Financial News
Quotient Technology Inc. Announces First Quarter 2021 Results
- Quarterly Revenue of $115.3M, up 17% over Q1 2020
- GAAP Net Loss of $13.4M
- Adjusted EBITDA of $6.8M
- Signed New Retail Partnership in Grocery Vertical
Quotient Technology Inc. (NYSE: QUOT), the leading digital media and promotions technology company that creates cohesive omnichannel brand-building and sales-driving opportunities to deliver valuable outcomes for advertisers, retailers and consumers, today reported financial results for the first quarter ended March 31, 2021. Quotient’s complete first quarter 2021 financial results and management commentary can be found by accessing the Company’s stockholder letter under Key Resources on the overview page of the investor relations website.
“Q1 was a strong quarter for Quotient as we continued to execute on our strategic objectives and built upon the momentum of our success in the prior year,” said Steven Boal, CEO. “We continue to see demand for our platforms and solutions as advertisers and retailers look to us for impactful ROIs and meaningful omnichannel experiences for their shoppers. Our ability to adapt and innovate in this evolving environment, the large addressable opportunity set available to us and early indications from our pipeline for Q2 2021 and future quarters, give us confidence in our growth trajectory for this year.”
Outlook
For the second quarter of 2021, we expect:
- Revenue: $117.0 million to $125.0 million
- Adjusted EBITDA: $2.0 million to $12.0 million
- Operating Cash Flow: $5.0 million to $10.0 million
We are raising our previous guidance for the full year 2021 to the following:
- Revenue: $505.0 million to $525.0 million
- Adjusted EBITDA: $50.0 million to $65.0 million
- Weighted Average Diluted Shares Outstanding: ~97.1 million
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: http://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 Q1 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: http://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 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, certain acquisition-related costs, loss contingency/settlement related to a contract dispute, and restructuring charges. We exclude these items because we believe 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 our 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.
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 current expectations regarding demand for the Company's platforms and solutions, our ability to adapt and innovate our offerings in an evolving environment, the extent of the addressable market opportunity, the presence of momentum in our pipeline, our confidence in our growth trajectory, and the future financial performance of Quotient (including the guidance for the second 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 CPGs and shifts in CPG spend to digital solutions; the Company's expectations regarding other growth drivers including its ability to expand its relationships with retailers and obtain 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 significantly impact our business, plans and results of operations, as well as the value of our common stock;; and other factors identified in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K filed with the SEC on February 23, 2021 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 Technology Inc.
Quotient Technology (NYSE: QUOT) is the leading digital media and promotions technology company that creates cohesive omnichannel brand-building and sales-driving opportunities to deliver valuable outcomes for advertisers, retailers and consumers. The Quotient 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) |
|||||||
|
March 31, 2021 |
|
December 31, 2020 |
||||
|
(unaudited) |
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
241,086 |
|
|
$ |
222,752 |
|
Accounts receivable, net |
119,666 |
|
|
137,649 |
|
||
Prepaid expenses and other current assets |
13,682 |
|
|
18,547 |
|
||
Total current assets |
374,434 |
|
|
378,948 |
|
||
Property and equipment, net |
17,980 |
|
|
17,268 |
|
||
Operating leases right-of-use-assets |
19,212 |
|
|
16,222 |
|
||
Intangible assets, net |
37,439 |
|
|
44,898 |
|
||
Goodwill |
128,427 |
|
|
128,427 |
|
||
Other assets |
922 |
|
|
1,029 |
|
||
Total assets |
$ |
578,414 |
|
|
$ |
586,792 |
|
Liabilities and Stockholders' Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
9,089 |
|
|
$ |
15,959 |
|
Accrued compensation and benefits |
12,372 |
|
|
14,368 |
|
||
Other current liabilities |
62,801 |
|
|
70,620 |
|
||
Deferred revenues |
11,904 |
|
|
12,027 |
|
||
Contingent consideration related to acquisitions |
29,739 |
|
|
8,524 |
|
||
Total current liabilities |
125,905 |
|
|
121,498 |
|
||
Other non-current liabilities |
20,072 |
|
|
18,314 |
|
||
Contingent consideration related to acquisitions |
— |
|
|
20,930 |
|
||
Convertible senior notes, net |
180,015 |
|
|
177,168 |
|
||
Deferred tax liabilities |
1,853 |
|
|
1,853 |
|
||
Total liabilities |
327,845 |
|
|
339,763 |
|
||
|
|
|
|
||||
Stockholders' equity: |
|
|
|
||||
Common stock |
1 |
|
|
1 |
|
||
Additional paid-in capital |
715,301 |
|
|
698,333 |
|
||
Accumulated other comprehensive loss |
(1,015 |
) |
|
(1,001 |
) |
||
Accumulated deficit |
(463,718 |
) |
|
(450,304 |
) |
||
Total stockholders' equity |
250,569 |
|
|
247,029 |
|
||
Total liabilities and stockholders' equity |
$ |
578,414 |
|
|
$ |
586,792 |
|
| QUOTIENT TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2021 |
|
2020 |
||||
Revenues |
$ |
115,316 |
|
|
$ |
98,787 |
|
Cost of revenues(1) |
71,984 |
|
|
61,111 |
|
||
Gross Margin |
43,332 |
|
|
37,676 |
|
||
Operating Expenses: |
|
|
|
||||
Sales and marketing(1) |
27,365 |
|
|
25,034 |
|
||
Research and development(1) |
12,056 |
|
|
10,593 |
|
||
General and administrative(1) |
12,833 |
|
|
15,090 |
|
||
Change in fair value of contingent consideration |
285 |
|
|
460 |
|
||
Total operating expenses |
52,539 |
|
|
51,177 |
|
||
Loss from operations |
(9,207 |
) |
|
(13,501 |
) |
||
Interest expense |
(3,730 |
) |
|
(3,574 |
) |
||
Other income (expense), net |
(228 |
) |
|
580 |
|
||
Loss before income taxes |
(13,165 |
) |
|
(16,495 |
) |
||
Provision for income taxes |
249 |
|
|
230 |
|
||
Net loss |
$ |
(13,414 |
) |
|
$ |
(16,725 |
) |
|
|
|
|
||||
Net loss per share, basic and diluted |
$ |
(0.15 |
) |
|
$ |
(0.19 |
) |
|
|
|
|
||||
Weighted-average shares used to compute net loss per share, basic and diluted |
92,413 |
|
|
89,638 |
|
||
|
|
|
|
||||
| (1) The stock-based compensation expense included above was as follows: | |||||
|
Three Months Ended March 31, |
||||
|
2021 |
|
2020 |
||
Cost of revenues |
$ |
423 |
|
$ |
435 |
Sales and marketing |
1,255 |
|
1,402 |
||
Research and development |
972 |
|
881 |
||
General and administrative |
3,194 |
|
4,808 |
||
Total stock-based compensation |
$ |
5,844 |
|
$ |
7,526 |
| QUOTIENT TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) |
|||||||
|
Three Months Ended March 31, |
||||||
|
2021 |
|
2020 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(13,414 |
) |
|
$ |
(16,725 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
9,431 |
|
|
8,886 |
|
||
Stock-based compensation |
5,844 |
|
|
7,526 |
|
||
Amortization of debt discount and issuance cost |
2,846 |
|
|
2,698 |
|
||
Allowance (recovery) for credit losses |
(143 |
) |
|
217 |
|
||
Deferred income taxes |
249 |
|
|
230 |
|
||
Change in fair value of contingent consideration |
285 |
|
|
460 |
|
||
Other non-cash expenses |
958 |
|
|
726 |
|
||
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
18,125 |
|
|
16,252 |
|
||
Prepaid expenses and other current assets |
4,984 |
|
|
(128 |
) |
||
Accounts payable and other current liabilities |
(16,761 |
) |
|
(9,111 |
) |
||
Payments for contingent consideration and bonuses |
— |
|
|
(15,418 |
) |
||
Accrued compensation and benefits |
(1,771 |
) |
|
(5,694 |
) |
||
Deferred revenues |
(123 |
) |
|
1,183 |
|
||
Net cash provided by (used in) operating activities |
10,510 |
|
|
(8,898 |
) |
||
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
(2,797 |
) |
|
(2,488 |
) |
||
Net cash used in investing activities |
(2,797 |
) |
|
(2,488 |
) |
||
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
||||
Proceeds from issuances of common stock under stock plans |
13,070 |
|
|
468 |
|
||
Payments for taxes related to net share settlement of equity awards |
(2,246 |
) |
|
(2,312 |
) |
||
Principal payments on promissory note and finance lease obligations |
(163 |
) |
|
(82 |
) |
||
Payments for contingent consideration |
— |
|
|
(14,582 |
) |
||
Net cash provided by (used in) financing activities |
10,661 |
|
|
(16,508 |
) |
||
Effect of exchange rates on cash and cash equivalents |
(40 |
) |
|
(72 |
) |
||
Net increase (decrease) in cash and cash equivalents |
18,334 |
|
|
(27,966 |
) |
||
Cash and cash equivalents at beginning of period |
222,752 |
|
|
224,764 |
|
||
Cash and cash equivalents at end of period |
$ |
241,086 |
|
|
$ |
196,798 |
|
| QUOTIENT TECHNOLOGY INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (Unaudited, in thousands) |
|||||||
|
|
|
|
||||
|
Three Months Ended March 31, |
||||||
|
2021 |
|
2020 |
||||
Net loss |
$ |
(13,414 |
) |
|
$ |
(16,725 |
) |
Adjustments: |
|
|
|
||||
Stock-based compensation |
5,844 |
|
|
7,526 |
|
||
Depreciation and amortization |
9,431 |
|
|
8,885 |
|
||
Acquisition related costs and other(1) |
482 |
|
|
1,709 |
|
||
Change in fair value of contingent consideration |
285 |
|
|
460 |
|
||
Interest expense |
3,730 |
|
|
3,574 |
|
||
Other (income) expense, net |
228 |
|
|
(580 |
) |
||
Provision for income taxes |
249 |
|
|
230 |
|
||
|
|
|
|
||||
Total adjustments |
$ |
20,249 |
|
|
$ |
21,804 |
|
|
|
|
|
||||
Adjusted EBITDA |
$ |
6,835 |
|
|
$ |
5,079 |
|
|
|
|
|
||||
(1) For the three months ended March 31, 2020, other includes restructuring charges of $1.5 million. |
|||||||
| QUOTIENT TECHNOLOGY INC. | ||||||||||||||||||||
| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN | ||||||||||||||||||||
| (Unaudited, in thousands) | ||||||||||||||||||||
| Q1 FY 20 | Q2 FY 20 | Q3 FY 20 | Q4 FY 20 | Q1 FY 21 | ||||||||||||||||
| Net loss | $ |
(16,725 |
) |
$ |
(19,133 |
) |
$ |
(4,218 |
) |
$ |
(25,305 |
) |
$ |
(13,414 |
) |
|||||
| Adjustments: | ||||||||||||||||||||
Stock-based compensation |
|
7,526 |
|
|
7,006 |
|
|
6,489 |
|
|
7,350 |
|
|
5,844 |
|
|||||
Depreciation and amortization |
|
8,886 |
|
|
8,957 |
|
|
8,679 |
|
|
9,830 |
|
|
9,431 |
|
|||||
Acquistion related costs and other (1) |
|
1,708 |
|
|
388 |
|
|
2,393 |
|
|
7,872 |
|
|
482 |
|
|||||
Change in fair value of contingent consideration |
|
460 |
|
|
3,766 |
|
|
1,562 |
|
|
14,446 |
|
|
285 |
|
|||||
Interest expense |
|
3,574 |
|
|
3,610 |
|
|
3,646 |
|
|
3,691 |
|
|
3,730 |
|
|||||
Other (income) expense, net |
|
(580 |
) |
|
(187 |
) |
|
59 |
|
|
(432 |
) |
|
228 |
|
|||||
Provision for (benefit from) income taxes |
|
230 |
|
|
(35 |
) |
|
66 |
|
|
458 |
|
|
249 |
|
|||||
| Total adjustments | $ |
21,804 |
|
$ |
23,505 |
|
$ |
22,894 |
|
$ |
43,215 |
|
$ |
20,249 |
|
|||||
| Adjusted EBITDA (1) | $ |
5,079 |
|
$ |
4,372 |
|
$ |
18,676 |
|
$ |
17,910 |
|
$ |
6,835 |
|
|||||
| Adjusted EBITDA Margin (2) |
|
5% |
|
5% |
|
15% |
|
13% |
|
6% |
||||||||||
(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: restructuring charges of $1.5 million during Q1 FY 20; loss contingency of $2.0 million related to a contract dispute during Q3 FY 20; and settlement of $6.8 million related to a contract dispute during Q4 FY 20.
(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) | |||||||||||||
| Q1 FY 20 | Q4 FY 20 | Q1 FY 21 | |||||||||||
| Revenues | $ |
98,787 |
|
$ |
142,529 |
|
$ |
115,316 |
|
||||
| Cost of revenues (GAAP) | $ |
61,111 |
|
$ |
92,469 |
|
$ |
71,984 |
|
||||
| (less) Stock-based compensation |
|
(435 |
) |
|
(479 |
) |
|
(423 |
) |
||||
| (less) Amortization of acquired intangible assets |
|
(6,325 |
) |
|
(6,930 |
) |
|
(6,593 |
) |
||||
| (less) Settlement related to a contract dispute |
|
— |
|
|
(6,834 |
) |
|
— |
|
||||
| (less) Restructuring charges |
|
(82 |
) |
|
— |
|
|
— |
|
||||
| Cost of revenues (Non-GAAP) | $ |
54,269 |
|
$ |
78,226 |
|
$ |
64,968 |
|
||||
| Gross margin (GAAP) | $ |
37,676 |
|
$ |
50,060 |
|
$ |
43,332 |
|
||||
| Gross margin percentage (GAAP) |
|
38.1 |
% |
|
35.1 |
% |
|
37.6 |
% |
||||
| Gross margin (Non-GAAP)* | $ |
44,518 |
|
$ |
64,303 |
|
$ |
50,348 |
|
||||
| Gross margin percentage (Non-GAAP) |
|
45.1 |
% |
|
45.1 |
% |
|
43.7 |
% |
||||
| * Non-GAAP gross margin excludes stock-based compensation, amortization of acquired intangible assets, settlement related to a contract dispute, and restructuring charges. | |||||||||||||
| QUOTIENT TECHNOLOGY INC. | |||||||||||||||||||||
| RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES | |||||||||||||||||||||
| (Unaudited, in thousands) | |||||||||||||||||||||
| Q1 FY 20 | Q2 FY 20 | Q3 FY 20 | Q4 FY 20 | Q1 FY 21 | |||||||||||||||||
| Revenues | $ |
98,787 |
|
$ |
83,455 |
|
$ |
121,116 |
|
$ |
142,529 |
|
$ |
115,316 |
|
||||||
| Sales and marketing expenses |
|
25,034 |
|
|
23,814 |
|
|
24,555 |
|
|
31,124 |
|
|
27,365 |
|
||||||
| (less) Stock-based compensation |
|
(1,402 |
) |
|
(1,323 |
) |
|
(1,187 |
) |
|
(1,399 |
) |
|
(1,255 |
) |
||||||
| (less) Amortization of acquired intangible assets |
|
(916 |
) |
|
(914 |
) |
|
(866 |
) |
|
(866 |
) |
|
(866 |
) |
||||||
| (less) Restructuring charges |
|
(526 |
) |
|
- |
|
|
— |
|
|
— |
|
|
— |
|
||||||
| Non-GAAP Sales and marketing expenses | $ |
22,190 |
|
$ |
21,577 |
|
$ |
22,502 |
|
$ |
28,859 |
|
$ |
25,244 |
|
||||||
| Non-GAAP Sales and marketing percentage |
|
22 |
% |
|
26 |
% |
|
19 |
% |
|
20 |
% |
|
22 |
% |
||||||
| Research and development |
|
10,593 |
|
|
8,621 |
|
|
9,744 |
|
|
11,358 |
|
|
12,056 |
|
||||||
| (less) Stock-based compensation |
|
(881 |
) |
|
(839 |
) |
|
(1,003 |
) |
|
(1,108 |
) |
|
(972 |
) |
||||||
| (less) Restructuring charges |
|
(283 |
) |
|
- |
|
|
— |
|
|
— |
|
|
— |
|
||||||
| Non-GAAP Research and development expenses | $ |
9,429 |
|
$ |
7,782 |
|
$ |
8,741 |
|
$ |
10,250 |
|
$ |
11,084 |
|
||||||
| Non-GAAP Research and development percentage |
|
10 |
% |
|
9 |
% |
|
7 |
% |
|
7 |
% |
|
10 |
% |
||||||
| General and administrative expenses |
|
15,090 |
|
|
12,268 |
|
|
12,099 |
|
|
14,720 |
|
|
12,833 |
|
||||||
| (less) Stock-based compensation |
|
(4,808 |
) |
|
(4,457 |
) |
|
(3,857 |
) |
|
(4,364 |
) |
|
(3,194 |
) |
||||||
| (less) Restructuring charges |
|
(591 |
) |
|
- |
|
|
— |
|
|
— |
|
|
— |
|
||||||
| (less) Acquisiton related costs |
|
(226 |
) |
|
(387 |
) |
|
(393 |
) |
|
(1,039 |
) |
|
(482 |
) |
||||||
| Non-GAAP General and administrative expenses | $ |
9,465 |
|
$ |
7,424 |
|
$ |
7,849 |
|
$ |
9,317 |
|
$ |
9,157 |
|
||||||
| Non-GAAP General and administrative percentage |
|
10 |
% |
|
9 |
% |
|
6 |
% |
|
7 |
% |
|
8 |
% |
||||||
| Non-GAAP Operating expenses* | $ |
41,084 |
|
$ |
36,783 |
|
$ |
39,092 |
|
$ |
48,426 |
|
$ |
45,485 |
|
||||||
| Non-GAAP Operating expense percentage |
|
42 |
% |
|
44 |
% |
|
32 |
% |
|
34 |
% |
|
39 |
% |
||||||
| * 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/20210505005318/en/
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