COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2026

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Other Commitments

We lease property and equipment under non-cancelable operating lease agreements. Refer to Note 6—Leases for further details. In September 2020, we issued the 2020 Convertible Senior Notes with an aggregate principal amount of $230.0 million bearing an interest rate of 1.00% due in September 2025. During the year ended December 31, 2024, we partially paid down the 2020 Convertible Senior Notes and issued the 2024 Convertible Senior Notes with an aggregate principal amount of $172.5 million bearing an interest rate of 4.25% due on April 1, 2029. In September 2025, we paid down the remaining $46.1 million on the 2020 Convertible Senior Notes. As of March 31, 2026, we had net borrowings of $35.1 million against the 2018 Line of Credit. Refer to Note 7—Debt and Financing Arrangements for further details.

In January 2024, we renewed a cloud hosting agreement guaranteeing aggregate spend to a cloud hosting provider of $17.0 million each year over a three-year period. During the second year of the agreement, we had $16.2 million of aggregated spend. As a result of the shortfall, we accrued $0.8 million within accrued expenses liability on our consolidated balance sheets as of December 31, 2025. During the three months ended March 31, 2026, we entered into a new five-year agreement which replaced the existing three-year agreement and remediated the shortfall from year two. As a result, we reversed the previously recognized $0.8 million expense.

Litigation and Guarantees

From time to time, we may become involved in legal actions arising in the ordinary course of business including, but not limited to, intellectual property infringement and collection matters. We make assumptions and estimates concerning the likelihood and amount of any potential loss relating to these matters using the latest information available. We record a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, we accrue the best estimate within the range. If no amount within the range is a better estimate than any other amount, we accrue the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, we disclose the nature of the litigation and indicate that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, we disclose the nature and estimate of the possible loss of the litigation. We do not disclose information with respect to litigation where an unfavorable outcome is considered to be remote or where the estimated loss would not be material.

Additionally, we have assumed certain indemnification agreements in conjunction with acquisitions with former directors and officers that may require us, among other things, to indemnify them against certain liabilities and litigation that may arise by reason of their previous status or service as directors, officers or employees prior to being acquired by Cardlytics. As part of the Bridg acquisition, the Company assumed certain indemnification obligations of that company's officers which may cover certain litigation in which a former officer and his co-defendants are involved. The former officer and co-defendants discussed an initial settlement of their litigation at the end of March 2026 and the allocated portion of the former officer, with whom we may have an obligation, was $5.3 million. Subsequent to March 31, 2026, we extended an offer to the former officer to settle certain obligations under the indemnification that may extend between us and the former officer for $1.3 million and release of any rights to claims by the Company on the D&O policy covering that officer. We evaluated the offer in accordance with ASC 460, Guarantees, and concluded that as of March 31, 2026 that a loss is probable, and the offer represents the most likely estimate of the amount to settle the obligation. The Company is not aware of a final settlement agreement between the former officer and the other parties, so we are not currently able to determine a range of possible outcomes in excess of the $1.3 million offer; however, based on the current allocation to the former officer we believe the maximum amount of the liability could be $5.3 million, and we believe that $4.0 million will be covered by the D&O policy. We have determined that this item is a recognized subsequent event related to the Bridg acquisition, that was since divested in the first quarter of 2026, and we have included the expected loss within discontinued operations.

We are not presently a party to any other legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.