Earnings Call: Q1 2020

May 11, 2020

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2020 Cardlytics Inc. Earnings Conference Call. At this time, all participant lines are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kirk Summers, Chief Legal and Privacy Officer. Please go ahead. Good evening, and welcome to Cardlytics' Q1 2020 financial results call. Before we begin, let me remind everyone that today's discussion will contain forward looking statements based on our current assumptions, expectations and beliefs, including expectations about future financial performance or results, the anticipated impact of our key priorities on driving growth the timing of the rollout of Wells Fargo growth in FI MAUs or monthly active users future ARPU or average revenue per user expectations regarding adding new marketers and increasing marketer spend in 2020 the timing and evolution of our platform to provide self-service, the impact of COVID-nineteen on our business and the economy as a whole the impact of our rise, retain and return strategy and the sufficiency of our capital structure. A discussion of the specific risk factors that could cause our actual results to differ materially from today's discussion, please refer to the Risk Factors section of the company's 10 Q for the quarter ended March 31, 2020, that we filed earlier today and in subsequent periodic reports that we filed with the Securities and Exchange Commission. With are provided in the press release issued today and the 8 ks that has been filed with the SEC. Today's call is available via webcast and a replay will be available for 2 weeks. You can find all the information I've just described on the Investor Relations section of Cardlytics' website. Please note that a supplemental presentation to our Q1 results has also been posted to our Investor Relations website. Joining us on the call today is Cardlytics' leadership and CFO, Andy Christiansen. Following and CFO, Andy Christiansen. Following their prepared remarks, we'll open the call to your questions. With that, let me turn the call over to Scott Grimes, Cardlytics' CEO and Co Founder. Scott? Thanks, Kirk, and thank you to everyone for joining us on our Q1 2020 earnings conference call. First, we want to acknowledge that the past few months have presented unprecedented challenges around the world and in the global economy. Our hearts go out to those affected and Cardlytics has been doing its part to help ensure the health and safety of employees and community. 100% of the company has been working from home since early March. I am proud of our team for adapting to this evolving situation by maintaining business continuity and moving this forward to reach our goals. And of course, this is a particularly difficult time as a marketing company. One of our real strengths as a digital channel is our ability to drive customers into brick and mortar stores and restaurants. Additionally, our ability to find premium travelers and reach them via digital banking provides a powerful marketing tool for the travel vertical. With much of the U. S. And U. K. In lock down, consumer spending in our key verticals has been dramatically reduced and billings from these verticals are down in a similar way. But our team remains positive about the future. And despite the difficult nature of this crisis for our advertising partners, we have seen encouraging signs in the business. Spending in these verticals is improving relative to April. We are working closely with many marketers across all of our verticals to plan how we could help them restart their businesses. We can do this uniquely well due to the nature of our channel, our rich data set and our ability to provide an immediate and profitable return on marketing investments. We're also excited about new client opportunities that have arisen from the rapid disruption in our economy. Lynn will describe our RISE, retain and return strategy in more detail. Now let's review Q1 results. We delivered a solid first quarter with billings, revenue and adjusted contribution in the upper half of our prior guidance. Here are some of the highlights. Total billings for the Q1 were 67,800,000 dollars an increase of 16% year over year. Total revenue, which is equal to billings net of consumer incentives, was 45,500,000 6%. Adjusted contribution was $20,400,000 growing 16% year over year. In the Q1, we continued to grow the reach of our platform. We increased our average FI MAUs to 140,800,000 dollars a6% increase from the quarter and 30% from Q1 2019. As we announced in our Q4 earnings call, on May 15, 2020, my co founder, Lynn Lobe, will assume the role of CEO. Our team, our partners and our Board are all excited for Lynn to drive the next wave of growth. And she has done an exceptional job of keeping the company performing at a high level during this unprecedented environment we are in. I will continue to be closely involved with the company as Executive Chairman, where I'll be focusing on leading our Board of Directors, driving strategy and innovation and supporting Lynn and Cardlytics in any way I can. I'll now hand the call over to Lynn to provide greater detail on what we're seeing in our business. Lynn? Thanks, Scott. While we are disappointed with the impact the global pandemic is having on our business, we see opportunity as we help our advertising partners through this environment. Our key long term priorities of increasing the number of marketers working with us, bringing our solution to new industries, evolving the Cardlytics platform and continuing to demonstrate operating leverage in our business still remain. Today, I would like to focus on how we're helping our advertising clients navigate these extraordinary times. From the beginning, our business has been about driving commerce. And with clients facing severe swings in spend, both up and down, the value of purchase intelligence and our ability to reach the right consumer with cash back rewards is more important than it has ever been. We have a 3 pronged strategy in place designed to help all of our clients during the COVID-nineteen crisis, what we call rise, retain and return. First, there are industries that have experienced a rise in category spending, such as home fitness, home entertainment and streaming, meal prep and delivery, and direct to consumer ecom. Other industries are experiencing a rise in online spending, including grocery, pet supplies, office supplies, sporting goods and For all of these clients, we're providing a highly effective platform to acquire new customers and capture incremental spend. 2nd, we're working hard with brands who have experienced a boost in spend to help them retain the enormous amount of new customers they just acquired. We are very good at changing purchase behavior. Retail and grocery, in particular, have an opportunity to drive repeat behavior among their new customer base so they stay with them even when the pandemic ends. And third, for those advertisers who've been hit hard by drops in consumer spend and have paused their marketing, we are using our analytics to help them understand when and where spend may be coming back. We believe we're well positioned to be these clients first back in as they return to us when they resume marketing spend. Here are a few examples. Consumers are spending more on industries such as e as a whole. We've used our RISE strategy to address this spend for a major telco company, helping them to attract new customers during the pandemic. We drove 10% of all incremental subs for one of their programs in Q1 using our platform. We continue to grow our relationship with this important client by helping them bring in and then retain new customers. For clients whose focus is retaining their newly acquired customers, we're helping them dashboard, we're helping a major online grocery player focus on last, one time and light shoppers in regions where operations have begun to stabilize. Each week, we expand targeting to include designated marketing areas that move to the stable list. Finally, for our clients who've been hit particularly hard by the pandemic, we're providing supports with insights, flexibility and campaigns that reach consumers still spending in their category. 1 of our larger clients paused all of their marketing spend at the end of Q1, except for some of the campaigns they run with us. By targeting only consumers actively spending in their category, our client is still able to provide bank rewards that give consumers the savings they need right now in a way that doesn't set a dangerous precedent by encouraging consumers to go out of their home if they weren't already going. And despite the spend declines in travel, hospitality in many retail sectors, we continue to work hard to be good business partners to these clients so they'll be prepared to come out of the other side of this pandemic as well as they can. We continue to move on the evolution of our platform. While it's challenging building new capabilities from home, the team has embraced a number of new tools and practices, and we are confident we will deliver a basic version of our self-service by Q3, providing new tools and capabilities for our sales team and betas for agencies. Moving to the bank side of our business, we moved forward as planned on our Wells Fargo launch, which is more than halfway complete, and we continue to expect to reach 150,000,000 FI MAUs in Q2. As we've said on prior calls, we believe this scale places us on equal footing with other major U. S. Advertising platforms and provides a highly differentiated solution for marketers. We also recently announced a new 5 year agreement with U. S. Bank to begin a phased launch for its customers. Despite the challenging economic environment, I am looking forward to taking over as CEO on May 15 and continuing to reach the goals that Scott and I set forth when we started this company. We are very glad to be able to help our advertising clients during these challenging times and are equally grateful that we can help our bank partners provide targeted rewards and savings that customers need. With that, I will turn it over to Andy. Thanks, Lynn. First off, it's a pleasure to join the conversation and help share our unique story. And I'm very excited to continue contributing to the growth trajectory of Cardlytics in my new role. As Scott mentioned, we delivered solid Q1 results that were consistent with the guidance we provided everyone in March. But I first want to talk about our liquidity as that is top of mind for many of our investors. Then I can cover Q1 results and discuss our approach to guidance. We're comfortable that our current capitalization and liquidity will provide us the financial flexibility to fully weather the economic downturn triggered by COVID-nineteen and continue with some prudent strategic investments. We ended the quarter with $102,200,000 in cash compared to $104,500,000 in cash at the end of Q4. We also continue to have access to our undrawn AR facility, which had a total availability of $40,000,000 as of March 31. While there's a lot of near term uncertainty, we're focused on achieving our long term operational and financial goals and remain optimistic about seizing the opportunities in front of us. Before I dive into the numbers, I wanted to give everyone on the call a clear picture of how the quarter unfolded. The economic disruption caused by COVID-nineteen has been challenging for many of our customers and you can clearly see the impact in our results. For example, year over year billings growth was 12% in January, 32% in February and then declined to 5% growth in March as we saw consumer spending drop precipitously as the nation closed its doors. We saw further deterioration of our consumer spending and our billings in April, and we expect to see the effects of COVID-nineteen in our results over the coming months. We are hopeful to see a measured and revenue increased 26% year over year to $47,800,000 and revenue increased 26% year over year to $45,500,000 Our U. S. Revenue was up 28% year over year in Q1 Our U. S. Revenue was up 28% year over year in Q1 and our UK revenue grew 18%. Adjusted contribution was $20,400,000 in the Q1, up 16% from the Q1 of 2019. Adjusted EBITDA was negative $4,000,000 in the quarter, compared to negative $3,200,000 in Q1 of 2019, reflecting the revenue softness in the back half of March. As noted, we are continuing to invest in our business through the pandemic, which alongside with the effects of the crisis may cause fluctuations in our EBITDA over the coming quarters. ARPU during the Q1 was $0.32 down 3% year over year, primarily reflecting the 30% increase in MAUs stemming from growth at Chase and the Wells Fargo launch. Average MAUs grew from 108,500,000 in the Q1 of 2019 to $140,800,000 in the Q1 of 2020. We'd like to note, as we did last quarter, that ARPU will likely experience some pressure this year due to our MAU growth. And as a reminder, we think that MAU growth typically precedes our top line growth. Consistent with our recent commentary, we expect MAUs to grow to $150,000,000 once we fully launch Wells Fargo. And as Lynn mentioned, this is on track to be completed in the Q2. We expect some additional MAU growth through the rest of the year from the natural maturation of our ongoing efforts with FI Partners and continued adoption of digital banking. We had 26,800,000 shares outstanding at the end of Q1. Weighted average shares outstanding during the quarter was 26,700,000, which compares to weighted average shares outstanding of 20 2,500,000 during Q1 of 2019. Now on to guidance. Given the unprecedented nature of this global health crisis and its effect on both consumer spending and our advertising partners' budgets, we're unable to predict the effects on our business. We're therefore not providing Q2 guidance and are suspending our full year guidance until we have more visibility into the overall health of the economy. The best direction we can provide at this time is that we saw about a 50% year over year decline in billings and revenue in But we expect our billings will increase as consumer spending returns and marketers work to restart their businesses. Echoing Scott and Lynn, we are proud of our employees and the response to these difficult times. Despite the challenging environment, we are encouraged by the progress of our business and continue to focus on achieving our long term goals. We're all looking forward to the economy beginning to reopen and the eventual economic recovery. With that, I'll hand it back to Scott for his closing remarks before we open the call for questions. Scott? Thanks, Andy. Q1 was a solid but difficult quarter. We have never been more excited about our opportunities for growth and feel we have strong momentum despite the global crisis. We are cautiously optimistic that we are through the worst part of the crisis, but we have plans in place to address any scenario. Founding the company with Lynn 12 years ago and bringing the company to the point where it is has been one of the greatest honors of my life. Since this is my last earnings call as CEO, I want to thank all of the clients, partners and investors who believed in us. We couldn't have done it without you. I'm really excited about where Lynn and the team will bring the company going forward. Lynn and I are proud of our team's response in the workplace Thank Our first question comes from the line of Doug Anmuth with JPMorgan. Your line is now open. Great. Thanks for taking the questions. I have 2. First, just on the more recent color, you talked about March up 5%, but then obviously the significant deterioration in April to down 50%. Can you just help us understand where you are now kind of off of that April trough as we're in the first half of May? And then second, you talked about the analytics board that you rolled out. Just curious if you could elaborate a little bit how you're using that for customers, how much insight you're able to give them on a near real time basis given your views into bank and card spending? Thanks. Hey, Doug, it's Lynn. I'm going to take the dashboard part of the question, then I'll let Yogi give you any additional color he can give you on May. So the dashboard we actually developed a good 6, 7 weeks ago. It is a while it lags a couple of days, it is a real time on a daily basis dashboard where we are tracking at the geographic level where spend is down and up at the very detailed category level. And so it's not a dashboard that we widely send to any given client, but we're using it to engage all of our clients, whether they're in the rise, retain or return bucket to help them understand what's happening in specific markets, what's happening with consumers who are still going out and spending in stores, what's happening with consumers who are spending online, what's happening with their overall spend relative to the vertical in any particular area. So it has been we've always talked about the power of purchase intelligence and if there was ever a time that power was really shining, it's now. We're engaging with all of our customers even if they're not spending with us because we're helping them understand what's happening. And it's why we firmly believe we're going to be first back in for many of them because we can spot at a very granular level where they should be spending. So it's a really cool dashboard, happy to send you some examples of it, and even happy to use it to help answer some other questions potentially. But with that, I'll turn it over to Andy to talk more about May. Thanks, Lynn. April was pretty severely impacted by the initial reaction of the crisis. Consumer spending dropped pretty significantly starting in March. And then we had quite a few advertisers pulling budgets across really across a lot of their channels. And in late May, I tried to really kind of reassess their strategy. So April was definitely a tough month. Our data has lagged about 2 weeks, but we have seen consumer spending stabilize since that kind of initial shock. And the shape of the recovery is really going to be similar to how we recover. We're not providing any further guidance on Q2, especially May. But what I'll say is our billings will be depressed basically so long as we see depressed spend and businesses remain closed. But many states have started to reopen, and we expect business to pick up in the back half as that happens. Yes. And just to put more color to Andy's commentary, we do see early indications of spend coming back. And he is absolutely right. When the spend comes back, the advertisers come back. And as I mentioned, I think we're well positioned to be 1st back in because we can call every advertiser we have and say the spend is coming back, it's coming back in these markets and you should be on top of it. Yes. You know what's interesting, in our Q1 guidance, one of the reasons we were conservative was we saw spending beginning to drop in the early markets like Hawaii and Seattle, and that's what made us nervous about what was happening in March. The same way I think we're seeing we have good visibility on that maybe what's going to happen as we go into the recovery. And one of the things that we're able to do so well to see the spend, right, is that we see where the spend is strong and where it's going and can adjust and pivot because we see it, right? And so as we see the spend move around between different industries, as we see the spend recover in areas that have been historical strength, what we're trying to position to be there at those right times. Great. Thank you. Appreciate the color. Thank you. Our next question comes from the line of Youssef Squaw with SunTrust. Your line is now open. Hi, this is Sagar on for Youssef. Two questions, if I may. 1, will the change environment have any effects on the dynamics between the consumer incentives and FI share? And then 2, can you expand on any vertical or industry exposure? Last quarter, I remember there was discussion around refunds with specific travel advertisers. Just wondering if we can get an update on that as well. Thanks. Sure. Hey, this is Andy. No, we're not expecting any significant changes in the relationships between our billings, our revenue, adjusted contribution. We expect that what you've seen historically is what we're kind of forecasting ourselves moving forward. Now I don't know we did see obviously when you look back Q1 of 2020 compared to Q1 of 2019, you will see obviously a little bit of noise because of the ECI. So it's just a reminder that ECI, those investments of enhanced consumer incentives that were made back in last year really was an increase in our incentives and a reduction in our FI share. But that has really been kind of that one period where we saw a large spike. But sequentially, for the last several quarters, we've been relatively stable there. And then the question about billings release? I can take that one as well, sure. Yes, we actually have not engaged in any material billings relief for our clients. Obviously, we work very closely with them to make sure that we're providing them the necessary return for their business, but we haven't seen any material activities there. Okay. And is there any other color on just vertical or industry exposure? I know it's been a little bit of time since you guys have given some color on that as well. Sure. I think historically, right, we all kind of know that retail and restaurant have really been the biggest industries that we serve. Obviously, we've seen a lot of new order verticals, new industries where we have moved into like direct to consumer, e commerce, travel. And so we have gained additional exposure to other industries over time. But those restaurant and retail industries continue to be our largest areas. Obviously, what's happening in travel, it's all apparent to us that what you read out there is absolutely true that that is a tough place, but that's an area we've been making a lot of progress up until recently. Okay. Thanks. That's all very helpful. Thank you. Our next question comes from the line of Chris Shutler with William Blair. Your line is now open. Hey, everyone. Thanks for taking the question. Hope that you're all doing well. First on expenses, maybe just if you could give a little bit more detail on how you're managing expenses in the current environment? And just looking at the P and L, it looks to me like if we exclude the FI share and exclude depreciation and amortization, you're running at about $29,000,000 of Q1 operating expense. Maybe just help us think through how to think about that number over the course of the remainder of the year under different scenarios? Like is that a good run rate number or should we expect it to come down? Yes. So this is Lynn. Let me kind of answer it more from a philosophical standpoint and then I'll let Anne, Sandy, get into more of the detail. But from a philosophical standpoint right now, we see this as a good opportunity to be prudent in how we're spending our money. So we are certainly not making any unexpected or unwise investments in people or anything else right now. But we also see this as an opportunity though to make smart investments, particularly in people and hiring. We are fortunate in that we have a strong balance sheet. We can all work from home. And so we have not really missed a beat in terms of productivity in this company. Many others have had to lay off an awful lot of talent. And so we are very much looking at this as an opportunity to get talent that maybe wouldn't have taken our phone calls 6 or 9 months ago, and to opportunistically fill in where we can. So I would expect that our expenses, while this is still going on, we're going to do a good job of making sure that we are below where we've been in the past, but we're not trying to cut costs or save money aggressively just because. We're doing it because it's smart in this time and we're still hiring when we can. So Andy, I don't know if you can add more color to that. Yes. And really when I look at the OpEx trends, right, if you really kind of look at it ex stock comp, you get somewhere close to about 25. And certainly, as Lynn mentioned, there are some things that we are doing that you're going to see some natural kind of savings, right, from an incentive compensation, travel and marketing has been suspended, those types of things, right? But when I look out into the kind of the near term, we're not doing anything unnatural that would really distort kind of our run rate of OpEx. And I think we're actually trying to be prudently investing during the crisis. So that really you may not see a lot of movement at all in OpEx depending on how much things come back. One of the difficult things to model is the level of incentive compensation that's going to be following our billings performance, right. So you kind of have a washing of some natural things going on and some investments. But I would say, by and large, we would expect some small kind of incremental OpEx growth here in the near future. Now that being said, if this goes on for many, many months, if we see a second different conversation. But right now, we are cautiously optimistic that spend is starting to come back in pockets and we will continue to follow the strategy that you just say that. Okay, great. Maybe just another one, just to put a finer point on it. Can you give a sense of maybe in 2019, how big was incentive comp as a percentage of total OpEx? I don't have that here in front of me, but I believe it would be probably in the I would think in the high single digits. High single digit percentage? High single digit, 1,000,000. 1,000,000, got you. Okay. And then lastly, just with your FI partners, just how are they is there anything different that you're doing with them in the current environment, working more closely with them in any ways? Do you see them doing anything around the plowing more of their FI share into consumer incentive? It doesn't sound like that's the case, but any more detail would be great. We're obviously working very closely with all our FI partners basically to make sure that the content is appropriate for the time. They are understandably concerned that they don't want to incentivize people going into stores when it's not safe. And so we've done a lot of work with each individual FI to comb through the content, make sure that we take out content if it wasn't already sold by the advertisers, take out content where it's in store only. We've done a lot of work indicating what stores and locations have, for example, drive through or pickup options, what stores have online options. So we've gone through and made the program, tone appropriate for the pandemic. And our banks are actually really quite pleased with the way we've been able to do this. And they're very much positioning it as, it's a way for you to save money at a time when you need it the most. We have had 1 or 2 banks really lean forward in using us to help them try to identify, for example, healthcare workers or essential workers who may still be spending and to figure out if there's some ways we can help them. It's in the very early stages. But the banks are generally being very supportive partners during this time, understanding that obviously offer content is falling and just making sure that what we do have is appropriate. Okay. Thanks a lot. Thank you. Our next question comes from the line of Tim Willi with Wells Fargo. Your line is now open. Hey, thanks and good afternoon everybody. A couple of quick questions. One is just going back a little bit to the engagement of the consumer with DFI. Do you have any visibility into how that engagement and logins, etcetera, looked over the last couple of months? Just sort of curious if you were seeing consumers more frequently check for offers. I think as you just said, Lynn, it's a way to save money in these times. And so I'm just curious if there's anything that you could point to around the consumer and the bank and that frequency that's interesting or worth pointing out over the last couple of months? Yes. So first of all, we are tracking it very carefully. We actually we have 2 dashboards that we are tracking very carefully. 1 is the spend dashboard that we discussed earlier and then there's an engagement dashboard that we're looking at closely to help the banks understand who is still engaging with the program, who might not be. And the main reason we're doing that is, there is a bucket of customers who were engaging that have fallen off. And we have plans down in place with the banks for when the content starts to resume and become really strong, how do we get them back. But importantly, while there's a bucket of consumers that have engaged less because they're just spending less and they're going online less, there is a bucket of consumers who are actually going online quite a bit more. And those consumers are engaging quite frankly at higher levels than they were before this. So in the end, net net, engagement is about the same if you look at it across the board like on a total percentage level, but you've got some who are engaging more and you've got some likely those who don't have a job right now who are engaging less. And again, another place where I'm optimistic, the banks are working with us to say, how do we identify that they've likely gotten their jobs back and remind them that we now have other ways to help them save money when they have money to spend. So I hate to say it's a positive because obviously this is a terrible situation, but it has the trends are very much in the favor of our platform and what we see and the kind of spend that we drive and the direct benefits that we give to consumers. Okay, great. And then second question, I guess, just going back to sort of as the economy reopens and spending, do you it sounds like you expect your marketers and your content providers to be a little bit more, I guess, reactionary once they see evidence that, yes, whether it's in the state of Georgia or somewhere else that people are back out spending again restaurant wise or other, then they will, I guess, turn back on campaigns? Or do you think that there is some aspect of your content providers that will utilize Cardlytics as sort of their strategy to be in the front of a consumer's mind when those states reopen, if that makes sense? So again, think about our 3 prong strategy, rise, retain, return. For the rise and retain categories, we are actively working with them now and they are show show or even DMAs are starting to show signs of recovery and they have their campaigns in even before the recovery has fully happened. So that's the first time the consumer is actually going to say, okay, I'm going to go do some online grocery shopping or do some store shopping even, their stuff is there. So for the rise and retain category, they're being very proactive, but it's mainly because the spend has gone to them and they're trying to make sure they retain that spend as everything else recovers. For the return clients, I'm sure it's going to be a bit of both, but for many of the return clients, I think we will I'm not going to guarantee this, but I'm going to confidently tell you, I think we'll be first back on for many of them and the 1st place where they start to spend marketing dollars, when they start to spend marketing dollars. But they are certainly being a little bit more cautious, particularly because they don't want to set a precedent of advertising people to come into stores when it's not yet safe to do so. So it's very different than the rise and return categories where they're much more incenting the online purchases, the delivery purchases, the subscription purchases, etcetera. Excellent. That's all I had. Thanks very much. Thank you. Our next question comes from the line of Josh Beck with KeyBanc Capital Markets. Your line is now open. Thanks, Kim, for the question. I'm glad to hear everyone is doing well. I just wanted to ask a little bit more from the FI side. Has there been much of an impact on CX and how they're thinking about the importance of online banking and also the associated implementation. Obviously, they're reprioritizing things internally quite a bit. So I'm just wondering, have you seen any change in the importance of your type of solution from the FI point of view? Well, I mean, here's what I will point to. The Wells Fargo launch remains on track in the midst of a global pandemic, which I think is fairly telling. U. S. Bank, as we announced in the last quarter earnings call, is leaning forward heavily and has very aggressive time lines, which I'm not going to share because I don't know if they'll make them or not, but very aggressive time lines from their perspective. So I think, look, it's a good program. It drives good bank behavior, bank customer behavior and at a time when people are trying to save money, it's a pay per performance channel for marketers. Again, like I said, I hate to say this pandemic is playing in our favor, but it's playing in our favor. Yes. And I think that's certainly consistent at least how banks are thinking about the importance of digital with some of the comments we've heard from them on their earnings calls. So that makes a lot of sense. And I think, Lynn, maybe you mentioned it, but you said there were some early signs, I realize it's very early of spend coming back. And I'm just wondering if there's any other color you can provide either within a certain vertical or any other way to double click and provide a bit more color on that comment? Yes, sure, happy to. So probably the most tangible example, Georgia is one of the first states that has opened up and we all happen to live in Georgia. So we are watching that pretty closely. In Georgia, we have seen an uptick in spend in just about every category with the exception of travel. That is still pretty down. But restaurants reopened a week and a half ago and we're already seeing it noticeable at a scaled level in Georgia in terms of the impact on spend, same with retail. So now we're watching the impact in other states as they start to return. But like I said, the only place I believe, correct me if I'm wrong guys, but the only place where we have not started to see signs of it coming back in states that have opened is travel and it's still pretty down there. Okay, very helpful. Thank you. Thank you. Our next question comes from the line of Aaron Kessler with Raymond James. Your line is now open. Great. Thanks. A couple of questions. Maybe just first on e commerce, obviously, a lot of consumers have shifted more towards e commerce. Just curious maybe how you benefit from that shift if the contracts work the same as a consumer purchase on e commerce versus in store? And have any advertisers paused just because they're getting made a lot of organic traffic right now? Obviously, grocers would be one example where they're getting more organic traffic and may not to advertise as much? Thank you. Yes. I mean, so we have had a few advertisers pause because they don't need the traffic right now. Whether it's a combination of they don't have the supply chain ready in their stores or they just don't have the staff and the people to handle the volume. We have had some advertisers pause because it's too much versus not enough. But that plays right into our retain strategy, right? That we are seeing enormous upswells in certain areas, and we're going to be there to help them retain those customers and retain that market share. So that is definitely one of the 3 prongs, absolutely. And e commerce is a big strength for us, where a lot of our largest advertisers use this. So what we have found is that when somebody is a customer of a retail store and also an e commerce customer, their overall spend with the brand is 2x. And so where we've been doing a lot of work way before the pandemic hit is how do we make your brick and mortar customers, also your e commerce customers, it's an even more powerful time to be doing that now and we're also being very cord leaning to our advertisers. Got it. And then can you just maybe quickly comment on for restaurants maybe the QSRs versus the more dine in restaurants, maybe differences that you're seeing there? There are, I don't know it off the top of my head. Okay, everybody is telling me QSR is faster than the dine in restaurant, probably because of the drive through option. So yes, they've all got the dashboard in front of them. I don't have the advantage. Yes, they're down maybe slightly less, but obviously I think all in general is trying to adapt. Got it. Great. Thank you. Thank you. Our next question comes from the line of Jason Kreyer with Craig Hallum. Your line is now open. Great. Thanks for taking the questions. Just a question, just with the consumer side of things a little bit slower right now, are you seeing any opportunities to like accelerate the R and D pipeline internally or potentially accelerate things that you do with the financial institutions to get kind of updated platforms pushed out to them quicker than you would have thought? It's a great question. We are doing our best to accelerate our product roadmap. The roadmap itself is firm, but accelerate the timeline. It is challenging building things working from home. So we've had to go out and deploy some new tools to help make that happen remotely. Those tools are deployed. So what I would say is we are we continue to remain very confident that we will, for example, deliver a self-service tool for the back half of twenty twenty. Our ability to accelerate that is still being tested, to be very honest with you. Don't underestimate how hard it is to get 60 developers all coding together at once virtually. But we're still confident in moving forward as best we can and we won't fall behind. We may not just be able to accelerate those. Sure. Fair enough. And obviously, you guys have access to a lot of data. You shared some of that with us last quarter. But you're seeing some states that never went into sheltering orders. Other states have already opened things up and you just commented on some of that. But is there any timeline towards those volumes bouncing back that you've seen, whether it be, again, those states that didn't go into sheltering or like your home state? Did that open up pretty quickly with spend accelerating or was there any delay there? I mean, I can go off what I know off the top of my head. Like I said, in Georgia, we saw it in less than a week and a half in terms of QSR and restaurant spend starting to pick back up. So it did not take long. Other states who never really had a shelter in place, their spend is still pretty significantly. I don't think you see a material difference between them not having a formal shelter and their spend impact. I think they were all down pretty equally. It's the recovery I think that is going to be very different by state. Okay. And just the last one. I know there's obviously there remains a focus in bringing in advertisers. Just wondering what those sales cycles are like right now? What are you engaging with those people? And then are you making productive progress towards agreements? Or is that tough to come by in this kind of an environment? Again, it's another place where we're really advantaged. Our clients, even if they're not spending with us, want to talk to us because we have this amazing insight that nobody else on the planet has, which is where are people starting to spend, how can we get in front of it and how can we get ahead of it. So if our Head of Sales were on this call, he'd tell you that our phones are ringing as much as they ever were, if not more, with people who want our insights, which is why we're pretty confident that we're going to be first back on for those who have shut off. And for those who haven't, many of those rise and retain customers that I talked about are brand new customers. They weren't spending with us in Q4. And I think it's probably fair to say we have more senior relationships too. Yes. Because we're bringing yes. The senior people are really trying to get their arms around it. That's a great point. That's a great point. We have senior up a lot of our relationships. So I don't again, we were down 50% in April, I want to be clear, but we are really, really optimistic that things are moving in our favor in a pretty good way. I appreciate the color. Thank you. Thank you. Our next question comes from the line of Nat Schindler with Bank of America. Your line is now open. Yes. Hi. Is there any chance you can kind of detail and maybe remind us what the breakdown by industry your advertisers fell into kind of, let's say, at the end of 2019? And then as you look at are you making a lot of comments that travel hasn't returned? Is it where that you can kind of predict where those are going to go in Q2 as we hit these kind of wade through these bottoms? Yes. Thanks, Dan. This is Andy. So we've provided in the past, I think, a little bit of color around retail and restaurant really being our largest industries. And certainly coming into this, we've been making a lot of progress in the travel space. And we've seen the significant declines there and really have not seen any material bounce in travel at this point. So that's really obviously hard to predict when that may come back. But that was obviously a little bit smaller industry than, say, retail or restaurant. And that's about as much detail on the industries that we really have for you. Okay. Thank you. Thank you. This concludes today's question and answer session. I would now like to turn the call back to Scott Grimes for closing remarks. Hey, everybody. First of all, thank you for joining the call today. While it's certainly challenging times, we continue to be super impressed with how our team is operating through all this. And while it feels weird to say it, I think the company is probably in its best position ever and really well positioned to grow. I think as most people realize also, this is my last earnings call as CEO. I think it's where it's exciting, it was time for the company to upgrade the talent of its CEO and CFO, and we've done that with Lynn and Andy, and I couldn't imagine the company being in better hands. So thank you to everyone who supported us over the past few years, and we're really excited about what's coming over the next few years. So thanks, everybody. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. 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