Cardlytics, Inc. Aktie

Hello, everyone, and thank you for joining us, and welcome to Cardlytics' First Quarter 2026 Financial Results Call. [Operator Instructions] I'll now hand the conference over to Nick Lynton, Chief Legal and Privacy Officer. Please go ahead.

Good evening, and welcome to the Cardlytics First Quarter 2026 Financial Results Call. Before we begin, let me remind everyone that today's discussion will contain forward-looking statements based on our current assumptions, expectations and beliefs, including expectations around our future financial performance and results, including for the second quarter of 2026, our capital structure and operational and product initiatives.

For a discussion of the specific risk factors that could cause our actual results to differ materially from today's discussion, please refer to the Risk Factors section of our 10-Q for the quarter ending March 31, 2026, which has been filed with the SEC. Also during our call, we will discuss non-GAAP measures of our performance. GAAP financial reconciliations and supplemental financial information are provided in the press release issued today, which you can find on the Investor Relations section of the Cardlytics website.

Today's call is available via webcast, and a replay will also be available on our website. On the call today, we have CEO, Amit Gupta; and CFO, David Evans. Following their prepared remarks, we'll open it up for your questions.

With that, I'll hand the call over to Amit.

Good evening, and thank you for joining us. As I mentioned on our last call, 2026 is a year of execution for us. Our performance in Q1 reinforces our confidence that we can operate efficiently with a lower cost basis and still deliver on our stated business objectives. Our strategic priorities remain consistent. First, expanding our reach by deepening collaborations with bank partners and integrating new publishers into our network; second, driving incremental revenue growth for our advertisers by leveraging our advanced algorithmic and geo-centric capabilities; and third, continuing to invest in our technology platform to further differentiate our offering and improve operational efficiency.

We are also benefiting from the addition of experienced go-to-market and FI-facing leaders who are helping us elevate our performance across several key areas.

Let me start with our network and supply. After a prolonged period, we are pleased to report that our supply has stabilized and many of our existing FI partners are actively engaging with us to co-develop growth opportunities. For example, building on strong program performance and positive customer response, we will onboard new cardholder portfolios with one of our larger FI partners later this year. This momentum reflects the strength of our advertising content, the quality of our platform and the collaboration between our FI partners and our internal teams.

Additionally, we are partnering with banks to better market and enhance reward amounts being paid out to their customers. In the case of one of our newer neobanks, the Double Days program continues to be a lever for increased consumer engagement and drove 0.25 million new activators during the event. We are expanding similar incentive programs with other FI partners. These engagement-focused programs tend to be adopted first by our newer banks, shifting more volume to these banks and leading to a more favorable revenue margin overall.

Our push to meet new customers where they are continues. We continue to see interest in the Cardlytics Rewards Platform or CRP, from partners across multiple industries. We currently have three live CRP partners. And while still early, we are seeing month-over-month supply growth. We are also in discussions with larger partners about implementing CRP, and we'll share more as we make progress.

Turning to our advertiser base. In Q1, we received a strong signal from our cohort of new enterprise advertisers that they valued our measurement, network reach and technology forward platform capabilities over our competitors. Our focus on new business is translating into meaningful year-on-year pipeline growth, and we expect it to be impactful in our U.S. business throughout the year.

In Q1, we saw strong performance from the telecom, gas, and convenience verticals. One of the fastest-growing discount grocers following a successful Q1 campaign and strong iROAS performance is renewing in Q2 and is on track to become a top 10 advertiser for us this year. Several leading advertisers in our channel prefer the quality of our analytics and the reach of our network and have decided to consolidate CLO spend with Cardlytics despite the supply constraints. This has been a recurring narrative amongst our clients and reinforces the value that our multi-FI network can provide.

To augment our measurement capabilities, we are adding new measurement partners to our network to support advertisers with their preferred measurement model of choice. At the same time, we continue to invest in offer performance and ad ranking. Optimization experiments in Q1 are driving higher activation and redemption rates, and we're seeing double-digit growth in redeemers across banks with stable supply. Feedback from advertisers continues to reinforce that we outperform other alternatives.

Our U.K. business continues to deliver outstanding results with Q1 revenue surging over 21% year-over-year. This momentum highlights our omnichannel strength, particularly with the restaurant and retail sectors. We are proud to have served all of the U.K.'s largest grocers on our platform during the quarter. In the U.K., advertiser sentiment remains strong as we diversify our footprint. This allows partners to rely on Cardlytics as a single destination for high-quality relevant content for their card members.

Turning back to the U.S. Due to macro events, we are seeing some budget pressure in the travel and hospitality sectors with approvals being delayed or pushed into future quarters. Overall, with supply stabilizing and execution improving, we believe we are well positioned for sequential growth.

Turning to our technology platform. The work we did in 2025, particularly in data and AI is now delivering measurable impact. Our engineering efforts are improving both speed and efficiency across the platform. For example, our newly released Insights agent delivers weekly unique advertiser reports synthesizing macroeconomic data, industry trends and Cardlytics-specific insights.

Our new campaign data sync infrastructure, starting with impact.com enables our sales team to share performance data with measurement partners for advertiser accounts in minutes rather than days. We standardized on a unified agentic development environment with common AI skills and MCP servers, giving our engineers AI-assisted tooling across the full development life cycle.

We are now tracking development productivity metrics to measure adoption and scale these games. Now looking forward, with the Bridg transaction successfully closed, we are now fully aligned around our core platform with improved financial flexibility and the ability to move faster. Our focus remains on disciplined urgent execution against our strategic priorities.

I'll now turn it over to David to discuss the financials.

Thank you, Amit. As we talked about on our last earnings call, our core focus and strategic plan we set up for 2026 is quarterly sequential growth and self-sustainability. We are pleased to announce Q1 numbers that are above the midpoint of the guide across all metrics, including for the Q1 Bridg results. Our Q2 guide further represents and supports quarterly sequential growth. We have also taken another step towards self-sustainability since acquiring and quickly selling the PAR shares we received in consideration for the divestiture of the Bridg business, further improving our state of liquidity and balance sheet.

Turning to Q1 results. For awareness, I will speak first to results and year-over-year comparisons from continued operations, which exclude Bridg results, followed by Q1 numbers that are inclusive of the Bridg operations, given these totals were included in our Q1 guidance.

Bridg specific results can be found in the 10-Q and the earnings release. Also, the comments will be year-over-year comparisons to the first quarter of 2025, unless stated otherwise.

In Q1, our billings were $58.1 million, a 37% decrease year-over-year. Total billings, inclusive of Bridg Results was $62.3 million. Despite the departure of Bank of America in January, we were able to retain the vast majority of our clients and are seeing results of our focus on driving new business to the platform. Q1 revenue was $34.3 million, a 39% decrease year-over-year. Total revenue, inclusive of Bridg results was $38.5 million. As Amit mentioned, our U.K. business remains a standout performer with Q1 revenue increasing over 21% year-over-year.

Q1 adjusted contribution was $19.7 million, a 28% decrease year-over-year. Total Q1 adjusted contribution, inclusive of Bridg results was $23.3 million. Despite year-over-year decline, we continue to expand our revenue margin or adjusted contribution as a percentage of revenue to 60.6%, our highest on record. However, we do expect this to come down in future quarters due to the divestiture of Bridg.

Q1 adjusted EBITDA was positive $0.2 million compared to negative $4.1 million in the first quarter of 2025. Total Q1 adjusted EBITDA, inclusive of Bridg results was negative $2.2 million. This improvement in adjusted EBITDA underscores our ability to execute towards our goals with a lower expense base.

Q1 adjusted operating expenses was $19.5 million, a decrease of 38% from prior year. Total Q1 adjusted operating expenses, inclusive of Bridg was $25.5 million. This was largely due to reduction in force actions taken in 2025 and optimization of our cloud infrastructure. Q1 operating cash flow was negative $5.6 million compared to negative $6.7 million in the prior year.

Free cash flow was negative $7.9 million compared to negative $10.8 million year-over-year, an improvement of $2.9 million. On the balance sheet, we ended Q1 with $35.7 million in cash and cash equivalents. Subsequent to the quarter closing, we liquidated all the PAR shares we received in connection with the Bridg sale. We used the proceeds to reduce the amount owed under our credit facility and improve our cash position.

Our MQUs for the quarter were $197 million, accounting for the loss of Bank of America in January. ACPU for the quarter was $0.10, down 21.3% year-over-year.

Now turning to our outlook for Q2 2026. All comparisons to prior year and prior quarters will exclude Bridg. For Q2, we expect billings between $61 million and $67 million, revenue between $35 million and $40 million, adjusted contribution between $20 million and $23 million and adjusted EBITDA between negative $2.7 million and positive $1.3 million.

Our guidance represents quarterly sequential growth of 10%, 9% and 9% for billings, revenue and adjusted contribution, respectively, and excluding Bridg numbers in Q1 for comparison purposes. We continue to be committed to delivering sequential growth for the remainder of 2026.

Our adjusted EBITDA guide further represents our belief in our ability to execute at a lower expense base, and we remain committed to driving operational efficiencies. We are laser-focused on executing against our core competencies to drive sequential growth in 2026.

I will now turn it back to Amit for closing remarks.

We're moving forward with a stronger foundation to operate the leading purchase intelligence platform. Our team is heads down executing on our strategic priorities to deliver value for our advertisers, partners, shareholders and end consumers. I'll now turn it over to the operator to begin Q&A.

[Operator Instructions] There are no questions at this time. I will now turn the call back to Amit for closing remarks.

I'm not sure if Amit is coming through, but I can jump in here for closing remarks. I would reiterate for all of our listeners that as we stated at the beginning, we are executing against the plan that we set forth at the beginning of the year, which is to operate through 2026 showing sequential growth as well as being able to show and perform with self-sustainability.

Amit, if you are back on, you want to have any other closing remarks or otherwise, we can conclude the call. But Amit, I'll turn it to you if you can hear us.

This concludes today's call. Thank you for attending. You may now disconnect.

Good evening, ladies and gentlemen, and welcome to the Cardlytics' Fourth Quarter Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Wednesday, March 4, 2026.

I would now like to turn the conference call over to Nick Lynton, Chief Legal and Privacy Officer. Please go ahead.

Good evening, and welcome to the Cardlytics Fourth Quarter and Full Year 2025 Financial Results Call. Before we begin, let me remind everyone that today's discussion will contain forward-looking statements based on our current assumptions, expectations and beliefs, including expectations around our future financial performance and results, including for the first quarter of 2026, our capital structure and our operational and product initiatives. For a discussion of the specific risk that could cause our actual results to differ materially from today's discussion, please refer to the Risk Factors section of our 10-K for the year ended December 31, 2025, which has been filed with the SEC.

Also during our call, we will discuss non-GAAP measures of our performance. GAAP financial reconciliations and supplemental financial information are provided in the press release issued today, which you can find on the Investor Relations section of the Cardlytics website. Today's call is available via webcast, and a replay will also be available on our website.

On the call today, we have CEO, Amit Gupta; and CFO, David Evans. Following their prepared remarks, we'll open it up for your questions.

With that, I'll hand the call over to Amit.

Good evening, and thank you for joining us. Reflecting on 2025, it was a year we successfully reset the company to achieve sales sustainability. We have emerged as a leaner, more focused and financially healthier organization. Our strategic priorities are clear: first, expanding our reach by deepening collaborations with bank partners and integrating new publishers into our network; second, driving revenue growth for advertisers by leveraging our advanced algorithmic capabilities; finally, we will continue to invest in our tech staff to further differentiate our platform and enhance operational efficiency.

We have a strong team in place and are continuing to invest in our talent. To this end, we recently welcomed David Evans as our new CFO, along with several other highly skilled individuals joining Cardlytics from strong backgrounds. The strategic decisions made over the past several months have set our balance sheet on a path to controlling our own destiny. Looking ahead, 2026 is a year of execution for us. Our execution is stronger than ever, and we are maturing into a high-performing technology company with a top-notch team capable of producing strong financial results. We have more conviction than ever that our product is relevant and uniquely differentiated in the marketplace.

Now moving specifically to Q4. As part of our broader strategic reset, we conducted a comprehensive review of our financial institution relationships to ensure long-term alignment across economics, product direction and consumer engagement. Our FI partnerships in the U.S. and U.K. remain durable and constructive and in many instances, are expanding. We are adding new core portfolios with several existing partners, reflecting their confidence in our program's performance and value. We are in active discussions to introduce new growth offerings built on our modernized scalable platform, while continuing to roll out new engagement formats designed to increase program awareness and redemption.

For example, during our most recent double date program with a partner, we saw a 2x increase in redeemers on days with double rewards. We are scaling these initiatives and seeing increased investment from FI partners in both the U.S. and the U.K. In this context, we recently concluded our relationship with Bank of America. While they were a valued partner, the program structure and future direction did not align with our long-term objectives regarding economics, personalization and consumer engagement.

Our momentum in reaching consumers beyond traditional banks continues to grow. We have officially launched with the Philadelphia Flyers and Boston Celtics in the sports category and Atm.com in financial services. As shared earlier, while we do not view these as material from a financial perspective in 2026, it is very encouraging from a proof-of-concept standpoint. While we recognize that the loss of Bank of America creates near-term pressure on supply, we expect this impact to diminish over time. This will be driven by existing partners launching more portfolios, UI enhancements to increase participation and the addition of new bank and nonbank publishers. We are focused on the long term and are building a stronger network, which requires navigating some near-term challenges.

Now moving to our advertiser base. Market traction for our ad format remains robust. Our value proposition is resonating more strongly than ever with sophisticated marketing teams who recognize the unique incrementality we provide. We saw particular strength this quarter in the grocery and convenience sectors. A leading grocery retailer continued to spend with us as a strategic partner. During Q4, we secured increased spend to support targeted efforts for specific customer segments while consistently meeting their performance goals. We're 1 of the fastest-growing discount grocers are measurable results verified by their team drove an 8x spend increase year-over-year. Our earlier investments in measurement capabilities are paying off as leading advertisers see the direct impact of their spend with Cardlytics on their sales.

We received consistent feedback from leading advertisers in the U.S. and the U.K. regarding our superior value proposition compared to competitors. For instance, a large U.S. retail brand chose to double its quarter-over-quarter spend in Q4 despite supply options elsewhere. While we have experienced some recent pressures in our travel and entertainment and subscription services sectors, we are also seeing nice green shoots of opportunity in other areas. For example, advertisers in the fashion and luxury segment increased their spend by 70% quarter-over-quarter, reflecting deeper investment from top consumer brands.

As a follow-up to our heavier prioritization on new business, we saw meaningful conversions in Q4. For example, we added the world's largest athletic apparel maker to our advertiser roster. We achieved a 60% quarter-over-quarter increase in new business wins across e-commerce, retail and restaurants in Q4, and we expect this momentum to continue as the team further scales.

Our U.K. business remains a standout performer, with Q4 revenue searching over 35% year-over-year. This momentum highlights our omnichannel strength, particularly within the grocery sector. This segment drove more than 40% of our U.K. business for the quarter, headlined by a top 3 grocer that moved from initial pilot programs to a substantial Q4 spend increase. With stable supply and focused execution, we see our growth story realized in the U.K. By applying these execution lessons to our newly settled supply in the U.S., we expect our domestic business to return back to a state of sequential growth.

Now to our technology stack. We continue to build a differentiated category-leading technology platform. Key components of this work include platform modernization and the use of AI as a force multiplier. A key part of our reset involves retiring substantial technical debt and strengthening our engineering foundation. We migrated all partners to our ad server completely deprecating all instances of the offer placement system globally. We also transitioned from our legacy data warehouse to a unified data and AI platform on [ Databricks ]. These 2025 technological improvements enabled our engineering team to deliver features 20% faster while reducing infrastructure costs by 40%. Our algorithms are now more advanced leading to higher predictability and performance. Furthermore, we believe the delivery issues encountered in 2024 and early 2025 are now in the rear view.

We are embracing AI as a tool for both efficiency and innovation. Our engineering team utilizes AI for agentic coding and product development. And we have launched multiple AI tools on our platform to enhance operational efficiency. For example, we deployed an agent for customer support that now resolves large quantities of partner and campaign inquiries in minutes rather than days or weeks. We are reimagining our client engagement model to increase our execution velocity, enabling faster campaign projections and builds to shorten the time between contract signature and campaign launch.

One of our core strengths is the ability to attribute transactions to specific store locations. We have developed new visualizations within our ads manager UI to help clients make strategic decisions based on intuitive local level data. As we heard from one of our U.S. grocery and gas advertiser CMOs, [ start ], Cardlytics has become one of the most efficient growth channels. We are seeing stellar [ IRO ] performance well above our internal benchmarks. And more importantly, the sales are incremental and measurable input.

Finally, the Bridg transaction. As part of our commitment to focusing on our core business, we announced in January an agreement with PAR Technology to serve as a new home for the Bridge business. While we believe in the strength of the Bridge product, ongoing bank data connection issues kept it disconnected from our core business. Looking forward, we believe PAR is a better fit, allowing Bridg to be fully integrated with their core operations without their data constraints based at Cardlytics. We are working with the PAR team on final preparations and expect the closing to occur later this month. Upon the completion of the sale, our balance sheet will be strengthened, improving our path to self sustainability.

I'll now turn it over to David to discuss the financials.

Thank you, Amit, and good evening. It has been a little over a month since I rejoined the company, and it has been nice in reinvigorating to get back involved here at Cardlytics. For fiscal year 2025, our top line billings were $385 million, down 13.3% year-over-year. Our revenue was $233 million, down 16.2% year-over-year, and our annual adjusted EBITDA was $10.1 million, up $7.5 million year-over-year. While we navigated the supply constraints throughout 2025, we were disciplined in how we managed our expenses driving the third consecutive year of positive adjusted EBITDA. We are committed to attaining self-sustainability and believe this commitment requires balancing investments in growth and disciplined expense management.

The rest of my comments will be year-over-year comparisons to the fourth quarter of 2025, unless stated otherwise. In the third quarter, we delivered top line as expected across billings, revenue and adjusted contribution while surpassing the high end of our guidance for adjusted EBITDA. In Q4, our total billings were $94.1 million, a 19% decrease year-over-year. Even with the headwinds of supply constraints and content restrictions we were able to retain the vast majority of our advertisers, which reflects the differentiated value and incrementality we drive. Q4 revenue was $56.1 million, a 24.2% decrease year-over-year.

Our U.S. revenue, excluding Bridg was $40.1 million, decreasing 33.5% year-over-year due to lower billings as well as pricing adjustments, which drove lower billings margins than the prior year. This margin impact was partially due to strategic investments in certain advertisers to drive incremental ROAS, as well as an isolated onetime variance in December delivery as a result of the supply changes to our network. U.K. revenue was $10.8 million, increasing 35.1% year-over-year. This is our U.K. business' largest ever quarter driven by deepened engagement with advertisers and increased supply.

Q4 adjusted contribution was $31.7 million, a 22.1% decrease year-over-year. However, we expanded our Q4 margin as a percentage of revenue to 56.5%, an increase of 1.5 basis points to a more favorable FI partner mix. This margin is the highest we have achieved today, driven primarily by growth of our newest FI partners. Adjusted EBITDA was positive $8.5 million, an increase of $2.1 million.

Total adjusted operating expenses, excluding stock-based compensation, came in at $23.2 million, a reduction of $11.1 million year-over-year due to the reduction in staff in May and October as well as the optimization of our cloud infrastructure. Operating expenses benefited from $2.6 million in onetime benefits from an ERC tax credit. In Q4, operating cash flow was a positive $13 million. Free cash flow was positive $10.5 million, which was an improvement of $11.9 million from prior year due primarily to our lower expense base as well as receiving the full $6 million impact of 2 ERC tax credits received in 2025.

On the balance sheet, we ended Q4 with $48.7 million in cash and cash equivalents. During the quarter, we had a net payment of $6 million on our line of credit, resulting in $40.1 million currently drawn on the line. The proceeds from the expected Bridg transaction will serve to bolster the balance sheet, further positioning the business for self-sustainability. In the fourth quarter, we had 227 million MQUs, an increase of 18%, driven by the full ramp of our newest FI partners. Excluding these partners, MQUs would have increased 1%. ACPU was $0.12, down 35% year-over-year as a result of content restriction and as we added new [ TUs ] from our newest FI partners.

Now turning to our outlook for Q1 2026. For Q1, we expect billings between $57.5 million and $63.5 million. Revenue between $35 million and $40 million, adjusted contribution between $20 million and $23 million, and adjusted EBITDA between negative $7.5 million and negative $3.5 million. Our billings guidance represents a negative 41% to negative 35% decrease year-over-year. The primary driver of our expected billings decrease is a result of the content restrictions imposed by 1 of our largest FI partners and the departure of Bank of America. We will endeavor to execute against several strategies with our banks and advertisers that Amit touched on in his previous comments that will allow us this level set and grow sequentially from this point forward.

In Q1, we expect to continue to grow in the U.K., driven by continued success with our largest accounts, growing our new clients and attracting new advertisers to the platform. Revenue as a percentage of billings is expected to be in the low 60% range for Q1. We are making strategic pricing decisions to drive incremental spend from our advertisers to drive higher revenues and to remain competitive in the market, which is funded by our higher-margin bank mix. We expect adjusted contribution as a percentage of revenue to be in the mid- to high 50% range. Even with top line pressure and intentional pricing decisions, we're keeping more of every dollar we generate, which is an important component to our efforts around self-sustainability.

A key driver to the improved economics is due to our newest partners. That advantage allows us to reinvest in advertiser and consumer incentives to drive incremental budgets. In practice, more compelling rewards translates into better engagement, which strengthens advertising retention and our ability to scale.

For the first quarter, we expect operating expenses to be at or below $27 million, excluding stock-based compensation and severance, this represents a reduction of 27% from the prior year. We remain committed to driving operational efficiency. Our guiding principle is to be laser focused at executing against our core competencies to drive sequential adjusted contribution growth over the long run.

I'll now turn it back to Amit for closing remarks.

I'll close by reflecting on the last year. The through line across all these changes has been the resilience and grit of our team. Our people have endured an unusually demanding series of cycles that led to changes that were essential for this company's health. Our team showed up every day with sleeves rolled up to fight for our bank partners, our advertisers and the end consumer. And I couldn't be prouder of their goingness to persevere. We firmly believe we have the right team, the right tack and the right focus to deliver strong results for our shareholders in 2026 and beyond.

I'll now turn it over to the operator to begin Q&A.

[Operator Instructions] And we have our first question from Jacob Stephan with Lake Street Capital Markets.

First, I just kind of wanted to touch on the Q1 guidance a little bit. Maybe you could kind of help us think through a little bit on the sequential decline maybe to kind of the $60.5 million midpoint on the billing side. How much of that was BofA, how much of that was potentially the content restrictions that you're seeing at your other large FI partner?

Sure. This is David, assuming you can hear me okay, Jacob. I would say a large vast majority of that you could attribute to Bank of America. Their last campaign -- billings campaign ran on January 15. And so what you're seeing is kind of the impact of that. Obviously, some of the content restrictions plays a role as well, but the vast majority is D&A.

Okay. And then I got your comments on growing sequentially moving forward, David. Maybe you can kind of correlate that with future content restrictions at your FI partner, how does that play out through the year?

Yes. I mean the kind of way I think about the Q1 guide is really around the foundational level setting for how we can optimize and sequentially grow going forward. As you might imagine, with losing a partner like that had some impact in recalibrating the platform, but all that being said, when I mentioned sequential growth, we feel pretty confident in our ability to continue to optimize for the platform. If you remember last summer, we had some content restrictions through one of our major FI partners. I think the view there is that we can and should be able to get back to those levels at that point in time from last summer, but that's probably closer to the end of the year. Does that make sense?

Yes. That's helpful. And then maybe just one follow-up. You kind of called out grocery stores being a demand driver or at least a growing customer base for you guys. I'm wondering broader kind of consumer staples. Is that the case? Or are you seeing some strong growth out of that segment?

Yes. I think that's a good question, Jacob. One of the things we talked about in 2025, we had put in -- invested in our geocentric -- targeting geocentric capabilities. And that's what we see, especially in grocery stores, basically, advertisers with storefront and online channels, they are really benefiting from our omnichannel focus on omnichannel capabilities. So we do expect it's not limited, obviously, to grocery stores it's for other brands as well wherever we see kind of omnichannel requirements, those campaigns, we are substantially performing better versus our other competition in the market. So those advertisers will continue to benefit.

Now in addition, because of our geo targeting, even though there are folks that are direct-to-consumer via online channels, they still end up benefiting as well, but folks with store presence, store firm presence and omnichannel requirements get the lion's share of these advancements that we've made.

Got it. And if I could just sneak one more in. Maybe David, obviously, you're coming back to Cardlytics here. Maybe you could help us think through what was the driving decision behind that? And maybe one thing that excites, 2 or 3 things that you're really looking at honing in on in '26 here?

Yes. Given the nature of the call, I'll keep it fairly [ peasy ] here. But look, I would say this. Cardlytics remains a differentiated platform. I mean I wrote my own press release when I joined, and that is to say that I have a tremendous amount of affinity to this organization. In learning more about the opportunity during the process. I came away feeling like the team is still very much intact, and we still have an asset that is still unique and differentiated in the marketplace. When you think about even without BofA, we're still seeing 40% of every card swipe in the United States. And I don't know of another company that has the ability to integrate, utilize and act upon that scale of data with rights to do what we do. And I think there's a good chunk of that, that really excites me about what we can do from the level that we're at. And I think that's the important thing here is when we think about with where the company is, we still see, hear and feel the value in what we are providing for our advertisers, and we still are having similar conversations and interactions with our bank partners as well. So hopefully, that helps answer your question.

Our next question is from Jason Kreyer with Craig-Hallum.

Wondering if you can talk about what factors contributed to the decision to sunset the BofA relationship. Curious if there are any cost benefits or tech benefits that stem from that termination? And then if you can maybe talk about what impact that has on MQUs going forward.

Yes. Jason, thank you so much for the question. I think as we said in the prepared remarks, Bank of America was a valued partner, but we could not get on the same page in terms of how the program structure was set up, economics, personalization and consumer engagement. And we're very much thinking about how the network evolves and grows in the future, and that was -- there was a lack of alignment there. That said, we absolutely believe in the strength of our platform and our advertiser base and the value we can deliver for the end consumers. And should Bank of America revisit, we'll be ready to welcome them back.

To the second part of your question, there are tech benefits. As you might remember, we -- one of the key factors that was inhibiting the longer-term relationship was the need for Bank of America to migrate to our current tech stack, and that was a tall order for them. And that was -- we were literally managing and organizing a parallel stack for them. And I mentioned in our prepared remarks that we were able to let go of a significant level of tech debt, and that was partly due to sunsetting and concluding the Bank of America relationship. So there are definitely tech benefits. There also allows us to increase our execution velocity overall, our contract process, as I mentioned in our prepared remarks. That said, I think we're in a good place with the network and should Bank of America revisit their decision, we'll be ready to welcome them back.

You mentioned earlier in the prepared remarks, you just talked about some -- the potential for adding new card portfolios. Curious if you can give a little bit more detail on that.

Yes. As we've kind of increased or deepened our relationship or engagement with every single bank partner of ours, we've also started to get into a sense of what is specific for their overall card portfolio that they can benefit from our new set of capabilities. And this is something that we have kind of like a bank-by-bank conversation. So as we add new portfolios, we'll keep bringing them back and keeping all of you posted. But as of now, the conversations are happening in -- with several of our bank partners to onboard new, either segments or portfolios or sub card portfolios that were not previously in the program. And that cannot only increase the MQUs, but also allows us to deepen the relationship with the banks. But we'll keep you posted as those new portfolios come online, and we welcome them on our network.

We have our next question from Kyle Peterson with Needham.

Great. I wanted to start off on the BofA, just the timing and mechanics of that. I guess, could you guys just confirm what the exact kind of shutoff date was or roughly just want to confirm whether the 1Q guide as a full quarter's impact or if there's any kind of lingering benefit in the first quarter from BofA.

Yes, I mentioned on the question earlier, January 15.

Okay. And then I guess just follow-up in liquidity in the balance sheet. I think you mentioned that after the Bridg transaction closes, that should be fusion in the balance sheet. But I guess looking at the structure of the deal, I thought it looks like you guys got part stock. So I guess just like any more clarity on -- is that just -- like is there any lockup or hold up? Or what are your plans once that is delivered and how you're going to convert that to liquidity?

Yes. If you read the 8-K from the announcement we've got just aspects of the deal that we're still kind of on track to close for them. So if you think about just consents and final preparations, everything is on track there. once that's done, the deal will close and then we use a 15-day count to determine the number of shares that we will receive. And then once we receive those shares, we will look to quickly liquidate to get cash on our balance sheet. And more likely than not, we'll use those proceeds to pay down a decent amount of the facility.

Okay. Okay. That's helpful. And then I guess just if I could squeeze one last one in there. Is -- how should we think about cash flow? I know 1Q is normally kind of a weaker quarter and based on the guide kind of looks like that. But with the cost structure being quite a bit lower, I'm assuming there's also probably some costs that will come out with Bridg. But is there an opportunity to return back to at least EBITDA positive as early as the second quarter? And I guess, how are you guys kind of feeling about kind of the return to positive free cash flow moving forward.

Yes. Sounds good. Yes. With the Bridg going away, you mentioned that, you're absolutely right. We'll get some OpEx benefits from that, call it, $4 million, $5 million of help from that perspective. And then from an adjusted EBITDA perspective, I mean, look at the end of the day, if adjusted OpEx is kind of low mid-20s, that gives you a good indicator of kind of what we're going to need to achieve from a just contribution perspective. And to kind of answer your question, we we're pretty close in set of a level of confidence to being able to return back to some form of quarterly positive adjusted EBITDA, it remains pretty high.

Our next question is from Robert Coolbrith with Evercore.

Welcome back to David. Just a couple of quick ones left. Just wanted to confirm on the Q1 guidance, is Bridg being treated as discontinued ops there. I just wanted to -- I assume it is, but it wasn't confirmed anywhere, so I just want to double check that. And then I have a couple more.

Yes. So if we're kind of targeting a mid-month close at that point, it gives you a sense for how much is going to contribute to Q1 and then it's no longer part of Cardlytics after that.

Okay. So there is revenue contribution from Bridg through the mid-month close is contemplated?

Correct, right. Yes, correct. That's correct. Yes. Once we close, then we'll take credit for everything up to close.

Okay. Got it. And then just a couple more. subscription services, you noted, I think, some softness there. I think going back a couple of quarters ago, Amit, you had mentioned that as a source of strength. I just wanted to maybe ask about materiality and then also just if you could sort of give us a sense of the trends or any factors influencing what you're seeing from a demand perspective in that category? And then I've got just one last one after that.

Sure. I think overall, Robert, thank you for the question. Overall, subscription services, we do see a decline from a quarter-on-quarter point of view. Now while we -- the decline is largely -- or the pressure is largely coming from the restrictions from our bank partners, right? The platform strength about targeting and reach is still the same. But obviously, when there's contract restrictions from our partners, and obviously, departure of Bank of America, those are the reasons why we start to see some pressure on the subscription services.

That said, we're thinking through some newer formats that allow us to have people act because they end up being mostly event triggered. So we're trying to figure out new formats that can actually allow us to regain the footing in the subscription services category with our current network.

And then for some of the other category trends, as I mentioned before, gas and grocery, there's consistent growth, robust growth, about 21% year-on-year. Restaurant delivery about 13% year-on-year growth. So other categories continue to be strong. And we're excited about rolling out some of the newer formats with the bank partners that we're talking about, and we'll keep you posted as they roll out over the course of the year.

Got it. Great. And the last one is just I wanted to touch on. I know it's early, but the SKU level sort of targeting or advertising opportunity. You've talked a little bit about that in the past. I just wanted to understand, is that something that was sort of uniquely enabled by technology that resided within Bridg? Or is that something that you can retain as a capability going forward, an emerging capability going forward?

Yes. The appropriate question, Robert. So we're -- the short version is that we're going to put the SKU level offers on the back burner for now. As you said, it is -- it was primarily powered by the data set that we were connecting with the Bridg platform. and with the exit of the Bridg platform, while we can still do it, but it does require more hoops for us to do it and requires more integration, deeper integration with certain retailers. So for now, we're going to put it on the back burner. And as we execute kind of our current game plan at some point in the future when it makes sense, we'll bring it back. But for now, it's on the back corner.

And thank you. As there are no further questions at this time, this concludes today's conference call. We thank you for your participation. Ladies and gentlemen, you may now disconnect.

Good afternoon, ladies and gentlemen, and welcome to the Q3 2025 Cardlytics, Inc. Earnings Conference Call. [Operator Instructions] This call is being recorded on November 5, 2025.

And I would like to turn the conference over to Nick Lynton. Thank you. Please go ahead.

Good evening, and welcome to the Cardlytics Third Quarter 2025 Financial Results Call.

Before we begin, let me remind everyone that today's discussion will contain forward-looking statements based on our current assumptions, expectations and beliefs, including expectations around our future financial performance and results, including for the fourth quarter of 2025, the growth of CRP and the launches of new CRP partners, our capital structure, increasing our supply and operational and product initiatives.

For a discussion of the specific risk factors that could cause our actual results to differ materially from today's discussion, please refer to the Risk Factors section of our 10-Q for the quarter ended September 30, 2025, which has been filed with the SEC.

Also during our call, we will discuss non-GAAP measures of our performance. GAAP financial reconciliations and supplemental financial information are provided in the press release issued today, which you can find on the Investor Relations section of the Cardlytics website. Today's call is available via webcast, and a replay will also be available on our website.

On the call today, we have: CEO, Amit Gupta; and CFO, Alexis DeSieno. Following their prepared remarks, we'll open it up for your questions.

With that, I'll hand the call over to Amit.

Good evening, and thank you for joining us today. On our last call in August, we shared updates on the steady progress we made across our key priorities as well as the headwinds we would be facing starting Q3. As a reminder, these headwinds are stemming from our largest FI partners' decision to block our advertiser content from running on their channels.

Overall, our Q3 billings results were in line with our expectations as we actively work to shift volume to other partners in our network and learn from our mitigation strategy. In parallel, we have taken a series of steps to ensure the long-term sustainability and success of our company and maintained a relentless focus on our key business pillars.

First, increasing and diversifying our supply to meet consumers where they are. Our relationships with financial institutions continue to expand in both scope and depth, reinforcing the strategic value of our network, especially in light of replacing the supply we have lost from our largest FI partner. For example, with one bank partner, we expect to soon add their debit and SMB portfolios to our program, which represents a significant opportunity to deepen engagement with their customers and expand our reach.

We believe that strengthening consumer engagement is just as effective as adding new users, and we remain focused on doing this through new and innovative capabilities. For example, we recently ran a Double Days campaign where rewards were doubled on specific days to drive a sense of urgency. This campaign grew consumer engagement by approximately 15%.

In addition, building on previous success with one of our larger bank partners, we are expanding category level offers in Q4. These offers reward customers for spending in a specific category rather than with a specific advertiser and have proven to be effective in driving engagement with our offers. In Q2, we tested this with gas and grocery. And in Q3, we took our learnings to the entertainment category. Once again, these campaigns have demonstrated that category-level offers are highly effective in creating a halo effect. 73% of consumers who redeemed a category-level offer also redeemed another offer.

Due to the decision of our largest FI partner, approximately 1/3 of our total billings were set to be blocked. But we were able to mitigate a significant portion of the drop because the rest of our network is more than 2.5x larger than our largest FI partner alone. We can increase content shift to other banks with MTU capacity and also increase engagement with those banks customers. By doing more of this, we would be on the path to make up the billings shortfall with better margins.

Turning to Cardlytics Rewards Platform, our network of non-FI publishers. We are excited to share positive momentum from last quarter. We signed 3 new partners in the U.S., including OpenTable, a global leader in restaurant technology. Through this partnership, we plan to help boost engagement and loyalty with OpenTable's large user base as part of their recently revamped loyalty program. We look forward to sharing updates on when we expect to launch with OpenTable.

For our other 2 CRP partners, we expect to launch in Q4 after testing and integration, which is currently underway. We see CRP as a significant growth opportunity. Not only does CRP allow us to meet more consumers where they are, it can also help our traditional FI partners by enabling us to bring new advertisers and verticals to our platform. Additionally, we have seen an increase in our pipeline since last quarter as a result of customer loyalty becoming a more central focus in the market. We believe Cardlytics is perfectly positioned to be a commerce media partner for leading companies looking to accelerate their advertising efforts while delivering value to their customers.

Now moving on to our second pillar, strengthening and growing advertiser demand. Leading advertisers continue to recognize the unique value of our network and capabilities. While commerce media is undergoing a fundamental shift, advertisers have not lowered their standards. They continue to seek measurable outcomes and sophisticated capabilities to leverage different ad formats and micro target customers.

With our existing advertisers, we are building trust by continuing to build campaigns that deliver results. Of note, most advertisers have decided to stick with Cardlytics despite the supply changes with our largest FI partner. In fact, for the partners that run card-linked offers with Cardlytics as well as a competitor program, we consistently hear that our incremental ROAS is superior.

On the new business front, we signed pilots with iconic brands such as a large athletic apparel brand and a global hotel brand and 100% of our new business was on engagement-based pricing. We have also been focused on winning back key accounts. Several notable brands, including a global coffee chain and a global discount grocer have rejoined our network, which we believe underscores our ability to drive performance for our advertisers.

One of the core value propositions of our platform is that we drive both online and in-store sales. We have enhanced our geo-targeting capabilities over the last 6 months and implemented different reward amounts between online and offline purchases as well as newer features like shop ad targeting, which targets users where they buy, not just where they live.

Many auto gas and restaurant chains have used our multi-location reports to assess performance, identify top-performing locations and inform franchise marketing efforts. Geo-targeting also helps engagement with franchises that often have independent marketing budgets.

Our U.K. business continues to show strength with 22% revenue growth year-over-year. This quarter, we were able to grow budgets with all our top advertisers and closed a large number of new logos across grocery, gas, restaurant and retail. We are now working with all of the top 5 U.K. grocers, up from 4 previously, and ongoing recognition of the strength of our platform.

And finally, last quarter, we added another localized content partner to expand our Always On third-party content for our publishers. We can now deliver nearly 10,000 local and regional offers, which we are now providing to our smaller banks that did not have local offers previously.

Additionally, with our new partnership with OpenTable, not only will they be joining our platform as a publisher, but also as a content provider, bringing the restaurant partners to our network for the benefit of all our publishers. We believe all these initiatives drive awareness and relevancy for the program and deepen engagement with consumers.

Now turning to network performance. Building on the work we've done to modernize our tech stack, we continue to strengthen our engineering foundation to benefit our clients and improve internal productivity.

While our models continue to become stronger with higher predictability, we experienced some aberrations in July as supply changes began to take effect. These issues stabilized by the end of the quarter. And while they cause some choppiness in our margins, they are making our delivery models better at handling large-scale changes. We are also advancing the integration of our measurement models with widely adopted industry standards, which we believe make it easier for our advertisers to evaluate performance across channels.

Building on our efforts to ensure Cardlytics data is properly modeled in leading MMMs, we are now integrating with more partners to automatically feed our data into their dashboards. These changes help to retain our existing clients and we believe outperform other channels.

The performance of our network remains strong, reinforced by the impact and efficiency of the campaigns delivered through our platform. With the investments we've made in our models, our platform continues to perform better for our advertisers and bank partners with a 21% year-on-year improvement in ROAS.

Last but not least, our Bridg business. In Q3, we saw continued interest in our identity resolution product, both from existing clients and new prospects, including a grocer that engaged Bridg to gain access to previously unavailable insights around shopper behavior. This will allow them to significantly enhance their ability to understand, engage and target individuals, driving increased frequency, spend and loyalty.

I'm also pleased to share that we recently signed a 2-year renewal with a large fast food chain. On Rippl, we continue to make progress on both supply and demand. On the supply side, we added 2 new retailers to the Rippl network. We also continued to grow our demand, which resulted in the second consecutive quarter of doubling our revenue.

Before I turn it over to Alexis, I want to touch on the actions we took in Q3 to strengthen our financial foundation and sharpen operational focus. In September, we fully paid the $46 million remaining on our 2020 convertible notes.

Last month, we took a difficult but necessary step in reducing our workforce to ensure we can continue to operate sustainably and preserve the long-term financial health of our company. This latest reduction reflects a 30% decrease in our workforce as well as reductions to third-party spend, real estate and operations, and we expect these reductions to deliver annualized cash savings of $26 million. This follows prior reductions this year of $16 million in May and $8 million in January for a total of $50 million.

We are deeply appreciative of the contributions of the colleagues who departed as part of these changes. As a leaner organization, we are now moving forward with more focus and discipline.

Looking ahead, we are simplifying our strategic priorities. In 2026, we plan to further solidify our foundation and grow our commerce media platform. We will focus on expanding our CRP partner cohort while strengthening our existing FI partnerships. To unlock increased advertiser budgets, we will lean into value propositions that are in demand and where we believe we can deliver a differentiated product such as omnichannel performance. By doubling down on where we are best in the industry, we believe we can get back on a path to growth.

I'll now turn it over to Alexis to discuss the financials.

Thank you, Amit. My comments will be year-over-year comparisons to the third quarter of 2024, unless stated otherwise. In the third quarter, we delivered billings as expected and surpassed the high end of our guidance for adjusted EBITDA, though we were at the low end of the range for revenue and adjusted contribution.

In Q3, our total billings were $89.2 million, a 20.3% decrease. As expected, the content restrictions impacted the size of the budgets we could sell as a result of fewer consumers to whom we could serve offers. Despite this, we were able to retain the vast majority of our advertisers, which we believe demonstrates the value and incrementality that we drive for our advertisers.

Consumer incentives of $37.2 million were down from the prior year by 17.2% and revenue decreased 22.4% to $52.0 million, driven by a decrease in billings. Our revenue to billings margin was 1.6 points lower than the prior year. This margin impact is partially due to strategic investments in certain advertisers to drive incremental ROAS as well as a temporary overcorrection as a result of the supply changes to our network. We believe we have now normalized our ability to deliver on budgets, and we are seeing our October billings margin trending higher than the Q3 average.

Looking at our segment revenue results. Our U.S. revenue, excluding Bridg, decreased 28% due to lower billings stemming from the content restrictions and pricing investments we previously discussed. In the U.K., we saw 22% revenue growth driven by higher billings and increased supply. We grew billings across our top clients and saw a significant increase in billings from new merchants, including a large athletic apparel brand. Bridg revenue decreased 15% due to the loss of a major account in previous quarters.

Adjusted contribution was $30.0 million, down 17.5% from prior year. However, we expanded our margin as a percentage of revenue to 57.7%, an increase of 3.5 points due to a more favorable partner mix. This margin is the highest we have experienced to date, driven primarily by growth of our newest FI partners.

Adjusted EBITDA was positive $3.2 million, an increase of $5.0 million. Total adjusted operating expenses, excluding stock-based compensation, came in at $26.8 million, a reduction of $11.4 million year-over-year due to the reduction in staff in May and the optimization of our cloud infrastructure. Operating expenses benefited from $5 million in onetime benefits, including from the [ ERT ] tax credit we received in September.

In Q3, operating cash flow was positive $1.8 million. Free cash flow was negative $2.7 million, which was an improvement of $1.2 million from prior year due primarily to our lower expense base. Free cash flow improved from the previous quarter by $0.7 million. On the balance sheet, we ended Q3 with $44 million in cash and cash equivalents. During the quarter, we had a net draw of $46.1 million on our line of credit, which was used entirely to repay our remaining 2020 notes.

In the third quarter, we had 230.3 million MQUs, an increase of 21%, driven by the full ramp of our newest FI partners. Excluding these partners, MQUs would have increased 3%. ACPU was $0.11, down 31% year-over-year as a result of content restrictions and as we ramp our newest FI partners.

Now turning to our outlook for Q4. For Q4, we expect billings between $86 million and $96 million, revenue between $51.1 million and $59.1 million, adjusted contribution between $29.0 million and $35.0 million and adjusted EBITDA between $0.9 million and $7.9 million. Our billings guidance represents a negative 26% to negative 17% decrease year-over-year.

Despite this top line weakness, we expect adjusted EBITDA to be positive for both the quarter and the full year. The primary driver of our expected billings decrease is a result of further content restrictions imposed by our largest FI partner. To mitigate this, we are focusing on several initiatives with our advertisers.

First, we are continuing to prove performance with top brands, which are already running at maximum capacity, which has helped to secure renewals in Q4 and 2026. We are also working to scale certain categories or brands that are not at maximum capacity by leaning into alignment with our advertisers' measurement models. And lastly, our new business team is focused on signing new accounts and winning back key accounts.

We expect to see continued incremental spend from our advertisers as many brands are starting holiday promotions earlier and want to benefit from budget add-ons based on consumer demand and performance.

Our priority remains replacing lost supply through new partnerships, shifting volume to the rest of the network and increasing engagement with our existing partners. To illustrate our progress in shifting volume to other partners, we continue to see positive trends with our newest large FI partner. We had almost 3x as many advertisers on this partner's channels in Q3 than in Q1, which represents approximately half of our brands. We expect this momentum to continue and are already seeing October billings at approximately 50% higher than in Q3. With this FI, our activation rate is 2x the network average, and we believe our partnership is strong.

While we are excited about our newest CRP partnerships announced today, we are not assuming any material financial impact in 2025 from the Cardlytics Rewards platform. CRP remains a key piece of our strategy for 2026, both to diversify supply and also to unlock demand as the industry moves towards loyalty programs and embedded rewards.

In Q4, we plan to continue to grow in the U.K., driven by continued success with our largest accounts and in attracting new advertisers to the platform. Revenue as a percentage of billings is expected to be in the low 60% range for Q4.

We are making strategic pricing decisions to drive incremental spend from our advertisers and to remain competitive in the market, which is funded by our higher-margin bank mix. In fact, we expect adjusted contribution as a percentage of revenue to be in the mid- to high 50% range. This continues to be among the highest we have seen due to the improved economics with our new and ramping bank partners and allows us to invest back into advertiser and consumer incentives to unlock incremental budgets and drive higher ROAS.

Offers and more compelling rewards mean better engagement, and this leads to a higher likelihood of scale and retention with our advertisers. Despite top line weakness and strategic pricing decisions, we are keeping more of every dollar we make, and we remain focused on driving profitability.

Our adjusted EBITDA guidance is a reflection of our reset operational cost base following the large reduction in force that we completed on October 1. For the fourth quarter, we expect operating expenses to be at or below $28 million, excluding stock-based compensation and severance. This represents a reduction of 19% from the prior year.

After adjusting for the $5 million in onetime benefits in Q3, this represents a $3 million to $4 million sequential improvement quarter-over-quarter in operating expenses and an additional $2 million of savings in capital expenses. As a reminder, the $26 million in annualized savings that we are expecting in 2026 represents both operating and capitalized expenses as well as timing of certain other changes such as lease terminations.

We remain committed to driving operational efficiency and we'll make further changes as needed. For now, we believe we have fully reset our cost base to reflect our new top line reality while balancing the need to invest in both consumer engagement and supply diversification.

Our guiding principle is to focus only on priorities that have a clear line of sight to driving revenue and that align with our goal of positive adjusted EBITDA in 2025 and 2026. We are confident we can return to growth and achieve profitability once we get through the current headwinds.

I'll now turn it back to Amit for closing remarks.

As we continue to navigate a challenging environment, we've taken decisive steps to reset our business, reduce our concentration risk and set ourselves up for a financially healthy future. We remain confident in the fundamental strength of our commerce media platform, our partnerships and our teams. By prioritizing the areas where we know we can win, we expect to deliver greater value to our advertisers, partners, shareholders and consumers.

I'll now turn it over to the operator to begin Q&A.

[Operator Instructions] And your first question comes from the line of Jacob Stephan from Lake Street Capital Markets.

I guess, first, I just kind of wanted to touch on the billing margins commentary a bit. Maybe kind of help me piece this together when you think through kind of -- we saw a decrease in Q3, but it sounds like you're seeing better margins with your remaining FI partners, and it sounds like it improved in October. Kind of help me think through what the impact was in Q3 and overall, how you see these trending as we kind of enter '26?

No problem. Thanks for the question. So yes, there's 2 different types of margin, the billings to revenue margin, which you saw a little bit of a decrease in Q3. That was primarily all in July, where we were impacted by the abrupt change to our supply from our largest FI partner. It took a little bit of time to normalize that. And by the end of the quarter, we were back to normal in terms of our ability to deliver and had learned how to properly target from that point on.

There's also a little bit of margin pressure in there from performance incentives or higher ROAS that we've been seeing. We make strategic decisions to remain competitive, and this is normal practice in the market. So it's a little bit of both. The run rate in October is higher than what we saw in Q3. And so we expect that to continue. I would probably continue to model it in the low 60s. So that really was a blip from the July changes.

And then just to touch on the bank mix piece, which is more what I look at when I talk about revenue to adjusted contribution -- or sorry, adjusted contribution to revenue margin. That was the highest that we've seen so far even despite the lower billings margin. So we saw around 58% in Q3. That's among the highest we've seen, and that's as a result of our newer partners who are better economics, taking share from our legacy partners, which are worse economics from a revenue share perspective.

So it really highlights that it's unlocking our ability to invest more of that margin back into engagement and performance for our advertisers and our customers. And we're still able to keep more of every dollar we make from a contribution standpoint. Hopefully, that helps. And we should expect to see adjusted contribution margin continuing to improve or be stable around the high 50s. (sic) [ high 50% ]

Okay. Yes, very helpful. And then second question, more so on kind of the guidance. There's roughly a $7 million range between the low-end and high-end of adjusted EBITDA. That's bigger than the range of adjusted contribution. What -- I guess, what are the puts and takes that kind of get you to the higher end versus the lower end of that? And maybe talk a little bit about the overall cost base now.

Yes, very helpful. You're right, that is confusing at first look. Adjusted OpEx is really not a big range. It's only about $1 million. So all of this is flowing down from the range of the contribution and revenue guide. OpEx basically is $27 million to $28 million is what we're guiding on OpEx. And so the rest of it comes from really that top line and margin flowing down. Does that make sense?

Okay. Understood. Yes, yes. Totally.

[Operator Instructions]

That ends our question-and-answer session. Ladies and gentlemen, this concludes today's call. Thank you for participating. You may all disconnect.

Good afternoon, ladies and gentlemen, and welcome to the Second Quarter 2025 Cardlytics, Inc. Earnings Conference Call. [Operator Instructions] This call is being recorded on Wednesday, August 6 of 2025.

I would now like to turn the conference over to Nick Lynton. Please go ahead.

Good evening, and welcome to the Cardlytics Second Quarter 2025 Financial Results Call. Before we begin, let me remind everyone that today's discussion will contain forward-looking statements based on our current assumptions, expectations and beliefs, including expectations regarding our future financial performance and results, including for the third quarter of 2025, our capital structure, increasing our supply, the growth of new partners, advertiser churn and operational and product initiatives. For a discussion of the specific risk factors that could cause our actual results to differ materially from today's discussion, please refer to the Risk Factors section of our 10-Q for the quarter ended June 30, 2025, which has been filed with the SEC.

Also, during this call, we will discuss non-GAAP measures of our performance. GAAP financial reconciliations and supplemental financial information are provided in the press release issued today, which you can find on the Investor Relations section of the Cardlytics website. Today's call is available via webcast, and a replay will also be available on our website.

On the call today, we have CEO, Amit Gupta; and CFO, Alexis DeSieno. Following their prepared remarks, we'll open it up for your questions.

With that, I'll hand the call over to Amit.

Good evening, and thank you for joining our second quarter 2025 earnings call. Q2 marked another quarter of steady progress against our strategy. As I look back over the past year since stepping into the CEO role, we significantly improved the product and tech challenges facing us over the past several quarters, diversified our ecosystem and set a foundation for growth.

With the work we've accomplished, we are now deepening our efforts in key areas that will be most critical for the next stage of our business. I'd like to share details on the progress we've made last quarter to advance our 4 business pillars. First, increasing and diversifying our supply to meet consumers where they are.

Our publisher base is what makes our network unique and growing and diversifying this foundation continues to be a top priority for us. We're focused on growing our partnerships with both financial institutions and merchants from other verticals. We are pleased with the early progress with our newest bank partners, and we have a robust pipeline of prospective FI and non-FI partners in both the U.S. and U.K.

We are not only focused on adding more publishers with large user bases, but also working with our bank partners to maximize user engagement with our offers. When our partners are fully committed to our shared goal of maximizing value for consumers, we see a substantial difference in results. As an example, we've been working with a top 5 bank partner who has been investing in their program and increasing their marketing and merchandising activities around cashback offers.

And through these efforts, this partner is seeing a significant lift across key metrics, including a 92% increase in activations and a 48% increase in redemptions year-over-year. We plan to continue these efforts with several bank partners who are interested in working with us to increase engagement and bring more demand.

Now, turning to the retail side of our CLO network. On our last call, we announced the launch of the Cardlytics Rewards platform, which strategically diversifies our publisher base beyond FIs. We are now collecting data from our pilot, making refinements to the platform and optimizing for the best consumer experience. In parallel, we are progressing many active conversations with leading merchants in the U.S. and U.K. We look forward to sharing more partner updates in due time.

While we continue our efforts to expand our supply, we are also working through a notable change with our largest FI partner. This partner, who built their program with our offers over the last several years, has recently decided to restrict a large amount of content from running on their channels starting July 1.

While we expected some level of this, we did not anticipate brand restrictions at this scale. The implications are that this partner's users will likely receive significantly less content and less value. We have also heard from numerous advertisers that they are equally concerned about the negative impacts to the efficacy of their programs if restricted from running on the trusted and proven Cardlytics platform. This change is posing significant limitations for our business.

Despite our attempts to find a better path forward for us and their customers, we are now focused on mitigating the impact of this bank's decision. First, we will continue to invest in efforts to meet consumers where they are, and we expect to increase and diversify our supply.

Second, we are improving our relevancy and targeting tools, which we expect will allow us to shift our content to other publishers that are focused on leveraging the Cardlytics platform to deliver value to consumers. Third, our shift to engagement-based pricing is helping advertisers see our platform as a real performance media ad format.

Four, we are working with our advertisers to blend TVC reporting, incrementality results and MMM readings for a more comprehensive view of performance, which we believe will continue to position Cardlytics as a trusted and a measurable growth channel.

For clarity, the restrictions imposed by this bank are unique to this partner as no other FI partner of ours has imposed restrictions of any similar magnitude nor do we expect them to. In fact, our other bank partners are leaning into our platform to deliver more value to their users and are growing their share on our network. We are committed to ensuring that our business is sustainable and on a path to profitability. Alexis will discuss more about the financial impact these changes will have.

We believe that our network capabilities are a real market differentiator that cannot be easily replicated. Competitors have generally not been successful in capturing budgets from advertisers with multiunit chains or more sophisticated CLO needs.

We hear this time and time again from our advertisers that only Cardlytics has the scale and ability to run the type of novel ad formats that they want. Since these restrictions were imposed, we've seen negligible churn with our restricted brands. The vast majority of them have stayed on our platform so far.

Now moving on to our second pillar, strengthening and growing advertiser demand. In light of supply limitations, doubling down on demand is of utmost importance. Our U.K. business continued to show strong growth with the highest billings quarter in history, driven by strength in categories like everyday spend, subscription services and retail.

We signed over 20 new logos, about half of which are top 150 brands in the U.K., and we are focused on growing these accounts and securing longer-term commitments. With more pressures on performance, we are helping our advertisers demonstrate results and working closely with them to develop longer-term CLO strategies.

In the U.S., we also saw increased performance expectations from our advertisers. Advertiser churn was mostly concentrated in mid- to small-sized brands, which have been more susceptible to budget reductions. We saw strength in everyday spend and specialty retail, consistent with trends from the previous quarter.

Travel and restaurant categories experienced softness in the first half of the year as we've seen across the industry. We are encouraged by signing new top-tier brands in the U.S. as well, including a leading rideshare player, top retailers and national restaurant chains. These enterprise accounts are where we see the highest potential for growth and scaling in the second half of this year.

In the light of the changes with our largest FI partner, we are focused on reinforcing our relationship with our top advertisers and ensuring their content is effectively delivered across our spectrum of publishers. We have reorganized our sales organization under our new Chief Business Officer and are accelerating our go-to-market efforts with intensity.

We have been seeing success with our vertical focused go-to-market initiatives, and we will enhance and expand on this strategy. We are also leading with proven performance, which remains a true differentiator in the market against our competitors. And while we diversify our supply, we are also adding new demand to our network.

We expect to attract new brands and verticals to fuel our growth strategy with CRP. Furthermore, by aligning U.S. and U.K. under one leader, we are able to work with leading brands and support their marketing spends across these markets contiguously.

Our third pillar, maximizing the performance of our network. We are seeing the benefits of our focused efforts to stabilize and optimize our platform over the past few quarters. Our network is performing effectively and efficiently, bringing more confidence to our partners and advertisers.

As recently announced, we launched new dashboards within the Cardlytics Insights portal to bring the full power of our network data to our advertisers. The new dashboards are focused on customer insights, which have historically been generated by our analytics team rather than self-serve and in real time. With the Insights portal, our advertisers can access market data and customer intelligence on demand whenever they need them.

One client noted, we are sharing these insights internally to highlight Cardlytics not just as a media partner, but a partner that provides real value to our business through data. Lastly, we continue to make progress with the migration to engagement-based pricing models, which are now implemented for 79% of our advertisers.

In Q2, 96% of our new business ran on engagement-based pricing, reinforcing the fact that this pricing model is aligned with what our advertisers are looking for as it provides lower funnel signals that are valuable to them. Engagement-based pricing has also helped us compress sales cycles, aligned with internal brand measurement models, and we believe it will make us more resistant to churn over time.

And our final pillar, accelerating our growth in Bridg. Last quarter, we saw strong and steady client interest for our identity resolution capability, including a long-term renewal with a high-end beauty brand. We also signed a new partnership with a popular restaurant chain that is using our advanced analytics and business intelligence for deeper customer insights.

For Rippl, we're encouraged by the positive trends that helped us more than double our revenue quarter-over-quarter. We recently welcomed Hy-Vee's RedMedia to Rippl as our newest partner, which will further expand our current scale of over 140 million unique shopper profiles.

Building on our efforts to scale supply over the past year, we are now continuing to focus on the demand side. In Q2, there has been strong traction with the adoption of our Rippl audiences across different platforms. In fact, we're seeing 10% growth week-over-week on Trade Desk alone. We are continuing to work with new and existing platform partners to accelerate this momentum and drive broader adoption and more revenue diversification.

On our last call, I shared that we launched a pilot for CPG offers with one of our large retail clients and bank partners. I am pleased to report that initial results from this pilot are encouraging. Not only did we validate the feasibility of connecting our Bridg and Cardlytics data, the pilot demonstrated a positive impact on both shopper behavior and basket size.

Among redeemers, we saw a 30% increase in the rate of baskets containing the specific product as well as a 2% increase in basket size of transactions containing the product and a 13% increase for all other transactions. Overall, we continue to move forward, taking a deliberate and thoughtful approach to growing our business.

There are undoubtedly challenges that we did not anticipate a year ago, but we believe that over the medium term, the strategic shifts we initiated earlier this year will position us for profitable growth. We are operating efficiently and effectively, and we believe these shifts will ensure that we continue to deliver on our promise to our partners, advertisers, consumers and investors.

I'll now turn it over to Alexis to discuss the financials.

Thank you, Amit. In the second quarter, we delivered results above the midpoint of our guidance for most metrics, and we surpassed the high end of our guidance for adjusted EBITDA. My comments will be year-over-year comparisons to the second quarter of 2024, unless stated otherwise.

In Q2, our total billings were $104 million, a 5.7% decrease. We achieved our billings guidance by continuing to expand billings with many of our top accounts in the grocery and gas category, which grew 41%. We also had success in the retail category, growing our largest retail advertiser by $2.8 million in billings year-over-year.

We continue to see weakness in the travel category, which declined across a few key accounts. On new business, we are encouraged by the high quality of brands and momentum with 45 total new logos signed in Q2 and a strong potential to scale.

Consumer incentives of $40.8 million were flat to prior year and revenue decreased 9.2% to $63.2 million, driven by a decrease in billings. Our revenue to billings margin was 2.3 points lower than prior year due to pressures on advertiser performance.

Looking at our segment revenue results. Our U.S. revenue, excluding Bridg, decreased 13% due to lower billings and pricing pressure, as previously discussed. In the U.K., we saw 29% revenue growth, driven by higher billings and increased supply. We grew billings with all of our top 5 clients in the quarter and launched a new advertiser whose billings were in the top 5.

Bridg revenue decreased 8% due to the loss of a major account in previous quarters. Adjusted contribution was $36.1 million, down 0.6% from the prior year. However, we expanded our margin as a percentage of revenue to 57.1%, an increase of 5 points due to a more favorable partner mix. This margin is the highest we have experienced to date, driven primarily by growth of our newest bank partners.

Adjusted EBITDA was positive $2.7 million, an increase of $5 million. Total adjusted operating expenses, excluding stock-based compensation, came in at $33.4 million, a reduction of $5.2 million, primarily due to our previously discussed reduction in staff and a reduction to incentive compensation.

In Q2, operating cash flow was positive $1.2 million. Free cash flow was negative $3.4 million, which was $3 million less than the prior year due to interest on our 2029 convertible notes and severance payments that was partially offset by improved working capital. Free cash flow improved from the prior quarter by $7.4 million.

On the balance sheet, we ended Q2 with $46.7 million in cash and cash equivalents. This week, we drew $50 million on our line of credit, leaving us with $10 million of unused available borrowings. We have $106.7 million of liquidity, including the undrawn amount or $81.7 million after accounting for our minimum cash covenant of $25 million.

As previously shared, we plan to use the funds to pay for our upcoming 2025 convertible maturity as well as to give us extra flexibility as we navigate the upcoming quarters while keeping our cash on hand at a comfortable level. Lastly, in Q2, we paid the final $2 million of our settlement with SRS, fully closing this matter.

As a reminder, last quarter, we introduced Monthly Qualified Users or MQUs, to drive consistent reporting across our FI and non-FI publisher partners. In the second quarter, we had 224.5 million MQUs, an increase of 19%, driven by full ramp of our newest FI partners. Excluding these partners, MQUs would have been up 1%.

ACPU reflects how efficiently we convert advertiser budgets to value that the company can retain. In the second quarter, ACPU was $0.14, down 15% year-over-year as the MQU base of our newest large FI partner has not yet been fully monetized. ACPU expanded 10% in the second quarter versus the prior quarter.

Now turning to our outlook for Q3. Our expectations reflect the change with our largest FI partner, which Amit explained earlier. For Q3, we expect billings between $87 million and $95 million, revenue between $52.2 million and $58.2 million, adjusted contribution between $30.3 million and $34.3 million and adjusted EBITDA between negative $2.3 million and positive $2.7 million.

Our billings guidance represents a negative 15% to negative 22% decrease year-over-year. Despite this top line weakness, we still expect adjusted EBITDA to be breakeven, and we further expect to have the highest contribution as a percentage of billings and revenue to-date.

The primary driver of our expected billings decrease is the result of the content restrictions and reduced supply available to specific brands. As Amit mentioned, our largest FI partner is restricting certain content from running on its channels starting on July 1. While this option has always existed per the terms of our agreement, this is the largest restriction we have experienced.

We are discussing this change with our advertising partners and working to shift as much of this volume as possible to other channels. We are still learning how to optimize projections and targeting based on these changes. While we are undertaking a range of actions to help mitigate this, as Amit discussed, we expect to see some impact to our results, which you will see reflected in our guide.

We are still in the early days of this optimization and are modeling conservatively. This change underscores the importance of our diversification strategy across banks and nonbanks as well as continuing to diversify our demand. While we navigate the impact of the expected reduction in billings, we are prudently slowing the pace of some of our investments and focus on overall expense management.

We continue to make progress with our newest, large financial institution partner. We had twice as many unique advertisers live with this partner in Q2 than in Q1. We expect this momentum to continue and are pleased to see engagement rates similar to our most established partners, and in some cases, higher AOVs and redemption values for certain premium types of advertisers that do well with this unique demographic.

We continue to believe there is significant upside as engagement deepens. We are encouraged by our recent run rate in billings, which is now similar to one of our top 5 U.S. banks, and we believe there continues to be upside as this partner scales. Our newest digital banking partner also helps to expand our reach with a different demographic and supports long-term diversification. Consistent with our last call, we are not assuming any material financial impact in 2025 from either Cardlytics Rewards platform or CPG offers.

Lastly, U.K. continues to be a bright spot as we expect continued strong positive growth in Q3, driven by a healthy pipeline of quality advertisers and continued supply growth. Revenue as a percentage of billings is expected to be in the low 60% range for Q3 as well as for the full year. We have made strategic decisions to drive incremental performance in billings.

We expect adjusted contribution as a percentage of revenue to be in the mid- to high 50% range. This continues to be among the highest we have seen and reflects our improved economics with our new and ramping bank partners. Despite top line weakness, we are keeping more of every dollar we make, and we remain focused on driving profitability. We continue to expect this metric to improve sequentially as we diversify our supply.

Our adjusted EBITDA guidance is a reflection of our reset operational cost base following the reduction in staff that we completed in May. We continue to hire in our lower-cost technology hub, so we can continue to invest in key product areas. Operating expenses are expected to be sustained at or below $33 million per quarter for the remainder of the year, excluding stock-based compensation.

Given the changes to our top line, we remain committed to driving operational efficiency, and we will make further changes as needed. As we stated last quarter, we believe we have sufficient liquidity to satisfy all of our financial obligations, including the repayment of our outstanding convertible note. Given our expected top line results, we are further narrowing our focus and slowing investments until we can show sustained improvement.

I'll now turn it back to Amit for closing remarks.

Thank you, Alexis. We remain confident in our ability to navigate the headwinds and focus on our strategy to grow and diversify our platform. We have made meaningful progress on our turnaround over the past year, and we are committed to delivering continued success despite the challenging near-term dynamics.

Before moving on to Q&A, I want to thank our teams for their effort and commitment, our partners and advertisers for the opportunity to serve them and our investors for their patience.

I'll now turn it over to the operator to begin Q&A.

[Operator Instructions] Your first question comes from Jacob Stephan of Lake Street.

Maybe just first, starting on the kind of Q3 outlook, the billings decrease. Help me understand a little bit better on the content restrictions. Is this mostly brands that the -- your FI partner is already doing business with and Cardlytics platform may be competing with them? Or maybe just kind of help us think through this and their decision.

Yes. Thank you, Jacob. Thank you for the question. So, this is -- goes broader than -- the restriction is broader than the brands that the FI partner is currently engaged with or the content you see. We were obviously not expecting this level of content restriction. It's gotten -- it is beyond that what our expectation was, and that's why it's reflected in the guide. But we are actively working with our bank partners and advertisers to make sure we minimize the impact of this.

Okay. And maybe you could just kind of talk a little bit more on the credit line. It sounds like you guys are -- drew $50 million of that in Q3 here. Has the debt paydown already occurred? Or is that going to be prior to Q3 end? Or will that be in Q4?

No. So, we drew the line of credit yesterday for $50 million. The intent is to pay that at maturity for the notes that are due in September, so certainly not waiting until Q4. That's consistent with what we said in the past, right? We've always intended to draw the line to repay our notes and also have maintained an operating cash balance between $40 million and $50 million. So, all of this is consistent with what I said in terms of using it to pay the debt and maintaining a comfortable cash balance, and then, giving us sufficient flexibility to navigate the near-term headwinds that we're experiencing.

Got it. And sorry, just maybe back to the outlook, if I could ask in a different way. The concern from advertisers versus what your kind of FI partner is restricting content. How much of the billings decrease sequentially is kind of from each bucket there? I think in the past, you had said billings should grow sequentially throughout the remainder of the year, but the shortfall there, what's kind of in each bucket?

Yes. I'll take that. So, we did not anticipate this when I made the comment about sequential billings growth. I would say, a large portion of this decrease is due to the supply change that we're seeing. This partner represents a large portion of our network in terms of billings, that's actually disproportionate to the number of MQUs that it has.

So, we do believe we can shift some of this volume to other partners. We're only a few weeks into the change, and so still learning how much we actually can shift. So, I do think there is room to do better than what I guided, but being conservative and still learning on how we expect this volume to shift. So, I would say majority is related to this partner. We're still learning this over the next couple of weeks.

Amit, do you want to add anything?

Yes. No, I think that's exactly right. This is an unexpected change. But at the same time, I think what Alexis said, I'll underscore, our bank partners' initial response and our advertising partners' initial response has been very much a lean-in response. And so that's what we're engaging with them on.

Your next question comes from Luke Horton of Northland Capital Markets.

This is Ben on for Luke. Last quarter, you announced for Cardlytics Rewards platform to diversify with nonbank partners. Just wondering how that initial digital sports partnership has been going and how the build-out of the platform is going or if there's any other updates on new partners?

Thank you, Luke. So, we completed the pilot that we mentioned in the previous quarter and are now collecting data and the initial market feedback so we can optimize customer experience. Even though it was a pilot, but we saw a very positive and promising rates of customers linking their cards and redeeming offers. So, based on the initial results, we believe that there is a large potential for us to grow this part of the platform. And obviously, now we're focused on iterating and scaling this area.

We're also very encouraged by the interest we're seeing with a long pipeline of prospective partners, both across U.S. and U.K. that we're engaged with. So active conversations with the pipelines of several leading brands across verticals, including telecom, rideshare and fintech. And as soon as we have updates that we can share, we'll bring it back to you. But we're pretty positively -- it's very promising that the initial pilot has gone well.

That's great color. And then also, how is Cardlytics leveraging AI throughout the platform? And what areas of the business do you think can benefit the most from that adoption, either internally or externally with partners and customers?

Yes, it's a great question. I mean, it's something that we've been thinking and starting to bring on board recently. So, the 3 areas that we've been debating and starting down this path, first of all, is within our dev team, our engineering team to use the typical tools which can help in code dev, code generation snippets and so on and QA. So those are -- those elements are in progress already.

The other area which, obviously, as you can imagine, is a big area of opportunity is in our analytics space. We have a treasure trove of data with close to $6 trillion of spend that we have insight into. We absolutely expect to think about models that can actually connect the dots, identify patterns that can bring new capabilities to our advertisers. But given this changes from this bank partner, we are now thinking about how to prioritize these initiatives. But these are things that we've been talking about, but they might slow down, given our reprioritizations that we might need to undertake.

Your next question comes from Jason Kreyer of Craig-Hallum Capital Group.

This is Cal on for Jason. So maybe first, we've been noticing an increase of local offers on some of your partner platforms. So, just wondering if you can speak to any added traction that you've seen with scaling local offers.

Yes. Thank you, Cal. I think we mentioned this in our last earnings call as we have continued to invest in creating a high-performance network, one of the areas that we've invested and honed our capability is very much focused on geo-targeted offers so we can now differentiate where an individual lives and where do they shop.

So, this has allowed us to actually bring in more geo-targeted content, more local offers. We continue to plan to increase those. You can imagine leading across multiunit chains in QSRs, they're excited about it. Multiunit or multiline retail stores are excited about it. So, we are definitely seeing benefits in everyday spend in QSRs, in general restaurant category, and we plan to continue to bring these local offers where it makes sense across our network.

Great. And then second, good to hear all the traction that you're seeing with Rippl. Just on the Hy-Vee partnership, can you just speak to the drivers for the win? And as you continue to build more referenceable wins like Hy-Vee, are you starting to see that accelerate interest and adoption of Rippl?

Yes, it's a great question. I think you heard in our prepared remarks that the traction in Rippl has definitely increased substantially, especially over the recent weeks. And the quick answer to that is yes. As we bring on high-quality partners that we had before like the Wegmans and the Giant Eagle and the new ones that we add like Hy-Vee and others, advertisers are getting more excited about the kind of scale that they see and also the quality of data that they see.

So, we're seeing at the typical DSPs like Trade Desk, there's a large volume increase. A lot of advertisers are actually coming and approaching us for custom work as well. So, we're excited about the prospect that Rippl has and the continued progress as more and more retailers are choosing to come and join the Rippl network.

[Operator Instructions] Your next question comes from Robert Coolbrith of Evercore.

Anything you can tell us about the MQU impact? I know you said that it sounds like the billings impact is bigger than the MQU impact, but just anything more you can tell on that? And any way of sort of more precisely characterizing the extent of the restriction that's in place and whether that could ramp up?

Sort of further related to that, what is the nature of the basis of the restriction? Are there opportunities to substitute in something else that may not violate the restriction of whatever type? And then the comment about the concern -- the global concern from brands, I just wanted to clarify that. I mean, so is the concern about running on that FI partner without the benefit of the Cardlytics platform and technology. It's not about a broader concern about the Cardlytics platform. I just wanted to make sure that I understood that correctly.

Thank you for the multi-set question, Robert. I want to make sure we address all the parts of it. The first one was around MQUs. So, just to give you a sense, our broader set of bank partners represent more than 50% of our MQUs, right? So -- and they represent a lower percentage in billings, but the broader set of the -- our bank partners in the U.S. represent more than 50% of our MQUs. So, hopefully, this gives you a sense of -- it is a large scale, but the network -- overall network continues to be scaled and resilient.

And I think as we mentioned, I think your second question was around ability to replace and the concern about the brands. Frankly, the concern that brands has, it's mostly driven by the frustration that, now that because of these restrictions, it limits their ability to come to one platform for all their CLO needs. And -- so, some of them have actually expressed their dissatisfaction to us and the bank partner. But that said, our view is that our value proposition continues to resonate. We continue to make sure that brands have access to the largest financial media network, regardless of this bank's decision.

And the areas that are resonating a lot with the brands as we've interacted with them and engage with them, first of all, they appreciate our progress on all the measurement efforts, our blending in TVC reporting, incrementality results and MMM readings so they can really get a clear view of ROAS. So, even from Q1 till now, advertisers have seen more than 25% growth in ROAS on the Cardlytics platform.

So, their trust and belief in Cardlytics platform remain consistent and increases from what we see. The move to engagement-based pricing has been welcomed by our advertisers. They are now able to look at TLO spend on Cardlytics as a true performance media buy. And we recently also reorganized our sales team under our new Chief Business Officer. So vertical focused efforts increased the velocity.

We brought U.S. and U.K. under this leader so that we can actually have marketing strategies across the 2 geographies run contiguously. And lastly, just to state the obvious, we very much plan to compete aggressively in the market and make sure we bring the best of our capabilities to our advertisers and to the network.

As there are no further questions at this time, this concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.