Shares of Cardlytics, an Atlanta-based advertising platform, experienced a surge after the company resolved a shareholder dispute and announced better-than-expected fourth-quarter results.
Settlement Agreement Reached with Shareholder Representative Services
Cardlytics successfully reached a settlement agreement with Shareholder Representative Services (SRS). SRS represented former shareholders of Bridg, a customer-data platform that Cardlytics acquired in 2021. The dispute primarily revolved around earnout payments related to the merger agreement’s first and second anniversary.
According to the settlement deal, Cardlytics will pay $25 million in cash to SRS and issue them 3.6 million shares of the company’s common stock. The cash payment will be distributed between January 2024 and June 2025. The total settlement value is under $46 million, and no further payments for withheld earnouts are required.
Promising Q4 Results Exceed Expectations
Cardlytics also released preliminary results for the fourth quarter, which showcased strong performance. The company estimates revenue to be in the range of $89 million to $90 million, surpassing both their earlier projections and the $84.7 million forecast by analysts.
Furthermore, adjusted Ebitda is expected to surpass previous guidance, indicating strong profitability, while billings are projected to align with the upper range of expectations. These promising fourth-quarter results imply positive adjusted Ebitda for the entirety of 2023.
With this positive momentum, Cardlytics’ stock price increased by 25% to $7.24 on Monday, partially offsetting the 19% decline since the beginning of the year.