Company: CDLX
Filing Date: 2025-04-03
Form Type: ARS
Source: 0001666071-25-000048
Chunk: 100

Company: Cardlytics, Inc.
Filing Date: 2025-04-03
Form: ARS
Chunk 100
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 make significant judgments related to discount rates and forecasts of future revenues and cash flows. Changes in these assumptions could have a significant impact on either the fair values of the reporting units, the amount of any goodwill impairment charge, or both. The Company performed an interim impairment test for goodwill as of September 30, 2024. As a result of the continued slowdown in the economy and decreased consumer spend, which resulted in further declines in the Company’s stock price, the Company recognized a goodwill impairment charge of $117.8 million for the Bridg platform reporting unit, as the fair value of the reporting unit was determined to be less than its carrying value. This eliminated all remaining Goodwill allocated to the Bridg platform. No impairment charge was recorded for the Cardlytics platform in the U.S. reporting unit. The consolidated goodwill balance was $159.4 million as of December 31, 2024, the entire balance of which was allocated to the Cardlytics platform in the U.S. reporting unit. We identified valuation of goodwill for the Cardlytics platform in the U.S. reporting unit and the Bridg platform reporting unit as a critical audit matter because of the significant judgments made by management to estimate the fair values of these reporting units. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the selection of the discount rate and forecasts of future revenues and cash flows for the Cardlytics platform in the U.S. reporting unit and the Bridg platform reporting unit. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the valuation methodology, discount rate and forecasts of future revenues and cash flows used by management to estimate the fair value of the Cardlytics platform in the U.S. reporting unit and Bridg platform reporting unit included the following, among others: • We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the Cardlytics platform in the U.S. reporting unit and Bridg platform reporting unit, such as controls related to management’s selection of the discount rate and forecasts of future revenues and cash flows. • With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate, including testing the source information underlying the determination of the discount rate, testing the mathematical accuracy of the calculation, and developing a range