Cardlytics, Inc. (CDLX) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals significant revenue and billings decline due to the loss of Bank of America, despite operational improvements. The guidance suggests continued revenue challenges, and macroeconomic pressures further impact key sectors. While there are positive aspects like U.K. growth and improved liquidity, the overall sentiment is negative due to declining financial metrics and risks, leading to a likely negative stock price movement in the next two weeks.
Key Financial Performance
Billings $58.1 million, a 37% decrease year-over-year. Total billings, inclusive of Bridg Results was $62.3 million. The decrease was attributed to the departure of Bank of America in January, though the company retained the majority of its clients and focused on driving new business.
Revenue $34.3 million, a 39% decrease year-over-year. Total revenue, inclusive of Bridg results was $38.5 million. The decline was due to the departure of Bank of America, but the U.K. business showed strong performance with a 21% year-over-year increase.
Adjusted Contribution $19.7 million, a 28% decrease year-over-year. Total adjusted contribution, inclusive of Bridg results was $23.3 million. Despite the decline, the revenue margin (adjusted contribution as a percentage of revenue) expanded to 60.6%, the highest on record, due to operational efficiencies.
Adjusted EBITDA Positive $0.2 million compared to negative $4.1 million in the first quarter of 2025. Total adjusted EBITDA, inclusive of Bridg results was negative $2.2 million. The improvement was driven by a lower expense base.
Adjusted Operating Expenses $19.5 million, a decrease of 38% from the prior year. Total adjusted operating expenses, inclusive of Bridg, was $25.5 million. The reduction was largely due to workforce reductions in 2025 and optimization of cloud infrastructure.
Operating Cash Flow Negative $5.6 million compared to negative $6.7 million in the prior year. The improvement reflects better operational efficiency.
Free Cash Flow Negative $7.9 million compared to negative $10.8 million year-over-year, an improvement of $2.9 million. This was attributed to improved operational efficiency.
Cash and Cash Equivalents $35.7 million at the end of Q1. Subsequent to the quarter closing, proceeds from the liquidation of PAR shares were used to reduce credit facility debt and improve cash position.
Monthly Qualified Users (MQUs) 197 million, accounting for the loss of Bank of America in January.
Average Customer Per User (ACPU) $0.10, down 21.3% year-over-year.
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Operating Highlights
Cardlytics Rewards Platform (CRP): Continued interest from partners across multiple industries, with three live CRP partners and ongoing discussions with larger partners.
Insights Agent: Newly released tool delivering weekly unique advertiser reports synthesizing macroeconomic data, industry trends, and Cardlytics-specific insights.
Campaign Data Sync Infrastructure: New infrastructure starting with impact.com enables faster sharing of performance data with measurement partners.
U.K. Market: Revenue surged over 21% year-over-year in Q1, driven by strong performance in restaurant and retail sectors. All major U.K. grocers were served on the platform.
U.S. Market: Strong performance in telecom, gas, and convenience verticals. A discount grocer is on track to become a top 10 advertiser after a successful Q1 campaign.
Operational Efficiency: Achieved highest revenue margin on record at 60.6% in Q1, despite year-over-year revenue decline. Adjusted operating expenses decreased by 38% year-over-year.
Technology Enhancements: Engineering efforts improved platform speed and efficiency, including AI-assisted tooling and productivity tracking.
Bank Partnerships: Stabilized supply and co-developed growth opportunities with FI partners. Expanded incentive programs like Double Days to drive consumer engagement.
Advertiser Base: Focus on new enterprise advertisers led to meaningful year-on-year pipeline growth. Added new measurement partners to support advertisers' preferred models.
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Risk or Challenges
Macroeconomic Budget Pressure: Budget constraints in the travel and hospitality sectors due to macroeconomic events, leading to delays or deferrals in approvals and impacting revenue from these sectors.
Loss of Major Client: Departure of Bank of America in January resulted in a significant decrease in billings and revenue, highlighting client retention risks.
Revenue Decline: Year-over-year revenue and billings decreased significantly (37% and 39%, respectively), indicating challenges in maintaining growth and financial performance.
Supply Constraints: Despite stabilizing supply, constraints remain, potentially limiting the ability to meet advertiser demand and impacting revenue growth.
Operational Efficiency Risks: While operational efficiencies have improved, there is a risk of reduced revenue margin in future quarters due to the divestiture of Bridg.
Cash Flow Challenges: Negative free cash flow of $7.9 million in Q1, though improved from the prior year, indicates ongoing liquidity challenges.
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Guidance & Outlook
Future Financial Performance: The company expects sequential growth in billings, revenue, and adjusted contribution for the remainder of 2026. Q2 2026 guidance includes 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.
Revenue Margin: The adjusted contribution as a percentage of revenue reached a record 60.6% in Q1 2026 but is expected to decrease in future quarters due to the divestiture of Bridg.
Market Trends and Advertiser Sentiment: The U.K. business is expected to continue its strong performance, driven by omnichannel strength in the restaurant and retail sectors. In the U.S., macroeconomic pressures are causing budget delays in the travel and hospitality sectors, but overall advertiser sentiment remains positive.
Technology and Operational Efficiency: The company plans to leverage advancements in data and AI to improve platform efficiency and advertiser insights. New tools like the Insights agent and campaign data sync infrastructure are expected to enhance operational capabilities.
Strategic Initiatives: The company is focused on expanding its network by onboarding new cardholder portfolios and implementing incentive programs with financial institution partners. Discussions are ongoing with larger partners to adopt the Cardlytics Rewards Platform (CRP).
Liquidity and Capital Structure: The company has improved its liquidity position by liquidating PAR shares received from the Bridg sale and reducing credit facility obligations.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Are there any questions from the participants?
A:There are no questions at this time.
Q:What are the closing remarks from the management?
A:David Evans, the CFO, reiterated that the company is executing its plan to operate through 2026 with sequential growth and self-sustainability.
Q:Review of Unclear Management Responses
A:There were no instances of management avoiding questions or providing unclear responses, as there were no questions from participants during the session.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI engineering
AI skill
AI tooling
America ACPU
America majority
Amit UK
Amit core
Bank America
Bridg result
CRP partner
Cardlytics Financial
Financial Results
PAR share
advertiser measurement
amount
campaign
collaboration
contribution Bridg
decrease Bridg
development
divestiture Bridg
efficiency
event
expense base
grocer
industry
infrastructure
measurement partner
month
network advertiser
priority
quality
quarter
sector
self sustainability
technology platform
CDLX Transcript
Cardlytics, Inc. (CDLX) Q1 2026 Earnings Call Transcript
Unknown5-8
The earnings call reveals significant revenue and billings decline due to the loss of Bank of America, despite operational improvements. The guidance suggests continued revenue challenges, and macroeconomic pressures further impact key sectors. While there are positive aspects like U.K. growth and improved liquidity, the overall sentiment is negative due to declining financial metrics and risks, leading to a likely negative stock price movement in the next two weeks.
Cardlytics, Inc. (CDLX) Q4 2025 Earnings Call Transcript
Unknown3-4
The earnings call presents a mixed outlook. Positive indicators include increased EBITDA, positive cash flow, and strong UK market growth. However, the loss of a major partner, BofA, and content restrictions pose significant challenges. The company is optimistic about future growth with new partnerships and cost reductions, but uncertainties remain, particularly regarding MQUs and the full impact of BofA's exit. The Q&A reveals cautious optimism but lacks clarity on some issues, leading to a neutral sentiment prediction.
Cardlytics, Inc. (CDLX) Q3 2025 Earnings Call Transcript
Unknown11-5
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%.
Cardlytics, Inc. (CDLX) Q2 2025 Earnings Call Transcript
Unknown8-6
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.
CDLX Report
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