SEGMENTS

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

SEGMENTS

SEGMENTS

As of December 31, 2023, we have three operating segments: the Cardlytics platform in the U.S. and 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.

Revenue can be directly attributable to each segment. With the exception of deferred implementation costs, Partner Share and other third-party costs is also directly attributable to each segment. The accounting policies of each of our reportable segments are the same as those described in the summary of significant accounting policies.

The following table provides information regarding our reportable segments (in thousands):

	Year Ended December 31,
	2023		2022		2021
Cardlytics platform
Revenue	$	285,425	$	277,185	$	258,754
Minus: Adjusted Partner Share and other third-party costs(1)	149,907		154,204		137,079
Adjusted Contribution	$	135,518	$	122,981	$	121,675
Bridg platform
Revenue	$	23,779	$	21,357	$	8,362
Minus: Adjusted Partner Share and other third-party costs(1)	671		1,303		409
Adjusted Contribution	$	23,108	$	20,054	$	7,953
Consolidated
Revenue	$	309,204	$	298,542	$	267,116
Minus: Adjusted Partner Share and other third-party costs(1)	150,578		155,507		137,488
Adjusted Contribution	$	158,626	$	143,035	$	129,628

(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 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 revenue 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):

	Year Ended December 31,
	2023		2022		2021
Adjusted Contribution	$	158,626	$	143,035	$	129,628
Minus:
Deferred implementation costs(1)	—		—		3,785
Delivery costs	28,248		30,403		22,503
Sales and marketing expense	57,425		74,745		65,996
Research and development expense	51,352		54,435		38,104
General and administration expense	58,810		81,446		66,222
Change in fair value of contingent consideration	1,246		(128,174)		1,374
Impairment of goodwill and intangible assets	70,518		453,288		—
Acquisition, integration and divestiture (benefits) costs	(6,313)		(2,874)		24,372
Loss on divestitures	6,550		—		—
Depreciation and amortization expense	26,460		37,544		29,871
Total non-operating (income) expense	(968)		8,932		13,830
Loss before income taxes	$	(134,702)	$	(466,710)	$	(136,429)

(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):

	Year Ended December 31,
	2023		2022		2021
Revenue:
United States	$	291,420	$	275,256	$	246,315
United Kingdom	17,785		23,286		20,801
Total	$	309,204	$	298,542	$	267,116

	December 31,
	2023		2022
Property and equipment:
United States	$	3,244	$	4,453
United Kingdom	79		1,463
Total	$	3,323	$	5,916

Capital expenditures within the United Kingdom and India were $0.2 million, $0.5 million and $0.7 million during 2023, 2022 and 2021, 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 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 in treasury obligation funds and money market accounts with six financial institutions, which we believe are of high credit quality.

Marketers

As of December 31, 2023, we define a marketer as a customer who has a distinct contractual relationship with us, rather than aggregating by parent company. We believe this is a more accurate representation for how marketing budgets are managed at our customer level. This methodology change in our aggregation impacts how we calculate our revenue and accounts receivable concentration and we changed the prior year presentation to be in conformity.

Our revenue and accounts receivable are diversified among a large number of marketers segregated by both geography and industry. During the years ended December 31, 2023 and 2022 our top five marketers accounted for 15% of our revenue for each period, with no marketer representing over 10% during each of 2023 and 2022. During the year ended December 31, 2021 our top five marketers accounted for 27% of our revenue, with one marketer accounting for over 10% during 2021. As of December 31, 2023 and 2022, our top five marketers accounted for 19% and 18% of our accounts receivable, respectively, with no individual marketer representing over 10% as of the end of each period.