Good evening, ladies and gentlemen, and welcome to the Cardlytics Fourth Quarter Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Wednesday, March 4, 2026. I would now like to turn the conference call over to Nick Lynton, Chief Legal and Privacy Officer. Please go ahead.

Good evening, and welcome to the Cardlytics Fourth Quarter and Full Year 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 first quarter of 2026, our capital structure and our 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-K for the year ended December 31, 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, David Evans. Following their prepared remarks, we'll open it up for your questions. With that, I'll hand the call over to Amit.

Good evening, and thank you for joining us. Reflecting on 2025, it was a year we successfully reset the company to achieve self-sustainability. We have emerged as a leaner, more focused and financially healthier organization. Our strategic priorities are clear: first, expanding our reach by deepening collaborations with bank partners and integrating new publishers into our network; second, driving revenue growth for advertisers by leveraging our advanced algorithmic capabilities; finally, we will continue to invest in our tech stack to further differentiate our platform and enhance operational efficiency. We have a strong team in place and are continuing to invest in our talent. To this end, we recently welcomed David Evans as our new CFO, along with several other highly skilled individuals joining Cardlytics from strong backgrounds. The strategic decisions made over the past several months have set our balance sheet on a path to controlling our own destiny. Looking ahead, 2026 is a year of execution for us. Our execution is stronger than ever, and we are maturing into a high-performing technology company with a top-notch team capable of producing strong financial results. We have more conviction than ever that our product is relevant and uniquely differentiated in the marketplace. Now moving specifically to Q4. As part of our broader strategic reset, we conducted a comprehensive review of our financial institution relationships to ensure long-term alignment across economics, product direction and consumer engagement. Our FI partnerships in the U.S. and U.K. remain durable and constructive, and in many instances, are expanding. We are adding new card portfolios with several existing partners, reflecting their confidence in our program's performance and value. We are in active discussions to introduce new growth offerings built on our modernized scalable platform while continuing to roll out new engagement formats designed to increase program awareness…

Thank you, Amit, and good evening. It has been a little over a month since I rejoined the company, and it has been nice and reinvigorating to get back involved here at Cardlytics. For fiscal year 2025, our top line billings were $385 million, down 13.3% year-over-year. Our revenue was $233 million, down 16.2% year-over-year, and our annual adjusted EBITDA was $10.1 million, up $7.5 million year-over-year. While we navigated the supply constraints throughout 2025, we were disciplined in how we managed our expenses, driving the third consecutive year of positive adjusted EBITDA. We are committed to attaining self-sustainability and believe this commitment requires balancing investments in growth and disciplined expense management. The rest of my comments will be year-over-year comparisons to the fourth quarter of 2025, unless stated otherwise. In the fourth quarter, we delivered top line as expected across billings, revenue and adjusted contribution while surpassing the high end of our guidance for adjusted EBITDA. In Q4, our total billings were $94.1 million, a 19% decrease year-over-year. Even with the headwinds of supply constraints and content restrictions, we were able to retain the vast majority of our advertisers, which reflects the differentiated value and incrementality we drive. Q4 revenue was $56.1 million, a 24.2% decrease year-over-year. Our U.S. revenue, excluding Bridg, was $40.1 million, decreasing 33.5% year-over-year due to lower billings as well as pricing adjustments, which drove lower billings margins than the prior year. This margin impact was partially due to strategic investments in certain advertisers to drive incremental ROAS, as well as an isolated onetime variance in December delivery as a result of the supply changes to our network. U.K. revenue was $10.8 million, increasing 35.1% year-over-year. This is our U.K. business' largest ever quarter, driven by deepened engagement with advertisers and increased supply. Q4 adjusted…

I'll close by reflecting on the last year. The through line across all these changes has been the resilience and grit of our team. Our people have endured an unusually demanding series of cycles that led to changes that were essential for this company's health. Our team shows up every day with sleeves rolled up to fight for our bank partners, our advertisers and the end consumer, and I couldn't be prouder of their willingness to persevere. We firmly believe we have the right team, the right tech and the right focus to deliver strong results for our shareholders in 2026 and beyond. I'll now turn it over to the operator to begin Q&A.

[Operator Instructions] And we have our first question from Jacob Stephan with Lake Street Capital Markets.

First, I just kind of wanted to touch on the Q1 guidance a little bit. Maybe you could kind of help us think through a little bit on the sequential decline maybe to kind of the $60.5 million midpoint on the billing side. How much of that was BofA? How much of that was potentially the content restrictions that you're seeing at your other large FI partner?

Sure. This is David. I assume you can hear me okay. Jacob, thanks for the question. I would say a large -- vast majority of that you could attribute to Bank of America. Their last campaign -- billings campaign ran on January 15. And so what you're seeing is kind of the impact of that. Obviously, some of the content restrictions plays a role as well, but the vast majority is BofA.

Okay. And then I got your comments on the growing sequentially moving forward, David, but maybe you can kind of correlate that with future content restrictions at your FI partner. How does that play out through the year?

Yes. And kind of the way I think about the Q1 guide is really around the foundational level setting for how we can optimize and sequentially grow going forward. As you might imagine, with losing a partner like that had some impact in recalibrating the platform. But all that being said, when I mentioned sequential growth, we feel pretty confident in our ability to continue to optimize for the platform. If you remember last summer, we had some content restrictions through one of our major FI partners, I think the view there is that we can and should be able to get back to those levels at that point in time from last summer, but that's probably closer to the end of the year. Does that make sense?

Yes. Yes, that's helpful. And then maybe just one follow-up. You kind of called out grocery stores being a demand driver or at least a growing customer base for you guys. I'm wondering broader kind of consumer staples. Is that the case? Are you seeing some strong growth out of that segment?

Yes. I think that's a good question, Jacob. One of the things we chatted -- talked about in 2025, we had put in invested in our geocentric -- targeting geocentric capabilities. And that's what we see, especially in grocery stores, basically advertisers with storefront and online channels. They are really benefiting from our omnichannel focus and omnichannel capabilities. So we do expect it's not limited, obviously, to grocery stores, it's for other brands as well, wherever we see kind of omnichannel requirements, those campaigns, we are substantially performing better versus our other competition in the market. So those advertisers will continue to benefit. Now in addition, because of our geotargeting, even though there are folks that are direct-to-consumer via online channels, they still end up benefiting as well. But folks with store presence, storefront presence and the omnichannel requirements get the lion's share of these advancements that we've made.

Got it. And if I could just sneak one more in. Maybe, David, obviously, you're coming back to Cardlytics here. Maybe you could help us think through what was the driving decision behind that? And maybe one thing that excites you, 2 things -- 2 or 3 things that you're really looking at honing in on in '26 here?

Yes. Given the nature of the call, I'll keep it fairly peasy here. But look, I would say this, Cardlytics remains a differentiated platform. I mean, I wrote my own press release when I joined, and that is to say that I have a tremendous amount of affinity to this organization. In learning more about the opportunity during the process, I came away feeling like the team is still very much intact, and we still have an asset that is still unique and differentiated in the marketplace. When you think about even without BofA, we're still seeing 40% of every card swipe in the United States. And I don't know of another company that has the ability to integrate, utilize and act upon that scale of data with rights to do what we do. And I think there's a good chunk of that, that really excites me about what we can do from the level that we're at. And I think that's the important thing here is that when we think about with where the company is, we still see, hear and feel the value in what we are providing for our advertisers, and we still are having similar conversations and interactions with our bank partners as well. So hopefully, that helps answer your question.

Our next question is from Jason Kreyer with Craig-Hallum.

Wondering if you can talk about what factors contributed to the decision to sunset the BofA relationship. Curious if there are any cost benefits or tech benefits that stem from that termination? And then if you can maybe talk about what impact that has on MQUs going forward?

Yes. Jason, thank you so much for the question. I think as we said in the prepared remarks, Bank of America was a valued partner, but we could not get on the same page in terms of how the program structure was set up, economics, personalization and consumer engagement. And we are very much thinking about how the network evolves and grows in the future, and that was -- there's lack of alignment there. That said, we absolutely believe in the strength of our platform and our advertiser base and the value we can deliver for the end consumers. And should Bank of America revisit, we'll be ready to welcome them back. To the second part of your question, there are tech benefits. As you might remember, we -- one of the key factors that was inhibiting the longer-term relationship was the need for Bank of America to migrate to our current tech stack. And that was a tall order for them. And that was -- we were literally managing and organizing a parallel stack for them. And I mentioned in our prepared remarks that we were able to let go of a significant level of tech debt, and that was partly due to sunsetting and concluding the Bank of America relationship. So there are definitely tech benefits. There also -- allows us to increase our execution velocity overall, our contract process, as I mentioned in our prepared remarks. That said, I think we're in a good place with the network. And should Bank of America revisit their decision, we'll be ready to welcome them back.

You mentioned earlier in the prepared remarks, you just talked about some -- the potential for adding new card portfolios. I'm curious if you can give a little bit more detail on that.

Yes. As we've kind of increased or deepened our relationship or engagement with every single bank partner of ours, we've also started to get into a sense of what is specific for their overall card portfolio that they can benefit from our new set of capabilities. And this is something that we have kind of like a bank-by-bank conversation. So as we add new portfolios, we'll keep bringing them back and keeping all of you posted. But as of now, the conversations are happening in -- with several of our bank partners to onboard new -- either segments or portfolios or sub card portfolios that were not previously in the program. And that can not only increase the MQUs, but also allows us to deepen the relationship with the banks. But we'll keep you posted as those new portfolios come online, and we welcome them on our network.

We have our next question from Kyle Peterson with Needham.

I wanted to start off on the BofA, just the timing and mechanics of that. I guess, could you guys just confirm what the exact kind of shutoff date was or roughly? Just want to confirm whether the 1Q guide has a full quarter's impact or if there's any kind of lingering benefit in the first quarter from BofA?

Yes. I mentioned on the question earlier, January 15.

Okay. And then I guess just a follow-up on liquidity and the balance sheet. I think you mentioned that after the Bridg transaction closes, there should be an infusion in the balance sheet. But I guess looking at the structure of the deal, I thought it looks like you guys got PAR stock. So I guess just like any more clarity on -- is that just -- like is there any lockup or hold up? Or what are your plans once that is delivered and how you're going to convert that to liquidity?

Yes. If you read the 8-K from the announcement, we've got just aspects of the deal that we're still kind of on track to close for them. So if you think about just consents and final preparations, everything is on track there. Once that's done, the deal will close and then we use a 15-day calc to determine the number of shares that we will receive. And then once we receive those shares, we will look to quickly liquidate to get cash on our balance sheet. And more likely than not, we'll use those proceeds to pay down a decent amount of the facility.

Okay. Okay. That's helpful. And then I guess just if I could squeeze one last one in there. Is -- how should we think about cash flow? I know 1Q is normally kind of a weaker quarter and based on the guide kind of looks like that. But with the cost structure being quite a bit lower, I'm assuming there's also probably some costs that will come out with Bridg. But is there an opportunity to return back to at least EBITDA positive as early as the second quarter? And I guess, how are you guys kind of feeling about kind of the return to positive free cash flow moving forward?

Yes. Sounds good. Yes, with the Bridg going away, you mentioned that, you're absolutely right. We'll get some OpEx benefits from that, call it, $4 million or $5 million of help from that perspective. And then from an adjusted EBITDA perspective, I mean, look, at the end of the day, if adjusted OpEx is kind of low mid-20s, that gives you a good indicator of kind of what we're going to need to achieve from adjusted contribution perspective. And to kind of answer your question, we're pretty close. And so my level of confidence to being able to return back to some form of quarterly positive adjusted EBITDA remains pretty high.

Our next question is from Robert Coolbrith with Evercore.

Welcome back to David. Just a couple of quick ones left. Just wanted to confirm on the Q1 guidance, is Bridg being treated as discontinued ops there? I just wanted to -- I assume it is, but it wasn't confirmed anywhere. So I just want to double check that. And then I have a couple more.

Yes. So if we're kind of targeting a mid-month close at that point, it gives you a sense for how much is going to contribute to Q1 and then it's no longer part of Cardlytics after that.

Okay. So there is revenue contribution from Bridg through the mid-month close that's contemplated. Is that correct?

Correct. Yes. Correct. Thank you for clarifying. That's correct. Yes. Once we close, then we'll take credit for everything up to close.

Okay. Got it. And then just a couple more. Subscription services, you noted, I think, some softness there. I think going back a couple of quarters ago, Amit, you had mentioned that as a source of strength. So I just wanted to maybe ask about materiality. And then also just if you could sort of give us a sense of the trends or any factors influencing what you're seeing from a demand perspective in that category? And then I've got just one last one after that.

Sure. I think overall, Robert, thank you for the question. Overall, subscription services, we do see a decline from a quarter-on-quarter point of view. Now while we -- the decline is largely -- or the pressure is largely coming from the restrictions from our bank partners, right? The platform strength about targeting and reach is still the same. But obviously, when there's content restrictions from our partners, and obviously, departure of Bank of America, those are the reasons why we start to see some pressure on the subscription services. That said, we're thinking through some newer formats that allow us to have people act because they end up being mostly event triggered. So we're trying to figure out new formats that can actually allow us to regain the footing in the subscription services category with our current network. And then for some of the other category trends, as I mentioned before, gas and grocery, there's consistent growth, robust growth, about 21% year-on-year. Restaurant delivery about 13% year-on-year growth. So other categories continue to be strong, and we're excited about rolling out some of the newer formats with the bank partners that we're talking about, and we'll keep you posted as they roll out over the course of the year.

Got it. Great. And last one is just I wanted to touch on the -- I know it's early, but the SKU level sort of targeting or advertising opportunity. You've talked a little bit about that in the past. I just want to understand, is that something that was sort of uniquely enabled by technology that resided within Bridg? Or is that something that you can retain as a capability going forward, emerging capability going forward?

Yes. The appropriate question, Robert. So we're -- the short version is that we're going to put the SKU level offers on the back burner for now. As you said, it is -- it was primarily powered by the data set that we were connecting with the Bridg platform. And with the exit of the Bridg platform, while we can still do it, but it does require more hoops for us to do it and requires more integration, deeper integration with certain retailers. So for now, we're going to put it on the back burner. And as we execute kind of our current game plan, at some point in the future, when it makes sense, we'll bring it back. But for now, it's on the back burner.

And thank you. As there are no further questions at this time, this concludes today's conference call. We thank you for your participation. Ladies and gentlemen, you may now disconnect.