- Quarterly revenue of $130 million, exceeding
outlook
- Continued strong performance in non-insurance client
verticals
- Continued disciplined margin and expense management
- Solidly cash flow positive, strong balance sheet, no bank
debt
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 fourth quarter and fiscal year ended June 30, 2023.
For the fiscal fourth quarter, the Company reported revenue of
$130.3 million, down 11% year-over-year.
GAAP net loss for the fiscal fourth quarter was $(55.9) million,
or $(1.03) per diluted share. Adjusted net loss for the fiscal
fourth quarter was $(0.5) million, or $(0.01) per diluted
share.
Adjusted EBITDA for the fiscal fourth quarter was $1.8
million.
For full fiscal year 2023, the Company reported revenue of
$580.6 million, approximately flat year-over-year.
GAAP net loss for fiscal year 2023 was $(68.9) million, or
$(1.28) per share. Adjusted net income for fiscal year 2023 was
$7.3 million or $0.13 per diluted share.
Adjusted EBITDA for fiscal year 2023 was $16.7 million.
For the fiscal fourth quarter, the Company generated $18.0
million in operating cash flow and closed the year with $73.7
million in cash and cash equivalents and no bank debt.
“We said last quarter that we would continue to make great
progress broadening our footprint and delivering good results in
non-insurance client verticals. We did that in fiscal Q4,”
commented Doug Valenti, CEO of QuinStreet. “Non-insurance client
vertical revenue grew at a strong double-digit rate, and we expect
those businesses to grow at strong double-digit rates for the
foreseeable future. These are enormous market opportunities. We
also said last quarter that we would stay prepared to take full
advantage of the return of auto insurance client spending when it
comes. Our technology, products, and competitive position in auto
insurance have never been better. We expect excellent operating
leverage and financial inflection when auto insurance client
budgets return. Finally, we said last quarter that we would
maintain a strong financial foundation. And we did. Through
continued margin and expense discipline, we generated solidly
positive adjusted EBITDA and good cash flow in fiscal Q4, improving
our already strong balance sheet.
“Moving to our outlook, for full fiscal year 2024, which began
in July, we continue to expect that revenue and adjusted EBITDA
will grow at double-digit rates year-over-year driven mainly by
continued momentum in non-insurance client verticals. We expect a
significant positive inflection in auto insurance client spending
to begin in January. We will also, of course, maintain our strong
balance sheet.
“For fiscal Q1, we expect revenue to be between $120 and $125
million and adjusted EBITDA to be approximately break-even.
“Our longer-term outlook has never been better. We expect
double-digit annual revenue growth rates due to continued strong
performance in non-insurance businesses alone. Revenue from
non-insurance businesses grew 26% in FY23 to over $367 million, and
has grown organically at a compound annual rate of 19% over the
past three years. We also expect insurance revenue to be up and to
the right, eventually returning to and exceeding prior peak levels.
We expect adjusted EBITDA to grow faster than revenue, eventually
exceeding a 10% margin,” concluded Valenti.
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
888-886-7786 (domestic) or +1 416-764-8658 (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 #65611073. 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)
June 30,
June 30,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
73,677
$
96,439
Accounts receivable, net
67,748
81,429
Prepaid expenses and other assets
9,779
4,924
Total current assets
151,204
182,792
Property and equipment, net
16,749
9,311
Operating lease right-of-use assets
3,536
6,801
Goodwill
121,141
121,141
Other intangible assets, net
38,700
49,696
Deferred tax assets, noncurrent
—
44,220
Other assets, noncurrent
5,825
5,948
Total assets
$
337,155
$
419,909
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
37,926
$
42,410
Accrued liabilities
44,010
54,459
Deferred revenue
9
341
Other liabilities
7,875
12,369
Total current liabilities
89,820
109,579
Operating lease liabilities,
noncurrent
1,261
3,858
Other liabilities, noncurrent
16,273
20,472
Total liabilities
107,354
133,909
Stockholders' equity:
Common stock
54
53
Additional paid-in capital
329,093
316,422
Accumulated other comprehensive loss
(266
)
(261
)
Accumulated deficit
(99,080
)
(30,214
)
Total stockholders' equity
229,801
286,000
Total liabilities and stockholders'
equity
$
337,155
$
419,909
QUINSTREET, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
2023
2022
2023
2022
Net revenue
$
130,312
$
146,502
$
580,624
$
582,099
Cost of revenue (1)
119,713
134,742
532,101
528,368
Gross profit
10,599
11,760
48,523
53,731
Operating expenses: (1)
Product development
7,061
6,911
28,893
21,906
Sales and marketing
2,891
3,269
12,542
11,042
General and administrative
5,985
3,742
27,904
25,501
Operating loss
(5,338
)
(2,162
)
(20,816
)
(4,718
)
Interest income
231
3
296
10
Interest expense
(164
)
(258
)
(790
)
(1,075
)
Other (expense) income, net
(8
)
(30
)
(52
)
21
Loss before income taxes
(5,279
)
(2,447
)
(21,362
)
(5,762
)
(Provision for) benefit from income
taxes
(50,612
)
(2,495
)
(47,504
)
514
Net loss
$
(55,891
)
$
(4,942
)
$
(68,866
)
$
(5,248
)
Net loss per share:
Basic
$
(1.03
)
$
(0.09
)
$
(1.28
)
$
(0.10
)
Diluted
$
(1.03
)
$
(0.09
)
$
(1.28
)
$
(0.10
)
Weighted average shares used in computing
net loss per share:
Basic
54,196
54,342
53,799
54,339
Diluted
54,196
54,342
53,799
54,339
(1) Cost of revenue and operating expenses
include stock-based compensation expense as follows:
Cost of revenue
$
1,685
$
2,896
$
7,923
$
7,475
Product development
655
1,078
2,880
2,575
Sales and marketing
328
901
2,298
2,378
General and administrative
63
1,741
5,685
6,078
QUINSTREET, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
2023
2022
2023
2022
Cash Flows from Operating
Activities
Net loss
$
(55,891
)
$
(4,942
)
$
(68,866
)
$
(5,248
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
5,151
4,302
19,155
16,961
Provision for sales returns and doubtful
accounts receivable
1,848
202
2,745
581
Stock-based compensation
2,731
6,616
18,786
18,506
Revaluation adjustment of contingent
liability
—
(3,624
)
—
(926
)
Non-cash lease expense
(259
)
(291
)
(1,081
)
(1,043
)
Deferred income taxes
50,474
2,028
47,214
(791
)
Other adjustments, net
(3
)
125
(149
)
482
Changes in assets and liabilities:
Accounts receivable
36,011
(4,229
)
10,936
5,543
Prepaid expenses and other current
assets
(997
)
1,409
(4,802
)
3,003
Other assets, noncurrent
145
121
124
(788
)
Accounts payable
(3,208
)
2,564
(4,770
)
(2,885
)
Accrued liabilities
(18,041
)
3,153
(7,122
)
(5,031
)
Deferred revenue
9
257
(332
)
308
Net cash provided by operating
activities
17,970
7,691
11,838
28,672
Cash Flows from Investing
Activities
Capital expenditures
(1,024
)
(466
)
(3,062
)
(2,842
)
Business acquisitions, net of cash
acquired
—
(797
)
—
(1,797
)
Internal software development costs
(3,446
)
(1,188
)
(11,942
)
(4,672
)
Other investing activities
(1
)
—
(121
)
86
Net cash used in investing activities
(4,471
)
(2,451
)
(15,125
)
(9,225
)
Cash Flows from Financing
Activities
Proceeds from exercise of stock options
and issuance of common stock under employee stock purchase plan
14
582
3,219
1,854
Payment of withholding taxes related to
release of restricted stock, net of share settlement
(645
)
(776
)
(5,389
)
(7,342
)
Post-closing payments and contingent
consideration related to acquisitions
(1,235
)
(2,800
)
(11,643
)
(12,559
)
Repurchase of common stock
(915
)
(15,268
)
(5,646
)
(15,268
)
Net cash used in financing activities
(2,781
)
(18,262
)
(19,459
)
(33,315
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(2
)
(3
)
(15
)
(12
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
10,716
(13,025
)
(22,761
)
(13,880
)
Cash, cash equivalents and restricted cash
at beginning of period
62,976
109,478
96,453
110,333
Cash, cash equivalents and restricted cash
at end of period
$
73,692
$
96,453
$
73,692
$
96,453
Reconciliation of cash, cash
equivalents, and restricted cash to the condensed consolidated
balance sheets
Cash and cash equivalents
$
73,677
$
96,439
$
73,677
$
96,439
Restricted cash included in other assets,
noncurrent
15
14
15
14
Total cash, cash equivalents and
restricted cash
$
73,692
$
96,453
$
73,692
$
96,453
QUINSTREET, INC.
RECONCILIATION OF NET LOSS
TO
ADJUSTED NET (LOSS)
INCOME
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
2023
2022
2023
2022
Net loss
$
(55,891
)
$
(4,942
)
$
(68,866
)
$
(5,248
)
Amortization of intangible assets
2,661
2,808
11,115
11,581
Stock-based compensation
2,731
6,616
18,786
18,506
Acquisition and divestiture costs
70
2
102
519
Contingent consideration adjustment
—
(3,624
)
—
(926
)
Litigation settlement expense
—
(62
)
6
34
Tax settlement expense
(794
)
—
(755
)
516
Restructuring costs
28
12
212
138
Tax valuation allowance
51,922
—
51,922
—
Tax impact after non-GAAP items
(1,241
)
1,149
(5,254
)
(5,627
)
Adjusted net (loss) income
$
(514
)
$
1,959
$
7,268
$
19,493
Adjusted diluted net (loss) income per
share
$
(0.01
)
$
0.04
$
0.13
$
0.35
Weighted average shares used in computing
adjusted diluted net (loss) income per share
54,196
54,934
54,978
55,481
QUINSTREET, INC.
RECONCILIATION OF NET LOSS
TO
ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
2023
2022
2023
2022
Net loss
$
(55,891
)
$
(4,942
)
$
(68,866
)
$
(5,248
)
Interest and other (income) expense,
net
(59
)
285
546
1,044
Provision for (benefit from) income
taxes
50,612
2,495
47,504
(514
)
Depreciation and amortization
5,151
4,302
19,155
16,961
Stock-based compensation
2,731
6,616
18,786
18,506
Acquisition and divestiture costs
70
2
102
519
Contingent consideration adjustment
—
(3,624
)
—
(926
)
Litigation settlement expense
—
(62
)
6
34
Tax settlement expense
(794
)
—
(755
)
516
Restructuring costs
28
12
212
138
Adjusted EBITDA
$
1,848
$
5,084
$
16,690
$
31,030
QUINSTREET, INC.
RECONCILIATION OF CASH
PROVIDED BY
OPERATING ACTIVITIES TO FREE
CASH FLOW
AND NORMALIZED FREE CASH
FLOW
(In thousands)
(Unaudited)
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
2023
2022
2023
2022
Net cash provided by operating
activities
$
17,970
$
7,691
$
11,838
$
28,672
Capital expenditures
(1,024
)
(466
)
(3,062
)
(2,842
)
Internal software development costs
(3,446
)
(1,188
)
(11,942
)
(4,672
)
Free cash flow
$
13,500
$
6,037
$
(3,166
)
$
21,158
Changes in operating assets and
liabilities
(13,919
)
(3,275
)
5,965
(150
)
Normalized free cash flow
$
(419
)
$
2,762
$
2,799
$
21,008
QUINSTREET, INC.
DISAGGREGATION OF
REVENUE
(In thousands)
(Unaudited)
Three Months Ended
Fiscal Year Ended
June 30,
June 30,
2023
2022
2023
2022
Net revenue:
Financial Services
$
75,203
$
100,762
$
379,723
$
417,110
Home Services
53,137
44,295
193,133
158,805
Other Revenue
1,972
1,445
7,768
6,184
Total net revenue
$
130,312
$
146,502
$
580,624
$
582,099
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809832850/en/
Investor Contact: Robert
Amparo (347) 223-1682 ramparo@quinstreet.com
QuinStreet (NASDAQ:QNST)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
QuinStreet (NASDAQ:QNST)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024