CDLX earnings call transcript, November 5, 2026

Good evening, and thank you for joining us. Q3 was another quarter of execution against our priorities, deepening our bank partnerships, expanding our publisher network, driving incremental revenue for our advertisers. and investing in our technology platform that differentiates us. Billings and revenue were down from Q2, and we came in below our guidance. We experienced some sluggishness in the third quarter, one of our bank partners in the UK. had issues unrelated to us that reduced our billings and caused offers not to get served to their consumers for a long stretch of time macro pressure weighed on advertiser budgets, particularly in grocery and in some industries budgets contracted. or move to other formats. We don't view this as a signal for Q4. David will take you through the details in a few moments. What encourages us is that we are building for the next stage of growth. New brands are coming onto the platform at a faster pace each quarter. And we are expanding our publisher network with new CRP partners. Starting with our network and supply. We have signed. Three new CRP partners this quarter. We welcomed Yahoo to our publisher network and we'll start by bringing offers to Yahoo Mail users through Yahoo Mail's primary ad unit. Users can link a card. Browse personalized offers and earn Yahoo Cashback automatically on their purchases they're already making. This puts CRP in front of millions of consumers on one of the largest platforms globally. And we.

Expect the experience to roll out over the next few months. In the UK, we recently signed a partnership with Vodafone 3 for three mobile customers to use Cardlytics on the 3 Plus Rewards app. Vodafone 3 is the UK's largest mobile network operator serving the fixed and mobile market formed following the merger of Vodafone UK and 3UK. We will start with launching off. Vodafone 3 plus with plans to bring it to very me in the future. This partnership also marks 3 first for Cardlytics in the UK. Our first open banking partner at scale, our first UK CRP partner outside of financial institutions, and our first to offer rewards as a credit off the phone bill. We also announced a partnership with Rove, a universal airline mile program built for Gen Z and millennials. Rove members can link a card and earn Rove miles through personalized offers on top of the miles they already earned through flights, hotels, and shopping. The offers experience will roll out later in Q4 to all Rove users. Since the end of the quarter, we have also signed a fourth CRP partner, Coopert, a loyalty platform that will bring our offers to its users. in the U.S. and U.K. through its website, browser extension, and mobile app. Each of these partners sits outside the traditional banking across telecom, online media, travel, and cashback vertical. Together, we see CRP gaining traction and our supply diversifying to new services beyond banks.

It also expands who we reach. More than half of the cards consumers link through CRP come from outside. Our existing bank network, so each partner brings us consumers we could not see before. We continue to have positive conversations with other potential bank and non-bank partners, and we look forward to sharing more as these. Launches roll out, and we see an impact in 2027. On the bank side, several of our largest partners are investing heavily in Q4 to promote their programs and boost engagement. That includes bank-funded offers, bonus redemption days, boosted rewards, and sweepstakes. Turning to our advertiser base, despite the challenges we noted in some of our existing accounts, we continue to be encouraged by growth we see in new business. New business billings grew 25% from Q2. The advertisers that launched with us in Q2 ramped quickly, with this cohort's billing up. 58% in Q3, and 70% of them renewed with new budgets, so those advertisers are valuing the Cardlatics channel. Over half of the advertisers that launched with us in Q2 built more in Q3, including a national electronics retailer that nearly tripled. Every day spend is a growing part of our advertiser base. Restaurant, gas, and grocery advertisers now make up 29% of our active advertisers. Advertisers are still watching their budgets closely, but they know Q4 is an important quarter, and we expect that to show up in our results. We are bringing them new ad formats.

and new programs, and as I said earlier, our bank partners are investing alongside us. Our purchase intelligence also shows that the consumer is still spending. We saw U.S. consumer spending grew 10% compared with the third quarter of last year. Shoppers made 7% more purchases, and the average transaction size was about 3% larger compared to Q3 2025.

Gas and convenience also grew 27% because of higher fuel prices. Travel spend grew 17% in the same time period. And we see that in our advertiser base too, with the number of active travel advertisers. There's up more than 50% from a year ago, including new airline, hotel, cruise, and online travel agency logos. Travel brands come to us for verified redemptions and because we can deliver revenue within. A set window, which helps them hit specific goals like Q4 targets. We plan to bring verified redemptions to other industries, such as retail. In the UK, billings were down 4% year over year. As mentioned earlier, the decline primarily came from a technical disruption at one of our bank partners, which reduced billings during the quarter. Underneath that, our advertiser base was healthy. We saw growth across our time. Top 10 advertisers and retail grew about 5%. Our UK data shows a change in shopper behavior versus last year. Instead of concentrating purchases around the deepest discount days like Black Friday, shoppers are making more considered purchases spread across the whole holiday season. In response, new and existing retail partners are investing earlier and more steadily instead of timing their spend around seasonal spikes. Now to our technology platform. We launched the ability for banks to set custom reward tiers. A bank can now offer a higher reward multiplier to encourage customers to move up to a higher account tier. We worked with one of our banks.

partners to extend our program to a broader part of its customer base. We also tested boosted rewards for customers who had not redeemed an offer in more than six months. In early tests across bank partners, billing rose 13%. In the test groups, we are finalizing the plan to expand it. We scaled our AI insights agent and expanded our industry outlook reports to seven sectors, including quick service restaurants, grocery and travel. The agent now produces this content across hundreds of brands with very little engineering effort, which lets our sales team build custom campaigns for advertisers quickly and with minimal effort. Advertisers tell us our share of wallet insights change how they plan. That's the concept behind our newly released Cardlytics Demand Index. It is designed to turn our network's verified purchase data into aggregated privacy safe insights on consumer spending. Our goal is to give advertisers more confidence in how they plan and add a better view of consumer health to the broader economic conversation. Finally, as consumers begin shopping through AI agents, we plan to bring our offer network into those experiences. We are designing our technology so AI shopping agents can become a new type of public. In our network, showing consumers relevant offers at the point of purchase and tying those offers to verified redemptions. Looking ahead with Vodafone 3, Yahoo, Rove, and Cooper.

Signed, we are excited about growth in CRP, and we are focused on launching these partners successfully and carrying that momentum into 2027. We expect to return to sequential growth in Q4. David, we'll take you through our financials. With that, I'll turn it over to him.

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Your first question comes from the line of Jason Crayer with Craig Hallam. Jason, your line is open.