QuinStreet, Inc. (NASDAQ:QNST) Q1 2019 Earnings Conference Call - Final Transcript

Oct 30, 2018 • 05:00 pm ET


QuinStreet, Inc. (NASDAQ:QNST) Q1 2019 Earnings Conference Call - Final Transcript


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Good day, and welcome to the QuinStreet First Quarter 2019 Financial Results Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Ms. Erica Abrams. Please go ahead, ma'am.

Erica Abrams

Thank you, Brad. Good afternoon, ladies and gentlemen. Thank you for joining us today to report QuinStreet's first quarter of 2019 financial results. Joining me on the call today are Doug Valenti, CEO; and Greg Wong, CFO of QuinStreet. This call is being simultaneously webcast on the Investor Relations section of our website at www.quinstreet.com.

(Forward-Looking Cautionary Statements) Today, we will be discussing both GAAP and non-GAAP measures. A reconciliation of GAAP to non-GAAP financial measures are included in today's earnings release, which is available on our Investor Relations website.

With that, I'll turn the call over to Doug Valenti, CEO of QuinStreet. Please go ahead.

Doug Valenti

Thank you, Erica, and thank you all for joining us today. Fiscal Q1 continued our recent trend of positive business momentum. We saw strong demand for our digital performance marketplace solutions. Our marketer clients are spending more in the digital channel to catch up with the growth in traffic and activity there relative to other channels. And QuinStreet is benefiting because we are able to consistently deliver measurably attractive results at scale due to our superior technologies and strong digital networks.

We expect the trends of strong growth in digital marketing and shifting spend to performance marketing with more measurement and transparency like QuinStreet delivers to continue. And we expect those trends to provide tailwinds to our business. QuinStreet is a clear leader in providing the best solutions and results in performance marketing at scale for big brands in our client verticals. And we continue to invest aggressively to grow that lead.

Revenue in FY Q1 was up 29% year-over-year. We grew revenue in each of our reported client verticals by over 20%. We also continued to expand margins with adjusted EBITDA up 56% and adjusted net income up 108% year-over-year. After quarter end, we closed the acquisition of AmOne Corporation, an add-on to our fast-growing personal loans business. AmOne, a company that has been around for about 20 years, with particular success in personal loans over the past 10 years or so, brings highly complementary media and client coverage and capabilities to QuinStreet.

As previously announced, we paid $20 million in upfront cash and we'll pay $8 million over the next two years for the acquisition. We will be releasing audited results for AmOne in coming weeks. But at a high level, they did around $22 million in revenue and $4 million in EBITDA on a trailing 12-month basis. We are raising our revenue outlook for full fiscal year 2019 from at least 10% growth to growth of between 15% and 20% over fiscal 2018. We continue to expect -- to expand margins, and that full fiscal year 2019 adjusted EBITDA will be approximately 10% of revenue.

With that, I'll turn the call over to Greg.