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Why Cardlytics Stock Plunged Today

By Evan Niu, CFA – Aug 5, 2020 at 1:09PM

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The advertising platform and bank loyalty program operator reported second-quarter results.

What happened

Shares of Cardlytics (CDLX -2.15%) have plunged today, down by 11% as of noon EDT, after the company reported second-quarter earnings. The results were mixed compared to analyst expectations.

So what

Revenue in the second quarter declined by 42% to $28.2 million, which resulted in an adjusted net loss of $10.2 million, or $0.38 per share. Consensus estimates had called for $30.8 million in sales and an adjusted net loss per share of $0.47. Billings fell 46% to $39.5 million and financial institution monthly active users (FI MAUs) were 157.2 million.

Red stock chart going down with red numbers in the background

Image source: Getty Images.

"Despite the unprecedented environment in which we have been operating since mid-March, we have stayed focused and kept our foot on the accelerator, in terms of executing our plan for long-term revenue growth and profitability," CEO Lynne Laube said in a statement. "Consumer spending recovered throughout the quarter, and despite a slight pause in recent weeks, we are optimistic that we can narrow our year-over-year declines in the second half of 2020."

Now what

Cardlytics, which operates an advertising platform and manages banking rewards programs for financial institutions, has been hit hard by the COVID-19 pandemic because consumer spending has fallen precipitously. The company declined to provide specific financial guidance going forward due to ongoing macroeconomic uncertainty resulting from the coronavirus.

"While we see signs that the economy is in a more stable position than it was in early Q2, there are concerns around recent infection trends and the pause of the recovery," CFO Andy Christiansen said on the conference call with analysts. "However, we expect to see sequential improvement in both Q3 and Q4."

Evan Niu, CFA 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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