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01/11 16:20
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call revealed several negative aspects: declining financial performance, cautious advertiser spending due to macroeconomic uncertainty, and a workforce reduction. Despite some positive elements like increased MQUs and engagement-based pricing, the overall sentiment is negative due to liquidity concerns, negative EBITDA, and a lack of clear guidance on future opportunities. The Q&A section highlighted management's reluctance to provide specifics, further contributing to uncertainty. These factors suggest a negative stock price movement in the short term.
Total Billings $97.6 million, a 7.3% decrease year-over-year, driven primarily by pipeline wins in the U.S. and incremental improvement on delivery.
Consumer Incentives $35.7 million, a decrease of 5.1% year-over-year.
Revenue $61.9 million, an 8.4% decrease year-over-year, driven by lower top line billings and a category mix of advertisers.
Adjusted Contribution $32.4 million, down 12.5% year-over-year, with an adjusted contribution margin of 52.4%, down 2.4 points due to a less favorable partner mix.
Adjusted EBITDA Negative $4.4 million, a decline of $4.6 million year-over-year.
Operating Cash Flow Negative $6.7 million.
Free Cash Flow Negative $10.8 million, an improvement of $11.6 million year-over-year due to a reduction in incentive compensation payout.
Cash and Cash Equivalents $52 million at the end of Q1.
Unused Borrowings under Line of Credit $60 million.
Monthly Qualified Users (MQUs) 214.9 million, an increase of 12% year-over-year, driven by the introduction of a new large FI partner.
Adjusted Contribution per MQU (ACPU) Down 24% year-over-year, as the MQU base of the new large FI partner has not yet been fully monetized.
New Product Launches: Launched with a new large financial institution partner, scaling content volume and engagement.
Cardlytics Rewards Platform: Introduced the Cardlytics Rewards platform with the first non-FI partner, expanding engagement opportunities.
Market Expansion: Signed first non-FI partner agreement to run offers on a leading digital sports platform.
New Partnerships: New neobank partner launched on the latest platform, reaching eligible card members.
Operational Efficiencies: Improved tech stack for quicker onboarding of partners, reducing integration time significantly.
Cost Management: Implemented a 15% workforce reduction to control costs and improve liquidity.
Strategic Shift: Transitioning to a differentiated commerce media platform, focusing on multisided participation and data capabilities.
Engagement-Based Pricing: 74% of advertisers are now on engagement-based pricing, reflecting a strategic shift in pricing model.
Macroeconomic Environment: Volatility and declining consumer sentiment have been observed, leading to cautious advertising budgets from brands.
Competitive Pressures: Advertisers are more cautious with their budgets due to macroeconomic uncertainty, impacting overall spending.
Supply Chain Challenges: The airline industry is facing headwinds, affecting advertising budgets and spending.
Regulatory Issues: The company is navigating potential impacts from tariffs, which may influence consumer purchasing behavior.
Workforce Reduction: A 15% reduction in workforce was implemented to control costs and ensure liquidity.
Financial Performance: Q1 billings decreased by 7.3%, with expectations of continued caution among advertisers leading to potential declines in future billings.
Investment in Technology: The company is shifting resources to lower-cost geographies and deprioritizing certain product initiatives to manage expenses.
Liquidity Concerns: Despite having sufficient liquidity, the company is taking a disciplined approach to investments, focusing on top-line performance.
Key Business Pillars: Cardlytics focuses on four key pillars: increasing supply, strengthening demand, optimizing the network, and growing Bridg to platformize the company.
Partnership Expansion: Cardlytics has launched partnerships with a large financial institution and a neobank, expecting strong engagement and growth in content volume.
Cardlytics Rewards Platform: The company has signed its first non-financial institution partner to launch the Cardlytics Rewards platform, expanding its network.
Tech Stack Investment: Investments in the tech stack are aimed at providing plug-and-play opportunities for publisher partners, enhancing integration speed.
Workforce Reduction: A 15% workforce reduction was implemented to control costs and improve liquidity.
New Leadership: Rory Mitchell has joined as Chief Business Officer to support the platformization journey.
Q2 2025 Billings Guidance: Expected billings between $100 million and $108 million, representing a 9% to 2% decrease year-over-year.
Q2 2025 Revenue Guidance: Expected revenue between $61 million and $67 million.
Q2 2025 Adjusted Contribution Guidance: Expected adjusted contribution between $32.5 million and $36.5 million.
Q2 2025 Adjusted EBITDA Guidance: Expected adjusted EBITDA between negative $4 million and positive $1 million.
2025 Capital Expenditures: Expected to reduce to the low $4 million range per quarter.
Free Cash Flow Outlook: Expected to improve sequentially, including semi-annual interest payments on convertible notes.
Share Repurchase Program: None
The earnings call reveals significant challenges: a loss of a major FI partner, a 20.3% decline in billings, and a 22.4% drop in revenue. Despite some positive aspects, like improved adjusted EBITDA and U.K. growth, the dependence on new partnerships and economic uncertainties pose risks. The Q&A didn't alleviate concerns, as explanations confirmed ongoing margin pressures and uncertainties in guidance. These factors, along with the lack of a market cap, suggest a negative sentiment, anticipating a stock price decline of -2% to -8%.
The earnings call reveals several negative indicators: a 9.2% revenue decline, decreased revenue to billings margin, and ongoing pressures on advertiser performance. Despite some positive elements like increased U.K. revenue and positive adjusted EBITDA, the Q&A highlights significant concerns about FI partner restrictions affecting billings and unclear management responses. The guidance for Q2 2025 further indicates a potential decline. These factors suggest a negative sentiment, likely resulting in a stock price decrease between -2% to -8% over the next two weeks.
The earnings call revealed several negative aspects: declining financial performance, cautious advertiser spending due to macroeconomic uncertainty, and a workforce reduction. Despite some positive elements like increased MQUs and engagement-based pricing, the overall sentiment is negative due to liquidity concerns, negative EBITDA, and a lack of clear guidance on future opportunities. The Q&A section highlighted management's reluctance to provide specifics, further contributing to uncertainty. These factors suggest a negative stock price movement in the short term.
The earnings call reveals several concerning factors: a missed EPS expectation, declining revenue, and a negative growth outlook for Q1. Despite some positive developments like new partnerships and improved delivery, the lack of a share buyback or dividend program, coupled with weak guidance and cautious financial health, suggests a negative sentiment. The Q&A section highlighted management's vague responses, particularly regarding Dosh's contributions and micro-targeting opportunities, further dampening confidence.
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