Hello, everyone. Thank you for joining us and welcome to the Q2 2026 Cardlytics, Inc. Earnings Conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the call over to Chris Cheng, Chief Legal Officer. Chris, please go ahead.

Good evening, and welcome to the Cardlytics second quarter 2026 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 third quarter of 2026, our capital structure, and operational and product initiatives. For a discussion on 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-Q for the quarter ending June 30, 2026, which has been filed with the SEC. Also during our call, we will discuss non-GAAP measures of our performance. Gap 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 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. The second quarter showed clear progress against our strategic priorities. The investments we made earlier this year in our people, advertiser business, and tech platform are starting to deliver. We remain focused on the same priorities we've talked about all year, deepening our bank partnerships and expanding our publisher network, driving incremental revenue for advertisers through our precious intelligence, and continuing to invest in our tech platform that differentiates us. As we've stated in the past, 2026 has been and is a year of execution. The biggest takeaway from Q2 is that we are beginning to see the results of the reset. Our advertiser growth is accelerating, churn is improving materially, and supply has stabilized. Starting with our network and supply, rewards programs across the industry are shifting toward merchant-funded, locally relevant models, and we are at the center of that shift. We are partnering with industry leaders to define how this evolves industry-wide, particularly as AI adoption accelerates. The shift is happening across the industry. At their investor day this year, one of the country's largest card issuers said they're shifting more towards merchant-funded offers than expensive points-based rewards. The reason is simple. Consumers want offers that are more relevant and personalized. On CRP, market interest remains strong, and our pilot partners already live on our platform are giving us positive feedback. The proposition is resonating. Our focus now is executing well for those early partners while we continue conversations to bring new ones onto the platform. We continue to grow with our existing bank partners and we're in active discussions with new ones. Several longstanding FI partners, along with some newer ones, have asked us to expand our card-linked offers program to additional portfolios, a direct result of the value we are driving for their cardholders and the top-of-wallet behavior it creates. One of our major bank partners recently agreed to temporarily reduce their FI share as a show of good partnership to accelerate co-development and innovation in their program. We've seen this play out in concrete outcomes this quarter. In one recent bank-funded program, we tested extra rewards for cardholders who made two redemptions in a month with an even higher reward for three. As a result of this program, we saw total redemptions go up 105%, first-time redeemers were up 113%, and merchant funded redemption spend increased 78%. This shows the Cardlytics flywheel delivering for all three sides of our business, consumers, bank partners, and advertising merchants. We are also continuing to grow are local third-party offers. They are now live across four major banks and drive nearly 5,000 redemptions a day. They get strong engagement because they are highly relevant to consumers locally, and billings are up 20% since the start of the year. We expect to lean into these even more in the second half. In the UK, Cardlytics expanded our role in providing offers for Monzo, one of the fastest-growing banks in the UK. Starting July 2026, Cardlytics now powers more card-linked offers for Monzo's UK customers, delivering personalized, spend-based cashback rewards directly within the Monzo app. The partnership expands Cardlytics' UK reach by building on its extensive network of agencies and partners, giving brands direct access to Monzo's highly engaged digitally native customer base. The partnership reflects growing demand among leading UK financial institutions for data-driven frictionless reward solutions. Across our FI and CRP conversations, we're hearing the same themes consistently from market leaders. The strength of our tech platform, the scale of our merchant network, and the size of value we can deliver to their consumers sets us apart. Turning to our advertiser base. Q2 advertiser base demonstrated growth both quarter over quarter and year over year. Active advertisers grew 18% quarter over quarter and billings grew 11% alongside it. New logo volume was the strongest signal up 59% quarter over quarter. Total new business billings for this group grew 17% year over year and our largest new logo this quarter was more than a hundred percent higher than our largest new logo a year ago growing advertisers those increasing their billings with us grew 42 percent churn improved across the board down 50 percent by advertiser count and 88 percent by dollar impact that growth comes down to two things measurement and scaling proving results quickly with new advertisers and making it easy for them to scale immediately one large national restaurant brand piloted with us in q2 and has already resigned to the max potential a home services brand piloted with a single location and before the pilot even wrapped expanded to seven others, and is now also at our maximum tier across their full portfolio. In the UK, billings are up 10% year over year, and we saw a great example this quarter of what our purchase intelligence can do for our advertisers. Some of our restaurant clients thought their sales were slowing because the whole category was shrinking. Our data showed that wasn't the case. The category was flat and their customers were still eating out but increasingly ordering through third-party delivery services. We got ahead of the trend and proactively adjusted look-back periods to reflect shifting market dynamics, capturing customers during their normal dormancy windows before spend moved out of the category. This ensured we sustained advertiser investment even in a category under real budget and margin pressure. We are seeing the same pattern here in the U.S. Quick service spend grew 3.3% year over year, but almost all of that was menu inflation. Real demand was flat. It's not just this quarter. QSR's share of restaurant spend has been shrinking year over year since 2024, while delivery keeps picking up the difference up more than 18% this quarter alone. People aren't ordering less quick service food that spend is just shifting to delivery. One QSR brand saw this play out directly. They knew their purchase frequency trailed key competitors and assumed they were losing customers out of the category. Our data showed those customers hadn't left. They'd migrated to other brands mirroring that same category-wide shift. that insight moved their strategy from broad acquisition to retention and re-engagement and purchase frequency among those re-engaged customers came in stronger than across their broader base that's the value we deliver not just what's happening but the action that drives growth our everyday spend data shows resilience in gas and convenience up 11.1 percent year over year even as discretionary dining growth flattens. That same purchase intelligence extends beyond category-level trends into the broader economy. Our data shows that the U.S. consumer spend growth rebounded to 3.6% year-over-year in June, up from 2.3% in May. Contrary to popular opinion, lower-spend households are driving this recent growth. We often see shifts like these before they show up in broader economic data, and sophisticated advertisers take advantage of these broader trends as they plan their marketing efforts with us. Now on to our technology platform. Last year, we invested in cleaning up our tech debt and building an AI-forward tech stack. Now that these investments are behind us, we are now operating more efficiently and moving faster. We are also continuing to put AI to work across the platform. We recently launched new AI capabilities that automatically pull industry and brand level spending insights from our purchase data. Leading advertisers are using these insights to benchmark their performance and understand broader consumer trends, utilizing them in marketing decisions and beyond. We launched an AI-driven campaign publishing engine that automates core setup and configuration workflows within our advertiser platform. Operating with human-in-the-loop oversight, this capability significantly reduces time to market for advertiser campaigns while driving long-term operating efficiencies across our sales and ad operations teams. In the U.S., we're building ad campaigns in about half the time we were a year ago, while still hitting our internal targets 99.4% of the time. We are also building new capabilities that let banks personalize rewards for their own customer segments. Banks can tell us, through our APIs, which customers they consider high tier or at risk of churning, and our platform can make personalized decisions on reward values, offer ranking, and bank-funded offers tailored specifically to those groups. We expect to begin testing this with one of our bank partners soon. We're developing token-based solutions that make our market-leading offers protocol embeddable across different partner experiences. This will allow us to extend our reach and meet more consumers wherever they are. Now looking forward, Q2 showed that our plan is working and our core business is getting stronger. As we move into Q3, our focus is on solidifying that foundation. We want to continue building supply, growing our advertiser base, improving retention, and scaling the capabilities we've invested in across our platform. We expect Q3 to be another quarter of execution and strengthening the core business while we continue laying the foundation for renewed growth. We are starting to see early benefits of the hard work done earlier this year to reset the company while being fully aware of the challenges that come with being a small public company. Our focus remains on discipline, urgent execution against our strategic priorities. Before I turn it over to David, I want to welcome Chris Cheng to Cardletics. Chris joined us earlier this week as our chief legal officer and brings more than 20 years of legal experience from some of the leading technology companies. Chris, we are excited to have you on the team, and thank you for jumping right in and helping lead us through the call tonight. David, over to you.

Thank you, Amit. As we talked about in our last earnings call, our core focus and strategic plan we set up at the beginning of the year was to level set around sequential growth and self-sustainability. We are pleased to announce that we were within our guide for billings, revenue, and adjusted contribution and exceeded the high end of our guide for adjusted EBITDA. This performance was driven by continued advertiser growth that's building a healthier revenue base while also demonstrating a keen eye to cost containment in the quarter. Turning to Q2 results. For awareness, all comparisons to prior year will be presented excluding bridge, which we divested in Q1 of this year. Bridge-specific results can be found in the 10Q. Also, the comments will be year-over-year comparisons to the second quarter of 2025, unless stated otherwise. In Q2, our billings were $65.5 million, a 34% decrease year over year. We will continue to see tough comps year over year until Q1, 2027, when we anniversary the previously discussed changes in our bank partner relationships. Over the course of the year, we have seen supply stabilize and our advertiser base increase. Q2 revenue was $36.9 million, a 36% decrease year-over-year. As Amit mentioned, our UK business remains a standout performer, with Q2 revenue increasing over 10% year-over-year. Q2 adjusted contribution was $21.3 million, a 32% decrease year-over-year. We materially increased our adjusted contribution as a percentage of revenue to 57.7% from 54% in the prior year. Q2 adjusted EBITDA was positive $1.7 million compared to $3 million in the second quarter of 2025. Q2 adjusted operating expenses were $19.6 million, a decrease of 31% from prior year. This was largely due to reduction in force actions taken in the second half of 2025 and optimization of our cloud infrastructure. Q2 operating cash flow was negative $8.6 million compared to $1.2 million in the prior year. Free cash flow was negative $10.7 million compared to negative $3.4 million year over year. From a liquidity perspective and on the balance sheet, we ended Q2 with $28 million in cash and cash equivalents and approximately $20 million available on our credit facility. Our continued laser focus on free cash flow and where we are making investments to support our near- and medium-term efforts to continue to grow our business in a self-sustainable manner remains our clear priority. We see free cash flow trending in the right direction and converging closer to adjusted EBITDA going forward. Our MQUs for the quarter were $185 million, down from $224 million a year ago due to the previously discussed changes in our bank partner relationships. Now turning to our outlook for Q3, 2026. For Q3, we expect billings between $61 and $67 million, revenue between $34 and $39 million, adjusted contribution between $20 and $23 million, and adjusted EBITDA between zero and positive $3 million. Our guidance represents comparable performance in Q3 versus Q2 as our business solidifies and matures around the investments made earlier this year. This is largely consistent with our historical quarterly trends when adjusted for unusual events. We are laser focused on executing against our core competencies to drive growth in 2026.

I'll now turn it back to Amit for closing remarks to wrap up our second quarter results reflect the execution we committed to at the start of the year we are focused on the fundamentals and market feedback confirms the importance of the cardlytics platform in delivering value to consumers bank partners and advertisers a big thank you to our cardlytics team for their extraordinary commitment and to our bank partners and advertisers for their continued collaboration and trust. I'll now turn it over to the operator to begin Q&A.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Your first question comes from the line of Jason Crayer with Craig Hallam Capital Group. Jason, your line is open.

Hey guys, this is Thomas on for Jason. Thanks for taking the questions. Maybe first, Amit, can you give some color on what you're seeing in the broader consumer landscape and consumer utilization of offers?

Yeah, Jason, thank you for the question. Overall, First of all, we see the consumer, the U.S. consumers spend getting stronger, especially over the over the slight slump in the quarter during during the month of May. So we strengthen happening there in QSR. I think, as we mentioned in the prepared remarks, while the demand is flat, but there are there are increases in the QSR sector due to menu inflation. We see uptick in gas and multi-line retail. And then discretionary spending is up in pockets in certain segments of the U.S. consumer base and certain segments in the U.K. consumer base.

Great, thanks. Maybe one for David. Can you talk about where you're at with the cost structure? You've done some work right-sizing the organization. and now you've got bridge removed and you are delivering sequential growth. Just trying to gain some perspective on where things are like from a headcount perspective and where OpEx goes from here.

Absolutely. So as I've mentioned in the past, a lot of the investments that Amit mentioned in the beginning of the year, we see that now being level set and kind of flowing through the model, if you will. We don't anticipate any additional OpEx or CapDev in the business going forward. What we'll have needs occasionally from time to time in and around headcount, but I would expect on a more kind of broader base to kind of see headcount kind of staying the same, if that helps answer your question.

Yeah, that's great. Thank you guys.

Our next question comes from the line of Sam Knapp with Lake Street Capital Markets. Sam, your line is open.

Congrats on the quarter. I just had a question about, it sounds like the overall 2026 plan is quarter over quarter sequential growth, but Q3 Billings guidance, which is $64 million to do at 6.5. So could you put a color on what that is and if it's trial hospitality pushout or as the pipeline order, just some general color around?

Sure. You're cutting in and out there, Sam. I don't know if that was on my end or your end. Can you hear me okay?

I can.

Okay, good. Yeah, it's a fair question. A couple things that I would say there in a minute. Obviously, feel free to jump in. And we will in our guiding to some sequential growth on the EBITDA side, but here are you on the Q3 piece, and that is and continues to be kind of a focus for us. We do see growth throughout the rest of the year, and that is an important thing to make sure that we keep in mind. And we make the comment earlier around a lot of this is really consistent with what we've seen in prior years with regards to the relationship between Q2 and Q3. So there's not a whole lot of concern per se. You know, we touched a little bit on new business. We've seen new business really taking off in a nice way. And just as we sit here at this point in time in the quarter, that's kind of where we land from a guide perspective. But I'm also very optimistic that we're seeing a lot of goodness out there that gives us confidence in seeing growth throughout the rest of this year, regardless of kind of how we think about Q3. if that helps answer your question, but it's a fair point and question.

Yeah, and I think, Sam, that's a good point. The trajectory, if you think about the overall arc for the year, we wanted to make sure that the business is on a strong footing and we feel very good about the business is strong. And I think as we've mentioned previously, as David just mentioned as well, as we go into Q3, not only is it historically aligned with how we've performed before, but it also solidifies our base of investments that we've made before, and they start to come to fruition. And the most important part is it helps us lay the groundwork for future growth, and that's what we're excited about. And we're seeing that both on the bank partner supply side and on the advertiser side as well.

Thank you, guys. I appreciate it.

Thanks, Sam. We have reached the end of the Q&A session. I will now turn the call back to Amit Gupta for closing remarks.

Thank you for the questions today. And I just want to convey a huge thanks again to our stellar Cardlytics team, our amazing bank partners and advertisers that really put a lot of trust to help grow their businesses with us and really make the Cardlytics flywheel work for everyone, especially for the everyday consumer across U.S. and U.K. so we're excited about that and looking forward to the rest of the year that we're laying a foundation for growth over time. So thank you again.

This concludes today's call. Thank you for attending.