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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 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%.
Total Billings $89.2 million, a 20.3% decrease year-over-year. The decrease was due to content restrictions impacting the size of the budgets that could be sold as a result of fewer consumers to whom offers could be served.
Consumer Incentives $37.2 million, down 17.2% year-over-year. The decline was attributed to the same content restrictions affecting billings.
Revenue $52.0 million, a 22.4% decrease year-over-year. This was driven by a decrease in billings and a 1.6-point lower revenue-to-billings margin, partially due to strategic investments in certain advertisers and temporary overcorrections from supply changes.
Adjusted Contribution $30.0 million, down 17.5% year-over-year. However, the margin as a percentage of revenue increased to 57.7%, up 3.5 points, due to a more favorable partner mix.
Adjusted EBITDA Positive $3.2 million, an increase of $5.0 million year-over-year. This improvement was driven by reduced operating expenses and optimization of cloud infrastructure.
Operating Cash Flow Positive $1.8 million. This was an improvement from the prior year, attributed to a lower expense base.
Free Cash Flow Negative $2.7 million, an improvement of $1.2 million year-over-year, primarily due to lower expenses.
U.S. Revenue (excluding Bridg) Decreased 28% year-over-year due to lower billings stemming from content restrictions and pricing investments.
U.K. Revenue Increased 22% year-over-year, driven by higher billings and increased supply. Growth was seen across top clients and new merchants.
Bridg Revenue Decreased 15% year-over-year due to the loss of a major account in previous quarters.
MQUs (Monthly Qualified Users) 230.3 million, an increase of 21% year-over-year. Excluding new FI partners, MQUs increased 3%.
ACPU (Average Consumer Per User) $0.11, down 31% year-over-year, attributed to content restrictions and the ramping of new FI partners.
Cardlytics Rewards Platform (CRP): Signed 3 new partners in the U.S., including OpenTable, a global leader in restaurant technology. Two other CRP partners are expected to launch in Q4 after testing and integration.
Category-level offers: Expanded category-level offers in Q4, which reward customers for spending in specific categories. Proven effective in driving engagement, with 73% of consumers redeeming another offer after using a category-level offer.
Double Days campaign: Ran a campaign where rewards were doubled on specific days, increasing consumer engagement by approximately 15%.
U.K. market: Achieved 22% revenue growth year-over-year. Now working with all top 5 U.K. grocers, up from 4 previously. Closed new deals across grocery, gas, restaurant, and retail sectors.
New partnerships: Added localized content partner to expand Always On third-party content, delivering nearly 10,000 local and regional offers. Partnered with OpenTable to bring restaurant partners to the network.
Workforce reduction: Reduced workforce by 30%, resulting in annualized cash savings of $26 million. Total reductions in 2025 amount to $50 million.
Debt repayment: Fully paid $46 million remaining on 2020 convertible notes.
Operational cost base: Reset operational cost base, reducing operating expenses by 19% year-over-year for Q4.
Supply diversification: Focused on increasing and diversifying supply to replace lost volume from the largest FI partner. Added debit and SMB portfolios with one bank partner.
Advertiser demand: Signed pilots with iconic brands, including a large athletic apparel brand and a global hotel brand. Won back key accounts like a global coffee chain and a global discount grocer.
Technology enhancements: Improved geo-targeting capabilities and integrated measurement models with industry standards to enhance advertiser performance evaluation.
Loss of largest FI partner: The decision by the largest FI partner to block advertiser content has resulted in a significant loss of approximately 1/3 of total billings, creating a major revenue shortfall.
Revenue decline: Q3 2025 billings decreased by 20.3% year-over-year, and revenue dropped by 22.4%, primarily due to content restrictions and reduced consumer reach.
Operational cost reductions: A 30% workforce reduction and other cost-cutting measures were implemented to save $26 million annually, reflecting financial strain and the need for operational efficiency.
Dependence on new partnerships: The company is heavily reliant on new FI and CRP partnerships to replace lost supply and revenue, which introduces execution risk and uncertainty.
Advertiser retention challenges: While most advertisers have stayed, the company faces challenges in retaining and growing advertiser budgets amidst reduced supply and competitive pressures.
Margin pressure: Revenue-to-billings margin decreased by 1.6 points year-over-year, partly due to strategic pricing investments and temporary overcorrections in delivery models.
Economic uncertainties: The broader economic environment and shifts in consumer behavior could impact advertiser budgets and campaign performance.
Integration and scaling risks: The company faces risks in scaling new partnerships, integrating new technologies, and ensuring consistent performance across its network.
Q4 2025 Financial Guidance: Billings expected 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. Revenue as a percentage of billings is expected to be in the low 60% range. Adjusted contribution as a percentage of revenue is expected to be in the mid- to high 50% range.
2026 Strategic Focus: Plans to solidify foundation and grow commerce media platform by expanding CRP partner cohort and strengthening existing FI partnerships. Focus on omnichannel performance to unlock increased advertiser budgets and deliver differentiated products.
CRP Partnerships: Three new CRP partners signed, including OpenTable. Two partners expected to launch in Q4 2025 after testing and integration. CRP is seen as a significant growth opportunity for 2026.
U.K. Market Growth: Continued growth expected in the U.K. market, driven by success with largest accounts and new advertisers. Revenue growth of 22% year-over-year in Q3 2025.
Operational Cost Reductions: Reduction in workforce by 30% and other cost-saving measures expected to deliver annualized cash savings of $26 million in 2026. Operating expenses for Q4 2025 expected to be at or below $28 million, representing a 19% reduction from the prior year.
Advertiser Engagement: Focus on proving performance with top brands, scaling underutilized categories, and signing new accounts. Incremental spend expected from advertisers due to early holiday promotions and performance-based budget add-ons.
New FI Partner Performance: Positive trends with newest large FI partner, with October billings approximately 50% higher than Q3 2025. Activation rate is 2x the network average.
The selected topic was not discussed during the call.
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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