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Cardlytics, Inc. (CDLX)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 materially exceeded the high end of prior guidance across billings, revenue, adjusted contribution, and adjusted EBITDA, reflecting improved delivery and pipeline wins; management framed 2025 as a turnaround year with sequential improvements and positive adjusted EBITDA exiting the year .
  • Revenue declined 17.0% year over year to $74.0M and adjusted EBITDA fell to $6.4M from $10.0M, while GAAP net loss improved sharply to $(15.6)M versus $(100.8)M in Q4 2023 due to fewer non‑recurring charges; adjusted contribution margin expanded to 55% of revenue (+250 bps YoY) .
  • Q1 2025 guidance implies seasonal trough: billings $91.5–$94.5M, revenue $57.0–$60.0M, adjusted contribution $30.0–$32.5M, adjusted EBITDA $(7.5)M to $(4.0)M; U.K. momentum continues, Bridg expected to return to positive growth as key account laps .
  • Liquidity appears sufficient: $65.6M cash, $60M undrawn revolver, >$100M total liquidity after minimum cash covenant; first convertible note interest payment (~$4M) made; remaining SRS settlement to be completed in June .

What Went Well and What Went Wrong

What Went Well

  • Beat prior Q4 guidance on all key metrics (billings, revenue, adjusted contribution, adjusted EBITDA) due to improved platform delivery and pipeline wins .
  • Adjusted contribution margin rose to 55% of revenue (+250 bps YoY) on a more favorable partner mix; revenue‑to‑billings margin improved by 3.7 points sequentially .
  • Engagement‑based pricing adoption scaled to 61% of U.S. advertisers (from 51% in Q3), a core lever to optimize campaign performance and predictability .

What Went Wrong

  • Revenue fell 17.0% YoY to $74.0M, billings fell 11.9% YoY to $116.3M, and adjusted EBITDA fell to $6.4M from $10.0M, reflecting weaker large U.S. advertiser budgets and higher redemptions .
  • U.S. revenue declined 19.9% YoY; Bridg revenue declined 12.7% YoY due to prior key account loss; MAUs were flat and ARPU down 16.7% YoY .
  • Under‑delivery of campaign budgets remains a drag into Q1, and Q1 guidance points to a trough quarter (billings −13% to −10% YoY) .

Financial Results

Sequential performance (Q2 → Q3 → Q4 2024)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$69.636 $67.057 $73.996
Billings ($USD Millions, non-GAAP)$110.389 $111.958 $116.279
Adjusted Contribution ($USD Millions, non-GAAP)$36.378 $36.382 $40.711
Gross Profit ($USD Millions)$28.717 $28.552 $32.732
Adjusted EBITDA ($USD Millions, non-GAAP)$(2.285) $(1.816) $6.398
Net Loss ($USD Millions, GAAP)$(4.257) $(145.182) $(15.590)
Diluted EPS (GAAP)$(0.09) $(2.90) $(0.31)
Adjusted Net Income (Loss) per diluted share (non-GAAP)$(0.15) $(0.15) $0.00

Year-over-year (Q4 2023 vs Q4 2024)

MetricQ4 2023Q4 2024YoY Change
Revenue ($USD Millions)$89.167 $73.996 (17.0%)
Billings ($USD Millions, non-GAAP)$131.947 $116.279 (11.9%)
Adjusted Contribution ($USD Millions, non-GAAP)$47.287 $40.711 (13.9%)
Adjusted EBITDA ($USD Millions, non-GAAP)$9.987 $6.398 $(3.6)M
Net Loss ($USD Millions, GAAP)$(100.838) $(15.590) +$85.248M (improvement)
Diluted EPS (GAAP)$(2.56) $(0.31) +$2.25 (improvement)

Margins

MetricQ4 2023Q4 2024
Adjusted Contribution % of Revenue53.0% 55.0%
Adjusted Contribution % of Billings35.8% 35.0%

Vs. Estimates

MetricQ4 2024 ActualConsensusSurprise
Revenue ($USD Millions)$73.996 N/AN/A
EPS (GAAP, $)$(0.31) N/AN/A

S&P Global consensus was unavailable today; comparisons to Wall Street estimates could not be completed. Values when provided are retrieved from S&P Global.*

Segment breakdown (Q4 2024 YoY)

SegmentYoY Change
U.S. Revenue(19.9%)
U.K. Revenue+27.2%
Bridg Revenue(12.7%)

KPIs

KPIQ2 2024Q3 2024Q4 2024
MAUs (Millions)165.5 166.4 167.3
ARPU ($)$0.42 $0.40 $0.44
Q4 YoY Change——MAUs (−0.4%), ARPU (−16.7%)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ActualChange
Billings ($M)Q4 2024$102.0–$108.0 $116.279 actual Beat
Revenue ($M)Q4 2024$62.0–$67.0 $73.996 actual Beat
Adjusted Contribution ($M)Q4 2024$33.0–$36.0 $40.711 actual Beat
Adjusted EBITDA ($M)Q4 2024$(5.0)–$(1.0) $6.398 actual Beat
Billings ($M)Q1 2025N/A$91.5–$94.5 New
Revenue ($M)Q1 2025N/A$57.0–$60.0 New
Adjusted Contribution ($M)Q1 2025N/A$30.0–$32.5 New
Adjusted EBITDA ($M)Q1 2025N/A$(7.5)–$(4.0) New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Delivery/performanceStrong advertiser demand but results challenged by slower billings growth and higher consumer incentives Focus on building a more performant network; beat guidance in Q3 Delivery within acceptable parameters; improved pacing and ROAS; sequential margin improvement (+3.7 pts rev/billings) Improving
Engagement-based pricingNot disclosed51% adoption baseline61% of U.S. advertisers on engagement-based pricing; aiming for vast majority in 2025 Rising adoption
Advertiser demand/churnStrong demand; high consumer engagement Reduction in a few key accounts; diversified content New brands signed; custom microtargeting; CPG pilots via Bridg product-level data Mixed to recovering
U.K. growth——Fourth consecutive quarter of double-digit revenue growth (+27.2%); highest quarter of rewards Accelerating
Bridg/RipplGrowth constraints noted —Healthy pipeline; positive growth expected to return as comps lap; >110M shopper profiles via Rippl Soft in 2024; improving H2 2025
Liquidity/Balance sheetBalance sheet supports investment Cash $66.988M; equity and debt actions Cash $65.6M; $60M undrawn LOC; >$100M liquidity; convertible interest ~$4M; SRS settlement nearing completion Stable/adequate

Management Commentary

  • CEO: “We exceeded the high end of our guidance across all metrics… Q1 will represent the billings trough of our transitional period. We are setting the stage for 2025 to be a transformative year” .
  • CEO on strategy: “Focused on strengthening our competitive moat… modernize our platform, enhance product and tech capabilities, and expand our network of partners and advertisers” .
  • CFO: “Revenue decreased 16% to $74.0 million… adjusted contribution margin was 55%, up 2.5 points… operating cash flow was positive $3 million; free cash flow negative $1.5 million” .
  • CFO on outlook: “We expect Q1 to represent the trough… adjusted EBITDA improving sequentially through the year and positive exiting 2025” .

Q&A Highlights

  • Delivery: Over‑delivery addressed; under‑delivery improving via tighter campaign controls, pacing, targeting, ad ranking, and conversion models; automation to reduce human intervention .
  • Incentives/margins: Revenue‑to‑billings expected to remain in low‑60% range as engagement rises and rewards are managed; supports margin stability under engagement‑based pricing .
  • Dosh wind‑down: No material P&L impact; non‑cash gain in Q1 for unwithdrawn balances; step improves focus and resource allocation .
  • New FI partners: Large U.S. FI fully ramped late Q1; neobank partnership launched, expected quick scale; not material to Q1 but ramps through 2025 .
  • OpEx: Expect sustained below $40M (ex‑SBC); normalize to mid‑high 30s after Q4 incentive comp reductions; Taiwan tech hub investment offsets non‑core pullbacks .
  • Macro: Signs of discretionary pullback (travel/restaurants) with everyday spend (grocery/multiline retail) strong; deal‑seeking consumers play to CLO strengths .
  • Renewals/partner share: Renewals ongoing; product roadmap tailored per FI needs; data/targeting models to improve redemption and perceived value .

Estimates Context

  • S&P Global consensus for Q4 2024 revenue and EPS was unavailable today, so formal “vs. estimates” comparison cannot be provided. Based on Q1 2025 guidance (billings down 13% to 10% YoY; adjusted EBITDA negative), near‑term Street models may lean lower on Q1, offset by management’s plan for sequential improvement and positive adjusted EBITDA exiting 2025 .
  • When available, comparisons will anchor on S&P Global Wall Street consensus. Values, when provided, are retrieved from S&P Global.*

Key Takeaways for Investors

  • Q4 delivered a significant beat vs. prior guidance across all major P&L metrics, driven by improved delivery and pipeline wins—a near‑term positive narrative shift .
  • Despite YoY declines, adjusted contribution margin expanded to 55% and sequential revenue‑to‑billings margin improved by 3.7 points—evidence of better rewards management and partner mix .
  • Management expects Q1 to be the trough (seasonal plus executional factors), with sequential adjusted EBITDA improvement and positive adjusted EBITDA exiting 2025—key medium‑term milestone .
  • Liquidity appears adequate (> $100M), with sufficient runway to invest and meet obligations, including the convertible note; watch upcoming FI renewals for partner share economics .
  • U.K. continues to be a growth engine (+27.2% YoY in Q4); scaling engagement‑based pricing (61% adoption) should enhance predictability and ROAS, supporting advertiser trust .
  • Bridg/Rippl: expect inflection ahead (lapping key account loss) and potential upside from CPG micro‑targeting pilots linking product‑level data to bank offers .
  • Trading lens: stock‑moving catalysts near term include execution on Q1 trough narrative, visibility on FI renewals, traction of new FI and neobank supply, and demonstrable gains in delivery and engagement‑based pricing conversion .