Exhibit 99.2 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 2 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 3 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 4 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 5 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 6 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 7 |
Steven Boal | Pamela Strayer | |
Chief Executive Officer | Chief Financial Officer |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 8 |
• | GAAP results for Q3 2021: |
o | We delivered revenue of $135.9 million, up 12% over Q3 2020, up 10% over Q2 2021. |
o | Gross profit was $49.3 million and gross margin was 36.3% of revenue, an increase of $1.8 million compared to $47.5 million and 39.2% in Q3 2020. |
o | Operating expenses were $53.0 million and 39.0% of revenue, compared to $48.0 million and 39.6% of revenue in Q3 2020. |
o | We recorded a Net Loss of $7.8 million, compared to a Net Loss of $4.2 million in Q3 2020. Net loss Per Share in the quarter was $0.08 compared to $0.05 in Q3 2020. |
• | Non-GAAP results for Q3 2021: |
o | Non-GAAP gross profit increased by $4.8 million to $60.8 million, compared to $56.0 million in Q3 2020. Non-GAAP gross margin was 44.7% of revenues in the quarter, compared to 46.2% in Q3 2020. On a sequential basis, non-GAAP gross profit increased by $10.8 million and gross margins expanded by 440 basis points. |
o | Non-GAAP operating expenses were $45.5 million and 33.5% of revenue, compared to the prior year of $39.1 million and 32.3% of revenue. |
o | Non-GAAP Operating Income of $15.3 million decreased by $1.6 million compared to the prior year. |
o | Adjusted EBITDA was $17.3 million, representing a 12.8% margin. |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 9 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 10 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 11 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 12 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 13 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 14 |
• | Revenue guidance is estimated to be $114.0 million to $124.0 million in Q4 2021. For historical comparison purposes, without these accounting changes, our revenue guidance would have been approximately $20 million higher. |
• | 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 $7.0 million to $12.0 million. |
• | Operating cash flow to be in the range of $0.0 million to $6.0 million. |
• | Revenue of $490.0 million to $500.0 million. For historical comparison purposes, if the accounting changes had not been made, the revenue range would have been approximately $24 million higher representing growth over the prior year of 16% at the mid-point on a like-for-like or gross basis. |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 15 |
• | We expect Adjusted EBITDA for the full year 2021 to be in the range of $35.0 million to $40.0 million. |
• | We expect weighted average basic shares outstanding for 2021 to be approximately 93.8 million. |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 16 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 17 |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 18 |
QUOTIENT TECHNOLOGY INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
September 30, 2021 | December 31, 2020 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 244,945 |
| $ | 222,752 |
| ||
Accounts receivable, net |
| 156,404 |
|
| 137,649 |
| ||
Prepaid expenses and other current assets |
| 14,437 |
|
| 18,547 |
| ||
Total current assets |
| 415,786 |
|
| 378,948 |
| ||
Property and equipment, net |
| 21,819 |
|
| 17,268 |
| ||
Operating lease right-of-use-assets |
| 20,755 |
|
| 16,222 |
| ||
Intangible assets, net |
| 15,978 |
|
| 44,898 |
| ||
Goodwill |
| 128,427 |
|
| 128,427 |
| ||
Other assets |
| 1,774 |
|
| 1,029 |
| ||
Total assets | $ | 604,539 |
| $ | 586,792 |
| ||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 14,997 |
| $ | 15,959 |
| ||
Accrued compensation and benefits |
| 19,604 |
|
| 14,368 |
| ||
Other current liabilities |
| 80,978 |
|
| 70,620 |
| ||
Deferred revenues |
| 21,154 |
|
| 12,027 |
| ||
Contingent consideration related to acquisitions |
| 21,655 |
|
| 8,524 |
| ||
Total current liabilities |
| 158,388 |
|
| 121,498 |
| ||
Operating lease liabilities |
| 22,182 |
|
| 15,956 |
| ||
Other non-current liabilities |
| 746 |
|
| 2,358 |
| ||
Contingent consideration related to acquisitions |
| — |
|
| 20,930 |
| ||
Convertible senior notes, net |
| 185,823 |
|
| 177,168 |
| ||
Deferred tax liabilities |
| 1,853 |
|
| 1,853 |
| ||
Total liabilities |
| 368,992 |
|
| 339,763 |
| ||
Stockholders’ equity: | ||||||||
Common stock |
| 1 |
|
| 1 |
| ||
Additional paid-in capital |
| 725,401 |
|
| 698,333 |
| ||
Accumulated other comprehensive loss |
| (1,093 | ) |
| (1,001 | ) | ||
Accumulated deficit |
| (488,762 | ) |
| (450,304 | ) | ||
Total stockholders’ equity |
| 235,547 |
|
| 247,029 |
| ||
Total liabilities and stockholders’ equity | $ | 604,539 |
| $ | 586,792 |
|
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 19 |
QUOTIENT TECHNOLOGY INC. | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(Unaudited, in thousands, except per share data) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 |
| 2020 |
| 2021 |
| 2020 | ||||||||||
Revenues | $ | 135,884 |
| $ | 121,116 |
| $ | 375,080 |
| $ | 303,358 |
| ||||
Cost of revenues (1) |
| 86,535 |
|
| 73,603 |
|
| 240,680 |
|
| 185,445 |
| ||||
Gross margin |
| 49,349 |
|
| 47,513 |
|
| 134,400 |
|
| 117,913 |
| ||||
Operating Expenses: | ||||||||||||||||
Sales and marketing (1) |
| 29,401 |
|
| 24,555 |
|
| 85,233 |
|
| 73,403 |
| ||||
Research and development (1) |
| 11,074 |
|
| 9,744 |
|
| 34,541 |
|
| 28,958 |
| ||||
General and administrative (1) |
| 12,244 |
|
| 12,099 |
|
| 40,086 |
|
| 39,457 |
| ||||
Change in fair value of contingent consideration |
| 245 |
|
| 1,562 |
|
| 772 |
|
| 5,788 |
| ||||
Total operating expenses |
| 52,964 |
|
| 47,960 |
|
| 160,632 |
|
| 147,606 |
| ||||
Loss from operations |
| (3,615 | ) |
| (447 | ) |
| (26,232 | ) |
| (29,693 | ) | ||||
Interest expense |
| (3,809 | ) |
| (3,646 | ) |
| (11,306 | ) |
| (10,830 | ) | ||||
Other income (expense), net |
| (96 | ) |
| (59 | ) |
| (130 | ) |
| 708 |
| ||||
Loss before income taxes |
| (7,520 | ) |
| (4,152 | ) |
| (37,668 | ) |
| (39,815 | ) | ||||
Provision for income taxes |
| 323 |
|
| 66 |
|
| 790 |
|
| 261 |
| ||||
Net loss | $ | (7,843 | ) | $ | (4,218 | ) | $ | (38,458 | ) | $ | (40,076 | ) | ||||
Net loss per share, basic and diluted | $ | (0.08 | ) | $ | (0.05 | ) | $ | (0.41 | ) | $ | (0.44 | ) | ||||
Weighted-average shares used to compute net loss per share, basic and diluted |
| 94,133 |
|
| 90,585 |
|
| 93,408 |
|
| 90,113 |
| ||||
(1) The stock-based compensation expense included above was as follows: | ||||||||||||||||
Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||||
2021 |
| 2020 |
| 2021 |
| 2020 | ||||||||||
Cost of revenues | $ | 525 |
| $ | 442 |
| $ | 1,349 |
| $ | 1,264 |
| ||||
Sales and marketing |
| 1,411 |
|
| 1,187 |
|
| 3,847 |
|
| 3,912 |
| ||||
Research and development |
| 1,076 |
|
| 1,003 |
|
| 3,025 |
|
| 2,723 |
| ||||
General and administrative |
| 1,678 |
|
| 3,857 |
|
| 8,853 |
|
| 13,122 |
| ||||
Total stock-based compensation | $ | 4,690 |
| $ | 6,489 |
| $ | 17,074 |
| $ | 21,021 |
|
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 20 |
QUOTIENT TECHNOLOGY INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited, in thousands) | ||||||||
Nine Months Ended September 30, | ||||||||
2021 |
| 2020 | ||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (38,458 | ) | $ | (40,076 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization |
| 24,425 |
|
| 26,522 |
| ||
Stock-based compensation |
| 17,074 |
|
| 21,021 |
| ||
Amortization of debt discount and issuance cost |
| 8,655 |
|
| 8,203 |
| ||
Impairment of intangible assets |
| 9,086 |
|
| — |
| ||
Allowance for credit losses |
| 115 |
|
| 542 |
| ||
Deferred income taxes |
| 790 |
|
| 261 |
| ||
Change in fair value of contingent consideration |
| 772 |
|
| 5,788 |
| ||
Other non-cash expenses |
| 3,236 |
|
| 2,546 |
| ||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable |
| (18,871 | ) |
| 2,615 |
| ||
Prepaid expenses and other current assets |
| 3,264 |
|
| 158 |
| ||
Accounts payable and other current liabilities |
| 7,952 |
|
| 4,893 |
| ||
Payments for contingent consideration and bonuses |
| (2,901 | ) |
| (15,418 | ) | ||
Accrued compensation and benefits |
| 5,445 |
|
| (4,334 | ) | ||
Deferred revenues |
| 9,127 |
|
| 450 |
| ||
Net cash provided by operating activities |
| 29,711 |
|
| 13,171 |
| ||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment |
| (10,773 | ) |
| (6,648 | ) | ||
Purchase of intangible assets |
| — |
|
| (3,000 | ) | ||
Net cash used in investing activities |
| (10,773 | ) |
| (9,648 | ) | ||
Cash flows from financing activities: | ||||||||
Proceeds from issuances of common stock under stock plans |
| 14,794 |
|
| 1,579 |
| ||
Payments for taxes related to net share settlement of equity awards |
| (5,286 | ) |
| (5,456 | ) | ||
Principal payments on promissory note and finance lease obligations |
| (169 | ) |
| (100 | ) | ||
Payments for contingent consideration |
| (6,121 | ) |
| (14,582 | ) | ||
Net cash provided by (used in) financing activities |
| 3,218 |
|
| (18,559 | ) | ||
Effect of exchange rates on cash and cash equivalents |
| 37 |
|
| 126 |
| ||
Net increase (decrease) in cash and cash equivalents |
| 22,193 |
|
| (14,910 | ) | ||
Cash and cash equivalents at beginning of period |
| 222,752 |
|
| 224,764 |
| ||
Cash and cash equivalents at end of period | $ | 244,945 |
| $ | 209,854 |
| ||
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 21 |
QUOTIENT TECHNOLOGY INC. | ||||||||||||||||||||||||||||
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN | ||||||||||||||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||||||||||
Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
2021 |
| 2020 |
| 2021 |
| 2020 | ||||||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||
Net Loss ($) / Loss Margin (%) (2) | $ | (7,843 | ) | (6 | %) | $ | (4,218 | ) | (3 | %) | $ | (38,458 | ) | (10 | %) | $ | (40,076 | ) | (13 | %) | ||||||||
Adjustments: | ||||||||||||||||||||||||||||
Stock-based compensation |
| 4,690 |
| 3 | % |
| 6,489 |
| 5 | % |
| 17,074 |
| 5 | % |
| 21,021 |
| 7 | % | ||||||||
Depreciation and amortization |
| 7,287 |
| 6 | % |
| 10,685 |
| 9 | % |
| 24,425 |
| 7 | % |
| 30,020 |
| 9 | % | ||||||||
Acquisition related costs and other (1) |
| 8,720 |
| 7 | % |
| 387 |
| — |
|
| 12,453 |
| 3 | % |
| 991 |
| — |
| ||||||||
Change in fair value of contingent consideration |
| 245 |
| — |
|
| 1,562 |
| 1 | % |
| 772 |
| — |
|
| 5,788 |
| 2 | % | ||||||||
Interest expense |
| 3,809 |
| 3 | % |
| 3,646 |
| 3 | % |
| 11,306 |
| 3 | % |
| 10,830 |
| 4 | % | ||||||||
Other (income) expense, net |
| 96 |
| — |
|
| 59 |
| — |
|
| 130 |
| — |
|
| (708 | ) | — |
| ||||||||
Provision for income taxes |
| 323 |
| — |
|
| 66 |
| — |
|
| 790 |
| — |
|
| 261 |
| — |
| ||||||||
Total adjustments | $ | 25,170 |
| 19 | % | $ | 22,894 |
| 18 | % | $ | 66,950 |
| 18 | % | $ | 68,203 |
| 22 | % | ||||||||
Adjusted EBITDA ($) / Adjusted EBITDA Margin (%) (2) | $ | 17,327 |
| 13 | % | $ | 18,676 |
| 15 | % | $ | 28,492 |
| 8 | % | $ | 28,127 |
| 9 | % | ||||||||
(1) For the three and nine months ended September 30, 2021, "other" includes a charge of $6.5 million and $9.1 million, respectively, related to the impairment of certain intangible assets due to the termination of our partnership with Albertsons, and restructuring charges of $1.8 million and $2.0 million, respectively, for such periods. For the three and nine months ended September 30, 2020, "other" includes restructuring charges of zero and $1.5 million, respectively, and a $2.0 million loss contingency for both respective periods, related to a contract dispute with Albertsons associated with a guaranteed distribution fee arrangement. | ||||||||||||||||||||||||||||
(2) Profit (Loss) Margin and Adjusted EBITDA Margin is the ratio of Profit (Loss) to Revenues and Adjusted EBITDA to Revenues. |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 22 |
QUOTIENT TECHNOLOGY INC. | ||||||||||||
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN | ||||||||||||
(Unaudited, in thousands) | ||||||||||||
Q3 FY 20 | Q2 FY 21 | Q3 FY 21 | ||||||||||
Revenues | $ | 121,116 |
| $ | 123,880 |
| $ | 135,884 |
| |||
|
|
| ||||||||||
Cost of revenues (GAAP) | $ | 73,603 |
| $ | 82,161 |
| $ | 86,535 |
| |||
(less) Stock-based compensation |
| (442 | ) |
| (401 | ) |
| (525 | ) | |||
(less) Amortization of acquired intangible assets |
| (6,026 | ) |
| (5,276 | ) |
| (4,396 | ) | |||
(less) Loss contingency related to a contract dispute |
| (2,000 | ) |
| — |
|
| — |
| |||
(less) Impairment of certain intangible assets |
| — |
|
| (2,580 | ) |
| (6,506 | ) | |||
(less) Restructuring charges |
| — |
|
| — |
|
| (5 | ) | |||
Cost of revenues (Non-GAAP) | $ | 65,135 |
| $ | 73,904 |
| $ | 75,103 |
| |||
|
|
| ||||||||||
|
|
| ||||||||||
Gross margin (GAAP) | $ | 47,513 |
| $ | 41,719 |
| $ | 49,349 |
| |||
Gross margin percentage (GAAP) |
| 39.2 | % |
| 33.7 | % |
| 36.3 | % | |||
|
|
| ||||||||||
Gross margin (Non-GAAP)* | $ | 55,981 |
| $ | 49,976 |
| $ | 60,781 |
| |||
Gross margin percentage (Non-GAAP) |
| 46.2 | % |
| 40.3 | % |
| 44.7 | % | |||
* Non-GAAP gross margin excludes stock-based compensation, amortization of acquired intangible assets, loss contingency related to a contract dispute, impairment of certain intangible assets, and restructuring charges. | ||||||||||||
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 23 |
QUOTIENT TECHNOLOGY INC. | ||||||||||||||||||||
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES | ||||||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||
Q3 FY 20 | Q4 FY 20 | Q1 FY 21 | Q2 FY 21 | Q3 FY 21 | ||||||||||||||||
Revenues | $ | 121,116 |
| $ | 142,529 |
| $ | 115,316 |
| $ | 123,880 |
| $ | 135,884 |
| |||||
Sales and marketing expenses |
| 24,555 |
|
| 31,124 |
|
| 27,365 |
|
| 28,467 |
|
| 29,401 |
| |||||
(less) Stock-based compensation |
| (1,187 | ) |
| (1,399 | ) |
| (1,255 | ) |
| (1,181 | ) |
| (1,411 | ) | |||||
(less) Amortization of acquired intangible assets |
| (866 | ) |
| (866 | ) |
| (866 | ) |
| (866 | ) |
| (837 | ) | |||||
(less) Restructuring charges |
| — |
|
| — |
|
| — |
|
| (217 | ) |
| (903 | ) | |||||
Non-GAAP Sales and marketing expenses | $ | 22,502 |
| $ | 28,859 |
| $ | 25,244 |
| $ | 26,203 |
| $ | 26,250 |
| |||||
Non-GAAP Sales and marketing percentage |
| 19 | % |
| 20 | % |
| 22 | % |
| 21 | % |
| 19 | % | |||||
Research and development |
| 9,744 |
|
| 11,358 |
|
| 12,056 |
|
| 11,411 |
|
| 11,074 |
| |||||
(less) Stock-based compensation |
| (1,003 | ) |
| (1,108 | ) |
| (972 | ) |
| (977 | ) |
| (1,076 | ) | |||||
(less) Restructuring charges |
| — |
|
| — |
|
| — |
|
| — |
|
| (463 | ) | |||||
Non-GAAP Research and development expenses | $ | 8,741 |
| $ | 10,250 |
| $ | 11,084 |
| $ | 10,434 |
| $ | 9,535 |
| |||||
Non-GAAP Research and development percentage |
| 7 | % |
| 7 | % |
| 10 | % |
| 8 | % |
| 7 | % | |||||
General and administrative expenses |
| 12,099 |
|
| 14,720 |
|
| 12,833 |
|
| 15,009 |
|
| 12,244 |
| |||||
(less) Stock-based compensation |
| (3,857 | ) |
| (4,364 | ) |
| (3,194 | ) |
| (3,981 | ) |
| (1,678 | ) | |||||
(less) Restructuring charges |
| — |
|
| — |
|
| — |
|
| — |
|
| (463 | ) | |||||
(less) Acquisition related costs |
| (393 | ) |
| (1,039 | ) |
| (482 | ) |
| (453 | ) |
| (380 | ) | |||||
Non-GAAP General and administrative expenses | $ | 7,849 |
| $ | 9,317 |
| $ | 9,157 |
| $ | 10,575 |
| $ | 9,723 |
| |||||
Non-GAAP General and administrative percentage |
| 6 | % |
| 7 | % |
| 8 | % |
| 9 | % |
| 7 | % | |||||
Non-GAAP Operating expenses* | $ | 39,092 |
| $ | 48,426 |
| $ | 45,485 |
| $ | 47,212 |
| $ | 45,508 |
| |||||
Non-GAAP Operating expense percentage |
| 32 | % |
| 34 | % |
| 39 | % |
| 38 | % |
| 33 | % | |||||
* 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. |
Q3 2021 FINANCIAL RESULTS AND BUSINESS UPDATES | 24 |