XML 29 R17.htm IDEA: XBRL DOCUMENT
v3.20.2

SEGMENTS | 6 Months Ended
--- | ---
Jun. 30, 2020
Segment Reporting [Abstract] |
SEGMENTS | SEGMENTS As of June 30, 2020, we have two operating segments: Cardlytics Direct in the U.S. and U.K., as determined by the information that our Chief Executive Officer, who we consider our chief operating decision-maker, uses to make strategic goals and operating decisions. Our Cardlytics Direct operating segments in the U.S. and U.K. represent our proprietary native bank advertising channels and are aggregated into one reportable segment given their similar economic characteristics, nature of service, types of customers and method of distribution. Our chief operating decision maker allocates resources to, and evaluates the performance of, our operating segments based on revenue and adjusted contribution. The following table provides information regarding our Cardlytics Direct reportable segment (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2020 |  | 2019 |  | 2020
Adjusted contribution | $ | 21,841 |  |  | $ | 12,402 |  |  | $ | 39,478 |  |  | $ | 32,781 |
Plus: Adjusted FI Share and other third-party costs(1) | 26,889 |  |  | 15,820 |  |  | 45,240 |  |  | 40,950 |
Revenue | $ | 48,730 |  |  | $ | 28,222 |  |  | $ | 84,718 |  |  | $ | 73,731 |
(1) | Adjusted FI Share and other third-party costs presented above represents GAAP FI Share and other third-party data costs less amortization of deferred FI implementation costs, which is detailed below in our reconciliation of GAAP loss before income taxes to adjusted contribution.
Adjusted Contribution Adjusted contribution measures the degree by which revenue generated from our marketers exceeds the cost to obtain the purchase data and the digital advertising space from our FI partners. Adjusted contribution demonstrates how incremental marketing spend on our platform generates incremental amounts to support our sales and marketing, research and development, general and administration and other investments. Adjusted contribution is calculated by taking our total revenue less our FI Share and other third-party costs exclusive of amortization of deferred FI implementation costs, which is a non-cash cost. Adjusted contribution does not take into account all costs associated with generating revenue from advertising campaigns, including sales and marketing expenses, research and development expenses, general and administrative expenses and other expenses, which we do not take into consideration when making decisions on how to manage our advertising campaigns. The following table presents a reconciliation of loss before income taxes presented in accordance with GAAP to adjusted contribution (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2020 |  | 2019 |  | 2020
Adjusted contribution | $ | 21,841 |  |  | $ | 12,402 |  |  | $ | 39,478 |  |  | $ | 32,781 |
Minus: |  |  |  |  |  |  |
Amortization of deferred FI implementation costs(1) | 731 |  |  | 991 |  |  | 1,384 |  |  | 1,999 |
Delivery costs | 3,370 |  |  | 3,499 |  |  | 6,616 |  |  | 6,905 |
Sales and marketing expense | 11,047 |  |  | 10,405 |  |  | 20,384 |  |  | 21,373 |
Research and development expense | 2,782 |  |  | 3,966 |  |  | 5,723 |  |  | 7,817 |
General and administration expense | 8,340 |  |  | 11,734 |  |  | 15,340 |  |  | 22,478 |
Depreciation and amortization expense | 1,053 |  |  | 1,545 |  |  | 2,014 |  |  | 3,876 |
Total other expense | 1,028 |  |  | 20 |  |  | 841 |  |  | 1,622 |
Loss before income taxes | $ | (6,510 | ) |  | $ | (19,758 | ) |  | $ | (12,824 | ) |  | $ | (33,289 | )
(1) | Amortization of deferred FI implementation costs is excluded from adjusted FI Share and other third-party costs, which is shown above in our reconciliation of GAAP revenue to adjusted contribution.
The following tables provide geographical information (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2020 |  | 2019 |  | 2020
Revenue: |  |  |  |  |  |  |
United States | $ | 43,123 |  |  | $ | 26,750 |  |  | $ | 74,471 |  |  | $ | 66,778 |
United Kingdom | 5,607 |  |  | 1,472 |  |  | 10,247 |  |  | 6,953 |
Total | $ | 48,730 |  |  | $ | 28,222 |  |  | $ | 84,718 |  |  | $ | 73,731 |
| December 31, 2019 |  | June 30, 2020
Property and equipment, net: |  |  |
United States | $ | 12,052 |  |  | $ | 10,465 |
United Kingdom | 2,010 |  |  | 2,338 |
India | 228 |  |  | 180 |
Total | $ | 14,290 |  |  | $ | 12,983 |
Capital expenditures within the United Kingdom and India were $0.3 million and $0.4 million during the six months ended June 30, 2019 and 2020, respectively. Concentrations of Risk Customers Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. A substantial majority of our cash and cash equivalents are held in fully FDIC–insured demand deposit accounts that distribute funds, and credit risk, over a vast number of financial institutions. Our remaining cash and cash equivalents are held with three financial institutions, which we believe are of high credit quality. Our accounts receivable are diversified among a large number of marketers segregated by both geography and industry. One marketer represented 10% and 17% of our revenue during the six months ended June 30, 2019 and 2020, respectively. This marketer also represented 24% of our accounts receivable as of June 30, 2020. A different marketer represented 12% of our accounts receivable as of June 30, 2019. FI Partners Our business is substantially dependent on a limited number of FI partners. We require participation from our FI partners in Cardlytics Direct and access to their purchase data in order to offer our solutions to marketers and their agencies. We must have FI partners with a sufficient number of customers and levels of customer engagement to ensure that we have robust purchase data and marketing space to support a broad array of incentive programs for marketers. Our agreements with a substantial majority of our FI partners have terms of three to seven years but are generally terminable by the FI partner on 90 days or less prior notice. If an FI partner terminates its agreement with us, we would lose that FI as a source of purchase data and online banking customers. During both the six months ended June 30, 2019 and 2020, Bank of America, National Association (“Bank of America”) and JPMorgan Chase Bank, National Association (“Chase”) combined to account for over 75% of the total FI Share we paid to all FIs, with each representing over 30%. No other FI partner accounted for over 10% of FI Share during these periods.

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration