Cardlytics (CDLX) Faces Investor Lawsuit Over Growth Projections - Hagens Berman

SAN FRANCISCO, Feb. 25, 2025 /PRNewswire/ -- Cardlytics, the advertising technology company that connects marketers with consumers through their banking apps, is facing a class-action lawsuit alleging that it misled investors about its growth prospects.

Hagens Berman urges Cardlytics, Inc. (NASDAQ: CDLX) investors who suffered substantial losses to submit your losses now. The firm also encourages persons with knowledge who may be able to assist in the investigation to contact its attorneys.

Class Period: Mar. 14, 2024 – Aug. 7, 2024
Lead Plaintiff Deadline: Mar. 25, 2025
Visit: www.hbsslaw.com/investor-fraud/cdlx
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Cardlytics, Inc. (CDLX) Securities Class Action:

The suit, filed in the Northern District of Georgia and captioned Froess v. Cardlytics, Inc., accuses the company and certain of its current and former executives of violating the Securities Exchange Act of 1934.

The lawsuit, which seeks to represent investors who purchased or acquired Cardlytics stock between Mar. 14, 2024, and Aug. 7, 2024, claims that Cardlytics made "false and/or misleading statements" and failed to disclose key information about its business. Cardlytics operates an advertising platform in the United States and the United Kingdom.

The plaintiffs allege that Cardlytics executives misrepresented the impact of increased consumer engagement on the company's financial performance. Specifically, the suit claims that while increased engagement did lead to a rise in consumer incentives, Cardlytics was unable to translate that engagement into commensurate growth in billings. This, the suit contends, created a "significant risk" of slowing or declining revenue growth. The lawsuit also points to the company's Ads Decision Engine, alleging that changes to the system, while increasing consumer engagement, led to "under-delivery" of budgets and customer billing estimates.

The lawsuit highlights two significant stock drops following the company's disclosures, which the suit alleges revealed the misleading nature of earlier statements made by Cardlytics and its executives.

On May 8, 2024, Cardlytics revealed that its first-quarter 2024 revenue had increased by only 8 percent year-over-year, despite a 12 percent increase in billings. This, the company said, was due to a 20.2 percent jump in consumer incentives. Following this news, Cardlytics stock price fell by more than 36 percent, according to the complaint.

Then, on Aug. 7, 2024, Cardlytics released its second-quarter 2024 results. The company reported a 9 percent year-over-year decline in revenue, to $69.6 million, and a 3 percent decrease in adjusted contribution, to $36.4 million. Cardlytics also announced the resignation of its chief executive, Karim Temsamani. The stock price plummeted by more than 57 percent following this announcement, the lawsuit states.

Hagens Berman is investigating the complaint's allegations.

"We're investigating whether Cardlytics may have misled investors about the prospects for its growth initiatives," said Reed Kathrein, the Hagens Berman partner leading the investigation.

If you invested in Cardlytics and have substantial losses submit your losses now »

If you'd like more information and answers to frequently asked questions about the Cardlytics case and our investigation, read more »

Whistleblowers: Persons with non-public information regarding Cardlytics should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].

About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

SOURCE Hagens Berman Sobol Shapiro LLP