Cardlytics, Inc.

Good day and thank you for standing by. Welcome to the Cardlytics Earnings Conference Call. At this time, all participants are in 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press Star 1-1 again. 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 Linton.

Good evening, and welcome to the Cardly Next 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. 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 10-Q for the quarter ended March 31st, 2024, 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 and the 8K that has been filed with SEC, which you 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. Joining us on the call today is Cardlytics CEO, Kareem Timsamani, and CFO, Alexis DiCieno. Following their prepared remarks, we'll open the call to your questions. With that said, let me turn the call over to Kareem.

Good evening, and thank you for joining our Q1 2024 earnings call. On our last earnings call, I highlighted the progress we made in 2023 and early 2024. We rebalanced our cost structure, resolved the SRS dispute, invested in our tech and products, renegotiated partner agreements, and signed a new bank partner. I also discussed how we could now fully focus on execution and growth as well as addressing our capital needs. Since the call, we made significant steps to remove the capital concerns around the company. We raised $50 million in cash and repurchased the majority of outstanding 2020 convertible notes at prices below par and issued new convertible notes not due until 2029. Coupled with our positive adjusted EBITDA results for full year 2023, and now also in Q1 2024, we believe we have fully addressed our balance sheet issues, ensuring our bank partners and advertisers have confidence to work with us in the long term. As we have completed these transactions and find ourselves on a path to sustained profitability, we are starting a new period for Cardlytics. We have slowly rebuilt the foundation of the business over the past 18 months, so we can now turn to our longer-term growth prospects. I am confident we have the technology, products, and the team to make significant growth a reality. While the full transition will take some more time and there will be some noise along the way, we are making the necessary progress to ensure we finish 2024 with even stronger momentum. Our first quarter performance has us off to a good start to 2024. Excluding entertainment, which we saw at the end of 2023, billings grew 12% over the first quarter of 2023, indicating strong interest from advertisers. Redemptions, which, as we said last earnings call, we view as a no-star, were also up significantly. More redemptions mean more people are engaging with our program more frequently, which provides the best outcome for our banks, their customers, and our advertisers. And importantly, adjusted contribution grew 27% over the first quarter of 2023 when excluding entertainment. Adjusted contribution is an important metric that reflects our business performance, as it is the money we keep from our billings after paying out customer rewards and bank revenue share. Additionally, driven by the strong top-line performance, we finished the quarter with $0.2 million of adjusted EBITDA. This is the first time in our history that we have been positive in the first quarter. which is a seasonally lower billings quarter. Alexis will provide further details on all these financial metrics later in the call. We believe this momentum will continue in the second quarter. But bigger picture, we have much higher growth ambitions for the business and believe we can achieve sustained higher growth rates longer term. Let me expand. First, the macro environment. We benefit from market tailwinds as cookie-less identity resolution becomes essential for any business, and card-linked offers become table stakes for our partners. As opposed to cookies, we use purchase data to provide precise targeting, insights, and measurement for businesses looking to reach new customers, better understand their existing unknown customers, and increase frequency from their loyal customers. It's also clear that rewards are increasingly vital to our banking partners with continued regulatory pressure on traditional card benefit programs. And that loyalty is more important than ever for retailers who look to retain customers in the face of rising costs. Second, our investments in tech and sales. Our recent upgrades and progress with our ad decisioning engine, or ADE, have laid the groundwork for ongoing innovation at a more agile pace than ever before. For example, we are currently building a dynamic marketplace, which will allow us to provide flexible campaign durations, meet campaign optimizations, more timely reporting, and dynamic pricing based on offer activations. These improvements are critical to delighting advertisers and better aligning our US business to the engagement-centric pricing model that is driving our growth internationally. We are not only investing in our tech, but have also started to reinvest in our agency team and our account management teams to better support more advertising clients. Investors will see bumpiness in our short-term expense numbers, but we are confident that we are making the right investments to exit 2024 with strong momentum. Third, redemptions and engagement. We continue to make technology upgrades across our network. We're seeing ongoing signs of progress towards a North Star of driving redemptions and engagement. While we still have a long way to go in achieving our aspirations, the trends we discussed in Q4 remain consistent in Q1 as we saw a 30 percentage point difference in redemptions between customers of banks on ADE versus customers of banks not on ADE. We are putting the right offers in front of the right users faster and these offers are driving larger basket sizes and incremental purchases. As a result, We are consuming budgets more quickly and delivering more value within a campaign, including more rewards to consumers. While we are not currently billing for all this added value due to campaign budgets, it signals the capacity and potential for adjusted contribution growth in the future. Improving offer quality and increasing consumer reductions is a trend we expect to continue. which will significantly increase the scale of outcomes we will deliver to our clients and partners. Fourth, scale. Scale is crucial to competing for bigger budgets in advertising, and we are growing our network, including by actively working towards onboarding our newest large bank partners. Marketers are investing in the few platforms that deliver the most meaningful and measurable outcomes, and growing a network ensures clients benefit from the reach they need to scale their campaigns. Recently, we are seeing strong growth potential from our global investments as our international business grew over 50% year-on-year in Q1. We believe that we will keep similar growth levels for the next several quarters especially as we look to increase our presence internationally. Fifth, bridge. By leveraging its unique and exclusive identity resolution capabilities, bridge is on a path to establishing itself as the new keys in a cookie-less advertising world. A logical growth path to increasing a total addressable market means continuing to enhance our customer data platform products and pushing into new solution areas, such as retail media, which is already responsible for 29% of digital lifespan in the U.S. We launched Ripple, our retail media and data network, to further establish our presence in the retail media market and deliver growth. And we have line of sight to onboarding 100 million individual shopper profiles by year end. This would make Ripple one of the largest retail media networks in the country. To further expand our retail media network solution, we're also working to allow brands to use the Ripple technology to export and access targeted audience segments, which will allow them to target customers through integrations with major DSPs, such as the Trade Desk and LiveRamp. On the retail media network front, we've recently launched initial test campaigns with Snooks Markets, where Danone and Kraft targeted specific audiences using Bridges data on individual shopping preference at the SKU level and the repo technology. The initial campaigns showed better performance on most indicators of campaign performance against benchmark averages. The success prompted these brands to launch a second round of campaigns with plans to expand to more for retailers in the future. This demonstrates the strong performance and demand for our audiences and segmentation. With our capital needs addressed through our $50 million raise and new convertible notes not due until 2029, we are focused on higher growth rates. Our Q1 results and projected Q2 results continue to give us confidence. We have strong tailwinds behind us, and we have scale that allows us to provide the best breadth and depth of offers for our banks and measurable outcomes for advertisers. We are rapidly innovating our platform with major developments on the way, including the dynamic marketplace. We are beginning to drive deeper engagement and are starting to see the results of our changes. We are also making the right short-term investments to drive longer-term growth and exit 2024 with strong momentum. And our bridge business is continuing to show signs of progress, especially given our progress with Ripple, which sets us to be one of the largest retail media networks in the country. It is an exciting new period for Cardlytics. Now, I'll hand it over to Alexis to discuss our financial results.