Cardlytics, Inc. ((CDLX)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Cardlytics, Inc. recently held its earnings call, revealing a mixed performance for the company. The call highlighted significant achievements such as expanding partnerships and maintaining strong consumer spending. However, challenges were also evident, including declines in billings and revenue, particularly within the travel category. The company’s strategic move to expand beyond financial institutions shows promise, yet macroeconomic uncertainties and a workforce reduction suggest a cautious outlook.
Strong Consumer Spending Rebound
Despite an initial softness in February, Cardlytics experienced a rebound in consumer spending in March, which continued to grow steadily in April. This growth was driven by increased spending in categories such as auto, home improvement, e-commerce, and apparel.
Successful Launch of Cardlytics Rewards Platform
Cardlytics marked a significant milestone by signing its first non-financial institution partner agreement with a leading digital sports platform for the Cardlytics Rewards Platform. This move signifies a substantial expansion beyond traditional financial institutions.
Expansion in the U.K. Market
The U.K. market saw an 8.6% revenue growth, fueled by higher billings and increased supply. Cardlytics successfully signed 15 new brands in categories like travel, entertainment, and restaurants, contributing to this growth.
High Engagement with Insights Portal
There was a notable 77% sequential increase in advertisers using the Insights portal in Q1. This engagement directly contributed to high-value renewals, showcasing the portal’s effectiveness in retaining advertisers.
Increased Supply and Engagement
Cardlytics launched with a new large financial institution partner and a neobank, experiencing strong engagement and high redemption rates, which are crucial for sustaining growth.
New Chief Business Officer
Rory Mitchell joined Cardlytics as the new Chief Business Officer, bringing over 15 years of experience in Commerce Media. His expertise is expected to drive further growth and innovation within the company.
Decline in Total Billings and Revenue
The company faced a 7.3% decrease in total billings to $97.6 million and an 8.4% decrease in revenue to $61.9 million. This decline was driven by lower top-line billings and a shift in the category mix of advertisers.
Reduced Travel Category Revenue
The travel category experienced a decline in revenue as budgets from a few key accounts shrank, contributing to the overall revenue decrease.
Adjusted EBITDA Loss
Cardlytics reported an adjusted EBITDA loss of $4.4 million, a decline of $4.6 million compared to the previous year, highlighting financial challenges the company is facing.
15% Workforce Reduction
In a bid to achieve $16 million in annualized savings, Cardlytics implemented a 15% reduction in its workforce, reflecting a strategic move to manage expenses amid economic uncertainties.
Non-renewal of Bank of America Agreement
Cardlytics announced it will not be renewing its current agreement with Bank of America. However, the company expects this decision to have a non-material impact on its operations.
Forward-Looking Guidance
Looking ahead, Cardlytics provided guidance for Q2 2025, projecting billings between $100 million and $108 million and revenue between $61 million and $67 million. The company also anticipates an adjusted contribution between $32.5 million and $36.5 million, with adjusted EBITDA ranging from negative $4 million to positive $1 million. Despite macroeconomic uncertainties, Cardlytics is focusing on diversifying supply, growing Bridg, and optimizing its network while maintaining disciplined expense management.
In summary, Cardlytics, Inc.’s earnings call reflected a mixed sentiment with both achievements and challenges. While the company is making strides in expanding partnerships and maintaining consumer spending, it faces hurdles such as declining billings and revenue. The forward-looking guidance indicates cautious optimism as Cardlytics navigates macroeconomic uncertainties and aims to leverage its data capabilities to support advertisers.