Cardlytics, Inc.

Previous wording

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "project," "will," "would" or the negative or plural of these words or similar expressions or variations, and such forward-looking statements include, but are not limited to, statements with respect to our business strategy, plans and objectives for future operations, including our expectations regarding our expenses; continued enhancements of our platform and new product offerings; our future financial and business performance; and anticipated payments under the Merger Agreement with Bridg. The events described in these forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled "Risk Factors," set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and in our other SEC filings. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Current wording

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "project," "will," "would" or the negative or plural of these words or similar expressions or variations, and such forward-looking statements include, but are not limited to, statements with respect to our business strategy, plans and objectives for future operations, including our expectations regarding our expenses; continued enhancements of our platform and new product offerings; our future financial and business performance; and our ability to continue to add new FI partners, merchant data partners and marketers and maintain our relationships with existing FI partners, merchant data partners and marketers. The events described in these forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled "Risk Factors," set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and in our other SEC filings. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Previous wording

Our company's mission is to make commerce smarter and rewarding for everyone. We work to accomplish this mission by operating an advertising platform within our own and our partners' digital channels, which includes online, mobile applications, email and various real-time notifications (the "Cardlytics platform"). We also operate a customer data platform that utilizes point-of-sale ("POS") data, including product-level purchase data, to enable marketers to perform analytics and targeted loyalty marketing and also measure the impact of their marketing (the "Bridg platform"). The partners for the Cardlytics platform are predominantly financial institutions ("FI partners") that provide us with access to their anonymized purchase data and digital banking customers. The partners for the Bridg platform are predominantly merchants ("merchant data partners") that provide us with access to their POS data, including product-level purchase data. By applying advanced analytics to the purchase data we receive, we make it actionable, helping marketers reach potential buyers at scale and measure the true sales impact of their marketing spend. We have strong relationships with leading marketers across a variety of industries, including retail, restaurant, travel and entertainment, direct-to-consumer, and grocery and gas.

Current wording

We operate a commerce media platform that is designed to make commerce smarter and rewarding for everyone. At the core of our commerce media platform is the financial media network that we run within our partners' digital channels, which includes online channels and mobile applications (the "Cardlytics platform"). Additionally we operate an identity resolution platform that utilizes point-of-sale ("POS") data, including product-level purchase data, to enable advertisers to conduct analytics and targeted loyalty marketing and also measure the impact of their marketing (the "Bridg platform"). The partners for the Cardlytics platform are predominantly financial institutions ("FI partners") that provide us with access to their anonymized purchase data and digital banking customers. The partners for the Bridg platform are predominantly merchants ("merchant data partners") that provide us with access to their POS data, including product-level purchase data. By applying advanced analytics to the purchase data we receive, we make it actionable, helping marketers reach potential customers at scale and measure the true sales impact of their marketing spend. We have strong relationships with leading marketers across a variety of industries, including everyday spend, specialty retail, restaurant, travel and entertainment.

Previous wording

Working with a marketer, we design a campaign that targets consumers based on their purchase history. The consumer is offered an incentive to make a purchase from the marketer within a specified period. We use a portion of the fees that we collect from marketers to provide these Consumer Incentives to customers after they make qualifying purchases ("Consumer Incentives"). We report our Revenue on our consolidated statements of operations net of Consumer Incentives since we do not provide the goods or services that are purchased by customers from the marketers to which the Consumer Incentives relate.

Current wording

Working with an advertiser, we design a campaign that targets consumers based on their purchase history. The consumer is offered an incentive ("Consumer Incentives") to make a purchase from the brand within a specified period. We use a portion of the fees that we collect from advertisers to provide these Consumer Incentives to customers after they make qualifying purchases. We report our Revenue on our consolidated statements of operations net of Consumer Incentives since we do not provide the goods or services that are purchased by customers from the advertisers to which the Consumer Incentives relate.

Previous wording

We pay certain partners a negotiated and fixed percentage of our Billings to marketers less any Consumer Incentives that we pay to customers and certain third-party data costs ("Partner Share"). We report our Revenue gross of Partner Share. Partner Share costs are included in Partner Share and other third-party costs in our consolidated statements of operations, rather than as a reduction of Revenue, because we and not our partners act as the principal in our arrangements with marketers.

Current wording

We pay certain partners a negotiated and fixed percentage of our Billings to advertisers less any Consumer Incentives that we pay to consumers and certain third-party data costs ("Partner Share"). We report our Revenue gross of Partner Share. Partner Share costs are included in Partner Share and other third-party costs in our consolidated statements of operations, rather than as a reduction of Revenue, because we and not our partners act as the principal in our arrangements with advertisers.

Previous wording

We run campaigns offering compelling Consumer Incentives to drive an expected rate of return on advertising spend for marketers. At times, we may collaborate with a partner to enhance the level of Consumer Incentives to their respective customers, funded by their Partner Share. We believe that these investments by our partners positively impact our platforms by making their customers more highly engaged with our platforms. However, these investments negatively impact our GAAP Revenue, which is reported net of Consumer Incentives.

Current wording

We run campaigns offering compelling Consumer Incentives to drive an expected rate of return on advertising spend for marketers. At times, we may collaborate with a partner to enhance the level of Consumer Incentives to their respective customers, funded by their Partner Share. We believe that these investments by our partners positively impact our platform by making their customers more highly engaged with our platforms. However, these investments negatively impact our GAAP Revenue, which is reported net of Consumer Incentives.

Previous 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.

Current wording

During the three months ended March 31, 2025, Cardlytics MQUs increased by 23.7 million compared to the three months ended March 31, 2024 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.S.

Previous wording

Cardlytics Average Revenue per User ("ARPU")

Current wording

We define ACPU as the Cardlytics platform Adjusted Contribution generated in the applicable period, divided by Cardlytics average MQUs in the applicable period. We believe that Adjusted Contribution is the most relevant metric as it reflects the value Cardlytics keeps after subtracting out rewards, Partner Share and other third-party costs. We believe that ACPU measures the Cardlytics platform's efficiency in converting marketer budgets into the value generated by customer engagement. Beginning on March 31, 2025, we will no longer report Cardlytics Average Revenue per User. We have applied this change to our reporting for current and prior periods in this Quarterly Report on Form 10-Q.

Previous wording

Adjusted Contribution measures the degree by which revenue generated from our marketers exceeds the cost to obtain the purchase data and the digital advertising space from our partners. Adjusted Contribution demonstrates how incremental Revenue on our platforms generates incremental amounts to support our sales and marketing, research and development, general and administration and other investments. Adjusted Contribution is calculated by taking our total Revenue less our Partner Share and other third-party costs exclusive of deferred implementation costs, which is a non-cash cost. Adjusted Contribution does not take into account all costs associated with generating Revenue from advertising campaigns, including sales and marketing expenses, research and development expenses, general and administrative expenses and other expenses, which we do not take into consideration when making decisions on how to manage our advertising campaigns. Management views Adjusted Contribution as the most relevant metric to measure the financial performance as it reflects the dollars we keep after all of our partners are paid.

Current wording

Adjusted Contribution measures the degree by which Revenue generated from our marketers exceeds the cost to obtain the purchase data and the digital advertising space from our partners. Adjusted Contribution demonstrates how incremental Revenue on our platforms generates incremental amounts to support our sales and marketing, research and development, general and administrative and other investments. Adjusted Contribution is calculated by taking our total Revenue less our Partner Share and other third-party costs. Adjusted Contribution does not take into account all costs associated with generating Revenue from advertising campaigns, including sales and marketing expenses, research and development expenses, general and administrative expenses and other expenses, which we do not take into consideration when making decisions on how to manage our advertising campaigns. Management views Adjusted Contribution as the most relevant metric to measure the financial performance as it reflects the dollars we keep after all of our partners are paid.

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 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.

Current wording

Adjusted EBITDA represents our Net Loss before interest expense, net; depreciation and amortization; stock-based compensation expense; foreign currency (gain) loss; loss (gain) on disposal or divestiture; and change in contingent consideration; and, in applicable periods, certain other income and expense items, such as impairment of goodwill and intangible assets; gain on debt extinguishment; acquisition, integration and divestiture costs (benefit); 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 (gain) loss 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) 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.

Current wording

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

Previous 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.

Current wording

During the three months ended March 31, 2025, Billings decreased by$7.6 million compared to the three months ended March 31, 2024, primarily driven by a $12.8 million decrease in net sales to existing marketers, partially offset by an increase of $5.2 million in sales to new marketers.

Previous wording

The following table presents a reconciliation of Billings to Revenue, the most directly comparable GAAP measure, for each of the periods indicated (in thousands):

Current wording

The following table presents a reconciliation of Billings to Revenue, the most directly comparable GAAP measure, for each of the periods indicated:

Previous wording

The following table presents a reconciliation of Adjusted Contribution to gross profit, the most directly comparable GAAP measure, for each of the periods indicated (in thousands):

Current wording

The following table presents a reconciliation of Adjusted Contribution to gross profit, the most directly comparable GAAP measure, for each of the periods indicated:

Previous 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.

Current wording

(1)Stock-based compensation expense recognized in consolidated delivery costs totaled $0.5 million and $0.6 million during the three months ended March 31, 2025 and 2024, respectively.

Previous wording

The following table presents a reconciliation of adjusted EBITDA to Net Loss, the most directly comparable GAAP measure (in thousands):

Current wording

The following table presents a reconciliation of Adjusted EBITDA to Net Loss, the most directly comparable GAAP measure:

Previous wording

The following table presents a reconciliation of Adjusted Net Loss to Net Loss, the most directly comparable GAAP measure, for each of the periods indicated (in thousands):

Current wording

The following table presents a reconciliation of Adjusted Net Loss to Net Loss, the most directly comparable GAAP measure, for each of the periods indicated:

Previous wording

The following is a reconciliation of free cash flow to net cash provided by (used in) operating activities, the most directly comparable GAAP measure, for each of the periods indicated (in thousands):

Current wording

The following is a reconciliation of free cash flow to net cash used in operating activities, the most directly comparable GAAP measure, for each of the periods indicated:

Previous wording

We sell our Cardlytics platform solution by entering into agreements directly with marketers or their marketing agencies, generally through the execution of insertion orders. The insertion orders state the terms of the arrangement, the negotiated fee, payment terms and the fixed period of time of the campaign. We invoice marketers monthly based on the qualifying purchases of our partners' customers as reported by our partners during the month. We report our Revenue net of Consumer Incentives and gross of Partner Share and other third-party costs. The Bridg platform generates Revenue through the sale of subscriptions to our cloud-based customer-data platform and the delivery of professional services, such as implementation, onboarding and technical support in connection with each subscription. We recognize subscription Revenue on a ratable basis over the contract term beginning on the date that our service is made available to the customer.

Current wording

We sell our Cardlytics platform solution by entering into agreements directly with marketers or their marketing agencies, generally through the execution of insertion orders. The insertion orders state the terms of the arrangement, the negotiated fee, payment terms and the fixed period of time of the campaign. We generally invoice marketers monthly based on the qualifying purchases of our partners' customers as reported by our partners during the month or based on the engagement of our partners' customers with our offers during the month. We report our Revenue net of Consumer Incentives and gross of Partner Share and other third-party costs. The Bridg platform generates Revenue through the sale of subscriptions to our cloud-based customer-data platform and the delivery of professional services, such as implementation, onboarding and technical support in connection with each subscription. We recognize subscription Revenue on a ratable basis over the contract term beginning on the date that our service is made available to the customer.

Previous wording

Partner Share and other third-party costs consist primarily of the Partner Share that we pay our partners, media and data costs and deferred implementation costs incurred pursuant to our agreements with certain partners. To the extent that we use a specific partners' customer's anonymized purchase data in the delivery of our solutions, we generally pay the applicable partner a Partner Share calculated based on the relative contribution of the data provided by the partner to the overall delivery of the services. We expect that our Partner Share and other third-party costs will increase in absolute dollars as a result of our Revenue growth.

Current wording

Partner Share and other third-party costs consist primarily of the Partner Share that we pay our partners, media and data costs and deferred implementation costs incurred pursuant to our agreements with certain partners. To the extent that we use a specific partner's customers' anonymized purchase data in the delivery of our solutions, we generally pay the applicable partner a Partner Share calculated based on the relative contribution of the data provided by the partner to the overall delivery of the services. We expect that our Partner Share and other third-party costs will fluctuate over time in connection with changes in our revenue.

Previous wording

Delivery costs consist primarily of personnel costs of our campaign, data operations and production support teams, including salaries, benefits, bonuses, stock-based compensation and payroll taxes. Delivery costs also include hosting costs, purchased or licensed software costs, outsourcing costs and professional services costs. As we continue to migrate our technology to the cloud, our delivery costs will increase in absolute dollars and if such anticipated Revenue growth does not occur, our delivery costs as a percentage of Revenue will be adversely affected. Over time, we expect delivery costs will decline as a percentage of Revenue.

Current wording

Delivery costs consist primarily of personnel costs of our campaign, data operations and production support teams, including salaries, benefits, bonuses, stock-based compensation and payroll taxes. Delivery costs also include hosting costs, purchased or licensed software costs, outsourcing costs and professional services costs. As we continue to migrate our technology to the cloud, we expect our delivery costs will increase in absolute dollars and if such anticipated Revenue growth does not occur, our delivery costs as a percentage of Revenue will be adversely affected. Over time, we expect delivery costs will decline as a percentage of Revenue.

Previous wording

Research and development expense consists primarily of personnel costs of our information technology ("IT") engineering, IT architecture and product development teams, including salaries, benefits, bonuses, stock-based compensation and payroll taxes. Research and development expense also includes outsourcing costs, software licensing costs, professional fees and travel expenses. We focus our research and development efforts on improving our solutions and developing new ones. We expect research and development expense to increase in absolute dollars as we continue to create new solutions and improve the functionality of our existing solutions.

Current wording

Research and development expense consists primarily of personnel costs of our IT engineering, IT architecture and product development teams, including salaries, benefits, bonuses, stock-based compensation and payroll taxes. Research and development expense also includes outsourcing costs, software licensing costs, professional fees and travel expenses. We focus our research and development efforts on improving our solutions and developing new ones. In the near term we expect research and development expenses will decline in absolute dollars as we optimize our development efforts. Over time we expect it to decrease 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 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.

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 decrease over time 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

The following table presents our condensed consolidated statements of operations (in thousands):

Current wording

The following table presents our condensed consolidated statements of operations:

Previous wording

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

Current wording

Comparison of Three Months Ended March 31, 2025 and 2024

Previous 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.

Current wording

The $5.7 million decrease in Revenue during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was comprised of a $7.6 million decrease in Billings and a $1.9 million decrease in Consumer Incentives. Consumer Incentives decreased at a lower rate than Billings during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to advertiser mix and lower billings than previous quarter.

Previous 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.

Current wording

Partner Share and other third-party costs decreased by$1.1 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily drivenby lower top line billings and changes in Partner mix.

Previous 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.

Current wording

Total delivery costs increased by $1.1 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Delivery costs excluding stock-based compensation increased by $1.2 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, driven by $1.5 million increase in data storage expense, partially offset by a $0.2 million decrease in desktop software and data center expense and a $0.1 million decrease in staff expense.

Previous 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.

Current wording

Total sales and marketing expense decreased by $1.4 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Sales and marketing expenses excluding the impact of stock-based compensation decreased by $0.3 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a $0.1 decrease in staff expense, $0.1 million decrease in training and subscription expenses, and $0.1 million decrease in travel expenses.

Previous 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.

Current wording

Total research and development expense decreased by$1.3 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Research and development expense excluding stock-based compensation decreased by $0.2 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a $0.7 million decrease in IT and desktop license expenses and $0.1 million decrease in travel expenses, partially offset by $0.6 million increase in staff expenses.

Previous wording

The following table summarizes the allocation of stock-based compensation in the condensed consolidated statements of operations (in thousands):

Current wording

The following table summarizes the allocation of stock-based compensation in the condensed consolidated statements of operations:

Previous 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.

Current wording

During the three months ended March 31, 2025 we realized a expense of $0.1 million primarily related to interest accretion associated with the contingent consideration. During the three months ended March 31, 2024 we realized an expense of $5.8 million primarily due to the change in value of contingent consideration to the former Bridg shareholders. Refer to Note 8—Fair Value Measurements to our consolidated financial statements for additional information regarding the contingent consideration.

Previous wording

Depreciation and amortization expense increased by $1.0 million during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to amortization on capitalized software.

Current wording

Depreciation and amortization expense remained flat during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to amortization on capitalized assets.

Previous 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.

Current wording

Interest expense, net increased by $1.0 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 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 6—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 $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.

Current wording

Foreign currency gain (loss) was a gain of $2.6 million during the three months ended March 31, 2025 compared to a loss of $0.6 million during the three months ended March 31, 2024, primarily due to the change in the value of the British pound relative to the U.S. dollar.

Previous wording

The following table summarizes our cash and cash equivalents, accounts receivable, working capital and unused available borrowings (in thousands):

Current wording

The following table summarizes our cash and cash equivalents, working capital, accounts receivable and contract assets, net and unused available borrowings:

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 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.

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 March 31, 2025, our money market account and our U.S. Treasury Bills had earned approximately 4.1% and 4.3% annual rate of interest, respectively. As of March 31, 2025, $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 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.

Current wording

Through March 31, 2025, we have incurred accumulated net losses of $1,313.9 million since inception, including net loss of $13.3 million for the three months ended March 31, 2025. 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 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.

Current wording

Our 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

On April 1, 2024, we partially paid down the 2020 Convertible Senior Notes at prices below par and issued the 2024 Convertible Senior Notes (as defined below) with an aggregate principal amount of $172.5 million bearing an interest rate of 4.25% due on April 1, 2029 as described below. The remaining portion not paid down on the 2020 Convertible Senior Notes are due on April 1, 2025.

Current wording

On April 1, 2024, we partially paid down the 2020 Convertible Senior Notes at prices below par and issued the 2024 Convertible Senior Notes (as defined below) with an aggregate principal amount of $172.5 million bearing an interest rate of 4.25% due on April 1, 2029 as described below. The remaining portion that was not paid down on the 2020 Convertible Senior Notes is due on September 15, 2025.

Previous wording

On April 1, 2024, we issued of $172.5 million principal amount of its 4.25% Convertible Senior Notes due in 2029 (the "2024 Convertible Senior Notes" and together with the 2020 Convertible Senior Notes, the "Notes") in a private offering, including the exercise in full of the initial purchasers' option to purchase up to an additional $22.5 million principal amount of 2024 Convertible Senior Notes. The net proceeds from the offering were an $166.8 million, after deducting the initial purchasers' discounts, commissions and the offering expenses payable by us. The 2024 Convertible Senior Notes were issued pursuant to, and are governed by, an indenture, dated as of April 1, 2024, between us and U.S. Bank Trust Company, National Association, as trustee. We used approximately $169.3 million, consisting of the net proceeds from the offering, together with cash on hand, to repurchase for cash approximately $183.9 million in aggregate principal amount of the 2020 Convertible Senior Notes, together with accrued and unpaid interest, in privately negotiated transactions below par and entered into concurrently with the pricing of the offering through one of the initial purchasers or one of its affiliates, as our agents.

Current wording

On April 1, 2024, we issued $172.5 million principal amount of our 4.25% Convertible Senior Notes due in 2029 (the "2024 Convertible Senior Notes" and together with the 2020 Convertible Senior Notes, the "Notes") in a private offering, including the exercise in full of the initial purchasers' option to purchase up to an additional $22.5 million principal amount of 2024 Convertible Senior Notes. The net proceeds from the offering were $166.8 million, after deducting the initial purchasers' discounts, commissions and the offering expenses payable by us. The 2024 Convertible Senior Notes were issued pursuant to, and are governed by, an indenture, dated as of April 1, 2024, between us and U.S. Bank Trust Company, National Association, as trustee. We used approximately $169.3 million, consisting of the net proceeds from the offering, together with cash on hand, to repurchase for cash approximately $183.9 million in aggregate principal amount of the 2020 Convertible Senior Notes, together with accrued and unpaid interest, in privately negotiated transactions below par and entered into concurrently with the pricing of the offering through one of the initial purchasers or one of its affiliates, as our agents.