QUOT - Earnings call transcript Q1 2022 | Quotient Technology Inc.

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Operator

Good afternoon, and thank you for attending today's Quotient's First Quarter 2022 Earnings Call. My name is Sam, and I will be the operator for today's call. [Operator Instructions] At this time, I'd now like to turn the call over to our host, Marla Sims, Vice President of Investor Relations. Marla, you may proceed.

Marla Sims

Thank you, operator. to quarter welcome earnings and afternoon, our XXXX first call. Good Kellerman, are on Krepsik, Steven John CFO, the me our Khan. our our Yuneeb call CFO, Matt With CEO, today CEO, incoming incoming Boal, Interim and our on company's of IR our release our The presentation. alongside section and investors.quotient.com, the earnings been website, letter has press stockholder posted corporate

year will of forward-looking are good we set uncertainties time XXXX. located Relations contained related to quarter from statements, including forward-looking begin, will this unknown those you in hear second are uncertainties statements please subject Before cause forward-looking of statements of and and our risks the guidance Investor These and differ note management known risks that be statements. forward-looking we presentation based and call, and materially available the call in for and earnings that slides as our team the full These and faith during actual are this forth information to could results our the in site. to providing the on beliefs the

Additional and intends important to the and of connection otherwise, carefully any and can website. direct loss proxy materials in the posted XXXX, amended its earnings our disclaim Please a filings update stockholders' in card that statement, company, the at margins to note company XXXX, SEC, information, in today like in new our information other or today filed read SEC's Investors XXXX company's SEC strongly to company future by website March or statement of file from measure the of company the letter and measures be and stockholders could the gross to events remind participants proxy XX-K/A Stockholders interest about We by found April amendment would company's on reconciliation officers report the Form each the financial financial on issued company's and impact proxy number are GAAP financial www.sec.gov. filed our the that contain through solicitation to net due the in I company's are Form section of indirect been and non-GAAP the you the of their Information company's in factors having Further, directors the information X, statements, regarding SEC letter for XX, of The set entirety in on meeting basis, annual measures expenses, certain stockholders' risk expenses. as or accompanying identified and these issued operating information. the found Annual the be section presentation non-GAAP obligation XX-K on factors their forward-looking all adjusted results of the can discussed be filed its result the on found otherwise. encouraged proxy our or which be are and with slides the that a for will participants and they definitive through as one executive the the Meeting. definitive in company's corresponding in results identity between filed potentially GAAP contained with the today certain holdings SEC can with A security materials whether the in the documents website exclude in future for SEC. free proxies in course. by forth the with the as with definitive the with

this with it Engaged Steven? I over to the now will comment call. not on Steven. proxy turn With will contest Capital We on that,

Steven Boal

be will to you know, welcome and call. as CEO to forward. we This leading I Quotient's who, about last am execute will Krepsik, my on year-end. will Thank everyone, accomplishments confident you, Quotient that Quotient's transition orderly Matt, calls the a Marla. going Matt an in good started Hello, QX leadership time become I hands the assembling few our as earnings earnings by be to minutes. his team more a bit has talk will its and company at impressive shareholders date in and already he XXXX

start are Let few a business. positioned and we briefly by quarter discussing where me as last highlights a about first

guidance revenue XXXX, In meeting and our We million in EBITDA. in to and good high EBITDA. and $XX profit, guidance a gross non-GAAP adjusted million we million in both are off in the $XX our non-GAAP negative at gross revenue, targets or in of adjusted initial start exceeding QX, profit delivered end $X

made now unwavering but have remaining team incredible which and not have transformation negatively the EBITDA. impact progress contracts material we on revenue in going do no have impact forward, am such call our adjustments, out our on of or our that indicated, previously gross dedication, client any to the As renegotiated and proud to we expect profit I majority commitment execution gross-to-net to our of service. adjusted changes we accounting focus

XX review a other positions shaping right tech, been of While process, role at Africa finance next strength Directors. Quotient and this we and extending Yuneeb I global us Quotient the strategic of there Executive process Technology to planning and also operating a sale Nielsen, reins confident enterprise. to Board future. company's than Asia recruiting Outcomes an Matt and product partnership road Matt ad Quotient, growth. Director for network will which Khan believe Chief culminated joining to Nielsen's and the be recently Nielsen to Vice and NielsonIQ, I Senior General drive by he Advent in from as where is stage years America. and the Vice of world-leading result East and looking he integral experience position Products. this came year-long Products, At succession Matt here. for most various to of year Quotient deliberate more Yuneeb Officer, attribution, of Manager since Matt's new the held for also strong had is map, Matt leadership activation forward an and from over excited more veteran years company is to led included Global an from served as the President, joining CFO. the be the the strategic intelligence role has as Analytics instrumental transition. executive team as over global partner He products, be marketing couldn't Analytics to work International media Head planning is Matt important laid more who a and its as senior appointment that It $X.X our our is led a a foundation, ad Quotient's lead President will where level Yuneeb roles. taking and continue consumer several and Holdings, brings of Analytics executive am talent Pacific, marketing I'm level we Nielsen business to NielsenIQ recently ago forward our Analytics Officer defining as will be Chief smooth in Quotient's Quotient strategy, Nielsen's have Middle from formerly business and he in more of XX of CEO. be joins Matt done, of our CEO is nearly and in tech Matt's billion. Krepsik positions. enters person NielsenIQ will North

it in go-forward business the to I'll Quotient's shareholder to take strategy Operations strategy. profitable financial Quotient's from say During and Financial over through And Technology. commercial Chief variety XXXX a on a Officer with few development Connect, faith roles, Global Nielsen, NielsenIQ the Chief business utmost now words Global of Matt handing creation. and present, Financial growth strategy of to and he his I his and of planning, team to Consumer Yuneeb? XX-year over value Global tenure and to achieve before Nielsen now product served to growth Yuneeb Matt Nielsen including President it of to us sustainable, in drive and turn Officer Insights have execute

Yuneeb Khan

I team the am perfect and portfolio be After years dynamic I the past work joining to to positions itself take of to development a financial this you, commercial business eager platforms. join. company that the tech wanted to has years to the throughout XX with Steven, able product Quotient I afternoon, evaluating leadership was and to In serving is planning, felt add done the currently a transform be myself could business, to where valuable have value. two all up partner financial career. expect I now lot good and to over over strong look take particular, you roll to over But the all. Quotient, a sleeves over at well I you and coming the strategy months. opportunities opportunity then, of ahead. the to my to alongside lend leadership my in with turn team ad I my And in more in transformation a be I Matt Quotient. will the excited roles, forward spent Thank all underway and to many product person this and industry introduce everyone. I expertise lie that advantage not before meeting of variety the that, CPG and will Matt. call time

Matt Krepsik

be here Quotient's next today It's Yuneeb. to Thank you, CEO. an as honor

to take like moment acknowledge and as CEO a great Steven's I Founder company. started, and Before I'd of get contributions this

to begun transactional During from a business media to network retail revenue. business Quotient promotions repeatable to a generate his services and reoccurring tenure, mature platform and has designed scalable

one what as What a biggest which, me well lie connect since three ROI view, Quotient and the believe he We our where it's future. we're our in headed. more to join me promotions and to attracted and Over year our ability for our CEO, platforms as a even it's CEO the led to positions of ago years media Quotient for last where amplify Steven is rejoined us has advertisers. transformation, incoming opportunities excites the

has path Over the shopping years, everywhere. are mean making reach also become buy the less that trips, purchase their discovery complex. being shoppers in frequently. very deliberate I aisles is They're aim places the to by walking more shoppers they more can difficult. What past few We and to more have promotion

experiences for in very how intentional We these deliver our them partnered the of and even evolving can been solving better challenges. better consumers. clients their to meet understand with needs we have We

by and and expanding drive outcomes we've opportunities reach result, platforms easier and it shoppers a to of We our we to to to number brands. will our three, believe consumers in winning promotions reach for promotions networks three brands areas: media media key of make number for promotions. identified retail our strength network; two, leverage these technology and growth opportunities utilize simplifying number capture buying; one, integrating the As to

start has partners along consumers has promotions complex greater across pandemic me pickup, and with are of more such turn, model, as network previously we and touch more evolve more help the more network journey. our points scale their noted, these margins. e-commerce our become with touch the continuing is trends, partner reach network. and the Let to create shopping to options expanding as more The adding that In to generate delivery to improve To enables shopping growth up way. operating our keep during with leverage in-store us us accelerated and new starting purchase and path points

scale to basis. launching new and a announced our We recently and experiences on and to aim continue are continuing partners is regular partnerships, up existing

tags believe partnership a promotions to checkout utilization consumers can We incorporating app. of code into for entered Quotient. provide tags leading economics a to then through and retailer's recently will retailers, at to or for price along grocery QR retailers. with and this in shelf redeem awareness units value for we result be move our more easily increased Quotient shoppers sales promotions, on-shelf brands, that for scan and example, a into will For

In our of the more national awareness scale with Hive, our Quotient. for customers recently national Hive this we extend raise and greater capabilities, addition, reach launching ways believe creating Hive rebates, rebate extended and even will partnership to enabling Quotient's We save.

to media simplifying of quality data the purchasing is significant directly pillar reach brands close influence has given buying. growth the point retail strategic focus for to shoppers media decisions. next ability the Our become sale Retail a of to and the

banner retail each campaign executing across to creatives audience fragmented and must definitions retail Advertisers relevant with numerous a each audience and also target that each highly However, formats. This networks, requires ad and media buy different a process. manual location. separate are and different for store media remains localized

localize goal to target So long-term CPGs. campaign by solution relevant the in easy will is while are reduce shop, we retailer benefits to where many why time clients, campaigns. measure to cost this reach and barrier buddy of to interested retail is channels executing margin intend the their scale, growth. This I CPGs they buyers, a all drive is believe performance cost creative ultimately involved is intended help very be brands and media, to our for a That and execute them a across media our is to complexity, structure. with What mean improve broad to This platform and we the serve.

across retail Let platform, me each buyers once, of Using simplifies elaborate retail each multiple [indiscernible]. can advertisers identifying buyers bit can audiences at our build networks which their separately our have Today's on the its of audiences. these points. then process deployed and of for media audience Quotient brand's media find building a network. advertisers be to

tailor formats, this need very banners is to process. store location. and ads retailer, time-consuming tailoring different to each specific manual using a their their ad Today, brands each and Next,

simplify process creative, create of Our platform brands and improving thousands efficiency piece is tens returns. significantly to one leverages and AI off to this of of enable ads designed dynamically to of

of to make media omnichannel and for to reach a it retail one-stop platform continuing channels add shop are expanding media our buying. also We partners media the by

CTV we recently enable we interest to buy to example, a expect CTV through Video, clients platform. XXXX. CTV our the media we advertiser leader buy For more it Today, connected channel to are video than announce TV, for to began global The partnership clients offering and retail pleased TV. advertisers, significant garnering is and with double ability Tremor to advertising in new a connected by

campaign welcome excited the them into to investments in provides execution media network in their real-time are attributed Quotient better providing may to outcomes. by look future. achieve finally, our We they that into with partner information forward so full the platform fully providing and And their to clients more measurement optimize transparency

time teach As on use clients adoption. educate with it to any service, technology platform broad achieve rollout, and to it how the takes them

While of benefits for excited platform. clients we receptive our implementation, they are utilizing and stages in by early the been have can achieve the

for and strategy The our third and growth pillar to our our connect outcomes brands. media drive sales ability our to is of promotions

to and product. As of we're I mentioned develop One evolving, we consumer trade channels tool earlier, them. consumers to consumers this promotion in the reach to brands enables creative launch earlier shop. media continue our to of this spending will awareness across Promotion brands various way believe activities. and through habits reach to doing in-store are Amplification journey into the This ways We more merchandising purchase create online drive stores is or

While Quotient that are company together like our at scale. tools media, the promotions and has retail only competitors media in product and Amplification with we in promotions retail brings Promotion

and drivers, relentless drive to As lead and such, growth we believe, as promotions to share to advantage. ability continue key our enable sales outcomes growth. market to we amplify see a in to will order competitive summary, In capture our on unit us these focus profitable

network long-term I our we will streamline you thank here for operations of yield our all returns want Quotient enhance today. portfolio, our believe we and expand our business meaningful to model, being stakeholders. product for As again

I'm walk to it financial. over through to John Now, you pleased to turn our

John Kellerman

on our Relations our And everyone. financial I in to on will remarks good full read Investor website. results all on be page afternoon, you posted My the highlights. letter our focused stockholder financial encourage the

million to adjusted top We EBITDA. a down million made the reflected commercial of year-over-year, to revenue included the XX moving good in of original on from terms operations. profit adjustment result towards GAAP loss to Revenue million. as we gross-to-net are our million, guidance of of but February $XX related start XX% gross changes a and $XX from off to end and recognition $XX.X and was QX $XX Albertsons the a

QX prior Excluding Albertsons decreased respectively, both media, year XX% revenue XXXX. net in of XX%, revenue declined gross and year-over-year. to revenues from recognition represented and and Promotions adjustment versus Promotion revenue XX% the XX% XX% quarters, XX% the current year-over-year. total in

revenue as by XX.X%, revenues national revenue by and in end down promotions to being Media due was planned of spending has of high-margin negative exit More last of our XXX our business from gross-to-net $XX promotion those year. year, was resulting supply current XX.X%, held move due by to negative compares chain and promotions was compared funds challenges of operating $XX.X CPGs end profit This By prior offset to resulting specialty on spent the to impact last campaigns on was difficult excluding gross declined gross-to-net specialty impacted mix margin specialty performance to gross-to-net for to remain gross points. share in supply as the as at chain guidance chain negatively QX declined tight, down business. of by year, a from implementing margin negatively original issues. into year, less lower business issues. the also leverage Non-GAAP lower basis well revenue from impacted saw million. the in lower $XX promotions XXXX primarily towards offset margin retail the intangibles product. decrease due of of by contrast, gross-to-net back retail Albertsons adjustments, impacted our year compares Similar due negatively promotions, difficult adjustments. and top XXXX. the and million, media and the basis XX% XX% impact national in Excluding that accounting compounded exit the need in amortization recognition. first back exit by COVID, million revenue the on XXXX Gross Albertsons specifically, high-margin inventories revenue and and promotions, noted chain lower stronger-than-expected from negative a was half was national adjustments. supply CPGs supply This revenues retail QX XX% led this or XX.X% pull to was the to our issues GAAP previously high-margin points partially as partially of to mix XX and planned revenue Gross our QX

headcount guidance call was operating the remaining gross-to-net expect majority course year-over-year from expenses $X.X our million forward, do costs $XX.X in we non-GAAP increase prior the and related to new negative range Over marketing versus EBITDA our the specialty due which was we material primarily estimates. due a an our operating with gross to our million business, million, to of positive prior by and year decline in to going removal down was partially of sequentially. the year a the able exited to $X original million profit, The R&D. a we capitalized $X.X $X adjusted QX lower any of quarter, expenses. in million. million of $X.X down offset $X.X that EBITDA million were Adjusted to contracts and negative not such The were reductions, the to changes decline negative renegotiate a in lower out

gross from to and the expense recognized being retail of promotions gross-to-net non-GAAP implementation network, benefit expect throughout continue revenue improve in as to our national in recognition see high-margin see margins and of our management. starting from year to importantly, leverage expansion and we we scale our platform of expect margin the careful the benefits media from but the promotions We more positive mix growth QX, operating adoption

year improvement combined to with should management improvements as gross lead progresses. that We EBITDA OpEx also the margin careful believe adjusted

Turning to cash.

operating year guidance. full our flow reaffirming cash are We

a constraints quarter, guidance $X million, in to we in to negative QX, flow $X the of We with to slower-than-expected $XX.X duration-based build of QX, CPGs working million primarily our payables. chain primarily in in positive mostly million capital cash expected. collections timing in the cash by an used in However, of usage due operating than more This bookings faced revenue results supply deferred below to had promotions, addition due and associated fluctuations.

$XX.X ended of million $X of healthy amortized with and million first strong in these year. in down primarily $XXX.X quarter Ubimo customer remains the in Importantly, second against year-end, $XX the million with future back and receivables due are payment earnout Both will final be the cash million We a our to to revenue. items our pipeline upfront the cash our line equivalents, payment a to from and and expectations. that were half

Now, turning to the outlook.

the we range second the to in expect EBITDA million, million, flow $X $XX be range to to of million. to range revenue gross negative million the $X of be be $XX of For $XX quarter million the $XX to range cash in to million million positive a in the margin in operating $XX adjusted XXXX, non-GAAP and $X of million to to of be

we million gross XXXX, $XXX million. range $XX.X $XXX And and be be reiterating are weighted of average your our that, $XX.X year full million operating we estimate be million in Operator? to to to the range cash million, flow $XXX $XX of to $XX estimate will our adjusted We EBITDA revenue million. previous for $XXX in to be the in million, in XXXX guidance take For slightly margin be the of $XX million non-GAAP the million the to to below range for of to range with $XX million, questions. to now outstanding shares approximately basic prior of

Operator

now is will Bennett take Chad, We Craig-Hallum. your Instructions] line open. question from of our Chad [Operator

Chad Bennett

quick one on again. cash the So just maybe a

by went down million sequentially. cash So your $XX

couple items. of cited a You

the -- mentioned, they items like items unknown million. flow $XX from quarter? when gave benefited you or the mean, way cash actually burn I the You down, guidance And came you for for guidance receivables cash quarter were the

Matt Krepsik

brands rate just little We the had receivables. towards our certainly on issues timing And some out a some end supply of we bit just deferred programs had had. chains from expected kind and yes, Chad, certain further, some there our programs. of due some of build kind a our then revenue pressures slow to payables than on on that duration move

Chad Bennett

that is right? though, receivables from benefited You

Matt Krepsik

and receivables, We had expected from we in have just to benefit more on come had timing. some there did. but some We a movement

Chad Bennett

Okay.

again cite that the the year-over-year. on of forma, media I then you and didn't revenue? that -- so Could catch kind And pro

Matt Krepsik

The revenue on year-over-year?

Chad Bennett

Yes. impacts think I that Yes, --.

Matt Krepsik

Yes, minute just here. one

John Kellerman

Yes.

first quarter. XX% declined media in the So

Chad Bennett

If the XX% of else for mean, anything -- has spend else, the of something been rates. you trying year-over-year, supply better the have a Is just I kind growth gross-to-net, ex kind there missing? next time. I'm been to ad on there long I forma so pro think Albertsons probably understand our issues So if I we're been has XX% down look promo comps. they've -- don't improved. mean, spend and at chain

Matt Krepsik

Yes.

is The I'd too, have QX a kind last thing other strong strong say, we of year.

as think the the was early back that saw the spending. the said like we a into in I -- towards And pandemic I like we you time come end into early pull So budget about saw that of flush of should in lot brands -- QX, early lot of QX then a through. and period

we So kind strong year. last QX a of had really

thing comps just is the in out so, the we're comparison tough seeing apps once some we of year kind And one of of this pull terms change. year-over-year that kind

Chad Bennett

where you are and platform do platform you work areas And as laying about Okay. of Kind for Albertsons you we to more do more now acting forth. CEO on media customers today? And to retail of have take simplifying sense than talk kind add rather of Target of you for kind or more the we And develop effectively, of kind kind really and to that last in in the measurement get value where of role, it about to role then Matthew. talk kind the today? how via focus much mean, just Matthew, maybe just the network one out and so their buying one I'm and what there of of trying it? whatever? and media how Walmart running that is they or CEO your to or or I more talk retail a you're platform to

Matt Krepsik

Yes.

it's customers would our field lot say of past look been -- media that tremendous media deterministic evolution So And talking to we as in think and verified presents fantastic lot a more the retail over a media clients. as all see towards spending and audiences, I've just opportunity a months, at opportunity about time the our a in a I out few spades. of channel. retail landscape, kind the we move the of of we It's

we more challenge is in want starting However, to love this but potential across of and see but with "Hey, sit or when to XX, dollars chat retail of like, all they We seats, retail can media we space, across and networks. the X, them we biggest we the spend down X, X, we're to media." individual continue four XX, face buy X, XX one, X, two, this challenge can't different three different promise buy

lot these clients the simplify so, And big intersection the been, really can guys "Hey, ask you we sit You of this?" from at demand our has a of retailers.

lot You and a you're our creative that have a execute capabilities of performance metric. of We're campaign out experience a that right? we provide building from launched across the and technology kind to simplify love where to networks, So kind and that's we've to of the going really good where managing network, process. rolling our a multi-touch standpoint capability ability attribution that platform

each relevant build brands personalized and for thousands that So of localized retailer. and can are ads

this getting our more of transformation in the start So kind of and for about brands media to transition there's a make users excited platform hands just with partnering lot of space. retail they momentum really this the and as commerce. and in there And

Operator

I'd this At remarks. turn back time, like management call the any closing over to for the team to

Matt Krepsik

call. Thank today's EBITDA. to gross end and and you adjusted range everyone solid We high of participated profit the who for on for achieving listened and delivered revenue within you, range our operator, a and in thank quarter,

pillars time promotions shareholders. advertisers, promotions we build transform upcoming making three conferences. and our we our excited coming we're forward this of the with days the network, again significant are over expect to our and retail combination many and partners, deliver investor media with key the value I'm Thank our opportunities our at media. national leverage ahead. capitalize forward you on our on of look And joining, the the to and on you out to capitalize pleased for our and platform continuing to progress forward and and company enhanced to We for company of to important consumers lead look speaking growth execute to the

Operator

you earnings the concludes first call. for quarter your That all Thank Quotient's participation. XXXX

disconnect now may You your lines.

Quotient Technology (QUOT) 7 May 222022 Q1 Earnings call transcript