta, CEO, Cardlytics: Yeah. It’s a great question. I mean, something that we’ve been thinking and and starting to bring on board recently. So, you know, the three areas that we’ve been debating and and starting down this path, first of all, is within our dev team, our engineering team, to use the typical tools which can help in code dev, code generation snippets, and so on, and and QA. So those are those elements are in progress already.

The other area, which obviously, as you can imagine, is a big area of opportunity, is in our analytics space. We have a treasure trove of data with close to $6,000,000,000,000 of spend that we have insight into. We absolutely expect to think about models that can actually connect the dots, identify patterns, that can bring new capabilities to advertisers. But given these changes from this bank partner, we are now thinking about how to prioritize these initiatives. But these are things that we’ve been talking about, but they might slow down given our reprioritization that we might need to undertake.

Ben, Analyst, Northland Capital Markets: Thank you so much. I will return to the queue.

Conference Operator: Your next question comes from Jason Krayer of Craig Hallum Capital Group. Your line is already open.

Cal, Analyst, Craig Hallum Capital Group: Thank you. This is Cal on for Jason. So maybe first, you know, we’ve been noticing an increase of local offers on some of your partner platforms. So just wondering if you can speak to any added traction that you’ve seen with scaling local offers.

Amit Gupta, CEO, Cardlytics: Yeah. Thank you, Cal. I think we mentioned this in our last earnings call. As we have continued to invest in creating a high performance network, one of the areas that we’ve invested and honed our capability is very much focused on geo targeted offers so we can now differentiate where an individual lives and where do they shop. So this has allowed us to actually bring in more geo targeted content, more local offers.

We continue to plan to increase those. You can imagine leading cross multiunit chains in QSRs. They’re excited about it. Multi line retail stores are excited about it. So we are definitely seeing benefits in everyday spend, in QSRs, in general restaurant category, and we plan to continue to bring these local offers where it makes sense across our network.

Cal, Analyst, Craig Hallum Capital Group: Great. Thank you. And then second, you know, good to hear all the traction that you’re seeing with Ripple. Just on the Hy Vee partnership, you know, can you just speak to the drivers for the win? And, you know, as you continue to build more referenceable wins like Hy Vee, are you starting to see that accelerate interest and adoption of Ripple?

Amit Gupta, CEO, Cardlytics: Yeah. It’s a great question. I think you heard in our prepared remarks that the traction in Ripple has definitely increased substantially, especially over the recent weeks. And the quick answer to that is yes. As we bring on high quality partners that we had before, like Wegmans and the Giant Eagles and the new ones that we had, like Hy Vee’s and others, advertisers are getting more excited about the kind of scale that they see and also the quality of data that they see.

So we’re seeing at the typical DSPs like Trade Desk, there’s a large volume increase. A lot of advertisers are actually coming and approaching us for custom work as well. So the the so we’re excited about the prospect that Ripple has and the continued progress as more and more retailers are choosing to come and join the Ripple network.

Cal, Analyst, Craig Hallum Capital Group: Great. Thank you. Appreciate the color.

Conference Operator: Your next question comes from Robert Kulbaris of Evercore. Your line is already open.

Robert Kulbaris, Analyst, Evercore: Great. Thank you very much. Anything you can tell us about the MQ impact? I know you said that it sounds like the billings impact is bigger than the MQ impact, but just anything more you can tell us that. Any way of sort of more precisely characterizing the extent of the restriction that’s in place and whether that could ramp up sort of further related to that, what is the nature of the basis of the restriction?

Are there opportunities to substitute in something else that may not violate the restriction of whatever type? And then the comment about the concern, the level of concern from brands, just wanted to clarify that. I mean, so is the concern about running on that F5 partner without the benefit of the Cardlytics platform and technology, it’s not about a broader concern about the Cardlytics platform. I just wanted to make sure that I understood that correctly. Thank you very much.

Amit Gupta, CEO, Cardlytics: Thank you for the multi set question, Robert. I want to make sure we address all the parts of it. The first one was around MQUs. So just to give you a sense, our broader set of bank partners represent more than 50% of our MQUs. Right?

And they represent a lower percentage in billings, but the broader set of our bank partners in The US represent more than 50% of our MTUs. So hopefully, this gives you a sense of it is a large scale, but the overall network continues to be scaled and resilient. And I think as we mentioned, think your second question was around ability to replace and the concern about the brand. Frankly, concern that brands have, it’s mostly driven by the frustration that now that because of these restrictions, it limits their ability to come to one platform for all their CLO needs. And so some of them have actually expressed their dissatisfaction to us and the bank partner.

But that said, our view is that our value proposition continues to resonate. We continue to make sure that brands have access to the largest financial media network regardless of this bank’s decision. And the areas that are resonating a lot with the brands as we’ve interacted with them, engaged with them First of all, they appreciate our progress on all the measurement efforts for blending in TVC reporting, incrementality results, and ratings, so they can really get a clear view of ROAS. So even from Q1 to now, advertisers have seen more than 25 growth in ROAS on the Cardlytics platform. So their trust and belief in Cardlytics platform remain consistent and increases from what we see.

The move to engagement based pricing has been welcomed by our advertisers. They are now able to look at CLO spend on Cardlytics as a true performance media buy. And we’ve recently also reorganized our sales team under our new Chief Business Officer. So vertical focus efforts increased the velocity. We brought US and UK under this leader so that we can actually have marketing strategies across the two geographies run contiguously.

And lastly, just to say the obvious, we very much plan to compete aggressively in the market and make sure we bring the best of our capabilities to our advertisers and to the network.

Robert Kulbaris, Analyst, Evercore: Got it. Thank you.

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