Cardlytics (CDLX): The Most Underrated Marketing Platform in the World?

If you’re willing to look beyond short-term fears, you might be looking at one of the most undervalued opportunities in the entire world.

Cardlytics Inc / NASDAQ: CDLX

I believe the market doesn’t understand the competitive advantage, growth, and business model of the strongest digital marketing platform in the world. There’s a lot of ugly and difficult history behind us, plenty of problems, and recent events have caused most investors to dump the stock – today we’re looking at the lowest price in the company’s history. This is what I call a “special situation” and the kind of moment that gets me excited, precisely when everyone else is running away.

This is the story of a platform that connects millions of consumers and thousands of advertisers through banking apps.

And here comes a personal confession. This idea is not mine. I didn’t “discover” Cardlytics. Like every other investment I’ve ever made, I cloned it from someone smarter and a better investor than me. In this case, that’s Cliff Sosin – a man who runs a fund of almost two billion dollars. I like it when a company passes through the filters of someone smarter than me. And honestly, I like it even more that I’m buying it at a price much lower than the one Cliff paid (sorry, Cliff, if you’re reading this). And thank you for the idea.

And maybe it lies in my investing nature — that I only become interested when things go wrong. Because only then can you find something that makes no sense at all. And the nature of investing in the stock market is that we will sometimes see anomalies on both ends — either absurdly cheap or absurdly expensive.

Maybe I’m crazy, but while most see a terminal illness, I see a patient getting ready to get out of bed. Maybe, just maybe, we’re about to witness one of the wildest comebacks the market has ever seen.

“If there’s a ten percent chance of a one-hundredfold payoff, you take that bet every time.” – Jeff Bezos

Business Model

Let’s say you eat at McDonald’s. You open your banking app and see an offer: “20% off everything at McDonald’s.”You tap “activate”, pay with your card – and that’s it. The discount is automatically credited back to you. No codes, no coupons.

What really happens behind the scenes? Cardlytics is the “connector” between the advertiser (e.g., McDonald’s) and your bank. The bank already sees your card transactions, but that data never leaves the bank; Cardlytics simply helps display the right offer to the right person inside the bank’s system. For example, if you often eat fast food but rarely at McDonald’s, you’ll get the McDonald’s offer – or one from a competitor.

Then comes the most important part: measurement. Cardlytics always runs a small experiment – some people see the offer, some don’t – and compares spending. This way, McDonald’s knows exactly how much additional sales came from the offer (not “clicks,” but actual receipts).

Who gets what in this ecosystem?

• You get cashback for something you already regularly buy.

• McDonald’s pays Cardlytics only if it sees real sales growth. For $1 spent, it usually earns several times more in revenue. Most importantly, it can precisely target people who eat fast food – whether at McDonald’s or, even more importantly, at a competitor – in the places where they live, at their workplace, or where they frequently move around. In addition, McDonald’s gets measurable ROI and the ability to optimize future offers based on real transaction data.

• The bank gets its share and, more importantly, a more loyal customer who uses their card more often. In some new models, like with Amex, the bank doesn’t even take a revenue share, which allows the customer (and Cardlytics) to offer an even better discount. Here, the bank values engagement far more than the direct ad revenue.

• Cardlytics takes its cut from the ad dollar (the discount goes to you, the rest is roughly split between the bank and Cardlytics – or more to you if the bank skips its share).

The same principle works for gas stations, supermarkets, drugstores, hotels, travel – everything we buy every week. That’s why the model is powerful: small amounts that repeat constantly, at massive scale.

Cardlytics enables advertisers and companies to retain their customers – because any company that can take $1 from you is a great company, since it can also do it from a million others. But at the same time, it also enables competitors to win over your customers. That’s why this digital platform can become massive – it leverages the advantages of brutally competitive capitalism.

It will remain highly attractive to both advertisers and banks because, in the end, it’s about survival. In capitalism, everything eventually disappears – but the first to go are the companies that deliver little or no value. Cardlytics creates an ecosystem where every participant wins.

"Cardlytics, in some sense, the joke is that it’s a broken slot machine — you put money in and you always get more money out than you put in." - Cliff Sosin

Competitive Advantage (Ultra Simple)

Google and Facebook are among the largest companies in the world precisely because of digital marketing. How does it work? When you accept “cookies” online, you give permission for data about your visits and behavior to be collected. If you’ve recently looked at Nike sneakers (or it just feels like they’re listening to you), you’ll very likely see a Nike ad. These platforms piece together a profile from traces (searches, clicks, interests) and assume you might be a buyer. The emphasis is on — assume.

Cardlytics works differently. As an advertiser, through banking apps you can directly offer a discount to people who actually buy. Example: you want to sell a new Nike sneaker model. You target people aged 20–30 (segmented within the bank), who bought Nike sneakers about a year ago (time for a new pair) and regularly pay a fitness studio with their card — so they train. You offer them, say, 25% off — directly in their banking app — they activate with one tap, pay with their card, and the discount is credited automatically.

The key difference is in measurement. On Facebook/Google, performance is often “modeled,” assumed. With Cardlytics, you know: you show the Nike offer to 1,000 people, and another 1,000 don’t get it (A/B). You then know exactly how many activated the offer, how many bought, and what the exact ROAS (Return on Ad Spend) was.

In one sentence: Facebook/Google assume — Cardlytics knows.

The second competitive advantage is in data no one else has. Cardlytics today has visibility into roughly every second card transaction in the U.S. — about six trillion transactions per year. For scale: a trillion (10¹²) seconds ≈ 31,700 years; six trillion seconds ≈ 190,000 years. That’s how massive it is.

No other company has this combination of reach and data quality. Many have tried to “extract” banking data — including Google and Facebook — and got a “no, thanks.” Cardlytics got through because the data stays inside the banks. That’s why I say: Cardlytics is effectively a monopoly in this niche today. Anyone starting from scratch would have to go bank by bank, contract by contract, integration by integration. Banks are not eager to share data, regulations change, and even in ideal conditions it would take many years to replicate this model.

The third competitive advantage is that the business is capital-light. Annual costs for people, technology, and cloud are around $250–300M and remain similar even if sales grow into the billions.

This means every new revenue dollar comes with little additional cost, so margins rise over time. Similar to Amazon — while cloud (AWS) is its largest segment, Amazon Ads is the most profitable, because once the system is set up, revenue comes with almost no new investment. Cardlytics works in (almost) the same way.

One risk is that banks – as happened with Chase – could decide to run their own ads, offering bigger discounts since there’s no Cardlytics share in between. But that would mean around 50% fewer offers, especially because small and mid-sized businesses can’t easily scale without Cardlytics. Costs would rise, efficiency would drop – creating a lose-lose situation.

Cardlytics is literally a monopoly, a capital-light business with data no one else has — but at the same time, it’s dependent on the banks.

Painful History

“…the story of Cardlytics is like pushing a boulder uphill through mud.” – Cliff Sosin

For years, Cardlytics has been trying to build what we now call the largest bank advertising platform, but the road has been anything but smooth. For too long, they had too little reach, relying on a small number of banks and the slow adoption of mobile banking. Advertisers were slow to join — banks prefer large, well-known brands, and those brands are reluctant to commit to new channels. Even when they agreed, outdated app designs and limited ad space restricted results.

It has also happened in the past – and still does today – that Cardlytics lost clients when a CMO left and a new one came in who didn’t understand or trust the platform, choosing Facebook or Google instead. The key challenge is that most advertisers still don’t realize the difference between Facebook’s algorithm that only guesses, and Cardlytics’ model that actually knows through real transaction data. That’s one of the biggest challenges for the company’s future.

On top of that, Cardlytics had to convince the market of the value of its “gold standard” ad performance measurement — something that required education and time. All this happened while banks, slow and conservative by nature, made decisions on timelines measured in years, not months. And then there’s the ever-present risk — that big banks might try to build it all in-house, or that neobanks and Big Tech could steal their users. In such an environment, every technical advance — from better design, to a self-service platform, to advanced segmentation — required years of patience and integration.

Google and Facebook never had these problems. Their growth was lightning-fast because they had a global audience, simple integration processes, and didn’t have to wait years for major partners to approve every change. Cardlytics, by contrast, built its network in an industry where banks are slow, cautious, and introduce changes only after lengthy procedures.

Then came the blows that made everything worse. Bank of America ended its contract, and recently its largest financial partner — Chase — limited advertising to test its own platform. This loss of critical mass also makes it much harder to introduce advanced features such as product-level targeting, which previously represented a key driver of growth. Combined with declining sales, frequent CEO changes, and mass stock sell-offs by numerous investors, this led to a total collapse in share price. Today, Cardlytics trades at all-time lows, while the market speculates about a possible end to the company.

At the same time, advertisers are showing greater hesitation, as the smaller reach raises the risk of weaker campaign results or even discontinued offers. On top of that, the transition of ad spend to American Express is moving far too slowly. Both Amex and Wells Fargo are lagging in adopting new technology, while Bank of America has shown no willingness to make the shift at all.

Together, these issues create significant headwinds for a company that was already struggling to accelerate growth.

Why the Market (Probably) Is Overreacting

“Most things change over time, but some stay the same. People will always want low prices, fast delivery, and wide selection. It’s impossible to imagine them saying one day: ‘I wish it were more expensive.’” – Jeff Bezos

I believe most investors are too focused on the next quarter instead of looking at the bigger picture. The new CEO, Amit Gupta, only recently took the helm and needs time. So far, he has implemented several changes, but the key move has been significantly cutting costs to steer the company toward profitability.

When it comes to long-term investing in Cardlytics, it’s especially important to look far ahead — because with banks, everything moves slowly. Even Cliff Sosin was talking about CRP back in 2021, and it’s only now, in 2025, entering full swing, with profitability projected in 2026. Everything in this company takes longer than the market likes, but that doesn’t mean the model isn’t working.

Gupta has diversified the business — beyond the core FI (bank) segment, there are:

• CRP – a platform that opens the door for non-FI partners (like Fanatics) to run offers beyond traditional banking. Given Cardlytics’ reach (about half of all card transactions in the US and a quarter in the UK), CRP greatly expands the potential audience, adding new verticals like retail, restaurants, and loyalty publishers.

• Ripple (powered by Bridg) – a digital network for card-linked offers, which has just onboarded Hy-Vee’s RedMedia, expanding the Ripple network to over 285 Hy-Vee supermarket locations. This significantly increases reach to consumer audiences. Ripple also includes Giant Eagle’s Leap Media Group, a regional chain adding an additional 70 million shopper profiles with SKU-level data through Bridg’s technology.

• CPG (Consumer Packaged Goods) – The ability to advertise products at the SKU level means that McDonald’s, instead of giving one blanket 20% discount on everything (which could be unprofitable if coffee has a 10% margin while burgers have a 30% margin), can tailor offers to maximize profitability. For example, they could give 5% off coffee and 20% off a burger, or offer 10% off coffee only during slow hours when the restaurant is empty. This level of precision allows them to drive sales where it matters most, without unnecessarily cutting into margins.

  It’s a game changer for global brands like Coca-Cola, Unilever, or P&G, which spend billions of dollars annually on marketing but increasingly demand precise targeting and measurable ROI. Instead of wasting budget on broad, inefficient campaigns, they can now deliver the right discount to the right customer at the right time — and know exactly how well it worked.

• Non-FI partners – partnerships outside of banking, further expanding reach.

Notably, Amex is only beginning to scale, and the UK just had a record quarter. Advertisers remain, with new ones like Uber joining in. EBITDA is slightly positive — which means that despite all the challenges, the business is slowly turning in the right direction.

Is Bankruptcy Coming?

The market today treats Cardlytics as if it’s on the verge of bankruptcy. A very similar story happened with Carvana a few years ago — the stock dropped to $3.55, only to soon surge to over $400. That was a return of more than 100x (but only for those who bought instead of selling in fear :)).

Here, in my view, the situation is even better. Carvana at that time had about $9 billion in debt, while Cardlytics has around $220 million, and it’s spread out — part maturing in 2028, part in 2029. This means they still have plenty of time, and the debt is relatively small. On top of that, it’s convertible debt — if the stock rises above $19, the bonds convert into shares and the debt essentially disappears (with some dilution, but without heavy repayment).

In the worst-case scenario, I believe Cliff Sosin would step in, as it’s in his interest to see the stock reach its full — and enormous — potential. Also, Cardlytics works with banks, and it’s in the banks’ interest for CDLX to survive, as it brings them significant value. This means that, if needed, they could easily secure additional financing.

On top of that, I expect interest rate cuts in the coming months — a particularly big deal for nano-cap companies.

Yes — there are risks, but I think they’re smaller than they were with Carvana. The key is simply not losing any more major FI partners. For Cardlytics to recover, banks need to adopt new technologies faster and the company must secure another major partner, such as Capital One. In addition, meaningful international expansion is essential to regain scale and drive long-term growth.

Potential and Intrinsic Value

It’s hard to find a company that’s both this undervalued and has such a strong moat. Cardlytics is trading at all-time lows, while the market it operates in is massive.

I’m not going to focus too much on valuation, but here’s the short version – price is what I pay, value is what I get: price is around $60 million, the company has $45 million in cash, debt not due until 2029, EBITDA breakeven positive, I’m getting $250 million in revenue, likely double-digit annual growth for the next 20 years, Ripple, Bridg, etc. Cardlytics’ Card-Linked Offers (CLO) platform is finally gaining the mainstream recognition it deserves, as Company has been named Best Digital Ad Network at the 2025, beating over 4,000 global entries. And I get access to 6T transactions a year — how much is that worth?

This is a bet I’d take all day long.

Cliff Sosin has repeatedly emphasized that if all key pieces fall into place — MAU growth, higher user engagement, more granular offers (by category and SKU), international expansion, and growth into non-financial partners — revenue could approach Facebook’s US ARPU levels. For comparison, Meta earns about $68 per user per year.

Let’s say that in 10 years Cardlytics reaches 250 million users (today around 230M) and achieves the same per-user engagement as Meta — $68/year. That’s roughly $17B in revenue, which could mean about $7B in net income. If the market then values the company at a P/E of 20, you get a $140B market cap — about 2,300× today’s price!

And Cliff, if I apply a margin of safety and you’re wrong by 50% and it’s “only” a 1000x — I’ll forgive you everything. :)

And that’s just the US and UK. What if they expand internationally — Canada, Australia, maybe the EU (regulation is tougher), or Scandinavian countries where 100% of users do mobile banking? New partner Amex operates in 130 countries, and integration could be relatively smooth.

Honestly, I have no idea what the exact intrinsic value is. Sosin himself says it’s competitive advantage × TAM( Total Addressable Market). If TAM is around $100B and the competitive advantage is (currently) a monopoly on insight into 6 trillion in annual transactions, the numbers become almost impossible to pin down.

That’s why I believe Chase’s ad limits and BofA’s exit are just short-term noise. The signal is in the long-term picture — but for that reward, you need patience. With this company, you need a lot of patience, keeping a wide view. There will be ups and downs, but if it works, the returns will be insane.

And yes, there are negatives. There will be dilution, management has made mistakes, and everything seems to take five years longer than it should. But I know all of that is just noise, and that nobody will be talking about Chase limiting ads in 2025. By then, Chase will be nothing more than a footnote — a tiny mouse in the shadow of what this company will have become.

“I just don’t see advertisers not taking the free money in the long term, I don’t see consumers not taking the free money in the long term, and I don’t see banks not connecting the two… like water goes downhill.”
— Cliff Sosin on the long-term scenario for CDLX 0.00%↑

Cheers — Sandro :)