Q1 2024 Cardlytics Inc Earnings Call
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Operator: Good day, and thank you for standing by. Welcome to the Cardlytics Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Nick Lynton.
Good day, and thank you for standing by.
Operator: Do the card Lytic earnings conference call at this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to probably start with one on your telephone you will then hear an automated message if I read your heritage ready.
Speaker Change: Your question. Please press star one.
Operator: Please be advised that today's conference is being recorded I would now.
Nick Lynton: They have the conference over to your first speaker today Nicholas.
Nick Lynton: Good evening, and welcome to the Cardlytics first quarter 2024 financial results call. Before we begin, let me remind everyone that today's discussion will be forward-looking based on our current assumptions, expectations, and beliefs, including expectations regarding our future financial performance and results, including for the second quarter of 2024, our capital structure, and various product initiatives and improvements. For a discussion of the specific risk factors that could cause our actual results to differ materially from today's discussion, please refer to the risk factors section of the company's 10-Q for the quarter ended March 31st, 2024, which has been filed with the FDA.
Nick Lynton: Good evening and welcome to the <unk> first quarter 2024 financial results call before we begin let me remind everyone that today's discussion will contain forward looking statements based on our current assumptions.
Nick Lynton: Patients and beliefs.
Nick Lynton: Expectations regarding our future financial performance and results, including for the second quarter of 2020 for our capital structure and various product initiatives and improvements.
Nick Lynton: For a discussion of the specific risk factors that could cause our actual results to differ materially from today's discussion. Please refer to the risk factors section of the company's 10-Q for the quarter ended March 31, 2024, which has been filed with the SEC.
Nick Lynton: Also during this call we will discuss non-GAAP measures of our performance GAAP financial reconciliations and supplemental financial information.
Nick Lynton: In the press release issued today and the 8-K that has been filed with the SEC, which you can find on the Investor Relations section of the card Linux Web site.
Nick Lynton: Today's call is available via webcast and a replay will also be available on our website.
Speaker Change: Many of US on the call today is card lytic CEO cream comes to money and CFO elect with Tcl.
Nick Lynton: Following their prepared remarks, we'll open the call to your questions with that said, let me turn the call over to Korea.
Nick Lynton: Also, during this call, we will discuss non-GAAP measures of our performance. Gap Financial Reconciliations and Supplemental Financial Information are provided in the press release issued today and the 8K that has been filed with the SEC, which you can find in the Investor Relations section of Cardlytics. Today's call is available via webcast, and a replay will also be available on our website. Joining us on the call today is Cardlytics CEO, Karim Temsamani, and CFO, Alexis DeSieno. Following their prepared remarks, we'll open the call to your questions. With that said, let me turn the call over to Karim.
Karim Temsamani: Good evening, and thank you for joining our Q1 2024 earnings call. On our last earnings call, I highlighted the progress we made in 2023 and early 2024. We rebalanced our cost structure, resolved the SRS dispute, invested in our tech and products, renegotiated partner agreements, and signed a new bank partnership. I also discussed how we could now fully focus on execution and growth, as well as address our capital needs. Since the call, we have made significant steps to remove capital concerns around the company.
Karim Temsamani: Good evening and thank you for joining our Q1 2024 earnings call.
Karim Temsamani: On our last earnings call I highlighted the progress we made in 2023 in early 2024.
Karim Temsamani: We rebalanced our cost structure.
Karim Temsamani: <unk> D S always dispute investing not taken products renegotiated partner agreements and signed a new bank partner.
Karim Temsamani: I'll also discuss how we could now fully focused on execution and growth as well as addressing our capital needs.
Karim Temsamani: Since the call we made significant steps to remove the capital concerns around the company.
Karim Temsamani: We raised $50 million in cash and repurchased the majority of our outstanding 2020 convertible notes at prices below par and issued new convertible notes not due until 2029, coupled with positive adjusted EBITDA results for full year 2023. And now, also in Q1, 2024, we believe we have fully addressed a balance sheet issue, ensuring our bank partners and advertisers have confidence to work with us in the long term. As we have completed these transactions and find ourselves on a path to sustain profitability, we are starting a new period for Cardlytics.
Karim Temsamani: We raised $50 million in cash and repurchased the majority of our outstanding 2020 convertible notes at prices below par and issued new convertible notes not due until 2029.
Karim Temsamani: Coupled with our positive adjusted EBITDA results for full year 2023, and now also in Q1 2024, we believe we have fully addressed our balance sheet issues.
Karim Temsamani: Turing, our bank partners and advertisers confidence to work with us in the long term.
Karim Temsamani: As we have completed these transactions and find ourselves on a path to sustained profitability. We are starting a new period for diabetics.
Karim Temsamani: We have slowly rebuilt the foundation of the business over the past 18 months, so we can now turn to our longer-term growth strategy. I am confident we have the technology, products, and the team to make significant growth a reality. While the full transition will take some more time, and there will be some noise along the way, we are making the necessary progress to ensure we finish 2024 with even stronger momentum. Our first quarter performance has us off to a good start in 2024.
Karim Temsamani: We have slowly rebuilt the foundation of the business over the past 18 months. So we can now turn to our longer term growth prospects.
Karim Temsamani: I am confident we have the technology products and the team to make significant growth a reality.
Karim Temsamani: While the full transition will take some more time and there will be some noise along the way we are making the necessity progress to ensure we finished 2024.
Karim Temsamani: Even stronger momentum.
Karim Temsamani: Our first quarter performance has us off to a good start to 2024, excluding entertainment, which we sold at the end of 2023 billings grew 12% over the first quarter of 2023, indicating strong interest from advertisers.
Karim Temsamani: Excluding entertainment, which we saw at the end of 2023, billings grew 12 percent over the first quarter of 2023, indicating strong interest from advertisers. Redemptions, which, as we said last earnings call, we view as a no star, were also up significantly. More redemptions mean more people are engaging with our program more frequently, which provides the best outcome for our banks, their customers, and our advertisers. And importantly, adjusted contribution grew 27% over the first quarter of 2023 when excluding entertainment.
Karim Temsamani: Redemptions, which as we said last earnings call, we view as our North Star.
Karim Temsamani: Also up significantly.
Karim Temsamani: More redemptions I mean more people are engaging with our programs more frequently which provides the best outcome for bags.
Karim Temsamani: Customers and advertisers.
Karim Temsamani: And importantly, adjusted contribution grew 27% over the first quarter of 2023, when excluding and statements.
Karim Temsamani: Adjusted contribution is an important metric that reflects our business performance as it is the money we keep from our billings after paying out customer rewards and bank revenue share. Additionally, driven by the strong top-line performance, we finished the quarter with $0.2 million of adjusted EBITDA. This is the first time in our history that we have been positive in the first quarter, which is a seasonally lower billings quarter.
Karim Temsamani: Adjusted contribution is an important metric that reflects our business performance.
Karim Temsamani: There is the money we keep for my billings after paying out customer rewards and bank revenue share.
Karim Temsamani: Additionally, driven by the strong top line performance, we finished the quarter with zero point $2 million of adjusted EBITDA.
Karim Temsamani: This is the first time in our history that we have been positive in the first quarter, which is seasonally lower billings quarter.
Karim Temsamani: Alexis will provide further details on all these financial metrics later in the call. We believe this momentum will continue in the second quarter. But bigger picture, we have much higher growth ambitions for the business and believe we can achieve sustained higher growth rates in the longer term. Let me explain.
Karim Temsamani: Alexis will provide further details on all of these financial metrics later in the call.
Karim Temsamani: We believe this momentum will continue in the second quarter, but bigger picture, we have much higher growth ambitions for the business and believe we can achieve sustained higher growth rates longer term.
Speaker Change: Let me expand.
Karim Temsamani: First, the macro environment. We benefit from market tailwinds as cookie-less identity resolution becomes essential for any business, and Cardlinked Offers become table stakes for our partners. As opposed to cookies, we use purchase data to provide precise targeting, insights, and measurement for businesses looking to reach new customers, better understand the existing unknown customers, and increase frequency from their loyal customers. It's also clear that rewards are increasingly vital to our banking partners with continued regulatory pressure on traditional card benefit programs.
Karim Temsamani: First the macro environment.
Karim Temsamani: We benefit from market tailwind as cookie less identity resolution becomes essential for any business and card linked offers become table Stakes for our partners.
Karim Temsamani: As opposed to cookies, we use purchase data to provide precise targeting insights and measurement for businesses looking to reach new customers better understand their existing unknown customers and increase frequency from the loyal customers.
Karim Temsamani: It is also clear that rewards are increasingly vital to our banking partners. We've continued regulatory pressure on traditional card benefit programs.
Karim Temsamani: And that loyalty is more important than ever for retailers who look to retain customers in the face of rising costs. Second, our investments in tech and sales. Our recent upgrades and progress with our Ad Decisioning Engine, or ADE, have laid the groundwork for ongoing innovation at a more agile pace than ever before. For example, we are currently building a dynamic marketplace, which will allow us to provide flexible campaign durations, meet campaign optimizations, more timely reporting, and dynamic pricing based on offer activation.
Karim Temsamani: And that loyalty.
Karim Temsamani: Is more important than ever for retailers, who look to retain customers in the face of rising costs.
Karim Temsamani: Second our investments intake and sales.
Karim Temsamani: Our recent upgrades in progress with our AD decisioning engine or <unk>.
Karim Temsamani: Have laid the groundwork for ongoing innovation at a more agile pace than ever before.
Karim Temsamani: For example, we are currently building a dynamic marketplace, which will allow us to provide flexible campaign durations meet campaign optimization more timely reporting and dynamic pricing based on offer activations.
Karim Temsamani: These improvements are critical to delighting advertisers and better aligning our US business to the engagement-centric pricing model that is driving our growth internationally. We are not only investing in our tech but have also started to reinvest in our agency team and our account management teams to better support more advertising clients. Investors will see bumpiness in our short-term expense numbers, but we are confident that we are making the right investments to exit 2024 with strong momentum. Third, redemptions and engagement.
Karim Temsamani: These improvements are critical to delighting advertisers and better aligning our U S business to the engagement centric pricing model that is driving our growth internationally.
Karim Temsamani: We are not only investing in our tech, but have also started to reinvest in our agency team.
Karim Temsamani: <unk> management teams to better support more advertising clients.
Karim Temsamani: Investors will see bumping is in a short term expense numbers, but we are confident that we are making the right investments to exit 2024 with strong momentum.
Karim Temsamani: Okay.
Karim Temsamani: Third redemptions and engagement.
Karim Temsamani: We continue to make technology upgrades across our network, and we're seeing ongoing signs of progress towards a North Star of driving redemptions and engagement. While we still have a long way to go in achieving our aspirations, the trends we discussed in Q4 remain consistent in Q1, as we saw a 30 percentage point difference in redemptions between customers of banks on ADE versus customers of banks not on ADE.
Karim Temsamani: We continue to make technology upgrades across our network, we're seeing ongoing signs of progress towards the north star of driving redemptions and engagement.
Karim Temsamani: Well, we still have a long way to go in achieving our aspirations. The trends we discussed in Q4 remained consistent in Q1 as we saw a 30 percentage point difference in redemptions between customers of banks on AE versus customers of banks not on <unk>.
Karim Temsamani: We are putting the right offers in front of the right users faster, and these offers are driving larger basket sizes and incremental purchases. As a result, we are consuming budgets more quickly and delivering more value within a campaign, including more rewards to consumers. While we are not currently billing for all this added value due to the campaign budget, it signals the capacity and potential for adjusted contribution growth in the future. Improving offer quality and increasing consumer redemptions is a trend we expect to continue, which will significantly increase the scale of outcomes we will deliver to our clients and partners.
Karim Temsamani: We are putting the right offers in front of the right users faster and these offers are driving larger basket sizes and incremental purchases.
Karim Temsamani: As a result, we are consuming budgets more quickly and delivering more value within our campaign, including more rewards to consumers.
Karim Temsamani: We are not currently billing for all this added value due to campaign budget it signals the capacity and potential for adjusted contribution growth in the future.
Karim Temsamani: Improving offer quality and increasing consumer redemptions is a trend we expect to continue which will significantly increase the scale of outcomes, we will deliver to our clients and partners.
Karim Temsamani: Fourth scale.
Karim Temsamani: Scale is crucial to competing for bigger budgets in advertising, and we are growing our network, including by actively working towards onboarding our newest large bank partners. Marketers are investing in the few platforms that deliver the most meaningful and measurable outcomes, and growing a network ensures clients benefit from the reach they need to scale their campaigns. Recently, we are seeing strong growth potential from our global investments as our international business grew over 50% year on year in Q1.
Karim Temsamani: Rail is crucial to competing for bigger budgets in advertising and we are growing our network, including by actively working towards Onboarding, our newest large bank partner.
Karim Temsamani: Marketers are investing in the few platforms that deliver the most meaningful and measurable outcomes and growing our network insurance clients benefit from the reach they need to scale they campaigns.
Karim Temsamani: Italy, we are seeing strong growth potential.
Karim Temsamani: Our global investments as our international business grew over 50% year on year in Q1, we.
Karim Temsamani: We believe that we will keep similar growth levels for the next several quarters, especially as we look to increase our presence internationally. 5th Bridge By leveraging its unique and exclusive identity resolution capabilities, Bridge is on a path to establishing itself as the new keys in a cookie-less advertising world.
Karim Temsamani: We believe that we will keep similar growth levels for the next several quarters, especially as we look to increase our presence internationally.
Karim Temsamani: Fifth bridge.
Karim Temsamani: By leveraging its unique and exclusive identity reservation capabilities reach is on a path to establishing itself as the new keys in a cookie less advertising world.
Karim Temsamani: A logical growth path to increasing the total addressable market means continuing to enhance the customer data platform product and pushing into new solution areas such as retail media, which is already responsible for 29% of digital spend in the US. We launched Ripple, our retail media and data network, to further establish a presence in the retail media market and deliver growth. And we have a line of sight to onboarding 100 million individual shopper profiles by year end.
Karim Temsamani: A logical growth path to increasing our total addressable market means continuing to enhance our customer data platform product and pushing into new solution areas, such as retail media, which is already responsible for 29% of digital AD spend in the U S.
Karim Temsamani: We launched triple our retail media and data network to further establish our presence in the retail media market and deliver growth and we have line of sight to Onboarding 100 million individuals shopper profiles by year end.
Karim Temsamani: This would make Ripple one of the largest retail media networks in the country. To further expand our retail media network solution, we're also working to allow brands to use the Ripple technology to export and access targeted audience segments, which will allow them to target customers through integrations with major DSPs, such as the Trade Desk and Live Ramp. On the retail media network front, we recently launched initial test campaigns with Nuke's markets, where Danone and Kraft targeted specific audiences using breaches data on individual shopping preferences at the SKU level and the report technology. The initial campaigns showed better performance on most indicators of campaign performance against benchmark averages.
Karim Temsamani: This would make ripple one of the largest retail media networks in the country.
Karim Temsamani: To further expand our retail media network solution. We are also working to our brands.
Karim Temsamani: To use the repo technology to export and access targeted audience segments, which will allow them to target customers through integrations with major DSP, such as the trade desk and live rep.
Karim Temsamani: On the retail media network front, we've recently launched initial test campaigns with nukes markets, where danone and craft targeted at specific audiences using richest data on individuals shopping preference at the SKU level and the repo technology.
Karim Temsamani: The initial campaigns showed better performance on most indicators of campaign performance against benchmark averages.
Karim Temsamani: The success prompted these brands to launch a second round of campaigns with plans to expand to more retailers in the future. This demonstrates the strong performance and demand for audiences and segmentation. With our capital needs addressed through our $50 million raise and new convertible notes not due until 2029, we are focused on higher growth rates. Our Q1 results and projected Q2 results continue to give us confidence. We have strong tailwinds behind us, and we have scale that allows us to provide the best breadth and depth of offers for our banks and measurable outcomes for our advertisers. We are rapidly innovating a platform with major developments on the way, including the dynamic marketplace.
Karim Temsamani: The success prompted these brands to launch a second round of campaigns with plans to expand to more for retailers in the future.
Karim Temsamani: This demonstrates the strong performance and demand for our audiences and segmentation.
Karim Temsamani: We've got capital needs addressed through our $50 million raise and new convertible notes not June till 2029, we are focused on higher growth rates.
Karim Temsamani: Our Q1 results and projected Q2 results continued to give us confidence.
Karim Temsamani: We have strong tailwind behind us and we have scale that allows us to provide the best breadth and depth of our first for our banks and measurable outcomes for advertisers.
Karim Temsamani: We are rapidly innovating our platform with major developments underway, including the dynamic marketplace. We are beginning to drive deeper engagement and are starting to see the results of our changes.
Karim Temsamani: We are beginning to drive deeper engagement and are starting to see the results of our changes. We are also making the right short-term investments to drive longer-term growth and exit 2024 with strong momentum. And our bridge business is continuing to show signs of progress, especially given our progress with Ripple, which sets us up to be one of the largest retail media networks in the country. It is an exciting new period for Cardlytics. Now, I'll hand it over to Alexis to discuss our financial report.
Alexis: We are also making the right short term investments to drive longer term growth and exit 2024 with strong momentum.
Alexis: And our bridge business is continuing to show signs of progress, especially given our progress with repo, which sets us to be one of the largest retail media networks in the country.
Alexis: It is an exciting new period for cosmetics.
Karim Temsamani: Now I'll hand, it over to Alexis to discuss our financial results.
Alexis DeSieno: Thank you, Karim. We are pleased with our financial results for the first quarter, driven by strengths and redemptions, which indicates that our product initiatives are working, as well as the material improvement to our balance sheet. For the first quarter, we performed in line with our guidance and delivered the third consecutive quarter of positive adjusted EBITDA, and we saw meaningful acceleration in billings from Q4. Given Q1 is a seasonally weak quarter for the company, this result is a testament to the work we have done to re-engineer our costs. Now, I'm turning to our first quarter results.
Alexis: Thank you Carolyn.
Alexis DeSieno: We are pleased with our financial results for the first quarter driven by strength in redemptions, which indicates that our product initiatives are working as well as the material improvement to our balance sheet for.
Alexis DeSieno: For the first quarter, we performed in line with our guidance and delivered the third consecutive quarter of positive adjusted EBITDA and we saw a meaningful acceleration in billings from Q4.
Alexis DeSieno: Given Q1 is a seasonally weak quarter for the company. This result is a testament to the work we have done to reengineer our cost base.
Alexis DeSieno: My comments will be year-over-year comparisons for the first quarter, excluding entertainment, which we sold in December 2023 unless stated otherwise in Q1. Billings reached $105.2 million, a 12% increase. On a category basis, we continue to see strengths in travel and everyday spend.
Alexis DeSieno: Now turning to our first quarter results my comments will be year over year comparisons for the first quarter, Excluding entertainment, which we sold in December 2023, unless stated otherwise.
Alexis DeSieno: In Q1.
Alexis DeSieno: Billings reached $105 2, million% to 12% increase.
Alexis DeSieno: On a category basis, we continue to see strength in travel and everyday spend.
Alexis DeSieno: The restaurant category also grew once again this quarter after rebuilding our sales. More than half of our growth came from our top accounts spending more with us, winning back key accounts, and reducing prices. Our North Star redemptions, which drive consumer incentives on our income statement, were up 20% to $37.6 million. Revenue, which is Billings Net of Consumer Incentives but before partner share, was $67.6 million, up 8%. As we continue to refine ADE, we are getting more effective at driving redemptions, and we believe redemptions should be seen as a leading indicator of demand.
Alexis DeSieno: The restaurant category also grew once again this quarter after rebuilding our sales team.
Alexis DeSieno: More than half of our growth came from our top accounts spending more with us winning back key accounts and reducing churn.
Alexis DeSieno: Our Northstar redemptions, which drives consumer incentives on our income statement were up 20% to $37 6 million.
Alexis DeSieno: Revenue, which is billings net of consumer incentives for our partners share was $67 6 million up 8%.
Alexis DeSieno: As we continue to refine ADP, we are getting more effective at driving redemptions and we believe prevention should be seen as a leading indicator of demand.
Alexis DeSieno: In the short term, we may see outsized rewards as engagement accelerates beyond top-line growth due to our targeting and ranking improvements. We feel good about this dynamic, especially given adjusted contribution was $37.1 million, up 27%. Margin increased from 47% to 55% as a percentage of revenue and 31% to 35% as a percentage of billing. We are keeping more of every dollar we bill, even while redemptions are accelerating.
Alexis DeSieno: In the short term, we may see outsized rewards as engagement accelerates beyond topline growth due to our targeting and ranking improvements.
Alexis DeSieno: We feel good about this dynamic, especially given adjusted contribution was $37 1 million up 27%.
Alexis DeSieno: Margin increased from 47% to 55% as a percentage of revenue and 31% to 35% as a percentage of billings.
Alexis DeSieno: We are keeping more of every dollar we bill even while redemptions are accelerating.
Alexis DeSieno: About half of the operating leverage we are seeing is driven by our partner share renegotiations, which annualize in June, with the rest driven by mixed shifts between banks. We believe adjusted contribution is a better long-term indicator for our business, rather than gap revenue. Turning briefly to segment results.
Alexis DeSieno: About half of the operating leverage we are seeing is driven by our partners share renegotiations, which annualize in June with the rest driven by mix shift between base.
Alexis DeSieno: We believe adjusted contribution is a better long term indicator for our business rather than GAAP revenue.
Alexis DeSieno: Turning briefly to segment results.
Alexis DeSieno: U.S. revenue increased 6 percent. The UK continued to show very strong double-digit growth at 56%, partially due to our auto-enrollment program with Lloyd. As we mentioned, auto-enrollment means customers no longer have to opt into our offers program, which has allowed our UK sales team to sell and deliver larger budgets. We expect to see very strong double-digit growth in the U.K. in Q2 as a result of auto-enrollment, new leadership, and our newest U.K. bank partner, Monzo, which is now live.
Alexis DeSieno: U S revenue increased 6%.
Alexis DeSieno: UK continued to show very strong double digit growth at 56%, partially due to our auto enrolment program with Lloyd's.
Alexis DeSieno: As we mentioned auto enrollment means customers no longer have to opt into our offers program, which has allowed our UK sales team to sell and deliver larger budgets.
Alexis DeSieno: We expect to see very strong double digit growth in the UK in Q2, as a result of the auto enrollment new leadership and our newest <unk>.
Alexis DeSieno: <unk> Bank partner, Monzo, which is now live.
Alexis DeSieno: Notably, our UK business is primarily on a cost per redemption pricing model, and we believe the US business will begin to see the benefits of shifting to similar models, which we plan to do later this year, albeit on a larger scale. Bridge revenue grew 1% due to the expansion of existing contracts and offset by the loss of a single existing customer. The redemption and partnership dynamics we've discussed do not impact bridge, so revenue is the key metric we use to assess the performance of this.
Alexis DeSieno: Notably our U K business is primarily on a cost per redemption pricing model and we believe the U S business will begin to see the benefits of shifting to similar models, which we plan to do later this year, albeit on a larger base.
Alexis DeSieno: First revenue grew 1% due to the expansion of existing contracts and offset by the loss of a single existing customer.
Alexis DeSieno: The redemption and partners your dynamics, we've discussed do not impact bridge. So revenue is the key metric we use to assess the performance of this business.
Alexis DeSieno: In Q1, we invested in foundational elements, including product design, engineering architecture, and go-to-market. We continue to grow the profiles in our database, and we are actively onboarding top regional grocers with a line of sight to 100 million profiles, and we believe we have the scale to be relevant to CPG customers.
Alexis DeSieno: In Q1, we invested in foundational elements, including product design engineering architecture and go to market resource thing.
Alexis DeSieno: We continue to grow their profiles in our database and we are actively onboarding top regional grocers with a line of sight to $100 million profiles and we believe we have the scale to be relevant to CPG customers.
Alexis DeSieno: Adjusted EBITDA was $0.2 million, and as Karim said, this was the first time in the company's history for adjusted EBITDA to be positive in the first quarter. However, business operating expenses came in lower than expected at $36.8 million. However, operating expenses should normalize in the mid to low 40s, given the investments we are making in our technology, product, and sales organizations in support of key growth initiatives. Operating cash flow was negative $17.6 million. The first quarter is always seasonally low from a cashless standpoint due to annual bonus payments, interest payments, and timing of accounts.
Alexis DeSieno: Adjusted EBITDA was <unk> 2 million and as Karim said, the first time in the Companys history for adjusted EBITDA to be positive in the first quarter.
Alexis DeSieno: Business operating expenses came in lower than expected at $36 8 million.
Alexis DeSieno: However, operating expenses should normalize in the mid to low <unk> given the investments we are making in our technology product and sales organizations in support of key growth initiatives.
Alexis DeSieno: Operating cash flow was negative $17 6 million.
Alexis DeSieno: The first quarter is always seasonally low from a cash flow standpoint, due to annual bonus payments interest payments and timing of accounts receivable.
Alexis DeSieno: Last quarter, we introduced a new metric, free cash flow. In Q1, free cash flow was negative $22.4 million. However, we expect free cash flow to be positive in the second half of 2020. On the balance sheet, we ended Q1 with $97.8 million in cash and cash equivalents, and we had $29.5 million of unused available borrowings under our line of credit. As a reminder, we paid $20 million at the end of January as part of our settlement with SRS, which was offset by cash received from the $50 million equity offering in March.
Alexis DeSieno: Last quarter, we introduced a new metric free cash flow.
Alexis DeSieno: In Q1 free cash flow was negative $22 $4 million. However, we expect free cash flow to be positive in the second half of 2024.
Alexis DeSieno: We also repaid the $30 million draw on our line of credit. In addition, we repurchased $184 million of our outstanding 2020 convertible notes at prices below par value, partially via the issuance of $172.5 million of new convertible notes now due in 2029. Through these transactions and the repayment of the line of credit, we have reduced the amount of debt that would have been considered current as of September 2024 to $46 million from $260 million absent other capital transactions.
Alexis DeSieno: On the balance sheet, we ended Q1 with $97 $8 million in cash and cash equivalents, and we had $29 $5 million of unused available borrowings under our line of credit.
Alexis DeSieno: As a reminder, we paid $20 million at the end of January as part of our settlement with Srs, which was offset by cash received from the $50 million equity offering in March.
Alexis DeSieno: We also repaid the $30 million draw on our line of credit in April.
Alexis DeSieno: In addition, we repurchased $184 million of our outstanding 2020 convertible notes at prices below par value par.
Alexis DeSieno: Really the other issuance of $172 5 million of new convertible notes now deal in 2029.
Alexis DeSieno: Through these transactions and the repayment of the line of credit we have reduced the amount of debt that would have been considered current as of September 2000, $24 million to $46 million from $260 million absent other capital transactions.
Alexis DeSieno: The convertible transaction settled on April 1st and will be reported in our Q2 Finance. Lastly, MAUs were $168.5 million and ARPU was $0.40 for the first quarter, an increase of 7% and a decrease of 2%, respectively. The increase in MAUs was driven primarily by net new MAUs, and the decrease in ARPU was driven by a 20% increase in reduction.
Alexis DeSieno: The convertible transaction settled on April one and will be reported in our Q2 financials.
Alexis DeSieno: Lastly, and then use were $168 5 million and <unk> was <unk> 40 for the first quarter, an increase of 7% and a decrease of 2% respectively.
Alexis DeSieno: The increase in <unk> was driven primarily by net new and used and the decrease of <unk> was driven by 20% increase in redemptions.
Alexis DeSieno: Turning to our Q2 outlook. For Q2, we expect billings between $115 and $126 million, revenue between $73 and $81 million, Adjusted contribution between $40 and $45 million, and adjusted EBITDA between negative $3 million and positive $1 million. Our billings guidance represents 7-17% growth, excluding the sale of enterprises. I'd like to provide some additional color on what we are seeing in the top line.
Alexis DeSieno: Turning to our Q2 outlook.
Alexis DeSieno: For Q2, we expect billings between 115 at $126 million.
Alexis DeSieno: Revenue between 73 and $81 million.
Alexis DeSieno: Adjusted contribution between 40% and $45 million.
Alexis DeSieno: Adjusted EBITDA between negative $3 million and positive $1 million.
Alexis DeSieno: Our billings guidance represents 7% to 17% growth excluding the sale of entertainment.
Alexis DeSieno: I'd like to provide some additional color on what youre seeing in the topline.
Alexis DeSieno: Billing continues to be driven by success in the everyday spend and travel categories, and our larger clients are spending more with us. We are focusing on getting new brands onto the platform and winning back lapsed brands. With these brands, we are seeing pilot programs convert into larger budgets based on strong campaign performance. We are expecting another quarter of elevated redemptions as we continue to see the benefits of improved targeting and redemptions.
Alexis DeSieno: Billings continues to be driven by success in the everyday spend and travel categories.
Alexis DeSieno: And our larger clients are spending more with us.
Alexis DeSieno: We are focusing on getting new brands onto the platform and winning back lapsed brands.
Alexis DeSieno: With these brands, we are seeing pilot programs convert into larger budgets based on strong campaign performance.
Alexis DeSieno: We are expecting another quarter of elevated redemptions as we continued to see the benefits of improved targeting and ranking.
Alexis DeSieno: Adjusted contribution is expecting 19% growth excluding entertainment at the midpoint of our guidance. As previously stated, we expect operating expenses to increase to the mid-40s, excluding stock-based compensation, due to the investments we are making in our technology, product, and sales team, and in support of key growth initiatives like dynamic marketplace and bridge. We continue to expect double-digit billings growth for the full year 2024 and to be operating cash flow positive on a full year basis, with both accelerating as we enter 2025. We are focused on our North Star, Redemptions, and we expect to continue to drive consumer engagement, top-line growth, and full-year positive adjusted EBITDA. Now I'll turn it back to the operator.
Alexis DeSieno: Adjusted contribution is expecting 19% growth excluding entertainment at the midpoint of our guidance.
Alexis DeSieno: As previously stated we expect operating expenses to increase to the mid <unk>, excluding stock based compensation due to the investments we are making in our technology product and sales teams and in support of key growth initiatives like dynamic marketplace and bridge.
Alexis DeSieno: We continue to expect double digit billings growth for the full year 2024 and to be operating cash flow positive on a full year basis with both accelerating as we enter 2025.
Alexis DeSieno: We are focused on our north star redemptions, and we expect to continue to drive consumer engagement topline growth and full year positive adjusted EBITDA.
Speaker Change: Now I'll turn it back to the operator for questions.
Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A list. Our first question comes from Kyle Peterson at Needham.
Speaker Change: Thank you at this time, we will conduct a question and answer session.
Operator: A reminder to ask a question you will need to press star one on your telephone at my figure to be announce to withdraw. Your question. Please press star one again, please stand by while the compound the Q&A roster.
Operator: Our first question comes from Cal Peter.
Operator: <unk>.
Kyle David Peterson: Hey, good afternoon, guys. Thanks for taking the questions. I wanted to start off, I guess, on some of the billing trends you guys saw throughout the quarter. I guess, just given the timing of when you guys are kind of reporting towards the end of the first quarter, it was a little surprise to see you guys be a little closer to the low end of the guidance. So, did you guys have any, like, larger problems, whether it was, like, cancellations or delays or anything that you saw in the last two weeks of March?
Kyle David Peterson: Hey, good afternoon, guys. Thanks for taking the questions.
Kyle David Peterson: I wanted to start off.
Kyle David Peterson: I guess on some of the billings trends you guys saw throughout the quarter.
Kyle David Peterson: Just given the timing of I guess youre kind of reporting.
Kyle David Peterson: Towards the end of the first quarter was all surprise you guys.
Kyle David Peterson: Hello closer to the low end of the guidance. So did you guys have any any like larger whether it was like cancellations or delays or anything that you saw in the last two weeks of March.
Alexis DeSieno: Yeah, thanks for the question. Look, we're still growing 12% on the top line, and our adjusted contribution was 27%. So, this is pretty good performance for a historically weak quarter and a pretty good acceleration from Q4, which was less than 5% growth. But to answer your question more specifically, yes, we're making a lot of changes to our network and our tech all at the same time. And some of our partners are also making changes to their UX, which you've probably seen.
Speaker Change: Yes, thanks for the question.
Alexis DeSieno: Look we're still growing 12% on the top line and our adjusted contribution was 27% so.
Alexis DeSieno: This is pretty good performance on a historically weak quarter.
Alexis DeSieno: Good acceleration from Q4, which was less than 5% growth, but to answer your question more specifically.
Alexis DeSieno: Yes, we're making a lot of changes to our network and our tech all at the same time in some of our partners are also making changes to their you asked which you've probably seen.
Alexis DeSieno: And that's all leading to higher engagement, which is why I say that rewards are really a leading indicator of demand. And so, as Karim said in his remarks, we're consuming budgets more quickly, which is driving those higher redemptions. But in some cases, we can't bill for all of that demand yet. And we also had a few campaigns that didn't go through. So, again, we're happy with the adjusted contribution growth of 27%, and Adjusted EBITDA is still positive, even while we're paying out more rewards than we expected.
Alexis DeSieno: Not all leading to higher engagement, which is why I say that rewards are really a leading indicator of demand.
Alexis DeSieno: And so as <unk> said in his remarks, we're consuming budgets more quickly which is driving this higher redemptions, but in some cases, we cant bill for all of that demand yet and we also had a few campaigns that didn't come through so again, we're happy with the adjusted contribution growth of 27%.
Alexis DeSieno: Adjusted EBITDA.
Alexis DeSieno: Still being positive, even though we're paying out more rewarding than we expected.
Alexis DeSieno: Okay, that's helpful. And then, I guess just a follow up on some of the moving pieces with the higher redemption rates. Is the 1Q consumer incentives, kind of as a percentage of billings, is that a good proxy to use going forward? Or are redemption rates increased? Should we expect that percentage to continue to go up, just trying to get some sense of kind of what the mix and redemption rates are gonna be on the P&L in the near term? Yeah.
Alexis DeSieno: Okay.
Alexis DeSieno: That's helpful and then I guess, just a follow up on.
Alexis DeSieno: On some of.
Alexis DeSieno: The moving pieces with the higher redemption rates.
Alexis DeSieno: Is the one key you.
Alexis DeSieno: Consumer incentives.
Alexis DeSieno: Kind of as a percentage of billings is that a good proxy to use going forward or is.
Alexis DeSieno: Redemption rates increase should we expect.
Alexis DeSieno: That that percentage to continue to go up just trying to get some.
Alexis DeSieno: So is that kind of what the mix in <unk>.
Alexis DeSieno: <unk> rates, it's going to be on the P&L in the near term.
Alexis DeSieno: Yeah, at least for Q2, we're starting to be similar, as you can see from the guidance ranges. You know, continuing to focus on our North Star of Redemptions is really the main focus right now, and those tech initiatives are really paying off, so we, you know, continue to convert accounts to our new pricing models, and excited to have this increased engagement that is higher than we've typically seen. And then the other portion of that is from the renegotiation of certain bank contracts, which we'll annualize in June, so we'll continue to see similar margins, but the growth rate may not be quite as high as we annualize that, and that starts in Q3, obviously.
Speaker Change: Yes at least for Q2, we're expecting it to be similar as you can see from the guidance ranges.
Alexis DeSieno: Continuing to focus on our North Star of redemptions is really the main focus right now and those type of initiatives are really paying off. So we continue to convert accounts to our new pricing models and excited to have this increased engagement that is higher than we've typically seen in the other portion of that is from.
Alexis DeSieno: The renegotiation of certain bank contracts, which will annualize in June so you'll continue to see similar margins, but the growth rate may not be quite as high as we annualize that and that starts in Q3, obviously.
Kyle David Peterson: Okay, I'll stop while I hop back in queue. Thank you. Thank you. One moment for our next question.
Alexis DeSieno: Okay.
Speaker Change: That's helpful I'll hop back in queue. Thank you.
Kyle David Peterson: Thank you one moment for our next question.
Jacob Kreyer: Our next question comes from Jacob Kreyer and Craig Howell.
Kyle David Peterson: Our next question comes from Jason <unk> at Craig Hallum.
Jacob Kreyer: Thank you. I just want to focus a little bit more on the redemptions that we're talking about. Historically, if we look at the model, the proportion of incentives has been in a pretty tight band. But it moved out of that band in this quarter. You're optimistic that redemptions are the positive leading indicator. I'm curious how that number moves so much in a quarter and if we need to rethink the ratio of redemption versus billing going forward.
Jacob Kreyer: Thank you.
Jacob Kreyer: I just wanted to focus a little bit more on the <unk>.
Jacob Kreyer: The redemptions that we're talking about.
Jacob Kreyer: Historically, if we look at the model the proportion of incentives has been in a pretty tight band that moved out of that band in this quarter.
Jacob Kreyer: Youre optimistic that redemption is the positive leading indicator I'm just I'm curious at how that number moves so much in a quarter and if we need to rethink the ratio of redemption versus billings going forward.
Alexis DeSieno: Yes, a similar answer to prior. I think for Q2, at least, I would consider a similar model of redemptions to billings as a percentage. So, this is really a testament to the product changes we're making on ADE, better targeting, and optimization of our ranking capabilities. And so, as people are making changes to the UX in terms of our bank partners, the widget moving up, this is really driving higher engagement. It's all good for the future, but it may take a while for us to get those budgets to match the engagement that we're seeing.
Speaker Change: Yes, it's a similar answer to prior I think for Q2 at least I would consider similar model.
Alexis DeSieno: Redemptions to billings as a percentage.
Alexis DeSieno: So this is really a testament to the product changes, we're making on AE better targeting.
Alexis DeSieno: Optimization of our ranking capabilities.
Alexis DeSieno: And so as you know.
Alexis DeSieno: People are making changes to the U S in terms of our bank partners.
Alexis DeSieno: Thanks.
Alexis DeSieno: This is really driving higher engagement, it's all good for the future, but it may take a while for us to get those budgets.
Alexis DeSieno: Two to match the engagement that we're seeing.
Jacob Kreyer: Okay, and if you're consuming budgets at a more rapid pace, I think you've talked about that a couple of times, it would seem that if you're driving successful campaign performance, you're, you know, delivering on those campaigns at a more rapid pace. It would seem a pretty easy argument to go back to those marketers and be able to fill the budget, you know, after those campaigns end more quickly. Am I wrong to think that?
Alexis DeSieno: Okay.
Jacob Kreyer: If youre consuming budgets at a more rapid pace I think you talked about that a couple of times. It would seem that if you're driving successful campaign performance youre.
Jacob Kreyer: Delivering on those campaigns at a more rapid pace.
Jacob Kreyer: It would seem a pretty easy argument to to go back to those marketers and be able to still budgets.
Jacob Kreyer: After those campaigns and more quickly and my wrong to think that no we agree.
Alexis DeSieno: No, we agree. Obviously, the, you know, Q1 We had low transparency into this, but we now are understanding how our models are working better. I think we're investing in our sales team significantly more to try to capture more of these budgets and focus more on selling and less on account management. So, you know, we are investing in the sales team and also in the agency to capture more budgets as we're opening up more engagement for our brands in general. Karim, I don't know if you have anything you want to add.
Karim Temsamani: Obviously the Q1.
Karim Temsamani: We had low transparency into this but.
Karim Temsamani: We now enter understanding how our models are working better I think we're investing in our sales team significantly more to try to capture more of these budgets and focus more on selling and less on account management. So.
Karim Temsamani: We are investing in the sales team.
Karim Temsamani: And also on agency to capture more budgets as we're opening up more engagement.
Karim Temsamani: Rents in general cream I don't know if you have anything you want to add.
Karim Temsamani: No, I mean, this is a good question, Jason, and clearly, you know, it's a very positive thing that we're driving more engagement in the program, which is driving more redemptions. And it's obviously good for our bank partners. It's good for advertisers. There is a timing difference here with regard to our teams being able to go back and get the budget in the timeframes that we're talking about. But in the longer term, it's very healthy for the program.
Karim Temsamani: No I mean this is a good question, Jason and clearly.
Karim Temsamani: It's a very positive thing that we're driving more engagement in the program, which is driving more redemptions. It's obviously good for our bank partners. It's good.
Karim Temsamani: There is a timing difference here with regards to our teams being able to go back and get the budgets in the timeframe that were talking about the longer term, it's very healthy for the program.
Jacob Kreyer: On the surface, it kind of seems like you're driving more redemption, but are you driving more redemptions at a greater cost to the model? So that's the part of this that I'm kind of struggling with. I'm struggling to gain... an understanding of that just a near-term issue or is it a longer-term evolution?
Karim Temsamani: Okay.
Jacob Kreyer: Surface it kind of seems like you're driving more redemptions, but youre driving more redemptions at a greater cost to the model.
Jacob Kreyer: So that's the part of this that I'm kind of struggling with.
Jacob Kreyer: I'm struggling to gain.
Jacob Kreyer: And understanding of that just a near term issue or is it a longer term evolution.
Karim Temsamani: No, I think it's very clearly a longer-term evolution, and I would say we have been observing this for a very long period of time. From the first call since I joined 18 months ago, we basically said that it was really important for us to drive further engagement in the program, that engagement rates were low, and that driving engagement is positive for our bank partners, that it's much more aligned with what they want, much more aligned with providing consumers with the benefits they should have from the program.
Speaker Change: No I think it's very clearly a longer term evolution and I would say.
Karim Temsamani: We have been signaling this for a very long period of time from the first call. Since I joined 18 months ago. We basically said that he was really important for us to drive further engagement in the program.
Karim Temsamani: Engagement rates were low and the growing engagement is positive for our bank partners.
Karim Temsamani: It's much more in line with what they want is much more aligned with providing consumers with the benefits that should have from the program, it's better aligned with driving additional budget for advertisers what needs to come with it is us continuing to negotiate Rev share agreements with our banking partners to ensure that.
Karim Temsamani: It's better aligned with driving additional budget for advertisers. But what needs to come with it is us continuing to negotiate rev-share agreements with our banking partners to ensure that the gains that they're getting from people consuming more and, therefore, spending more on their cards are a net benefit for us as well. So I think longer term, you'll see that as we continue to grow billings, we're going to hopefully continue to drive a lot more redemptions, but we should keep more in adjusted contributions. So you're going to see some differences in the economics of the business as a whole, but we think that we can manage that in a very healthy manner going forward.
Karim Temsamani: The gains that they're getting from people consuming more and therefore spending more and that causes is a net benefit for us as well.
Karim Temsamani: So I think longer term you would see that as we continue to grow billings.
Karim Temsamani: We're going to hopefully continue to drive a lot of redemptions, but we should keep more in adjusted contribution so youre going to see some differences in the economics of the business as a whole, but we think that we can manage that in a very healthy amount of going forward.
Jacob Kreyer: Okay, thanks for taking the questions. Thank you.
Speaker Change: Okay. Thanks for taking the questions.
Operator: Thank you. One moment for our next question. The next question comes from Jacob Stephan and Lake Street Capital Markets.
Speaker Change: Thank you one moment our next question.
Jacob Michael Stephan: Our next question comes from Jacobs, Steven and Lake Street capital markets.
Jacob Michael Stephan: Hey guys, thanks for taking my question. Maybe, Karim, if you could just kind of help us think about, you know, where you're investing in kind of the agency side of the business. Is that directly related to headcount, or maybe just kind of help us think about some of those investments?
Jacob Michael Stephan: Hey, guys. Thanks for taking my question.
Jacob Michael Stephan: Maybe.
Jacob Michael Stephan: If you could just kind of help us think about where you're investing in kind of on the agency side of the business is that directly related to head count or more.
Jacob Michael Stephan: Maybe just kind of help us think about some of those investments.
Karim Temsamani: Yeah, as Alexis mentioned in the call, and thanks Jacob for the question, as Alexis mentioned in the call earlier, there are several areas in which we invest in the business, as I mentioned as well. In my remarks, we are investing in our tech and products just to ensure that we continue to innovate and provide the right products to our banks and to our advertisers. But what we have also identified are several areas in terms of our sales teams in which we need to reinvest.
Karim Temsamani: Alec.
Karim Temsamani: As mentioned in the call and thanks Jacob for the question, Alex as I mentioned in the call earlier.
Karim Temsamani: From areas in which we're investing in the business.
Karim Temsamani: As I mentioned as well.
Karim Temsamani: In my remarks.
Karim Temsamani: Our investing and I've taken product is to ensure that we continue to innovate and providing the right products too.
Karim Temsamani: Our banks and to advertisers.
Karim Temsamani: But what we have also identified several areas in terms of our sales teams in which we needed to reinvest we talked about in the last quarter about our investments in the restaurant and retail sectors.
Karim Temsamani: We talked about in the last quarter about our investment in the restaurant and retail sectors. And at present, we continue to invest in our account management team so that we can service our clients better but also serve more customers. And one area that we haven't invested in for a while is our agency team, and we think that agencies can be a big driver of growth for us in the future, where we can get many more accounts. So it's mostly a headcount investment here that you're talking about, but we definitely want to be able to gain more budgets from our agencies in the future.
Karim Temsamani: At present, we continue to invest in our account management team.
Karim Temsamani: So that we can service our clients better, but also service more customers and one area, which.
Karim Temsamani: We had not invested four one was agency team and we think that agencies can be a big driver for growth for us in future, where we can get many more accounts.
Karim Temsamani: We'll see a head count.
Karim Temsamani: Investment here that you're talking about but we definitely want to.
Karim Temsamani: April two.
Karim Temsamani: Gained more budgets by the agencies in the future.
Jacob Michael Stephan: Okay, that's helpful. And then maybe just kind of talk about the self-serve platform. You know, how far along are we in kind of the development of that platform? Is that, you know, ready to go? Or is there still some work to be done?
Speaker Change: Okay. That's helpful. And then maybe just kind of talk about the the self serve platform.
Jacob Michael Stephan:
Jacob Michael Stephan: How far along are we in kind of the development of that platform is that ready to go or is there still some work to be done there.
Karim Temsamani: Can you be more specific? Are you talking about what we mentioned last quarter, which was an automated dashboard, or some of the longer-term plans for a self-serve platform for advertisers to book projects? Yeah, just looking more at the longer term kind of tech enablement and the self-serve side, which caters more to the agency. Yeah, so I mean, I'll cover both just in case.
Jacob Michael Stephan: Can you be more specific are you talking about what we mentioned last quarter, which was an automated dashboard or sort of the longer term plans for self serve platform for advertisers.
Karim Temsamani: Just looking more more at the longer term kind of.
Karim Temsamani: Check.
Karim Temsamani: Enablement in the self serve side.
Karim Temsamani: On the first one, the automated dashboard side, which I think is really important to surface insights to our customers, which will also be very important for agency customers. We'll essentially have about 10% of our customers having access to automated insights by the end of Q2, and we plan a full rollout by the end of the year. Self-serve overall with regard to the ability to book budgets without intervention from our team will take longer. That's part of the reason why we're also investing in account management, because this is obviously on our roadmap for the longer term, but it's probably not something that we'll get to.
Karim Temsamani: Caters more to the agency.
Karim Temsamani: Yes, so I mean I'll cover both.
Karim Temsamani: In case on the first one.
Karim Temsamani: Industrial side, which I think is really important to surface insights for our customers, which will be also very important for <unk>.
Karim Temsamani: Agency customers.
Karim Temsamani: Well, we will essentially have about 10% of our customers having access to automated insights by the end of Q2, and we plan a full rollout by the end of the year.
Karim Temsamani: So self serve overall with regards to the ability to budgets without intervention for I assume will take longer that's part of the reason why we also invest in account management because this is all.
Karim Temsamani: On our road map longer term, but but it's probably not something that we will get through this year.
Jacob Michael Stephan: Okay, got it. Maybe just switching over to Bridge. You know, last quarter, I think we talked about, you know, a large new restaurant customer joining the platform. It sounds like, you know, you might add some customer churn. But you know, what can we kind of expect, you know, the growth rate here in 2024?
Speaker Change: Okay got it.
Jacob Michael Stephan: Maybe just switching over to bridge.
Jacob Michael Stephan: Last quarter, I think we talked about.
Jacob Michael Stephan: A large new restaurant customer joining the platform.
Jacob Michael Stephan: Sounds like you might add some customer churn.
Jacob Michael Stephan: What can we kind of expect.
Jacob Michael Stephan: The growth rate here.
Jacob Michael Stephan: In 2024.
Karim Temsamani: So just to be clear, the last restaurant customer we mentioned last time was on Carlytics, not with regard to Brydge. With regard to Brydge, obviously, we are reinvesting in the product. We feel very confident that we have a long-term asset in Brydge. However, you know, we have to rebuild a lot of the technology that was there from a Brydge perspective.
Jacob Michael Stephan: Okay.
Jacob Michael Stephan: So just to be clear the lodge restaurant customer we mentioned last time was on cosmetics.
Speaker Change: What's the bridge.
Karim Temsamani: We began to bridge.
Karim Temsamani: Usually we are reinvesting in the product we feel very confident that.
Karim Temsamani: We have a long term assets in bridge.
Karim Temsamani: We have to rebuild a lot of the technology.
Karim Temsamani: And importantly, as we've discussed over the last several quarters, we're investing in Ripple, which is a retail media network as well, to provide not only the ability to get the insights that our customers want, but also the ability to target customers across the broader landscape. And so we're making the investments now. I don't want to give you growth rates with regard to Ripple, as we don't report specifically on this, nor do we give guidance specifically on this.
Karim Temsamani: Is that from a bridge perspective, and importantly, as we've discussed over the last several quarters. We are investing in report, which is retail media network as well to provide not only the ability to get the insights.
Karim Temsamani: Customers want but also have the ability to target customers across the.
Karim Temsamani: The broader landscape and so we're making we're making the investments now.
Karim Temsamani: I don't want to give you.
Karim Temsamani: Growth rates with regards to <unk>, We don't report specifically on data, we don't give guidance specifically on this.
Karim Temsamani: But again, we're very confident.
Karim Temsamani: But again, we're very confident that we're playing in a very large market there, an area that's really expanding, that we have the right foundational elements with regard to the engineering infrastructure, and we have the go-to-market resourcing now. We've onboarded a number of regional grocers that give us line of sight to 100 million profiles by the end of the year, and therefore, we have the scale to drive significant growth. But I won't give you a specific number on the growth rates.
Karim Temsamani: We're playing in a very large market bear an area, that's really expanding that we have the right foundational elements with regards to the engineering infrastructure. We have the go to market Resourcing now.
Karim Temsamani: On boarded a number of regional grocers that give us line of sight to a 100 million.
Karim Temsamani: Profiles by the end of the year and therefore that we have the scale to drive significant growth.
Karim Temsamani: I won't give you a specific.
Karim Temsamani: It's a big number on the growth rates, we expect.
Jacob Michael Stephan: Okay, I understand. Thanks, guys.
Speaker Change: Okay understood. Thanks, guys.
Jacob Michael Stephan: Yes.
Speaker Change: Thank you.
Karim Temsamani: I'm showing no further questions at this time. I would now like to turn it back to Karim for closing remarks.
Speaker Change: I am showing no further questions at this time I would now like to turn it back to <unk> for closing remarks.
Karim Temsamani: Thank you very much, and thank you everyone for joining us today. We look forward to discussing our second quarter results on the next earnings call.
Karim Temsamani: Thank you very much and thank you everyone for joining US today, we look forward to discussing our second quarter results on the next earnings call.
Operator: Thank you for your participation in today's conference. This does include a program you may now disconnect.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Operator: Okay.
Operator: [music].