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CI

Cardlytics, Inc. (CDLX)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue of $63.2M declined 9% YoY; adjusted EBITDA improved to $2.7M from $(2.3)M, while adjusted contribution margin expanded to 57.1% from 52.2% YoY . Versus S&P Global consensus, revenue was slightly below and EPS (Primary) beat; details below. Results were within/above prior Q2 guidance on all metrics, with adjusted EBITDA above the high end .
  • Management guided Q3 to double‑digit YoY declines (Revenue: $52.2–$58.2M; Billings: $87–$95M; Adj. Contribution: $30.3–$34.3M; Adj. EBITDA: $(2.3)–$2.7M), signaling near‑term top‑line pressure (catalyst) despite improving unit economics .
  • Strategic narrative emphasized network diversification (new non‑FI Cardlytics Rewards Platform, SDK/API plug‑and‑play), geo‑targeted/local offers, and momentum at Bridg/Rippl (Hy‑Vee RedMedia joined Rippl), supporting medium‑term mix and monetization .
  • Cost discipline and liquidity remain focus areas after workforce reduction (15% annualized savings) and extended revolver; Opex run‑rate expected sub‑$35M per quarter ex‑SBC, aiding path to improved EBITDA through 2025 .

What Went Well and What Went Wrong

  • What Went Well

    • Margin expansion and mix: Adjusted contribution margin rose to 57.1% of revenue (vs. 52.2% LY) and adjusted EBITDA turned positive to $2.7M from $(2.3)M LY, indicating better partner/rewards management and operating discipline .
    • Platform/product progress: Management highlighted ramp of geo‑targeted/local offers and turnkey integrations (SDK/APIs), reducing time‑to‑launch (e.g., CRP partner in ~4 weeks) and improving relevancy and conversion models .
    • Retail media traction: Rippl expanded with Hy‑Vee’s RedMedia joining, enlarging addressable audiences for CPG/retail activation and closed‑loop measurement . Quote: “We’re… seeing benefits in everyday spend… and we plan to continue to bring these local offers” – CEO, Q2 call .

  • What Went Wrong

    • Top‑line pressure: Revenue fell 9% YoY, with billings down 6% and MQUs outpacing ACPU (scale ahead of monetization), reflecting cautious advertiser budgets and mix .
    • Cash generation: Free cash flow was $(3.4)M in Q2 (worse than $(0.4)M LY) and net cash used in operating activities was $1.2M, underscoring continued investment needs and working‑capital dynamics .
    • Near‑term outlook softened: Q3 guide implies double‑digit YoY declines across billings/revenue/adj. contribution, tempering expectations for a rapid rebound despite operational improvements .

Financial Results

MetricQ4 2024Q1 2025Q2 2025Q2 2025 Consensus*
Revenue ($M)$74.0 $61.9 $63.2 $64.0*
GAAP Diluted EPS$(0.31) $(0.26) $(0.18) $(0.1625)*
Adjusted EPS (diluted)$0.00 $(0.21) $(0.13) —
Adjusted EBITDA ($M)$6.4 $(4.4) $2.7 —
Adjusted EBITDA Margin % (of Rev)8.6% (7.1%) 4.3% —
Adjusted Contribution ($M)$40.7 $32.4 $36.1 —
Adjusted Contribution Margin % (of Rev)55.0% 52.4% 57.1% —

*Values retrieved from S&P Global.

Segment revenue

Segment Revenue ($M)Q1 2025Q2 2025
Cardlytics platform$56.4 $58.0
Bridg platform$5.46 $5.21

KPIs

KPIQ2 2024Q1 2025Q2 2025
MQUs (M)188.8 214.9 224.5
ACPU ($)$0.16 $0.13 $0.14

Guidance Changes

Forward guidance (new/updated in Q2)

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Billings ($M)Q3 2025—$87.0–$95.0New
Revenue ($M)Q3 2025—$52.2–$58.2New
Adjusted Contribution ($M)Q3 2025—$30.3–$34.3New
Adjusted EBITDA ($M)Q3 2025—$(2.3)–$2.7New

Guidance vs actuals (Q2 2025)

MetricQ2 2025 Prior Guidance (May 7)Q2 2025 ActualResult vs Guidance
Billings ($M)$100–$108 $104.0 In‑range
Revenue ($M)$61–$67 $63.2 In‑range
Adjusted Contribution ($M)$32.5–$36.5 $36.1 Near high end
Adjusted EBITDA ($M)$(4.0)–$1.0 $2.7 Above high end

Earnings Call Themes & Trends

TopicQ4 2024 (Prior-2)Q1 2025 (Prior-1)Q2 2025 (Current)Trend
Supply diversification (new FI, neobank, CRP)Signed new neobank; scaling new FI; engaging non‑FI partners CRP launched with first non‑FI; rapid onboarding via SDK/APIs Continued emphasis; CRP and non‑FI model highlighted; local offers scaling Improving
Delivery performance“Within acceptable parameters”; over‑delivery addressed; under‑delivery improving Further refinements to targeting/ranking; expected sequential improvements Benefits seen in local/geo‑targeted relevance Stabilizing
Engagement‑based pricing61% of US advertisers on EBP; majority targeted by YE 74% on EBP; >50% of billings Continued progression implied Improving
Bridg/Rippl retail media110M+ profiles; pipeline building 130M+ shoppers; CPG pilots with combined data Hy‑Vee RedMedia joins Rippl, expanding reach Accelerating
Macro/advertiser budgetsCuts in a few key US accounts; UK double‑digit growth Advertisers cautious; travel softness; everyday spend strong Cautious tone persists; local/QSR traction highlighted Mixed
Tech/AI/data modelingMicro‑targeting, conversion models, relevancy Geo‑targeting (work/live/workflow), automation; SDK/APIs Geo‑targeting/local offer momentum Improving
Bank partner dynamicsRenewals in focus; liquidity comfort Not renewing BoA contract; expect no material impact; will serve via other means; sunset legacy stack post‑term —Mixed

Management Commentary

  • “We are navigating headwinds by doubling down on our diversification efforts and reinforcing our unique network capabilities.” – Amit Gupta, CEO, Q2 press release .
  • “We believe delivery issues are now largely resolved… with improved budget management, projections and rankings.” – Prepared remarks, Q1 call .
  • “We can now differentiate where an individual lives and where they shop… bringing in more geo‑targeted content, more local offers.” – CEO, Q2 call (Q&A) .
  • “Rippl… has definitely increased substantially… advertisers are getting more excited about… scale and… quality of data.” – CEO, Q2 call (Q&A) .

Q&A Highlights

  • Local/geo‑targeted offers: Management sees clear benefits in everyday spend (QSR/restaurant) from geo‑targeted local offers and plans to scale network‑wide .
  • Rippl traction: Addition of large retailers (e.g., Hy‑Vee RedMedia) boosts advertiser interest; volume increases via DSPs like The Trade Desk and custom activations .
  • (From prior quarter) Cost actions and liquidity: 15% workforce reduction (~$16M annualized savings), sub‑$35M quarterly Opex ex‑SBC target underpin sequential EBITDA improvement goals through 2025 .

Estimates Context

Consensus (S&P Global) vs actual – Q2 2025

MetricConsensus*ActualSurprise
Revenue ($M)$64.02*$63.25 Slight miss
Primary EPS$(0.1625)*$(0.13) Beat
NotesRevenue: 5 est.; EPS: 4 est.*GAAP diluted EPS $(0.18) —
  • EBITDA (S&P definition) consensus was −$2.20M* vs actual −$6.27M*; company’s reported Adjusted EBITDA was +$2.7M, reflecting differing definitions; we anchor on revenue/EPS for comparability .
    *Values retrieved from S&P Global.

Where estimates may adjust

  • Modest revenue under‑delivery and a better‑than‑expected EPS (Primary) print, alongside stronger adjusted contribution margin, may support slight upward EPS revisions but likely cautious top‑line trajectory given Q3 guide implies double‑digit declines .

Key Takeaways for Investors

  • Q2 print was operationally cleaner with positive adjusted EBITDA and higher contribution margins, but subdued growth (−9% revenue) underscores ongoing demand/mix pressure .
  • All Q2 metrics met/beat guidance (notably adjusted EBITDA above the high end), reinforcing improved execution and delivery discipline .
  • Q3 guide calls for double‑digit YoY declines across billings/revenue/adj. contribution; near‑term stock reaction likely tied to this outlook and visibility on pipeline conversion (catalyst) .
  • Strategic diversification is tangible: CRP launch expands non‑FI supply; faster SDK/API integrations reduce time‑to‑revenue; geo/local offer gains should lift relevancy and conversion over time .
  • Retail media optionality building: Hy‑Vee’s RedMedia joining Rippl broadens CPG/retail activation reach and closed‑loop attribution, a medium‑term lever for mix and monetization .
  • Cost discipline and liquidity actions (15% RIF, revolver extension) support the path to sequential EBITDA improvement in 2H25, though FCF remains a watch item near term .
  • KPI lens: MQUs grew 19% YoY to 224.5M as scale leads monetization; ACPU dipped YoY but improved vs Q1, suggesting gradual monetization of new supply .