Good afternoon, ladies and gentlemen, and welcome to the Q3 2025 Cardlytics, Inc. Earnings Conference Call. [Operator Instructions] This call is being recorded on November 5, 2025. And I would like to turn the conference over to Nick Lynton. Thank you. Please go ahead.

Good evening, and welcome to the Cardlytics Third Quarter 2025 Financial Results Call. Before we begin, let me remind everyone that today's discussion will contain forward-looking statements based on our current assumptions, expectations and beliefs, including expectations around our future financial performance and results, including for the fourth quarter of 2025, the growth of CRP and the launches of new CRP partners, our capital structure, increasing our supply and operational and product initiatives. For a discussion of the specific risk factors that could cause our actual results to differ materially from today's discussion, please refer to the Risk Factors section of our 10-Q for the quarter ended September 30, 2025, which has been filed with the SEC. Also during our call, we will discuss non-GAAP measures of our performance. GAAP financial reconciliations and supplemental financial information are provided in the press release issued today, which you can find on the Investor Relations section of the Cardlytics website. Today's call is available via webcast, and a replay will also be available on our website. On the call today, we have: CEO, Amit Gupta; and CFO, Alexis DeSieno. Following their prepared remarks, we'll open it up for your questions. With that, I'll hand the call over to Amit.

Good evening, and thank you for joining us today. On our last call in August, we shared updates on the steady progress we made across our key priorities as well as the headwinds we would be facing starting Q3. As a reminder, these headwinds are stemming from our largest FI partners' decision to block our advertiser content from running on their channels. Overall, our Q3 billings results were in line with our expectations as we actively work to shift volume to other partners in our network and learn from our mitigation strategy. In parallel, we have taken a series of steps to ensure the long-term sustainability and success of our company and maintained a relentless focus on our key business pillars. First, increasing and diversifying our supply to meet consumers where they are. Our relationships with financial institutions continue to expand in both scope and depth, reinforcing the strategic value of our network, especially in light of replacing the supply we have lost from our largest FI partner. For example, with one bank partner, we expect to soon add their debit and SMB portfolios to our program, which represents a significant opportunity to deepen engagement with their customers and expand our reach. We believe that strengthening consumer engagement is just as effective as adding new users, and we remain focused on doing this through new and innovative capabilities. For example, we recently ran a Double Days campaign where rewards were doubled on specific days to drive a sense of urgency. This campaign grew consumer engagement by approximately 15%. In addition, building on previous success with one of our larger bank partners, we are expanding category level offers in Q4. These offers reward customers for spending in a specific category rather than with a specific advertiser and have proven to be…

Thank you, Amit. My comments will be year-over-year comparisons to the third quarter of 2024, unless stated otherwise. In the third quarter, we delivered billings as expected and surpassed the high end of our guidance for adjusted EBITDA, though we were at the low end of the range for revenue and adjusted contribution. In Q3, our total billings were $89.2 million, a 20.3% decrease. As expected, the content restrictions impacted the size of the budgets we could sell as a result of fewer consumers to whom we could serve offers. Despite this, we were able to retain the vast majority of our advertisers, which we believe demonstrates the value and incrementality that we drive for our advertisers. Consumer incentives of $37.2 million were down from the prior year by 17.2% and revenue decreased 22.4% to $52.0 million, driven by a decrease in billings. Our revenue to billings margin was 1.6 points lower than the prior year. This margin impact is partially due to strategic investments in certain advertisers to drive incremental ROAS as well as a temporary overcorrection as a result of the supply changes to our network. We believe we have now normalized our ability to deliver on budgets, and we are seeing our October billings margin trending higher than the Q3 average. Looking at our segment revenue results. Our U.S. revenue, excluding Bridg, decreased 28% due to lower billings stemming from the content restrictions and pricing investments we previously discussed. In the U.K., we saw 22% revenue growth driven by higher billings and increased supply. We grew billings across our top clients and saw a significant increase in billings from new merchants, including a large athletic apparel brand. Bridg revenue decreased 15% due to the loss of a major account in previous quarters. Adjusted contribution was $30.0 million,…

As we continue to navigate a challenging environment, we've taken decisive steps to reset our business, reduce our concentration risk and set ourselves up for a financially healthy future. We remain confident in the fundamental strength of our commerce media platform, our partnerships and our teams. By prioritizing the areas where we know we can win, we expect to deliver greater value to our advertisers, partners, shareholders and consumers. I'll now turn it over to the operator to begin Q&A.

[Operator Instructions] And your first question comes from the line of Jacob Stephan from Lake Street Capital Markets.

I guess, first, I just kind of wanted to touch on the billing margins commentary a bit. Maybe kind of help me piece this together when you think through kind of -- we saw a decrease in Q3, but it sounds like you're seeing better margins with your remaining FI partners, and it sounds like it improved in October. Kind of help me think through what the impact was in Q3 and overall, how you see these trending as we kind of enter '26?

No problem. Thanks for the question. So yes, there's 2 different types of margin, the billings to revenue margin, which you saw a little bit of a decrease in Q3. That was primarily all in July, where we were impacted by the abrupt change to our supply from our largest FI partner. It took a little bit of time to normalize that. And by the end of the quarter, we were back to normal in terms of our ability to deliver and had learned how to properly target from that point on. There's also a little bit of margin pressure in there from performance incentives or higher ROAS that we've been seeing. We make strategic decisions to remain competitive, and this is normal practice in the market. So it's a little bit of both. The run rate in October is higher than what we saw in Q3. And so we expect that to continue. I would probably continue to model it in the low 60s. So that really was a blip from the July changes. And then just to touch on the bank mix piece, which is more what I look at when I talk about revenue to adjusted contribution -- or sorry, adjusted contribution to revenue margin. That was the highest that we've seen so far even despite the lower billings margin. So we saw around 58% in Q3. That's among the highest we've seen, and that's as a result of our newer partners who are better economics, taking share from our legacy partners, which are worse economics from a revenue share perspective. So it really highlights that it's unlocking our ability to invest more of that margin back into engagement and performance for our advertisers and our customers. And we're still able to keep more of every dollar we make from a contribution standpoint. Hopefully, that helps. And we should expect to see adjusted contribution margin continuing to improve or be stable around the high 50s. (sic) [ high 50% ]

Okay. Yes, very helpful. And then second question, more so on kind of the guidance. There's roughly a $7 million range between the low-end and high-end of adjusted EBITDA. That's bigger than the range of adjusted contribution. What -- I guess, what are the puts and takes that kind of get you to the higher end versus the lower end of that? And maybe talk a little bit about the overall cost base now.

Yes, very helpful. You're right, that is confusing at first look. Adjusted OpEx is really not a big range. It's only about $1 million. So all of this is flowing down from the range of the contribution and revenue guide. OpEx basically is $27 million to $28 million is what we're guiding on OpEx. And so the rest of it comes from really that top line and margin flowing down. Does that make sense?

Okay. Understood. Yes, yes. Totally.

[Operator Instructions] That ends our question-and-answer session. Ladies and gentlemen, this concludes today's call. Thank you for participating. You may all disconnect.