Cardlytics (CDLX) Q2 Users Jump 19%

Cardlytics (CDLX 2.91%), a digital marketing platform that partners with banks and merchants to deliver targeted offers to consumers, released its second quarter 2025 results on August 6, 2025. The most notable news from this earnings release was a clear improvement in adjusted earnings per share (EPS), which beat analyst expectations by $0.26 per share (non-GAAP) in Q2 2025. Despite this, revenue (GAAP) came in slightly below consensus and continued to decline year over year. Adjusted EBITDA improved, while top-line figures highlighted persistent challenges in monetizing Cardlytics’ growing user base. Overall, the quarter showed operational progress but signaled ongoing headwinds for revenue growth.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Understanding Cardlytics’ Business and Recent Priorities

Cardlytics operates a digital marketing platform that connects advertisers with consumers via direct offers delivered through banking and merchant partners. Its main products include the Cardlytics platform, which uses anonymized purchase data from financial institutions, and the Bridg platform, which taps into point-of-sale (POS) data from merchant partners to inform and target marketing efforts.

The company’s recent business priorities center on expanding its network of data partners, especially non-bank (non-financial institution) partners, and developing more advanced analytics to drive greater marketing precision. Key success factors include growing both the number of active users and the breadth of partners, while efficiently converting this scale into higher per-user returns. Ensuring data privacy, maintaining competitive technological advantages, and keeping operating costs in check remain focus areas.

Quarter Highlights: Financial and Operational Developments

During the period, Cardlytics reported a diluted non-GAAP EPS loss of $0.13, outperforming the analyst estimate of $(0.39) (non-GAAP). Revenue (GAAP) was $63.2 million, below both the $64.0 million GAAP estimate and the $69.6 million GAAP result from Q2 2024. This marked the third consecutive quarter of declining top-line results. Non-GAAP billings, which reflect total advertiser budgets before incentives and partner payments, also fell 6% year-over-year.

The company’s adjusted EBITDA, a non-GAAP metric that excludes certain one-time or non-cash charges, was $2.7 million, a notable turnaround from negative $2.3 million (non-GAAP Adjusted EBITDA) in the prior-year period. Adjusted contribution margin as a percentage of revenue also improved to 57.1% (non-GAAP), supported by disciplined cost cuts—operating expenses in sales and marketing, research and development, and general and administrative all declined from the previous year, aided by a 15% workforce reduction announced earlier in the year. However, net loss under generally accepted accounting principles (GAAP) widened to $9.3 million, though adjusted net loss improved modestly year over year.

Cardlytics saw a 19% rise in monthly qualified users (MQUs), reaching 224.5 million, compared to 188.8 million in Q2 2024. This expansion came largely from new bank and non-bank partner onboardings. ACPU was down 24% year-over-year, as the MQU base of the newest large FI partner has not yet been fully monetized. The company’s core Cardlytics platform contributed $58.041 million in GAAP revenue, a 9.3% drop, while Bridg platform revenue (GAAP) fell 7.6%.

The company highlighted its scale advantage, noting its network now covers approximately half of all card-based transactions in the U.S. On the risk side, a non-renewal notice from legacy partner Bank of America signaled potential headwinds ahead, though management expects no immediate financial impact. No dividend was declared or adjusted during the period. CDLX does not currently pay a dividend.

Product Types, Segment Insights, and Context

The Cardlytics platform serves as a purchase-data-driven marketing network, delivering targeted offers to consumers via banking partners. Bridg is a merchant analytics solution that leverages POS purchase data to inform marketer decision-making. Everyday spend categories remained resilient, driving ongoing advertiser engagement.—several retailers reported using Cardlytics data for marketing planning and even for brick-and-mortar expansion insights.

This quarter marked important steps in diversifying supply, with the launch of the Cardlytics Rewards Platform, which extends offer capabilities beyond bank channels and enables partnerships with app-based digital properties. Integration times improved—Cardlytics reported launching its first non-bank partner in just four weeks, as disclosed on the Q1 2025 earnings call, compared to much longer timetables for traditional banks in the past. These improvements support a key strategy to reduce reliance on any single channel or partner and to unlock new monetization opportunities.

Despite these advances, the period underscored a persistent challenge: converting rapid user growth into higher returns per user, as Cardlytics adjusted contribution per user ("ACPU") declined to $0.14 from $0.16 in Q2 2024. While the MQUs milestone testifies to Cardlytics’ reach, the declining ACPU (non-GAAP) highlights delayed engagement among users from new partnerships. The company’s management has identified this monetization lag as a primary focus as it seeks to enhance both engagement and the economics of its expanded user base.

Looking Forward: Management Guidance and Key Watchpoints

Cardlytics provided guidance for Q3 2025 calling for further revenue declines, with projected revenue between $52.2 million and $58.2 million (GAAP), billings of $87.0 million to $95.0 million (non-GAAP), and adjusted contribution in the range of $30.3 million to $34.3 million (non-GAAP)—all representing substantial drops year over year. Guidance for adjusted EBITDA (non-GAAP) in Q3 2025 ranges from a loss of $2.3 million to a gain of $2.7 million.

No solid or clear long-term guidance was provided by management beyond these next-quarter estimates. Cardlytics leaders cite ongoing efforts to diversify partners, improve technology, and control expenses, but note advertiser caution and legacy partner transitions as persistent uncertainties. For the coming quarters, investors should closely monitor trends in adjusted contribution per user, the impact of new non-bank partnerships, and the company’s ability to convert its growing audience into higher and more stable revenues. CDLX does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.