QUOT - Earnings call transcript Q3 2018 | Quotient Technology Inc.

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Operator

Welcome to the Third Quarter 2018 Quotient Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded and will be available for replay from the Investor Relations section of Quotient's website following this call. I will now turn the call over to Stacie Clements, Vice President of Investor Relations. Thank you. Ms. begin. now may you Clements,

Stacie Clements

the Thank you, quarter to to third available and the website. our Hello earnings call. everyone, on are XXXX call slides on welcome section Please of remarks corporate our today's operator. IR note accompany that

Ron with Chairman, and is questions well available our the here and call Aamir, after President Boal, for remarks. today as me, On CFO. our Mir Steven are our CEO; Fior, Executive prepared our and

the call, our Before will please full our we and that in well the statements our for begin, statements. platforms; forward-looking projections year for as in forward-looking business strategies expected fourth you generally. These partnership, expectations note hear and pricing growth offerings, as investments XXXX; of include our quarter and

available to and of on risks and good as Forward-looking the beliefs management differ materially. subject based time and of that or of cause the statements are known are to and you actual our performances team could results unknown to uncertainties call information this faith

obligation August these between with issued With update X, on to slide posted about result found note now the operating non-GAAP that, with today's in are exclude on have the the disclaim Additional future the Please to over in revenues, that financial can on our results release GAAP of could today on margin any been quarterly net and XXXX. and statements, on factors the XX-Q website. reconciliation today expenses. impact in exception gross basis discussed be and events A potentially deck certain We found report call and measures non-GAAP I'll contained information, turn financial loss, company's Mir. expenses, financial a result Form measures can SEC in adjusted whether new information to forward-looking press filed that of a as or in otherwise. our release be identified and press factors risk the information

Mir Aamir

and Stacie, first record you, with We over everyone. record revenue quarter marking our and a third delivering had EBITDA quarter million. welcome, Thank record and revenue $XXX

Within more through with customers, of which us we Retailer from e-commerce grew retailer a the XX% something of smaller of and in digital XX%. we drive year-over-year. was the leading acquisition marketing. XX% promotions a total a also by digital and I'll for Third our digital over and as the of from $XXX.X walk promotions, same annually was converge believe enhance we announced about e-commerce was for and grew our Retailer XX% Retailer CPG in revenue proprietary and drive revenue some will analytics-driven at of EBITDA revenue increased grew CPG on brands time platform media promotions, quarterly strength through includes the our greatly grew will significant all quarter last by up revenue our believe efficiently transformation ago, paperless sales year. potential is data, And Last a top many all estimated Elevaate XXXX. other paradigm small over I coupons QX solutions and XX% XX% marketing Revenue data-driven billion to data. marketing. media This CPG and record digital year to that this $XXX testament by to mid-sized true In from high X% shopper our coming media iQ customers integrated to partners, XX CPG iQ sales turn our iQ QX through a up are media, moment. period. We $XX.X growth with from together U.K.-based Adjusted brands, driven million, QX, solutions. continues and new speak spend capabilities now in week, digital from CPGs highlights. revenue million.

campaign is a a and recently real-time near Analytics, insights gives launched self-service as Quotient that catalyst serving platform for CPGs measurement, Our more business.

retailer-specific we national primarily that demand revenue from CPGs coupons promotion to where supply products use on which of grow shopper personalized. than can are in To date, platform, And billion spending now discounts sales spend help of future drive has $XXX digital into spend, trade shelf. campaigns. selling also majority our drive from paper. us To for CPGs. the budgets, have promotion X,XXX on over and we on represent continue CPG come on exceeds the These far more $X more annually we're not coupons budgets, optimize by Additionally, measurement a studies almost more billion National discounting database tapping from that coupons, our spend CPGs more to through digital although coupons, efficiently. coupons

large For example QX, results a in campaigns the piloted and CPG in few with increase driving we an sales. average a of XX% great, were

to like for shopper CRM we scale, digital natural retailers at CPG advantage Retailer a spend have to shoppers brands partner significant to terms with scale unique Quotient's online. circular, CPG we digital of over in promotion million for data. innovations the by this technology do with accelerate of believe And coupons, shift powered from XX and and to targeted with a programs amount offline registered brands and are CPG iQ We

coupon to activation. this on bring the we of model. based market. a fees CPG example rather signed to We which is recently ROI-based redemption One pricing on prominent Additionally, than continue

us committed XX% result, with to a their XXXX. over spend increase in As digital coupon have they by

concept their X also additional by live sold resonating audience In campaigns and campaigns it are enable digital QX coupons at launched The campaigns, have We include maximize packaged further are programs digital XXXX. media, is all already package for with as to dollars pricing. combined which data, CPGs, ROI we spend. CPGs we whereby marketing well that and QX, bringing them on to buying improves working

us. to year-over-year, driven media. I'll Media retailers. For from particularly Revenue media to turn and our for platform has integrated entire now media Quotient, exciting and with it XX% our fits tremendous well coupons, of and been solutions increased our digital a marketing by partnerships with growth story suite shopper for data.

reminder, performance a offers buyer used and our media over on platform XXX property, from and service of million Quotient's reaching a intent for based is data that audience targeting consumer flagship full data Coupons.com. verified measurement shopper transaction solutions, As

In a addition at U.S. to million data, estimated audiences XXX% based on this of based actual as of shopper audience data, segments have model almost XXX adults expect about people. on to we we reach

the our about expand with media outperform our with Collectively, on e-commerce, units ad to online integrated now another industry exclusive data. success our to influencer I'm sale to their be transaction annual as and CPG as well campaigns on partnership creative media as represent that well we average using includes have strong billion. for and technology in continue of grocery X excited mobile, partnerships also that $XXX work expanded We that Quotient. been must delivering the is Top retailers has through driven in that we very We're acquisitions. shopper by capabilities. the our in That in as built This retailer grocery dynamic announce to digital U.S. months. ads marketing these data our spend wanting which purchase deliver benchmarks. partner, This media digital expected to technology all using as partner, media on ad meaning return solution which social makes serves sponsored and live go these exclusive offline shoppers and to search media CPGs digital Quotient the retailer coming retailer fifth

over solution chose its as ago. great in recognized seeing Del number solution The report says its and retail partner focus of e-commerce. first-ever we're Ahalogy leader in investment Monte from marketing. report "the with Ahalogy. We're XXX%. increasing is on media its for influencer social capability also brands Additionally, Forrester from Del fit it agencies eager influencer momentum as service." for our stated saw an The result, CPG a shopper Quotient's Ahalogy marketers to just from year almost working best influencer As rise full our example, programs influencer Independent drive that research ROI Monte and a after a on by

platforms. of elsewhere technology the spent Google, As retailer that e-commerce. digital attracting on a on search partners Elevaate, our search properties ads we drives Amazon time media on product are e-commerce budget boost platform e-commerce currently sales retailers shoppers mentioned, at week, to and with searches and and retailer's e-commerce products us enables through other sales and when a sell retailer and directly last acquisition acquisition heavily sponsored their properties web, help groceries in our announced initiating The investing that more of are

CPGs invest brands at partners technology, sites. consumers. to we such we're in Overall, have to is capability to content, their technologies. and eager strengthen accelerating to value proposition loyalty And through innovation add and to revenue our e-commerce and into solutions search with sponsored as retailer retailers several CRM scale. new our programs our And continue a rate. great data run CPG acquiring consumers growth their continue we for brand new One building result, We

which repeat data. shoppers And we for space. our to retailers With to a capability, this in large in of these adds are acquired programs, capability time. already we began purchase Retailer this Savingstar testing of a across transaction company year, over a rewarded Earlier, this brand enhance shopper amount iQ called QX,

this available brands should CRM retail previously product CRM and at a in in their platform some marketplace. promotions launching happening CPG the and our revenue our loyalty to into be another we're marketplace. scale With catalyst We accelerating partnerships, is growth. leveraging the spend and marketing integrated not Converging believe retailer relationships offering for a

help are that. tremendous competitive Our how in CPG to the face and excited and macro do retailer partners they them go-to-market of challenges. very We're redefining

come. data competitive we scale us significant consumers I to a assets, will for Ron. years Our allow believe with for coupons and call will to growth over significant provide that now with accelerating media technology in the advantage turn and

Ronald Fior

everyone. you, Mir, and Thank welcome,

loss million year-on-year million. Mir, and to million, QX by the smaller and over a million shares million a $XX.X in change well revenues you last a from cost of and continued just revenues net year. certain and costs interest over fair of in recorded and up by value were net acquisition-related of EBITDA Total from was the up Growth was provision QX compensation, had as expense, in in were of for the quarter, just changes the escrowed led depreciation XXXX. quarter benefit value media XXXX. QX revenues record other quarter $XXX.X million, net from or GAAP of promotion stock-based media Retailer QX As and We a record in as or XX% promotions. software of X% of escrow GAAP in XX% shares GAAP of amortization, increased third X up excludes $X.X third $XX.X costs. billion, loss heard taxes, offset the expense third net over income GAAP compared growth iQ operations quarter implementation loss. driven of record in we contingent third Transactions a Adjusted XXXX. consideration $X.X ERP restructuring income in in consideration, compensation QX fair EBITDA contingent charges, cash stock-based to Adjusted from expense, and $XX.X

at the generated included from burnout a $XXX.X revenues, used Drilling cash promotions balance Crisp with specialty from anticipated million in quarter this partnerships, QX Net payments, a retailer summary, in that $XX.X short-term revenue digital pleased last X% slight million of $XX the Excluding for we buyback $XXX.X investments our over year ended with netting digital investment million, and our of we In growth cash revenue cash the down very $XX.X XX% in was and retail cash revenues. our in for activities, X%. and approximately million, the decline Look the operating used quarter. Retailer iQ, of M&A at the Crisp QX. of are down burnout uptick and in with we in in stock of million coupons, performance print came program, operations. XX% into paperless up

media; at our by marketing. was $XX.X year, media in last including Looking and shopper increase quarter focus a our now revenue the on driven Ahalogy XX% integrated over million, solutions, media

XX%. approximately And year last past engine; shown to revenue. coupons over and media digital accounted average quarter growth for of in year-on-year growth the our third quarters, of our an quarterly total XX% this grow at XX% Looking combined and X over combination rate paperless has the

Looking promotions in total while XX% customers to continue more at of Retailer our proportion year-on-year paperless their iQ. customers; our from XX spend on top top QX revenues. grew CPGs increasing Revenue

to side, On XX spend us QX customers XX% last their compared grew Top the our media with year. in

Looking at CPGs. from revenue total

XX% small total As in increased mentioned, QX revenue of and Mir customers, quarter, CPG third by XX% brands, ago. by Revenue mid-sized in from includes year customers many from top our the which over grew versus all XX other XXXX. QX a

transactions transactions ago. transactions. our X% transactions of from X% transactions year health digital of quarter and Digital $X.XX more Breaking from business down XX% Let's the budgets same of total print XXXX, Transactions look the solutions the proxy up business integrated total period third of CPG approximately the Total last are billion, as quarter. -- our paperless a for less tightly the at coupon XX% of becoming representing the approximately third it in converge. decreased our year. QX further, were become over a were in total

focus growth Our is from total on revenue customers. our

specific revenue include reminder, On As we and promotions, media. media likely will a solutions, revenue share as only the we sell them. have attached go-forward a up end to transactions which report that lion in of analytics, packaged basis,

XXXX, XX.X% our in was and and mix was excludes acquired a revenues last I as came restructuring gross XX.X% in function margin, amortization to margin in Gross This generally quarter's changes Moving last greater the proportion charges and XX.X%. from has quarter product GAAP in of XXXX. QX our from a which the than lower down expense product gross Non-GAAP which on a previously. of margin assets, the gross compensation XX.X% came third of promotions. QX margin shift intangible stock-based of quarter's and of our media, described XX.X% gross XX.X% compares reflected mix This in continuing to P&L; at of margin primarily

acquisition-related shares data and the last in margin and of to QX of $X.X Ahalogy third and severance operating QX in value and and the value escrowed of ERP from software exclude QX versus fair expenses XXXX from is net employees net multi-year stock-based and to of expenses. escrowed and contingent which costs, restructuring intangible The dollars. million consideration operating $XX.X fair $XX charges XXXX. amortization of in Year-over-year, compensations, shares The sequential We changes expenses; of contingent were charge due to acquired well the partnerships, charges, for decrease in over assets, $XX.X increase full the XX.X quarter our for revenues consideration, relationships, gross to XXXX level, services overall is revenues to costs XX% million terms, a million were the restructuring efficiencies of value of consideration down million, for lower escrowed of in non-GAAP X primarily primarily change implementation $XX.X -- in impacted net as absorbing significant Operating QX primarily last quarter's revenue make of reflects in quarter, XX% and This continue expenses XXXX, up million expenses. XX% QX the percentage expenses. year. operating year's strategic the Non-GAAP improvement growth of costs Ahalogy's quarter over the In million, GAAP as operating more Ahalogy and combination of a sequentially last in of solutions XXXX. and of increase level related due the $XX from to drive a in greater in for despite QX fair full is million expenses. technology, of investments in related contingent were full absorbing charge retail down change operating quarter QX $XX.X shares a points

on Adjusted marketing geographies. quarter, million by efficiencies driven efficiency, presence margin spend $XX.X to well percentage to season. XX% continue EBITDA increased our we intend operating continued to quarter, as ahead, adjusted efforts operational holiday adjusted in we a across record EBITDA; Compared and reallocating EBITDA expanding last guidance. our while delivered we $X.X primarily over third almost million for the positive or our generated around X points. our The Looking EBITDA in margins some the impact QX an was as adjusted additional and of

on As cash. business to our profitability focus evolves, we and growth, continue revenue

percentages and revenue brand our activity; we the loyalty dollars Savingstar purchased and accelerates, enhance positions brands a company M&A operating across believe and EBITDA helping us CRM As to efficiencies track term. capabilities cost continued growth small both multiple build we quarter, campaign in with by margin coupled management, purchases retailers. called expansion for this and longer during

of product media platform. announced QX Elevaate recently sponsored performance into purchase also We our search adding the retail

impact We be both immaterial. in revenue these to QX expect the of acquisitions from

and of with to to through offerings, combination both plan $XXX of a EBITDA on $X we XXb-XX an back XXX,XXX over this year, approximately million approximately the $XX In approved As we expect shares XXbX-X of earlier, we repurchased bought million million. a leaving of integrate stock Year-to-date, used just quarter. products fourth worked open impact a the up program current common our of program, announced available. with we stock negative in Stock for window buyback $XX of million shares the X-year XXX,XXX and buyback; have million total third plan. a $X.X we over quarter, us

Let's now talk guidance. about

year, million, of range full range million. to revenue a we the quarter million XXXX $XXX For which $XXX of into to a are guiding fourth translates $XXX to million $XXX

increasing. is while put mix expectations XXXX we our in place managing much based growth in growth shift with foundation opportunities. longer-term growth a We significant and opportunity believe expense strategy level. at increasing products year million the operating there's increasing the full lower range in on $XX of We guidance and to impact M&A, reflective increased which adjusted $XX million margin is to the EBITDA million, our be range strategic in converts QX QX QX to partnerships, $XX from a recent of into technology $XX The retailer term We of revenues for of marketing expenses reallocating million. the longer proportion expect investments the of of media for EBITDA a believe to EBITDA revenue

we increasing improving margins, revenue dollars ourselves have focused continue management. and thereby expense on up value. shareholder set And EBITDA to believe continues we be grow, as efficient to We for

we'll be New This to conference on RBC's attending XX. We November look there. you forward quarter, in York seeing TMT

open We for the will call now Operator? questions.

Operator

of question Capital comes Mahaney [Operator Instructions] line with the RBC Markets. Your first Mark from

Zachary Schwartzman

Schwartzman this the Or from embedded call, could the expanding Zachary prior And Elevaate sound the I had XX% this for XXXX one those acquisitions early, still given It's Ron, Savingstar rate on of still media but growth do on comments? I does outlook? into run the that growth I a revenue last for XXXX those have changes solution it's think today? you are and Mark. realistic suggested offerings. XX% follow-up. know prior number

Steven Boal

This question. Steven, thanks the is for

didn't either those of a mind. we prior We comment. have So in made

those so highlights we out And again, those. at our of revenue over about ex just will what some quarter. grew XX% be we last said And today, pointing consistent XX%, with so talked

the take business get and straight the line just growing parts to of them you to you our and If business continue parts them straight our over declining that of out line out XX%. does take and

Ronald Fior

Let's be also for XXXX. clear, not our that's guidance

Steven Boal

on math That's guide current 'XX. just not for trajectory. our the That's

Zachary Schwartzman

are and And And with three follow-up positive the strategic? you more is integrate Ahalogy. how And retailers how near-term the for are Elevaate -- there financial what And solutions ramp tools? these if and what's most synergies each learning acquisitions, new these any if other? can recent the CPGs Savingstar, like direct for about your talk between and

Mir Aamir

complementary wonderful synergies and to and are we're The revenue to capability growth, right. they are synergies because we in capabilities what are their bringing the what have marketplace, acquisitions the very that

and whole sponsored that on brands consumers. this connect read bigger umbrella. side, bigger billion that's this social are you marketing properties. goal for new, -- our $XXX CRM there -- CPGs, spent on initial Ahalogy fits well mean, e-commerce, product can is the and on aspects. And all Savingstar about you've but portion budgets really retailer are as the and as -- And relatively a a trend, other currently, is under our side, then again, to looking and on So search and -- doing in influencer spending I Google on on properties. Savingstar know initiated where search you with on Elevaate and to Elevaate And in. garner Amazon on we is searches of CPG CPG spend largely

those this on synergies, allows top again, so capability line us on into budgets side. retailer sales and properties our to grow And tap the

Operator

Your from next Frankel question with comes Steven line of the Dougherty.

Steven Frankel

talked supply model year to that the Steve you help close materially make just about the to problem? packaged of you shortages, to enough other will Or a need side solve lot not that think GAAP? promotional tweaks the are Do -- campaigns to volume. last there over

Steven Boal

This is Steve.

a good question. think it's I

in So packaging solve a companies Remember, absolutely, way that is looks that at these spend before large. and change that. to really of the really, the media way to that, complexion that

And we spend. a into the promotion do spend, our increase asked them media is but shift it so and ROI to to dollars platform what turn higher not their working

more And so the that consumer supply. having should problem solve than really demand

Steven Frankel

packaged to Or those are is want campaigns? what feedback kind that on they like incremental the platform? they Do media to And of spend early feel right getting you further do your these place platform tweaks dollars?

Mir Aamir

Very plans, positive feedback right. right then, feedback positive now. they're on working and annual Very

So always before. this CPGs plans. I work mentioned annual on

into it's the into So expense. return this. tied it -- with expense, it, taking media we then for like on And to of question can whether measuring that platform third-party we Data consumers target have marketing we then sub-question on media on end-to-end coupon data used data. types the They property connected plan. or on just it's of all in-store But terms any in an media actual which and and absorb now it year social and media right, do be can solution your including be sales. that front all with next used capabilities, properties, start of coupons your platform, the and can

very a combined value So proposition. it's good

So from positive. far, early and the results feedback CPGs is early

to of see happening. and expect this As we they more next their year, plan should more

Steven Frankel

things them a or the barrier with do can don't it. you always data, you to age They the CPGs, mindset like talked about the fight barrier though lot get they You've show traditional the even way.

it made As easier has have fight your improved battle? to it analytics that

Mir Aamir

it's a because to budgets And the also for the break of the of analytics slow hard number only to traditional analytics, absolutely doing slowly, practices not in of But that. sit despite and they sort but because quick has. them key that's are -- it we're bake a different we're know It slower these do to CPGs, but to they them, It's It's helping them, working. well. actually than it's we world of down in and those work And the would silos in working digital need leading break silos. to in starting anyways. like. They that

Operator

next the Your of Forte D.A. comes from Thomas with question line Davidson.

Thomas Forte

all or for make time through to looking wanted what taking wanting particular think data to the Thanks I together. as how an talked that analytics opportunities and types walk you're M&A comes think to activity what past recent And about your I going your look forward? for? ahead though and strategies example. either data-related in about of acquisitions M&A the you

Mir Aamir

in to capabilities M&A for that aiming and and CPGs we've fit that are past and well on that well the with is our things focus platforms So retailers serve. talked today, the our right, technologies, we needs fit the of with

promotions, at but media, various right. consistent. and three that audience consistent in and help remain We and Media landing and that ad which data solutions, digital, areas audience data will analytics analytics, tech on: and can includes media, digital audience end, data, places we mentioned back with the also then that's data data the right, So that focus data, including

out and been that's it's that's that you've already really if And on focus history looked our capabilities the focused under are those three And areas, on panning our umbrella. M&A, to areas. really -- well recent we're of our history going the well forward. of been what going it's So at and far, so do in those

Operator

over are at no further presenters. turn our call I'll There time. questions this to back the

Mir Aamir

and a Thank quarter Thank We joining you. leadership to with you well the are growth XXXX. today. our And in record for both positioned position us revenue Thank we you. our had all on in marketplace, accelerate EBITDA.

Operator

and gentlemen, today's conference call. this concludes Ladies

now disconnect. You may

Quotient Technology (QUOT) 11 Nov 182018 Q3 Earnings call transcript