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01/11 11:26
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
EPS Reported EPS is $-0.30566, missing expectations of $-0.24.
Total Billings Total billings were $116.3 million, an 11.2% decrease year-over-year, primarily due to a reduction in a few key accounts but offset by new brand signings.
Consumer Incentives Consumer incentives decreased by 1.2% to $42.3 million.
Revenue Revenue decreased 16% to $74.0 million, with U.S. revenue down 19.9% due to lower billings and higher redemptions, while UK revenue grew 27.2%.
Adjusted Contribution Margin Adjusted contribution was $40.7 million, down 12%, with a margin of 55%, up 2.5 points due to a more favorable partner mix.
Adjusted EBITDA Adjusted EBITDA declined from $10.3 million to $6.4 million.
Operating Cash Flow Operating cash flow was positive $3 million.
Free Cash Flow Free cash flow was negative $1.5 million, a sequential improvement of $2.4 million from the prior quarter.
Cash and Cash Equivalents Ended Q4 with $65.6 million in cash and cash equivalents.
Monthly Active Users (MAUs) MAUs were 167.3 million, a decrease of 0.4%.
Average Revenue Per User (ARPU) ARPU was $0.44, down 16.7% due to increased consumer incentives.
New Partnerships: Signed a new Neobank partner in Q4, one of the fastest growing fintechs in the U.S., with plans to scale by the end of Q1 2025.
Product Development: Accelerated development of micro-targeting solutions by combining Cardlytics and Bridg capabilities.
Insights Portal: 50% increase in brands using the insights portal, indicating strong interest in consumer spend data.
Market Expansion: Continued growth in the UK business with a 27.2% revenue increase in Q4, driven by new advertisers and increased consumer engagement.
New Advertisers: Signed a large number of new brands in Q4, with over 90% on engagement-based pricing.
Operational Efficiency: Improved delivery and predictability of campaign budgets, with 61% of U.S. advertisers on engagement-based pricing.
Cost Management: Maintained operating expenses below $40 million, excluding stock-based compensation.
Strategic Shift: Refocused efforts on a turnaround plan, divesting non-core businesses like Dosh to unlock growth.
Growth Strategy: Plans to invest in a technology hub in Taiwan to leverage local talent aligned with growth priorities.
Earnings Miss: Cardlytics reported an EPS of $-0.30566, missing expectations of $-0.24.
Executional Challenges: The company faced executional challenges around network upgrades, changes in financial institution (FI) partner platforms, and increased competition.
Churn and Budget Reductions: There was an increase in churn and reduced budgets from a small number of large advertisers in the U.S., driven by organizational changes and broader macro factors.
Supply Chain Challenges: The company is experiencing growth constraints with Bridg, which is impacting overall performance.
Regulatory and Legal Issues: The company settled an outstanding lawsuit, which may have implications for future operations.
Liquidity Concerns: Despite a comfortable liquidity position, the company is cautious about its ability to fund operations and pay off current debt obligations.
Market Conditions: Q1 is expected to be a seasonally weak quarter for the advertising industry, impacting billings and revenue.
Performance Expectations: The company anticipates Q1 to represent the trough of its performance, with expectations of negative growth in billings.
Turnaround Plan: Cardlytics is implementing a turnaround plan focused on growth by building on core strengths, divesting non-core businesses, and reinvesting in areas that unlock growth.
Partnership Expansion: The company is building partnerships and data engineering capabilities, including a new office in Taiwan to leverage local talent.
New Financial Institution Partners: Cardlytics signed a new Neobank partner in Q4 and is working to renew agreements with existing financial institution partners.
Engagement-Based Pricing: 61% of advertisers in the U.S. are now on engagement-based pricing, with a goal to have the majority by year-end.
Bridg Growth: The company is optimistic about growing Bridg revenue with new advertisers and product improvements.
Q1 2025 Billings Guidance: Expected billings between $91.5 million and $94.5 million, representing negative 13% to negative 10% growth.
Q1 2025 Revenue Guidance: Expected revenue between $57 million and $60 million.
Q1 2025 Adjusted Contribution Guidance: Expected adjusted contribution between $30 million and $32.5 million.
Q1 2025 Adjusted EBITDA Guidance: Expected adjusted EBITDA between negative $7.5 million and negative $4.0 million.
2025 CapEx Guidance: Expected to remain in the mid to high $4 million range per quarter.
2025 Adjusted EBITDA Outlook: Focus on delivering improved adjusted EBITDA sequentially through the year and positive adjusted EBITDA by year-end.
Shareholder Return Plan: Cardlytics has not announced any share buyback program or dividend program during the earnings 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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