QuinStreet, Inc. (NASDAQ:QNST) Q3 2019 Earnings Conference Call - Final Transcript

May 09, 2019 • 05:00 pm ET

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QuinStreet, Inc. (NASDAQ:QNST) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day and welcome to the QuinStreet Third 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

Executive
Erica Abrams

Thank you, Mitchell. Good afternoon, ladies and gentlemen. Thank you for joining us today as we report QuinStreet's third quarter fiscal year 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.

Before we get started, I would like to remind you that the following discussion contains forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those projected by such statements and are not guarantees of future performance. Factors that may cause the results to differ from our forward-looking statements are discussed in our recent SEC filings, including our most recent 10-Q filing made on February 11, 2019. Forward-looking statements are based on assumptions as of today and the Company undertakes no obligation to update these 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 press release which is available on our Investor Relations website.

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

Executive
Douglas Valenti

Thank you, Erica and thank you all for joining us today. Fiscal Q3 results were about what we expected except for our decision to write-off the DCEH receivable which represented a net expense impact of about $5.8 million. We said in our last call that due to tough comps and the timing of ramping initiatives, we expected second half growth to come from Q4. That remains the case. FY Q4 results are expected to get us to full year FY '19 revenue growth of about 15% and adjusted EBITDA margin of about 10% consistent with the outlook we provided last call excluding the DCEH write-off. So FY '19 has been and will end being a year of very good financial results with growth and margin expansion at record scale in our 20th year. And we have made great important progress strengthening and building the business for the future.

From my perspective, our business has never been in better shape and looking ahead, the future has never been brighter. We have the largest number of big long-term business initiatives ramping across the broadest footprint that we have ever had in the history of the Company. Progress from those initiatives contributed significantly in Q3 and offset a lot of tough comps from last year and the initiatives continue to ramp. We expect to deliver strong year-over-year growth and margin expansion in the current quarter, our fiscal Q4 and double digit growth and margin expansion again in fiscal 2020 and beyond.

With that, I'll turn the call over to Greg and then I will return