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What changed in Cardlytics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Cardlytics, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+367 added−377 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-14)

Top changes in Cardlytics, Inc.'s 2024 10-K

367 paragraphs added · 377 removed · 297 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe have revamped our new hire experience to a three day program that includes a more in depth training on all parts of the business, and includes an overview of our new operating model, performance management process, and we introduce all new hires to individual development planning. 10 Our use of equity compensation allows our employees to operate as owners and is a key component of our total rewards strategy to retain, motivate and attract the best talent.
Biggest changeOur use of equity compensation allows our employees to operate as owners and is an important component of our total rewards strategy to retain, motivate and attract the best talent. We encourage our employees to think and act like shareholders, and they are invested in our success.
We only target marketing against anonymized data and/or data that has undergone processing such that it is only linked to anonymized identifiers. Our privacy and security standards have also been designed to meet the requirements of, and safeguard the reputations of, our partners and marketers, many of which are large, multinational corporations.
We only target marketing against anonymized data or data that has undergone processing such that it is only linked to anonymized identifiers. Our privacy and security standards have also been designed to meet the requirements, and safeguard the reputations, of our partners and marketers, many of which are large, multinational corporations.
A critical part of our strategy involves a design focused on gathering data without collecting, maintaining or using sensitive personal data, such as social security numbers, credit card numbers, financial account information or medical records. Our platforms are designed so that we do not receive or have access to any PII from our FI partners.
A critical part of our strategy involves a design focused on gathering data without collecting, maintaining or using sensitive personal data, such as social security numbers, credit card numbers, financial account information or medical records. Our platforms are designed so that we do not receive or have access to any personal data from our FI partners.
Our analytics makes our data actionable, enabling us to develop insights that marketers and partners rely on to make more informed business decisions and create more meaningful customer connections. • Loyalty Tactics Beyond Loyalty Programs . The Bridg platform easily ingests POS data, allowing marketers to identify and reach previously unreachable customers.
Our analytics make our data actionable, enabling us to develop insights that marketers and partners rely on to make more informed business decisions and create more meaningful customer connections. • Loyalty Tactics Beyond Loyalty Programs . The Bridg platform easily ingests POS data, allowing marketers to identify and reach previously unreachable customers.
The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 11
The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
If we become more successful, we believe that competitors will be more likely to try to develop solutions and services that are similar to ours and that may infringe our proprietary rights. It may also be more likely that competitors or other third parties will claim that our platforms infringes their proprietary rights.
If we become more successful, we believe that competitors will be more likely to try to develop solutions and services that are similar to ours and that may infringe our proprietary rights. It may also be more likely that competitors or other third parties will claim that our platforms infringe their proprietary rights.
Agreements with Chase In May 2018, we entered into a Master Agreement and Schedule #1 to the Master Agreement (collectively, the "Master Agreement") with Chase, pursuant to which we provide Chase with access to the Cardlytics platform. Under the Master Agreement, we provide Chase with access to the Cardlytics platform through November 2025.
Agreements with Chase In May 2018, we entered into a Master Agreement and Schedule #1 to the Master Agreement (collectively, the "Master Agreement") with Chase, pursuant to which we provide Chase with access to the Cardlytics platform. Under the Master Agreement, we provide Chase with access to the Cardlytics platform through November 19, 2025.
We have registered, or are registering, the "Cardlytics," "Dosh", "Bridg" and "Rippl" names and logos in the U.S. and certain other countries.
We have registered, or are registering, the "Cardlytics," "Bridg" and "Rippl" names and logos in the U.S. and certain other countries.
We are generally the primary provider of native bank channel digital advertising to our FI partners. Our ability to connect and support multiple banks as a single vendor provides network scale that would otherwise be impossible for a single bank to achieve.
We are the primary provider of native bank channel digital advertising to many of our FI partners. Our ability to connect and support multiple banks as a single vendor provides network scale that would otherwise be impossible for a single bank to achieve.
We also partner with several of the largest bank processors and digital banking providers to help us reach customers of small and mid-sized FI partners. 4 The Bridg Platform The Bridg platform is a customer data platform that utilizes POS data from our merchant data partners, including product-level purchase data to enable marketers to perform analytics and targeted loyalty marketing.
We also partner with multiple bank processors and digital banking providers to help us reach customers of small and mid-sized FI partners. 4 The Bridg Platform The Bridg platform is a customer data platform that utilizes POS data from our merchant data partners, including product-level purchase data to enable marketers to perform analytics and targeted loyalty marketing.
In 2023, we launched an additional product offered through the Bridg platform, Rippl, a data and media network. This product is a unique solution that unlocks profitable retail media partnerships for regional grocers, brands, and consumer packaged goods companies by leveraging first-party customer data in order to strengthen targeting capability for retail media purposes.
In 2023, we launched an additional product offered through the Bridg platform, Rippl, our retail media network. This product is a unique solution that unlocks profitable retail media partnerships for regional grocers, brands, and consumer packaged goods companies by leveraging customer data in order to strengthen targeting capability for retail media purposes.
Our FI partner sales team helps drive adoption of our solution offerings and partners with FIs to develop curated content and enhancements to the user experience for FI partners’ customers to drive increased engagement with the Cardlytics Platform. 8 Competition The market for utilizing purchase intelligence to power marketing decisions is still emerging, and we believe we are one of the only companies that can provide purchase intelligence with the scale and the level of granularity that is equivalent to ours.
Our FI partner sales team helps drive adoption of our solution offerings and partners with FIs to develop curated content and enhancements to the user experience for FI partners' customers to drive increased engagement with the Cardlytics Platform. 8 Competition The market for utilizing purchase data to power marketing decisions is still emerging, and we believe we are one of the only companies that can utilize purchase data with the scale and the level of granularity that is equivalent to ours.
Bridg also enables marketers to measure the impact of their marketing. The Bridg platform's unique ability to identify, understand, and engage previously unreachable in-store customers is made possible through industry leading identity resolution, proprietary census of identity and characteristics, and unique strategic data partnerships.
Bridg also enables marketers to measure the impact of their marketing. The Bridg platform's unique ability to identify, understand, and engage previously unreachable in-store customers is made possible through industry leading identity resolution capabilities, a proprietary census of customers' identity and characteristics, and unique strategic data partnerships.
As of December 31, 2023, we had sixteen issued patents relating to our software. We cannot assure you that our patents will give us the protection that we seek or that any such patents will not be challenged, invalidated, or circumvented. Our patents may not provide sufficiently broad protection and may not be enforceable in actions against alleged infringements.
As of December 31, 2024, we had seventeen issued patents relating to our software. We cannot assure you that our patents will give us the protection that we seek or that any such patents will not be challenged, invalidated, or circumvented. Our patents may not provide sufficiently broad protection and may not be enforceable in actions against alleged infringements.
We have designed the Cardlytics platform to protect first-party data. Our proprietary, distributed architecture helps facilitate both the effective delivery of our solution and the protection of our FI partners' customers' PII. No PII is shared by FI partners with Cardlytics and the data received from FI partners is anonymized and cannot be associated with any known individual.
We have designed the Cardlytics platform to protect our data. Our proprietary, distributed architecture helps facilitate both the effective delivery of our solution and the protection of our FI partners' customers' personal data. No personal data is shared by FI partners with Cardlytics and the data received from FI partners is anonymized and cannot be associated with any known individual.
Our purchase intelligence, coupled with our access to customers using our and our partners' digital channels, enables us to help solve fundamental problems for marketers. Marketers increasingly have access to data on the purchase behavior of their customers in their own stores, websites and loyalty programs.
Our data capabilities, coupled with our access to customers using our partners' digital channels, enable us to help solve fundamental problems for marketers. Marketers increasingly have access to data on the purchase behavior of their customers in their own stores, websites and loyalty programs.
Since we are able to measure the impact marketing campaigns have on in-store and online sales, marketers can use our purchase intelligence to optimize their advertising efforts with new or increased investment in the Cardlytics and Bridg platforms.
Since we are able to measure the impact marketing campaigns have on in-store and online sales, marketers can use our data capabilities to optimize their advertising efforts with new or increased investment in the Cardlytics and Bridg platforms.
We provide compelling return on advertising spend due to our ability to influence likely buyers, which we demonstrate through our insights into consumer purchase data. This allows us to serve marketers at scale across a variety of industries, including retail, restaurant, travel and entertainment, direct-to-consumer, and grocery and gas.
We provide compelling return on advertising spend due to our ability to influence likely buyers, which we demonstrate through our insights into consumer purchase data. This allows us to serve marketers at scale across a variety of industries, including everyday spend, specialty retail, restaurant, travel and entertainment.
During 2023, the Cardlytics platform analyzed approximatel y $4.7 trillion in purchases across all categories and geographies, both online and in-store. We have access to purchase data on the Cardlytics platform in the form of credit, debit, ACH and bill pay transactions. We provide marketers with the opportunity to leverage this unique data set to precisely reach millions of consumers.
During 2024, the Cardlytics platform analyzed approximatel y $5.8 trillion in purchases across all categories and geographies, both online and in-store. We have access to purchase data on the Cardlytics platform in the form of credit, debit, ACH and bill pay transactions. We provide marketers with the opportunity to leverage this unique data set to precisely reach millions of consumers.
The Cardlytics platform enables marketers to reach consumers in a secure, brand-safe, and digitally engaging environment, at a time when they are thinking about their finances. We have access to consumers through both online and mobile channels and are increasingly reaching them through various other channels, including emails and real-time notifications. • Massive Reach Informed by Purchase Intelligence .
The Cardlytics platform enables marketers to reach consumers in a secure, brand-safe, and digitally engaging environment, at a time when they are thinking about their finances. We have access to consumers through both online and mobile channels and are increasingly reaching them through various other channels, including emails and real-time notifications. • Massive Data Set and Reach .
By applying advanced analytics to the purchase data we receive, we make it actionable, helping marketers reach potential buyers at scale and measure the true sales impact of their marketing spend. We have strong relationships with leading marketers across a variety of industries, including retail, restaurant, travel and entertainment, direct-to-consumer, and grocery and gas.
By applying advanced analytics to the purchase data we receive, we make it actionable, helping marketers reach potential buyers at scale and measure the true sales impact of their marketing spend. We have strong relationships with leading marketers across a variety of industries, including everyday spend, specialty retail, restaurant, travel and entertainment.
The data provided by the FI partner is anonymized so that it cannot be associated with any one individual. In the U.S., the Cardlytics platform ingests approximately one in every two debit and credit card transactions. This data allows us to serve relevant advertisements to our FI partners’ customers through our native bank advertising channel.
The data provided by the FI partner is anonymized so that it cannot be associated with any one individual. In the U.S., the Cardlytics platform ingests approximately one in every two debit and credit card transactions. This data allows us to serve relevant advertisements to our FI partners' customers through our financial media network.
Our marketing efforts are focused on increasing brand awareness for Cardlytics and Bridg through partnerships, public relations, industry events and publications. We have dedicated sales teams responsible for establishing relationships with marketers and their agencies. Our sales teams are organized by industry, which include retail, restaurant, travel and entertainment, direct-to-consumer, grocery and gas.
Our marketing efforts are focused on increasing brand awareness for Cardlytics and Bridg through partnerships, public relations, industry events and publications. We have dedicated sales teams responsible for establishing relationships with marketers and their agencies. Our sales teams are organized by industry, which include everyday spend, specialty retail, restaurant, travel and entertainment.
We believe that we compete favorably with respect to these factors and that we are well positioned as a leading provider and innovator of purchase intelligence. The Bridg platform competes with other companies that operate enterprise customer data platforms.
We believe that we compete favorably with respect to these factors and that we are well positioned as a leading provider and innovator in our industry. The Bridg platform competes with other companies that operate enterprise customer data platforms.
We also operate a customer data platform that utilizes point-of-sale ("POS") data, including product-level purchase data, to enable marketers to perform analytics and targeted loyalty marketing and also measure the impact of their marketing (the "Bridg platform").
Additionally, we operate an identity resolution platform that utilizes point-of-sale ("POS") data, including product-level purchase data, to enable marketers to perform analytics and targeted loyalty marketing and also measure the impact of their marketing (the "Bridg platform").
Today, our FI partners include Bank of America, National Association ("Bank of America"), JPMorgan Chase Bank, National Association (“Chase”) and Wells Fargo Bank, National Association ("Wells Fargo"), as well as many other national and regional financial institutions, financial technology companies and virtual-only banks.
Today, our FI partners include Bank of America, National Association ("Bank of America"), JPMorgan Chase Bank, National Association ("Chase"), Wells Fargo Bank, National Association ("Wells Fargo"), and American Express Travel Related Services Company, Inc. ("American Express"), as well as many other national and regional financial institutions, financial technology companies and virtual-only banks.
In the future, we may face greater competition from other bank service providers, online retailers, credit card companies, digital publishers and mobile pay providers with access to a substantial amount of consumer purchase data.
In the future, we may face greater competition from other bank service providers, online retailers, credit card companies, digital publishers, mobile pay providers with access to a substantial amount of consumer purchase data, and our FI partners that have introduced, or may in the future introduce, competitive solutions.
Employees As of December 31, 2023, we had 434 full-time employees, including 60 in delivery, 159 in sales and marketing, 148 in research and development and 67 in general and administrative. None of our employees are covered by collective bargaining agreements. We believe our employee relations are good, and we have not experienced any work stoppages.
Employees As of December 31, 2024, we had 454 full-time employees, including 61 in delivery, 162 in sales and marketing, 155 in research and development and 76 in general and administrative. None of our employees are covered by collective bargaining agreements. We believe our employee relations are good, and we have not experienced any work stoppages.
We also leverage the power of purchase intelligence to provide marketers utilizing the Cardlytics platform with valuable insights into the preferences of their actual or potential customers wherever they shop.
We also leverage the power of our data to provide marketers utilizing our financial media network with valuable insights into the preferences of their actual or potential customers wherever they shop.
With the Bridg platform, we enable marketers to leverage their own POS data and reach their customers across a wide variety of digital advertising channels that they would not otherwise be able to identify and reach. Marketers are also challenged to measure the performance of their marketing.
With the Bridg platform, we enable marketers to leverage their own POS data and reach their customers across a wide variety of digital advertising channels that they would not otherwise be able to identify and reach, or to reach customers based on their product-level past purchases.
We believe our platforms transform purchase data into purchase intelligence, creating a disruptive opportunity to comprehensively address these challenges by enabling marketers to precisely measure how marketing drives both in-store and online sales through "closed loop-measurement." Solutions The Cardlytics Platform Through the Cardlytics platform, marketers can deliver advertising content to customers that allows them to earn rewards, which are funded with a portion of the fees we collect from marketers.
Marketers are also challenged to measure the performance of their marketing, and our financial media network addresses these challenges by enabling marketers to precisely measure how marketing drives both in-store and online sales through "closed loop-measurement." Solutions The Cardlytics Platform Through the Cardlytics platform, our financial media network, marketers can deliver advertising content to customers that allows them to earn rewards, which are funded with a portion of the fees we collect from marketers.
Purchase Intelligence Purchase Data from our FI Partners Purchase data from our FI partners provides a secure view into where and when consumers are spending their money. The Cardlytics platform aggregates and analyzes purchase data without any personally identifiable information ("PII") leaving the FI partnersor otherwise being made available to us.
Data and Analytics Purchase Data from our FI Partners Purchase data from our FI partners provides a secure view into where and when consumers are spending their money. Our financial media network aggregates and analyzes purchase data without any personal data leaving the FI partners or otherwise being made available to us.
Our advanced analytics capabilities are what transforms our unique purchase dataset into valuable purchase intelligence. We use sophisticated quantitative methods to quickly access our massive volumes of data and make sense of what has happened—and, importantly, what is likely to happen.
We use sophisticated quantitative methods to quickly access our massive volumes of data and make sense of what has happened—and, importantly, what is likely to happen.
Bank of America has the right to approve all offers to be presented to Bank of America customers on the Cardlytics platform. Bank of America may terminate the GSA at any time upon 90 days’ written notice. The GSA will automatically renew for 12-month periods thereafter, unless terminated earlier in accordance with the terms of the GSA.
Bank of America has the right to approve all offers to be presented to Bank of America customers on the Cardlytics platform. Bank of America may terminate the GSA at any time upon 90 days' written notice. The GSA will automatically renew on a monthly basis, unless terminated by either party upon 90 days' written notice.
Corporate Information Cardlytics, Inc. was initially incorporated under the laws of the State of Delaware in June 2008. Our principal executive offices are located at 675 Ponce de Leon Avenue NE, Suite 4100, Atlanta, Georgia 30308. Our telephone number is (888) 798-5802. Our website address is www.cardlytics.com.
Our principal executive offices are located at 675 Ponce de Leon Avenue NE, Suite 4100, Atlanta, Georgia 30308. Our telephone number is (888) 798-5802. Our website address is www.cardlytics.com.
We also license software from third parties for integration into our offerings, including open-source software and other software made available on commercially reasonable terms. We cannot assure you that such third parties will maintain such software or continue to make it available.
We also license software from third parties for integration into our offerings, including open-source software and other software made available on commercially reasonable terms.
Despite our efforts to protect our proprietary technology and trade secrets, unauthorized parties may attempt to misappropriate, reverse engineer or otherwise obtain and use them. In addition, others may independently discover our trade secrets, which would prevent us from being able to assert trade secret rights or develop similar technologies and processes.
In addition, others may independently discover our trade secrets, which would prevent us from being able to assert trade secret rights or develop similar technologies and processes.
We also intend to grow our business with new marketers in newer industry verticals such as travel and entertainment, direct-to-consumer, and grocery and gas. We also intend to continue growing the footprint of the Bridg platform through both new and existing merchant data partners. • Continue to Realize Synergies between the Cardlytics and Bridg Platforms.
We also intend to continue growing the footprint of the Bridg platform through both new and existing merchant data partners. • Continue to Realize Synergies between the Cardlytics and Bridg Platforms.
Headquartered in Atlanta, GA with additional offices in New York, NY; Menlo Park, CA; Los Angeles, CA; Champaign, IL and London, U.K, our employees are an essential part of all of our successes. Diversity, Equity, Inclusion, and Belonging ("DEIB") is integrated in everything we do.
Headquartered in Atlanta, GA with additional offices in New York, NY; Menlo Park, CA; Los Angeles, CA; Champaign, IL and London, U.K., our employees are an essential part of all of our successes. As of December 31, 2024, our global workforce is made up of approximately 42% women and 45% people of color.
Our analytics make our data actionable, enabling us to develop insights that marketers and partners rely on to make more informed business decisions and create more meaningful customer connections.
Advanced Analytics Capabilities We use sophisticated quantitative methods to quickly access our massive volumes of data and make sense of past customer spend—and, importantly, predict future customer spend. Our analytics make our data actionable, enabling us to develop insights that marketers and partners rely on to make more informed business decisions and create more meaningful customer connections.
Each year, with the help of outside experts, we evaluate each aspect of compensation and benefits to ensure they are in alignment with the market and our peers. As a purpose-driven company, we are focused on creating undeniable impact for partners while delivering real value to people, and our values reflect what drives our success.
As a purpose-driven company, we are focused on creating undeniable impact for partners while delivering real value to people, and our values reflect what drives our success. Our people and culture are our most valuable assets and greatest differentiators.
Our people and culture are our most valuable assets and greatest differentiators. We prioritize growth over comfort, place our customers and partners first, act with urgency and focus, ensure integrity with our partners and data, hold ourselves accountable even when challenged, and value empowerment over hierarchy.
We prioritize growth over comfort, place our customers and partners first, act with urgency and focus, ensure integrity with our partners and data, hold ourselves accountable even when challenged, and value empowerment over hierarchy. 10 Corporate Information Cardlytics, Inc. was initially incorporated under the laws of the State of Delaware in June 2008.
ITEM 1. BUSINESS Overview Our company's mission is to make commerce smarter and rewarding for everyone. We work to accomplish this mission by operating an advertising platform within our own and our partners' digital channels, which includes online, mobile applications, email and various real-time notifications (the "Cardlytics platform").
ITEM 1. BUSINESS Overview We operate a commerce media platform that is designed to make commerce smarter and rewarding for everyone. At the core of our commerce media platform is the financial media network that we run within our partners' digital channels, which includes online and mobile applications (the "Cardlytics platform").
We encourage our employees to think and act like shareholders, and they are invested in our success. Employee equity is the cornerstone in our compensation philosophy along with comprehensive medical benefits, a positive work/life ratio, flexible paid time off, health and wellness programs, and learning and development opportunities.
Additionally, we offer comprehensive medical benefits, a positive work/life ratio, flexible paid time off, health and wellness programs, and learning and development opportunities. Each year, with the help of outside experts, we evaluate each aspect of compensation and benefits to ensure they are in alignment with the market and our peers.
We are the registered holder of a variety of domestic and international domain names that include cardlytics.com, dosh.com, bridg.com, and similar variations on those names. 9 In order to protect our unpatented proprietary technologies and processes, we rely on trade secret laws and confidentiality agreements with our employees, consultants, financial institution partners, marketers, vendors and others.
In order to protect our unpatented proprietary technologies and processes, we rely on trade secret laws and confidentiality agreements with our employees, consultants, financial institution partners, marketers, vendors and others. Despite our efforts to protect our proprietary technology and trade secrets, unauthorized parties may attempt to misappropriate, reverse engineer or otherwise obtain and use them.
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This issue is particularly acute with respect to measuring the impact of marketing on in-store sales, where the vast majority of consumer spending occurs.
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We cannot assure you that such third parties will maintain such software or continue to make it available. 9 We are the registered holder of a variety of domestic and international domain names that include cardlytics.com, dosh.com, bridg.com, and similar variations on those names.
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Advanced Analytics Capabilities The advanced analytics we apply to our unique purchase datasets are what transform them into valuable purchase intelligence. We use sophisticated quantitative methods to quickly access our massive volumes of data and make sense of past customer spend—and, importantly, predict future customer spend.
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A significant part of our company’s goal of creating a culture that promotes DEIB is embedded in each aspect of the talent lifecycle: attraction, recruitment, onboarding, development and retention. We build external relationships to ensure our talent pipelines are filled with candidates of diverse backgrounds. At the foundation of our DEIB focus is our employee-led Special Interest Groups ("SIGs").
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These groups facilitate learning and development, holistic wellness, professional connections, philanthropy, and raising awareness internally and externally for meaningful causes. Each group is sponsored by senior leaders in the organization. Cardlytics Connect, our newest SIG, focuses on our Black and Hispanic employees across the globe.
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As of December 31, 2023, our global workforce is made up of approximately 41% women and 44% people of color. A key component to our sustainability and success is talent development and learning. We are intentional in our efforts to provide all employees opportunities to grow, including manager development programming, which over 50 managers completed since the launch in 2022.
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Additionally, we have introduced initiatives to give all employees access to learning content providers. In 2023, our technical teams consumed over 75 hours of video content, read over 30,000 book pages, and participated in over 150 hours of live training.
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The addition of a second content library for all employees gives us access to over 100 business and soft skill courses, which we are using to build learning pathways to support career journeys. Our Educational Assistance program is helping several employees gain master’s degrees, professional certifications and professional development experiences.
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Our student loan reimbursement program helps employees pay down their loans.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe, our FI partners, our marketers and other third parties whom we rely upon are subject to a number of data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy policies, contractual requirements, and other obligations relating to data privacy and security as well as laws and regulations regarding online services and the Internet generally. 29 In the U.S., the rules and regulations to which we, directly or contractually through our partners, or our marketers may be subject, include but are not limited to those promulgated under the authority of the Federal Trade Commission, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the Health Insurance Portability and Accountability Act, the Gramm-Leach-Bliley Act and state cybersecurity, privacy and breach notification laws, as well as regulator enforcement positions and expectations reflected in federal and state regulatory actions, settlements, consent decrees and guidance documents.
Biggest changeIn the U.S., the rules and regulations to which we, directly or contractually through our partners, or our marketers are or may be subject, include but are not limited to those promulgated under the authority of the Federal Trade Commission, the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, the Health Insurance Portability and Accountability Act, the Gramm-Leach-Bliley Act and state cybersecurity, privacy and breach notification laws, as well as regulator enforcement positions and expectations reflected in federal and state regulatory actions, settlements, consent decrees and guidance documents.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: 34 • authorize our board of directors to issue preferred stock without further stockholder action and with voting liquidation, dividend and other rights superior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent, and limit the ability of our stockholders to call special meetings; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for director nominees; • establish that our board of directors is divided into three classes, with directors in each class serving three-year staggered terms; • require the approval of holders of two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or amend or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors and the ability of stockholders to take action by written consent or call a special meeting; • prohibit cumulative voting in the election of directors; and • provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our Board of Directors to issue preferred stock without further stockholder action and with voting liquidation, dividend and other rights superior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent, and limit the ability of our stockholders to call special meetings; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for director nominees; • establish that our Board of Directors is divided into three classes, with directors in each class serving three-year staggered terms; • require the approval of holders of two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our amended and restated bylaws or amend or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors and the ability of stockholders to take action by written consent or call a special meeting; • prohibit cumulative voting in the election of directors; and • provide that vacancies on our Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum.
Our ability to collect and use data may be restricted or prevented by a number of other factors, including: • the failure of our network or software systems, or the network or software systems of our partners; • decisions by our partners to restrict our ability to collect data from them (which decision they may be able to make at their discretion) or to refuse to implement the mechanisms that we request to ensure compliance with our technical requirements or legal obligations; • decisions by our partners to limit our ability to use their purchase data outside of the applicable banking channel; • decisions by our partners' customers to opt out of the incentive program or to use technology that reduces our ability to deliver relevant advertisements; • interruptions, failures or defects in our or our partners' data collection, mining, analysis and storage systems; • changes in regulations impacting the collection and use of data; • changes in browser or device functionality and settings, and other new technologies, which impact our partners’ ability to collect and/or share data about their customers; and • changes in international laws, rules, regulations and industry standards or increased enforcement of international laws, rules, regulations, and industry standards.
Our ability to collect and use data may be restricted or prevented by a number of other factors, including: • the failure of our network or software systems, or the network or software systems of our partners; • decisions by our partners to restrict our ability to collect data from them (which decision they may be able to make at their discretion) or to refuse to implement the mechanisms that we request to ensure compliance with our technical requirements or legal obligations; • decisions by our partners to limit our ability to use their purchase data outside of the applicable banking channel; • decisions by our partners' customers to opt out of the incentive program or to use technology that reduces our ability to deliver relevant advertisements; • interruptions, failures or defects in our or our partners' data collection, mining, analysis and storage systems; • changes in regulations impacting the collection and use of data; 20 • changes in browser or device functionality and settings, and other new technologies, which impact our partners' ability to collect and/or share data about their customers; and • changes in international laws, rules, regulations and industry standards or increased enforcement of international laws, rules, regulations, and industry standards.
Acquisitions involve many risks, including the following: • an acquisition may negatively affect our business, financial condition, operating results or cash flows because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel or operations of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us; • an acquisition, whether or not consummated, may disrupt our ongoing business, divert resources, increase our expenses and distract our management; • an acquisition may result in a delay or reduction of purchases for both us and the company that we acquired due to uncertainty about continuity and effectiveness of solution from either company; • we may encounter difficulties in, or may be unable to, successfully sell any acquired products or solutions; • an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • challenges inherent in effectively managing an increased number of employees in diverse locations; • potential strain on our financial and managerial controls and reporting systems and procedures; • potential known and unknown liabilities associated with an acquired company; • our use of cash to pay for acquisitions would limit other potential uses for our cash; 25 • if we incur debt to fund such acquisitions, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; • the risk of impairment charges related to potential write-downs of acquired assets or goodwill in future acquisitions; and • to the extent that we issue a significant amount of equity or convertible debt securities in connection with future acquisitions, existing stockholders may be diluted and earnings (loss) per share may decrease (increase).
Acquisitions involve many risks, including the following: • an acquisition may negatively affect our business, financial condition, operating results or cash flows because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel or operations of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us; • an acquisition, whether or not consummated, may disrupt our ongoing business, divert resources, increase our expenses and distract our management; • an acquisition may result in a delay or reduction of purchases for both us and the company that we acquired due to uncertainty about continuity and effectiveness of solution from either company; 24 • we may encounter difficulties in, or may be unable to, successfully sell any acquired products or solutions; • an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • challenges inherent in effectively managing an increased number of employees in diverse locations; • potential strain on our financial and managerial controls and reporting systems and procedures; • potential known and unknown liabilities associated with an acquired company; • our use of cash to pay for acquisitions would limit other potential uses for our cash; • if we incur debt to fund such acquisitions, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; • the risk of impairment charges related to potential write-downs of acquired assets or goodwill in future acquisitions; and • to the extent that we issue a significant amount of equity or convertible debt securities in connection with future acquisitions, existing stockholders may be diluted and earnings (loss) per share may decrease (increase).
If there is no lawful manner for us to transfer personal data from the EEA, the U.K., or other jurisdictions to the U.S., or if the requirements for a legally compliant transfer are 30 too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
If there is no lawful manner for us to transfer personal data from the EEA, the U.K., or other jurisdictions to the U.S., or if the requirements for a legally compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
Further, we could expend significant financial and operational resources to protect against or in response to a security incident, including repairing system damage, increasing cybersecurity protection costs by deploying additional personnel and protection 16 technologies, dealing with regulatory scrutiny, and litigating and resolving legal claims, all of which could divert resources and the attention of our management and key personnel away from our business operations.
Further, we could expend significant financial and operational resources to protect against or in response to a security incident, including repairing system damage, increasing cybersecurity protection costs by deploying additional personnel and protection technologies, dealing with regulatory scrutiny, and litigating and resolving legal claims, all of which could divert resources and the attention of our management and key personnel away from our business operations.
Our success in expanding sales of our solutions to marketers in new industries will depend on a variety of factors, including our ability to: • tailor our solutions so that they that are attractive to businesses in such industries; • hire personnel with relevant industry experience to lead sales and services teams; and • develop sufficient expertise in such industries so that we can provide effective and meaningful marketing programs and analytics.
Our success in expanding sales of our solutions to marketers in new industries will depend on a variety of factors, including our ability to: 14 • tailor our solutions so that they that are attractive to businesses in such industries; • hire personnel with relevant industry experience to lead sales and services teams; and • develop sufficient expertise in such industries so that we can provide effective and meaningful marketing programs and analytics.
Seasonality could have a material impact on our revenue, operating results, cash flow from operations and other key performance metrics from period to period. Our corporate culture has contributed to our success, and if we cannot maintain it as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be harmed.
Seasonality could have a material impact on our revenue, operating results, cash flow from operations and other key performance metrics from period to period. 21 Our corporate culture has contributed to our success, and if we cannot maintain it as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be harmed.
For all of these reasons, we may not be able to compete successfully against our current or future competitors. 20 If we fail to identify and respond effectively to rapidly changing technology and industry needs, our solutions may become less competitive or obsolete. Our future success depends on our ability to adapt and innovate.
For all of these reasons, we may not be able to compete successfully against our current or future competitors. If we fail to identify and respond effectively to rapidly changing technology and industry needs, our solutions may become less competitive or obsolete. Our future success depends on our ability to adapt and innovate.
Although we may in the future decide to undertake foreign exchange hedging transactions to cover a portion of our foreign currency exchange exposure, we currently do not hedge our exposure to foreign currency exchange risks. 24 Our ability to use net operating losses and certain other tax attributes to offset future taxable income may be limited.
Although we may in the future decide to undertake foreign exchange hedging transactions to cover a portion of our foreign currency exchange exposure, we currently do not hedge our exposure to foreign currency exchange risks. Our ability to use net operating losses and certain other tax attributes to offset future taxable income may be limited.
A change in these principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change. Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism.
A change in these principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change. 35 Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism.
No other partner accounted for over 10% of Partner Share during these periods. Our agreements with a substantial majority of our FI partners have three- to seven-year terms but are generally terminable by the FI partner on 90 days or more prior notice.
No other partner accounted for over 10% of Partner Share during these periods. 13 Our agreements with a substantial majority of our FI partners have three- to seven-year terms, but are generally terminable by the FI partner on 90 days or more prior notice.
Our ability to refinance any future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
Our ability to refinance any existing or future indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
An adverse outcome of a dispute may require us to: • pay substantial damages, including treble damages, if we are found to have willfully infringed a third party's patents or copyrights; • cease developing or selling solutions that rely on technology that is alleged to infringe or misappropriate the intellectual property of others; 32 • expend additional development resources to attempt to redesign our solutions or otherwise develop non-infringing technology, which may not be successful; • enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies or intellectual property rights; and • indemnify our partners and other third parties.
An adverse outcome of a dispute may require us to: • pay substantial damages, including treble damages, if we are found to have willfully infringed a third party's patents or copyrights; • cease developing or selling solutions that rely on technology that is alleged to infringe or misappropriate the intellectual property of others; 31 • expend additional development resources to attempt to redesign our solutions or otherwise develop non-infringing technology, which may not be successful; • enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies or intellectual property rights; and • indemnify our partners and other third parties.
Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a 15 variety of sources, including traditional computer "hackers," threat actors, "hacktivists," organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.
Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer "hackers," threat actors, "hacktivists," organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.
Our ability to achieve significant revenue growth will depend, in large part, on our success in recruiting, training, integrating and retaining sufficient numbers of sales personnel to support our growth. New hires require significant training, and it may take significant time before they achieve full productivity.
Our ability to achieve significant revenue growth will depend, in large part, on our success in recruiting, training, integrating and retaining sufficient numbers of sales personnel to support our revenue goals. New hires require significant training, and it may take significant time before they achieve full productivity.
Failure to manage our future growth effectively could cause our business to suffer, which, in turn, could have an adverse impact on our business, financial condition and operating results. If currency exchange rates fluctuate substantially in the future, the results of our operations could be adversely affected.
Failure to manage our future growth effectively could cause our business to suffer, which, in turn, could have an adverse impact on our business, financial condition and operating results. 23 If currency exchange rates fluctuate substantially in the future, the results of our operations could be adversely affected.
Any such error, failure, malfunction, disruption or delay could result in damage to our reputation and could harm our business, financial condition and operating results. 21 Significant system disruptions, loss of data center capacity, or changes to our data hosting solutions could adversely affect our business, financial condition and operating results.
Any such error, failure, malfunction, disruption or delay could result in damage to our reputation and could harm our business, financial condition and operating results. Significant system disruptions, loss of data center capacity, or changes to our data hosting solutions could adversely affect our business, financial condition and operating results.
Our employees and personnel may use generative AI technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating generative AI.
Our employees and personnel use generative AI technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating generative AI.
Our stock price could also be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism. 36 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Our stock price could also be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Our international operations subject us to a variety of risks and challenges, including: • localization of our solutions, including adaptation for local practices; • increased management, travel, infrastructure and legal and compliance costs associated with having international operations; • fluctuations in currency exchange rates and related effects on our operating results; • longer payment cycles and difficulties in collecting accounts receivable or satisfying revenue recognition criteria; • increased financial accounting and reporting burdens and complexities; • general economic conditions in each country or region, including inflationary pressure; • the global economic uncertainty and financial market conditions; • reduction in billings associated with the U.K as well as issues related to foreign currency exchange rates and trade with the,U.K.; • contractual and legislative restrictions or changes; • economic uncertainty around the world; 23 • compliance with foreign laws and regulations and the risks and costs of non-compliance with such laws and regulations; • compliance with applicable laws and regulations for foreign operations, including the Foreign Corrupt Practices Act, the U.K.
Our international operations subject us to a variety of risks and challenges, including: • localization of our solutions, including adaptation for local practices; • increased management, travel, infrastructure and legal and compliance costs associated with having international operations; 22 • fluctuations in currency exchange rates and related effects on our operating results; • longer payment cycles and difficulties in collecting accounts receivable or satisfying revenue recognition criteria; • increased financial accounting and reporting burdens and complexities; • general economic conditions in each country or region, including inflationary pressure; • the global economic uncertainty and financial market conditions; • reduction in billings associated with the U.K. as well as issues related to foreign currency exchange rates and trade with foreign jurisdictions; • contractual and legislative restrictions or changes; • economic uncertainty around the world; • compliance with foreign laws and regulations and the risks and costs of non-compliance with such laws and regulations; • compliance with applicable laws and regulations for foreign operations, including the Foreign Corrupt Practices Act, the U.K.
If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
If one or more holders elect to convert their Notes, as applicable, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
If we are unable to maintain consistent revenue, revenue growth or billings growth, our stock price could be volatile, and it may be difficult for us to achieve and maintain profitability. We are dependent upon the Cardlytics platform. The majority of our revenue and billings during 2023 and 2022 were derived from sales of advertising via the Cardlytics platform.
If we are unable to maintain consistent revenue, revenue growth or billings growth, our stock price could be volatile, and it may be difficult for us to achieve and maintain profitability. We are dependent upon the Cardlytics platform. The majority of our revenue and billings during 2024 and 2023 were derived from sales of advertising via the Cardlytics platform.
A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness.
A default under an indenture or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness.
Changes in export or import laws or corresponding sanctions may delay the introduction and sale of our products in international markets, or, in some cases, prevent the export or import of our products to certain countries, regions, governments, persons or entities altogether, which could adversely affect our business, financial condition and 33 results of operations.
Changes in export or import laws or corresponding sanctions may delay the introduction and sale of our products in international markets, or, in some cases, prevent the export or import of our products to certain 32 countries, regions, governments, persons or entities altogether, which could adversely affect our business, financial condition and results of operations.
Any of these factors could harm our business, results of operations, and financial condition. In addition, if we incur additional indebtedness, the risks related to our business and our ability to service or repay our indebtedness would increase. The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and results of operations.
Any of these factors could harm our business, results of operations, and financial condition. In addition, if we incur additional indebtedness, the risks related to our business and our ability to service or repay our indebtedness would increase. The conditional conversion feature of either series of Notes, if triggered, may adversely affect our financial condition and results of operations.
Factors that may impact our quarterly operating results include the factors set forth in this "Risk Factors" section, as well as the following: • our ability to attract and retain marketers and partners; • the amount and timing of revenue, operating costs and capital expenditures related to the operations and expansion of our business, particularly with respect to our efforts to attract new marketers and partners to our network; • the revenue mix revenue generated from our operations in the U.S. and U.K.; • the revenue mix generated from the operations of Cardlytics and its subsidiaries; 12 • decisions made by our FI partners to increase Consumer Incentives or use their Partner Share to fund their Consumer Incentives; • changes in the economic prospects of marketers, the industries that we primarily serve, or the economy generally, which could alter marketers' spending priorities or budgets; • the termination or alteration of relationships with our partners in a manner that impacts ongoing or future marketing campaigns; • reputational harm; • the amount and timing of expenses required to grow our business, including the timing of our payments of Partner Share and Partner Share commitments as compared to the timing of our receipt of payments from our marketers; • changes in demand for our solutions or similar solutions; • seasonal trends in the marketing industry; • competitive market position, including changes in the pricing policies of our competitors; • exposure related to our international operations and foreign currency exchange rates; • quarantine, private travel limitation, or business disruption in regions affecting our operations, stemming from actual, imminent or perceived outbreak of contagious disease; • other events or factors, including those resulting from war, such as hostilities between Russia and Ukraine, and the current armed conflict in the Middle East, and incidents of terrorism; • expenses associated with items such as litigation, regulatory changes, cyberattacks or security breaches; • the introduction of new technologies, products or solution offerings by competitors; and • costs related to acquisitions of other businesses or technologies.
Factors that may impact our quarterly operating results include the factors set forth in this "Risk Factors" section, as well as the following: • our ability to attract and retain marketers and partners; • the amount and timing of revenue, operating costs and capital expenditures related to the operations and expansion of our business, particularly with respect to our efforts to attract new marketers and partners to our network; • the revenue mix generated from our operations in the U.S. and U.K.; • the revenue mix generated from the operations of Cardlytics and its subsidiaries; • decisions made by our FI partners to increase Consumer Incentives or use their Partner Share to fund their Consumer Incentives; • decisions made by our FI partners to not allow certain offers to appear in some or all of their channels; • changes in the economic prospects of marketers, the industries that we primarily serve, or the economy generally, which could alter marketers' spending priorities or budgets; • the termination or alteration of relationships with our partners in a manner that impacts ongoing or future marketing campaigns; • reputational harm; • the amount and timing of expenses required to grow our business, including the timing of our payments of Partner Share and Partner Share commitments as compared to the timing of our receipt of payments from our marketers; • changes in demand for our solutions or similar solutions; • seasonal trends in the marketing industry; • competitive market position, including changes in the pricing policies of our competitors; • exposure related to our international operations and foreign currency exchange rates; • quarantine, private travel limitation, or business disruption in regions affecting our operations, stemming from actual, imminent or perceived outbreak of contagious disease; • other events or factors, including those resulting from war, such as hostilities between Russia and Ukraine, and the current armed conflict in the Middle East, and incidents of terrorism; • expenses associated with items such as litigation, regulatory changes, cyberattacks or security breaches; • the introduction of new technologies, products or solution offerings by competitors; and • costs related to acquisitions of other businesses or technologies.
To the extent that our partners de-emphasize incentive programs, make incentive programs difficult to locate on their website or mobile applications or fail to provide a user interface that is appealing to partners' customers, partners' customers may be less likely to engage with the incentive programs, which could negatively impact the amount of fees that we are able to charge our marketer customers in connection with marketing campaigns, and, therefore, our revenue.
To the extent that our partners de-emphasize incentive programs or our offers that appear on these programs, make incentive programs difficult to locate on their website or mobile applications or fail to provide a user interface that is appealing to partners' customers, partners' customers may be less likely to engage with the incentive programs or our offers that appear on these programs, which could negatively impact the amount of fees that we are able to charge our marketer customers in connection with marketing campaigns, and, therefore, our revenue.
We may not be able to maintain year-over-year revenue and billings growth in the near term or at all, and you should not consider our revenue and billings growth in any specific historical periods as indicative of our future performance.
We may not be able to achieve or maintain year-over-year billings growth and may not see revenue growth in the near term or at all, and you should not consider our revenue and billings growth in any specific historical periods as indicative of our future performance.
We leverage our FI partners' purchase data and infrastructures to deliver our Cardlytics platform. We do not currently receive or have access to any PII from our FI partners, although we may obtain or have access to PII from our FI partners in the future as our business evolves.
We leverage our FI partners' purchase data and infrastructures to deliver our Cardlytics platform. We do not currently receive or have access to any personal data from our FI partners, although we may obtain or have access to personal data from our FI partners in the future as our business evolves.
To the extent that we breach or are alleged to have breached the terms of our agreement with any FI partner, or a disagreement arises with an FI partner regarding the interpretation of our contractual arrangements, which has occurred in the past and may occur again in the future, such an FI partner may be more likely to cease providing us data or to terminate its agreement with us.
To the extent that we breach or are alleged to have breached the terms of our agreement with any FI partner, or a disagreement arises with an FI partner regarding the interpretation of our contractual arrangements, which has occurred in the past and may occur again in the future, such FI partner may be more likely to cease providing us data, reduce its reliance on us, or terminate its agreement with us.
Our failure to repurchase the Notes at a time when the repurchase is required by the indenture governing the Notes or to pay any cash payable on future conversions as required by such indenture would constitute a default under such indenture.
Our failure to repurchase the Notes at a time when the repurchase is required by the indentures governing the Notes, as applicable, or to pay any cash payable on future conversions as required by such indenture would constitute a default under such indenture.
Our revenue and billings may be negatively impacted in future periods due to a number of factors, including slowing demand for our solutions, increasing competition, decreasing growth of our overall market, inflationary pressure, our inability to engage and retain a sufficient number of marketers or partners, or our failure, for any reason, to capitalize on growth opportunities.
Our revenue and billings may be negatively impacted in future periods due to a number of factors, including, but not limited to, slowing demand for our solutions, increasing competition, decreasing growth of our overall market, inflationary pressure, our inability to engage and retain a sufficient number of marketers or partners, or our failure, for any reason, to capitalize on growth opportunities.
If we or the third parties which we rely upon fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including, but not limited to: government enforcement actions (which could result in investigations, fines, penalties, audits and inspections), litigation (including class-action claims), additional reporting requirements and/or oversight, bans on processing personal data and orders to destroy or not use personal data.
If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including, but not limited to: government enforcement actions (which could result in investigations, fines, penalties, audits and inspections), litigation (including class-action claims), additional reporting requirements and/or oversight, bans on processing personal data and orders to destroy or not use personal data.
The actual or perceived failure by us, our partners, or other third parties whom we rely upon to comply with such obligations could lead to regulatory investigations or actions, litigation (including class claims), mass arbitration demands, disruptions of our business operations, or loss of customers or sales, harm our reputation, result in significant expense or loss of revenue or profits, subject us to significant fines and liability or otherwise adversely affect our business.
The actual or perceived failure by us, our partners, or other third parties with whom we work to comply with such obligations could lead to regulatory investigations or actions, litigation (including class action claims), mass arbitration demands, disruptions of our business operations, or loss of customers or sales, harm our reputation, result in significant expense or loss of revenue or profits, subject us to significant fines and liability or otherwise adversely affect our business.
Our operating results could suffer due to: • lack of continued participation by FI partners in our network or our failure to attract new FI partners; • any decline in demand for the Cardlytics platform by marketers or their agencies; • failure by our FI partners to increase engagement with our solutions within their customer bases, adopt our new technology and products, improve their customers’ user experience, increase customer awareness, leverage additional customer outreach channels like email or otherwise promote our incentive programs on their websites and mobile applications, including by making the programs difficult to access or otherwise diminishing their prominence; • our failure to offer compelling incentives to our FI partners' customers; • FI partners may elect to use their Partner Share to fund their Consumer Incentives; 13 • the introduction by competitors of products and technologies that serve as a replacement or substitute for, or represent an improvement over, the Cardlytics platform, or an FI partner’s decision to implement any existing or future product or technology of a competitor alongside, or in lieu, of the Cardlytics platform; • FI partners developing, or acquiring, their own technology to support purchase intelligence marketing or other incentive programs; • technological innovations or new standards that the Cardlytics platform does not address; and • sensitivity to current or future prices offered by us or competing solutions.
Our operating results could suffer due to: • lack of continued participation by FI partners in our network, in whole or in part, or our failure to attract new FI partners; • any decline in demand for the Cardlytics platform by marketers or their agencies; • failure by our FI partners to increase engagement with our solutions within their customer bases, adopt our new technology and products, improve their customers’ user experience, increase customer awareness, leverage additional customer outreach channels like email or otherwise promote our incentive programs on their websites and mobile applications, including by making the programs difficult to access or otherwise diminishing their prominence; • our failure to offer compelling incentives to our FI partners' customers; • FI partners may elect to use their Partner Share to fund their Consumer Incentives; • the introduction by competitors of products and technologies that serve as a replacement or substitute for, or represent an improvement over, the Cardlytics platform, or an FI partner’s decision to implement any existing or future product or technology of a competitor alongside, or in lieu, of the Cardlytics platform; • FI partners developing, or acquiring, their own products, technology, or lines of business to support transaction-based marketing or other incentive programs; • technological innovations or new standards that the Cardlytics platform does not address; and • sensitivity to current or future prices offered by us or competing solutions.
In addition, many of our employees work remotely, which may make us more vulnerable to cyberattacks and has increased risks to our systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.
In addition, many of our employees work remotely, which makes us more vulnerable to cyberattacks and has increased risks to our systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.
To safeguard these rights, we rely on a combination of patent, trademark, copyright and trade secret laws and contractual protections in the U.S. and other jurisdictions, all of which provide only limited protection and may not now or in the future provide us with a competitive advantage. 31 As of the date of filing, we had sixteen issued patents relating to our software.
To safeguard these rights, we rely on a combination of patent, trademark, copyright and trade secret laws and contractual protections in the U.S. and other jurisdictions, all of which provide only limited protection and may not now or in the future provide us with a competitive advantage. 30 As of the date of filing, we had seventeen issued patents relating to our software.
These laws and regulations generally prohibit companies and their employees and intermediaries from authorizing, offering or providing improper payments or benefits to officials and other recipients for improper purposes.
These laws and regulations generally prohibit companies and their employees and intermediaries from directly or indirectly authorizing, offering or providing improper payments or benefits to officials and other recipients for improper purposes.
Although our common stock is listed on the Nasdaq Global Market, we cannot assure you that an active trading market for our shares will be sustained.
An active trading market for our common stock may not be sustained. Although our common stock is listed on the Nasdaq Global Market, we cannot assure you that an active trading market for our shares will be sustained.
The PECR also imposes sector-specific breach reporting requirements, but these requirements only apply to providers of certain public electronic communications services. Additional European Union member state laws of this type may follow. In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries.
The PECR also imposes sector-specific breach reporting requirements, but these requirements only apply to providers of certain public electronic communications services. Additional European Union member state laws of this type may follow. In the ordinary course of business, we transfer personal data from Europe and other jurisdictions to the U.S. or other countries.
We have historically generated a substantial majority of our revenue from marketers in the restaurant, brick and mortar retail, telecommunications and cable industries, and have expanded into new industries such as travel and entertainment, direct-to-consumer, grocery and gas, and believe that our future success will depend, in part, on our ability to expand adoption of our solutions in new industries.
We have historically generated a substantial majority of our revenue from marketers in the restaurant, brick and mortar retail, telecommunications and cable industries, and have expanded into the gas, grocery, travel and entertainment industries, and believe that our future success will depend, in part, on our ability to expand adoption of our solutions in new industries.
We had an accumulated deficit of $1.1 billion as of December 31, 2023. We have never achieved net income on an annual basis, and we do not know if we will be able to achieve or sustain net income.
We had an accumulated deficit of $1.3 billion as of December 31, 2024. We have never achieved net income on an annual basis, and we do not know if we will be able to achieve or sustain net income.
Bribery Act, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to sell our products in certain foreign markets, and the risks and costs of non-compliance; • potential changes in a specific country's or region's political or economic climate, including the current hostilities between Russia and Ukraine and conflict in the Middle East; • heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results, which may also result in restatements of financial statements or irregularities in financial statements; • difficulties in repatriating or transferring funds from or converting currencies in certain countries; • cultural differences inhibiting foreign employees from adopting our corporate culture; • reduced protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad; and • compliance with the laws of foreign taxing jurisdictions and overlap of different tax regimes.
Bribery Act, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to sell our products in certain foreign markets, and the risks and costs of non-compliance; • potential changes in a specific country's or region's political or economic climate, including ongoing international tension and conflict; • heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results, which may also result in restatements of financial statements or irregularities in financial statements; • difficulties in repatriating or transferring funds from or converting currencies in certain countries; • cultural differences inhibiting foreign employees from adopting our corporate culture; • reduced protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad; and • compliance with the laws of foreign taxing jurisdictions and overlap of different tax regimes.
As of December 31, 2023 and 2022, our top five marketers accounted for 19% and 18% of our accounts receivable, respectively, with no individual marketer representing over 10% as of the end of each period. We do not have material long-term commitments from most of these marketers.
As of December 31, 2024 and 2023, our top five marketers accounted for 17% and 19% of our accounts receivable, respectively, with no individual marketer representing over 10% as of the end of each period. We do not have material long-term commitments from most of these marketers.
If the market for purchase intelligence does not continue to develop or develops more slowly than we expect, our business, financial condition and operating results could be harmed. The market in which we participate is competitive and we may not be able to compete successfully with our current or future competitors.
If the market in which we participate does not continue to develop or develops more slowly than we expect, our business, financial condition and operating results could be harmed. 19 The market in which we participate is competitive and we may not be able to compete successfully with our current or future competitors.
This matching process enables us to, among other things, use purchase intelligence to measure in-store and online campaign sales impact or provide marketers with valuable visibility into the behaviors of current or prospective customers both within and outside the context of their marketing efforts.
This matching process enables us to, among other things, use transaction data to measure in-store and online campaign sales impact or provide marketers with valuable visibility into the behaviors of current or prospective customers both within and outside the context of their marketing efforts.
The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, and includes statutorily defined damages of up to $7,500 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages, which is expected to increase data breach litigation.
The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches, and includes statutorily defined damages for intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages, which is expected to increase data breach litigation.
In addition to traditional computer "hackers," we and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), threat actors, software bugs, malicious code (such as viruses and worms), employee theft or misuse, denial-of-service attacks, credential attacks, credential harvesting, and ransomware attacks, sophisticated nation-state and nation-state supported actors now engage in attacks (including advanced persistent threat intrusions).
In addition to traditional computer "hackers," we and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), threat actors, software bugs, malicious code (such as viruses and worms), malware (including: as a result of advanced persistent threat intrusions), employee theft or misuse, denial-of-service attacks, credential attacks, credential harvesting, and ransomware attacks, sophisticated nation-state and nation-state supported actors now engage in attacks (including advanced persistent threat intrusions).
We believe that key factors in the success and effectiveness of our incentive program include the level of accessibility and prominence of the program on the partners' website and mobile applications, as well as the user interface through which a customer is presented with marketing content.
We believe that key factors in the success and effectiveness of our incentive program include the level of accessibility and prominence of the program on the partners' website and mobile applications and the accessibility and prominence of our offers within these programs, as well as the user interface through which a customer is presented with marketing content.
We believe that our future success will depend in large part on the growth, if any, of the market for purchase intelligence. Utilization of consumer purchase data to inform marketing is an emerging industry and future demand and market acceptance for this type of marketing is uncertain.
We believe that our future success will depend in large part on the growth, if any, of the market for transaction-based marketing solutions. Utilization of consumer purchase data to inform marketing is an emerging industry and future demand and market acceptance for this type of marketing is uncertain.
We have a history of losses and may not achieve net income in the future. We have incurred annual net losses since inception and expect to incur net losses in certain periods in the future. During 2023 and 2022, our net loss was $134.7 million and $465.3 million, respectively.
We have a history of losses and may not achieve net income in the future. We have incurred annual net losses since inception and expect to incur net losses in certain periods in the future. During 2024 and 2023, our net loss was $189.3 million and $134.7 million, respectively.
During 2023, the top FI partner represented over 50% and the second and third largest FI partners represented over 10% of Partner Share. During 2022 and 2021 the top two FI partners represented over 20% and 25%, respectively, and the third largest FI partner represented over 10%, of Partner Share for each period.
During 2024 and 2023 the top FI partner represented over 50% and the second and third largest FI partners each represented over 10% of Partner Share. During 2022, the top two FI partners represented over 20% and 25%, respectively, and the third largest FI partner representing over 10% of Partner Share for each period.
If we fail to meet or exceed expectations for our operating results for these or any other reasons, the market price of our stock could fall and we could face costly lawsuits, including securities class action suits. We may not be able to sustain our revenue and billings growth rate in the future.
If we fail to meet or exceed expectations for our operating results for these or any other reasons, the market price of our stock could fall and we could face costly lawsuits, including securities class action suits. 12 We may not achieve or sustain revenue and billings growth in the future.
In the event the conditional conversion feature of the Notes is triggered, holders of Notes will be entitled to convert the Notes at any time during specified periods at their option.
In the event the conditional conversion feature of either series of Notes is triggered, holders of such Notes will be entitled to convert their Notes at any time during specified periods at their option.
Fluctuations in the exchange rates between the U.S. dollar and British pound could result in the dollar equivalent of such revenue and expenses being lower, which could have a negative net impact on our reported operating results.
Fluctuations in the exchange rates between the U.S. dollar and foreign currencies could result in the dollar equivalent of such revenue and expenses being lower, which could have a negative net impact on our reported operating results.
An actual or perceived breach of the security of our systems, or those of third parties upon which we rely, could result in adverse consequences resulting from such breach, including but not limited to a disruption of our operations, reputational harm, loss of revenue or profits, loss of customers, regulatory investigations or actions, litigation, fines and penalties and other adverse consequences.
An actual or perceived breach of the security of our systems, or those of third parties with whom we work, could result in adverse consequences resulting from such breach, including but not limited to a disruption of our operations, reputational harm, loss of revenue or profits, loss of customers, regulatory investigations or actions, litigation, fines and penalties and other adverse consequences.
We are also reliant on our network of partners to promote their digital incentive programs, increase customer awareness and leverage additional customer outreach channels like email, all of which can increase customer engagement.
We are also reliant on our network of partners to promote their digital incentive programs and our offers that appear on these programs, increase customer awareness and leverage additional customer outreach channels like email, all of which can increase customer engagement.
Larger and more established companies may focus on purchase intelligence marketing and could directly compete with us. Smaller companies could also launch new products and services that we do not offer and that could gain market acceptance quickly.
Larger and more established companies may focus on transaction-based marketing and could directly compete with us. Smaller companies could also launch new products and services that we do not offer and that could gain market acceptance quickly.
Our net operating loss ("NOL") carry-forwards could expire unused and be unavailable to offset future tax liabilities because of their limited duration or because of restrictions under U.S. tax law. As of December 31, 2023 and December 31, 2022, we had U.S. federal and state NOLs of $896.0 million and $879.6 million , respectively.
Our net operating loss ("NOL") carry-forwards could expire unused and be unavailable to offset future tax liabilities because of their limited duration or because of restrictions under U.S. tax law. As of December 31, 2024 and December 31, 2023, we had U.S. federal and state NOLs of $900.7 million and $896.0 million , respectively.
Any patents that may issue in the future from our pending or future patent applications may not provide sufficiently broad protection and may not be enforceable in actions against alleged infringements. We have registered, or are registering, the "Cardlytics," "Dosh," "Bridg" and "Rippl" names and logos in the U.S. and certain other countries.
Any patents that may issue in the future from our pending or future patent applications may not provide sufficiently broad protection and may not be enforceable in actions against alleged infringements. We have registered, or are in the process of attempting to register, the "Cardlytics," "Dosh," "Bridg" and "Rippl" names and logos in the U.S. and certain other countries.
Our international sales and operations subject us to additional risks that can adversely affect our business, operating results and financial condition. During the years ended 2023, 2022 and 2021, we derived 5.8%, 7.8% and 7.8%, respectively, of our revenue from outside the U.S.
Our international sales and operations subject us to additional risks that can adversely affect our business, operating results and financial condition. During 2024 and 2023, we derived 8.7% and 5.8%, respectively, of our revenue from outside the U.S.
Due to our international operations, we may be exposed to the effects of fluctuations in currency exchange rates, including inflationary pressure. We generate revenue and incur expenses for employee compensation and other operating expenses at our U.K. office in the local currency.
Due to our international operations, we may be exposed to the effects of fluctuations in currency exchange rates, including inflationary pressure. We generate revenue and incur expenses for employee compensation and other operating expenses at our foreign offices in the local currency.
Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws. Although there are currently various mechanisms that may be used to transfer personal data from the EEA and U.K. to the U.S. in compliance with law, such as the EEA standard contractual clauses and U.K.’s International Data Transfer Agreement, and the EU-U.S.
Other jurisdictions may adopt, or have already adopted, similarly stringent data localization and cross-border data transfer laws. Although there are currently various mechanisms that may be used to transfer personal data from the EEA and U.K. to the U.S. in compliance with law, such as the EEA standard contractual clauses and U.K.'s International Data Transfer Agreement, and the EU-U.S.
During times of war and other major conflicts, we, the third parties upon which we rely, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyberattacks, that could materially disrupt our systems and operations, and ability to provide our service.
During times of war and other major conflicts, we, the third parties with whom we work, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyberattacks, that could materially disrupt our systems and operations, and ability to provide our service.
Many of these obligations conflict with each other, and interpretation of these laws, rules and regulations and their application to our solutions in the U.S. and foreign jurisdictions is ongoing and cannot be fully determined at this time. A number of existing bills are pending in the U.S.
Many of these obligations conflict with each other, and interpretation of these laws, rules and regulations and their application to our solutions in the U.S. and foreign jurisdictions is ongoing and cannot be fully determined at this time.
Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations.
Moreover, despite our efforts, our personnel or third with whom we work may fail to comply with such obligations, which could negatively impact our business operations.
While we may be entitled to damages if our third-party service providers fail to satisfy their data privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
While we may be entitled to damages if the third parties fail to satisfy their data privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
As of December 31, 2023, we had 434 full-time employees. We intend to further expand our overall headcount and operations, with no assurance that we will be able to do so while effectively maintaining our corporate culture.
As of December 31, 2024, we had 454 full-time employees. We may further expand our overall headcount and operations, with no assurance that we will be able to do so while effectively maintaining our corporate culture.
In addition, any of our future debt agreements may contain restrictive covenants that may prohibit us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of our debt.
In addition, our 2018 Line of Credit contains and our future debt agreements may contain restrictive covenants that may limit our ability to or prohibit us from adopting any of these alternatives. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of our debt.
Any success that we may experience in the future will depend in large part on our ability to, among other things: • maintain and expand our network of partners; • build and maintain long-term relationships with marketers and their agencies; • develop and offer competitive solutions that meet the evolving needs of marketers; • expand our relationships with partners to enable us to use their purchase data for new solutions; • improve the performance and capabilities of our solutions; • successfully expand our business; • successfully compete with other companies that are currently in, or may in the future enter, the markets for our solutions; • increase market awareness of our solutions and enhance our brand; • manage increased operating expenses as we continue to invest in our infrastructure to scale our business; and • attract, hire, train, integrate and retain qualified and motivated employees. 18 Any failure of our partners to effectively deliver and promote the online incentive programs that comprise the Cardlytics platform could materially and adversely affect our business.
Any success that we may experience in the future will depend in large part on our ability to, among other things: • maintain and expand our network of partners; • build and maintain long-term relationships with marketers and their agencies; • develop and offer competitive solutions that meet the evolving needs of marketers; • expand our relationships with partners to enable us to use their purchase data for new solutions; 17 • improve the performance and capabilities of our solutions; • successfully expand our business; • successfully compete with other companies that are currently in, or may in the future enter, the markets for our solutions; • increase market awareness of our solutions and enhance our brand; • manage increased operating expenses as we continue to invest in our infrastructure to scale our business; and • attract, hire, train, integrate and retain qualified and motivated employees.
Given our relatively short operating history and the rapidly evolving purchase intelligence industry, our historical operating results may not be useful in predicting our future operating results.
Given our relatively short operating history and the rapidly evolving nature of our industry, our historical operating results may not be useful in predicting our future operating results.
A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our platform.
A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our platform.
Bringing new FI partners into our network may impede our ability to accurately forecast the performance of our network. Bringing new FI partners into our network may impede our ability to accurately predict how certain marketing campaigns will perform, and thus may impede our ability to accurately forecast the performance of our network.
Bringing new FI partners into our network, or changes made by our existing FI partners, may impede our ability to accurately predict how certain marketing campaigns will perform, and thus may impede our ability to accurately forecast the performance of our network.
In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital. 28 Transactions relating to our Notes may affect the value of our common stock.
In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the applicable series of Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
Due to a variety of both internal and external factors, including defects or misconfigurations of our technology, our services could become vulnerable to security incidents (both from intentional attacks and accidental causes) that cause them to fail to secure networks and detect and block attacks.
Due to a variety of both internal and external factors, including defects or misconfigurations of our technology, our services have in the past and may in the future become vulnerable to security incidents (both from intentional attacks and accidental causes) that cause them to fail to secure networks and detect and block attacks.
Any failure to meet these demands may hamper the growth of our business and the attractiveness of our solutions. 19 Our ability to retain and increase sales of our solutions and attract new marketers and their agencies may be adversely affected by competitive offerings, marketing methods that are lower priced or perceived as more effective than our solutions, or a general continued reduction or decline in spending by marketers due to the global economic uncertainty and financial market conditions.
Our ability to retain and increase sales of our solutions and attract new marketers and their agencies may be adversely affected by competitive offerings, marketing methods that are lower priced or perceived as more effective than our solutions, or a general continued reduction or decline in spending by marketers due to the global economic uncertainty and financial market conditions.
Since shares of our common stock were sold in our initial public offering in February 2018 at a price of $13.00 per share, our stock price has ranged from an intraday low of $2.60 to an intraday high of $161.47 through March 13, 2024.
Since shares of our common stock were sold in our initial public offering in February 2018 at a price of $13.00 per share, our stock price has ranged from an intraday low of $1.77 to an intraday high of $161.47 through March 12, 2025.
Our ability to monitor these third parties' information security practices is limited, and these third parties may not have adequate information security measures in place. If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
Our ability to monitor these third parties' information security practices is limited, and these third parties may not have adequate information security measures in place. If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences.
Holders of the Notes have the right to require us to repurchase their Notes upon the occurrence of a fundamental change (as defined in the indenture governing the Notes) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any.
Holders of the Notes have the right to require us to repurchase their Notes upon the occurrence of a fundamental change (as defined in the indentures governing the 2020 Convertible Senior Notes and 2024 Convertible Senior Notes, respectively) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, as applicable, plus accrued and unpaid interest, if any.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe assess the likelihood that such threats could result in a material impact to our information assets, operations, ability to provide our goods and services, our core business functions, customer acquisition and retention, personnel, reputation and identified critical business objectives.
Biggest changeWe assess the likelihood that such threats could result in a material impact to our information assets, operations, ability to provide our goods and services, our core business functions, customer acquisition and retention, personnel, reputation and identified critical business objectives. 36 Based on our assessment process, we implement and maintain various technical, physical and organizational measures designed to manage and mitigate such risks and potential material impacts.
A critical part of our strategy involves focusing on gathering data without collecting, maintaining or using sensitive personal data such as social security numbers, credit card numbers, financial account information or medical records. The Cardlytics platform is designed so that we do not receive or have access to any PII from our FI partners.
A critical part of our strategy involves focusing on gathering data without collecting, maintaining or using sensitive personal data such as social security numbers, credit card numbers, financial account information or medical records. The Cardlytics platform is designed so that we do not receive or have access to any personal data from our FI partners.
Our cybersecurity risk management strategy relies on input from management, including the Chief Technology Officer, Chief Legal and Privacy Officer, Chief Operating Officer, and Chief Financial Officer, who report to the Chief Executive Officer, as well as the Chief Information Security Officer, to help us understand cybersecurity risks, establish priorities, determine the scope and details of our cybersecurity program and implement it.
Our cybersecurity risk management strategy relies on input from management, including the Chief Technology Officer, Chief Legal and Privacy Officer, and Chief Financial Officer, who report to the Chief Executive Officer, as well as the Chief Information Security Officer, to help us understand cybersecurity risks, establish priorities, determine the scope and details of our cybersecurity program and implement it.
Management participates in cybersecurity incident response efforts by being a member of the incident response team and helping direct our response to cybersecurity incidents. Our board of directors oversees our risk management strategy with respect to cybersecurity risks and threats.
Management participates in cybersecurity incident response efforts by being a member of the incident response team and helping direct our response to cybersecurity incidents. 37 Our board of directors oversees our risk management strategy with respect to cybersecurity risks and threats.
Management is also responsible for hiring appropriate personnel, integrating cybersecurity considerations into our overall risk management strategy, and for communicating key priorities to employees. Our cybersecurity incident response and vulnerability management processes involve management, who participates in our disclosure controls and procedures. Every six months, management discusses cybersecurity risk and reviews our cybersecurity program.
Management is also responsible for hiring appropriate personnel, integrating cybersecurity considerations into our overall risk management strategy, and for communicating key priorities to employees. Our cybersecurity incident response and vulnerability management processes involve management, who participate in our disclosure controls and procedures. Every six months, management discusses cybersecurity risk and reviews our cybersecurity program.
Depending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, our vendor management process may include reviewing the cybersecurity practices of such provider, contractually imposing obligations on the provider related to the services they provide or the information they process, conducting security assessments, conducting on-site inspections, requiring their completion of written 37 questionnaires regarding their services and data handling practices and conducting periodic re-assessments during their engagement.
Depending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, our vendor management process may include reviewing the cybersecurity practices of such provider, contractually imposing obligations on the provider related to the services they provide or the information they process, conducting security assessments, requiring their completion of written questionnaires regarding their services and data handling practices and conducting periodic re-assessments during their engagement.
To operate our business, we utilize certain third-party service providers to perform a variety of functions, such as professional services, SaaS platforms, managed services, cloud-based infrastructure, data center facilities, encryption and authentication technology and other functions.
To operate our business, we utilize certain third-party service providers to perform a variety of functions, such as professional services, SaaS platforms, managed services, cloud-based infrastructure, encryption and authentication technology and other functions.
"Risk Factors" in this Annual Report, including "An actual or perceived breach of the security of our systems, or those of third parties upon which we rely, could result in adverse consequences resulting from such breach, including but not limited to a disruption of our operations, reputational harm, loss of revenue or profits, loss of customers, regulatory investigations or actions, litigation, fines and penalties and other adverse consequences." Governance Our board of directors addresses the Company's cybersecurity risk management as part of its general oversight function.
"Risk Factors" in this Annual Report, including "An actual or perceived breach of the security of our systems, or those of third parties with whom we work, could result in adverse consequences resulting from such breach, including but not limited to a disruption of our operations, reputational harm, loss of revenue or profits, loss of customers, regulatory investigations or actions, litigation, fines and penalties and other adverse consequences." Governance Our board of directors addresses the Company's cybersecurity risk management as part of its general oversight function.
We identify such threats by, among other things, monitoring the threat environment using manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and actors, conducting scans of the threat environment, evaluating our and our industry’s risk profile, evaluating threats reported to us, logging and monitoring our IT environment, conducting threat assessments for internal and external threats and conducting vulnerability assessments to identify vulnerabilities.
We identify such threats by, among other things, monitoring the threat environment using manual and automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and actors, conducting scans of the threat environment, evaluating threats reported to us, logging and monitoring our IT environment, conducting threat assessments for internal and external threats, conducting vulnerability assessments to identify vulnerabilities and conducting tabletop incident response exercises.
Risks from cybersecurity threats are among those that we address in our general risk management program, where we conduct investigations and take actions as required to assess risks to the organization and take mitigating actions to reduce, eliminate or manage risks. Risk assessments are performed quarterly as part of this program and the results are discussed and reviewed with management.
Risks from cybersecurity threats are among those that we address in our general risk management program, where we conduct investigations and take actions as required to assess risks to the organization and take mitigating actions designed to reduce, eliminate or manage risks.
We prioritize our efforts based on the threats that are more likely to lead to a material impact to our business, such as ransomware, theft of IP and interruption of services.
We implement measures designed to prevent, detect, respond to, mitigate and recover from identified and significant cybersecurity threats. We prioritize our efforts based on the threats that are more likely to lead to a material impact to our business, such as ransomware, theft of IP and interruption of services.
Removed
Based on our assessment process, we implement and maintain various technical, physical and organizational measures designed to manage and mitigate such risks and potential material impacts. We may implement measures designed to prevent, detect, respond to, mitigate and recover from identified and significant cybersecurity threats.
Added
Risk assessments are performed quarterly as part of this program and the results are discussed and reviewed with management.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. On January 22, 2025, a putative securities class action lawsuit was filed against Cardlytics and certain of its current and former officers in the U.S.
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 39 PART II.
Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 38 PART II.
Removed
As part of the acquisition of Bridg, and pursuant to the terms of the Agreement and Plan of Merger dated as of April 12, 2021, as amended (the "Merger Agreement"), we agreed to make two earnout payments: the First Anniversary Payment Amount and the Second Anniversary Payment Amount, based on the First Anniversary ARR and the Second Anniversary ARR of Bridg, respectively .
Added
District Court for the Northern District of Georgia, captioned Froess v. Cardlytics, Inc., Case No. 1:25-cv-00279-MHC. The complaint, brought on behalf of a putative class of all persons who purchased our securities between March 14, 2024 and August 7, 2024, alleged that defendants violated Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder.
Removed
We were unable to reach an agreement with respect to the First Anniversary Payment Amount with the Stockholder Representative and submitted our dispute to an independent accountant as contemplated by the Merger Agreement. 38 On April 28, 2023, the independent accountant made its determination of the appropriate amount of the First Anniversary ARR, determining the First Anniversary ARR to be $23.2 million.
Added
On February 13, 2025, we filed a motion to dismiss the complaint. Subsequently, on March 7, 2025, the plaintiff voluntarily dismissed the action without prejudice pursuant to Rule 41(a)(1)(A)(i) of the Federal Rules of Civil Procedure. Because the dismissal is without prejudice, the plaintiff reserves the right to refile similar claims in the future.
Removed
After review of the determination by the independent accountant, we filed a verified complaint in the Delaware Court of Chancery in May 2023 seeking declaratory judgment that a certain portion of the independent accountant's determination related to the First Anniversary ARR be stricken as null and void.
Removed
Subsequently, on January 25, 2024, we entered into a settlement agreement (the "Settlement Agreement") with the Stockholder Representative to resolve all outstanding disputes related to the Merger Agreement, including the First Anniversary Payment Amount, pursuant to which we agreed to pay $25 million in cash and issue 3.6 million shares of our common stock to the Stockholder Representative, inclusive of broker fees and transaction bonuses and to dismiss our verified complaint in the Delaware Court of Chancery.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the Nasdaq Global Market under the symbol "CDLX." Holders of Record As of February 29, 2024, there were approximately 135 stockholders of record of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the Nasdaq Global Market under the symbol "CDLX." Holders of Record As of February 28, 2025, there were approximately 109 stockholders of record of our common stock.
The following performance graph compares the performance of our common stock with the performance of the Standard & Poor's 500 Stock Index and the Nasdaq Composite Index, from December 31, 2018 through December 31, 2023. The graph plots the changes in value of an initial $100 investment over the indicated time period, assuming all dividends are reinvested.
The following performance graph compares the performance of our common stock with the performance of the Standard & Poor's 500 Stock Index and the Nasdaq Composite Index, from December 31, 2019 through December 31, 2024. The graph plots the changes in value of an initial $100 investment over the indicated time period, assuming all dividends are reinvested.
The graph uses the closing price on December 31, 2018 of $10.83 per share as the initial value of our common stock. The stock price performance in this graph is not necessarily indicative of future stock price performance. ITEM 6. [RESERVED] 40
The graph uses the closing price on December 31, 2019 of $62.86 per share as the initial value of our common stock. The stock price performance in this graph is not necessarily indicative of future stock price performance. ITEM 6. [RESERVED] 39

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change(2) Deferred implementation costs is excluded from Adjusted Partner Share and other third-party costs as follows (in thousands): Year Ended December 31, 2021 Cardlytics Platform Bridg Platform Consolidated Partner Share and other third-party costs $ 140,864 $ 409 $ 141,273 Minus: Deferred implementation costs 3,785 — 3,785 Adjusted Partner Share and other third-party costs $ 137,079 $ 409 $ 137,488 46 Adjusted EBITDA The following table presents a reconciliation of Adjusted EBITDA to Net Loss, the most directly comparable GAAP measure, for each of the periods indicated (in thousands): Year Ended December 31, 2023 2022 2021 Net Loss $ (134,702) $ (465,264) $ (128,565) Plus: Interest expense, net 2,336 2,556 12,563 Depreciation and amortization 26,460 37,544 29,871 Stock-based compensation expense 40,980 44,686 50,264 Acquisition, integration and divestiture (benefits) costs (6,313) (2,874) 24,372 Change in fair value of contingent consideration 1,246 (128,174) 1,374 Foreign currency (gain) loss (3,304) 6,376 1,267 Impairment of goodwill and intangible assets 70,518 453,288 — Loss on divestiture 6,550 — — Restructuring and reduction of force — 8,139 713 Income tax benefit — (1,446) (7,864) Deferred implementation costs — — 3,785 Adjusted EBITDA $ 3,771 $ (45,169) $ (12,220) 47 The following table presents a reconciliation of Adjusted EBITDA to Adjusted Contribution, the most directly comparable segment income measure, for each of the periods indicated (in thousands): Year Ended December 31, 2023 2022 2021 Consolidated Adjusted Contribution $ 158,626 $ 143,034 $ 129,628 Minus: Delivery costs 28,248 30,402 22,503 Sales and marketing expense 57,425 74,745 65,996 Research and development expense 51,352 54,435 38,104 General and administration expense 58,810 81,446 66,222 Stock-based compensation expense (40,980) (44,686) (50,264) Restructuring and reduction of force — (8,139) (713) Adjusted EBITDA $ 3,771 $ (45,169) $ (12,220) Cardlytics platform Adjusted Contribution $ 135,518 $ 122,981 $ 121,675 Minus: Delivery costs 21,447 24,112 18,170 Sales and marketing expense 48,671 67,830 62,771 Research and development expense 45,746 47,579 35,393 General and administration expense 56,542 79,069 63,379 Stock-based compensation expense (37,782) (43,490) (47,223) Restructuring and reduction of force — (8,139) (713) Adjusted EBITDA $ 894 $ (43,980) $ (10,102) Bridg platform Adjusted Contribution $ 23,108 $ 20,053 $ 7,953 Minus: Delivery costs 6,801 6,290 4,333 Sales and marketing expense 8,754 6,915 3,225 Research and development expense 5,606 6,856 2,711 General and administration expense 2,268 2,377 2,843 Stock-based compensation expense (3,198) (1,196) (3,041) Restructuring and reduction of force — — — Adjusted EBITDA $ 2,877 $ (1,189) $ (2,118) 48 Adjusted Net Loss The following table presents a reconciliation of Adjusted Net Loss to Net Loss, the most directly comparable GAAP measure, for each of the periods indicated (in thousands): Year Ended December 31, 2023 2022 2021 Net Loss $ (134,702) $ (465,264) $ (128,565) Plus: Stock-based compensation expense 40,980 44,686 50,264 Foreign currency (gain) loss (3,304) 6,376 1,267 Acquisition, integration and divestiture (benefits) costs (6,313) (2,874) 24,372 Amortization of acquired intangibles 13,589 25,019 19,712 Change in fair value of contingent consideration 1,246 (128,174) 1,374 Impairment of goodwill and intangible assets 70,518 453,288 — Loss on divestiture 6,550 — — Restructuring and reduction of force — 8,139 713 Income tax benefit — (1,446) (7,864) Adjusted Net Loss $ (11,436) $ (60,250) $ (38,727) Weighted-average number of shares of common stock used in computing Adjusted net loss per share: Weighted-average common shares outstanding, diluted 36,488 33,419 32,202 Adjusted weighted-average common shares outstanding, diluted 36,488 33,419 32,202 Adjusted Net Loss per share attributable to common stockholders, diluted $ (0.31) $ (1.80) $ (1.20) Free Cash Flow The following is a reconciliation of free cash flow to the most comparable GAAP measure, net cash used in operating activities (in thousands): Year Ended December 31, 2023 2022 2021 Net cash used in operating activities $ (185) $ (53,904) $ (38,523) Plus: Acquisition of property and equipment (667) (1,171) (3,108) Acquisition of patents — (175) (133) Capitalized software development costs (11,725) (12,140) (9,323) Free Cash Flow $ (12,577) $ (67,390) $ (51,087) Components of Results of Operations Revenue We sell our Cardlytics platform solution by entering into agreements directly with marketers or their marketing agencies, generally through the execution of insertion orders.
Biggest changeBillings increased by $10.9 million during 2023 compared to 2022, primarily driven by an increase of $32.8 million in sales to new marketers, offset by a $21.9 million decrease in sales to existing marketers. 43 The following table presents a reconciliation of billings to revenue, the most directly comparable GAAP measure, for each of the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Consolidated Revenue $ 278,298 $ 309,204 $ 298,542 Plus: Consumer Incentives 165,542 144,222 143,935 Billings $ 443,840 $ 453,426 $ 442,477 Cardlytics platform Revenue $ 255,615 $ 285,425 $ 277,185 Plus: Consumer Incentives 165,542 144,222 143,935 Billings $ 421,157 $ 429,647 $ 421,120 Bridg platform Revenue $ 22,683 $ 23,779 $ 21,357 Plus: Consumer Incentives — — — Billings $ 22,683 $ 23,779 $ 21,357 Adjusted Contribution The following table presents a reconciliation of Adjusted Contribution to gross profit, the most directly comparable GAAP measure, for each of the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Revenue $ 278,298 $ 309,204 $ 298,542 Minus: Partner Share and other third-party costs 127,761 150,578 155,507 Delivery costs (1) 29,643 28,248 30,403 Gross Profit 120,894 130,378 112,632 Plus: Delivery costs (1) 29,643 28,248 30,403 Adjusted Contribution $ 150,537 $ 158,626 $ 143,035 (1) Stock-based compensation expense recognized in delivery costs totaled $2.7 million, $2.4 million and $2.7 million during 2024, 2023 and 2022, respectively. 44 Adjusted EBITDA The following table presents a reconciliation of Adjusted EBITDA to Net Loss, the most directly comparable GAAP measure, for each of the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Net Loss $ (189,304) $ (134,702) $ (465,264) Plus: Interest expense, net 5,553 2,336 2,556 Depreciation and amortization 25,689 26,460 37,544 Stock-based compensation expense 40,367 40,980 44,686 Acquisition, integration and divestiture costs (benefits) 161 (6,313) (2,874) Change in contingent consideration 210 1,246 (128,174) Foreign currency loss (gain) 1,269 (3,304) 6,376 Impairment of goodwill and intangible assets 131,595 70,518 453,288 Gain on debt extinguishment (13,017) — — Loss on divestiture — 6,550 — Restructuring and reduction of force — — 8,139 Income tax benefit — — (1,446) Adjusted EBITDA $ 2,523 $ 3,771 $ (45,169) Adjusted Net Loss The following table presents a reconciliation of Adjusted Net Loss to Net Loss, the most directly comparable GAAP measure, for each of the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Net Loss $ (189,304) $ (134,702) $ (465,264) Plus: Stock-based compensation expense 40,367 40,980 44,686 Foreign currency loss (gain) 1,269 (3,304) 6,376 Acquisition, integration and divestiture costs (benefits) 161 (6,313) (2,874) Amortization of acquired intangibles 9,810 13,589 25,019 Change in contingent consideration 210 1,246 (128,174) Impairment of goodwill and intangible assets 131,595 70,518 453,288 Gain on debt extinguishment (13,017) — — Loss on divestiture — 6,550 — Restructuring and reduction of force — — 8,139 Income tax benefit — — (1,446) Adjusted Net Loss $ (18,909) $ (11,436) $ (60,250) Weighted-average number of shares of common stock used in computing Adjusted net loss per share: Weighted-average common shares outstanding, diluted 48,361 36,488 33,419 Adjusted Net Loss per share, diluted $ (0.39) $ (0.31) $ (1.80) 45 Free Cash Flow The following is a reconciliation of free cash flow to the most comparable GAAP measure, net cash used in operating activities (in thousands): Year Ended December 31, 2024 2023 2022 Net cash used in operating activities $ (8,824) $ (185) $ (53,904) Plus: Acquisition of property and equipment (1,562) (667) (1,171) Acquisition of patents — — (175) Capitalized software development costs (17,736) (11,725) (12,140) Free Cash Flow $ (28,122) $ (12,577) $ (67,390) Components of Results of Operations Revenue We sell our Cardlytics platform solution by entering into agreements directly with marketers or their marketing agencies, generally through the execution of insertion orders.
We expect that our sales and marketing expense will increase in absolute dollars as a result of hiring new sales representatives and as we invest to enhance our brand. Over time, we expect sales and marketing expenses will decline as a percentage of revenue.
We expect that our sales and marketing expense will increase in absolute dollars over time as a result of hiring new sales representatives and as we invest to enhance our brand. Over time, we expect sales and marketing expenses will decline as a percentage of Revenue.
Partner Share costs are included in Partner Share and other third-party costs in our consolidated statements of operations, rather than as a reduction of revenue, because we and not our partners act as the principal in our arrangements with marketers. We run campaigns offering compelling Consumer Incentives to drive an expected rate of return on advertising spend for marketers.
Partner Share costs are included in Partner Share and other third-party costs in our consolidated statements of operations, rather than as a reduction of Revenue, because we and not our partners act as the principal in our arrangements with advertisers. We run campaigns offering compelling Consumer Incentives to drive an expected rate of return on advertising spend for marketers.
In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. Estimates of future taxable income are based on assumptions that are consistent with our plans.
In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. 59 Estimates of future taxable income are based on assumptions that are consistent with our plans.
Delivery costs also include hosting costs, purchased or licensed software costs, outsourcing costs and professional services costs. As we continue to migrate our technology to the cloud, our delivery costs will increase in absolute dollars and if such anticipated revenue growth does not occur, our delivery costs as a percentage of revenue will be adversely affected.
Delivery costs also include hosting costs, purchased or licensed software costs, outsourcing costs and professional services costs. As we continue to migrate our technology to the cloud, we expect our delivery costs will increase in absolute dollars and if such anticipated Revenue growth does not occur, our delivery costs as a percentage of Revenue will be adversely affected.
Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant d ecrease in expected cash flows. Loss on Divestiture Loss on divestiture of businesses consists of loss on the sale of a business during the year ended December 31, 2023.
Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate or a significant d ecrease in expected cash flows. 47 Loss on divestiture Loss on divestiture of businesses consists of loss on the sale of a business during the year ended December 31, 2023.
We define Adjusted Net Loss per share as Adjusted Net Loss divided by our weighted-average common shares outstanding, diluted. Free Cash Flow We define Free Cash Flow as net cash provided by (used in) operating activities, plus acquisition of property and equipment, acquisition of patents and capitalized software development costs.
We define Adjusted Net Loss per share as Adjusted Net Loss divided by our weighted-average common shares outstanding, diluted. Free Cash Flow We define Free Cash Flow as net cash used in operating activities, plus acquisition of property and equipment, capitalized software development costs and acquisition of patents.
Over time, we expect delivery costs will decline as a percentage of revenue. Sales and Marketing Expense Sales and marketing expense consists primarily of personnel costs of our sales, account management, marketing and analytics teams, including salaries, benefits, bonuses, commissions, stock-based compensation and payroll taxes.
Over time, we expect delivery costs will decline as a percentage of Revenue. 46 Sales and Marketing Expense Sales and marketing expense consists primarily of personnel costs of our sales, account management, marketing and analytics teams, including salaries, benefits, bonuses, commissions, stock-based compensation and payroll taxes.
At times, we may collaborate with a partner to enhance the level of Consumer Incentives to their respective customers, funded by their Partner Share. We believe that these investments by our partners positively impact our platforms by making their customers more highly engaged with our platforms.
At times, we may collaborate with a partner to enhance the level of Consumer Incentives to their respective customers, funded by their Partner Share. We believe that these investments by our partners positively impact our platform by making their customers more highly engaged with our platforms.
This amendment also extended the maturity date of the 2018 Loan Facility from December 31, 2022 to April 29, 2024, and further stated that if we had positive Adjusted EBITDA by December 31, 2023, we could extend the maturity date of the loan to April 29, 2025.
This amendment also extended the maturity date of the 2018 Loan Facility from December 31, 2022 to April 29, 2024, and further stated that if we had positive Adjusted EBITDA by December 31, 2024, we could extend the maturity date of the loan to April 29, 2025.
A gain or loss is recognized in the income statement for fair value adjustments. If we make additional acquisitions, it is possible that we will incur gains or losses in the future due to the change in the fair value of contingent consideration.
A gain or loss is recognized in the income statement for fair value adjustments. If we make additional acquisitions, it is possible that we will incur gains or losses in the future due to the change in contingent consideration.
Notably, any impacts related to minimum Partner Share commitments in connection with agreements with certain FI partners are not added back to net loss in order to calculate Adjusted EBITDA.
Notably, any impacts related to minimum Partner Share commitments in connection with agreements with certain partners are not added back to net loss in order to calculate Adjusted EBITDA.
However, these investments negatively impact our GAAP revenue, which is reported net of Consumer Incentives. 41 Non-GAAP Measures and Other Performance Metrics We regularly monitor a number of financial and operating metrics in order to measure our current performance and estimate our future performance. Our metrics may be calculated in a manner different than similar metrics used by other companies.
However, these investments negatively impact our GAAP Revenue, which is reported net of Consumer Incentives. 40 Non-GAAP Measures and Other Performance Metrics We regularly monitor a number of financial and operating metrics in order to measure our current performance and estimate our future performance. Our metrics may be calculated in a manner different than similar metrics used by other companies.
Integration costs primarily represent integration-related employee compensation, advisory costs and travel costs. Divestiture costs primarily represent legal and other professional fees. Change in Fair Value of Contingent Consideration Our acquisition of Bridg included a component of contingent consideration to be paid to the sellers if certain performance levels were achieved by Bridg over a specific period of time.
Integration costs primarily represent integration-related employee compensation, advisory costs and travel costs. Divestiture costs primarily represent legal and other professional fees. Change in Contingent Consideration Our acquisition of Bridg included a component of contingent consideration to be paid to the sellers if certain performance levels were achieved by Bridg over a specific period of time.
Research and Development Expense Research and development expense consists primarily of personnel costs of our information technology ("IT") engineering, IT architecture and product development teams, including salaries, benefits, bonuses, stock-based compensation and payroll taxes. Research and development expense also includes outsourcing costs, software licensing costs, professional fees and travel expenses.
Research and Development Expense Research and development expense consists primarily of personnel costs of our IT engineering, IT architecture and product development teams, including salaries, benefits, bonuses, stock-based compensation and payroll taxes. Research and development expense also includes outsourcing costs, software licensing costs, professional fees and travel expenses.
For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2023.
For a discussion of the year ended December 31, 2022, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Liquidity and Capital Resources" in our Annual Report on Form 10-K for the year ended December 31, 2021.
For a discussion of the year ended December 31, 2023, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Liquidity and Capital Resources" in our Annual Report on Form 10-K for the year ended December 31, 2022.
Recent Accounting Pronouncements Refer to Note 3—Accounting Standards to our consolidated financial statements for additional information. 62
Recent Accounting Pronouncements Refer to Note 3—Accounting Standards to our consolidated financial statements for additional information.
We report our revenue on our consolidated statements of operations net of Consumer Incentives since we do not provide the goods or services that are purchased by customers from the marketers to which the Consumer Incentives relate.
We report our Revenue on our consolidated statements of operations net of Consumer Incentives since we do not provide the goods or services that are purchased by customers from the advertisers to which the Consumer Incentives relate.
Some of these limitations are as follows: (1) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (2) Adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation; (3) Adjusted EBITDA does not reflect tax payments or receipts that may represent a reduction or increase in cash available to us and (4) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces the usefulness of the metric as a comparative measure.
Some of these limitations are: (1) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (2) Adjusted EBITDA does not reflect the potentially dilutive impact of stock-based compensation and equity instruments issued to our partners; (3) Adjusted EBITDA does not reflect tax payments or receipts that may represent a reduction or increase in cash available to us; and (4) other companies, including companies in our industry, may calculate adjusted EBITDA or similarly titled measures differently, which reduces the usefulness of the metric as a comparative measure.
Any lag between the timing of our payments to FI partners and our receipt of payment from marketers and their agencies can exacerbate our need for working capital during the first quarter of the calendar year. 59 Historical Cash Flows In this section, we discuss the activity of our cash flows for the year ended December 31, 2023 and the year ended December 31, 2022.
Any lag between the timing of our payments to FI partners and our receipt of payment from marketers and their agencies can exacerbate our need for working capital during the first quarter of the calendar year. 56 Historical Cash Flows In this section, we discuss the activity of our cash flows for the year ended December 31, 2024 and the year ended December 31, 2023.
We expect to incur additional operating losses as we continue our efforts to grow our business. We have historically financed our operations and capital expenditures through convertible note financings, private placements of our redeemable convertible preferred stock, public offerings of our common stock as well as lines of credit and term loans. As part of our acquisition of Bridg, Inc.
We expect to incur additional operating losses as we continue our efforts to grow our business. We have historically financed our operations and capital expenditures through convertible note financings, private placements of our redeemable convertible preferred stock, public offerings of our common stock as well as lines of credit and term loans.
Working with a marketer, we design a campaign that targets consumers based on their purchase history. The consumer is offered an incentive to make a purchase from the marketer within a specified period. We use a portion of the fees that we collect from marketers to provide these Consumer Incentives to customers after they make qualifying purchases ("Consumer Incentives").
Working with an advertiser, we design a campaign that targets consumers based on their purchase history. The consumer is offered an incentive to make a purchase from the brand within a specified period. We use a portion of the fees that we collect from advertisers to provide these Consumer Incentives to customers after they make qualifying purchases ("Consumer Incentives").
By applying advanced analytics to the purchase data we receive, we make it actionable, helping marketers reach potential buyers at scale and measure the true sales impact of their marketing spend. We have strong relationships with leading marketers across a variety of industries, including retail, restaurant, travel and entertainment, direct-to-consumer, and grocery and gas.
By applying advanced analytics to the purchase data we receive, we make it actionable, helping marketers reach potential buyers at scale and measure the true sales impact of their marketing spend. We have strong relationships with leading marketers across a variety of industries, including everyday spend, specialty retail, restaurant, travel and entertainment.
Key Performance Metrics Year Ended December 31, in thousands except per user amounts 2023 2022 2021 Cardlytics MAUs 162,148 154,550 146,242 Cardlytics ARPU $ 1.91 $ 1.93 $ 1.83 Cardlytics Monthly Active Users ("MAUs") We define MAUs as targetable customers that have logged in and visited online or mobile applications containing offers, opened an email containing an offer, or redeemed an offer from the Cardlytics platform during a monthly period.
Key Performance Metrics Year Ended December 31, in thousands except per user amounts 2024 2023 2022 Cardlytics MAUs 166,943 162,148 154,550 Cardlytics ARPU $ 1.67 $ 1.91 $ 1.93 Cardlytics Monthly Active Users ("MAUs") We define MAUs as targetable customers that have logged in and visited online or mobile applications containing offers, opened an email containing an offer, or redeemed an offer from the Cardlytics platform during a monthly period.
We pay certain partners a negotiated and fixed percentage of our billings to marketers less any Consumer Incentives that we pay to customers and certain third-party data costs ("Partner Share"). We report our revenue gross of Partner Share.
We pay certain partners a negotiated and fixed percentage of our Billings to advertisers less any Consumer Incentives that we pay to consumers and certain third-party data costs ("Partner Share"). We report our Revenue gross of Partner Share.
Income Taxes Income taxes are accounted for using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carry-forwards.
Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carry-forwards.
The insertion orders state the terms of the arrangement, the negotiated fee, payment terms and the fixed period of time of the campaign. We invoice marketers monthly based on the qualifying purchases of our partners' customers as reported by our partners during the month.
The insertion orders state the terms of the arrangement, the negotiated fee, payment terms and the fixed period of time of the campaign. We generally invoice marketers monthly based on the qualifying purchases of our partners' customers as reported by our partners during the month or based on the engagement of our partners' customers with our offers during the month.
The change in our net operating assets and liabilities was primarily due to a $4.5 million increase in accounts receivable and contract assets, a $9.5 million decrease in other accrued expenses and a $1.7 million decrease in Partner Share liability, partially offset by a $1.4 million increase in our Consumer Incentive liability.
The change in our net operating assets and liabilities was primarily due to a $12.5 million increase in accounts receivable and contract assets, a $6.6 million decrease in other accrued expenses, and a $7.1 million decrease in our Consumer Incentive liability, partially offset by a $1.4 million decrease in prepaid expense and other assets and a $16.4 million increase in Partner Share liability.
We believe free cash flow is useful to measure the funds generated in a given period that are available to invest in the business. We believe this supplemental information enhances stockholders' ability to evaluate our performance.
We believe free cash flow is useful to measure the funds generated in a given period that are available for distribution or to sustain the business. We believe this supplemental information enhances stockholders' ability to evaluate our performance.
The non-cash charges primarily related to stock-based compensation expense, depreciation and amortization expense (including the amortization of acquired intangible assets) impairment of goodwill and intangible assets, amortization of right-of-use assets, changes in the fair value of our contingent consideration, credit loss expense and income tax benefit.
The non-cash charges primarily related to stock-based compensation expense, depreciation and amortization expense (including the amortization of acquired intangible assets), impairment of goodwill and intangible assets, amortization of right-of-use assets, changes in contingent consideration, and credit loss expense.
We expect that general and administrative expenses will increase on an absolute dollar basis but decrease as a percentage of revenue as we focus on processes, systems and controls to enable our internal support functions to scale with the growth of our business. 50 Acquisition, Integration and Divestiture Costs Acquisition costs primarily represent diligence efforts, legal and advisory costs, broker fees and insurance premiums.
We expect that general and administrative expenses will decrease over time as a percentage of Revenue as we focus on processes, systems and controls to enable our internal support functions to scale with the growth of our business. Acquisition, Integration and Divestiture Costs (Benefit) Acquisition costs primarily represent diligence efforts, legal and advisory costs, broker fees and insurance premiums.
While our investment in our operations in the U.K. is not considered indefinitely invested, we do not plan to repatriate these funds. Through December 31, 2023, we have incurred accumulated net losses of $1,111.3 million since inception, including net losses of $134.7 million, $465.3 million and $128.6 million during 2023, 2022 and 2021, respectively.
While our investment in our operations in the U.K. is not considered indefinitely invested, we do not have any current plans to repatriate these funds. Through December 31, 2024, we have incurred accumulated net losses of $1,300.6 million since inception, including net losses of $189.3 million, $134.7 million and $465.3 million during 2024, 2023 and 2022, respectively.
Refer to Note 15—Segments to our consolidated financial statements for further details on our Adjusted Contribution by segment. 43 Adjusted EBITDA Adjusted EBITDA represents our Net Loss before income tax benefit; interest expense, net; depreciation and amortization; stock-based compensation expense; acquisition, integration and divestiture (benefits) costs; change in fair value of contingent consideration; foreign currency (gain) loss; impairment of goodwill and intangible assets; loss on divestiture; restructuring and reduction of force; income tax benefit; and deferred implementation costs.
Refer to Note 15—Segments to our consolidated financial statements for further details on our Adjusted Contribution by segment. 42 Adjusted EBITDA Adjusted EBITDA represents our Net Loss before interest expense, net; depreciation and amortization; stock-based compensation expense; foreign currency loss (gain); gain on debt extinguishment; acquisition, integration and divestiture costs (benefits); change in contingent consideration; impairment of goodwill and intangible assets, loss on divestiture; restructuring and reduction of force; income tax benefit and, in applicable periods, certain other income and expense items, such as deferred implementation costs.
Adjusted Net Loss We define Adjusted Net Loss as our Net Loss before stock-based compensation expense; foreign currency (gain) loss; acquisition, integration and divestitures costs (benefits); amortization of acquired intangibles; change in fair value of contingent consideration; impairment of goodwill and intangible assets; loss on divestiture; restructuring and reduction of force; and income tax benefit.
Adjusted Net Loss We define Adjusted Net Loss as our Net Loss before stock-based compensation expense; foreign currency loss (gain); acquisition, integration and divestiture costs (benefits); amortization of acquired intangibles; change in contingent consideration; impairment of goodwill and intangible assets; gain on debt extinguishment; loss on divestiture; restructuring and reduction of force; and income tax benefit, in applicable periods, certain other income and expense items.
Adjusted Contribution should be considered together with other operating and financial performance measures presented in accordance with GAAP. Also, Adjusted Contribution may not necessarily be comparable to similarly titled measures presented by other companies.
Adjusted Contribution should not be considered in isolation from, or as an alternative to, measures prepared in accordance with GAAP. Adjusted Contribution should be considered together with other operating and financial performance measures presented in accordance with GAAP. Also, Adjusted Contribution may not necessarily be comparable to similarly titled measures presented by other companies.
"Risk Factors" and "Special Note Regarding Forward-Looking Statements" in this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Overview Our company's mission is to make commerce smarter and rewarding for everyone.
"Risk Factors" and "Special Note Regarding Forward-Looking Statements" in this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
We also operate a customer data platform that utilizes point-of-sale ("POS") data, including product-level purchase data, to enable marketers to perform analytics and targeted loyalty marketing and also measure the impact of their marketing (the "Bridg platform").
Additionally we operate an identity resolution platform that utilizes point-of-sale ("POS") data, including product-level purchase data, to enable advertisers to perform analytics and targeted loyalty marketing and also measure the impact of their marketing (the "Bridg platform").
During 2022, we recognized $453.3 million of impairment of goodwill and intangible assets related to the Cardlytics and Bridg platforms. The impairment of goodwill and intangible assets resulted from a continued slowdown in the economy, decreased consumer spend, and a sustained decline in our stock price.
During 2023, we recognized $70.5 million of impairment of goodwill and intangible assets related to the Bridg platform. The impairment of goodwill and intangible assets resulted from a continued slowdown in the economy, decreased consumer spend, and a sustained decline in our stock price.
We then calculate a monthly average of these MAUs for the periods presented. We believe that MAUs is an indicator of the Cardlytics platform's ability to drive engagement and is reflective of the marketing base that we offer to marketers.
We then calculate a monthly average of these MAUs for the periods presented. We believe that MAUs is an indicator of the Cardlytics platform's ability to drive engagement and is reflective of the marketing base that we offer to marketers. We report only the total number of unique targetable customers within each FI.
Refer to Note 4—Business Combinations to our consolidated financial statements for additional disclosures related to our acquisitions and divestitures. 60 Financing Activities Our cash flows used in financing activities have primarily been composed of contingent consideration payments to Bridg, repurchasing shares of our common stock, offset by borrowings and repayments under our debt facilities, proceeds from the issuance of common stock and payments for costs related to debt issuances and equity offerings.
Financing Activities Our cash flows used in financing activities have primarily been composed of contingent consideration payments to Bridg, repurchasing shares of our common stock, offset by borrowings and repayments under our debt facilities, proceeds from the issuance of common stock and payments for costs related to debt issuances and equity offerings.
Adjusted Contribution demonstrates how incremental revenue on our platforms generates incremental amounts to support our sales and marketing, research and development, general and administration and other investments. Adjusted Contribution is calculated by taking our total revenue less our Partner Share and other third-party costs exclusive of deferred implementation costs, which is a non-cash cost.
Adjusted Contribution demonstrates how incremental Revenue on our platforms generates incremental amounts to support our sales and marketing, research and development, general and administrative and other investments. Adjusted Contribution is calculated by taking our total Revenue less our Partner Share and other third-party costs.
The following table shows a summary of our cash flows for the periods presented (in thousands): Year Ended December 31, 2023 2022 Cash, cash equivalents and restricted cash at beginning of period $ 121,985 $ 233,562 Net cash used in operating activities (185) (53,904) Net cash used in investing activities (10,062) (15,760) Net cash used in financing activities (20,026) (39,987) Effect of exchange rates on cash, cash equivalents and restricted cash 118 (1,926) Cash, cash equivalents and restricted cash at end of period $ 91,830 $ 121,985 Operating Activities Historically, we have experienced negative operating cash flows, which reflects our investments to grow our business.
The following table shows a summary of our cash flows for the periods presented (in thousands): Year Ended December 31, 2024 2023 Cash, cash equivalents and restricted cash at beginning of period $ 91,830 $ 121,985 Net cash used in operating activities (8,824) (185) Net cash used in investing activities (18,746) (10,062) Net cash provided by (used in) financing activities 1,444 (20,026) Effect of exchange rates on cash, cash equivalents and restricted cash (110) 118 Cash, cash equivalents and restricted cash at end of period $ 65,594 $ 91,830 Operating Activities Historically, we have experienced negative operating cash flows, which reflects our investments to grow our business.
We expect that our Partner Share and other third-party costs will increase in absolute dollars as a result of our revenue growth. Delivery Costs Delivery costs consist primarily of personnel costs of our campaign, data operations and production support teams, including salaries, benefits, bonuses, stock-based compensation and payroll taxes.
We expect that our Partner Share and other third-party costs will fluctuate over time in connection with changes in our revenue. Delivery Costs Delivery costs consist primarily of personnel costs of our campaign, data operations and production support teams, including salaries, benefits, bonuses, stock-based compensation and payroll taxes.
Investing Activities Our cash flows used in investing activities are primarily driven by our investments in, and purchases of, property and equipment and costs to develop internal-use software. We expect that we will continue to use cash for investing activities as we continue to invest in and grow our business.
Investing Activities Our cash flows used in investing activities are primarily driven by our investments in, and purchases of, property and equipment and costs to develop internal-use software.
We evaluate our goodwill for impairment annually during the fourth quarter and whenever events or changes in circumstances indicate that the fair value of a reporting unit is more likely than not less than the carrying amount.
We evaluate our goodwill for impairment annually during the fourth quarter and whenever events or changes in circumstances indicate that the fair value of a reporting unit is more likely than not less than the carrying amount. Our reporting units are one level below the operating segments at which level our segment management conducts regular reviews of the operating results.
Many marketers tend to devote a significant portion of their marketing budgets to the fourth quarter of the calendar year to coincide with consumer holiday spending and reduce marketing spend in the first quarter of the calendar year.
Our operating cash flows also vary from quarter to quarter due to the seasonal nature of our marketers’ advertising spending. Many marketers tend to devote a significant portion of their marketing budgets to the fourth quarter of the calendar year to coincide with consumer holiday spending and reduce marketing spend in the first quarter of the calendar year.
Valuation and Impairment of goodwill and intangible assets Intangible assets are recorded at fair value on the date of acquisition and amortized over their estimated useful lives. The intangible assets are evaluated whenever events or changes in circumstances indicated that we should estimate the fair value of our individual long-lived assets to determine if any impairment charges were present.
The intangible assets are evaluated whenever events or changes in circumstances indicated that we should estimate the fair value of our individual long-lived assets to determine if any impairment charges were present.
Refer to Note 5—Goodwill and Acquired Intangibles to our condensed consolidated financial statements for additional information regarding the goodwill impairment. 55 Loss on divestiture Year Ended December 31, Change in thousands 2023 2022 $ % Loss on divestiture $ 6,550 $ — $ 6,550 n/a % of Revenue 2 % n/a On December 7, 2023 we sold and transferred substantially all of the assets of Entertainment for $6.0 million in cash, subject to a combined $1.1 million held in escrow for indemnities and sales and use taxes, as well as customary post-closing adjustment.
Loss on divestiture Year Ended December 31, Change in thousands 2024 2023 $ % Loss on divestiture $ — $ 6,550 $ (6,550) n/a % of Revenue — % 2 % On December 7, 2023 we sold and transferred substantially all of the assets of HSP EPI Acquisition, LLC ("Entertainment") for $6.0 million in cash, subject to a combined $1.1 million held in escrow for indemnities and sales and use taxes, as well as customary post-closing adjustment.
We do not consider these excluded items to be indicative of our core operating performance. The items that are non-cash include foreign currency gain (loss), impairment of goodwill and intangible assets, loss on divestiture, deferred implementation costs, depreciation and amortization, stock-based compensation expense and change in fair value of contingent consideration.
We do not consider these excluded items to be indicative of our core operating performance. Of these items depreciation and amortization expense, stock-based compensation expense, gain on debt extinguishment, impairment of goodwill and intangible assets and foreign currency loss (gain) are non-cash impacting.
The 2018 Loan Facility includes customary representations, warranties and covenants (affirmative and negative), including restrictive covenants that prohibit mergers, acquisitions, dispositions of assets, inccurrence of indebtedness, encumbrances on our assets and the payment or declaration of dividends, in each case subject to specified exceptions.
We also confirmed the extension of the maturity date of the loan to April 29, 2025 based on our positive Adjusted EBITDA result. 55 The 2018 Loan Facility includes customary representations, warranties and covenants (affirmative and negative), including restrictive covenants that prohibit mergers, acquisitions, dispositions of assets, incurrence of indebtedness, encumbrances on our assets and the payment or declaration of dividends, in each case subject to specified exceptions.
All of our obligations under the 2018 Loan Facility are secured by a first priority lien on substantially all of our assets. The 2018 Loan Facility does not include any prepayment penalties. During the year ended December 31, 2023, we borrowed $30.0 million against our 2018 Line of Credit.
All of our obligations under the 2018 Loan Facility are secured by a first priority lien on substantially all of our assets. The 2018 Loan Facility does not include any prepayment penalties. In April 2024, we repaid in full $30.0 million of the principal balance of the 2018 Line of Credit.
Results of Non-GAAP Measures Billings Year Ended December 31, Change Year Ended December 31, Change in thousands 2023 2022 $ % 2022 2021 $ % Billings $ 453,426 $ 442,477 10,949 2 $ 442,477 $ 394,075 48,402 12 Billings increased by $10.9 million during 2023 compared to 2022, primarily driven by an increase of $32.8 million in sales to new marketers, offset by a $21.9 million net decrease in sales to existing marketers.
Results of Non-GAAP Measures Billings Year Ended December 31, Change Year Ended December 31, Change in thousands 2024 2023 $ % 2023 2022 $ % Billings $ 443,840 $ 453,426 (9,586) (2) $ 453,426 $ 442,477 10,949 2 Billings decreased by $9.6 million during 2024 compared to 2023, primarily driven by an increase of $45.7 million in sales to new marketers, offset by a $55.3 million net decrease in sales to existing marketers.
The table above does not include obligations under agreements that we can cancel without a significant penalty. 58 2018 Loan Facility On April 29, 2022, we amended our 2018 Loan Facility to increase the capacity of our Line of Credit from $50.0 million to $60.0 million with an option to increase to $75.0 million upon syndication.
On April 29, 2022, we amended our 2018 Loan Facility to increase the capacity of our Line of Credit from $50.0 million to $60.0 million with an option to increase to $75.0 million upon syndication.
Operating activities used $53.9 million of cash in 2022, which reflected our net loss of $465.3 million, $422.7 million of which were non-cash charges, and a $11.3 million change in our net operating assets and liabilities.
Operating activities used $8.8 million of cash in 2024, which reflected our net loss of $189.3 million, $196.3 million of which were non-cash charges, and a $15.8 million change in our net operating assets and liabilities.
Impairment of goodwill and intangible assets Year Ended December 31, Change in thousands 2023 2022 $ % Impairment of goodwill and intangible assets $ 70,518 $ 453,288 $ (382,770) (84) % % of Revenue 23 % 152 % During 2023, we recognized $70.5 million of impairment of goodwill and intangible assets related to the Bridg platform.
Impairment of goodwill and intangible assets Year Ended December 31, Change in thousands 2024 2023 $ % Impairment of goodwill and intangible assets $ 131,595 $ 70,518 $ 61,077 87 % % of Revenue 47 % 23 % During 2024, we recognized $131.6 million of impairment of goodwill and intangible assets related to the Bridg platform.
Cardlytics ARPU increased by $0.10 during 2022 compared to 2021 as a result of a $31.4 million increase in revenue and an 8.3 million increase in Cardlytics MAUs. 42 Non-GAAP Metrics Year Ended December 31, in thousands 2023 2022 2021 Revenue $ 309,204 $ 298,542 $ 267,116 Billings $ 453,426 $ 442,477 $ 394,075 Gross Profit $ 130,378 $ 112,632 $ 103,340 Adjusted Contribution $ 158,626 $ 143,035 $ 129,628 Net Loss $ (134,702) $ (465,264) $ (128,565) Adjusted EBITDA $ 3,771 $ (45,169) $ (12,220) Adjusted Net Loss $ (11,436) $ (60,250) $ (38,727) Net cash used in operating activities $ (185) $ (53,904) $ (38,523) Free Cash Flow $ (12,577) $ (67,390) $ (51,087) Definitions of Non-GAAP Measures Billings Billings represents the gross amount billed to customers and marketers for services in order to generate revenue.
Cardlytics ARPU decreased by $0.02 during 2023 compared to 2022 as a result of a $0.3 million increase in Consumer Incentives due to changes to our targeting and ranking system that led to higher engagement. 41 Non-GAAP Metrics Year Ended December 31, in thousands 2024 2023 2022 Revenue $ 278,298 $ 309,204 $ 298,542 Billings $ 443,840 $ 453,426 $ 442,477 Gross Profit $ 120,894 $ 130,378 $ 112,632 Adjusted Contribution $ 150,537 $ 158,626 $ 143,035 Net Loss $ (189,304) $ (134,702) $ (465,264) Adjusted EBITDA $ 2,523 $ 3,771 $ (45,169) Adjusted Net Loss $ (18,909) $ (11,436) $ (60,250) Net cash used in operating activities $ (8,824) $ (185) $ (53,904) Free Cash Flow $ (28,122) $ (12,577) $ (67,390) Definitions of Non-GAAP Measures Billings Billings represents the gross amount billed to customers and marketers for services in order to generate revenue.
Further, the timing of payment of commitments and implementation fees to our FI partners may also result in variability of our operating cash flows for any period. Our operating cash flows also vary from quarter to quarter due to the seasonal nature of our marketers’ advertising spending.
As a result, timing of cash receipts from our marketers can significantly impact our operating cash flows for any period. Further, the timing of payment of commitments and implementation fees to our FI partners may also result in variability of our operating cash flows for any period.
Financing activities used $20.0 million in cash in 2023, consisting of $50.1 million paid for the First Anniversary Payment, partially offset by $30.0 million borrowed under our 2018 Line of Credit. Financing activities used $40.0 million in cash in 2022, consisting of $40.0 million used to repurchase shares of our common stock.
Financing activities used $20.0 million in cash in 2023, consisting of $50.1 million paid for the First Anniversary Payment, partially offset by $30.0 million borrowed under our 2018 Line of Credit. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
We believe that Adjusted Contribution provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and board of directors. Adjusted Contribution should not be considered in isolation from, or as an alternative to, measures prepared in accordance with GAAP.
We view Adjusted Contribution as an important operating measure of our financial results. We believe that Adjusted Contribution provides useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and Board of Directors.
Uses of Funds Our collection cycles can vary from period to period based on the payment practices of our marketers and their agencies. We are generally obligated to pay Consumer Incentives between one and four months following redemption, regardless of whether we have collected payment from a marketer or its agency.
We are generally obligated to pay Consumer Incentives between one and four months following redemption, regardless of whether we have collected payment from a marketer or its agency. We are generally obligated to pay our FI partners' Partner Share by the end of the month following our collection of payment from the applicable marketer or its agency.
For the periods presented, income tax benefit represents the release of a portion of our valuation allowance in connection with deferred tax liabilities arising from our acquisitions of Dosh and Bridg. 51 Results of Operations The following table sets forth our consolidated statements of operations (in thousands): Year Ended December 31, 2023 2022 2021 Revenue $ 309,204 $ 298,542 $ 267,116 Costs and expenses: Partner Share and other third-party costs 150,578 155,507 141,273 Delivery costs 28,248 30,403 22,503 Sales and marketing expense 57,425 74,745 65,996 Research and development expense 51,352 54,435 38,104 General and administrative expense 58,810 81,446 66,222 Acquisition, integration and divestiture (benefits) costs (6,313) (2,874) 24,372 Change in fair value of contingent consideration 1,246 (128,174) 1,374 Impairment of goodwill and intangible assets 70,518 453,288 — Loss on divestiture 6,550 — — Depreciation and amortization expense 26,460 37,544 29,871 Total costs and expenses 444,874 756,320 389,715 Operating loss (135,670) (457,778) (122,599) Other income (expense): Interest expense, net (2,336) (2,556) (12,563) Foreign currency gain (loss) 3,304 (6,376) (1,267) Total other income (expense) 968 (8,932) (13,830) Loss before income taxes (134,702) (466,710) (136,429) Income tax benefit — 1,446 7,864 Net Loss $ (134,702) $ (465,264) $ (128,565) Comparison of Years Ended December 31, 2023 and 2022 In this section, we discuss the results of our operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
These are primarily non-cash and are associated with debt payment transactions which are non-recurring. 48 Results of Operations The following table sets forth our consolidated statements of operations (in thousands): Year Ended December 31, 2024 2023 2022 Revenue $ 278,298 $ 309,204 $ 298,542 Costs and expenses: Partner Share and other third-party costs 127,761 150,578 155,507 Delivery costs 29,643 28,248 30,403 Sales and marketing expense 52,649 57,425 74,745 Research and development expense 49,607 51,352 54,435 General and administrative expense 56,482 58,810 81,446 Acquisition, integration and divestiture costs (benefits) 161 (6,313) (2,874) Change in contingent consideration 210 1,246 (128,174) Impairment of goodwill and intangible assets 131,595 70,518 453,288 Loss on divestiture — 6,550 — Depreciation and amortization expense 25,689 26,460 37,544 Total costs and expenses 473,797 444,874 756,320 Operating loss (195,499) (135,670) (457,778) Other income (expense): Interest expense, net (5,553) (2,336) (2,556) Foreign currency (loss) gain (1,269) 3,304 (6,376) Gain on debt extinguishment 13,017 — — Total other income (expense) 6,195 968 (8,932) Loss before income taxes (189,304) (134,702) (466,710) Income tax benefit — — 1,446 Net Loss (189,304) (134,702) (465,264) Net loss per share, basic and diluted $ (3.91) $ (3.69) $ (13.92) Weighted-average common shares outstanding, basic and diluted 48,361 36,488 33,419 Comparison of Years Ended December 31, 2024 and 2023 In this section, we discuss the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We recognize subscription revenue on a ratable basis over the contract term beginning on the date that our service is made available to the customer. 49 Cost and Expense We classify our expenses into the following categories: Partner Share and other third-party costs; delivery costs; sales and marketing expense; research and development expense; general and administrative expense; and depreciation and amortization expense.
Cost and Expense We classify our expenses into the following categories: Partner Share and other third-party costs; delivery costs; sales and marketing expense; research and development expense; general and administrative expense; and depreciation and amortization expense.
Investing activities used cash totaling $10.1 million and $15.8 million, in 2023 and 2022, respectively. Our investing cash outflows during these periods primarily consisted of funds used for the purchases of technology hardware and costs to develop internal-use software.
Our investing cash outflows during these periods primarily consisted of funds used for the purchases of technology hardware and costs to develop internal-use software. Additionally, in 2024 and 2023, we had cash inflows of $0.6 million and $2.3 million, respectively, related to proceeds from divestitures, net of cash divested.
Liquidity and Capital Resources The following table summarizes our cash and cash equivalents, restricted cash, working capital, accounts receivable and contract assets, net and unused available borrowings (in thousands): December 31, 2023 2022 Cash and cash equivalents $ 91,830 $ 121,905 Restricted cash — 80 Working capital (1) 52,779 1,098 Accounts receivable and contract assets, net 120,622 115,609 Unused available borrowings 16,688 60,000 (1) We define working capital as current assets less current liabilities.
Refer to Note 9—Debt and Financing Arrangements to our consolidated financial statements for additional information regarding the 2020 Convertible Senior Notes. 53 Liquidity and Capital Resources The following table summarizes our cash and cash equivalents, restricted cash, working capital, accounts receivable and contract assets, net and unused available borrowings (in thousands): December 31, 2024 2023 Cash and cash equivalents $ 65,594 $ 91,830 Working capital (1) 29,028 52,779 Accounts receivable and contract assets, net 103,252 120,622 Unused available borrowings (2) 60,000 16,688 (1) We define working capital as current assets less current liabilities.
We use Adjusted Contribution extensively to measure the efficiency of our advertising platform, make decisions to manage advertising campaigns and evaluate our operational performance. We view Adjusted Contribution as an important operating measure of our financial results.
Management views Adjusted Contribution as the most relevant metric to measure the financial performance as it reflects the dollars we keep after all of our partners are paid. We use Adjusted Contribution extensively to measure the efficiency of our advertising platform, make decisions to manage advertising campaigns and evaluate our operational performance.
Stock-based Compensation Expense The following table summarizes the allocation of stock-based compensation in the consolidated statements of operations (dollars in thousands): Year Ended December 31, Change 2023 2022 $ % Delivery costs $ 2,427 $ 2,682 $ (255) (10) % Sales and marketing expense 12,624 11,935 689 6 Research and development expense 16,392 13,262 3,130 24 General and administrative expense 9,537 16,807 (7,270) (43) Total stock-based compensation expense $ 40,980 $ 44,686 $ (3,706) (8) % % of Revenue 13 % 15 % 54 Stock-based compensation expense decreased by $3.7 million during 2023 compared to 2022 primarily driven by the reversal of the 2021 PSUs and higher forfeitures related to executive departures that occurred in 2023.
Stock-based Compensation Expense The following table summarizes the allocation of stock-based compensation in the consolidated statements of operations (dollars in thousands): Year Ended December 31, Change 2024 2023 $ % Delivery costs $ 2,680 $ 2,427 $ 253 10 % Sales and marketing expense 10,017 12,624 (2,607) (21) Research and development expense 14,957 16,392 (1,435) (9) General and administrative expense 12,713 9,537 3,176 33 Total stock-based compensation expense $ 40,367 $ 40,980 $ (613) (1) % % of Revenue 15 % 13 % Stock-based compensation expense decreased by $0.6 million during 2024 compared to 2023.
Revenue Year Ended December 31, Change in thousands 2023 2022 $ % Billings $ 453,426 $ 442,477 $ 10,949 2 % Consumer Incentives 144,222 143,935 287 — Revenue $ 309,204 $ 298,542 $ 10,662 4 % % of billings 68 % 67 % The $10.7 million increase in revenue during 2023 compared to 2022 was comprised of a $10.9 million increase in billings, offset by a $0.3 million increase in Consumer Incentives.
Revenue Year Ended December 31, Change in thousands 2024 2023 $ % Billings $ 443,840 $ 453,426 $ (9,586) (2) % Consumer Incentives 165,542 144,222 21,320 15 Revenue $ 278,298 $ 309,204 $ (30,906) (10) % % of Billings 63 % 68 % 49 The $30.9 million decrease in Revenue during 2024 compared to 2023 was comprised of a $9.6 million decrease in Billings and a $21.3 million increase in Consumer Incentives.
Refer to Note 12—Fair Value Measurements to our consolidated financial statements for additional information regarding the contingent consideration.
During 2023 we realized a $1.2 million expense primarily due to the change in contingent consideration to the former Bridg shareholders. Refer to Note 12—Fair Value Measurements to our consolidated financial statements for additional information regarding the contingent consideration.
Delivery Costs Year Ended December 31, Change in thousands 2023 2022 $ % Delivery costs excluding stock-based compensation expense and restructuring and reduction of force $ 25,821 $ 25,860 $ (39) — % Plus: Stock-based compensation expense 2,427 2,682 (255) (10) Restructuring and reduction of force — 1,861 (1,861) (100) Total delivery costs $ 28,248 $ 30,403 $ (2,155) (7) % % of Revenue 9 % 10 % Delivery costs decreased by $2.2 million during 2023 compared to the 2022 .
Delivery Costs Year Ended December 31, Change in thousands 2024 2023 $ % Delivery costs excluding stock-based compensation expense $ 26,963 $ 25,821 $ 1,142 4 % Plus: Stock-based compensation expense 2,680 2,427 253 10 Total delivery costs $ 29,643 $ 28,248 $ 1,395 5 % % of Revenue 11 % 9 % Total delivery costs increased by $1.4 million during 2024 compared to 2023 .
See our consolidated financial statements for further details regarding our current assets and current liabilities. Our cash and cash equivalents are available for working capital purposes. We do not enter into investments for trading purposes, and our investment policy is to invest any excess cash in short-term, highly liquid investments that limit the risk of principal loss.
We do not enter into investments for trading purposes, and our investment policy is to invest any excess cash in short-term, highly liquid investments that limit the risk of principal loss. Currently, a significant portion of our cash and cash equivalents are held in fully FDIC-insured money market accounts, demand deposit accounts and U.S. Treasury Bills.
Our reporting units are one level below the operating segments at which level our segment management conducts regular reviews of the operating results. 61 Our impairment evaluation consists of a qualitative assessment. If this assessment indicates that the fair value of the reporting unit is not more likely than not less than the carrying amount, goodwill is not considered impaired.
Our impairment evaluation consists of a qualitative assessment. If this assessment indicates that the fair value of the reporting unit is not more likely than not less than the carrying amount, goodwill is not considered impaired. Otherwise, a quantitative impairment test is performed by comparing the estimated fair value of a reporting unit to its carrying value, including goodwill.
Year Ended December 31, Change Year Ended December 31, Change in thousands 2023 2022 # % 2022 2021 # % Cardlytics MAUs 162,148 154,550 7,598 5 154,550 146,242 8,308 6 Cardlytics MAUs increased by 7.6 million during 2023 compared to 2022 primarily driven by an increase in new MAUs (41% of total growth) and lapsed customers returning (59% of total growth).
Year Ended December 31, Change Year Ended December 31, Change in thousands 2024 2023 # % 2023 2022 # % Cardlytics MAUs 166,943 162,148 4,795 3 162,148 154,550 7,598 5 Cardlytics MAUs increased by 4.8 million during 2024 compared to 2023, primarily driven by organic growth of the existing FI partners in the U.K. and U.S. and a new FI Partner in the U.K.
If the carrying value of the net assets associated with the reporting unit exceeds the fair value of the reporting unit, goodwill is considered impaired and the impairment will be determined as the amount by which the reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.
If the carrying value of the net assets associated with the reporting unit exceeds the fair value of the reporting unit, goodwill is considered impaired and the impairment will be determined as the amount by which the reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. 58 We assessed the triggering events criteria along with related conditions and developments as of September 30, 2024, and we concluded that we had a triggering event as a result of a sustained decline in our stock price during the three months ended September 30, 2024.
Otherwise, a quantitative impairment test is performed by comparing the fair value of a reporting unit to its carrying value, including goodwill. We can bypass the qualitative assessment for any period and proceed directly to the quantitative impairment test.
We can bypass the qualitative assessment for any period and proceed directly to the quantitative impairment test.
In addition, we are required to pay an unused line fee of 0.15% per annum on the average daily unused amount of the $60.0 million revolving commitment, which remains unchanged in the most recent amendment.
Interest on advances under the 2018 Line of Credit bore an interest rate equal to the prime rate plus 0.25%. In addition, we were required to pay an unused line fee of 0.15% per annum on the average daily unused amount of the revolving commitment.
Sales and marketing expense excluding stock-based compensation and restructuring and reduction of force decreased by $15.9 million primarily due to a $10.7 million decrease in headcount , a $2.4 million decrease in marketing events, a $1.8 million decrease in professional fees, a $0.5 million decrease in facility expense, a $0.3 million decrease in software licensing costs and a $0.2 million decrease in travel expenses. 53 Research and Development Expense Year Ended December 31, Change in thousands 2023 2022 $ % Research and development expense excluding stock-based compensation expense and restructuring and reduction of force $ 34,960 $ 39,573 $ (4,613) (12) % Plus: Stock-based compensation expense 16,392 13,262 3,130 24 Restructuring and reduction of force — 1,600 (1,600) (100) Total research and development expense $ 51,352 $ 54,435 $ (3,083) (6) % % of Revenue 17 % 18 % Research and development expense decreased by $3.1 million during 2023 compared to 2022.
Sales and marketing expenses excluding stock-based compensation decreased by $2.2 million during 2024 compared to 2023 primarily due to a $2.2 million decrease in staff expenses, mostly related to the divestiture of entertainment in December 2023, a $0.3 million decrease in training, dues and subscriptions expenses, and a $0.3 million decrease in travel and entertainment, partially offset by a $0.5 million increase in marketing events and a $0.1 million increase in software licenses. 50 Research and Development Expense Year Ended December 31, Change in thousands 2024 2023 $ % Research and development expense excluding stock-based compensation expense $ 34,650 $ 34,960 $ (310) (1) % Plus: Stock-based compensation expense 14,957 16,392 (1,435) (9) Total research and development expense $ 49,607 $ 51,352 $ (1,745) (3) % % of Revenue 18 % 17 % Total research and development expenses decreased $1.7 million in 2024 compared to 2023.
Year Ended December 31, Change Year Ended December 31, Change 2023 2022 $ % 2022 2021 $ % Cardlytics ARPU $ 1.91 $ 1.93 (0.02) (1) $ 1.93 $ 1.83 0.10 5 Cardlytics ARPU decreased by $0.02 during 2023 compared to 2022 as a result of a $10.7 million increase in revenue and a 7.6 million increase in Cardlytics MAUs.
Year Ended December 31, Change Year Ended December 31, Change 2024 2023 $ % 2023 2022 $ % Cardlytics ARPU $ 1.67 $ 1.91 (0.24) (13) $ 1.91 $ 1.93 (0.02) (1) Cardlytics ARPU decreased by $0.24 during 2024 compared to 2023 as a result of a $21.3 million increase in Consumer Incentives due to changes to our targeting and ranking system that led to higher engagement.
Research and development expense excluding stock-based compensation and restructuring and reduction of force decreased by $4.6 million primarily due to a $5.9 million decrease in headcount, a $1.5 million increase in capital development and a $0.5 million tax benefit, partially offset by a $2.4 million increase in non staff software licensing and data storage costs related to operations and a $0.9 million increase in professional fees.
Research and development expenses excluding stock-based compensation decreased by $0.3 million during 2024 compared to 2023, primarily due to a $0.8 million decrease in professional fees, a $0.3 million decrease in administrative expenses, and a $0.2 million decrease in staff expenses partially offset by a $1.0 million increase in data storage and data center expense.
Foreign Currency Gain (Loss) Year Ended December 31, Change in thousands 2023 2022 $ % Foreign currency gain (loss) $ 3,304 $ (6,376) $ 9,680 (152) % % of Revenue 1 % (2) % Foreign currency gain (loss) was $3.3 million during 2023 compared to foreign currency loss of $6.4 million during 2022, primarily due to the decrease in the value of the British pound relative to the U.S. dollar. 56 Income Tax Benefit Year Ended December 31, Change in thousands 2023 2022 $ % Income tax benefit $ — $ 1,446 $ (1,446) (100) % % of Revenue — % — % Income tax benefit was $1.4 million during 2022 due to the release of a portion of our valuation allowance in connection with deferred tax liabilities arising from our acquisitions of Dosh and Bridg.
Foreign Currency (Loss) Gain Year Ended December 31, Change in thousands 2024 2023 $ % Foreign currency (loss) gain $ (1,269) $ 3,304 $ (4,573) (138) % % of Revenue — % 1 % Foreign currency loss was $1.3 million during 2024 compared to a gain of $3.3 million during 2023, primarily due to the change in the value of the British pound relative to the U.S. dollar.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk The interest rate under the 2018 Line of Credit is variable. Interest on advances under the 2018 Line of Credit bears an interest rate of the prime rate of 8.50%.
Biggest changeInterest Rate Risk The interest rates under the 2018 Line of Credit are variable. Interest on advances under the 2018 Line of Credit bears an interest rate of the prime rate of 8.50% plus 0.25%. In July 2024, we amended our 2018 Loan Facility, which decreased the interest rate to prime rate plus 0.125%.
For example, if the average value of the British pound had been 10% lower relative to the U.S. dollar during 2023, 2022 and 2021, our revenue would have decreased by $1.8 million, 2.3 million and 2.1 million, respectively.
For example, if the average value of the British pound had been 10% lower relative to the U.S. dollar during 2024, 2023 and 2022, our revenue would have decreased by $2.4 million, 1.8 million and 2.3 million, respectively.
The overall impact to net loss would be partially mitigated by decreases in operating expense of $0.5 million, $1.1 million and $1.0 million in 2023, 2022 and 2021, respectively. 63
The overall impact to net loss would be partially mitigated by decreases in operating expense of $1.8 million, $0.5 million and $1.1 million in 2024, 2023 and 2022, respectively. 60
As of December 31, 2023, the prime rate was 8.50% and a 10% increase in the current prime rate would, for example, result in a $0.5 million annual increase in interest expense if the maximum borrowable amount under the 2018 Line of Credit were outstanding for an entire year. The interest rate on the Notes is fixed at 1.00%.
As of December 31, 2024, the prime rate was 8.50% and a 10% increase in the current prime rate would, for example, result in a $0.5 million annual increase in interest expense if the maximum amount under the 2018 Line of Credit was outstanding for an entire year.
We bear foreign currency risks related to the extent that any unfavorable fluctuation in the exchange rate between U.S. dollars and the British pound could result in an adverse impact to either revenue or expense.
Foreign Currency Exchange Risk Both revenue and operating expense of Cardlytics UK Limited are denominated in British pounds. We bear foreign currency risks related to the extent that any unfavorable fluctuation in the exchange rate between U.S. dollars and the British pound could result in an adverse impact to either revenue or expense.
Removed
Refer to Note 9—Debt and Financing Arrangements to our consolidated financial statements for additional disclosures related to our debt. Foreign Currency Exchange Risk Both revenue and operating expense of Cardlytics UK Limited are denominated in British pounds.
Added
The interest rate on the 2020 Convertible Senior Notes is fixed at 1.00%. On April 1, 2024, we issued the 2024 Convertible Senior Notes bearing an interest rate of 4.25%. Refer to Note 9—Debt and Financing Arrangements to our consolidated financial statements for additional disclosures related to our debt.

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