Cardlytics ($CDLX): 3Q24 Post-Earnings Analysis (Research Note #286)
Notes and thoughts after earnings.
The following CDLX Research Note reviews Q3 2024 earnings from last week.
There were some positive developments, but some of the more near-term downsides and negative factors mentioned in the Q3 pre-earnings analysis also occurred:
Some of these issues impacted guidance, which was likely the largest contributor to the stock price decline immediately following earnings.
However, the stock had a very quick and sizable run-up in the few days leading up to earnings, likely from short-term trading. When tied with the quick price recovery, today’s price is about flat from just last Monday, before earnings. Even the low from the large decline last Thursday was still higher than just last month. This paints a different story compared to only looking at the price decline immediately following earnings.
I will discuss these issues that impacted results and guidance in the CDLX Research Note below, specifically around larger advertisers, CMS, and delivery (including possible reasons for why both over and under delivery is occurring at the same time, why now, why the size of the impact, why the under-delivery has been difficult to fix, why over-delivery needs to be addressed first, and more).
I also discussed in that pre-earnings Research Note how my recent allocation decisions were a function of longer-term factors (given the near term could continue to be impacted by some of those shorter-term issues). This is why attention also needs to be given within this Research Note to the longer-term prospects, and whether they have improved or weakened based on the new information from Q3, or if any short-term issues may instead persist longer term.
As it relates to those longer-term prospects, there was the positive news on AmEx, with confirmation of not only the partnership still occurring, but also that the initial launch of the phased rollout has already started. There were also some other new items / considerations from the call, such as related to CMS, larger advertisers, delivery, and more (both positive and negative, which I’ll cover later).
I discuss all of these items and more in the CDLX Research Note below.
High Level / Summary
Q3 Results
Q4 Guidance
FY 2025 Guidance
AmEx
Chase Media Solutions (CMS)
New Banks
Large Advertisers
Advertiser Insights Portal (Dashboard)
Rippl and CPG Spend
Measurement and MMM
SKU-Level Insights and Product Offers
MAUs
Operating Expenses
Rev Share Changes
Dynamics Marketplace and Engagement-Based Pricing Model