Cardlytics, Inc.

At this time, all participants' lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If you wish to ask a question during that time, please press star and 1 on your telephone keypad. If at any time during the call you require immediate assistance, please press star 0 for the operator. This call is being recorded on Wednesday, May 7, 2025. Now I would like to turn the call over to Nick Linton, Chief Legal and Privacy Officer. Please go ahead.

Good evening, and welcome to the Cardlytics first quarter 2025 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 2025, our capital structure, the rollout of new partners, and operational and product initiatives. For discussion on 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 10Q for the quarter ending March 31st, 2025, which has been filed with the SEC. Also during this call, we will discuss non-GAAP measures of our performance. Gap financial reconciliations and supplemental financial information are provided in the press release issued today, 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. On the call today, we have CEO Amit Gupta and CFO Alexis Diceno. Following their prepared remarks, we'll open it up for your questions. With that, I'll hand the call over to Amit.

Good evening. And thank you for joining our first quarter 2025 earnings call. I'm going to start our call with a few comments on the macro environment. As you're all acutely aware, we've seen a lot of headlines about volatility and declining consumer sentiment in the first quarter. Based on our purchase data, which represents approximately $5.8 trillion in spend annually, consumer spending is still strong. While there were some softness in February, we saw spending rebound in March and grow steadily in April. Our data showed strong growth across categories like auto, home improvement, e-commerce, and apparel, suggesting that consumers are front-running their purchases before tariffs take effect. We are keeping a close pulse on these fluctuations and how consumers are responding to market changes. Leading brands continue to spend with us, but overall, advertisers have been more cautious with their budgets given the macroeconomic uncertainty. While we expect this wait-and-see stance to continue, we are focused on leveraging the breadth and depth of our purchase intelligence to help our advertisers navigate this uncertainty. For example, we know that the airline industry has been facing headwinds, and we've helped a large U.S. carrier bridge this gap. Seeing strong performance and incremental return, this advertiser scaled up to annualized budgets to reengage their customers and deliver outsized value. Now turning to our key business pillars. As I shared on our last call, we entered 2025 with continued focus on building momentum across our key pillars to maximize consumer engagement, which remains our North Star. Our four pillars? Increasing supplies, strengthening demand, optimizing our network, and growing bridge continue to underpin our journey ahead to platformize Cardlytics. Let me explain what I mean by platformize. Building on our longstanding leadership in the financial media space, we continue to evolve our business to position ourselves as a differentiated commerce media platform. This means building an ecosystem that provides true multi-sided participation flywheel network effects, seamless plug-and-play integration, and powerful data capabilities. I see these elements as hallmarks of a high-performing tech platform, and we are focusing on the initiatives that further strengthen our position. We believe we are the only platform with this level of scale and data which enables us to provide an array of rich and sophisticated solutions for our publishers and advertisers alike. I'll now share more details on our progress. First, increasing and diversifying our supply to meet consumers where they are. I want to start by addressing a frequently asked question about why we don't share more details on our partners. While we strive for transparency, our partners' requests and often the terms of our contracts limit what we can discuss publicly. We look forward to sharing more details, including the names of certain new partners in time and when permitted. With our newest large FI partner, we have launched with all eligible users and continue to scale the volume of our content. We are seeing strong engagement from this user base and are unlocking different consumer demographics with this partnership. We expect this partner to continue ramping the volume of our content throughout the year, which will enable us to deliver more offers featuring our high-quality brands to their customers. As of April, they are now one of our top five banks in terms of billings run rate. Our newest neobank partner is now ramped up and live on our latest platform, and our offers are reaching all their eligible card members with premium membership. We are encouraged by the strong redemption rates in this digital-only channel since the launch only a few weeks ago. Next, I'm excited to share that our vision to expand and diversify our network beyond financial institutions is now a reality. We recently signed our first non-FI partner agreement to run offers on a leading digital sports platform, with friends and family now live and the full rollout expected in the coming weeks. We expect to bring additional partners on board soon, and these non-FIs will make up our new Cardlytics Rewards Platform, or CRP. With CRP, any merchant with digital properties frequented by consumers can become a publisher partner, which opens the door for new verticals that expand our supply universe. This is an important step in the platformization of Cardlytics, as we can now engage with merchants in a more strategic way. In addition, we have been investing in our tech stack to offer more plug and play opportunities for our publisher partners. Historically, Our integrations with large banks have been highly custom and lengthy. With the work we've done to ease the implementation process, we were able to onboard our newest neobank partner in eight weeks and our first CRP partner in four weeks. We now offer an SDK, hosted solutions, and robust APIs so that most publishers can integrate and go live on our platform quickly. These turnkey solutions are especially beneficial for smaller banks that want to join our network with minimal lift and friction. We can also expect to see benefits of our tech improvements the next time we integrate with a large bank. And lastly, we recently shared that we will not be renewing our current agreement with Bank of America. We expect to continue providing uninterrupted service to them through early 2026. and all signs point to us continuing to partner together after that and delivering our offers to their customers through other means. Additionally, after the conclusion of our current agreement, we expect to fully sunset our legacy tech staff and devote all resources to our current platform. Furthermore, we expect no material impact to our financials, and we will continue to invest in diversifying our supply. Second, strengthening and growing advertising demand. we are leaning into our core differentiators, which include more sophisticated capabilities like merchant location level data and multi-tier offers. These types of offer setups now account for nearly 10% of budgets and have proven effective in influencing behavior. Leading advertisers are using our capabilities to target specific areas of softness in their business and deliver more value to their customers. For example, Airlines have used targeted receipt-level offers to promote upgrades to premium seating or bookings to specific destinations. Gas brands have also leveraged these offers to boost premium fuel purchases. Leading retailers are using our capabilities to drive omnichannel behavior to deepen their customer relationships. We've built on our momentum to drive new business and continue to add new brands to our platform. We've also expanded our integrations with additional third-party content providers, which allows our publisher partners to reap network benefits by accessing diverse content with high-quality advertiser demand. In the UK, we had strong performance and growth in categories like travel and entertainment and restaurants, even as advertisers' overall marketing budgets shrunk. Looking ahead, we see opportunity for continued growth as brands shift their ad spend to direct marketing channels with proven results. We continue to see good traction with our Insights Portal, with a 77% sequential increase in advertisers utilizing the portal in Q1. The portal has played a critical role in securing executive buy-in and contributed directly to high-value renewals. Leading data-driven brands are accessing the insights portal on a daily basis and using insights routinely in broader business decisions. As our client at Shake Shack said, quote, we are in the portal regularly pulling data to share across the leadership team. The competitive share in particular is very valuable for us, end quote. Third, our continued efforts to optimize and build a high-performing network. On our last call, I shared how we were making continued improvements to delivery. With these ongoing efforts, I am pleased to share that we believe delivery issues are now largely resolved. Improved budget management, projections, and rankings have helped our progress, and we are making significant strides to automate these initiatives. To further maximize the performance of our network, we are working on a number of models designed to optimize for activations and redemptions by increasing relevancy and program participation. These models are showing early promising results, and we will continue to fine tune them. Our continued investments in data engineering are not only enhancing network effectiveness, but are also providing solutions to address specific advertiser challenges. For example, we are leveling up geo-targeting capabilities by matching spending patterns in different locations, enabling us to more precisely target consumers with offers in the areas they frequently visit and shop, not only where they live. Our shift to engagement-based pricing also continues to progress, with 74% of our advertisers on engagement-based pricing as of end of Q1, representing more than half of our billing. And our fourth and final pillar, accelerating our growth and bridge. We continue to see interest and a healthy pipeline for our identity resolution solution. In Q1, we expanded our relationship with a leading retailer and signed a top sporting goods chain, which further validates our core technology and growth potential. We are working with these clients to power their identity-driven marketing strategies and support their digital transformation goals. With Ripple, we now have more than 130 million unique shoppers across 11 retailers in the US. We are working to strengthen our revenue opportunities through custom audience campaign growth with CPG and agency clients. As mid-market and regional retail media networks gain prominence, our integrated solutions across bridge uniquely position us to power both sides of this evolving ecosystem, connecting retailers, brands, and shoppers with precision and measurable impact. Importantly, we continue to focus on integrating our SKU-level data from Bridge, which represents over 12 billion transactions per year with our Cardlytics purchase data. Last quarter, we mentioned we would begin testing a series of CPG offers from large retailers using both Bridge and Cardlytics data. And I'm happy to share that we have just launched this pilot with a retailer and one of our bank partners and look forward to sharing updates on this effort. This pilot represents the first time we've been able to publish a CPG offer or leverage bridge data on our core Cardlytics platform. By continuing to lean into our core platform capabilities and differentiators, we have created a resilient platform that performs through different macro environments. To position ourselves for success, we are proactively taking control of our costs and ensuring our liquidity is in a good position. We recently extended the maturity of our line of credit to 2028 and also implemented a 15% reduction to our workforce earlier this week. I will let Alexis share more details on these actions. I'd like to thank all our teams for their hard work and resiliency as we make decisions to future-proof our company. Finally, I am excited to welcome Rory Mitchell, our new Chief Business Officer, to our leadership team. Rory joins us with more than 15 years of experience in commerce media and leading teams through critical business transformations. I look forward to his insights and fresh perspective as we continue our platformization journey. I will now turn it over to Alexis to discuss the financials.