Delivered Record Revenues and Financial Results Above
Guidance
- Total revenue for Q4 2019: $118.5M, up 11% over Q4
2018
- Total revenue for FY 2019: $436.2M, up 13% over FY
2018
Generated $31.8 Million in Cash from Operations in
2019
Quotient Technology Inc. (NYSE: QUOT), the leading digital
promotions, media and analytics company for CPG and retail
marketing, today reported financial results for the fourth quarter
and full year ended December 31, 2019.
“I couldn’t be more pleased with how we ended the year, as we
continued to grow our core business, deliver new products and
expand our network. Over the last six months, we’ve strengthened
our leadership team and established key operating priorities to
drive the business forward. We believe we are now on course for
steady growth in revenues, gross margin and Adjusted EBITDA,” said
Steven Boal, CEO.
Boal added, “Retailers and brands are now moving quickly to
drive omni-channel initiatives forward. This dynamic has created a
tailwind for our growth, as CPGs plan to stop spending in offline
free-standing inserts and aim to meet retailers’ asks for more
digital marketing spend.”
Fourth Quarter 2019 Financial Results
- Total revenue was $118.5 million in Q4 2019, an increase of 11%
over Q4 2018.
- GAAP net loss for Q4 2019 was $9.6 million, compared to GAAP
net loss of $4.5 million in Q4 2018.
- Adjusted EBITDA was $11.5 million in Q4 2019, compared to $16.5
million in Q4 2018.
- Generated $1.8 million in cash from operations in Q4 2019,
compared to $13.8 million in Q4 2018.
Full Year 2019 Financial Results
- Total revenue was $436.2 million in 2019, an increase of 13%
over 2018.
- GAAP net loss for 2019 was $37.1 million, compared to GAAP net
loss of $28.3 million in 2018.
- Adjusted EBITDA was $45.2 million in 2019, compared to $57.6
million in 2018.
- Generated $31.8 million in cash from operations in 2019,
compared to $22.0 million in 2018.
Adjusted EBITDA, a non-GAAP measure, is reconciled to the
corresponding GAAP measure at the end of this release.
2019 Business Highlights
Expanded Retail Network and Shopper Demand
- Shopper demand on the Retailer iQ platform increased. The
number of registrants on programs powered by Retailer iQ grew 24%
over 2018 to 105 million with existing Retailer iQ partners. This
demonstrates the strength of our retail partners’ digital
initiatives as they continue to drive shopper registrants and
engagement into their digital loyalty programs.
- Added Giant Eagle Advantage Media to the Retail Performance
Media (RPM) network in early 2019.
Launched New Products and Partnerships
- Expanded Quotient Promotions with In-Lane Targeted Promotions
at check out. For brands, it closely ties campaign performance
results across important shopper touchpoints whether they are
engaged in-store or on digital.
- Two retail partners added Sponsored Product Search, enabling
brands to influence and drive sales within ecommerce.
- Launched Quotient Audiences in early 2019, expanding our
proprietary syndicated and custom audience segments to brand buyers
for sophisticated shopper targeting across networks.
- Signed agreement with Nielsen to deliver Quotient Audiences on
Nielsen Marketing Cloud and provide data for their third-party
measurement solutions. Nielsen is one of the largest third-party
measurement firms within retail/CPG, and our strategic partnership
validates the strength of our data.
- Released a market leading analytics dashboard for our customers
to access and monitor performance results in mid-flight, understand
key data points and build more impactful, strategic programs from
the learnings of previous campaigns.
Acquired Ubimo, a Leading Data and Media Activation
Company
- Through its demand-side platform (DSP), Ubimo brings
best-in-class technology to further strengthen Quotient’s targeted
digital media solutions, improve campaign performance and cost
efficiencies, and accelerate the development of Quotient’s
self-service platform.
- Additionally, Ubimo will provide a new partner base in the
complementary Digital Out-of-Home (DOOH) market, a growing
opportunity within CPG/retail. Magna Advertising forecasts revenues
from DOOH to increase 20% in 2020.
Business Outlook
Starting on April 1, 2020 we will modify the way we deliver a
portion of our media business and will no longer control certain
services before they are transferred to our customers. This change
will drive a portion of our media revenues to be recognized net of
certain costs in Q2, Q3 and Q4 of 2020, whereas in FY2019 these
revenues were recognized on a gross basis. As a result of these
changes, we expect gross margins to increase, with no direct impact
to our Net Income or Adjusted EBITDA.
Our Q1 2020 outlook, detailed below, is not impacted by these
changes. Our full year 2020 outlook below reflects these changes
and projects revenue from this portion of our media business on a
net basis effective April 1, 2020. Had we not made these changes
the projected 2020 revenues would have been approximately $33.0
million higher, which would have resulted in revenue growth of
approximately 20% as compared to 2019.
As of today, Quotient is providing the following business
outlook.
For the first quarter 2020, total revenue is expected to be in
the range of $106.0 million to $109.0 million. Adjusted EBITDA for
the first quarter of 2020 is expected to be in the range of $1.0
million to $3.0 million.
For the full year 2020, total revenue is expected to be in the
range of $485.0 million to $495.0 million. Adjusted EBITDA for the
full year 2020 is expected to be in the range of $58.0 million to
$62.0 million. Adjusted EBITDA is expected to grow throughout the
year with the fourth quarter Adjusted EBITDA margin forecasted to
be in the high teens.
A reconciliation of Adjusted EBITDA, a non-GAAP guidance
measure, 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 and expenses items
that are excluded in calculating Adjusted EBITDA.
Conference Call Information
The Company has posted prepared remarks and an earnings
presentation on the Investor Relations section of the Company
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.
Questions that investors would like to see asked during the call
should be sent to ir@quotient.com.
To access the call, please dial (833) 227-5842, or outside the
U.S. (647) 689-4069, with Conference ID# 3786324 at least five
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 has presented Adjusted EBITDA in this press release
because it is a key measure used by Quotient’s management and Board
of Directors to understand and evaluate core operating performance
and trends, to prepare and approve its annual budget, to develop
short and long-term operational plans, and to determine bonus
payouts. In particular, Quotient believes that the exclusion of
certain items of income and expenses in calculating Adjusted EBITDA
can provide a useful measure for period-to-period comparisons of
its core business as well as a useful comparison to peer companies.
Additionally, Adjusted EBITDA is a key financial metric used by the
compensation committee of our Board of Directors in connection with
the determination of compensation for our executive officers.
Accordingly, Quotient believes that Adjusted EBITDA provides useful
information to investors and others in understanding and evaluating
Quotient’s operating results in the same manner as Quotient’s
management and Board of Directors.
Quotient defines Adjusted EBITDA as net income (loss) adjusted
for interest expense, provision for (benefit from) income taxes,
depreciation and amortization, stock-based compensation, change in
fair value of escrowed shares and contingent consideration, net,
other income (expense) net, charges related to certain acquisition
related costs, restructuring charges, impairment of capitalized
software development costs, and Enterprise Resource Planning
(“ERP”) Software implementation costs. We exclude these items
because we believe that these items do not reflect expected future
operating expenses. Additionally, certain items are inconsistent in
amounts and frequency making it difficult to contribute to a
meaningful evaluation of our current or past operating
performance.
Quotient’s use of Adjusted EBITDA has limitations as an
analytical tool and should not be considered in isolation or as a
substitute for analysis of Quotient’s financial results as reported
under GAAP. Some of these limitations are:
- Although depreciation and amortization are non-cash expenses,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect capital
expenditure requirements for such replacements or for new capital
expenditure requirements; and
- Adjusted EBITDA does not reflect: (i) changes in, or cash
requirements for, working capital needs; (ii) interest and tax
payments that may represent a reduction in cash available to
Quotient; (iii) the effects of stock-based compensation,
amortization of acquired intangible assets, interest expense, other
income (expense) net, provision for (benefit from) income taxes,
change in fair value of escrowed shares and contingent
consideration, net, charges related to certain acquisition related
costs, restructuring charges, impairment of capitalized software
development costs, and ERP software implementation costs. Other
companies, including companies in its industry, may calculate
Adjusted EBITDA or similarly titled measures differently, which
reduces its usefulness as a comparative 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 measures 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 with respect to revenues and Adjusted EBITDA
for the first quarter and fiscal year 2020; the Company’s ability
to grow revenues, gross margin and Adjusted EBITDA; developments
with its solutions, partnerships, product launches; the benefits of
the Ubimo acquisition; CPGs’ plans to stop spending in offline
free-standing inserts; the impact of the Company’s shift to
recognize certain media services on a net basis; the future demand
and behavior of consumers, retailers and CPGs; and the Company’s
future investments and growth and ability to leverage its
investments and operating expenses. 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 in offline free-standing inserts; the Company’s ability
to timely launch products; the Company’s ability to 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 Company’s ability to negotiate
fee arrangements with CPGs and retailers; the Company’s ability to
maintain and expand the use by consumers of promotions and offers
on its platforms; the Company’s ability to execute its media
strategy; the Company’s ability to effectively manage its growth;
the performance of the Company’s various solutions; the Company's
ability to successfully integrate acquired companies into its
business; the Company’s ability to develop and launch new services
and features; CPGs’ receptivity to the Company’s packaged
solutions; our expectations regarding growth drivers; and other
factors identified in the Company’s filings with the Securities and
Exchange Commission (the “SEC”), including its Quarterly Report on
Form 10-Q filed with the SEC on November 8, 2019 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 is the leading digital promotions, media and
analytics company that delivers personalized digital coupons and
ads – informed by proprietary shopper and online engagement data –
to millions of shoppers daily. We use our proprietary Promotions,
Media, Audience and Analytics Cloud Platforms and services to
seamlessly target audiences, optimize performance, and deliver
measurable, incremental sales for CPG and retail marketers. We
serve hundreds of CPGs and retailers nationwide, including Clorox,
Procter & Gamble, General Mills, Unilever, Albertsons
Companies, CVS, Dollar General and Ahold-Delhaize USA. Quotient is
based in Mountain View, California, and has offices in Bangalore,
Cincinnati, New York, Paris and London, and Tel Aviv. Visit
www.quotient.com for more information.
Quotient, the Quotient logo and Ubimo 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) December 31,2019
December 31,2018 (unaudited)
Assets Current assets:
Cash and cash equivalents
$
224,764
$
302,028
Short-term investments
—
20,738
Accounts receivable, net
125,304
112,108
Prepaid expenses and other current assets
22,026
10,044
Total current assets
372,094
444,918
Property and equipment, net
13,704
15,579
Intangible assets, net
69,752
81,724
Goodwill
128,427
118,821
Other assets
7,961
1,311
Total assets
$
591,938
$
662,353
Liabilities and Stockholders’ Equity Current liabilities:
Accounts payable
$
19,116
$
17,060
Accrued compensation and benefits
15,232
13,107
Other current liabilities
50,032
53,255
Deferred revenues
10,903
8,686
Contingent consideration related to acquisitions
27,000
— Total current liabilities
122,283
92,108
Other non-current liabilities
7,119
3,622
Contingent consideration related to acquisitions
9,220
28,963
Convertible senior notes, net
166,157
155,719
Deferred tax liabilities
1,937
1,854
Total liabilities
306,716
282,266
Stockholders’ equity: Common stock
1
1
Additional paid-in capital
671,060
703,023
Accumulated other comprehensive loss
(916
)
(844
)
Accumulated deficit
(384,923
)
(322,093
)
Total stockholders’ equity
285,222
380,087
Total liabilities and stockholders’ equity
$
591,938
$
662,353
QUOTIENT TECHNOLOGY INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited, in thousands, except
per share data) Three Months EndedDecember 31,
Year EndedDecember 31,
2019
2018
2019
2018
Revenues
$
118,532
$
107,056
$
436,160
$
386,958
Costs and expenses: Cost of revenues (1)
72,219
60,935
263,606
206,230
Sales and marketing (1)
27,541
22,944
101,244
90,086
Research and development (1)
10,771
10,151
39,076
46,873
General and administrative (1)
14,227
14,311
58,328
49,805
Change in fair value of escrowed shares and contingent
consideration, net
519
1,148
1,571
13,190
Total costs and expenses
125,277
109,489
463,825
406,184
Loss from operations
(6,745
)
(2,433
)
(27,665
)
(19,226
)
Interest expense
(3,539
)
(3,404
)
(13,955
)
(13,411
)
Other income (expense), net
1,009
1,326
5,223
4,801
Loss before income taxes
(9,275
)
(4,511
)
(36,397
)
(27,836
)
Provision for income taxes
285
(15
)
660
482
Net loss
$
(9,560
)
$
(4,496
)
$
(37,057
)
$
(28,318
)
Net loss per share, basic and diluted
$
(0.11
)
$
(0.05
)
$
(0.41
)
$
(0.30
)
Weighted-average shares used to compute net loss per share,
basic and diluted
89,123
94,262
91,163
93,676
(1) The stock-based compensation expense included above was
as follows:
Three Months EndedDecember 31, Year
EndedDecember 31,
2019
2018
2019
2018
Cost of revenues
$
521
$
625
$
2,193
$
2,315
Sales and marketing
1,816
1,572
6,812
6,596
Research and development
1,225
540
4,804
6,137
General and administrative
4,883
4,194
18,328
16,338
Total stock-based compensation
$
8,445
$
6,931
$
32,137
$
31,386
QUOTIENT TECHNOLOGY INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands) Year
EndedDecember 31,
2019
2018
(unaudited)
Cash flows from operating activities: Net loss
$
(37,057
)
$
(28,318
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
31,437
25,041
Stock-based compensation
32,137
31,386
Amortization of debt discount and issuance cost
10,438
9,898
Restructuring charge related to facility exit costs —
1,057
Allowance for doubtful accounts
1,227
509
Deferred income taxes
660
482
Change in fair value of escrowed shares and contingent
consideration, net
1,571
13,190
Impairment of capitalized software development costs
3,579
— Other non-cash expenses
2,392
207
Changes in operating assets and liabilities: Accounts receivable
(7,142
)
(26,032
)
Prepaid expenses and other current assets
(11,145
)
(861
)
Accounts payable and other current liabilities
(62
)
6,449
Payments for contingent consideration —
(9,700
)
Accrued compensation and benefits
1,567
(1,287
)
Deferred revenues
2,216
27
Net cash provided by operating activities
31,818
22,048
Cash flows from investing activities: Purchases of
property and equipment
(9,021
)
(6,077
)
Purchases of intangible assets
(14,811
)
(20,545
)
Acquisitions, net of cash acquired
(13,730
)
(33,661
)
Purchases of short-term investments —
(75,120
)
Proceeds from maturity of short-term investment
20,738
114,284
Net cash used in investing activities
(16,824
)
(21,119
)
Cash flows from financing activities: Proceeds from
issuances of common stock under stock plans
5,017
7,495
Payments for taxes related to net share settlement of equity awards
(9,838
)
(11,658
)
Repurchases and retirement of common stock under share repurchase
program
(87,097
)
(14,285
)
Principal payments on promissory note and capital lease obligations
(317
)
(310
)
Payments for contingent consideration —
(14,800
)
Net cash used in financing activities
(92,235
)
(33,558
)
Effect of exchange rates on cash and cash equivalents
(23
)
22
Net decrease in cash and cash equivalents
(77,264
)
(32,607
)
Cash and cash equivalents at beginning of period
302,028
334,635
Cash and cash equivalents at end of period
$
224,764
$
302,028
QUOTIENT TECHNOLOGY INC. RECONCILIATION OF NET
LOSS TO ADJUSTED EBITDA (Unaudited, in thousands)
Three Months EndedDecember 31, Year EndedDecember 31,
2019
2018
2019
2018
Net loss
$
(9,560
)
$
(4,496
)
$
(37,057
)
$
(28,318
)
Adjustments: Stock-based compensation
8,445
6,931
32,137
31,386
Depreciation, amortization and other (1)
9,268
10,809
39,107
32,262
Change in fair value of escrowed shares and contingent
consideration, net
519
1,148
1,571
13,190
Interest expense
3,539
3,404
13,955
13,411
Other (income) expense, net
(1,009
)
(1,326
)
(5,223
)
(4,801
)
Provision for income taxes
285
(15
)
660
482
Total adjustments
$
21,047
$
20,951
$
82,207
$
85,930
Adjusted EBITDA
$
11,487
$
16,455
$
45,150
$
57,612
(1) For the three and twelve months ended December 31, 2019,
Other includes restructuring charges of zero and $4.3 million,
respectively, and certain acquisition related costs of $1.1 million
and $3.4 million, respectively. For the three and twelve months
ended December 31, 2018, Other includes: restructuring charges of
$1.7 million and $4.4 million, respectively, certain acquisition
related costs of $1.3 million and $2.8 million, respectively, and
ERP software implementation costs related to service agreements of
zero and $0.05 million, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200212005808/en/
Investor Relations Contact: Stacie Clements, 650-605-4535
Vice President, Investor Relations ir@quotient.com
Media Contact: Randy Zane press@quotient.com
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