Cardlytics, Inc.

Greetings, and welcome to Cardlytics Q1 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow for the presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I would now like to turn the conference over to your host, Kurt Summers, Chief Legal and Privacy Officer. Thank you, sir. You may begin.

Good evening and welcome to Cardlytic's first quarter 2021 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 results, including our financial guidance and cash position for the second quarter and full year of 2021, our ability to achieve key long-term priorities, the launch of additional functionality by banks, including U.S. Bank, growth in MAUs or monthly active users, the return to year-over-year growth, the launch of our new user experience and new technology infrastructure, the increase in ARPU or average revenue per user, 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 sufficiency of our capital structure, continued momentum in 2021, and the closing and anticipated benefits of our acquisition of Dosh Holdings Inc. and Bridge Inc. For a discussion of the specific 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-Q for the quarter ended March 31st, 2021, and in subsequent periodic reports that we file 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 the 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 first quarter results has also been posted to our investor relations website. Joining us on the call today is Cardlytic's 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 first quarter 2021 earnings call. We had a strong start to the year with Q1 billings and total revenue exceeding expectations, even before adding contributions from DOSH in March. Our results reflect a continued positive trajectory in our business. While we're still experiencing impacts from COVID, we are encouraged by the momentum we're seeing in the US. However, US travel and our UK business continue to be significantly impacted by the pandemic and related lockdown. Before moving to our results, I'd like to briefly address our recent acquisitions. We are integrating DOSH and making solid progress on combining the two organizations. We are pleased with the team and the capabilities and are already seeing our acquisition thesis come to light. We're also pleased to say that we expect to close the bridge acquisition in May. We believe the bridge acquisition has the potential to be transformational given its technology and unique position in the customer data platform or CDP market. I want to reiterate a few strategic points on both acquisitions for our investors. We expect the bridge and DOSH acquisitions will, first, once integrated, allow Cardlytics to utilize SKU data to provide product-level offers from CPGs, grocers, and wider retail. Second, accelerate the next generation consumer experience with consumer engagement features. And finally, provide a lightweight platform to attract new partners in the neobank and non-FI industries. We're very pleased with the early progress and results from DOSH already. Now let's turn to some highlights from the first quarter. Total billings were $76.3 million, up 13% year over year. Total revenue, which is equal to billings net of consumer incentives, was $53.2 million, an increase of 17% from Q1 2020. And adjusted contribution was $24.3 million, up 19% year over year. Our Q run results reflect growth in billings across many of our major industry verticals. D2C continues to be the largest vertical measured by billings, and we're pleased to have delivered year-over-year growth in this sector. In addition, we saw strong billing growth in both our retail and specialty retail verticals, and we're encouraged by the return of positive year-over-year growth in our restaurant vertical. I want to highlight a couple of success stories to drive home the importance of our platform to advertisers. We secured our first annual contract with one of the largest e-com platforms in the world, despite the fact that the same client cut advertising budgets by almost 75% for 2021. Additionally, a large specialty retail client exited our channel in the second half of 2020. Then the client began experiencing lost share of wallet, and we proved that targeting these switchers delivered a positive ROI. This resulted in the client signing a meaningful annual 2021 agreement. Travel remains muted given the ongoing impacts of COVID, But overall, we remain encouraged by momentum we're seeing in our results, and we believe we're on track to deliver strong results in 2021. Our MAU base grew to over 168 million in the first quarter, up approximately 20% year over year, mainly due to the launch of Wells Fargo. We expect that core CDLX MAU growth will eventually stabilize in the low to mid single digits in future quarters. We are evaluating the impact DOSH will have on MAUs and ARPUs over time. We're proud to announce that US Bank has launched with our newly built ad server that enables a richer and more robust user experience. The ad server offers both API and SDK integrations to enable faster iterations of any user experience module. Together with US Bank, we're taking an iterative approach to their deployment, continuously launching with new functionality over the course of the next few quarters. One of our initial modules is focused on educating the consumer about the offers program and how it works in order to drive adoption and engagement. Additionally, one of our other large banks has committed and will be deploying the new ad server in the second half of 2021. Into the first half of 2022, we will be migrating a large portion of our network over to this new technology infrastructure to enable speed, scale, and engagement. Before I turn it over to Andy, I also want to announce that we have launched our first UK-based FinTech rewards program with Curve. We're excited about the potential of this partnership. Andy?