Cardlytics, Inc. (CDLX) on Q3 2022 Results - Earnings Call Transcript

Company Representatives: Nick Lynton - Chief Legal Officer Karim Temsamani - Chief Executive Officer Andy Christiansen - Chief Financial Officer Operator: Thank you for standing by, and welcome to the Third Quarter 2022 Cardlytics, Inc., Earnings Conference Call. I will now hand the conference over to Nick Lynton. Please go ahead. Nick Lynton: Good evening, and welcome to Cardlytics third quarter 2022 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 about our future financial performance and results, our ability to achieve our key long term priorities, our future growth, adding new partners, advertisers and content to the network, the timeline and benefits of our ad server and cloud migration initiatives, our timelines for achieving positive adjusted EBITDA and positive free cash flow, our cost reduction initiatives and the Bridg earn-out payments. 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 the company’s 10-Q for the quarter ended September 30, 2022, which has been filed with the SEC. Also during this call, we will discuss non-GAAP measures of our performance. GAAP financial reconciliations and supplemental financial information are provided in the press release issued today, and the 8-K that has been filed with the SEC. Today’s call is available via webcast and a replay will be available for one week. You can find the information I have just described in the Investor Relations section of the Cardlytics website. Please note that a supplemental presentation to our third quarter results has also been posted to our Investor Relations website. Joining us on the call today is Cardlytics’ CEO, Karim Temsamani and CFO, Andy Christiansen. Following their prepared remarks, we’ll open the call to your questions. With that said, let me turn the call over to KArim. Karim? Karim Temsamani: Good evening, and thank you for joining our Q3 2022 earnings call. I am excited to have joined Cardlytics after spending 12 years at Google and nearly four years at Stripe. I’ve spent my first 60 days in the business with our leaders, key members and banks and I feel energized about the clear and large opportunity to build the scale and financially robust business. The strength of our data to partnerships with leading banks and fintechs, combined with the growing customer base of advertisers and agency leads me to believe that Cardlytics can become the leading purchase intelligence and incentives platform with the right vision and execution. Later in the call, I will expand on these observations and the state of our business. First though, let’s go through the Q3 results and key highlights. We delivered double-digit growth despite the fierce challenges present in the economy. This growth was fueled by solid performance in travel and entertainment, while we grew greater than 100% and retail, which was supported by both new and existing client growth. Here are the numbers. Billings increased 12% year-over-year to $110.4 million. Revenue increased 12% year-over-year to $72.7 million. Adjusted contribution increased 11% year-over-year to $35.1 million. Bridg revenues increased 86% year-over-year to $5.4 million. Agency grew greater than 85% this quarter year-over-year and excluding the large client mentioned over the past two quarters, our core Catalytics revenue growth was 30% year-over-year. I am also excited to say that we made significant progress on our key platform enhancement initiatives this quarter. We are proud to announce that four banks are connected to our ad server including one of our largest banks. We now have connected greater than 50% of our MAUs in U.S. server which surpasses the goal we set for the year. We expect to connect more partners in the coming months and our goal is to help all our bank partners upgrade to a new ad server by the end of 2023. We are also rapidly migrating our bank partners to the cloud and made significant progress in the quarter. We believe we can migrate nearly all of our banks by Q1 of next year, which places us well ahead of our Q3 2023 goal. I personally want to congratulate that team on the progress in delivering the ad server and cloud migration to our partners. Both are initiatives in realizing our long-term strategic goals. The next step of the banks that have moved is to launch the new user experience and we have already received the firm commitments from one of our largest bank to release by Q1 of 2023. As a reminder, banks do have to incorporate the new capabilities into their UX upgrade cycles, but we are working harder than ever to influence this timing to increase the value of their program. This will allow us to enable new capabilities such as enhanced imagery as well as new product offerings for our partners and advertisers. Additionally, these enhancements lay the foundation to optimize campaign performance, pricing and ultimately provide the differentiation our partners need to better serve their customers. We view these developments as strong signals that our bank partners are committed and truly value our relationship. I look forward to providing more positive updates from our bank team in the coming quarters. On a related note, we are taking steps to increase our MAU base by signing new partners. We are in discussions with multiple top-20 US banks and several high upside fintechs. While these conversations are early, our pipeline to increase MAUs over the next two years is strong. Expanding these relationships will further diversify our partner concentration, while providing advertisers with further scale to accomplish their marketing goals. We will continue to update you as we make progress on these potential partnerships. We’ve also made enhancements to advertising content. As we mentioned in prior quarters, the team has been hard at work in bringing third-party content to our platform through various pilots and proof-of-concepts. In Q3, we fully enabled the ability to bring in external content to our platform and delivered over 600 local offers across the United States. We are expecting scale to thousands of local offers with our banking partners over the coming quarters. Let me turn to market strength. This should be no surprise that consumers are increasingly being impacted by high inflation and rising interest rates. For the first time since Q4 of 2020, the year-over-year growth in basket size exceeded the growth of transaction frequency. We saw higher basket size across all key verticals. But the highest increases were within gas and travel. While household spending increased 9% year-over-year, it decreased 2% from Q2 2022. The sequential quarterly decline in household spending was seen across all our key verticals. Gas and travel were both down 6%, entertainment was down 3%, retail was down 2% and restaurant and grocery were both down 1%. These data matters what we are hearing from our clients across all our verticals and is consistent with trends we identified last quarter. Outside of the impacts of the large restaurant clients exiting our channel, the primary reason we saw reduced budget in Q3 was due to – of a recessionary environment impacting consumer demand. While we have performed well year-to-date, we believe these trends will impact our business moving forward. In response, we are cautiously guiding Q4 billings to be between $120 million and $132 million. With this in mind, we are doing everything in our path to exceed this range. We are also highly encouraged by the strong pipeline we have for 2023. Our goals of delivering sustainable positive adjusted EBITDA by Q2 2023 and positive free cash flow by Q3 2023 will be more challenging in a difficult auto markets. But we are committed to remain on track by making the necessary steps to lower our cost. A key priority in my first two months has been to evaluate the status of our current cost structure in a challenging environment and we have already identified several areas of additional cost savings. Andy will provide more details in his remarks. Now let me discuss our results and the macroeconomic environment, I want to lay out key learnings from my first sixty days at Cardlytics. It’s very clear to me Cardlytics achieves what many thought impossible. On the advertising platform that delivers positive outcome for consumers, banks and advertisers. Since the IPO, we’ve extended our reach to enter the three largest banks in the U.S., increase customer loyalty as value for our bank partners and improve our sales while diversifying our customer base. And we are well on our way to delivering the newest service with our largest bank partners which will provide better for consumers, more engagement for our partners and unlock broader advertising opportunities. We truly have a large opportunity in front of us. That said, I will find several areas that we must improve to successfully execute on this next phase of the business. First, we are good partners to banks, but we must obsess of achieving their goals and providing value to the customers. Banks are the most important assets of our business. The only way to create strong outcomes for Cardlytics is to create stronger outcomes for our partners. Second, I believe Cardlytics can better optimize the monetization of its assets to support long-term profitable growth across the business. We are already thinking about various revenue models that better leverage our capabilities, analytics and the idiosyncrasies of the verticals we serve. Third, Bridg, Dosh and entertainment are great assets and we must integrate, invest and scale them faster. Our combined value proposition is much more powerful and just showing in our Cardlytics alone. By doing this, we will become more important to current and future bank partners, open the doors to new offer constructs, enhance the measurement capabilities and deliver more content from the longer tail of advertisers. Fourth, to maintain a competitive position and drive long-term value, we must continue to upgrade our asset stack and be relentlessly focused on operational excellence. The ad server and cloud migration focus reflect this. But our operational processes are overly time consuming. Improvements, efficiency and automation will unlock the vast opportunity ahead of us and allow us to profitably grow the business. Fifth, we must remain hyper focused on profitability to believe on the goals with promise to our investors. The ability to control a destiny will fuel our growth strategy and ultimately be a key step in becoming the leading purchase intelligence and incentives platform. I see tremendous opportunity to scale Cardlytics profitably by layering in best-in-class systems, technologies and processes. We will be faster and more agile, data-driven, ambitious and accountable. In turn, we can make commerce smarter and more relevant for everyone. My number one priority in the short-term is to protect our balance sheet against the possibility of the long-term recession. With a more resilient expense base and responsible internal investments, the good news is that through hard work these key areas are firmly within our control to change. With that, I will hand it over to Andy to provide more details on our results and financial strategy. Andy Christiansen : Thank you, Karim. Our results this quarter were in line with our expectation given our clients’ growing concerns about the economy. High inflation and rising interest rates are still pressuring the consumer and the lack of consensus around the length and severity of recession has advertisers on those uncertain we’ve seen since the onset of the pandemic. Even with these issues, we delivered double-digit year-over-year growth. Billings grew 12% to $110.4 million, revenue grew 12% to $72.7 million and adjusted contribution grew 11% to $35.1 million. Bridg revenue grew 86% year-over-year. Geographically, U.S. revenue grew 13% year-over-year and UK revenues decreased 1% in U.S. dollars, but increased 3% on a constant currency basis. Customer concentration has improved dramatically over the past year as our top five customers accounted for 20% of revenue this quarter, compared to the 35% in Q3 of 2021. This will remain a key focus as we continue to grow and expand our advertiser base. Before we dive into adjusted EBITDA, I want to provide an update on our profitability goals and balance sheet. Like Karim said, given the weakening digital advertising market, we have been evaluating areas of additional cost savings beyond the $15 million of annualized savings we discussed last quarter. We’ve expanded this program to reduce annualized operating expenses by at least an additional $20 million. We are moving rapidly to realize these savings and expect them to begin positively impacting results early next year. Moving to our balance sheet, we ended Q3 with a $138.6 million in cash and cash equivalents compared to $157.1 million at the end of Q2. During Q2, we used $14.4 million of cash in operating activities, used $3.3 million for software development and capital expenditures, and realized $800,000 unfavorable impact from a strengthening U.S. dollar. Our $15 million loan facility still remains undrawn. Regarding the Bridg earnout, that not for 2022 is being disputed. It is currently in the resolution process outlined in the merger agreement and it will remain unpaid until it’s resolved. While the dispute is unfortunate, we are confident in our position and we’ll vigorously defend it. We still expect the first earnout inclusive of broker fees and transaction bonuses will be $126.4 million, requiring a minimum cash payment of $43.5 million. We expect the second earnout inclusive of fees and bonuses to be $69.5 million requiring a minimum cash payment of $24.9 million in 2023. Adjusted EBITDA was a loss of $12.7 million this quarter, compared to a loss of $5.2 million in Q3 of 2021. As we mentioned last quarter, we did not expect the cost savings announced last quarter to have an immediate impact on adjusted EBITDA. We are able to realize some of our cost savings in Q3 and we’ll be able to fully realize the benefits by Q1 of 2023. As Karim mentioned earlier, we have begun our migration to the cloud. We continue to estimate total incremental hosting cost of $7 million to $10 million during the migration of which we have incurred over $2 million so far. We’ve made great progress in the migration and expect to be fully migrated ahead of our goal of Q3 2023. M&A use of $184.7 million, an increase of 8% year-over-year. Our organic growth rate was slightly above our long-term expectations of low to mid-single-digit growth. ARPU during the second quarter was $0.36 which is flat year-over-year. Additionally, I want to briefly comment on engagement rates in U.S. Just like last quarter, our activations have increased meaningfully 72% year-over-year, our search have increased 82% year-over-year, slightly pressuring activation rates across the majority of our key verticals. We had 33.1 million shares outstanding end of Q3, compared with $32.9 million at the end of Q2. Weighted average shares outstanding during the quarter were 33 million above Q3 of 2022 and 2021. Now turning to guidance. As Karim mentioned earlier, uncertainty among our advertising clients increased in Q3, we are seeing even more reductions and delays in overall ad spending so far in October. The large restaurant client mentioned in prior quarters exited the platform in Q4. With that in mind, for Q4, we expect billings of between $120 million and $132 million, revenue of between $80 million and $90 million, adjusted contribution of between $38 million and $44 million, and a low to mid-single-digits adjusted EBITDA loss. As I mentioned previously, the cost savings we announced last quarter have just started impacting our results. We are prepared to expand this program in order to serve with a lower operating cost and reach our financial goals in 2023. Additionally, we expect Bridg to continue growing at a faster rate that the core Cardlytics business, which was a favorable impact on the overall margin profile of the company. The current environment presents many challenges to advertising platforms, but it leaves us also opportunities. Q4 as a seasonal high point due to the importance of the holiday season to marketers and in most years, we see unplanned budgets materializes on the quarter. We have concerned this dynamic may not exist this year given the current market headwinds. As a result we have not accounted for any unspent ad budgets in our guidance. On a positive note, our pipeline for 2023 look large as it has ever been at this time of the year. There is a wide range of outcomes for Q4, but our highest priority of meeting our profitability is our goals next year. Additionally, plans for the business will focus on profitable growth that will position us to maximize the value of our assets. With that, I’ll turn it back over to Karim. Karim Temsamani : To everyone listening, thank you for your support. I believe Cardlytics can drive better business outcomes for partners and advertisers, while making every transaction a delightful and rewarding experience for consumers. We are already making headway on improvements in the key areas identified and I am looking forward to iterating on this improvement quarter-after-quarter. While the economy maybe uncertain, I believe there is inherent resiliency in platforms that prove return on ad spend and I am positive that we can grow profitably. There is a large opportunity ahead of us and we will be disciplined in Q4 and beyond as we prioritize our goals and position the company well for the next ten years. With that, I will open the call to questions. Operator: Our first question comes from the line of Kyle Peterson with Needham & Co. Your line is now open. Kyle Peterson : There are some of the user trends are – billings and revenue, I know there is some moving pieces with that large restaurant client, but how should we think about the puts and takes between, call it, breadth versus depth of kind of where you guys are seeing the ad budgets are? A lot of your, kind of usual suspect still in the platform just reduce levels and more stop and go or have some guys exited full on together and what is left is still spending at a normal pace. Just trying to piece together the mix of breadth versus depth here. Andy Christiansen: This is Andy. I think what we are seeing several markers pull back in budgets, not everybody is – we don’t – we are not seeing an influx of customers leaving the channel. But there is not a lot of pressure out there. We are signing larger deals, long-term deals, but we see that pretty widely. Now, there are some additional churn this quarter that we are planning on just because of the market headwinds that we see. One thing I will say though is we do have a very strong pipeline, both for Q4 and for next year. I think what we are seeing is advertisers, not taking a pause and reevaluating things in this current economic environment and we’ve looked at our pipeline and I see a very healthy pipeline, we fully expect to see a resumption of our growth over the next couple quarters. But we are seeing kind of a combination of some point of that and some leads in general. Kyle Peterson : Got it. That’s helpful. And then, maybe just trying to think through some of your kind of expense runrate here and how we should think about it in the current environment kind of second quarter in a row you guys have called out some cost saving initiatives here. How should we think about where your cash expenses should be over the next couple quarters here, just we can kind of think about use of cash and the balance sheet here for the next handful of quarters? Andy Christiansen: Yeah, so, like I said, we implemented our cost savings last quarter, annualized savings of $15 million. We are evaluating further savings on top of that. The actions that we decide to take will be made to ensure that we have solid liquidity and reach profitability aligned with our goals of being EBITDA positive in Q2, positive cash flow in Q3, and as we can control our destiny. And so, certainly there is a lot of uncertainty of what the growth rate will be over the next several of quarters. That’s why we are taking the steps that we are taking now just to make sure that we are really mindful of expenses, because ultimately that is what we have full control over. Kyle Peterson : Alright. That’s good to hear. Thanks guys. Operator: Your next question comes from the line of Doug Anmuth with JPMorgan. Your line is now open. Wesley Sanford: Hi, this is Wesley for Doug. Thanks for taking my questions. Just kind of thinking back to last quarter when you guys guided 10% to 15% second half growth. I believe you had contemplated a deteriorating macro environment. So I guess, it will be helpful if you kind of walk us through the quarter and kind of what you saw and like kind of – it seems like it’s a bit lower in the second half now based on 3Q results and your 4Q guide. So just wondering what you are seeing there. I guess, just a sort of a follow-up, I believe there was a proposal laid out by Chase and Bank of America for the large advertising partner and just wondering now if there is any progress on that front. Thanks. Andy Christiansen: Hey, thanks. Excuse me. So from a growth perspective, the low budget headwind that we are facing is certainly velocity, large restaurant clients who left the platform, but there is a lot of disruption in the ad market. Excuse me. There is a lot of disruption in the ad market and we are just not immune to that. While we didn’t normalized for the loss of that large client and we reached 30% this quarter. But I think we are dealing what’s – before is a pretty significant pause by advertisers, pretty broadly that was not accepted. And we knew from public in Q1 of this year that that large client was in the exited channel. But I don’t think we anticipated the broad slow down that was going to occur in Q4. And so, that is something that did actually was certainly worse than what we expected, but again, I feel really good about the size of the pipeline that we have and what we are trying to guide for the quarter it’s awfully difficult to be able to anticipate some of the positive seasonality things that we see in the quarter. Right, we typically see budgets materialize, unplanned in quarter in Q4 and with the current headwinds, it just, it’s not prudent for us to say that those type of things that will show up. So, that’s really the largest delta if you will of our expectations versus how kind of Q4 is shaping up. That answers your question there. Wesley Sanford: Yes. Enough. Thank you. Operator: Your next question comes from the line of Jason Kreyer with Craig-Hallum. Your line is now open. Unidentified Analyst: Hey, this is Kyle on here for Jason. So, first just wanted to ask, you kind of talk about these M&A use ramping up. Just if you could talk about the learnings with that process and how kind of coming ahead of schedule how that kind of enhances the long-term opportunity here for Cardlytics. Andy Christiansen: We are really happy to report that we’ve got over 50% of the M&A is connected to the ad server. I mean, certainly when you look into next year, we anticipate that by the end of 2023, pretty late in the year that we’ll see some positive momentum. We have said that in number of years since we launched something really significant for our bank partners who are really excited to be able to do this. It’s going to take, obviously, a couple of quarters because not only once you get the ad server installed, when there is additional steps that are needed. And the bank need to actually evolve their user experience, incorporate the capabilities that we unlock to be able to actually bring those new things to their bank customers. So, it will take a couple quarters for those things to bear fruit. But we are really happy to see that progression. We do expect that all of our bank first will has to adopt it next year and then we’ll be able to show an impact as a result. Unidentified Analyst: Perfect. Thanks. And then just real quick, Karim coming in here, just kind of wondering on your thoughts on the progression towards profitability. I know you guys kind of talked about implementing further cost cutting measures. Just kind of curious how that’s kind of tracking so far and what you think the potential of that moving forward? Karim Temsamani: Thanks for the question. It’s pretty clear to me that we have a very large opportunity with this company. As I mentioned in my opening remarks, I think there is number of areas where we, in confusion, that’s been to ensure that we have a long-term profitable business. I mentioned the fact that we need to obsess about our banking partners and make sure that we have the right level of relationship and the right level of product offering with them. Obviously, as Andy just mentioned, this is one of the key components of that. I think we have an opportunity to better optimize the monetization of our assets and capabilities. We are undergoing a strategic process at the moment to enable us to unlock the power of Cardlytics. And I think with our clients, I believe that we have a better way and opportunity to integrate scale and invest our acquisitions that we made in recent years and I am focused on that as well, as well as upgrading our tech stack and focusing on operational excellence. All of these things are really critical for Cardlytics but they need to be underpinned by– this business to turn on profit and for – I have been very much focused a little over two months in discussing with the teams how we create further scale to operation and how we rationalize areas where we are spending more money than we should to ensure that we have the foundation to continue to invest in the future of the business on the areas that I mentioned about. Unidentified Analyst: Perfect. Thank you. Operator: Our next question comes from the line of Aaron Kessler with Raymond James. Your line is now open. Aaron Kessler: Great. Thanks guys. A couple of questions. Can you just quantify maybe some of the ad server benefits you are seeing thus far, start early? Second, just on the consumer incentive fees, those are a little bit higher than we expected in the quarter as a percentage of billings and third, just any – can you just quantify any of the agency spend that you’ve done in the last couple of quarters, as well. Thank you. Andy Christiansen: Sure, let me just start up with the margins. So we do have some customer mix. You may hear this quarter. Obviously, the exit of a large restaurant client will have an impact on our margins within restaurant are typically that higher than they are in some other areas that we are having a lot of success where we talked about travel in the past, things like contribution margins, so there is some mix. There is nothing fundamental driving some of those things. But you will see also I will refer back to the enhanced consumer incentives where at times we may have a bank partner who is investing in the program. So, actually when you normalize adjusted contribution for some of the accrual that we have for the shortfall, as you remember that from last quarter are actually – just the contribution margins are very healthy and probably steady over time. So we actually are fairly happy there. In terms of the ad server, it’s a bit early, right. We’ll probably have a lot more to talk about it as we get a little closer to it working with the bank partners around the timing in which that actually may hit market and some of those things that we expect in the back half of 2023 that to occur. We are just not quite at the point to talk deeply about 2023 at the moment. We will have more for you there. Aaron Kessler: Great. And probably on the agency incentive, any updates there? Andy Christiansen: So, I don’t… Aaron Kessler: So the agency – advertising agency spend levels. Andy Christiansen: Yeah, I mean, agencies continues to be a real source of growth for us, right. We started that up last year, middle of last year. We grew 85% here this quarter year-over-year. We’ll continue to see a lot of good momentum there. Great – greater than 85% year-over-year. And so, we just have really good momentum there. I mean, one of the things that we continue to talk about, right, is that, some of the other advertising channels, we’ve had a kind of an established measurement, ability to measure that media, those tools have been taken away from the other platforms, right. And so, we are at the performance channel that does not - that is first party data, right. Does not rely on cookies and hide your face and alike. So we continue to be a good place for folks to come and have reliable returns on ad spend. Aaron Kessler: Great. Thank you. Operator: We have no further questions at the queue. This concludes today’s conference call. Thank you for your participation. You may now disconnect.
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Analyst Downgrades Cardlytics, Inc. Amid Financial and Operational Challenges

  • Omar Dessouky of Bank of America Securities downgrades Cardlytics, Inc. (NASDAQ:CDLX) to Underperform with a new price target of $3.5, indicating a potential downside.
  • Cardlytics' Q2 financial performance shows a **9% decrease in revenue** year-over-year and a **3% drop in adjusted contribution**, reflecting operational challenges.
  • The resignation of CEO Karim Temsamani and an investigation by Levi & Korsinsky into potential federal securities law violations add to the company's uncertainties.

Omar Dessouky of Bank of America Securities has recently adjusted his outlook on Cardlytics, Inc. (NASDAQ:CDLX), setting a new price target of $3.5, a slight decrease from its current trading price of $3.69. This adjustment reflects a potential downside of about 5.15% for the stock. This move was accompanied by a downgrade of CDLX's rating to Underperform from Neutral, as reported by TheFly. This change in valuation and outlook for Cardlytics comes amidst a backdrop of financial and operational challenges for the company.

Cardlytics, a company that operates in the purchase intelligence sector, providing marketers with insights to help them measure and improve their advertising campaigns, has recently been under scrutiny. The company's financial performance in the second quarter of 2024 showed a **9% decrease in revenue** year-over-year, totaling $69.6 million. This decline in revenue, coupled with a **3% drop in adjusted contribution** to $36.4 million, signals potential underlying issues in the company's operations or market conditions. These financial results have likely contributed to the reassessment of Cardlytics' stock by analysts.

Adding to the company's challenges, the resignation of Karim Temsamani as Chief Executive Officer and from the Board of Directors introduces further uncertainty about the company's future direction and leadership stability. Leadership changes, especially at the CEO level, can often lead to volatility in a company's stock price as investors and analysts reassess the company's future prospects under new management.

Moreover, the initiation of an investigation by Levi & Korsinsky into potential violations of federal securities laws on behalf of shareholders who have incurred losses adds another layer of concern. This investigation, following the announcement of the company's financial results, suggests that there may be deeper issues related to the company's financial reporting or operational practices. Such legal challenges can distract from the company's core operations and potentially lead to financial penalties or settlements that could further impact the company's financial health.

The recent performance of CDLX's stock, with a significant decrease from its yearly high of $20.52 to its current price, reflects the culmination of these challenges. The company's market capitalization of approximately $183.91 million, alongside a trading volume of 954,891 shares, indicates investor reaction to the company's recent developments and future uncertainties. These factors collectively provide context to the downgrade and revised price target set by Omar Dessouky, highlighting the potential risks and headwinds facing Cardlytics in the near term.

Cardlytics’ Price Target Raised at Needham

Needham analysts boosted their price target for Cardlytics (NASDAQ:CDLX) to $17 from $15, while keeping their Buy rating on the stock. The analysts' updated perspective follows Cardlytics' significant partnership with American Express and two recent financial transactions, which are expected to address near-term financial stability concerns.

These moves are believed to lessen the uncertainty around the company's stock by ensuring it doesn't rely on external financing for its strategic initiatives. Additionally, the collaboration with American Express is anticipated to diversify Cardlytics' financial institution partnerships and contribute to growth and profitability over several years.