Cardlytics, Inc. (CDLX): Business Model Canvas [11-2024 Updated]

Cardlytics, Inc. (CDLX) has carved a niche in the marketing landscape by leveraging its unique business model to deliver targeted marketing solutions that drive consumer engagement and sales. By collaborating with financial institutions and retailers, Cardlytics utilizes extensive consumer purchase data to create highly personalized marketing campaigns. In this blog post, we delve into the intricacies of Cardlytics' Business Model Canvas, exploring the key partnerships, activities, resources, and revenue streams that fuel its innovative approach. Discover how Cardlytics is changing the game in marketing analytics!

Cardlytics, Inc. (CDLX) - Business Model: Key Partnerships

Collaboration with financial institutions (FI partners)

Cardlytics collaborates extensively with financial institutions to leverage their customer data and enhance marketing effectiveness. As of September 30, 2024, the company reported having 166,409 Monthly Active Users (MAUs), an increase of 3.9 million from the previous year, driven by organic growth from existing FI partners in both the U.K. and U.S., as well as the addition of a new FI partner in the U.K..

The Average Revenue Per User (ARPU) for Cardlytics was $0.40 for the three months ended September 30, 2024, down from $0.49 in the same period of 2023. This decrease was attributed to a $7.5 million rise in Consumer Incentives, reflecting higher engagement levels among customers.

The following table summarizes key metrics related to Cardlytics' collaboration with FI partners:

Metric	Q3 2024	Q3 2023	Change
MAUs	166,409	162,467	+3.9 million
ARPU ($)	0.40	0.49	-0.09
Consumer Incentives ($ million)	44.9	37.4	+7.5

Partnerships with retailers for marketing data

Cardlytics partners with various retailers to obtain marketing data that informs their advertising strategies. This collaboration enables the company to create targeted marketing campaigns that resonate with consumers. For the nine months ended September 30, 2024, Cardlytics reported total revenue of $204.3 million, a decrease of 7.2% compared to $220.0 million for the same period in 2023.

Despite the revenue decline, the company’s Billings increased by 1.9% to $327.6 million from $321.5 million during the same period, indicating a robust partnership with retailers that supports marketing initiatives.

The following table provides a breakdown of revenue from the Cardlytics platform by pricing model:

Pricing Model	Q3 2024 Revenue ($ thousands)	Q3 2023 Revenue ($ thousands)
Cost per Served Sale	36,127	49,957
Cost per Redemption	23,196	20,842
Other Revenue	1,787	2,265
Total Cardlytics Platform Revenue	61,110	73,064

Agreements with marketing agencies

Cardlytics maintains strategic agreements with marketing agencies to enhance its service offerings. These partnerships allow for the integration of various marketing strategies and tools, facilitating better engagement with customers. The company reported a net loss of $173.7 million for the nine months ended September 30, 2024, compared to a loss of $33.9 million for the same period in 2023.

The following table summarizes the financial impact of marketing agency agreements on Cardlytics' performance:

Financial Metric	Q3 2024 ($ thousands)	Q3 2023 ($ thousands)
Net Loss	(145,182)	(23,966)
Adjusted EBITDA	(1,816)	3,946
Free Cash Flow	(3,869)	(1,951)

Cardlytics, Inc. (CDLX) - Business Model: Key Activities

Running targeted marketing campaigns

Cardlytics implements targeted marketing campaigns primarily through its advertising platform, leveraging anonymized consumer purchase data gathered from financial institutions (FIs). During the nine months ended September 30, 2024, the company generated total revenue of $204.3 million, a decline from $220.0 million for the same period in 2023. This revenue is largely derived from campaigns that utilize consumer purchase data to tailor marketing efforts effectively.

The revenue breakdown for the Cardlytics platform, which is essential for understanding campaign effectiveness, is as follows:

Pricing Model	Three Months Ended September 30, 2024 (in thousands)	Three Months Ended September 30, 2023 (in thousands)	Nine Months Ended September 30, 2024 (in thousands)	Nine Months Ended September 30, 2023 (in thousands)
Cost per Served Sale	$36,127	$49,957	$116,664	$138,664
Cost per Redemption	$23,196	$20,842	$66,150	$58,305
Other Revenue	$1,787	$2,265	$4,531	$5,851
Total Revenue	$61,110	$73,064	$187,345	$202,820

Analyzing consumer purchase data

Cardlytics extensively analyzes consumer purchase data to inform its marketing strategies. As of September 30, 2024, the company reported 166,409 Monthly Active Users (MAUs), an increase of 3.9 million from 162,467 MAUs in the prior year. This growth is attributed to organic expansion among existing FI partners and the addition of new partners.

The Average Revenue per User (ARPU) for Cardlytics during the same period is as follows:

Period	ARPU (in USD)
Three Months Ended September 30, 2024	$0.40
Three Months Ended September 30, 2023	$0.49
Nine Months Ended September 30, 2024	$1.22
Nine Months Ended September 30, 2023	$1.37

The decrease in ARPU reflects a significant rise in Consumer Incentives, which amounted to $123.3 million for the nine months ended September 30, 2024, compared to $101.4 million in 2023. This increase indicates a strategy focused on enhancing engagement through targeted incentives.

Providing consumer incentives to drive engagement

Cardlytics' strategy incorporates providing consumer incentives to boost engagement with its platforms. The total Consumer Incentives paid out during the nine months ended September 30, 2024, reached $123.3 million, a substantial increase from $101.4 million in the previous year. This investment in Consumer Incentives is designed to stimulate purchase behavior, ultimately benefiting the marketers that partner with Cardlytics.

The impact of these incentives on financial performance is evident in the following metrics:

Metric	Three Months Ended September 30, 2024 (in thousands)	Three Months Ended September 30, 2023 (in thousands)	Nine Months Ended September 30, 2024 (in thousands)	Nine Months Ended September 30, 2023 (in thousands)
Consumer Incentives	$44,901	$37,425	$123,260	$101,443
Billings	$111,958	$116,430	$327,561	$321,480

These figures illustrate the ongoing commitment to using consumer incentives strategically to enhance engagement and drive revenue growth, despite the challenges faced in achieving overall revenue increases.

Cardlytics, Inc. (CDLX) - Business Model: Key Resources

Extensive anonymized purchase data from partners

Cardlytics utilizes extensive anonymized purchase data sourced from financial institutions (FIs) to drive its marketing solutions. As of September 30, 2024, the company reported having 166,409 monthly active users (MAUs), an increase of 3.9 million compared to the previous year. This data enables Cardlytics to offer targeted marketing campaigns based on real consumer behavior, thus enhancing the effectiveness of its advertising solutions.

Proprietary analytics technology

Cardlytics has developed proprietary analytics technology that processes the vast amounts of purchase data it collects. This technology is essential for analyzing consumer spending patterns and generating insights that inform marketing strategies. The company reported revenue of $67.1 million for the three months ended September 30, 2024, although this represented a decline from $79.0 million in the same period in 2023. The analytics platform supports various pricing models, including Cost per Served Sale (CPS) and Cost per Redemption (CPR), which are integral to its revenue generation.

Pricing Model	Revenue (Q3 2024)	Revenue (Q3 2023)	Change
Cost per Served Sale	$36.1 million	$50.0 million	($13.9 million)
Cost per Redemption	$23.2 million	$20.8 million	$2.4 million
Other Revenue	$1.8 million	$2.3 million	($0.5 million)
Total Cardlytics Platform Revenue	$61.1 million	$73.1 million	($12 million)

Established relationships with marketers and consumers

Cardlytics has fostered strong relationships with both marketers and consumers, which are critical for its business model. The company reported that its average revenue per user (ARPU) for the three months ended September 30, 2024, was $0.40, down from $0.49 in the previous year. These relationships allow Cardlytics to effectively deploy marketing campaigns that leverage its purchase data, thereby increasing engagement and driving sales for its partners.

As of September 30, 2024, the company had a net loss of $145.2 million for the quarter, compared to a net loss of $24.0 million in the same quarter of the previous year. This underscores the importance of maintaining and expanding its partnerships to enhance revenue streams and mitigate losses.

Cardlytics, Inc. (CDLX) - Business Model: Value Propositions

Targeted marketing solutions that drive sales

Cardlytics, Inc. utilizes a unique advertising platform that integrates with financial institutions (FIs) to deliver targeted marketing solutions. The company's revenue model primarily includes Cost per Served Sale (CPS) and Cost per Redemption (CPR), allowing marketers to pay based on actual sales generated through their campaigns. During the nine months ended September 30, 2024, the revenue from the CPS model was $116.7 million, while CPR revenue amounted to $66.2 million.

Enhanced consumer engagement through incentives

Cardlytics enhances consumer engagement by providing incentives that encourage spending. For the nine months ended September 30, 2024, the company reported consumer incentives totaling $123.3 million, up from $101.4 million in the same period of the previous year. The average revenue per user (ARPU) decreased to $1.22 from $1.37 year-over-year, reflecting increased consumer incentives as a strategy to drive higher engagement.

Measurable impact of marketing spend

Cardlytics emphasizes the measurable impact of marketing expenditures on sales performance. In the nine months ended September 30, 2024, total billings reached $327.6 million, an increase from $321.5 million in the prior year. The company's platform enables marketers to track the effectiveness of their campaigns, thereby optimizing marketing spend and improving return on investment (ROI). For example, during the last quarter, the total revenue generated was $67.1 million, despite a reported net loss of $145.2 million.

Metrics	Q3 2024	Q3 2023	Change
Revenue	$67.1 million	$79.0 million	-15.2%
Consumer Incentives	$123.3 million	$101.4 million	+21.6%
Billings	$327.6 million	$321.5 million	+1.9%
ARPU	$1.22	$1.37	-11%

Cardlytics, Inc. (CDLX) - Business Model: Customer Relationships

Engagement through personalized marketing offers

Cardlytics utilizes a model that focuses on personalized marketing offers tailored to individual user preferences. As of September 30, 2024, the platform reported a total revenue of $67.1 million for the third quarter, down from $79.0 million in the same period in 2023. The decrease in revenue is attributed to higher consumer incentives, which rose to $44.9 million from $37.4 million year-over-year.

Cardlytics engages its users with offers based on their purchasing behaviors, which has resulted in a monthly active user (MAU) count of 166,409 as of September 30, 2024, reflecting a growth of 3.9 million users compared to the previous year. This engagement strategy is designed to increase the effectiveness of marketing campaigns by providing relevant offers that resonate with users' interests.

Support via dedicated account management

Cardlytics emphasizes the importance of dedicated account management to foster strong relationships with its financial institution (FI) partners. The company has seen a slight decline in average revenue per user (ARPU), which dropped to $0.40 in Q3 2024 from $0.49 in Q3 2023. This decline is primarily due to the increased investment in consumer incentives.

In the nine months ended September 30, 2024, Cardlytics recorded a total billings amount of $327.6 million, which is an increase of $6.1 million compared to the same period in 2023. This increase was mainly driven by new marketer acquisitions. The dedicated account management teams play a crucial role in optimizing the onboarding process for new marketers and ensuring existing partners receive personalized support, which is vital for maintaining ongoing relationships.

Continuous feedback loops for campaign optimization

Cardlytics implements continuous feedback loops to optimize marketing campaigns. The company measures the effectiveness of its campaigns through various metrics, including consumer engagement and sales conversion rates. For the nine months ended September 30, 2024, the gross profit stood at $88.2 million, down from $90.9 million in the same period of 2023.

To enhance campaign performance, Cardlytics utilizes data analytics to gather insights from user interactions. This analytical approach allows the company to refine its marketing strategies, improve targeting accuracy, and ultimately increase the return on investment (ROI) for its partners. The total revenue generated from the Cardlytics platform was $61.1 million for Q3 2024, showing a significant focus on optimizing campaign effectiveness.

Metric	Q3 2024	Q3 2023	Change
Total Revenue	$67.1 million	$79.0 million	-15.1%
Consumer Incentives	$44.9 million	$37.4 million	+19.9%
Monthly Active Users (MAUs)	166,409	162,467	+2.4%
Average Revenue Per User (ARPU)	$0.40	$0.49	-18.4%
Total Billings	$327.6 million	$321.5 million	+2.0%
Gross Profit	$88.2 million	$90.9 million	-3.0%

Cardlytics, Inc. (CDLX) - Business Model: Channels

Digital banking platforms and mobile apps

Cardlytics leverages digital banking platforms and mobile applications to reach consumers directly. As of September 30, 2024, Cardlytics reported a Monthly Active User (MAU) count of 166,409, which reflects an increase of 3.9 million users compared to the same period in 2023. This growth is attributed to organic expansion among existing financial institution (FI) partners in the U.K. and U.S., as well as the addition of a new FI partner in the U.K. during the same time frame.

Email marketing campaigns

Cardlytics employs email marketing campaigns as a channel to communicate offers and incentives to potential customers. The effectiveness of these campaigns is reflected in the company's Average Revenue per User (ARPU), which for the three months ended September 30, 2024, decreased to $0.40 from $0.49 year-over-year. This decline is attributed to a $7.5 million increase in Consumer Incentives, indicating high engagement levels among users.

Direct marketing through partnered retailers

Direct marketing through partnered retailers is another critical channel for Cardlytics. The company reported revenue from its Cardlytics platform of $61,110,000 for the three months ended September 30, 2024, a decline from $73,064,000 in the same period in 2023. This revenue model primarily relies on the Cost per Served Sale (CPS) and Cost per Redemption (CPR) pricing structures. For the three months ending September 30, 2024, CPS revenue was $36,127,000 and CPR revenue was $23,196,000.

Channel	Metric	Q3 2024	Q3 2023	Change
Digital Banking Platforms	Monthly Active Users (MAUs)	166,409	162,467	+3,942
Email Marketing	Average Revenue per User (ARPU)	$0.40	$0.49	-0.09
Partnered Retailers	Revenue from Cardlytics Platform	$61,110,000	$73,064,000	-$11,954,000
Cost per Served Sale (CPS)	CPS Revenue	$36,127,000	$49,957,000	-$13,830,000
Cost per Redemption (CPR)	CPR Revenue	$23,196,000	$20,842,000	+$3,354,000

Overall, Cardlytics continues to utilize multiple channels to engage consumers and deliver its value proposition, although challenges in revenue generation are evident due to increased consumer incentives and evolving market dynamics.

Cardlytics, Inc. (CDLX) - Business Model: Customer Segments

Financial institutions seeking consumer engagement

Cardlytics partners with financial institutions (FIs) to enhance consumer engagement via targeted marketing campaigns. As of September 30, 2024, Cardlytics reported approximately 166,409 monthly active users (MAUs), which reflects a 2% increase year-over-year, driven by organic growth from existing FI partners in the U.S. and U.K.. This user base is critical for FIs as they seek to leverage consumer data to improve customer retention and satisfaction.

The average revenue per user (ARPU) for this segment was $0.40 for the three months ended September 30, 2024, down from $0.49 during the same period in 2023. This decline indicates a shift in consumer incentives that FIs are willing to offer to attract and retain consumers.

Retail marketers looking to increase sales

Retail marketers comprise a significant customer segment for Cardlytics, as they utilize the platform to drive sales through targeted incentives. In the three months ended September 30, 2024, Cardlytics generated $61,110,000 in revenue from its platform, with $36,127,000 coming from the Cost per Served Sale (CPS) model. This model incentivizes marketers to pay based on the actual sales generated from their campaigns, highlighting the effectiveness of Cardlytics in delivering measurable results.

During the same period, Cardlytics also reported $23,196,000 in revenue from the Cost per Redemption (CPR) model, which reflects the growing trend of performance-based marketing strategies. The total billings to marketers for the three months were $111,958,000, indicating a slight decrease of 4% compared to the previous year, primarily due to a $6.9 million drop in sales to existing marketers.

Consumers interested in rewards and incentives

Consumers are a crucial segment for Cardlytics, as they are the end-users of the marketing campaigns run through the platform. In the three months ended September 30, 2024, Cardlytics reported $44,901,000 in consumer incentives, an increase from $37,425,000 in the same period the previous year. This increase reflects a growing engagement strategy that encourages consumer participation through attractive rewards.

The overall engagement of consumers is indicated by the 2% year-over-year growth in MAUs, which shows that more consumers are interacting with offers presented through Cardlytics' platform. With an emphasis on providing valuable incentives, Cardlytics aims to enhance consumer loyalty and drive repeat purchases, benefiting both marketers and FIs.

Customer Segment	Key Metrics	Revenue	Consumer Incentives
Financial Institutions	MAUs: 166,409	ARPU: $0.40	N/A
Retail Marketers	Billings: $111,958,000	Total Revenue: $61,110,000	N/A
Consumers	N/A	N/A	$44,901,000

Cardlytics, Inc. (CDLX) - Business Model: Cost Structure

Partner Share and Third-Party Costs

Partner share and other third-party costs are significant components of Cardlytics' cost structure. For the three months ended September 30, 2024, these costs were approximately $30.7 million, a decrease of $5.5 million (15%) compared to $36.1 million for the same period in 2023. For the nine months ended September 30, 2024, the costs totaled $94.5 million, down $14.2 million (13%) from $108.7 million in 2023. These costs represented 46% of revenue for both periods in 2024, compared to 49% in 2023.

Period	Partner Share Costs (in thousands)	% of Revenue
Three Months Ended September 30, 2024	$30,675	46%
Three Months Ended September 30, 2023	$36,144	46%
Nine Months Ended September 30, 2024	$94,476	46%
Nine Months Ended September 30, 2023	$108,698	49%

Delivery and Operational Expenses

Delivery costs, which include personnel expenses, hosting costs, and software expenses, amounted to $7.2 million for the three months ended September 30, 2024, rising from $6.3 million in the same period of 2023, reflecting a 13% increase. For the nine months ended September 30, 2024, delivery costs totaled $19.6 million, a modest increase of 5% from $18.7 million in 2023. Delivery costs excluding stock-based compensation were $19.6 million for the nine months ended September 30, 2024, with stock-based compensation accounting for $2.0 million.

Period	Delivery Costs (in thousands)	Stock-Based Compensation (in thousands)	Total Delivery Costs (in thousands)
Three Months Ended September 30, 2024	$7,155	$675	$7,830
Three Months Ended September 30, 2023	$6,345	$667	$7,012
Nine Months Ended September 30, 2024	$19,625	$2,039	$21,664
Nine Months Ended September 30, 2023	$18,651	$1,800	$20,451

Sales and Marketing Expenditures

Sales and marketing expenses for Cardlytics were $13.2 million for the three months ended September 30, 2024, slightly down from $14.2 million in the same period of 2023. For the nine months ended September 30, 2024, these expenses totaled $41.3 million, down from $43.3 million in 2023. This indicates a strategic focus on managing marketing expenses while still aiming to drive revenue.

Period	Sales and Marketing Expenses (in thousands)
Three Months Ended September 30, 2024	$13,163
Three Months Ended September 30, 2023	$14,161
Nine Months Ended September 30, 2024	$41,306
Nine Months Ended September 30, 2023	$43,314

Cardlytics, Inc. (CDLX) - Business Model: Revenue Streams

Fees from marketers based on ad performance

Cardlytics primarily generates revenue through its advertising platform using two main pricing models: Cost per Served Sale (CPS) and Cost per Redemption (CPR).

As of September 30, 2024, the revenue breakdown from these models is as follows:

Pricing Model	Three Months Ended September 30, 2024 (in thousands)	Three Months Ended September 30, 2023 (in thousands)	Nine Months Ended September 30, 2024 (in thousands)	Nine Months Ended September 30, 2023 (in thousands)
Cost per Served Sale	$36,127	$49,957	$116,664	$138,664
Cost per Redemption	$23,196	$20,842	$66,150	$58,305
Other Revenue	$1,787	$2,265	$4,531	$5,851
Total Cardlytics Platform Revenue	$61,110	$73,064	$187,345	$202,820

Subscription fees for the Bridg platform

The Bridg platform generates revenue through subscription fees for its cloud-based customer-data platform and related professional services. The revenue figures for the Bridg platform are:

Period	Bridg Platform Revenue (in thousands)
Three Months Ended September 30, 2024	$5,947
Three Months Ended September 30, 2023	$5,941
Nine Months Ended September 30, 2024	$16,956
Nine Months Ended September 30, 2023	$17,217

Bridg platform subscription contracts usually range from 6 to 60 months and are generally billed in advance on a monthly, quarterly, or annual basis. As of September 30, 2024, there are significant future performance obligations totaling $37.9 million, with $17.6 million expected to be recognized in the next twelve months.

Revenue from consumer incentives and promotions

Cardlytics also incurs costs related to Consumer Incentives, which are crucial for driving engagement and revenue growth. In the three months ended September 30, 2024, Consumer Incentives amounted to:

Period	Consumer Incentives (in thousands)
Three Months Ended September 30, 2024	$44,901
Three Months Ended September 30, 2023	$37,425
Nine Months Ended September 30, 2024	$123,260
Nine Months Ended September 30, 2023	$101,443

The increase in Consumer Incentives reflects higher engagement levels among users, which is expected to enhance overall revenue performance. The total revenue for Cardlytics, including Consumer Incentives, for the three and nine months ended September 30, 2024, was $67,057 thousand and $204,301 thousand respectively.

Updated on 16 Nov 2024

Resources:

1. Cardlytics, Inc. (CDLX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cardlytics, Inc. (CDLX)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Cardlytics, Inc. (CDLX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.