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Why Cardlytics Stock Jumped 22%

By Daniel Miller – May 12, 2020 at 12:53PM

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Investors cheered first-quarter results despite a wider-than-expected loss.

What happened

Cardlytics (CDLX -5.47%), a company that uses purchase information to help marketing providers improve their rewards programs and other customer services, jumped 22% early Tuesday after releasing a solid first-quarter result.

So what

Revenue increased 26% over the prior year to $45.5 million, topping analysts' estimates of $44.2 million. Cardlytics' adjusted loss per share checked in at $0.26, worse than the prior year's $0.23 adjusted per-share loss, and wider than analysts' estimates of a $0.21 adjusted per-share loss. Investors shrugged off the losses in favor of other improved metrics, including a 16% jump in billings and gross profit, as well as a 30% increase in financial institution monthly active users (FI MAUs).

Customer loyalty graphic

Image source: Getty Images.

"We delivered solid first quarter results, with billings, revenue and adjusted contribution in the upper half of our prior guidance," said Scott Grimes, CEO and co-founder of Cardlytics, in a press release. "Our team remains positive about the future and, despite the difficult nature of the COVID-19 crisis for our advertising partners, we have seen encouraging signs in our business."

Now what

Management believes it has the liquidity to weather the COVID-19 coronavirus economic slowdown, and the company will continue focusing on increasing the number of marketing partners it works with and innovating solutions for new industries. Today's pop in stock price is welcomed by investors, but savvy investors would be wise to keep a long-term view and consider that a larger financial hit is likely to take place during the second quarter.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Cardlytics, Inc. Stock Quote
Cardlytics, Inc.
$9.51 (-5.47%) $0.55

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