The Company expects to report total revenue of over
GAAP net income is expected to be 10% or more of revenue, inclusive of the proceeds from the divestiture of the Education client vertical.
Adjusted EBITDA margin is expected to be approximately 9% of revenue, compared to the previous outlook of mid-single digits.
The Company expects to close the quarter with over
"Fiscal Q1 was a good quarter for the Company as we continued to deliver strong results in the Insurance and Home Services client verticals, our two largest businesses," commented
Further details and final results will be released in the Company's scheduled quarterly earnings conference call, on
Conference Call,
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Preliminary Financial Information
The information contained in this press release reflects our preliminary expectations of results for the first fiscal quarter ended
Non-GAAP Financial Measure
This release includes a discussion of adjusted EBITDA, which is a non-GAAP financial measure that is provided as a complement to results provided in accordance with accounting principles generally accepted in
We believe adjusted EBITDA is relevant and useful information because it provides 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 acquisition and divestiture costs, gain or loss on divestitures of businesses, restructuring costs and other income and expense) and the non-cash impact of depreciation expense, amortization expense and stock-based compensation expense.
We intend to provide this non-GAAP financial measure as part of our future earnings discussions and, therefore, the inclusion of this non-GAAP financial measure will provide consistency in our financial reporting. The following table presents a reconciliation of our preliminary estimates of adjusted EBITDA to preliminary estimates of net income, the most comparable GAAP measure.
Three Months Ended |
||||
|
||||
Preliminary Estimates: |
($ in thousands) |
|||
Preliminary net income |
$ |
13,818 |
||
Interest and other expense, net |
316 |
|||
Provision for income taxes |
4,705 |
|||
Depreciation and amortization |
4,133 |
|||
Stock-based compensation |
4,780 |
|||
Acquisition and divestiture costs |
276 |
|||
Gain on divestitures of businesses |
(16,689) |
|||
Restructuring costs |
391 |
|||
Preliminary adjusted EBITDA |
$ |
11,730 |
||
Preliminary net revenue |
$ |
138,000 |
||
Preliminary net income as a percentage of net revenue |
10 |
% |
||
Preliminary adjusted EBITDA as a percentage of net revenue |
9 |
% |
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 impact from risks and uncertainties relating to the COVID-19 pandemic; the impact of changes in industry standards and government regulation including, but not limited to investigation or enforcement activities of the
About
Investor Contacts:
eabrams@quinstreet.com
hblair@quinstreet.com
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