Cardlytics Inc

Previous wording

We define MAUs as targetable customers that have logged in and visited online or mobile applications containing offers, opened an email containing an offer, or redeemed an offer from the Cardlytics platform during a monthly period. We then calculate a monthly average of these MAUs for the periods presented. We believe that MAUs is an indicator of the Cardlytics platform's ability to drive engagement and is reflective of the marketing base that we offer to marketers. Beginning as of September 30, 2023, we are reporting only the total number of unique targetable customers within each FI, which we have applied to our reporting for current and prior periods in this Form 10-Q.

Current wording

We define MAUs as targetable customers that have logged in and visited online or mobile applications containing offers, opened an email containing an offer, or redeemed an offer from the Cardlytics platform during a monthly period. We then calculate a monthly average of these MAUs for the periods presented. We believe that MAUs is an indicator of the Cardlytics platform's ability to drive engagement and is reflective of the marketing base that we offer to marketers. We are reporting only the total number of unique targetable customers within each FI.

Previous wording

During the three months ended June 30, 2024, Cardlytics MAUs increased by 5.5 million compared to the three months ended June 30, 2023 primarily driven by organic growth of the existing FI partners in the U.K. and U.S. and a new FI Partner in the U.K.

Current wording

During the three months ended September 30, 2024, Cardlytics MAUs increased by 3.9 million compared to the three months ended September 30, 2023 primarily driven by organic growth of the existing FI partners in the U.K. and U.S. and a new FI Partner in the U.K.

Previous wording

During the six months ended June 30, 2024, Cardlytics MAUs increased by 7.9 million compared to the six months ended June 30, 2023 primarily driven by organic growth of the existing FI partners in the U.K. and U.S. and a new FI Partner in the U.K.

Current wording

During the nine months ended September 30, 2024, Cardlytics MAUs increased by 6.6 million compared to the nine months ended September 30, 2023 primarily driven by organic growth of the existing FI partners in the U.K. and U.S. and a new FI Partner in the U.K.

Previous wording

During the three months ended June 30, 2024, Cardlytics ARPU decreased by $0.06 compared to the three months ended June 30, 2023 as a result of an $8.0 million increase in Consumer Incentives due to higher engagement with our customers than expected.

Current wording

During the three months ended September 30, 2024, Cardlytics ARPU decreased by $0.09 compared to the three months ended September 30, 2023 as a result of an $7.5 million increase in Consumer Incentives due to due to high engagement by our customers.

Previous wording

During the six months ended June 30, 2024, Cardlytics ARPU decreased by $0.07 compared to the three months ended June 30, 2023 as a result of an $14.3 million increase in Consumer Incentives due to higher engagement with our customers than expected.

Current wording

During the nine months ended September 30, 2024, Cardlytics ARPU decreased by $0.15 compared to the three months ended September 30, 2023 as a result of an $21.8 million increase in Consumer Incentives due to high engagement by our customers.

Previous wording

Adjusted EBITDA represents our Net Loss before interest expense, net; depreciation and amortization; stock-based compensation expense; foreign currency (gain) loss; gain on debt extinguishment; acquisition, integration and divestiture benefit; and change in contingent consideration; and, in applicable periods, certain other income and expense items, such as impairment of goodwill and intangible assets; loss on divestiture; restructuring and reduction of force; income tax benefit; and deferred implementation costs. We do not consider these excluded items to be indicative of our core operating performance. Of these items depreciation and amortization expense, stock-based compensation expense, and foreign currency loss (gain) are non-cash impacting. Notably, any impacts related to minimum Partner Share commitments in connection with agreements with certain partners are not added back to net loss in order to calculate Adjusted EBITDA.

Current wording

Adjusted EBITDA represents our Net Loss before interest expense, net; depreciation and amortization; stock-based compensation expense; foreign currency (gain) loss; gain on debt extinguishment; acquisition, integration and divestiture costs (benefit); change in contingent consideration; and impairment of goodwill and intangible assets and, in applicable periods, certain other income and expense items, such as loss on divestiture; restructuring and reduction of force; income tax benefit; and deferred implementation costs. We do not consider these excluded items to be indicative of our core operating performance. Of these items depreciation and amortization expense, stock-based compensation expense, and foreign currency loss (gain) are non-cash impacting. Notably, any impacts related to minimum Partner Share commitments in connection with agreements with certain partners are not added back to net loss in order to calculate Adjusted EBITDA.

Previous wording

We define Adjusted Net Loss as our Net Loss before stock-based compensation expense; foreign currency (gain) loss; gain on debt extinguishment; acquisition, integration and divestiture benefit; amortization of acquired intangibles; and change in contingent consideration; and, in applicable periods, certain other income and expense items, such as impairment of goodwill and intangible assets; loss on divestiture; restructuring and reduction of force; and income tax benefit. We define Adjusted Net Loss per share as Adjusted Net Loss divided by our weighted-average common shares outstanding, diluted.

Current wording

We define Adjusted Net (Loss) Income as our Net Loss before stock-based compensation expense; foreign currency (gain) loss; gain on debt extinguishment; acquisition, integration and divestiture costs (benefit); amortization of acquired intangibles; change in contingent consideration; and impairment of goodwill and intangible assets and, in applicable periods, certain other income and expense items, such as loss on divestiture; restructuring and reduction of force; and income tax benefit. We define Adjusted Net (Loss) Income per share as Adjusted Net (Loss) Income divided by our weighted-average common shares outstanding, diluted.

Previous wording

During the three months ended June 30, 2024, Billings increased by$1.0 million compared to the three months ended June 30, 2023 primarily driven by an increase of $2.6 million in sales to new marketers, partially offset by a $1.6 million decrease in net sales to existing marketers.

Current wording

During the three months ended September 30, 2024, Billings decreased by$(4.5) million compared to the three months ended September 30, 2023 primarily driven by a $6.9 million decrease in net sales to existing marketers, partially offset by an increase of $2.4 million in sales to new marketers.

Previous wording

During the six months ended June 30, 2024, Billings increased by$10.6 million compared to the six months ended June 30, 2023 primarily driven by an increase of $13.7 million in sales to new marketers, partially offset by a $3.1 million decrease in net sales to existing marketers.

Current wording

During the nine months ended September 30, 2024, Billings increased by$6.1 million compared to the nine months ended September 30, 2023 primarily driven by an increase of $24.6 million in sales to new marketers, partially offset by a $18.5 million decrease in net sales to existing marketers.

Previous wording

(1)Stock-based compensation expense recognized in consolidated delivery costs totaled $0.7 million and $0.6 million for the three months ended June 30, 2024 and 2023, respectively. Stock based compensation expense recognized in consolidated delivery costs totaled $1.4 million and $1.1 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

(1)Stock-based compensation expense recognized in consolidated delivery costs totaled $0.7 million for each the three months ended September 30, 2024 and 2023. Stock based compensation expense recognized in consolidated delivery costs totaled $2.0 million and $1.8 million for the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Sales and marketing expense consists primarily of personnel costs of our sales, account management, marketing and analytics teams, including salaries, benefits, bonuses, commissions, stock-based compensation and payroll taxes. Sales and marketing expense also includes professional fees, marketing programs such as trade shows, marketing materials, public relations, sponsorships and other brand building expenses, as well as outsourcing costs, travel and entertainment expenses and company-funded consumer testing expenses for certain marketers that are not current customers. We expect that our sales and marketing expense will increase in absolute dollars as a result of hiring new sales representatives and as we invest to enhance our brand. Over time, we expect sales and marketing expenses will decline as a percentage of Revenue.

Current wording

Sales and marketing expense consists primarily of personnel costs of our sales, account management, marketing and analytics teams, including salaries, benefits, bonuses, commissions, stock-based compensation and payroll taxes. Sales and marketing expense also includes professional fees, marketing programs such as trade shows, marketing materials, public relations, sponsorships and other brand building expenses, as well as outsourcing costs, travel and entertainment expenses and company-funded consumer testing expenses for certain marketers that are not current customers. We expect that our sales and marketing expense will increase in absolute dollars over time as a result of hiring new sales representatives and as we invest to enhance our brand. Over time, we expect sales and marketing expenses will decline as a percentage of Revenue.

Previous wording

General and administrative expense consists of personnel costs of our executive, finance, legal, compliance, IT support and human resources teams, including salaries, benefits, bonuses, stock-based compensation and payroll taxes. General and administrative expense also includes professional fees for external legal, accounting and consulting services, financing transaction costs, facilities costs such as rent and utilities, royalties, bad debt expense, travel expense, property taxes and franchise taxes. We expect that general and administrative expenses will increase on an absolute dollar basis but decrease as a percentage of Revenue as we focus on processes, systems and controls to enable our internal support functions to scale with the growth of our business.

Current wording

General and administrative expense consists of personnel costs of our executive, finance, legal, compliance, IT support and human resources teams, including salaries, benefits, bonuses, stock-based compensation and payroll taxes. General and administrative expense also includes professional fees for external legal, accounting and consulting services, financing transaction costs, facilities costs such as rent and utilities, royalties, bad debt expense, travel expense, property taxes and franchise taxes. We expect that general and administrative expenses will increase over time on an absolute dollar basis but decrease as a percentage of Revenue as we focus on processes, systems and controls to enable our internal support functions to scale with the growth of our business.

Previous wording

Foreign currency (loss) gain consists primarily of gains and losses on foreign currency transactions.

Current wording

Foreign currency gain (loss) consists primarily of gains and losses on foreign currency transactions.

Previous wording

Comparison of Three and Six Months Ended June 30, 2024 and 2023

Current wording

Comparison of Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

The $7.1 million decrease in Revenue during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was comprised of a $1.0 million increase in Billings and a $8.0 million increase in Consumer Incentives. Consumer Incentives grew at a higher rate than Billings during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to higher engagement than expected.

Current wording

The $11.9 million decrease in Revenue during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was comprised of a $4.5 million decrease in Billings and a $7.5 million increase in Consumer Incentives. Consumer Incentives grew at a higher rate than Billings during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to higher engagement than previous years.

Previous wording

The $3.8 million decrease in Revenue during the six months ended June 30, 2024 compared to the three months ended June 30, 2023 was comprised of a $10.6 million increase in Billings and a $14.3 million increase in Consumer Incentives. Consumer Incentives grew at a higher rate than Billings during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to higher engagement than expected.

Current wording

The $15.7 million decrease in Revenue during the nine months ended September 30, 2024 compared to the three months ended September 30, 2023 was comprised of a $6.1 million increase in Billings and a $21.8 million increase in Consumer Incentives. Consumer Incentives grew at a higher rate than Billings during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to higher engagement.

Previous wording

Partner Share and other third-party costs decreased by$5.9 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by a renegotiation of terms with a certain FI Partner and changes in Partner Share mix.

Current wording

Partner Share and other third-party costs decreased by$5.5 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily driven by a renegotiation of terms with a certain FI Partner and changes in Partner Share mix.

Previous wording

Partner Share and other third-party costs decreased by$8.8 million during the six months ended June 30, 2024 compared to the six months ended June 30, 2023, partially due to a decrease of $1.3 million from a Partner Share commitment shortfall accrual in 2023 that did not reoccur in 2024. Excluding this shortfall commitment, the balance in Partner Share and other third-party costs decreased by $7.5 million. The decrease is primarily driven by a renegotiation of terms with a certain FI Partner and changes in Partner Share mix.

Current wording

Partner Share and other third-party costs decreased by$14.2 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, partially due to a decrease of $1.3 million from a Partner Share commitment shortfall accrual in 2023 that did not reoccur in 2024. Excluding this shortfall commitment, the balance in Partner Share and other third-party costs decreased by $12.9 million. The decrease is primarily driven by a renegotiation of terms with a certain FI Partner and changes in Partner Share mix.

Previous wording

Total delivery costs increased by $0.6 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Delivery costs excluding stock-based compensation increased by $0.5 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, driven by $0.5 million increase in data storage costs.

Current wording

Total delivery costs increased by $0.8 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Delivery costs excluding stock-based compensation increased by $0.8 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, driven by $0.9 million increase in data storage costs, partially offset by a $0.1 million decrease in staff expenses.

Previous wording

Total delivery costs increased by $0.4 million during thesix months ended June 30, 2024 compared to thesix months ended June 30, 2023. Delivery costs excluding stock-based compensation increased by $0.2 million during thesix months ended June 30, 2024 compared to thesix months ended June 30, 2023, driven by a $0.2 million increase in staff expenses.

Current wording

Total delivery costs increased by $1.2 million during thenine months ended September 30, 2024 compared to thenine months ended September 30, 2023. Delivery costs excluding stock-based compensation increased by $1.0 million during thenine months ended September 30, 2024 compared to thenine months ended September 30, 2023, driven by a $0.9 million increase in data storage costs and a $0.1 million increase in staff expenses.

Previous wording

Total sales and marketing expenses decreased by $1.2 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Sales and marketing expense excluding the impact of stock-based compensation decreased by $0.3 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to a $0.9 million decrease in staff expensesand a $0.1 million decrease in travel expenses, partially offset by a $0.7 million increase marketing expense.

Current wording

Total sales and marketing expenses decreased by $1.0 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Sales and marketing expenses excluding the impact of stock-based compensation decreased by $0.4 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to a $0.4 million decrease in staff expensesand a $0.2 million decrease in professional fees, partially offset by a $0.2 million increase in software licenses.

Previous wording

Total sales and marketing expenses decreased by $1.0 million during thesix months ended June 30, 2024 compared to thesix months ended June 30, 2023. Sales and marketing expense excluding the impact of stock-based compensation decreased by $0.3 million during thesix months ended June 30, 2024 compared to thesix months ended June 30, 2023 primarily due to a $0.5 million decrease in staff expenses, a $0.2 million decrease in administrative expenses and a $0.1 million increase in professional fees, partially offset by a $0.5 million increase in marketing expense.

Current wording

Total sales and marketing expenses decreased by $2.0 million during thenine months ended September 30, 2024 compared to thenine months ended September 30, 2023. Sales and marketing expenses excluding the impact of stock-based compensation decreased by $0.7 million during thenine months ended September 30, 2024 compared to thenine months ended September 30, 2023 primarily due to a $1.0 million decrease in staff expenses anda $0.3 million decrease in professional fees, partially offset by a $0.5 million increase in marketing expense and a$0.1 million increase in software licenses.

Previous wording

Total research and development expense decreased by$1.4 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Research and development expense excluding stock-based compensation decreased by $1.5 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2024, primarily due to a $1.2 million decrease in staff expenses and a $0.5 million decrease in consulting fee, partially offset by a $0.2 million increasein data storage and software licenses. The decrease of $1.2 million is primarily due to increased benefit from capitalized software development of $2.4 million, offset by a $1.2 million tax credit forfeiture.

Current wording

Total research and development expenses increased by$0.8 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Research and development expense excluding stock-based compensation increased by $1.0 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2024, primarily due to a $1.1 million increase in staff expenses and a$0.2 million increase indata storage and software licenses, partially offset by a $0.2 million decrease in consulting fees and a$0.1 million decrease in travel expenses. The staff expense increase was primarily driven by a decrease in a tax benefit we expected to receive.

Previous wording

Total research and development expense increased by$0.1 million during thesix months ended June 30, 2024 compared to thesix months ended June 30, 2023. Research and development expense excluding stock-based compensation decreased by $0.1 million during thesix months ended June 30, 2024 compared to thesix months ended June 30, 2023, primarily due to a $0.7 million decrease in professional fees, a $0.1 million decrease in staff expenses and a$0.1 million decrease in administrative expenses, partially offset by a $0.8 million increasein data storage and software licenses.

Current wording

Total research and development expenses increased by$0.9 million during thenine months ended September 30, 2024 compared to thenine months ended September 30, 2023. Research and development expense excluding stock-based compensation decreased by $1.1 million during thenine months ended September 30, 2024 compared to thenine months ended September 30, 2023, primarily due to a $1.1 million increase in staff expenses and a$1.0 million increasein data storage and software licenses, partially offset by a $0.8 million decrease in professional fees and a$0.2 million decrease in administrative expenses. The staff expense increase was primarily driven by a decrease in a tax benefit we expected to receive

Previous wording

Total general and administrative expense decreased by$0.1 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023. General and administrative expense excluding stock-based compensation decreased by $1.6 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to a$1.3 million decrease in software licenses, a$1.0 million decrease in professional fees, a$0.5 million decrease in facility expenses and a$0.2 million decrease in staff expenses, partially offset by a$1.2 million increase in bad debt and a$0.2 million increase in travel expenses.

Current wording

Total general and administrative expenses decreased by$3.5 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023. General and administrative expense excluding stock-based compensation decreased by $2.1 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to a$1.1 million decrease in professional fees, a$0.5 million decrease in software licenses, a$0.2 million in administrative expenses, a$0.2 million decrease in bad debtand a$0.2 million decrease in staff expenses, partially offset by a$0.1 million increase in travel expenses.

Previous wording

Total general and administrative expense increased by$1.3 million during thesix months ended June 30, 2024 compared to thesix months ended June 30, 2023. General and administrative expense excluding stock-based compensation decreased by $3.2 million during thesix months ended June 30, 2024 compared to thesix months ended June 30, 2023, primarily due to a$2.7 million decrease in software licenses, a$2.3 million decrease in professional fees, a$1.0 million decrease in facility expenses, a$0.5 million decrease in administrative expenses and a$0.1 million decrease in staff expenses, partially offset by a$3.0 million increase in bad debt and a$0.3 million increase in travel expenses.

Current wording

Total general and administrative expenses decreased by$2.2 million during thenine months ended September 30, 2024 compared to thenine months ended September 30, 2023. General and administrative expense excluding stock-based compensation decreased by $5.3 million during thenine months ended September 30, 2024 compared to thenine months ended September 30, 2023, primarily due to a$3.7 million decrease in professional fees, a$3.1 million decrease in software licenses, a$1.0 million decrease in facility expenses a$0.4 million decrease in staff expenses and a$0.1 million decrease in administrative expenses, partially offset by a$3.0 million increase in bad debt.

Previous wording

During the six months ended June 30, 2024 and 2023 we realized an expense of $0.2 million and a gain of $8.2 million primarily due to the changes in the estimated brokerage fees and transaction bonuses and accounting for all true-ups and credits related to the acquisition of Bridg. Refer to Note 3 - Business Combinations to our consolidated financial statements for additional information.

Current wording

During the three months ended September 30, 2024 and 2023 we realized an expense of zero and a gain of $0.1 million primarily due to the changes in the estimated brokerage fees and transaction bonuses and accounting for all true-ups and credits related to the acquisition of Bridg. Refer to Note 3 - Business Combinations to our consolidated financial statements for additional information.

Previous wording

During the three months ended June 30, 2024 and 2023 we realized an expense of $0.2 million and a gain of $9.9 million primarily due to the changes in the estimated brokerage fees and transaction bonuses and accounting for all true-ups and credits related to the acquisition of Bridg. Refer to Note 3 - Business Combinations to our consolidated financial statements for additional information.

Current wording

During the nine months ended September 30, 2024 and 2023 we realized an expense of $0.2 million and a gain of $8.1 million primarily due to the changes in the estimated brokerage fees and transaction bonuses and accounting for all true-ups and credits related to the acquisition of Bridg. Refer to Note 3 - Business Combinations to our consolidated financial statements for additional information.

Previous wording

During the three months ended June 30, 2024 we realized a gain of $5.8 million primarily related to the Settlement Agreement. Refer to Note 1—Overview of Business and Basis of Presentation for additional information. During the three months ended June 30, 2023 we realized a cost of $11.3 million primarily due to the change in value of contingent consideration to the former Bridg shareholders. Refer to Note 9—Fair Value Measurements to our consolidated financial statements for additional information regarding the contingent consideration.

Current wording

During the three months ended September 30, 2024 we realized a gain of $0.1 million primarily related to interest accretion associated with the contingent consideration. During the three months ended September 30, 2023 we realized a cost of $8.3 million primarily due to the change in value of contingent consideration to the former Bridg shareholders. Refer to Note 9—Fair Value Measurements to our consolidated financial statements for additional information regarding the contingent consideration.

Previous wording

During the six months ended June 30, 2024, the change in contingent consideration is less than a $0.1 million benefit as a result of the $5.9 million gain we recognized due to the Settlement Agreement, almost entirely offset by the $5.8 million loss related to the change in value of contingent consideration to the former Bridg shareholders. During the six months ended June 30, 2023 we realized a gain of $23.3 million primarily due to the change in value of contingent consideration to the former Bridg shareholders. Refer to Note 9—Fair Value Measurements to our consolidated financial statements for additional information regarding the contingent consideration.

Current wording

During the nine months ended September 30, 2024, the change in contingent consideration is less than a $0.1 million benefit as a result of the $5.9 million gain we recognized due to the Settlement Agreement, almost entirely offset by the $5.8 million loss related to the change in value of contingent consideration to the former Bridg shareholders. During the nine months ended September 30, 2023 we realized a gain of $15.0 million primarily due to the change in value of contingent consideration to the former Bridg shareholders. Refer to Note 9—Fair Value Measurements to our consolidated financial statements for additional information regarding the contingent consideration.

Previous wording

Interest expense, net increased by $1.0 million during the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to an increase in our interest expense related to our 2024 Convertible Senior Notes, partially offset by repayment of our 2018 Line of Credit. Refer to Note 7—Debt and Financing Arrangements to our consolidated financial statements for additional information regarding the 2024 Convertible Senior Notes.

Current wording

Interest expense, net increased by $0.6 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023 primarily due to an increase in our interest expense related to our 2024 Convertible Senior Notes, partially offset by repayment of our 2018 Line of Credit. Refer to Note 7—Debt and Financing Arrangements to our consolidated financial statements for additional information regarding the 2024 Convertible Senior Notes.

Previous wording

Interest expense, net increased by $0.9 million during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to an increase in our interest expense related to our 2024 Convertible Senior Notes, partially offset by repayment of our 2018 Line of Credit. Refer to Note 7—Debt and Financing Arrangements to our consolidated financial statements for additional information regarding the 2024 Convertible Senior Notes.

Current wording

Interest expense, net increased by $2.4 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to an increase in our interest expense related to our 2024 Convertible Senior Notes, partially offset by repayment of our 2018 Line of Credit. Refer to Note 7—Debt and Financing Arrangements to our consolidated financial statements for additional information regarding the 2024 Convertible Senior Notes.

Previous wording

Foreign currency gain (loss) was a gain of $0.1 million during the three months ended June 30, 2024 compared to a gain of $1.4 million during the three months ended June 30, 2023, primarily due to the decrease in the value of the British pound relative to the U.S. dollar.

Current wording

Foreign currency gain (loss) was a gain of $4.8 million during the three months ended September 30, 2024 compared to a loss of $2.4 million during the three months ended September 30, 2023, primarily due to the increase in the value of the British pound relative to the U.S. dollar.

Previous wording

Foreign currency gain (loss) was a loss of $0.5 million during the six months ended June 30, 2024 compared to a gain of $2.8 million during the six months ended June 30, 2023, primarily due to the decrease in the value of the British pound relative to the U.S. dollar.

Current wording

Foreign currency gain (loss) was a gain of $4.3 million during the nine months ended September 30, 2024 compared to a gain of $0.4 million during the nine months ended September 30, 2023, primarily due to the increase in the value of the British pound relative to the U.S. dollar.

Previous wording

Gain on debt extinguishment was a gain of $13.0 million during the three and six months ended June 30, 2024 compared to zero during the three and six months ended June 30, 2023, due to the aggregated payment towards the 2020 Convertible Senior Notes in April 2024. Refer to Note 7—Debt and Financing Arrangements to our consolidated financial statements for additional information regarding the 2020 Convertible Senior Notes.

Current wording

Gain on debt extinguishment was a gain of $13.0 million during the nine months ended September 30, 2024 compared to zero during the nine months ended September 30, 2023, due to the aggregated payment towards the 2020 Convertible Senior Notes in April 2024. Refer to Note 7—Debt and Financing Arrangements to our consolidated financial statements for additional information regarding the 2020 Convertible Senior Notes.

Previous wording

Our cash and cash equivalents are available for working capital purposes. We do not enter into investments for trading purposes, and our investment policy is to invest any excess cash in short-term, highly liquid investments that limit the risk of principal loss. Currently, a significant portion of our cash and cash equivalents are held in fully FDIC-insured money market accounts, demand deposit accounts and U.S. Treasury Bills. As of June 30, 2024, our demand deposit accounts and our money market account earned approximately 5.0% annual rate of interest. As of June 30, 2024, our U.S. Treasury Bills earned approximately 5.3% annual rate of interest. As of June 30, 2024, $3.1 million of our cash and cash equivalents were in the United Kingdom. While our investment in Cardlytics U.K. Limited is not considered indefinitely invested, we do not have any current plans to repatriate these funds.

Current wording

Our cash and cash equivalents are available for working capital purposes. We do not enter into investments for trading purposes, and our investment policy is to invest any excess cash in short-term, highly liquid investments that limit the risk of principal loss. Currently, a significant portion of our cash and cash equivalents are held in fully FDIC-insured money market accounts, demand deposit accounts and U.S. Treasury Bills. As of September 30, 2024, our demand deposit accounts and our money market account earned approximately 4.7% annual rate of interest. As of September 30, 2024, our U.S. Treasury Bills earned approximately 4.7% annual rate of interest. As of September 30, 2024, $4.1 million of our cash and cash equivalents were in the United Kingdom. While our investment in Cardlytics U.K. Limited is not considered indefinitely invested, we do not have any current plans to repatriate these funds.

Previous wording

Through June 30, 2024, we have incurred accumulated net losses of $1,139.8 million since inception, including net loss of $4.3 million for the three months ended June 30, 2024. We have historically financed our operations and capital expenditures through convertible note financings, private placements of our redeemable convertible preferred stock, public offerings of our common stock as well as lines of credit and term loans.

Current wording

Through September 30, 2024, we have incurred accumulated net losses of $1,285.0 million since inception, including net loss of $145.2 million for the three months ended September 30, 2024. We have historically financed our operations and capital expenditures through convertible note financings, private placements of our redeemable convertible preferred stock, public offerings of our common stock as well as lines of credit and term loans.

Previous wording

Our other future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts, our merger and acquisition efforts, the continued expansion of sales and marketing activities, the enhancement of our platforms, the introduction of new solutions, the continued market acceptance of our solutions and the extent of the impact of macroeconomic events on the global economy. We expect to incur additional operating losses in the near term as we continue our efforts to grow our business and may require additional capital resources to continue to grow our business. We believe that current cash and cash equivalents will be sufficient to fund our operations and capital requirements for at least the next 12 months and in the long-term following the date our consolidated financial statements were issued. However, if our access to capital is restricted or our borrowing costs increase, our operations and financial condition could be materially and adversely impacted. In the event that additional financing is required from outside sources, we may not be able to raise such financing on terms acceptable to us or at all.

Current wording

Our other future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts, our merger and acquisition efforts, the continued expansion of sales and marketing activities, the enhancement of our platforms, the introduction of new solutions, the continued market acceptance of our solutions and the extent of the impact of macroeconomic events on the global economy. We expect to incur additional operating losses in the near term as we continue our efforts to grow our business and may require additional capital resources to continue to grow our business. We believe that we have sufficient liquidity to fund our operations and capital requirements for at least the next 12 months and in the long-term following the date our consolidated financial statements were issued. However, if our access to capital is restricted or our borrowing costs increase, our operations and financial condition could be materially and adversely impacted. In the event that additional financing is required from outside sources, we may not be able to raise such financing on terms acceptable to us or at all.

Previous wording

We had a minimum Partner Share commitment to a certain FI partner totaling $10.0 million over a 12-month period which ended on March 31, 2023. We had accrued $4.5 million for the Partner Share shortfall, included within Partner Share liability on our condensed consolidated balance sheet. As of June 30, 2024, we paid $3.4 million of our shortfall. During the six months ended June 30, 2024 and 2023, we recognized zero and $1.3 million of expected minimum Partner Share commitment shortfalls within Partner Share and other third-party costs on our condensed consolidated statement of operations. Subsequent to June 30, 2024, we paid $1.1 million of the remaining portion of our shortfall commitment.

Current wording

We had a minimum Partner Share commitment to a certain FI partner totaling $10.0 million over a 12-month period which ended on March 31, 2023. We had accrued $4.5 million for the Partner Share shortfall, included within Partner Share liability on our condensed consolidated balance sheet. As of September 30, 2024, we paid $4.5 million of our shortfall extinguishing our minimum Partner Share liability. During the nine months ended September 30, 2024 and 2023, we recognized zero and $1.3 million of expected minimum Partner Share commitment shortfalls within Partner Share and other third-party costs on our condensed consolidated statement of operations.

Previous wording

As of June 30, 2024, the contingent consideration is valued at$4.4 million, exclusive of$0.3 million in broker fees and other costs, which is included in accrued expenses on our consolidated balance sheets. We determined the present value of the contingent consideration by discounting the future payments to be paid by January 31, 2025 and June 30, 2025. As the remaining payments are fixed as per the Settlement Agreement, the contingent consideration is no longer subject to ASC 820, Fair Value Measurement.

Current wording

As of September 30, 2024, the contingent consideration is valued at$4.5 million, exclusive of$0.3 million in broker fees and other costs, which is included in accrued expenses on our consolidated balance sheets. We determined the present value of the contingent consideration by discounting the future payments to be paid by January 31, 2025 and June 30, 2025. As the remaining payments are fixed as per the Settlement Agreement, the contingent consideration is no longer subject to ASC 820, Fair Value Measurement.