Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

QuinStreet Reports Results for First Quarter Fiscal 2024


QuinStreet, Inc. (Nasdaq: QNST), a leader in performance marketplaces and technologies for the financial services and home services industries, today announced financial results for the fiscal first quarter ended September 30, 2023.

For the fiscal first quarter, the Company reported revenue of $123.9 million, down 14% year-over-year.

GAAP net loss for the fiscal first quarter was $(10.6) million, or $(0.19) per diluted share. Adjusted net loss for the fiscal first quarter was $(1.4) million, or $(0.03) per diluted share.

Adjusted EBITDA for the fiscal first quarter was $1.0 million.

The Company closed the fiscal first quarter with $56.3 million in cash and cash equivalents and no bank debt.

"Fiscal Q1, or the September quarter, was another successful quarter for the Company," commented Doug Valenti, CEO of QuinStreet. "We delivered on our strategy to continue to invest in important long-term growth initiatives and to be positioned to take full advantage of the return of auto insurance spending, all while maintaining our strong financial position."

"Non-insurance client vertical revenue grew 18% year-over-year in the quarter and represented 79% of total Company revenue."

"Moving to our outlook, indications from carrier clients continue to support our expectation of a significant positive inflection in auto insurance client spending beginning in January. We expect that full fiscal year revenue will grow 5% to 15% year-over-year, and that adjusted EBITDA will grow significantly faster than revenue."

"For fiscal Q2, we expect revenue to be between $113 and $118 million, in line with typical sequential seasonality. We expect adjusted EBITDA in fiscal Q2 to be between $(0.5) and $0.5 million."

Conference Call Today at 2:00 p.m. PT

The Company will host a conference call and corresponding live webcast at 2:00 p.m. PT. To access the conference call dial +1 877-423-9813 (domestic) or +1 201-689-8573 (international). A replay of the conference call will be available beginning approximately two hours after the completion of the call by dialing +1 844-512-2921 (domestic) or +1 412-317-6671 (international) and using passcode #13742192. The webcast of the conference call will be available live and via replay on the investor relations section of the Company's website at http://investor.quinstreet.com.

About QuinStreet

QuinStreet, Inc. (Nasdaq: QNST) is a leader in performance marketplaces and technologies for the financial services and home services industries. QuinStreet is a pioneer in delivering online marketplace solutions to match searchers with brands in digital media, and is committed to providing consumers with the information and tools they need to research, find and select the products and brands that meet their needs.

Non-GAAP Financial Measures and Definitions of Client Verticals

This release and the accompanying tables include a discussion of adjusted EBITDA, adjusted net (loss) income, adjusted diluted net (loss) income per share and free cash flow and normalized free cash flow, all of which are non-GAAP financial measures that are provided as a complement to results provided in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The term "adjusted EBITDA" refers to a financial measure that we define as net loss less provision for (benefit from) income taxes, depreciation expense, amortization expense, stock-based compensation expense, interest and other (income) expense, net, acquisition and divestiture costs, contingent consideration adjustment, litigation settlement expense, tax settlement expense, and restructuring costs. The term "adjusted net (loss) income" refers to a financial measure that we define as net loss adjusted for amortization expense, stock-based compensation expense, acquisition and divestiture costs, contingent consideration adjustment, litigation settlement expense, tax settlement expense, tax valuation allowance, and restructuring costs, net of estimated taxes. The term "adjusted diluted net (loss) income per share" refers to a financial measure that we define as adjusted net (loss) income divided by weighted average diluted shares outstanding. The term "free cash flow" refers to a financial measure that we define as net cash provided by operating activities, less capital expenditures and internal software development costs. The term "normalized free cash flow" refers to free cash flow less changes in operating assets and liabilities. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. In addition, our definition of adjusted EBITDA, adjusted net income, adjusted diluted net income per share and free cash flow and normalized free cash flow may not be comparable to the definitions as reported by other companies.

We believe adjusted EBITDA, adjusted net (loss) income and adjusted diluted net (loss) income per share are relevant and useful information because they provide us and investors with additional measurements to analyze the Company's operating performance.

Adjusted EBITDA is useful to us and investors because (i) we seek to manage our business to a level of adjusted EBITDA as a percentage of net revenue, (ii) it is used internally by us for planning purposes, including preparation of internal budgets; to allocate resources; to evaluate the effectiveness of operational strategies and capital expenditures as well as the capacity to service debt, (iii) it is a key basis upon which we assess our operating performance, (iv) it is one of the primary metrics investors use in evaluating Internet marketing companies, (v) it is a factor in determining compensation, (vi) it is an element of certain financial covenants under our historical borrowing arrangements, and (vii) it is a factor that assists investors in the analysis of ongoing operating trends. In addition, we believe adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies and other interested parties in our industry as a measure of financial performance, debt-service capabilities and as a metric for analyzing company valuations.

We use adjusted EBITDA as a key performance measure because we believe it facilitates operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates or fluctuations in permanent differences or discrete quarterly items), non-recurring charges, certain other items that we do not believe are indicative of core operating activities (such as litigation settlement expense, tax settlement expense, acquisition and divestiture costs, contingent consideration adjustment, restructuring costs and other income and expense) and the non-cash impact of depreciation expense, amortization expense and stock-based compensation expense.

With respect to our adjusted EBITDA guidance, the Company is not able to provide a quantitative reconciliation to the most directly comparable GAAP financial measure without unreasonable efforts due to the high variability, complexity and low visibility with respect to certain items such as taxes, and income and expense from changes in fair value of contingent consideration from acquisitions. We expect the variability of these items to have a potentially unpredictable and potentially significant impact on future GAAP financial results, and, as such, we also believe that any reconciliations provided would imply a degree of precision that would be confusing or misleading to investors.

Adjusted net (loss) income and adjusted diluted net (loss) income per share are useful to us and investors because they present an additional measurement of our financial performance, taking into account depreciation, which we believe is an ongoing cost of doing business, but excluding the impact of certain non-cash expenses (stock-based compensation, amortization of intangible assets, and contingent consideration adjustment), non-recurring charges and certain other items that we do not believe are indicative of core operating activities. We believe that analysts and investors use adjusted net income and adjusted diluted net income per share as supplemental measures to evaluate the overall operating performance of companies in our industry.

Free cash flow is useful to investors and us because it represents the cash that our business generates from operations, before taking into account cash movements that are non-operational, and is a metric commonly used in our industry to understand the underlying cash generating capacity of a company's financial model. Normalized free cash flow is useful as it removes the fluctuations in operating assets and liabilities that occur in any given quarter due to the timing of payments and cash receipts and therefore helps investors understand the underlying cash flow of the business as a quarterly metric and the cash flow generation potential of the business model. We believe that analysts and investors use free cash flow multiples as a metric for analyzing company valuations in our industry.

We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.

Legal Notice Regarding Forward Looking Statements

This press release and its attachments contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties. Words such as "estimate", "will", "believe", "expect", "intend", "outlook", "potential", "promises" and similar expressions are intended to identify forward-looking statements. These forward-looking statements include the statements in quotations from management in this press release, as well as any statements regarding the Company's anticipated financial results, growth and strategic and operational plans. The Company's actual results may differ materially from those anticipated in these forward-looking statements. Factors that may contribute to such differences include, but are not limited to: the Company's ability to maintain and increase client marketing spend; the Company's ability, whether within or outside the Company's control, to maintain and increase the number of visitors to its websites and to convert those visitors and those to its third-party publishers' websites into client prospects in a cost-effective manner; the Company's exposure to data privacy and security risks; the impact from risks and uncertainties relating to the COVID-19 pandemic and its aftermath; the impact of changes in industry standards and government regulation including, but not limited to investigation enforcement activities or regulatory activity by the Federal Trade Commission, the Federal Communications Commission, the Consumer Finance Protection Bureau and other state and federal regulatory agencies; the impact of changes in our business, our industry, and the current economic and regulatory climate on the Company's quarterly and annual results of operations; the Company's ability to compete effectively against others in the online marketing and media industry both for client budget and access to third-party media; the Company's ability to protect our intellectual property rights; and the impact from risks relating to counterparties on the Company's business. More information about potential factors that could affect the Company's business and financial results are contained in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission ("SEC"). Additional information will also be set forth in the Company's annual report on Form 10-K for the fiscal year ended June 30, 2023, which will be filed with the SEC. The Company does not intend and undertakes no duty to release publicly any updates or revisions to any forward-looking statements contained herein.

QUINSTREET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

September 30,

 

June 30,

 

 

2023

 

2023

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

56,305

 

 

$

73,677

 

Accounts receivable, net

 

 

67,684

 

 

 

67,748

 

Prepaid expenses and other assets

 

 

8,690

 

 

 

9,779

 

Total current assets

 

 

132,679

 

 

 

151,204

 

Property and equipment, net

 

 

19,504

 

 

 

16,749

 

Operating lease right-of-use assets

 

 

5,806

 

 

 

3,536

 

Goodwill

 

 

121,141

 

 

 

121,141

 

Other intangible assets, net

 

 

36,122

 

 

 

38,700

 

Other assets, noncurrent

 

 

5,713

 

 

 

5,825

 

Total assets

 

$

320,965

 

 

$

337,155

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

34,286

 

 

$

37,926

 

Accrued liabilities

 

 

41,322

 

 

 

44,010

 

Deferred revenue

 

 

?

 

 

 

9

 

Other liabilities

 

 

7,649

 

 

 

7,875

 

Total current liabilities

 

 

83,257

 

 

 

89,820

 

Operating lease liabilities, noncurrent

 

 

4,047

 

 

 

1,261

 

Other liabilities, noncurrent

 

 

11,325

 

 

 

16,273

 

Total liabilities

 

 

98,629

 

 

 

107,354

 

Stockholders' equity:

 

 

 

 

Common stock

 

 

55

 

 

 

54

 

Additional paid-in capital

 

 

332,194

 

 

 

329,093

 

Accumulated other comprehensive loss

 

 

(268

)

 

 

(266

)

Accumulated deficit

 

 

(109,645

)

 

 

(99,080

)

Total stockholders' equity

 

 

222,336

 

 

 

229,801

 

Total liabilities and stockholders' equity

 

$

320,965

 

 

$

337,155

 

QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

September 30,

 

 

2023

 

2022

Net revenue

 

$

123,923

 

 

$

143,593

 

Cost of revenue (1)

 

 

116,274

 

 

 

131,245

 

Gross profit

 

 

7,649

 

 

 

12,348

 

Operating expenses: (1)

 

 

 

 

Product development

 

 

7,637

 

 

 

6,826

 

Sales and marketing

 

 

3,124

 

 

 

3,100

 

General and administrative

 

 

6,787

 

 

 

7,319

 

Operating loss

 

 

(9,899

)

 

 

(4,897

)

Interest income

 

 

166

 

 

 

7

 

Interest expense

 

 

(111

)

 

 

(226

)

Other income (expense), net

 

 

29

 

 

 

(23

)

Loss before income taxes

 

 

(9,815

)

 

 

(5,139

)

(Provision for) benefit from income taxes

 

 

(750

)

 

 

622

 

Net loss

 

$

(10,565

)

 

$

(4,517

)

 

 

 

 

 

Net loss per share:

 

 

 

 

Basic

 

$

(0.19

)

 

$

(0.08

)

Diluted

 

$

(0.19

)

 

$

(0.08

)

 

 

 

 

 

Weighted-average shares used in computing net loss per share:

 

 

 

 

Basic

 

 

54,470

 

 

 

53,350

 

Diluted

 

 

54,470

 

 

 

53,350

 

_________________________________

 

 

 

 

(1) Cost of revenue and operating expenses include stock-based compensation expense as follows:

Cost of revenue

 

$

2,052

 

 

$

2,119

 

Product development

 

 

773

 

 

 

765

 

Sales and marketing

 

 

640

 

 

 

652

 

General and administrative

 

 

1,810

 

 

 

1,734

 

QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

September 30,

 

 

2023

 

2022

Cash Flows from Operating Activities

 

 

 

 

Net loss

 

$

(10,565

)

 

$

(4,517

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

5,338

 

 

 

4,362

 

Provision for sales returns and doubtful accounts receivable

 

 

223

 

 

 

120

 

Stock-based compensation

 

 

5,275

 

 

 

5,270

 

Non-cash lease expense

 

 

(253

)

 

 

(262

)

Deferred income taxes

 

 

544

 

 

 

(802

)

Other adjustments, net

 

 

(438

)

 

 

(147

)

Changes in assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(159

)

 

 

5,822

 

Prepaid expenses and other assets

 

 

1,089

 

 

 

(426

)

Accounts payable

 

 

(3,603

)

 

 

(1,868

)

Accrued liabilities

 

 

(2,525

)

 

 

(1,594

)

Deferred revenue

 

 

(9

)

 

 

(293

)

Other liabilities, non-current

 

 

110

 

 

 

?

 

Net cash (used in) provided by operating activities

 

 

(4,973

)

 

 

5,665

 

Cash Flows from Investing Activities

 

 

 

 

Capital expenditures

 

 

(1,624

)

 

 

(476

)

Internal software development costs

 

 

(3,470

)

 

 

(2,561

)

Net cash used in investing activities

 

 

(5,094

)

 

 

(3,037

)

Cash Flows from Financing Activities

 

 

 

 

Proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan

 

 

1,579

 

 

 

1,560

 

Payment of withholding taxes related to release of restricted stock, net of share settlement

 

 

(2,187

)

 

 

(2,016

)

Post-closing payments and contingent consideration related to acquisitions

 

 

(5,277

)

 

 

(5,494

)

Repurchase of common stock

 

 

(1,426

)

 

 

(4,731

)

Net cash used in financing activities

 

 

(7,311

)

 

 

(10,681

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

6

 

 

 

(4

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(17,372

)

 

 

(8,057

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

73,692

 

 

 

96,453

 

Cash, cash equivalents and restricted cash at end of period

 

$

56,320

 

 

$

88,396

 

Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets

 

 

 

 

Cash and cash equivalents

 

$

56,305

 

 

$

88,382

 

Restricted cash included in other assets, noncurrent

 

 

15

 

 

 

14

 

Total cash, cash equivalents and restricted cash

 

$

56,320

 

 

$

88,396

 

QUINSTREET, INC.

RECONCILIATION OF NET LOSS TO

ADJUSTED NET (LOSS) INCOME

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

September 30,

 

 

2023

 

2022

Net loss

 

$

(10,565

)

 

$

(4,517

)

Amortization of intangible assets

 

 

2,578

 

 

 

2,822

 

Stock-based compensation

 

 

5,275

 

 

 

5,270

 

Acquisition and divestiture costs

 

 

?

 

 

 

32

 

Restructuring costs

 

 

270

 

 

 

50

 

Tax impact of non-GAAP items

 

 

1,023

 

 

 

(1,168

)

Adjusted net (loss) income

 

$

(1,418

)

 

$

2,489

 

Adjusted diluted net (loss) income per share

 

$

(0.03

)

 

$

0.05

 

Weighted average shares used in computing adjusted diluted net (loss) income per share

 

 

54,470

 

 

 

54,273

 

QUINSTREET, INC.

RECONCILIATION OF NET LOSS TO

ADJUSTED EBITDA

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

September 30,

 

 

2023

 

2022

Net loss

 

$

(10,565

)

 

$

(4,517

)

Interest and other expense, net

 

 

(84

)

 

 

242

 

Provision for (benefit from) income taxes

 

 

750

 

 

 

(622

)

Depreciation and amortization

 

 

5,338

 

 

 

4,362

 

Stock-based compensation

 

 

5,275

 

 

 

5,270

 

Tax settlement expense

 

 

?

 

 

 

32

 

Restructuring costs

 

 

270

 

 

 

50

 

Adjusted EBITDA

 

$

984

 

 

$

4,817

 

QUINSTREET, INC.

RECONCILIATION OF CASH (USED IN) PROVIDED BY

OPERATING ACTIVITIES TO FREE CASH FLOW

AND NORMALIZED FREE CASH FLOW

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

September 30,

 

 

2023

 

2022

Net cash (used in) provided by operating activities

 

$

(4,973

)

 

$

5,665

 

Capital expenditures

 

 

(1,624

)

 

 

(476

)

Internal software development costs

 

 

(3,470

)

 

 

(2,561

)

Free cash flow

 

 

(10,067

)

 

 

2,628

 

Changes in operating assets and liabilities

 

 

5,096

 

 

 

(1,641

)

Normalized free cash flow

 

$

(4,971

)

 

$

987

 

QUINSTREET, INC.

DISAGGREGATION OF REVENUE

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

September 30,

 

 

2023

 

2022

Net revenue:

 

 

 

 

Financial Services

 

$

72,125

 

$

94,990

Home Services

 

 

49,394

 

 

46,733

Other Revenue

 

 

2,404

 

 

1,870

Total net revenue

 

$

123,923

 

$

143,593

 


These press releases may also interest you

at 08:10
SG Analytics, a renowned global data solutions firm, proudly announces the appointment of Dr. Das Dasgupta to its esteemed Advisory Board. This strategic move promises to fortify SG Analytics' Data Strategy and Data Analytics offerings for the...

at 08:10
Today, BigBear.ai , a leading provider of AI-powered decision intelligence solutions, announced the completion of its acquisition of Pangiam Intermediate Holdings, LLC (Pangiam), a leader in Vision AI for the global trade, travel, and digital...

at 08:10
Kiromic BioPharma, Inc. ("Kiromic" or the "Company") announces that Virginia Oncology Associates, PC (Norfolk, Virginia) has been activated as the second clinical trial site in the Phase 1 Deltacel-01 trial evaluating Deltaceltm (KB-GDT-01),...

at 08:10
Myomo, Inc. ("Myomo" or the "Company"), a wearable medical robotics company that offers increased functionality for those suffering from neurological disorders and upper-limb paralysis, today announced that on February 29, 2024, the Centers for...

at 08:09
Hess today announced a new addition to its Hess Toy Truck collection -- the fifth in its plush toy series designed especially for its youngest fans. My Plush Hess Truck: 2024 School Bus is now on sale exclusively at HessToyTruck.com for $35.99 with...

at 08:05
Box, Inc. , the leading Content Cloud, today announced that it will host its FY25 Financial Analyst Day on Tuesday, March 19, 2024. Members of Box's executive management team will host a presentation followed by Q&A beginning at 11:00 a.m. PT....



News published on and distributed by: