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

MOUNTAIN VIEW, Calif.--()--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.

 

Contacts

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

Release Summary

Quotient Technology Inc. Announces First Quarter 2021 Results

$Cashtags

Contacts

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