8-K
0001117297false00011172972023-05-032023-05-03

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 3, 2023

 

QUINSTREET, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

001-34628

77-0512121

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

950 Tower Lane, 6th Floor

Foster City, CA 94404

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (650) 578-7700

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, par value $0.001 per share

 

QNST

 

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


 

Item 2.02. Results of Operations and Financial Condition.

On May 3, 2023, QuinStreet, Inc. (the “Company”) issued a press release announcing the Company’s financial results for the third quarter ended March 31, 2023. A copy of the Company’s press release is attached hereto as Exhibit 99.1.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference into the Company’s filings with the SEC under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibit

 

Exhibit

Number

Description

 

 

99.1

Press release dated May 3, 2023.

104

Cover Page Interactive Data File, formatted in Inline XBRL and included as Exhibit 101.

 

 


 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

QUINSTREET, INC.

 

 

 

 

Dated: May 3, 2023

By:

/s/ Gregory Wong

 

 

Gregory Wong

 

 

Chief Financial Officer

 

 


EX-99

 

Exhibit 99.1

 

QuinStreet Reports Results for Third Quarter Fiscal Year 2023

Record quarterly revenue of $173 million, up 15% YoY, exceeding outlook
Strong early beginning to auto insurance re-ramp
Non-insurance revenue up 34% YoY, representing 58% of total
Adjusted EBITDA of $9 million, up 30% YoY, exceeding outlook

FOSTER CITY, CA – May 3, 2023 – 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 third quarter ended March 31, 2023.

For the fiscal third quarter, the Company reported revenue of $172.7 million and grew 15% year-over-year.

GAAP net loss for the fiscal third quarter was $0.5 million, or ($0.01) per diluted share. Adjusted net income was $6.1 million, or $0.11 per diluted share.

Adjusted EBITDA for the fiscal third quarter was $9.0 million.

“Fiscal Q3 results were strong,” commented Doug Valenti, CEO of QuinStreet. “We delivered record quarterly revenue. Adjusted EBITDA jumped to $9 million in the quarter. The results reflect our strong core business, the continued broadening of our footprint, and the financial resilience and leverage of our business model. Auto insurance revenue surged in the quarter, growing 53% sequentially, as carrier clients began the early stages of their ramp back from pandemic and inflation challenges. Non-insurance revenue grew 34% year-over-year and was 58% of total, reflecting continued good progress on our long-term growth initiatives in big new market opportunities.”

“Turning to our outlook, we expect continued strong growth in non-Insurance client verticals in FYQ4, and beyond. We expect auto insurance revenue to decline sequentially in FYQ4, as carriers are unexpectedly pausing to assess the results of the recent surge, and to continue to adjust to complex market conditions. The long arc of auto insurance spending is still up and to the right. Carriers will continue to adjust and adapt, and marketing budgets will continue to shift from offline to online. Most consumers shop the digital channel, and performance marketing, pioneered and enabled by QuinStreet, is the most efficient spend for advanced marketers.”

“For full fiscal year 2023, which ends in June, we expect revenue of $575 to $580 million. We expect positive adjusted EBITDA in FYQ4, and that adjusted EBITDA for full fiscal year 2023 will be between $16 and $17 million. We have also begun the detailed planning process for our fiscal year 2024, which begins in July. We expect revenue and adjusted EBITDA to grow at double digit rates in fiscal 2024, and that we will be strongly cash flow positive.”

“Our longer-term outlook has never been better. We expect double-digit annual revenue growth rates, on average, in coming years, due to continued strong performance in non-insurance businesses alone. We expect auto insurance revenue to be up and to the right, eventually returning to and exceeding FY2021 levels. We expect adjusted EBITDA to grow faster than revenue, eventually exceeding a 10% margin. Our adjusted EBITDA in March jumped to 7%, just from the early stages of the return of auto insurance revenue, demonstrating the leverage we expect in future quarters and years,” 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 #37080900. 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 income, adjusted diluted net 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) income less (benefit from) provision for income taxes, depreciation expense, amortization expense, stock-based compensation expense, interest and other expense, net, acquisition and divestiture costs, contingent consideration adjustment, litigation settlement expense, tax settlement expense, and restructuring costs. The term "adjusted net income" refers to a financial measure that we define as net (loss) income adjusted for amortization expense, stock-based compensation expense, acquisition and divestiture costs, contingent consideration adjustment, litigation settlement expense, tax settlement expense, and restructuring costs, net of estimated taxes. The term "adjusted diluted net income per share" refers to a financial measure that we define as adjusted net 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 income and adjusted diluted net 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 without unreasonable efforts to the most directly comparable GAAP financial measure 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 income and adjusted diluted net 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 quarterly report on Form 10-Q for the quarter ended March 31, 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.

Investor Contact:

Robert Amparo

(347) 223-1682

ramparo@quinstreet.com

 


 

QUINSTREET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

March 31,

 

 

June 30,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

62,962

 

 

$

96,439

 

Accounts receivable, net

 

 

105,606

 

 

 

81,429

 

Prepaid expenses and other assets

 

 

8,729

 

 

 

4,924

 

Total current assets

 

 

177,297

 

 

 

182,792

 

Property and equipment, net

 

 

15,143

 

 

 

9,311

 

Operating lease right-of-use assets

 

 

4,020

 

 

 

6,801

 

Goodwill

 

 

121,141

 

 

 

121,141

 

Other intangible assets, net

 

 

41,362

 

 

 

49,696

 

Deferred tax assets, noncurrent

 

 

47,547

 

 

 

44,220

 

Other assets, noncurrent

 

 

5,969

 

 

 

5,948

 

Total assets

 

$

412,479

 

 

$

419,909

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

41,279

 

 

$

42,410

 

Accrued liabilities

 

 

62,892

 

 

 

54,459

 

Deferred revenue

 

 

 

 

 

341

 

Other liabilities

 

 

8,622

 

 

 

12,369

 

Total current liabilities

 

 

112,793

 

 

 

109,579

 

Operating lease liabilities, noncurrent

 

 

1,291

 

 

 

3,858

 

Other liabilities, noncurrent

 

 

13,868

 

 

 

20,472

 

Total liabilities

 

 

127,952

 

 

 

133,909

 

Stockholders' equity:

 

 

 

 

 

 

Common stock

 

 

54

 

 

 

53

 

Additional paid-in capital

 

 

327,929

 

 

 

316,422

 

Accumulated other comprehensive loss

 

 

(267

)

 

 

(261

)

Accumulated deficit

 

 

(43,189

)

 

 

(30,214

)

Total stockholders' equity

 

 

284,527

 

 

 

286,000

 

Total liabilities and stockholders' equity

 

$

412,479

 

 

$

419,909

 

 

 


 

QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net revenue

 

$

172,671

 

 

$

150,658

 

 

$

450,312

 

 

$

435,597

 

Cost of revenue (1)

 

 

155,633

 

 

 

136,567

 

 

 

412,388

 

 

 

393,626

 

Gross profit

 

 

17,038

 

 

 

14,091

 

 

 

37,924

 

 

 

41,971

 

Operating expenses: (1)

 

 

 

 

 

 

 

 

 

 

 

 

Product development

 

 

7,832

 

 

 

5,509

 

 

 

21,832

 

 

 

14,995

 

Sales and marketing

 

 

3,385

 

 

 

2,033

 

 

 

9,651

 

 

 

7,773

 

General and administrative

 

 

7,230

 

 

 

5,489

 

 

 

21,919

 

 

 

21,758

 

Operating (loss) income

 

 

(1,409

)

 

 

1,060

 

 

 

(15,478

)

 

 

(2,555

)

Interest income

 

 

46

 

 

 

7

 

 

 

65

 

 

 

7

 

Interest expense

 

 

(187

)

 

 

(277

)

 

 

(626

)

 

 

(817

)

Other (expense) income, net

 

 

(12

)

 

 

45

 

 

 

(44

)

 

 

51

 

(Loss) income before income taxes

 

 

(1,562

)

 

 

835

 

 

 

(16,083

)

 

 

(3,314

)

Benefit from income taxes

 

 

1,083

 

 

 

1,395

 

 

 

3,108

 

 

 

3,009

 

Net (loss) income

 

$

(479

)

 

$

2,230

 

 

$

(12,975

)

 

$

(305

)

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.01

)

 

$

0.04

 

 

$

(0.24

)

 

$

(0.01

)

Diluted

 

$

(0.01

)

 

$

0.04

 

 

$

(0.24

)

 

$

(0.01

)

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

53,950

 

 

 

54,645

 

 

 

53,668

 

 

 

54,339

 

Diluted

 

 

53,950

 

 

 

55,536

 

 

 

53,668

 

 

 

54,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Cost of revenue

 

$

2,006

 

 

$

491

 

 

$

6,238

 

 

$

4,579

 

Product development

 

 

695

 

 

 

203

 

 

 

2,225

 

 

 

1,497

 

Sales and marketing

 

 

660

 

 

 

18

 

 

 

1,970

 

 

 

1,477

 

General and administrative

 

 

1,947

 

 

 

699

 

 

 

5,622

 

 

 

4,337

 

 

 


 

QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Cash Flows from Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(479

)

 

$

2,230

 

 

$

(12,975

)

 

$

(305

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,972

 

 

 

4,247

 

 

 

14,004

 

 

 

12,660

 

Provision for sales returns and doubtful accounts receivable

 

 

169

 

 

 

(31

)

 

 

898

 

 

 

379

 

Stock-based compensation

 

 

5,308

 

 

 

1,411

 

 

 

16,055

 

 

 

11,890

 

Change in the fair value of contingent consideration

 

 

 

 

 

 

 

 

 

 

 

2,698

 

Non-cash lease expense

 

 

(280

)

 

 

(272

)

 

 

(822

)

 

 

(752

)

Deferred income taxes

 

 

(981

)

 

 

(1,204

)

 

 

(3,260

)

 

 

(2,819

)

Other adjustments, net

 

 

(6

)

 

 

123

 

 

 

(147

)

 

 

356

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(34,363

)

 

 

(13,574

)

 

 

(25,075

)

 

 

9,770

 

Prepaid expenses and other assets

 

 

(3,238

)

 

 

(473

)

 

 

(3,826

)

 

 

685

 

Accounts payable

 

 

3,113

 

 

 

1,463

 

 

 

(1,562

)

 

 

(5,448

)

Accrued liabilities

 

 

16,465

 

 

 

7,326

 

 

 

10,920

 

 

 

(8,184

)

Deferred revenue

 

 

(10

)

 

 

48

 

 

 

(341

)

 

 

51

 

Net cash (used in) provided by operating activities

 

 

(9,330

)

 

 

1,294

 

 

 

(6,131

)

 

 

20,981

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(485

)

 

 

(1,656

)

 

 

(2,038

)

 

 

(2,376

)

Internal software development costs

 

 

(3,031

)

 

 

(1,225

)

 

 

(8,496

)

 

 

(3,484

)

Business acquisitions, net of cash acquired

 

 

 

 

 

 

 

 

 

 

 

(1,000

)

Other investing activities

 

 

 

 

 

85

 

 

 

(120

)

 

 

85

 

Net cash used in investing activities

 

 

(3,516

)

 

 

(2,796

)

 

 

(10,654

)

 

 

(6,775

)

Cash Flows from Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

1,409

 

 

 

229

 

 

 

3,206

 

 

 

1,273

 

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

 

 

(1,518

)

 

 

(1,065

)

 

 

(4,744

)

 

 

(6,566

)

Post-closing payments and contingent consideration related to acquisitions

 

 

(3,184

)

 

 

(3,239

)

 

 

(10,408

)

 

 

(9,759

)

Repurchase of common stock

 

 

 

 

 

 

 

 

(4,731

)

 

 

 

Net cash used in financing activities

 

 

(3,293

)

 

 

(4,075

)

 

 

(16,677

)

 

 

(15,052

)

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

 

 

(2

)

 

 

5

 

 

 

(14

)

 

 

(9

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(16,141

)

 

 

(5,572

)

 

 

(33,476

)

 

 

(855

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

79,118

 

 

 

115,050

 

 

 

96,453

 

 

 

110,333

 

Cash, cash equivalents and restricted cash at end of period

 

$

62,977

 

 

$

109,478

 

 

$

62,977

 

 

$

109,478

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

62,962

 

 

$

109,463

 

 

$

62,962

 

 

$

109,463

 

Restricted cash included in other assets, noncurrent

 

 

15

 

 

 

15

 

 

 

15

 

 

 

15

 

Total cash, cash equivalents and restricted cash

 

$

62,977

 

 

$

109,478

 

 

$

62,977

 

 

$

109,478

 

 

 


 

QUINSTREET, INC.

RECONCILIATION OF NET (LOSS) INCOME TO

ADJUSTED NET INCOME

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income

 

$

(479

)

 

$

2,230

 

 

$

(12,975

)

 

$

(305

)

Amortization of intangible assets

 

 

2,808

 

 

 

2,820

 

 

 

8,454

 

 

 

8,773

 

Stock-based compensation

 

 

5,308

 

 

 

1,411

 

 

 

16,055

 

 

 

11,890

 

Acquisition and divestiture costs

 

 

 

 

 

51

 

 

 

32

 

 

 

516

 

Contingent consideration adjustment

 

 

 

 

 

 

 

 

 

 

 

2,698

 

Litigation settlement expense

 

 

6

 

 

 

 

 

 

6

 

 

 

 

Tax settlement expense

 

 

 

 

 

 

 

 

39

 

 

 

516

 

Restructuring costs

 

 

102

 

 

 

122

 

 

 

183

 

 

 

222

 

Tax impact of non-GAAP items

 

 

(1,597

)

 

 

(1,738

)

 

 

(4,012

)

 

 

(6,776

)

Adjusted net income

 

$

6,148

 

 

$

4,896

 

 

$

7,782

 

 

$

17,534

 

Adjusted diluted net income per share

 

$

0.11

 

 

$

0.09

 

 

$

0.14

 

 

$

0.31

 

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

 

 

55,680

 

 

 

55,536

 

 

 

54,952

 

 

 

55,665

 

 

 


 

QUINSTREET, INC.

RECONCILIATION OF NET (LOSS) INCOME TO

ADJUSTED EBITDA

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income

 

$

(479

)

 

$

2,230

 

 

$

(12,975

)

 

$

(305

)

Interest and other expense, net

 

 

153

 

 

 

225

 

 

 

605

 

 

 

759

 

Benefit from income taxes

 

 

(1,083

)

 

 

(1,395

)

 

 

(3,108

)

 

 

(3,009

)

Depreciation and amortization

 

 

4,972

 

 

 

4,247

 

 

 

14,004

 

 

 

12,660

 

Stock-based compensation

 

 

5,308

 

 

 

1,411

 

 

 

16,055

 

 

 

11,890

 

Acquisition and divestiture costs

 

 

 

 

 

51

 

 

 

32

 

 

 

516

 

Contingent consideration adjustment

 

 

 

 

 

 

 

 

 

 

 

2,698

 

Litigation settlement expense

 

 

6

 

 

 

 

 

 

6

 

 

 

 

Tax settlement expense

 

 

 

 

 

 

 

 

39

 

 

 

516

 

Restructuring costs

 

 

102

 

 

 

122

 

 

 

183

 

 

 

222

 

Adjusted EBITDA

 

$

8,979

 

 

$

6,891

 

 

$

14,841

 

 

$

25,947

 

 

 


 

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

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net cash (used in) provided by operating activities

 

$

(9,330

)

 

$

1,294

 

 

$

(6,131

)

 

$

20,981

 

Capital expenditures

 

 

(485

)

 

 

(1,656

)

 

 

(2,038

)

 

 

(2,376

)

Internal software development costs

 

 

(3,031

)

 

 

(1,225

)

 

 

(8,496

)

 

 

(3,484

)

Free cash flow

 

 

(12,846

)

 

 

(1,587

)

 

 

(16,665

)

 

 

15,121

 

Changes in operating assets and liabilities

 

 

18,032

 

 

 

5,210

 

 

 

19,884

 

 

 

3,126

 

Normalized free cash flow

 

$

5,186

 

 

$

3,623

 

 

$

3,219

 

 

$

18,247

 

 

 


 

QUINSTREET, INC.

DISAGGREGATION OF REVENUE

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Financial Services

 

$

120,219

 

 

$

108,277

 

 

$

304,520

 

 

$

316,347

 

Home Services

 

 

50,289

 

 

 

40,704

 

 

 

139,997

 

 

 

114,510

 

Other Revenue

 

 

2,163

 

 

 

1,677

 

 

 

5,795

 

 

 

4,740

 

Total net revenue

 

$

172,671

 

 

$

150,658

 

 

$

450,312

 

 

$

435,597