- Quarterly Revenue of $123.9M, up 48% over Q2 2020
- Signed and went live with Microsoft and MSN.com to offer
coupons from Quotient’s network
Quotient (NYSE: QUOT), the leading digital media and promotions
technology company, today reported financial results for the second
quarter ended June 30, 2021. Quotient’s complete second quarter
2021 financial results and management commentary can be found by
accessing the Company’s stockholder letter under Key Resources on
the overview page in the Investor Relations section of Quotient’s
website.
“We delivered another quarter of strong revenues and innovation
in Q2,” said Steven Boal, CEO. “Additionally, over the past quarter
we reached a milestone, and can now help brands exceed the sales
unit volumes and results of the Free-Standing Inserts (FSIs) on our
national promotions platform. Having the scale and innovative
offerings like our promotion amplification tool, we are providing
our customers and retailer partners digital alternatives to offline
paper solutions. We believe examples like this validate our value
proposition and extend the runway of opportunity ahead of us as a
market leader.”
Additionally, on July 30, 2021, Quotient appointed Alison
Hawkins, who has spent over twenty years in executive roles with
significant leadership accomplishments in financial services, real
estate and capital markets, to its Board of Directors and Audit
Committee. Concurrently, Michelle McKenna stepped down from
Quotient's Board of Directors. Please see Quotient’s filing on Form
8-K dated August 5, 2021 for complete details.
Outlook
In addition to the guidance, we have provided below as well as
what we have shared in prior commentary, we are in the midst of
contract renewals with certain retailers, which could have an
impact on future results.
For the second half of 2021, we expect that all sponsored search
revenue will be recognized net of third-party costs. We estimate
that this accounting change will reduce revenue and cost of sales
by approximately $5 million to $6 million per quarter in each Q3
2021 and Q4 2021. Based on this change, we expect the
following:
For the third quarter of 2021, we expect:
- Revenue: $126.0 million to $133.0 million
- Adjusted EBITDA: $2.0 million to $12.0 million
- Operating Cash Flow: $7.0 million to $12.0 million
For the full year 2021, we expect:
- Revenue: $505.0 million to $522.0 million
- Adjusted EBITDA: $50.0 million to $65.0 million
- Weighted Average Basic Shares Outstanding: ~95.0 million
Had we not made changes to our delivery and accounting for
sponsored search, our revenue guidance would have been
approximately $5 million higher for the third quarter of 2021 and
approximately $10 million higher for the full year. This change has
not impacted the guidance for Adjusted EBITDA, operating cash flow
or weighted average basic shares outstanding.
Conference Call Information
The Company has posted a stockholder letter and an earnings
presentation on the Investor Relations section of the Company’s
website at: https://investors.quotient.com/. Management will host a
conference call and live webcast to discuss the highlights of the
quarter and address questions today at 5:00 p.m. ET/ 2:00 p.m.
PT.
To access the call, we encourage you to pre-register to
eliminate long wait times using this link: Quotient Q2 2021
Earnings Pre Registration. After registering, a confirmation will
be sent via email and will include dial-in details and a unique PIN
code for entry to the call. Registration will be open through the
live call. We suggest registering at least 15 minutes before the
start of the call to receive your unique PIN code. You may also
access the call and register with a live operator by dialing (866)
270-1533, or outside the U.S. (412) 317-0797, at least 15 minutes
prior to the 2:00 p.m. PT start time. The live webcast and all
accompanying materials can be accessed on the Investor Relations
section of the Company website at: https://investors.quotient.com/.
A replay of the webcast will be available on the website following
the conference call.
Use of Non-GAAP Financial Measures
Quotient reports its financial statements in accordance with
generally accepted accounting principles in the United States
(GAAP) and the rules of the Securities and Exchange Commission
(SEC). To supplement its financial statements presented in
accordance with GAAP, Quotient provides investors in this press
release with Adjusted EBITDA, a non-GAAP financial measure.
Quotient believes that this non-GAAP measure provides investors
with additional useful information used by Quotient’s management
and Board of Directors for financial and operating decision making.
In particular, Quotient believes that the exclusion of certain
income and expense items in calculating this metric can provide a
useful measure for period-to-period comparisons of its core
business as well as a useful comparison to peer companies.
Quotient defines Adjusted EBITDA as net income (loss) adjusted
for interest expense, provision for (benefit from) income taxes,
other (income) expense, net, depreciation and amortization,
stock-based compensation, change in fair value of contingent
consideration, impairment of promotion service right, certain
acquisition-related costs, and restructuring charges. Quotient
excludes these items because it believes these items do not reflect
expected future operating expenses. Additionally, certain items are
inconsistent in size and frequency—making it difficult to
contribute to a meaningful evaluation of Quotient's current or past
operating performance.
There are a number of limitations related to the use of this
non-GAAP financial measure. Quotient compensates for these
limitations by providing specific information regarding the GAAP
amount excluded from this non-GAAP financial measure and evaluating
this non-GAAP financial measure together with its relevant GAAP
financial measure.
This non-GAAP financial measure is not intended to be considered
in isolation from, as substitute for, or as superior to the
corresponding financial measure prepared in accordance with GAAP.
Because of these and other limitations, Adjusted EBITDA should be
considered along with other GAAP-based financial performance
measures, including various cash flow metrics, net income (loss)
and Quotient’s other GAAP financial results.
For a reconciliation of this non-GAAP financial measure to the
nearest comparable GAAP financial measure, see “Reconciliation of
Net Loss to Adjusted EBITDA” included in this press release.
A reconciliation of the Adjusted EBITDA guidance metrics, which
are non-GAAP guidance measures, to a corresponding GAAP measure is
not available on a forward-looking basis without unreasonable
efforts due to the high variability and low visibility of certain
(income) expense items that are excluded in calculating Adjusted
EBITDA.
Forward-Looking Statements
This press release contains forward-looking statements
concerning the Company’s current expectations and projections about
future events and financial trends affecting its business.
Forward-looking statements in this press release include the
Company’s ability, through its national promotions platform, to
help brands exceed sales unit volumes through digital campaigns as
compared to free-standing insert, or paper-delivered, campaigns;
the Company’s scale and innovation capabilities, as exemplified by
its promotion amplification tool, enabling the Company to provide
its customers and retailer partners digital alternatives to offline
paper solutions; the Company’s solutions validating and extending
the runway of opportunity ahead of it as a market leader; the
contract renewal process with certain retailers as potentially
impacting the Company’s future results; and the future financial
performance of Quotient (including the guidance for the third
quarter and full year 2021). Forward-looking statements are based
on the Company’s current plans, objectives, estimates, expectations
and intentions and inherently involve significant risks and
uncertainties. Actual results and the timing of events could differ
materially from those anticipated in such forward-looking
statements as a result of these risks and uncertainties, which
include, without limitation, the Company’s ability to generate
positive cash flow and become profitable; the amount and timing of
digital marketing spend by advertisers (including consumer packaged
goods (CPG) companies) and shifts in advertiser spend to digital
solutions; the Company's expectations regarding other growth
drivers including its ability to expand its relationships with
retailers and obtain and maintain retailer support for its
platforms, and its ability to maintain and expand the use by
consumers of digital promotions on its platforms; the Company’s
ability to innovate and adapt to changing market conditions and
data regulations, including the Company’s ability to adapt to
changes in consumer habits and consumer data privacy concerns; the
impacts of the ongoing COVID-19 pandemic, which may continue to
impact the Company's business, plans and results of operations, as
well as the value of the Company's common stock; and other factors
identified in the Company’s filings with the SEC, including its
Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed
with the SEC on February 23, 2021 and May 10, 2021, respectively,
and future filings and reports by the Company. Quotient disclaims
any obligation to update information contained in these
forward-looking statements whether as a result of new information,
future events, or otherwise and does not assume responsibility for
the accuracy and completeness of the forward-looking
statements.
About Quotient
Quotient (NYSE: QUOT) is the leading digital media and
promotions technology company for advertisers, retailers and
consumers. Quotient’s omnichannel platform is powered by exclusive
consumer spending data, location intelligence and purchase intent
data to reach millions of shoppers daily and deliver measurable,
incremental sales.
Quotient partners with leading advertisers and retailers,
including Clorox, Procter & Gamble, General Mills, Unilever,
Albertsons Companies, CVS, Dollar General and Peapod Digital Labs,
a company of Ahold Delhaize USA. Quotient is headquartered in
Mountain View, California, and has offices across the US as well as
in Bangalore, Paris, London and Tel Aviv. For more information
visit www.quotient.com.
Quotient and the Quotient logo are trademarks or registered
trademarks of Quotient Technology Inc. and its subsidiaries in the
United States and other countries. Other marks are the property of
their respective owners.
QUOTIENT TECHNOLOGY
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
June 30, 2021
December 31, 2020
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
238,299
$
222,752
Accounts receivable, net
134,230
137,649
Prepaid expenses and other current
assets
16,094
18,547
Total current assets
388,623
378,948
Property and equipment, net
19,134
17,268
Operating leases right-of-use-assets
18,247
16,222
Intangible assets, net
27,717
44,898
Goodwill
128,427
128,427
Other assets
898
1,029
Total assets
$
583,046
$
586,792
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
12,295
$
15,959
Accrued compensation and benefits
14,279
14,368
Other current liabilities
73,326
70,620
Deferred revenues
17,977
12,027
Contingent consideration related to
acquisitions
21,410
8,524
Total current liabilities
139,287
121,498
Operating lease liabilities
18,510
15,956
Other non-current liabilities
725
2,358
Contingent consideration related to
acquisitions
—
20,930
Convertible senior notes, net
182,899
177,168
Deferred tax liabilities
1,853
1,853
Total liabilities
343,274
339,763
Stockholders' equity:
Common stock
1
1
Additional paid-in capital
721,795
698,333
Accumulated other comprehensive loss
(1,105
)
(1,001
)
Accumulated deficit
(480,919
)
(450,304
)
Total stockholders' equity
239,772
247,029
Total liabilities and stockholders'
equity
$
583,046
$
586,792
QUOTIENT TECHNOLOGY INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in thousands,
except per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Revenues
$
123,880
$
83,455
$
239,196
$
182,242
Cost of revenues(1)
82,161
50,731
154,145
111,842
Gross Margin
41,719
32,724
85,051
70,400
Operating Expenses:
Sales and marketing(1)
28,467
23,814
55,832
48,848
Research and development(1)
11,411
8,621
23,467
19,214
General and administrative(1)
15,009
12,268
27,842
27,358
Change in fair value of contingent
consideration
242
3,766
527
4,226
Total operating expenses
55,129
48,469
107,668
99,646
Loss from operations
(13,410
)
(15,745
)
(22,617
)
(29,246
)
Interest expense
(3,767
)
(3,610
)
(7,497
)
(7,184
)
Other income (expense), net
194
187
(34
)
767
Loss before income taxes
(16,983
)
(19,168
)
(30,148
)
(35,663
)
Provision for (benefit from) income
taxes
218
(35
)
467
195
Net loss
$
(17,201
)
$
(19,133
)
$
(30,615
)
$
(35,858
)
Net loss per share, basic and diluted
$
(0.18
)
$
(0.21
)
$
(0.33
)
$
(0.40
)
Weighted-average shares used to compute
net loss per share, basic and diluted
93,645
90,112
93,038
89,875
(1) The stock-based compensation expense
included above was as follows:
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Cost of revenues
$
401
$
387
$
824
$
822
Sales and marketing
1,181
1,323
2,436
2,725
Research and development
977
839
1,949
1,720
General and administrative
3,981
4,457
7,175
9,265
Total stock-based compensation
$
6,540
$
7,006
$
12,384
$
14,532
QUOTIENT TECHNOLOGY INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
Six Months Ended June
30,
2021
2020
Cash flows from operating
activities:
Net loss
$
(30,615
)
$
(35,858
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
17,138
17,843
Stock-based compensation
12,384
14,532
Amortization of debt discount and issuance
cost
5,731
5,432
Impairment of promotion service right
2,580
—
Allowance (recovery) for credit losses
(13
)
263
Deferred income taxes
467
195
Change in fair value of contingent
consideration
527
4,226
Other non-cash expenses
1,906
1,442
Changes in operating assets and
liabilities:
Accounts receivable
3,431
30,730
Prepaid expenses and other current
assets
2,467
(2,470
)
Accounts payable and other current
liabilities
(1,670
)
(7,551
)
Payments for contingent consideration and
bonuses
(2,901
)
(15,418
)
Accrued compensation and benefits
119
(7,478
)
Deferred revenues
5,950
2,108
Net cash provided by operating
activities
17,501
7,996
Cash flows from investing
activities:
Purchases of property and equipment
(6,426
)
(4,689
)
Net cash used in investing activities
(6,426
)
(4,689
)
Cash flows from financing
activities:
Proceeds from issuances of common stock
under stock plans
14,794
1,762
Payments for taxes related to net share
settlement of equity awards
(4,110
)
(3,327
)
Principal payments on promissory note and
finance lease obligations
(167
)
(91
)
Payments for contingent consideration
(6,121
)
(14,582
)
Net cash provided by (used in) financing
activities
4,396
(16,238
)
Effect of exchange rates on cash and cash
equivalents
76
39
Net increase (decrease) in cash and cash
equivalents
15,547
(12,892
)
Cash and cash equivalents at beginning of
period
222,752
224,764
Cash and cash equivalents at end of
period
$
238,299
$
211,872
QUOTIENT TECHNOLOGY INC.
RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA
(Unaudited, in
thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Net loss
$
(17,201
)
$
(19,133
)
$
(30,615
)
$
(35,858
)
Adjustments:
Stock-based compensation
6,540
7,006
12,384
14,532
Depreciation and amortization
7,707
8,958
17,138
17,843
Acquisition related costs and other(1)
3,251
387
3,733
2,096
Change in fair value of contingent
consideration
242
3,766
527
4,226
Interest expense
3,767
3,610
7,497
7,184
Other (income) expense, net
(194
)
(187
)
34
(767
)
Provision for (benefit from) income
taxes
218
(35
)
467
195
Total adjustments
$
21,531
$
23,505
$
41,780
$
45,309
Adjusted EBITDA
$
4,330
$
4,372
$
11,165
$
9,451
(1) For the three and six months ended June 30, 2021, "other"
includes a charge of $2.6 million related to the impairment of a
promotion service right, and restructuring charges of $0.2 million,
for both respective periods. The three months ended June 30, 2020,
include no other costs. For the six months ended June 30, 2020,
other includes restructuring charges of $1.5 million. Acquisition
related costs primarily include certain bonuses contingent upon the
acquired company meeting certain financial metrics over the
contingent consideration period and diligence, accounting, and
legal expenses incurred related to certain acquisitions.
Restructuring charges relate to severance for certain executive
management changes and impacted employees.
QUOTIENT TECHNOLOGY INC. RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN (Unaudited, in
thousands) Q2 FY 20 Q3 FY 20 Q4 FY
20 Q1 FY 21 Q2 FY 21 Net loss
$
(19,133
)
$
(4,218
)
$
(25,305
)
$
(13,414
)
$
(17,201
)
Adjustments: Stock-based compensation
7,006
6,489
7,350
5,844
6,540
Depreciation and amortization
8,957
8,679
9,830
9,431
7,707
Acquistion related costs and other (1)
388
2,393
7,872
482
3,251
Change in fair value of contingent consideration
3,766
1,562
14,446
285
242
Interest expense
3,610
3,646
3,691
3,730
3,767
Other (income) expense, net
(187
)
59
(432
)
228
(194
)
Provision for (benefit from) income taxes
(35
)
66
458
249
218
Total adjustments
$
23,505
$
22,894
$
43,215
$
20,249
$
21,531
Adjusted EBITDA (1)
$
4,372
$
18,676
$
17,910
$
6,835
$
4,330
Adjusted EBITDA Margin (2)
5%
15%
13%
6%
3%
(1) Adjusted EBITDA, a non-GAAP financial measure, is net
loss adjusted for stock-based compensation, depreciation and
amortization, change in fair value of contingent consideration,
interest expense, other (income) expense, net, provision for
(benefit from) income taxes, and acquistion related costs and
other, which includes: loss contingency of $2.0 million related to
a contract dispute during Q3 FY 20; settlement of $6.8 million
related to a contract dispute during Q4 FY 20, charge of $2.6
million related to the impairment of a promotion service right and
restructuring charge of $0.2 million during Q2 FY21. (2)
Adjusted EBITDA margin is the ratio of Adjusted EBITDA and
Revenues.
QUOTIENT TECHNOLOGY INC. RECONCILIATION OF
GROSS MARGIN TO NON-GAAP GROSS MARGIN (Unaudited, in
thousands) Q2 FY 20 Q1 FY 21 Q2 FY
21 Revenues
$
83,455
$
115,316
$
123,880
Cost of revenues (GAAP)
$
50,731
$
71,984
$
82,161
(less) Stock-based compensation
(387
)
(423
)
(401
)
(less) Amortization of acquired intangible assets
(6,278
)
(6,593
)
(5,276
)
(less) Impairment of promotion service right
—
—
(2,580
)
Cost of revenues (Non-GAAP)
$
44,066
$
64,968
$
73,904
Gross margin (GAAP)
$
32,724
$
43,332
$
41,719
Gross margin percentage (GAAP)
39.2
%
37.6
%
33.7
%
Gross margin (Non-GAAP)*
$
39,389
$
50,348
$
49,976
Gross margin percentage (Non-GAAP)
47.2
%
43.7
%
40.3
%
* Non-GAAP gross margin excludes stock-based compensation,
amortization of acquired intangible assets and impairment of a
promotion service right.
QUOTIENT TECHNOLOGY INC.
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING
EXPENSES (Unaudited, in thousands) Q2 FY
20 Q3 FY 20 Q4 FY 20 Q1 FY 21 Q2 FY
21 Revenues
$
83,455
$
121,116
$
142,529
$
115,316
$
123,880
Sales and marketing expenses
23,814
24,555
31,124
27,365
28,467
(less) Stock-based compensation
(1,323
)
(1,187
)
(1,399
)
(1,255
)
(1,181
)
(less) Amortization of acquired intangible assets
(914
)
(866
)
(866
)
(866
)
(866
)
(less) Restructuring charges
—
—
—
—
(217
)
Non-GAAP Sales and marketing expenses
$
21,577
$
22,502
$
28,859
$
25,244
$
26,203
Non-GAAP Sales and marketing percentage
26
%
19
%
20
%
22
%
21
%
Research and development
8,621
9,744
11,358
12,056
11,411
(less) Stock-based compensation
(839
)
(1,003
)
(1,108
)
(972
)
(977
)
Non-GAAP Research and development expenses
$
7,782
$
8,741
$
10,250
$
11,084
$
10,434
Non-GAAP Research and development percentage
9
%
7
%
7
%
10
%
8
%
General and administrative expenses
12,268
12,099
14,720
12,833
15,009
(less) Stock-based compensation
(4,457
)
(3,857
)
(4,364
)
(3,194
)
(3,981
)
(less) Acquisiton related costs
(387
)
(393
)
(1,039
)
(482
)
(453
)
Non-GAAP General and administrative expenses
$
7,424
$
7,849
$
9,317
$
9,157
$
10,575
Non-GAAP General and administrative percentage
9
%
6
%
7
%
8
%
9
%
Non-GAAP Operating expenses*
$
36,783
$
39,092
$
48,426
$
45,485
$
47,212
Non-GAAP Operating expense percentage
44
%
32
%
34
%
39
%
38
%
* Non-GAAP operating expenses excludes changes in fair value
of contingent consideration, stock-based compensation, amortization
of acquired intangible assets, restructuring charges, and
acquisition related costs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805005600/en/
Investor Relations Contact: Christine Marchuska Vice
President of Investor Relations cmarchuska@quotient.com Phone:
917-232-0852
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