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By applying advanced analytics to this aggregation of purchase data, we make it actionable, helping marketers identify, reach and influence likely buyers at scale, and measure the true sales impact of their marketing spend.
−Removed: We have strong relationships with leading marketers across a variety of industries, including national and regional restaurant and retail chains, large providers of cable satellite television and wireless services, and increasingly, travel and hospitality, grocery, e-commerce and luxury brands.
+Added: We have strong relationships with leading marketers across a variety of industries, including retail, restaurant, travel and entertainment, telecommunications, subscription services, direct to consumer, and grocery.
Our purchase intelligence, coupled with our access to customers using FIs’ online, mobile, and email channels, enables us to help solve fundamental problems for marketers.
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This issue is particularly acute with respect to measuring the impact of marketing on in-store sales, where the vast majority of consumer spending occurs.
−Removed: We believe purchase intelligence is the next disruptive opportunity in marketing and can comprehensively address these challenges by enabling marketers to precisely measure how marketing drives sales by “closing the loop”—both digital and in-store.
+Added: We believe purchase intelligence is a disruptive opportunity in marketing and can comprehensively address these challenges by enabling marketers to precisely measure how marketing drives sales by “closing the loop”—both digital and in-store.
Our platform also helps solve fundamental problems for FIs.
Leveraging our powerful predictive analytics, we are able to create compelling cash back offers that have the potential to drive deeper and sustained use of the FI channels, which we believe reduces customer attrition and increases use of the FIs’ credit and debit cards.
−Removed: Today, our FI partners include Bank of America, National Association ("Bank of America"), JPMorgan Chase Bank, National Association (“Chase”) and Wells Fargo Bank, National Association (“Wells Fargo”) in the U.S.
−Removed: and Lloyds Bank plc (“Lloyds”) and Santander UK plc (“Santander”) in the U.K., as well as many other national and regional financial institutions, including several of the largest bank processors and digital banking providers to reach customers of small and mid-sized FIs.
−Removed: Wells Fargo began a phased launch of our platform in the fourth quarter of 2019 that will continue into the first half of 2020.
−Removed: We have experienced growth in our revenue since inception.
−Removed: Revenue from sales of Cardlytics Direct, which is net of Consumer Incentives, was $122.4 million , $149.3 million and $210.4 million for 2017 , 2018 and 2019 , respectively, representing a compound annual growth rate of 40% .
−Removed: During 2017 , 2018 and 2019 , our average monthly active users ("FI MAUs") were approximately 54.9 million , 65.0 million and 122.6 million , respectively, and our average Cardlytics Direct revenue per user ("ARPU") was $2.23 , $2.30 and $1.72 , respectively.
+Added: Today, our FI partners include Bank of America, National Association ("Bank of America"), JPMorgan Chase Bank, National Association (“Chase”) and Wells Fargo Bank, National Association (“Wells Fargo”), as well as many other national and regional financial institutions, including several of the largest bank processors and digital banking providers to reach customers of small and mid-sized FIs.
+Added: Wells Fargo began a phased launch of our platform in the fourth quarter of 2019 that was completed in the second quarter of 2020.
+Added: Revenue from the Cardlytics platform, which is net of Consumer Incentives, was $149.3 million, $210.4 million and $186.9 million for 2018, 2019 and 2020, respectively.
+Added: During 2018, 2019 and 2020, our average monthly active users ("FI MAUs") were approximately 65.0 million, 122.6 million and 155.8 million, respectively, and our average revenue per user ("ARPU") was $2.30, $1.72 and $1.20, respectively.
FI MAU and ARPU are performance metrics defined under the heading "Non-GAAP Measures and Other Performance Metrics" within Item 7 of this Annual Report.
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During 2018, 2019 and 2020, our net loss includes stock-based compensation expense of $26.8 million, $15.9 million and $32.4 million, respectively.
−Removed: In 2017 , our net loss also includes a $5.0 million non-cash gain related to the change in fair value of convertible promissory notes.
−Removed: In 2018 , our net loss also includes a $6.8 million non-cash expense related to the change in fair value of our warrant liabilities, a $2.5 million non-cash expense related to the vesting of warrants issued to an FI partner that accelerated upon our IPO, a $0.9 million loss on extinguishment of debt and a $0.8 million gain related to the renewal of our agreement with an FI partner.
−Removed: Purchase Intelligence Platform
+Added: In 2018, our net loss also includes a $6.8 million non-cash expense related to the change in fair value of our warrant liabilities and a $2.5 million non-cash expense related to the vesting of warrants issued to an FI partner that accelerated upon our IPO.
+Added: Purchase Intelligence
Purchase data from FIs provides a secure view into where and when consumers are spending their money.
−Removed: Our technology aggregates and analyzes purchase data without any personally identifiable information ("PII") leaving the FI.
−Removed: Our platform analyzes online and in-store transactions across multiple accounts in the United States ("U.S."), including one in two debit and credit card transactions in the U.S.
+Added: Our technology aggregates and analyzes purchase data without any personally identifiable information ("PII") leaving the FI or otherwise being made available to us.
+Added: The data from the FI is anonymized so that it cannot be associated with any one individual.
+Added: Our platform analyzes online and in-store transactions across the United States ("U.S").
+Added: and United Kingdom ("U.K."), including one in two debit and credit card transactions in the U.S.
as of December 31, 2020.
−Removed: We believe that access to this purchase data can only be obtained at scale by partnering directly with FIs.
−Removed: This data allows us to serve relevant advertisements to our FIs’ customers through our Cardlytics Direct native bank advertising channel.
−Removed: We also leverage the power of purchase intelligence to provide marketers utilizing Cardlytics Direct with valuable insights into the preferences of their actual or potential customers wherever they shop.
+Added: We believe that access to both debit and credit card purchase data at scale can only be obtained by partnering directly with FIs.
+Added: This data allows us to serve relevant advertisements to our FIs’ customers through our native bank advertising channel.
+Added: We also leverage the power of purchase intelligence to provide marketers utilizing the Cardlytics platform with valuable insights into the preferences of their actual or potential customers wherever they shop.
Advanced Analytics Capabilities
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We analyze the impact marketing campaigns have on in-store and online sales.
−Removed: Since we are able to measure sales impact, marketers can use our purchase intelligence to optimize future campaigns.
+Added: Since we are able to measure sales impact, marketers can use our purchase intelligence to optimize their advertising efforts, increase their investment in the Cardlytics platform and enhance future campaigns.
Given our granular view into consumer spending across all categories, we can also help marketers identify share shift against their competition, and learn more about where else their customers spend their money.
−Removed: For FIs, we use our analytics to optimize the offers we display to FI customers within our Cardlytics Direct channel.
+Added: For FIs, we use our analytics to optimize the offers we display to FI customers within our channel.
By assigning relevancy scores to each offer based on what customers are most likely to buy, our platform can present the most relevant offers earlier in customers’ mobile and online banking sessions.
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Distributed Architecture
−Removed: A crucial aspect of our platform is our patented distributed architecture, which helps to facilitate both the effective delivery of our solutions and the protection of customer PII.
+Added: A crucial aspect of our platform is our patented distributed architecture, which helps to facilitate both the effective delivery of our solutions and the protection of customer PII, which is not shared by FIs to Cardlytics.
Our Offer Placement System ("OPS") and Offer Management System ("OMS") form the core of our advertising platform.
−Removed: The OPS is either hosted at the FI partner’s data center, behind the FI partner’s firewall, or hosted by us on behalf of the FI partner.
+Added: Each FIs' OPS is either hosted at the FI partner’s data center behind the FI partner’s firewall or hosted by us on behalf of the FI partner.
The OPS tracks impressions, engagement, activation and redemptions and is responsible for targeting and presenting offers, which are developed and designed within the OMS.
−Removed: Each of our FI partners has its own instance of the OPS, regardless of where hosted, which consists primarily of a web application and database that interact with the FI’s web servers to deliver marketing into the FI’s online banking portal.
The OPS interfaces with FI systems to receive anonymized purchase data, assign a unique consumer ID to each FI customer, which we call a Cardlytics ID, and aggregate this purchase data.
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OMS also provides a majority of the functionality for managing configuration settings within each OPS and the transfer of data between Cardlytics and our FI partners.
−Removed: Cardlytics Direct
+Added: The Cardlytics Platform
Through our platform, marketers can deliver advertising content to FI customers in the form of an opportunity to earn rewards, which are funded with a portion of the fees we collect from marketers.
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We maintain similar platforms in both the U.S.
−Removed: and the United Kingdom ("U.K.").
−Removed: Cardlytics helps marketers find high potential new customers that are active in their category, but not currently shopping with them, or to grow their business with existing customers.
−Removed: Our marketing is targeted and measured with each individual customer’s actual spending information.
+Added: Cardlytics helps marketers find potential new customers that are active in their category but not currently shopping with them, or to grow their business with existing customers.
+Added: Our marketing is targeted and measured based on actual spending information at a customer level.
However, all reporting is aggregated across consumers in our FI network.
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The breadth of our FI partners means that we are able to offer marketers the ability to optimize their marketing efforts to reach a large number of consumers through a single point of contact.
−Removed: Cardlytics also offers our FI partners a scalable solution for driving customer loyalty and engagement with little effort on their part, as we handle everything from contracting with marketers and creating, managing and reporting performance of their campaigns to attributing incentives to our FIs’ customers.
+Added: The Cardlytics platform also provides FIs a scalable solution for driving customer loyalty and engagement whereby Cardlytics handles everything from contracting with marketers and creating, managing and reporting performance of their campaigns to attributing incentives to each FIs' customers.
+Added: Prior to the year ended December 31, 2020, we referred to the Cardlytics platform as Cardlytics Direct.
Other Platform Solutions
Our Other Platform Solutions enabled marketers and marketing service providers to leverage the power of purchase intelligence outside the bank channel.
−Removed: We have shifted the majority of our efforts and resources to support the growth of Cardlytics Direct.
−Removed: As a result, we no longer generate revenue from Other Platform Solutions and do not expect to generate revenue from Other Platform Solutions for the foreseeable future.
−Removed: During 2017 , 2018 and 2019 , Other Platform Solutions revenue was $8.0 million , $1.4 million and $0.0 million , respectively.
+Added: During 2018, Other Platform Solutions revenue was $1.4 million, before shifting the majority of our efforts and resources to support the growth of the Cardlytics platform.
+Added: We no longer generate revenue from Other Platform Solutions and do not expect to generate revenue from Other Platform Solutions for the foreseeable future.
+Added: Privacy and Security
+Added: We have architected privacy and security into our systems and practices.
+Added: A critical part of our strategy involves a design focused on gathering data without collecting, maintaining or using sensitive information, such as social security numbers, credit card numbers, financial account information or medical records.
+Added: Our platform is currently designed so that we do not receive or have access to any PII from our FI partners.
+Added: We only target marketing against anonymized data.
+Added: This approach to privacy is intended to protect consumers.
+Added: Our privacy and security standards have also been designed and implemented to meet the requirements and safeguard the reputations of our FI partners and marketers, many of which are large, multinational corporations.
+Added: These customers frequently audit our practices and engage in detailed assessments of our infrastructure.
+Added: Despite the fact that we do not receive or have access to any PII from FIs, privacy and security are among our highest priorities and we commit significant resources to protecting the data that we receive.
+Added: We have implemented, assess on an ongoing basis, and, when necessary, upgrade our physical, procedural and technical controls.
+Added: We also take steps to impose compliance with these controls on our service providers via contract and regular audits.
+Added: We have implemented a number of security controls.
+Added: Our security controls have been audited and certified by third parties using standards which include SSAE 18, SQCS and SAS.
+Added: Sensitive data is subject to encryption, anonymization, or de-identification depending on the use case and risk profile.
+Added: We enhance network security through measures such as network segmentation, firewalls and network and host-based intrusion detection at critical network aggregation and ingress/egress points.
+Added: A cornerstone of our practices is transparency in data use and consumer choice.
+Added: Our privacy policy outlines the types of data we collect and how we use it.
+Added: Most of our FI partners maintain different types of "opt-out” features for any consumer wishing to opt out of the FI rewards program on the Cardlytics platform.
+Added: Outside of the U.S., our privacy and data handling practices are subject to regulation by data protection authorities and other regulators in the countries in which we do business, which may be more restrictive than the requirements that we are subject to in the U.S.
+Added: Acquisition of Dosh
+Added: On March 1, 2020, we announced the entry into an Agreement and Plan of Reorganization (the “Merger Agreement”) to acquire DOSH Holdings, Inc.
+Added: (“Dosh”), a personalized cash-back offers platform, for approximately $275.0 million, including $150.0 million in cash, subject to adjustments and escrows, and $125.0 million of our common stock at an agreed upon price of $136.33 per share.
+Added: The acquisition will be accounted for under the acquisition method of accounting with the operations of the newly acquired entity included in our operating results from the date of acquisition.
Competitive Strengths
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Our founders were bankers who understood the power of historical purchase data and the needs of marketers.
−Removed: Our platform was architected with our FI partners in mind and is designed to ensure that no PII ever leaves the FI.
+Added: Our platform was architected with our FI partners in mind and is designed to ensure that no PII ever leaves the FI or is otherwise made available to us.
+Added: The data is anonymized so that it cannot be associated with any one individual.
No FI partner with which we contract directly has unilaterally terminated its use of our platform.
−Removed: We are generally the exclusive provider of native bank channel advertising to our FI partners as mobile and online banking portals are not conducive to supporting marketing content from different vendors.
+Added: We are generally the exclusive provider of native bank channel advertising to our FI partners as mobile and online banking portals are typically not conducive to supporting marketing content from different vendors.
Further, advertising within banks' digital channels requires deep technological integrations, which we believe increases the cost of switching vendors and therefore increases FI partner loyalty to us.
−Removed: Proprietary Consumer Touchpoints .
+Added: • Valuable Consumer Touchpoints .
With all of our FI partners, we enable marketers to reach consumers in a captive, largely untapped, and digitally engaging environment, when they are thinking about their finances.
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• Massive Reach Informed by Purchase Intelligence .
−Removed: During 2019, our platform analyzed approximately $3.3 trillion in purchases across stores, retail categories, and geographies, both online and in-store.
+Added: During 2020, our platform analyzed approximatel y $3.4 trillion in purchases across stores, retail categories, and geographies, both online and in-store.
We have access to purchase data on our platform in the form of credit, debit, ACH and bill pay transactions.
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• Significant Scale with Marketers and Compelling Return on Advertising Spend ("ROAS") .
−Removed: We work with marketers across a variety of industry verticals, including national and regional restaurant and retail chains, large providers of cable and satellite television and wireless services, and increasingly, travel and hospitality, grocery, e-commerce and luxury brands.
+Added: We work with marketers across a variety of industries, including retail, restaurant, travel and entertainment, telecommunications, subscription services, direct to consumer, and grocery.
By serving these marketers at scale, we have developed deep insight into consumer behavior, which has allowed us to optimize how we reach and influence likely buyers.
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• Ability to Improve Marketing .
−Removed: Consumers spend a vast majority of their purchase dollars in physical stores and online marketers have long sought efficient and effective ways to understand online-to-offline attribution.
+Added: Even in the global pandemic, consumers spend a vast majority of their purchase dollars in physical stores and online marketers have long sought efficient and effective ways to understand online-to-offline attribution.
Likewise, although marketers may have access to data on the purchase behavior of their customers in their stores and on their websites, they lack visibility about these customers’ overall purchasing patterns and the purchasing behavior of other likely buyers.
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• Proprietary Technology Architecture and Advanced Analytics Capabilities .
−Removed: We have designed our purchase intelligence platform to protect highly sensitive first-party data.
+Added: We have designed our platform to protect highly sensitive first-party data.
Our proprietary, distributed architecture helps facilitate both the effective delivery of our solution and the protection of our FI customers’ PII.
−Removed: No PII is shared by the FIs with Cardlytics.
+Added: No PII is shared by the FIs with Cardlytics and the data is anonymized so that it cannot be associated with any one individual.
Our technologies leverage proprietary algorithms, to process raw purchase data into normalized purchase history useful for marketing and analytics.
−Removed: Our platform also supports integration of data from our FI partners and from third-party sources to enrich the intelligence that we are able to provide.
+Added: Our platform also supports integration of data from third-party sources to enrich the intelligence that we are able to provide.
Further, we apply advanced analytics to continuously increase our intelligence capabilities and identify actionable behavior patterns for our marketers.
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We intend to continue to expand our sales and marketing efforts to grow our share of advertising budgets from existing marketers and attract new brands, retailers and service providers.
−Removed: We also intend to grow our business with new marketers in new industry verticals such as travel and hospitality, grocery, e-commerce and luxury brands.
+Added: We also intend to grow our business with new marketers in new industry verticals such as travel and entertainment, direct to consumer, and grocery.
+Added: We plan to increase sales to marketers through advertising agencies by leveraging our platform’s new self-service capabilities.
• Drive Growth through Existing FI Partners .
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• Continue to Innovate and Evolve our Platform .
−Removed: As we continue to grow our data asset and enhance our platform, we are developing new solutions, greater automation and increasingly sophisticated analytical capabilities.
+Added: As we continue to grow our data asset and enhance our platform through the option of self-service, we are developing new solutions, greater automation and increasingly sophisticated analytical capabilities.
+Added: Our platform’s new self-service capabilities will provide existing and new marketers with the ability to build their own campaigns directly on our platform and enhance their experience with our product.
As we have in the past, we plan to continue to work in close collaboration with our FI partners to develop new purchase intelligence-based analytic solutions to enable marketers to make more informed business decisions.
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To facilitate these partnerships, we intend to focus on continued technological integration of our platform with those of complementary market participants.
−Removed: We define an FI partner as a separate contracting entity from which we access purchase data to empower our Cardlytics Direct platform either directly or through a third-party intermediary, such as a bank processor, digital banking provider or payment network operator.
+Added: We define an FI partner as a separate contracting entity from which we access purchase data to empower our platform either directly or through a third-party intermediary, such as a bank processor, digital banking provider or payment network operator.
We generally pay our FI partners an FI Share, which is a negotiated and fixed percentage of our billings to marketers less any Consumer Incentives that we pay to the FIs’ customers and certain third-party data costs.
−Removed: As the amount of revenue that we can generate from marketers with respect to Cardlytics Direct is primarily a function of the number of active users on our FI partners’ digital banking platforms, we believe that the number of FI MAUs contributed by any FI partner is indicative of our level of dependence on such FI partner.
−Removed: During 2017 , 2018 and 2019 , Bank of America contributed 51%, 47% , and 26% of our average FI MAUs, respectively.
−Removed: Chase contributed 9% and 47% of our average FI MAUs in 2018 and 2019 , respectively.
−Removed: We anticipate that Chase, Bank of America and, once the phased launch is complete, Wells Fargo will contribute a significant portion of our average FI MAUs for the foreseeable future.
As of December 31, 2020, we had direct contractual relationships with 20 of our FI partners.
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Agreements with Bank of America
−Removed: Since November 2010, our relationship with Bank of America has been governed by a General Services Agreement ("GSA") pursuant to which we provide Bank of America with access to Cardlytics Direct and certain other related services, and a related Software License, Customization and Maintenance Agreement, which grants Bank of America the right to use the software underlying Cardlytics Direct.
−Removed: The GSA terminates on November 2021 and may be extended by Bank of America for additional one-year periods.
−Removed: Pursuant to the GSA with Bank of America, we provide Cardlytics Direct to Bank of America customers which includes forming relationships with participating marketers;
+Added: Since November 2010, our relationship with Bank of America has been governed by a General Services Agreement ("GSA") pursuant to which we provide Bank of America with access to the Cardlytics platform and certain other related services, and a related Software License, Customization and Maintenance Agreement, which grants Bank of America the right to use the software underlying the Cardlytics platform.
+Added: The GSA terminates in December 2021 and may be extended by Bank of America for additional one-year periods.
+Added: Pursuant to the GSA with Bank of America, we provide the Cardlytics platform to Bank of America customers which includes forming relationships with participating marketers;
obtaining and publishing marketer offers to customers after screening both the marketer and specific advertising content;
−Removed: and monitoring redemption rates with respect to Consumer Incentives offered in Cardlytics Direct campaigns.
−Removed: Although we are primarily responsible for securing marketers to advertise on Cardlytics Direct, Bank of America may likewise secure marketers and has the right to approve all marketer offers to be presented to Bank of America customers on Cardlytics Direct.
−Removed: Under the GSA, we share the revenue that we generate from the sale of advertising within the Bank of America Cardlytics Direct channel with Bank of America, subject to certain exceptions.
+Added: and monitoring redemption rates with respect to Consumer Incentives offered in Cardlytics campaigns.
+Added: Although we are primarily responsible for securing marketers to advertise on our platform, Bank of America may likewise secure marketers and has the right to approve all marketer offers to be presented to Bank of America customers on the Cardlytics platform.
+Added: Under the GSA, we share the revenue that we generate from the sale of advertising within the Bank of America channel with Bank of America, subject to certain exceptions.
The amounts that we pay to Bank of America are reflected as FI Share.
−Removed: During 2017 , 2018 and 2019 , Bank of America accounted for 63% , 64% and 36% of our aggregate FI Share, respectively.
The specific FI Share percentage that we pay is based on whether we or Bank of America have secured the relevant marketer account and other marketer- and transaction-specific factors, provided that we are entitled to retain a minimum percentage of the monthly revenue subject to the GSA.
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Agreements with Chase
−Removed: In May 2018, we entered into a Master Agreement and Schedule #1 to the Master Agreement (collectively, the “Master Agreement”) with Chase, pursuant to which we rolled out Cardlytics Direct to Chase customers.
−Removed: Under the Master Agreement, we provided Chase with access to Cardlytics Direct through November 2025.
+Added: In May 2018, we entered into a Master Agreement and Schedule #1 to the Master Agreement (collectively, the “Master Agreement”) with Chase, pursuant to which we provide Chase with access to the Cardlytics platform.
+Added: Under the Master Agreement, we provide Chase with access to the Cardlytics platform through November 2025.
Chase may terminate the Master Agreement at any time upon 90 days’ written notice.
−Removed: Under the Master Agreement, we share billings that we generate from the sale of advertising within the Chase Cardlytics Direct channel with Chase, subject to certain exceptions.
+Added: Under the Master Agreement, we share billings that we generate from the sale of advertising within the Chase channel with Chase, subject to certain exceptions.
The amounts that we pay to Chase in excess of Consumer Incentives are reflected as FI Share.
The specific billing share percentage that we pay is based on whether we or Chase have secured the relevant marketer account and other marketer- and transaction-specific factors, provided that we are entitled to retain a minimum percentage of the monthly revenue subject to the Master Agreement.
−Removed: Chase accounted for 6% and 42% of FI Share during 2018 and 2019 , respectively.
−Removed: We enable marketers and their agencies to efficiently and effectively market to our FIs’ customers through Cardlytics Direct.
−Removed: We work with companies across a variety of industries, including national and regional restaurant and retail chains, large providers of cable and satellite television and wireless services, and increasingly, travel and hospitality, grocery, e-commerce and luxury brands.
−Removed: Our top five marketers represented 23%, 23% and 27% of revenue during 2017 , 2018 and 2019 .
+Added: We enable marketers and their agencies to efficiently and effectively market to our FIs’ customers through the Cardlytics platform.
+Added: We work with companies across a variety of industries, including retail, restaurant, travel and entertainment, telecommunications, subscription services, direct to consumer, and grocery.
+Added: During 2018, 2019 and 2020, our top five marketers accounted for 23%, 27% and 35% of our revenue.
No marketer represented a significant concentration of our accounts receivable as of December 31, 2018.
−Removed: One marketer represented 10% of our accounts receivable as of December 31, 2019 .
−Removed: One marketer accounted for 11% of our revenue as of December 31, 2019 .
−Removed: No marketer accounted for over 10% of revenue during 2017 or 2018 .
+Added: As of December 31, 2019 and December 31, 2020 our top five marketers accounted for 26% and 31% of our accounts receivable, respectively, with one marketer representing over 10% as of December 31, 2019 and December 31, 2020, respectively.
Sales and Marketing
−Removed: Our sales teams are focused on expanding our marketer and agency customers and our centralized marketing team is focused on increasing market awareness for Cardlytics through partnerships, public relations, industry events and publications.
−Removed: Our FI-focused account management team is focused on expanding our FI network.
+Added: Our sales teams are focused on growth with our marketer and agency customers and our marketing efforts are focused on increasing market awareness for Cardlytics through partnerships, public relations, industry events and publications.
+Added: Our FI-focused account management team is focused on deepening relationships with existing FI partners and expanding our FI network.
During 2018, 2019 and 2020, our total sales and marketing expenses were $41.9 million, $43.8 million and $45.3 million, respectively, representing approximately 28%, 21% and 24% of revenue, respectively.
We have dedicated sales teams responsible for establishing relationships with marketers and their agencies.
−Removed: Our sales teams are organized by industry vertical, which include national and regional restaurant and retail chains, large providers of cable and satellite television and wireless services, and increasingly, travel and hospitality, grocery, e-commerce and luxury brands.
−Removed: Each vertical team is led by an experienced sales manager and staffed with sales, sales support and service specialists who have deep domain knowledge and industry operating experience.
−Removed: We also have account managers that manage our customer relationships within each vertical.
+Added: Our sales teams are organized by industry, which include retail, restaurant, travel and entertainment, telecommunications, subscription services, direct to consumer, and grocery.
+Added: Each industry team is led by an experienced sales manager and staffed with sales, sales support and service specialists who have deep domain knowledge and industry operating experience.
+Added: We also have account managers that manage our customer relationships within each industry.
Financial Institution Partners
−Removed: Our efforts expand our FI network are focused on both nurturing our existing banking relationships and cultivating new relationships.
−Removed: Our FI partner sales team is focused on driving FIs to enhance their user interface for our Cardlytics Direct program, otherwise drive increased consumer engagement and encourage adoption of our solution offerings.
+Added: Our efforts to expand our FI network are focused on both nurturing our existing banking relationships and cultivating new relationships.
+Added: Our FI partner sales team is focused on driving FIs to enhance their user interface for our platform, otherwise drive increased consumer engagement and encourage adoption of our solution offerings.
The market for the utilization of purchase intelligence is nascent and we believe we are one of the only companies that can provide purchase intelligence with the scale and the level of granularity that is equivalent to ours.
We believe that we are the only company that enables marketing through FI channels at scale.
−Removed: In the future, we may face competition from online retailers, credit card companies, digital publishers and mobile pay providers with access to a substantial amount of consumer purchase data.
+Added: In the future, we may face greater competition from online retailers, credit card companies, digital publishers and mobile pay providers with access to a substantial amount of consumer purchase data.
While we may successfully partner with a wide range of companies that are, to some extent, currently competitive to us, these companies may become more competitive to us in the future.
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• depth and breadth of relationships with FIs, marketers and their agencies;
−Removed: utilizing purchase intelligence to inform marketing spend;
• depth and breadth of, and access to, purchase data;
−Removed: effectiveness in increasing return on advertising spend for marketers;
+Added: • effectiveness in increasing return on advertising spend ("ROAS") for marketers;
• effectiveness in increasing marketing campaign performance for marketers and their agencies;
+Added: • effectiveness in increasing FI customer engagement;
• ability to maintain confidentiality and security of FI transaction data;
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Despite our efforts to protect our proprietary technology and trade secrets, unauthorized parties may attempt to misappropriate, reverse engineer or otherwise obtain and use them.
−Removed: In addition, others may independently discover our trade secrets, in which case we would not be able to assert trade secret rights, or develop similar technologies and processes.
+Added: In addition, others may independently discover our trade secrets, which would prevent us from being able to assert trade secret rights, or develop similar technologies and processes.
Further, the contractual provisions that we enter into may not prevent unauthorized use or disclosure of our proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of our proprietary technology or intellectual property rights.
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Any claim of infringement, misappropriation or other violation of intellectual property rights by a third-party, even those without merit, could cause us to incur substantial costs defending against the claim and could distract our management from our business.
−Removed: Privacy and Security
−Removed: We have architected privacy and security into our systems and practices.
−Removed: A critical part of our strategy involves not collecting, maintaining or using sensitive information, such as social security numbers, credit card numbers, financial account information or medical records.
−Removed: We currently do not receive any PII from our FI partners.
−Removed: We only target marketing against anonymized data.
−Removed: This approach to privacy is intended to protect consumers.
−Removed: Our privacy and security standards have also been designed and implemented to meet the requirements and safeguard the reputations of our FI partners and marketers, many of which are large, multinational corporations.
−Removed: These customers frequently audit our practices and engage in detailed assessments of our infrastructure.
−Removed: Despite the fact that we do not receive any PII from FIs, privacy and security are among our highest priorities and we commit significant resources to protecting the data that we receive.
−Removed: We have implemented, assess on an ongoing basis, and, when necessary, upgrade our physical, procedural and technical controls.
−Removed: We also take steps to impose compliance with these controls on our service providers via contract.
−Removed: We have implemented a number of security controls.
−Removed: Our security controls have been audited and certified by third parties using standards which include SSAE 18, SQCS and SAS.
−Removed: Sensitive data is subject to encryption, anonymization, or de-identification depending on the use case and risk profile.
−Removed: We enhance network security through measures such as network segmentation, firewalls and network and host based intrusion detection at critical network aggregation and ingress/egress points.
−Removed: A cornerstone of our practices is transparency in data use and consumer choice.
−Removed: Our privacy policy outlines the types of data we collect and how we use it.
−Removed: Most of our FI partners maintain different types of "opt-out” features for any consumer wishing to opt out of Cardlytics Direct.
−Removed: Outside of the U.S., our privacy and data handling practices are subject to regulation by data protection authorities and other regulators in the countries in which we do business, which may be more restrictive than the requirements that we are subject to in the U.S.
Our cash flows from operations vary from quarter to quarter, largely due to the seasonal nature of our marketers’ advertising spending.
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We believe our employee relations are good and we have not experienced any work stoppages.
+Added: Human Capital Resources and Management
+Added: We are focused on building a revolutionary company, and we know this starts with investing in each of our employees.
+Added: Headquartered in Atlanta, GA with additional offices in New York, NY;
+Added: San Francisco, CA;
+Added: and Visakhapatnam, India, our employees are a big part of what drives our exceptional desire to win and help our advertisers and FI partners win.
+Added: Diversity, Equity, and Inclusion (“DEI”) is integrated in everything we do.
+Added: This mindset starts at the top.
+Added: Our CEO and other senior leaders have DEI objectives in their performance goals.
+Added: This focus is embedded in each aspect of the talent lifecycle:
+Added: attraction, recruitment, onboarding, development and retention efforts.
+Added: We build external relationships to ensure our talent pipelines are filled with candidates of diverse backgrounds.
+Added: At the foundation of our DEI focus is our employee-led Special Interest Groups (“SIGs”).
+Added: These groups facilitate learning and development, holistic wellness, professional connections, philanthropy, and raising awareness internally and externally for meaningful causes.
+Added: Each group is sponsored by senior leaders in the organization.
+Added: Cardlytics Connect, our newest SIG, focuses on our black employees across the globe and has a focused curriculum led by senior leaders.
+Added: As of December 31, 2020, approximately 39% of our global workforce is made up of women and 40% people of color.
+Added: A key component to our sustainability and success is learning and development.
+Added: We are intentional in our efforts to provide all employees opportunities to grow.
+Added: Cardlytics University is a resource for both new hires as well as longer tenured employees, and we have specialized curriculum for emerging leaders, managers and mentors.
+Added: Our use of equity compensation allows all employees to operate as owners and is a key component of our total rewards strategy to retain, motivate and attract the best talent.
+Added: All employees are shareholders and are invested, figuratively and literally, in our success.
+Added: Employee equity is the cornerstone in our compensation philosophy along with comprehensive medical benefits, a positive work/life ratio, unlimited paid time off, health and wellness programs, and learning and development opportunities.
+Added: Each year, with the help of outside experts, we evaluate each aspect of compensation and benefits to ensure they are in alignment with the market and our peers.
+Added: Our values reflect what drives our success.
+Added: Our people and culture are our most valuable assets and greatest differentiators.
+Added: We GSD, take initiative, are hungry to win, value transparency, and make it a priority to create a place where people want to be.
Corporate Information
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Our website address is www.cardlytics.com.
−Removed: We completed our IPO in February 2018 and our common stock is listed on the Nasdaq Global Market under the symbol “CDLX.” “Cardlytics,” the Cardlytics logo and other trademarks or service marks of Cardlytics, Inc.
+Added: Our common stock is listed on the Nasdaq Global Market under the symbol “CDLX.” “Cardlytics,” the Cardlytics logo and other trademarks or service marks of Cardlytics, Inc.
appearing in this Annual Report on Form 10-K are the property of Cardlytics, Inc.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.