Good evening, ladies and gentlemen, and welcome to the Cardlytics 4th Quarter Fiscal Year 2025 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Wednesday, March 4th, 2026. I would now like to turn the conference call over to Nick Linton, 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 factors 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 31st, 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 issue 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 the year we successfully reset the company to achieve self-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 court 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's 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 non-bank 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. For one of the fastest-growing discount grocers, our 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 receive 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 increase 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 UK business remains a standout performer with Q4 revenues surging over 35% year over year. This momentum highlights our omni-channel strength, particularly within the grocery sector. This segment drove more than 40% of our UK business for the quarter, headlined by a top three 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 UK. By applying these execution lessons to our newly settled supply in the US, 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 involved 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 that 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 Gats advertiser CMOs, start quote, Cardlytics has become one of the most efficient growth channels. We are seeing stellar IROF performance well above our internal benchmarks. And more importantly, the sales are incremental and measurable, end quote. Finally, the bridge 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 Bridge to be fully integrated with their core operations without their data constraints faced at Parlytics. 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, Ahmed, and good evening. It has been a little over a month since I rejoined the company, and it has been nice and 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 fourth 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 bridge, was $40.1 million, decreasing 33.5% year-over-year due to lower billings, as well as pricing adjustments, which drove lower billing 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 one-time variance in December delivery as a result of the supply changes to our network. UK revenue was $10.8 million, increasing 35.1% year-over-year. This is our UK business's 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 percentage of revenue to 56.5%, an increase of one and a half 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 one-time 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 two 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 branch 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 percent, driven by the full ramp of our newest FI partners. Excluding these partners, MQUs would have increased 1 percent. ACPU was 12 cents, down 35 percent year-over-year as a result of content restriction and as we added new MQUs from our newest FI partners. Now, turning to our outlook for Q1 2026. For Q1, we expect billings between $57.5 and $63.5 million, revenue between $35 and $40 million, adjusted contribution between $20 and $23 million, and adjusted EBITDA between negative $7.5 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 one 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 to level set and grow sequentially from this point forward. In Q1, we expect to continue to grow in the UK, 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 spin 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 FI 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 advertiser 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 shows 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 willingness to persevere. We firmly believe we have the right team, the right tech, 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.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you're using a speakerphone, please lift up the handset first before pressing any keys. And we have our first question from Jacob Steffen with Lake Street Capital Market.

Hey, guys. Appreciate you taking the questions. First, I just kind of wanted to touch on the Q1 guidance a little bit. you know, maybe you could kind of help us think through a little bit on the sequential decline, maybe to kind of the 60 and a half midpoint and on the billing side, you know, how much of that was B of A? How much of that, you know, 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, thanks for the question. I would say a large vast majority of that you could attribute to Bank of America. Their last campaign, Billings campaign ran on January 15th. 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 B of A. Okay. And then I got your comments on the, you know, correlate that with you know future content restrictions at your fi partner um you know how does that play out through the the year yeah i'm kind of the kind of way i think about the q1 guy is really around a foundational level setting for how we can optimize and sequentially grow going forward as you might imagine you know with losing a a a partner like that had some impact and 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 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?

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

Yeah, I think that's a good question, Jacob. One of the things we chatted, 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, you know, basically advertisers with storefronts and online channels. They are really benefiting from our omni-channel focus and omni-channel 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 you know even though there are folks that are direct to consumer via online channels you know they still end up benefiting uh uh as well but uh folks with uh store presence store firm presence and omni-channel 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, you know, David, obviously you're coming back to Cardlytics here. You know, maybe you could help us think through, you know, what was the driving decision behind that? And, you know, maybe one thing that excites you, two things, two or three things that, you know, you're really looking at honing in on in 26 here.

Yeah, given the nature the call keep it fairly pc here but look i would say this um hardlytics remains a differentiated platform i mean i i wrote my own my own press release when i joined and that is to say that i have a tremendous amount of affinity to this organization um in learning more about the opportunity during the process i came away feeling like the the team is still very much intact and we still have an asset that is still unique and differentiated in the in the marketplace when you think about even without B of A, we're still seeing 40% of every card swiped 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 that, you know, 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. Awesome. I appreciate it. You bet.

Thank you. Our next question is from Jason Cryer with Craig Hallam.

Thank you. I'm wondering if you can talk about what factors contributed to the decision to some sets of B&A relationship. Curious if there are any cost benefits or tax benefits that stem from that termination, and then if you can maybe talk about what impact that has on MQUs going forward.

Yeah. 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 there was 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, 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 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, all 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.

Thank you. You mentioned earlier in prepared remarks, you just talked about some of the potential for adding new card portfolios. I'm curious if you can give a little more detail on that.

Yeah. 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 a kind of like a bank by bank conversation. So as 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 with several of our bank partners to onboard new either segments or portfolios or subcard portfolios that were not previously in the program. And that can not only increase the MQUs, but also allows us to deepen the relationship with the banks. But we'll keep you posted as those new folios come online, and we welcome them on our network.

Great. Thanks, Ahmed. Thanks, David.

Thank you. We have our next question from Kyle Peterson with Needham.

Great. Good afternoon. Thank you for taking the questions. I wanted to start off on the B of A, 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 has a full quarter's impact or if there's any kind of lingering benefit in the first quarter from B of A?

Yeah. I mentioned on the question earlier, January 15th.

Okay. Thanks. And then I guess just a follow-up on liquidity in the balance sheet. I think you mentioned that, you know, after the bridge transaction closes that that should be, you know, fusion in the balance sheet.

But I guess looking at the structure of the deal, I thought it looked like you guys got par stock. so I guess just like any more clarity on is that just like is there any lock up or hold up or what are you what are your plans once that is delivered and how you're going to convert that to liquidity yeah if you um if you read the 8k from the announcement um we've got uh just you know aspects of the deal that we're still kind of on on track to to close uh forum so if you think about know just consents and final preparations everything's on track there and once that's done the deal will close and then we use a 15-day calc to determine the number of shares uh that we will

receive and then once we receive those uh those shares uh we will we will look to quickly uh liquidate to get cash uh on our um on our balance sheet and more more more likely than not we'll use those proceeds to pay down uh a decent amount of the facility okay okay that's that's helpful and then i guess just if i could squeeze uh you know one last one in there it is how should we think about you know cash flow i know one q 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'll come out with bridge, but is there an opportunity to return back to, you know, at least EBITDA positive as early as the second quarter? And I guess how are you guys kind of feeling about, you know, kind of the return to positive free cash flow? Yeah, moving forward.

Yeah, sounds good. Yeah, with the bridge going away, you mentioned that. You're absolutely right. and then we'll get some, we'll get some OPEX benefits from that, you know, call it four or five billion of help from that perspective. And then from an adjusted EBITDA perspective, I mean, you know, look at the end of the day, if, if adjusted OPEX is kind of low mid twenties, you know, that gives you a good indicator of kind of what we're going to need to achieve from a just contribution perspective. And, you know, to kind of answer your question, we, you know, we're pretty, we're pretty close.

And so my level of confidence to being able to return back to some form of quarterly positive adjusted EBITDA it remains pretty high okay um thanks for all the color um you better appreciate it thank you and thank you our next question is from robert coolber with evercore hi thanks for us for taking the questions and welcome back to david um uh just a couple uh quick ones left um i just wanted to confirm on on the q1 guidance Is Bridge being treated at discontinued ops there? I just wanted to – I assume it is, but it wasn't confirmed anywhere, so I just wanted to double-check that. Then I have a couple more.

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

Okay, so there is revenue contribution from Bridge through the mid-month close contemplated correct yeah correct that's good thank you for clarifying that that's correct yeah once it you know once we closed and we'll take credit for everything up to close okay got it thank you um and then just a couple more to um subscription services uh you noted i think some softness there i think going back a couple quarters ago i mean you had mentioned that as a source of strength so just wanted to you know maybe um ask about materiality and then And also just, you know, 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, you know, from a quarter-on-quarter point of view. Now, while 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, you know, 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. Thank you. And the last one is just, you know, I wanted to touch in on the, 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 want to understand, is that something that was sort of uniquely enabled by, you know, technology that resided within bridge or is that something that you can retain as a capability going forward, emerging capability going forward?

The appropriate question, Robert. So the short version is that we're going to put the SKU level offers on the back burner for now. As you said, it was primarily powered by the data set that we were connecting with the bridge platform. And with the exit of the bridge 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 burner.

Got it. Thank you very much.

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.