Cardlytics (CDLX) risk factors, FY2025 10-K

Risks Related to our Business and Industry

1. 01Unfavorable conditions, including inflationary pressure, or tariffs and other trade protection measures, in the global economy or the industries we serve could limit our ability to grow our business and negatively affect our operating results25% rewritten
2. 02Our quarterly operating results have fluctuated and may continue to vary from period to period, which could result in our failure to meet expectations with respect to operating results and cause the trading price of our stock to decline
3. 03We may not achieve or sustain revenue and billings growth in the future36% rewritten
4. 04We are dependent upon the Cardlytics platform
5. 05We are substantially dependent on Chase, Wells Fargo and a limited number of other FI partners47% rewritten
6. 06We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which would cause our stock price to decline
7. 07If we fail to maintain our relationships with current FI partners or attract new FI partners or other supply partners, we may not be able to sufficiently grow our revenue, which could significantly harm our business, results of operations and financial condition32% rewritten
8. 08The failure to consummate the sale of Bridg may materially and adversely affect our business, financial condition and results of operationsNew
9. 09Our future success will depend, in part, on our ability to expand into new industries
10. 10If we are unable to successfully market our solutions to appeal to marketers and their agencies in new industries, we may not be able to achieve our growth or business objectives37% rewritten
11. 11parties with whom we work. A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our platformNew
12. 12Our business could be adversely affected if marketers or their agencies are not satisfied with our solutions or our systems and infrastructure fail to meet their needs
13. 13We derive a material portion of our revenue from a limited number of marketers, and the loss of one or more of these marketers could adversely impact our business, results of operations and financial conditions28% rewritten
14. 14We have a relatively short operating history, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful
15. 15Any failure of our partners to effectively deliver and promote the online incentive programs that comprise the Cardlytics platform could materially and adversely affect our business
16. 16If we do not effectively grow and train our sales team, we may be unable to add new marketers or increase sales to our existing marketers and our business will be adversely affected
17. 17We generally do not have long-term commitments from marketers, and if we are unable to retain and increase sales of our solutions to marketers and their agencies or attract new marketers and their agencies, our business, financial condition and operating results would be adversely affected
18. 18We have a history of losses and may not achieve net income in the future30% rewritten
19. 19We operate in an emerging industry and future demand and market acceptance for our solutions is uncertain
20. 20The market in which we participate is competitive and we may not be able to compete successfully with our current or future competitors
21. 21If we fail to identify and respond effectively to rapidly changing technology and industry needs, our solutions may become less competitive or obsolete
22. 22A number of factors could impair our ability to collect the significant amounts of data that we use to deliver our solutions
23. 23The efficacy of some of our solutions depends upon third-party data providers
24. 24Defects, errors or delays in our solutions could harm our reputation, which would harm our operating results
25. 25Significant system disruptions, loss of data center capacity, or changes to our data hosting solutions could adversely affect our business, financial condition and operating results
26. 26Seasonal fluctuations in marketing activity could adversely affect our cash flows
27. 27Our corporate culture has contributed to our success, and if we cannot maintain it, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be harmed
28. 28If we are unable to attract, integrate and retain additional qualified personnel, including top technical talent, our business could be adversely affected
29. 29We are dependent on the continued services and performance of our senior management and other key personnel, the loss of any of whom could adversely affect our business
30. 30Our international sales and operations subject us to additional risks that can adversely affect our business, operating results and financial condition
31. 31If we do not manage our growth effectively, the quality of our solutions may suffer, and our business, financial condition and operating results may be negatively affected
32. 32If currency exchange rates fluctuate substantially in the future, the results of our operations could be adversely affected
33. 33Our ability to use net operating losses and certain other tax attributes to offset future taxable income may be limited28% rewritten
34. 34Changes in tax laws or regulations could materially adversely affect our company59% rewritten
35. 35Future acquisitions could disrupt our business and adversely affect our business, financial condition and operating results
36. 36Charges to earnings resulting from our acquisitions may cause our operating results to suffer29% rewritten
37. 37We may require additional capital to support growth, and such capital might not be available on terms acceptable to us, if at all, which may in turn hamper our growth and adversely affect our business
38. 38Bringing new FI partners into our network may require considerable time and expense and can be long and unpredictable
39. 39Bringing new FI partners into our network, or changes made by our existing FI partners, may impede our ability to accurately forecast the performance of our network
40. 40If we are not able to maintain and enhance our brand, our business, financial condition and operating results may be adversely affected

Risks Related to our Indebtedness

1. 41The conditional conversion feature of either series of 2024 Convertible Senior Notes, if triggered, may adversely affect our financial condition and results of operations30% rewritten
2. 42Transactions relating to our 2024 Convertible Senior Notes may affect the value of our common stock46% rewritten

Risks Related to Regulatory and Intellectual Property Matters

1. 43Similar laws are being considered in several other states, as well as at the federal and local levels. These developments may further complicate compliance efforts, and may increase legal risk and compliance costs for us and the third parties with whom we workNew
2. 44to investigation, enforcement actions by regulators or other adverse consequencesNew
3. 45Failure to protect our proprietary technology and intellectual property rights could substantially harm our business, financial condition and operating results
4. 46Assertions by third parties of infringement or other violations by us of their intellectual property rights, whether or not correct, could result in significant costs and harm our business, financial condition and operating results
5. 47Our use of open-source software could negatively affect our ability to sell our solutions and subject us to possible litigation
6. 48We have integrated, and may continue to integrate, AI and machine learning ("ML") technologies into our products, services, and internal operations. The development, adoption, and use of AI and ML technologies present significant risks and challenges that could adversely affect our businessNew
7. 49AI‑generated outputs may contain errors, biases, or hallucinations, may be insufficiently explainable for financial‑institution compliance review, and may require human‑in‑the‑loop oversight, which could reduce efficiency, increase costs, or lead to campaign rejection or remediationNew
8. 50We are subject to government regulation, including import, export, economic sanctions and anti-corruption laws and regulations that may expose us to liability and increase our costs34% rewritten

Risks Related to Ownership of Our Common Stock

1. 51The market price of our common stock has been and is likely to continue to be volatile
2. 52We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock
3. 53Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock
4. 54Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us
5. 55Natural or man-made disasters, pandemics and other similar events may significantly disrupt our business, and negatively impact our business, financial condition and operating results
6. 56An active trading market for our common stock may not be sustained
7. 57Future sales of our common stock in the public market could cause our share price to decline
8. 58If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline
9. 59Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the U.S
10. 60Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism