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SEGMENTS | 6 Months Ended
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Jun. 30, 2022
Segment Reporting [Abstract] |
SEGMENTS | SEGMENTS As of June 30, 2022, we have three operating segments: the Cardlytics platform in the U.S., the Cardlytics platform in the U.K. and the Bridg platform, as determined by the information that our Chief Executive Officer, who we consider our chief operating decision-maker ("CODM"), uses to make strategic goals and operating decisions. Our Cardlytics platform operating segments in the U.S. and U.K. represent our proprietary advertising channels and are aggregated into one reportable segment given their similar economic characteristics, nature of service, types of customers and method of distribution. Subsequent to the acquisition of Bridg, our CODM began reviewing Bridg's revenue and operating expenses. Therefore, we consider the Bridg platform to be a separate operating segment. Our CODM allocates resources to, and evaluates the performance of, our operating segments based on revenue and adjusted contribution. Our CODM does not review assets by operating segment for the purposes of evaluating performance or allocating resources. The following tables provide information regarding the Cardlytics platform and the Bridg platform reportable segments (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2021 |  | 2022 |  | 2021 |  | 2022
Cardlytics platform |  |  |  |  |  |  |
Adjusted contribution | $ | 27,603 |  |  | $ | 29,867 |  |  | $ | 51,944 |  |  | $ | 58,822 |
Plus: Adjusted Partner Share and other third-party costs(1) | 29,160 |  |  | 39,403 |  |  | 58,049 |  |  | 74,431 |
Revenue | $ | 56,763 |  |  | $ | 69,270 |  |  | $ | 109,993 |  |  | $ | 133,253 |
Bridg platform |  |  |  |  |  |  |
Adjusted contribution | $ | 2,027 |  |  | $ | 5,258 |  |  | $ | 2,027 |  |  | $ | 9,078 |
Plus: Adjusted Partner Share and other third-party costs(1) | 63 |  |  | 877 |  |  | 63 |  |  | 1,002 |
Revenue | $ | 2,090 |  |  | $ | 6,135 |  |  | $ | 2,090 |  |  | $ | 10,080 |
Total |  |  |  |  |  |  |
Adjusted contribution | $ | 29,630 |  |  | $ | 35,125 |  |  | $ | 53,971 |  |  | $ | 67,900 |
Plus: Adjusted Partner Share and other third-party costs(1) | 29,223 |  |  | 40,280 |  |  | 58,112 |  |  | 75,433 |
Revenue | $ | 58,853 |  |  | $ | 75,405 |  |  | $ | 112,083 |  |  | $ | 143,333 |
(1)Adjusted Partner Share and other third-party costs presented above represents GAAP Partner Share and other third-party data costs less deferred implementation costs, which is detailed below in our reconciliation of GAAP (loss) income 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 partners. Adjusted contribution demonstrates how incremental marketing spend on our platforms 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 Partner Share and other third-party costs exclusive of deferred 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,
| 2021 |  | 2022 |  | 2021 |  | 2022
Adjusted contribution | $ | 29,630 |  |  | $ | 35,125 |  |  | $ | 53,971 |  |  | $ | 67,900 |
Minus: |  |  |  |  |  |  |
Deferred implementation costs(1) | 730 |  |  | — |  |  | 1,612 |  |  | — |
Delivery costs | 5,748 |  |  | 8,162 |  |  | 9,686 |  |  | 14,695 |
Sales and marketing expense | 17,063 |  |  | 21,983 |  |  | 30,265 |  |  | 39,631 |
Research and development expense | 8,934 |  |  | 13,581 |  |  | 15,152 |  |  | 25,872 |
General and administration expense | 16,888 |  |  | 20,984 |  |  | 29,063 |  |  | 41,409 |
Acquisition and integration costs (benefit) | 14,182 |  |  | 2,197 |  |  | 21,212 |  |  | (2,401) |
Change in fair value of contingent consideration | 1,480 |  |  | (2,968) |  |  | 1,480 |  |  | (68,018) |
Goodwill impairment | — |  |  | 83,149 |  |  | — |  |  | 83,149 |
Depreciation and amortization expense | 8,833 |  |  | 10,356 |  |  | 11,898 |  |  | 20,227 |
Total other expense | 3,078 |  |  | 5,417 |  |  | 5,804 |  |  | 8,034 |
Loss before income taxes | $ | (47,306) |  |  | $ | (127,736) |  |  | $ | (72,201) |  |  | $ | (94,698) |
(1)Deferred implementation costs is excluded from adjusted Partner 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,
| 2021 |  | 2022 |  | 2021 |  | 2022
Revenue: |  |  |  |  |  |  |
United States | $ | 54,145 |  |  | $ | 69,178 |  |  | $ | 103,262 |  |  | $ | 130,831 |
United Kingdom | 4,708 |  |  | 6,227 |  |  | 8,821 |  |  | 12,502 |
Total | $ | 58,853 |  |  | $ | 75,405 |  |  | $ | 112,083 |  |  | $ | 143,333 |
| December 31, 2021 |  | June 30, 2022
Property and equipment, net: |  |  |
United States | $ | 7,750 |  |  | $ | 6,116 |
United Kingdom | 3,423 |  |  | 2,379 |
India | 100 |  |  | 124 |
Total | $ | 11,273 |  |  | $ | 8,619 |
Capital expenditures within the United Kingdom and India totaled $0.6 million and less than $0.1 million during the six months ended June 30, 2021 and 2022, respectively. Concentrations of Risk Cash and Cash Equivalents Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. A significant portion 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 eight financial institutions, which we believe are of high credit quality. Marketers Our revenue and accounts receivable are diversified among a large number of marketers segregated by both geography and industry. During each of the six months ended June 30, 2021 and 2022, our top five marketers accounted for 34% and 21% of our revenue, respectively, with one marketer accounting for over 10% during six months ended June 30, 2021 . As of June 30, 2021 and 2022, our top five marketers accounted for 30% and 19% of our accounts receivable, respectively, with one marketer representing over 10% as of June 30, 2021. FI Partners Our business is substantially dependent on a limited number of FI partners. We require participation from our FI partners in the Cardlytics platform 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. The agreements generally have autorenewal provisions that allow for the agreements to extend past their originally contemplated end date, unless terminated earlier in accordance with the terms of the agreement. 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 the six months ended June 30, 2021, our top two FI partners combined to account for over 75% of the total Partner Share we paid to all partners, with each representing over 30%. During the six months ended June 30, 2022, our top three FI partners combined to account for over 75% of the total Partner Share we paid to all partners, with the top two FI partners each representing over 20% and third largest FI partner representing over 10% of Partner Share. No other partner accounted for over 10% of Partner Share during these periods.

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- 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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