Cardlytics, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Carlytics' fourth quarter 2020 earnings conference call. At this time, all participant lines are on 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, then 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star, then 0. I would now like to hand the conference over to your host, Kirk Somers, Chief Legal and Privacy Officer. Please go ahead.

Good morning, and welcome to Carbolitics' fourth quarter and four-year 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 first quarter and year of 2021, 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 return to year-over-year growth, the launch of our new user experience, the increase in ARPU, or average revenue per user, our cash position, 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, the impact of our rise, retain, and return strategy, the sufficiency of our capital structure, continued momentum in 2021, and the closing and anticipated benefits of our acquisition of Dosh Holdings, Inc., For 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 10-K for the year ended December 31st, 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 reconciliation 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 of the information I've just described on the investor relations section of Cardlytics' website. Please note that a supplemental presentation to our fourth 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 to 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 fourth quarter and full year 2020 earnings conference call. We're pleased with our Q4 results, which exceeded the high end of our guidance for both billings and total revenue. I'm proud of the Cardlytics team for their ability to adapt and continue executing on our multi-year strategy in what was a challenging year. Before moving to our results, this morning we announced that we entered into a definitive agreement to acquire DOSH. Andy will discuss the financial details later in the call, but I'd like to take a moment to discuss our strategic rationale for this acquisition and why we believe it's a great opportunity for continued growth. DOSH is a company we've followed for a long time. We've been impressed with their team and their platform, and we believe that their business model fully complements our efforts to drive continued growth. There are four key benefits and capabilities I would like to highlight. First, DOSH has an easy-to-integrate technology platform, which is a proven solution for neobanks, fintechs, and non-financial organizations. Second, DOSH brings partnerships with multiple neobank and fintech players, including Venmo, Betterment, and Elavist. While in early stages, we believe these partnerships have meaningful long-term potential and naturally align with millennial and younger consumers who are generally not with our traditional large bank partners. Third, Dosh's platform also enables new advertising solutions, including a solution for small and medium advertisers and expands our capabilities for advertisers in the travel industry. And finally, Dosh has a D2C app that enables them to implement consumer test and learn strategies. Being able to test new products and features and quickly learn what drives the highest consumer engagement allows advertisers to increase their return on ad spend. These results are then shared with Dosh's larger financial partners to drive faster scale deployments. We believe this acquisition will benefit all of our combined partners, create new engagement opportunities, and further strengthen our ability to deliver great value to our advertising clients. I'm excited to welcome Dosh to the Cardlytics team. Now let's turn to some highlights from the fourth quarter. Total billings were $94 million, down 7% year over year, and up 51% sequentially from third quarter 2020. Total revenue, which is equal to billing's net of consumer incentives, was $67.1 million, down 3% year-over-year, and up 46% from third quarter of 2020. And adjusted contribution was $29.7 million, down 4% year-over-year, and up 51% from the third quarter of 2020. Our better than expected Q4 results reflect sequential billings growth across nearly all of our advertising verticals. We are encouraged by the consistent month-over-month growth in our billings since the height of COVID impacts in Q2. It's worth highlighting that we saw fourth quarter billings from our restaurant clients more than double sequentially from Q3. And importantly, 12 of the top 15 US restaurant chains were live in our platform in Q4. It's also notable that our US billings returned to pre-COVID levels in the fourth quarter, And we're essentially flat with Q4 2019. We are pleased with the momentum we're seeing in our results, and we believe this will continue throughout 2021. This momentum not only reflects the continued gradual recovery of consumer spending, but it validates the successful execution of our rise, retain, and return strategy. Let me share with you a few examples of how we're executing against our strategy and delivering value to new and existing advertising partners. In the retail category, we were able to successfully secure additional budgets from key advertisers in Q4 by driving incremental sales from their current loyal customers in addition to their existing programs designed to acquire new customers. This initiative not only drove additional Q4 billings, but positioned us for larger annual budgets in 2021. Cardlytics also worked in lockstep with one of the largest businesses in the U.S. to help them launch their new membership subscription service. I'm pleased to say we exceeded our partners' expectations in terms of net new subscribers in Q4, putting us in a great position for the upcoming year. Additionally, we secured our first test budget with a top five restaurant chain in the U.S. that was interested in driving incremental purchases from both new and lapsed customers. In our direct-to-consumer vertical, we've proven our effectiveness to one of the largest wireless service providers in the U.S. As a result, this marketer has more than doubled its upfront annual spend commitment with us in 2021. Our self-service platform continues to progress. Agencies and direct clients are expanding their investment with new, larger campaigns. Like prior quarters, we are working with them to create the best user experience possible. Each quarter moves us closer to sourcing material ad budgets via agency partnerships and with small and medium-sized advertisers. As for MAUs, we have over 90% of our MAUs connected to the platform, and look to get around 99% connected as we move forward with the U.S. Bank launch. Our MAU base grew to over 163 million in the fourth quarter, up 23% year over year, largely due to the launch of Wells Fargo. Our launch preparations with U.S. Bank remain on track, and we expect them to launch with the version one of our new user experience in the first half of 2021. We expect that MAU growth will eventually stabilize in the low to mid single digits in future quarters. With that, I will turn it over to Andy.