Cardlytics, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Cardlytics third quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. If you require any further assistance during the conference, please press star 0 and an operator will be happy to assist you. I would now like to hand the conference over to Kirk Summers, Chief Legal and Privacy Officer. Thank you, and please go ahead, sir.

Good evening, and welcome to Cardlytics' third quarter 2020 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 about future financial performance or results, our financial guidance for the fourth quarter of 2020, our ability to achieve our key long-term priorities, the launch of U.S. Bank, growth in FIMAUs, or monthly active users, the increase in our connectivity to our MAUs, the use of proceeds from the convertible notes, the evolution of our platform to a fully operational platform, the impact of COVID-19 on our business and the economy as a whole, including the stabilization of the economy and potential improvements in the economy in Q4, the impact of our rise, retain, and return strategy, and the sufficiency of our capital structure. 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 the company's 10Q for the quarter ended September 30, 2020 that we filed earlier today and in subsequent periodic reports that we filed with the Securities and Exchange Commission. 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 and the 8K that has been filed with the SEC. Today's call is available via webcast and a replay will be available for one week. You can find all the information I've just described on the investor relations section of Cardlytics' website. Please note that a supplemental presentation to our third quarter results has also been posted to our investor relations website. Joining us on the call today is Cardlytics' leadership team, including CEO and co-founder Lynn Lobey and CFO Andy Christensen. Following their prepared remarks, we'll open the call for your questions. With that, let me turn the call over to Lynn. Lynn?

Thanks, Kirk, and thank you to everyone for joining us on our third quarter 2020 earnings conference call. Q3 showed increases in spend throughout the quarter, so we are optimistic that the economy is in the middle of a slow recovery. We've also seen signs of this recovery in our business and continue to succeed with our rise, retain, and return strategies. For example, prior to Q3, every major hotel partner we had exited our channel. By the end of Q3, they had all signed an I.O. with Carlytics for a recovery campaign. And despite airline travel seeing a persistent decline in demand post-COVID, we're currently in a national full-scale recovery campaign with one of our airline partners. However, we are still cautious in regards to some aspects of our business, as consumer spending in the U.K. and some of our key verticals, especially travel and dining, while recovering are still dramatically reduced year over year. Our billings in these areas map in a similar way. We are also continuously monitoring spend data to make sure we're prepared as a company for a potential new wave of infections this winter. With all that in mind, here are our results. Total billings for the third quarter were $62.1 million, down 25% year over year. Total revenue, which is equal to billings, net of consumer incentives, was $46.1 million, a decline of 18% year-over-year. Adjusted contribution was $19.7 million, down 20% year-over-year. As we've said on calls and in meetings throughout the year, we remain optimistic about the future. Our key long-term priorities of increasing the number of marketers working with us, bringing our solutions to new industries, evolving the Cardlytics platform, and demonstrating operating leverage in our business remain fully achievable. Now on to several updates in specific areas of the business. With advertisers, we are seeing increased momentum in both long-standing partners and new ones. One of our top retail and dining partners renewed for 2021 with an 11% year-over-year contract growth and a 2% rate increase. In the third quarter, 10 new direct-to-consumer brands ran on our platform for the first time. All 10 have re-signed to subsequently run in Q4. and several have signed or are finalizing annual contracts for 2021. On a product note, we are pleased to report continued progress with our self-service platform. Agencies continue to test and we're working with them to create the best user experience possible. Our partner agencies are providing feedback on how we can improve and have simultaneously expanded testing to three new brands, including a CPG client. In addition, the platform is currently connected to over 75% of our MAUs and we expect to be connected to the vast majority by the first half of 2021. We're excited about the incremental strides we've made towards a fully operational platform this quarter. Moving to the bank side of our business, Wells Fargo continues to scale and our MAU base has grown to 161.6 million or a 26% increase year over year. We expect MAU growth to stabilize in the low to mid single digits in the future quarters. Further, our launch migrations with U.S. Bank are going as planned, and we still expect to launch them with our version one of our new user experience in the first half of 2021. With that, I will turn it over to Andy.