Exhibit 99.2 |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 2 |
● | We reached a milestone of our ability to exceed the sales unit volumes and results of the Free-Standing Inserts (FSIs) through our duration-based or fixed calendar digital national promotions. |
● | Expanded our National Rebates Platform with cash back offers for consumers, now available on the Coupons.com website and mobile web in addition to the Coupons.com app, and in the very near future to our network distribution partners. |
● | Launched a new, sophisticated multi-touch, impression-based attribution measurement with self-serve capabilities within our Quotient Analytics Platform. |
● | Continued to grow our industry presence as we secured AdExchanger’s Programmatic Power Players award for our core capabilities in performance marketing and media planning & buying. |
● | Expanded the reach of our promotion amplification tool as Albertsons recently went live with this solution and Hy-Vee is expected to launch this offering in the near future. Anecdotally, retailers, one in particular, are noting that the capabilities of our promotion amplification solution are providing them an alternative to paper circulars—allowing them to entirely cease producing the offline paper circular and move to our digital solution. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 3 |
● | Continued to see momentum for collaborative spend programs, where retailers partner with brands to shift a meaningful percentage of marketing and promotional spend onto their digital platforms powered by Quotient. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 4 |
● | In Q2 2021, we experienced an increase of over 340% in bookings on a dollar basis over Q2 2020 from smaller CPG brands. A key highlight from this segment’s performance, which we believe to be a direct result of changes to and a focused reorganization of our sales team, is not only our success in growing this area of our business but also the satisfaction of brands. This is demonstrated by the longer-term engagement of brands, who have a high retention rate with Quotient and a desire to do more business across multiple of our solutions. We believe growth in this area will continue as additional smaller CPGs look to utilize our platform and current brands seek to increase their spend with us based on our scale and our approach to working with them. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 5 |
● | National promotions continued its year-over-year bookings trend of the last two quarters, with 51% growth in the number of brands looking to deploy national promotion campaigns and 40% growth in bookings on a dollar basis in Q2 2021 over the prior year. Additionally, in Q2 2021, Quotient reached an important milestone—we demonstrated that, based on client feedback, our national promotions solution exceeded sales unit volumes and more importantly, the results of traditional FSIs. Now, having scaled our network and realigned our business to deliver promotions on a fixed calendar basis, where brands book time on our network for a specific duration to fully align with their merchandising schedules, we believe the rest of the already shifting offline FSI dollars can finally move to digital. |
● | Shopper (also known as retailer-specific) media continued to grow, with approximately 200% growth in bookings on a dollar basis in Q2 2021 over the prior year. This includes media solutions that are available to brands who continue to see increased efficiency and return on ad spend (ROAS) from using our digital solutions. Shopper media campaigns were critical during the pandemic, and we see this momentum continuing as we slowly move towards a post-pandemic environment where many changes in consumer behavior that emerged during the last year are forecast to remain in some capacity. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 6 |
● | In Q2 2021, Rite Aid went live with Quotient’s Retailer Promotions Platform. Rite Aid is now utilizing both our Promotions and RPM Platforms as well as additional solutions we offer to retailers. |
● | In addition to Ahold Delhaize’s USA Peapod Labs, who went live with our promotion amplification tool in Q1 2021, Albertsons recently went live with our tool, and Hy-Vee is slated to go live with this offering in the near future. Additionally, we are in talks with other current and potential new retail partners who are looking to leverage this innovative tool to drive scaled awareness of all temporary price reductions (TPRs) for their customers while eliminating inefficiencies that have burdened this industry for decades. Retailers are finally able to contemplate, and at least in one case, plan to completely eliminate the offline paper circular. |
● | RPM Platform demand continued this quarter. |
o | In Q2 2021, we saw an increase of 237% in bookings dollars from our customers utilizing RPM versus the prior year period. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 7 |
o | Quotient RPM retailers saw an approximate 100% increase in alternative revenue streams from our RPM Platform in the second quarter as compared to Q2 2020. |
● | Collaborative spend programs, where retailers work with brands to commit a meaningful percentage of total spend on their digital platforms powered by Quotient, continue to see momentum and produce impactful results. As noted in past quarters, we believe we are in the early innings with sufficient opportunity for growth in this area. |
● | In Q2 2021, Microsoft and MSN.com went live with Quotient’s digital coupons experience. The integration currently allows consumers to access and redeem coupons. Soon, it will also allow consumers to receive cash back rebates. We are in the early stages of this integration, and we look forward to the evolution of what we believe will be a significant opportunity for both Microsoft and Quotient in the upcoming quarters and years. |
● | We are working with several potential partners to add more distribution in the near-term that should significantly expand the size of our network. We remain focused on growing our reach into the number of households and consumers that desire access to savings and a better shopping experience across all touchpoints along the path to purchase. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 8 |
● | Hy-Vee, through its RPM Platform powered by Quotient, ran its first successful social campaign utilizing social platform partners Facebook, Instagram and Snapchat. |
● | We saw social revenue through our RPM Platform more than double in Q2 2021 as compared to Q2 2020. |
● | TikTok and native video continued to grow in popularity across our brands and partners, and we anticipate this to be a growth area within our influencer business in the 2H of 2021. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 9 |
● | At the end of Q2 2021, we had inventory of over 241,000+ screens nationwide. This translates to approximately 8.6 billion weekly impressions that we can transact on at any given moment. We continue to see this number increase as we onboard more screens each quarter to grow our inventory while maximizing reach and opportunities for our clients. As a result of this access to supply, we saw three times growth in DOOH revenue as well as broader adoption by customers and partners in Q2 2021 as compared to the prior sequential quarter. |
● | Our expanded role within the industry enabled us to host the first “CPG DOOH Event” with the Digital Place Based Advertising Association (DPAA), a leading global trade marketing association connecting out-of-home (OOH) media with the advertising community while moving OOH to digital. The CPG DOOH Event was a thought-leadership event attended by CPGs, advertising agency teams and media owners. The virtual event was well attended with several notable speakers, and our role in the event has already driven new business for Quotient. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 10 |
● | This solution is first being rolled out exclusively to early adopters, including Nestlé, Coca-Cola, Mondelēz and Bimbo Bakeries. We expect that this solution will be made available to all brands in Fall 2021. |
● | This launch sets the foundation for our automated performance-based capabilities. We believe this is a critical differentiator for Quotient as the media industry evolves from volume or impression-based buying and selling to performance-based optimization. This capability is also important for brands and demand side partners to maximize their ROIs, for our retail partners and supply side to maximize their yield, and for Quotient as we continue to proceed toward our goal to becoming the leading performance marketing platform. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 11 |
● | Demand for this solution continues to grow, especially with the availability of national rebates expanding from the Coupons.com app to the Coupons.com website and mobile web. |
● | Our national rebates solution, paired with the recent change in how we sell distribution across our network, and integrations and partnerships that we believe over time will provide access to the majority of households that shop using coupons, and those that don’t as of yet, provides brands of all sizes with a true digital alternative to the FSI—resulting in a more efficient promotion spend. |
● | Nine brands have activated this solution as of Q2 2021, with several additional brands already committed to running campaigns using this solution in the second half, and indications of a strong pipeline for the rest of FY 2021. Ahold Delhaize USA’s Peapod Digital Labs and Albertsons are utilizing promotion amplification on their RPM Platforms. Hy-Vee intends to implement this solution in the upcoming months, and we are in discussions with several other retailers to implement promotion amplification. |
● | Although we are still in the early days of the customer deployment of promotion amplification, we are seeing strong demand. Within the industry, this type of offering has not only been a want but also a need for decades. As noted above, we have started to see retailers make the switch from paper circulars to this solution and we believe this trend will grow as the efficiencies of this digital offering as well as the sales lift are compelling. We continue to have conversations with both brands and retailers regarding their desire to learn more about the solution and how they can start utilizing it or adding it to their platform. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 12 |
● | Sponsored search momentum continued in Q2, with the number of brands who booked a sponsored search campaign increasing approximately 21% compared to Q1 2021. Since adding this offering to our platform, we have seen consistent quarter-over-quarter growth in bookings. With more of this business moving to self-service, along with other product innovations, we believe demand for this solution will continue to grow. |
● | As shown in the graph below, and as was expected from the trend witnessed in the most recent quarters, the number of redemptions from our eCommerce channel decreased in Q2 2021 from Q1 2021. Although consumers continue to utilize online grocery sales channels, the lifting of quarantines and re-opening of establishments resulted in increased in-store shopping. In a July 2021 poll by The Feedback Group, 40% of consumers polled said they plan to shop more at a physical store for groceries over the next 12 months. However, we believe online spending will reach a more normalized level in the coming quarters since we predict that mixed-mode shopping will become a lasting consumer behavior from the pandemic. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 13 |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 14 |
Steven Boal Chief Executive Officer | Pamela Strayer Chief Financial Officer |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 15 |
● | We delivered revenue of $123.9 million, up 48% over Q2 2020 on a GAAP basis. |
● | GAAP gross margin was 33.7%, compared to 39.2% in Q2 2020. |
● | Non-GAAP gross margin was 40.3%, compared to 47.2% in Q2 2020. |
● | GAAP operating expenses were 44.5% of revenue, compared to 58.1% of revenue in Q2 2020. |
● | Non-GAAP operating expenses were $47.2 million and 38.1% of revenue, compared to the prior year of $36.8 million and 44.1% of revenue. |
● | We recorded a GAAP net loss of $17.2 million, compared to a net loss of $19.1 million in Q2 2020. The decrease in GAAP net loss was due primarily to a decrease in fair value of contingent consideration, a decrease in amortization of acquired intangible assets and a decrease in stock-based compensation. Net Loss Per Share in the quarter was $0.18 compared to $0.21 in Q2 2020. |
● | Adjusted EBITDA was $4.3 million, representing a 3.5% margin. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 16 |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 17 |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 18 |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 19 |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 20 |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 21 |
● | Revenue guidance is estimated to be $126.0 million to $133.0 million in Q3 2021. For historical comparison purposes, if sponsored search continued to be recognized on a gross basis, our revenue guidance would have been approximately $5 million higher representing growth over the prior year of 11% at the mid-point on a like-for-like or gross basis. |
● | Gross profit remains a focus while we continue to invest in our platform and automation to improve this metric. Our gross profit is significantly impacted by the mix of business that we book in any quarter with promotion revenues generally driving higher gross margins than media revenues. Predicting the mix of revenue between promotion and media remains difficult at this time. |
● | Adjusted EBITDA to be in the range of $2.0 million to $12.0 million. |
● | Operating cash flow to be in the range of $7.0 million to $12.0 million. |
● | Revenue of $505.0 million to $522.0 million. For historical comparison purposes, if sponsored search had remained on a gross basis, the revenue range would have been approximately $10 million higher representing growth over the prior year of 17% at the mid-point on a like-for-like or gross basis. |
● | We expect Adjusted EBITDA for the full year 2021 to be in the range of $50.0 million to $65.0 million. |
● | We expect weighted average basic shares outstanding for 2021 to be approximately 95.0 million. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 22 |
● | Oppenheimer Technology, Internet & Communications Conference (Virtual), August 10, 2021 |
● | UBS Digital Advertising Investor Call, August 17, 2021 |
● | Colliers Institutional Investor Conference (Virtual), September 9, 2021 |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 23 |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 24 |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 25 |
QUOTIENT TECHNOLOGY INC. | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(in thousands) | ||||||||||
| June 30, |
| December 31, | |||||||
| (unaudited) |
|
| |||||||
Assets |
|
|
| |||||||
Current assets: |
|
|
| |||||||
Cash and cash equivalents | $ | 238,299 |
|
|
| $ | 222,752 |
|
| |
Accounts receivable, net | 134,230 |
|
|
| 137,649 |
|
| |||
Prepaid expenses and other current assets | 16,094 |
|
|
| 18,547 |
|
| |||
Total current assets | 388,623 |
|
|
| 378,948 |
|
| |||
Property and equipment, net | 19,134 |
|
|
| 17,268 |
|
| |||
Operating leases right-of-use-assets | 18,247 |
|
|
| 16,222 |
|
| |||
Intangible assets, net | 27,717 |
|
|
| 44,898 |
|
| |||
Goodwill | 128,427 |
|
|
| 128,427 |
|
| |||
Other assets | 898 |
|
|
| 1,029 |
|
| |||
Total assets | $ | 583,046 |
|
|
| $ | 586,792 |
|
| |
Liabilities and Stockholders' Equity |
|
|
| |||||||
Current liabilities: |
|
|
| |||||||
Accounts payable | $ | 12,295 |
|
|
| $ | 15,959 |
|
| |
Accrued compensation and benefits | 14,279 |
|
|
| 14,368 |
|
| |||
Other current liabilities | 73,326 |
|
|
| 70,620 |
|
| |||
Deferred revenues | 17,977 |
|
|
| 12,027 |
|
| |||
Contingent consideration related to acquisitions | 21,410 |
|
|
| 8,524 |
|
| |||
Total current liabilities | 139,287 |
|
|
| 121,498 |
|
| |||
Operating lease liabilities | 18,510 |
|
|
| 15,956 |
|
| |||
Other non-current liabilities | 725 |
|
|
| 2,358 |
|
| |||
Contingent consideration related to acquisitions | — |
|
|
| 20,930 |
|
| |||
Convertible senior notes, net | 182,899 |
|
|
| 177,168 |
|
| |||
Deferred tax liabilities | 1,853 |
|
|
| 1,853 |
|
| |||
Total liabilities | 343,274 |
|
|
| 339,763 |
|
| |||
|
|
|
| |||||||
Stockholders' equity: |
|
|
| |||||||
Common stock | 1 |
|
|
| 1 |
|
| |||
Additional paid-in capital | 721,795 |
|
|
| 698,333 |
|
| |||
Accumulated other comprehensive loss | (1,105 | ) |
|
| (1,001 | ) |
| |||
Accumulated deficit | (480,919 | ) |
| (450,304 | ) |
| ||||
Total stockholders' equity | 239,772 |
|
|
| 247,029 |
|
| |||
Total liabilities and stockholders' equity | $ | 583,046 |
|
|
| $ | 586,792 |
|
|
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 26 |
QUOTIENT TECHNOLOGY INC. | ||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
(Unaudited, in thousands, except per share data) | ||||||||||||||||||||
|
| Three Months Ended |
| Six Months Ended | ||||||||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||||||||||
Revenues |
| $ | 123,880 |
|
|
| $ | 83,455 |
|
|
| $ | 239,196 |
|
|
| $ | 182,242 |
|
|
Cost of revenues(1) |
| 82,161 |
|
| 50,731 |
|
| 154,145 |
|
|
| 111,842 |
|
| ||||||
Gross Margin |
| 41,719 |
|
| 32,724 |
|
| 85,051 |
|
| 70,400 |
| ||||||||
Operating Expenses: |
|
|
|
|
|
|
|
| ||||||||||||
Sales and marketing(1) |
| 28,467 |
|
|
| 23,814 |
|
|
| 55,832 |
|
|
| 48,848 |
|
| ||||
Research and development(1) |
| 11,411 |
|
|
| 8,621 |
|
|
| 23,467 |
|
|
| 19,214 |
|
| ||||
General and administrative(1) |
| 15,009 |
|
|
| 12,268 |
|
|
| 27,842 |
|
|
| 27,358 |
|
| ||||
Change in fair value of contingent consideration |
| 242 |
|
|
| 3,766 |
|
|
| 527 |
|
|
| 4,226 |
|
| ||||
Total operating expenses |
| 55,129 |
|
|
| 48,469 |
|
|
| 107,668 |
|
|
| 99,646 |
|
| ||||
Loss from operations |
| (13,410 | ) |
|
| (15,745 | ) |
|
| (22,617 | ) |
|
| (29,246 | ) |
| ||||
Interest expense |
| (3,767 | ) |
|
| (3,610 | ) |
|
| (7,497 | ) |
|
| (7,184 | ) |
| ||||
Other income (expense), net |
| 194 |
|
|
| 187 |
|
|
| (34 | ) |
|
| 767 |
|
| ||||
Loss before income taxes |
| (16,983 | ) |
|
| (19,168 | ) |
|
| (30,148 | ) |
|
| (35,663 | ) |
| ||||
Provision for (benefit from) income taxes |
| 218 |
|
|
| (35 | ) |
|
| 467 |
|
|
| 195 |
|
| ||||
Net loss |
| $ | (17,201 | ) |
|
| $ | (19,133 | ) |
|
| $ | (30,615 | ) |
|
| $ | (35,858 | ) |
|
|
|
|
|
|
|
|
|
| ||||||||||||
Net loss per share, basic and diluted |
| $ | (0.18 | ) |
|
| $ | (0.21 | ) |
|
| $ | (0.33 | ) |
|
| $ | (0.40 | ) |
|
|
|
|
|
|
|
|
|
| ||||||||||||
Weighted-average shares used to compute net loss per share, basic and diluted |
| 93,645 |
|
|
| 90,112 |
|
|
| 93,038 |
|
|
| 89,875 |
|
| ||||
|
|
|
|
|
|
|
| |||||||||||||
|
|
|
|
|
|
|
| |||||||||||||
(1) The stock-based compensation expense included above was as follows: | ||||||||||||||||||||
|
| Three Months Ended |
| Six Months Ended | ||||||||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||||||||||
Cost of revenues |
| $ | 401 |
|
|
| $ | 387 |
|
|
| $ | 824 |
|
|
| $ | 822 |
|
|
Sales and marketing |
| 1,181 |
|
|
| 1,323 |
|
|
| 2,436 |
|
|
| 2,725 |
|
| ||||
Research and development |
| 977 |
|
|
| 839 |
|
|
| 1,949 |
|
|
| 1,720 |
|
| ||||
General and administrative |
| 3,981 |
|
|
| 4,457 |
|
|
| 7,175 |
|
|
| 9,265 |
|
| ||||
Total stock-based compensation |
| $ | 6,540 |
|
|
| $ | 7,006 |
|
|
| $ | 12,384 |
|
|
| $ | 14,532 |
|
|
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 27 |
QUOTIENT TECHNOLOGY INC. | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(Unaudited, in thousands) | ||||||||||
|
| Six Months Ended June 30, | ||||||||
|
| 2021 |
| 2020 | ||||||
|
|
|
|
| ||||||
Cash flows from operating activities: |
|
|
|
| ||||||
Net loss |
| $ | (30,615 | ) |
|
| $ | (35,858 | ) |
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
| ||||||
Depreciation and amortization |
| 17,138 |
|
|
| 17,843 |
|
| ||
Stock-based compensation |
| 12,384 |
|
|
| 14,532 |
|
| ||
Amortization of debt discount and issuance cost |
| 5,731 |
|
|
| 5,432 |
|
| ||
Impairment of promotion service right |
| 2,580 |
|
|
| — |
|
| ||
Allowance (recovery) for credit losses |
| (13 | ) |
|
| 263 |
|
| ||
Deferred income taxes |
| 467 |
|
|
| 195 |
|
| ||
Change in fair value of contingent consideration |
| 527 |
|
|
| 4,226 |
|
| ||
Other non-cash expenses |
| 1,906 |
|
|
| 1,442 |
|
| ||
Changes in operating assets and liabilities: |
|
|
|
| ||||||
Accounts receivable |
| 3,431 |
|
|
| 30,730 |
|
| ||
Prepaid expenses and other current assets |
| 2,467 |
|
|
| (2,470 | ) |
| ||
Accounts payable and other current liabilities |
| (1,670 | ) |
|
| (7,551 | ) |
| ||
Payments for contingent consideration and bonuses |
| (2,901 | ) |
|
| (15,418 | ) |
| ||
Accrued compensation and benefits |
| 119 |
|
|
| (7,478 | ) |
| ||
Deferred revenues |
| 5,950 |
|
|
| 2,108 |
|
| ||
Net cash provided by operating activities |
| 17,501 |
|
|
| 7,996 |
|
| ||
|
|
|
|
| ||||||
Cash flows from investing activities: |
|
|
|
| ||||||
Purchases of property and equipment |
| (6,426 | ) |
|
| (4,689 | ) |
| ||
Net cash used in investing activities |
| (6,426 | ) |
|
| (4,689 | ) |
| ||
|
|
|
|
| ||||||
Cash flows from financing activities: |
|
|
|
| ||||||
Proceeds from issuances of common stock under stock plans |
| 14,794 |
|
|
| 1,762 |
|
| ||
Payments for taxes related to net share settlement of equity awards |
| (4,110 | ) |
|
| (3,327 | ) |
| ||
Principal payments on promissory note and finance lease obligations |
| (167 | ) |
|
| (91 | ) |
| ||
Payments for contingent consideration |
| (6,121 | ) |
|
| (14,582 | ) |
| ||
Net cash provided by (used in) financing activities |
| 4,396 |
|
|
| (16,238 | ) |
| ||
Effect of exchange rates on cash and cash equivalents |
| 76 |
|
|
| 39 |
|
| ||
Net increase (decrease) in cash and cash equivalents |
| 15,547 |
|
|
| (12,892 | ) |
| ||
Cash and cash equivalents at beginning of period |
| 222,752 |
|
|
| 224,764 |
|
| ||
Cash and cash equivalents at end of period |
| $ | 238,299 |
|
|
| $ | 211,872 |
|
|
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 28 |
QUOTIENT TECHNOLOGY INC. | ||||||||||||||||||||
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA | ||||||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||
|
| Three Months Ended June 30, |
| Six Months Ended June 30, | ||||||||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 | ||||||||||||
Net loss |
| $ | (17,201 | ) |
|
| $ | (19,133 | ) |
|
| $ | (30,615 | ) |
|
| $ | (35,858 | ) |
|
Adjustments: |
|
|
|
|
|
|
|
| ||||||||||||
Stock-based compensation |
| 6,540 |
|
|
| 7,006 |
|
|
| 12,384 |
|
|
| 14,532 |
|
| ||||
Depreciation and amortization |
| 7,707 |
|
|
| 8,958 |
|
|
| 17,138 |
|
|
| 17,843 |
|
| ||||
Acquisition related costs and other(1) |
| 3,251 |
|
|
| 387 |
|
|
| 3,733 |
|
|
| 2,096 |
|
| ||||
Change in fair value of contingent consideration |
| 242 |
|
|
| 3,766 |
|
|
| 527 |
|
|
| 4,226 |
|
| ||||
Interest expense |
| 3,767 |
|
|
| 3,610 |
|
|
| 7,497 |
|
|
| 7,184 |
|
| ||||
Other (income) expense, net |
| (194 | ) |
|
| (187 | ) |
|
| 34 |
|
|
| (767 | ) |
| ||||
Provision for (benefit from) income taxes |
| 218 |
|
|
| (35 | ) |
|
| 467 |
|
|
| 195 |
|
| ||||
|
|
|
|
|
|
|
|
| ||||||||||||
Total adjustments |
| $ | 21,531 |
|
|
| $ | 23,505 |
|
|
| $ | 41,780 |
|
|
| $ | 45,309 |
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Adjusted EBITDA |
| $ | 4,330 |
|
|
| $ | 4,372 |
|
|
| $ | 11,165 |
|
|
| $ | 9,451 |
|
|
|
|
|
|
|
|
| ||||||||||||||
(1) For the three and six months ended June 30, 2021, "other" includes a charge of $2.6 million related to the impairment of a promotion service right, and restructuring charges of $0.2 million, for both respective periods. The three months ended June 30, 2020, include no other costs. For the six months ended June 30, 2020, other includes restructuring charges of $1.5 million. Acquisition related costs primarily include certain bonuses contingent upon the acquired company meeting certain financial metrics over the contingent consideration period and diligence, accounting, and legal expenses incurred related to certain acquisitions. Restructuring charges relate to severance for certain executive management changes and impacted employees. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 29 |
QUOTIENT TECHNOLOGY INC. | |||||||||||||
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN | |||||||||||||
(Unaudited, in thousands) | |||||||||||||
Q2 FY 20 | Q1 FY 21 | Q2 FY 21 | |||||||||||
Revenues | $ | 83,455 |
| $ | 115,316 |
| $ | 123,880 |
| ||||
Cost of revenues (GAAP) | $ | 50,731 |
| $ | 71,984 |
| $ | 82,161 |
| ||||
(less) Stock-based compensation |
| (387 | ) |
| (423 | ) |
| (401 | ) | ||||
(less) Amortization of acquired intangible assets |
| (6,278 | ) |
| (6,593 | ) |
| (5,276 | ) | ||||
(less) Impairment of promotion service right |
| — |
|
| — |
|
| (2,580 | ) | ||||
Cost of revenues (Non-GAAP) | $ | 44,066 |
| $ | 64,968 |
| $ | 73,904 |
| ||||
Gross margin (GAAP) | $ | 32,724 |
| $ | 43,332 |
| $ | 41,719 |
| ||||
Gross margin percentage (GAAP) |
| 39.2 | % |
| 37.6 | % |
| 33.7 | % | ||||
Gross margin (Non-GAAP)* | $ | 39,389 |
| $ | 50,348 |
| $ | 49,976 |
| ||||
Gross margin percentage (Non-GAAP) |
| 47.2 | % |
| 43.7 | % |
| 40.3 | % | ||||
* Non-GAAP gross margin excludes stock-based compensation, amortization of acquired intangible assets and impairment of a promotion service right. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 30 |
QUOTIENT TECHNOLOGY INC. | |||||||||||||||||||||
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES | |||||||||||||||||||||
(Unaudited, in thousands) | |||||||||||||||||||||
Q2 FY 20 | Q3 FY 20 | Q4 FY 20 | Q1 FY 21 | Q2 FY 21 | |||||||||||||||||
Revenues | $ | 83,455 |
| $ | 121,116 |
| $ | 142,529 |
| $ | 115,316 |
| $ | 123,880 |
| ||||||
Sales and marketing expenses |
| 23,814 |
|
| 24,555 |
|
| 31,124 |
|
| 27,365 |
|
| 28,467 |
| ||||||
(less) Stock-based compensation |
| (1,323 | ) |
| (1,187 | ) |
| (1,399 | ) |
| (1,255 | ) |
| (1,181 | ) | ||||||
(less) Amortization of acquired intangible assets |
| (914 | ) |
| (866 | ) |
| (866 | ) |
| (866 | ) |
| (866 | ) | ||||||
(less) Restructuring charges |
| — |
|
| — |
|
| — |
|
| — |
|
| (217 | ) | ||||||
Non-GAAP Sales and marketing expenses | $ | 21,577 |
| $ | 22,502 |
| $ | 28,859 |
| $ | 25,244 |
| $ | 26,203 |
| ||||||
Non-GAAP Sales and marketing percentage |
| 26 | % |
| 19 | % |
| 20 | % |
| 22 | % |
| 21 | % | ||||||
Research and development |
| 8,621 |
|
| 9,744 |
|
| 11,358 |
|
| 12,056 |
|
| 11,411 |
| ||||||
(less) Stock-based compensation |
| (839 | ) |
| (1,003 | ) |
| (1,108 | ) |
| (972 | ) |
| (977 | ) | ||||||
Non-GAAP Research and development expenses | $ | 7,782 |
| $ | 8,741 |
| $ | 10,250 |
| $ | 11,084 |
| $ | 10,434 |
| ||||||
Non-GAAP Research and development percentage |
| 9 | % |
| 7 | % |
| 7 | % |
| 10 | % |
| 8 | % | ||||||
General and administrative expenses |
| 12,268 |
|
| 12,099 |
|
| 14,720 |
|
| 12,833 |
|
| 15,009 |
| ||||||
(less) Stock-based compensation |
| (4,457 | ) |
| (3,857 | ) |
| (4,364 | ) |
| (3,194 | ) |
| (3,981 | ) | ||||||
(less) Acquisiton related costs |
| (387 | ) |
| (393 | ) |
| (1,039 | ) |
| (482 | ) |
| (453 | ) | ||||||
Non-GAAP General and administrative expenses | $ | 7,424 |
| $ | 7,849 |
| $ | 9,317 |
| $ | 9,157 |
| $ | 10,575 |
| ||||||
Non-GAAP General and administrative percentage |
| 9 | % |
| 6 | % |
| 7 | % |
| 8 | % |
| 9 | % | ||||||
Non-GAAP Operating expenses* | $ | 36,783 |
| $ | 39,092 |
| $ | 48,426 |
| $ | 45,485 |
| $ | 47,212 |
| ||||||
Non-GAAP Operating expense percentage |
| 44 | % |
| 32 | % |
| 34 | % |
| 39 | % |
| 38 | % | ||||||
* 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. |
Q2 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 31 |