Cardlytics (NASDAQ:CDLX) reported lower third-quarter billings and revenue and missed its guidance, as advertiser budgets tightened and a disruption at a U.K. bank partner prevented offers from reaching some consumers for an extended period.
CEO Amit Gupta said the company expects to return to sequential growth in the fourth quarter and does not view the third-quarter slowdown as a signal for the current period. Cardlytics also announced new publisher partnerships that it expects to help diversify its reach beyond banks.
Third-quarter results and liquidity
Third-quarter billings fell 32% from a year earlier to $57.2 million, while revenue declined 30% to $32.9 million. Adjusted contribution fell 24% to $19.4 million, though it rose as a percentage of revenue to 59% from 54.4%.
Adjusted EBITDA was positive $0.4 million, down from $3.3 million a year earlier. Adjusted operating expenses declined 14% to $19 million, which CFO David Evans attributed largely to workforce reductions in the second half of 2025 and cloud infrastructure optimization.
Free cash flow was negative $1.6 million, compared with negative $2.7 million in the prior-year quarter. Cardlytics ended the quarter with $29.9 million in cash and cash equivalents and approximately $10.4 million available under its credit facility. Evans said the company was evaluating options to improve its balance sheet and cash flow.
Evans said year-over-year comparisons excluded Bridg, which Cardlytics divested in the first quarter. He also said the company expects difficult comparisons until the first quarter of 2027, when it anniversaries previously discussed changes in bank partner relationships. MQUs fell to 187 million from 230 million a year earlier, though they increased by 1.2 million from the second quarter.
Advertiser pressure and fourth-quarter outlook
Gupta said macroeconomic pressure weighed on advertiser budgets, particularly in grocery, while spending in some industries contracted or shifted to other formats. U.K. billings fell 4% year over year, primarily because of the bank partner disruption, he said.
During the question-and-answer session, Gupta described the U.K. issue as a one-off stemming from an infrastructure change at the bank. He said the companies had worked together to strengthen their systems. He also characterized the grocery weakness as a combination of cyclical and advertiser-specific issues that Cardlytics does not expect to recur in 2027.
For the fourth quarter, Cardlytics forecast:
- Billings of $63 million to $69 million.
- Revenue of $35 million to $39 million.
- Adjusted contribution of $20 million to $23 million.
- Adjusted EBITDA ranging from negative $1 million to positive $2 million.
Evans said the billings range represents sequential growth of 10% to 20%. Gupta said several large bank partners are investing in fourth-quarter promotions, including bank-funded offers, boosted rewards and sweepstakes.
Publisher and advertiser expansion
Cardlytics signed three new CRP partners during the quarter: Yahoo, VodafoneThree and travel rewards program Rove. It signed loyalty platform Coupert after the quarter ended.
Gupta said Cardlytics expects to roll out offers to Yahoo Mail users over the next few months. The VodafoneThree partnership will begin with the Three+ Rewards app in the U.K., with plans to expand to VeryMe later. Offers are expected to reach all Rove users later in the fourth quarter, while Coupert plans to bring offers to users in the U.S. and U.K. through its website, browser extension and app.
Gupta said more than half the cards consumers link through CRP come from outside Cardlytics’ existing bank network. He expects the company to see an impact from the new partnerships in 2027.
On the advertiser side, Gupta said new-business billings grew 25% from the second quarter. Advertisers that launched in the second quarter increased their billings by 58% in the third quarter, and 70% renewed with new budgets, he said.
Cardlytics also introduced custom reward tiers for banks and released the Cardlytics Demand Index, which Gupta said is designed to turn verified purchase data into aggregated, privacy-safe consumer spending insights. The company is also designing technology to allow AI shopping agents to display offers and connect them to verified redemptions.
About Cardlytics (NASDAQ:CDLX)
Cardlytics, Inc is a financial technology and advertising company that operates a marketing platform through banks and other financial institutions. Its technology connects consumers with targeted merchant offers based on transaction data, while providing advertisers with a way to reach customers through digital banking applications and other financial channels.
The company’s platform supports merchant-funded rewards, cash-back promotions and purchase-based advertising. Participating consumers can receive offers from retailers, restaurants, travel providers and other businesses, while advertisers can use Cardlytics’ data and measurement tools to target audiences and evaluate whether campaigns lead to purchases.
Cardlytics was founded in 2008 by Scott Grimes and Lynne Laube and is headquartered in Atlanta, Georgia.
