Company: CDLX
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001666071-25-000126
Chunk: 304

Company: Cardlytics, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 3
Chunk 304
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ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign exchange rates.

Interest Rate Risk

The interest rates under the 2018 Line of Credit are variable. Interest on advances under the 2018 Line of Credit bears an interest rate of the prime rate of 7.50% plus 0.25%. In July 2024, we amended our 2018 Loan Facility, which decreased the interest rate to prime rate plus 0.125%. As of June 30, 2025, the prime rate was 7.50% and a 10% increase in the current prime rate would, for example, result in a $0.5 million annual increase in interest expense if the maximum amount under the 2018 Line of Credit was outstanding for an entire year. The interest rate on the 2020 Convertible Senior Notes is fixed at 1.00%. On April 1, 2024 we issued the 2024 Convertible Senior Notes bearing an interest rate of 4.25%.

Foreign Currency Exchange Risk

Both Revenue and operating expense of Cardlytics U.K. Limited are denominated in British pounds. We bear foreign currency risks related to the extent that any unfavorable fluctuation in the exchange rate between U.S. dollars and the British pound could result in an adverse impact to either Revenue or expense. For example, if the average value of the British pound had been 10% lower relative to the U.S. dollar during the six months ended June 30, 2025 and 2024, our Revenue would have decreased by $1.1 million and $0.9 million, respectively. The overall impact to net loss would be partially mitigated by decreases in operating expense of $0.9 million and $0.8 million in the six months ended June 30, 2025 and 2024, respectively.

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