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Quotient Technology Inc. Announces First Quarter 2021 Results

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  • 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/

Contacts

Investor Relations Contact:
Christine Marchuska
Vice President of Investor Relations
cmarchuska@quotient.com
Phone: 917-232-0852