Company: CDLX
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001666071-25-000159
Chunk: 113

Company: Cardlytics, Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 1
Chunk 113
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 as of September 30, 2025. As a result of the triggering event discussed above, we performed an impairment test as of September 30, 2025, and determined that the carrying value of the internal-use software development costs intangible asset associated with the Cardlytics asset group exceeded its fair value. The Cardlytics asset group is included in the Cardlytics platform reportable segment and primarily consists of the internal-use software development costs, which represents the predominant asset from which the group's cash flows are generated. As a result of the impairment test, we recognized an impairment of $9.7 million to the impairment of goodwill and intangible assets within the condensed consolidated statement of operations during the three months ended September 30, 2025.

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AmountBalance as of December 31, 2024$33,341 Additions to Capitalized software development costs, net15,852 Amortization on Capitalized software development costs, net(13,879)Impairment charge on Capitalized software development costs, net related to Cardlytics asset group(9,719)Balance as of September 30, 2025$25,595 The fair value of the intangible asset was estimated using the relief from royalty method, which estimates fair value based on the present value of the royalties avoided by owning the intangible asset rather than licensing it. Key assumptions in the valuation included an estimated royalty rate, projected revenue forecasts, and a discount rate, which reflect current market conditions and management’s expectations.

4.     REVENUE

The Cardlytics platformThe Cardlytics platform is our proprietary native bank advertising channel that enables marketers to reach consumers through the FI partners' trusted and frequently visited digital banking channels. Working with the marketer, we design a campaign that targets customers based on their purchase history. The consumer is offered an incentive (collectively, "Consumer Incentives") to make a purchase from the marketer within a specified period. We use a portion of the fees that we collect from marketers to provide these Consumer Incentives to our FI partners' customers after they make qualifying purchases. Leveraging our platform, we are able to create compelling Consumer Incentives that have the potential to increase return on advertising spend for marketers and measure the effectiveness of the advertising. Consumer Incentives totaled $37.2 million and $44.9 million during each of the three months ended September 30, 2025 and 2024. Consumer Incentives totaled $113