- Quarterly Revenue of $65.7M
- GAAP Net Loss of $15.9M
- Adjusted EBITDA of $3.0M
Quotient Technology Inc. (NYSE: QUOT), a leading digital
promotions and media technology company, today reported financial
results for the second quarter ended June 30, 2023. Due to the June
20, 2023 announcement of the pending acquisition of Quotient by CB
Neptune Holdings, LLC (“Neptune Parent”), the direct corporate
parent of Neptune Retail Solutions, Quotient will not host a
conference call or live webcast to discuss these financial results.
Additionally, due to the pending acquisition, Quotient is not
providing forward looking financial guidance or providing comment
or update on prior guidance.
Use of Non-GAAP Financial Measures
Quotient reports its financial statements in accordance with
generally accepted accounting principles in the United States
(GAAP) and the rules of the Securities and Exchange Commission
(SEC). To supplement its financial statements presented in
accordance with GAAP, Quotient provides investors in this press
release with non-GAAP Gross Profit, non-GAAP Gross Margin, Adjusted
EBITDA, Adjusted EBITDA Margin and non-GAAP Operating Expenses,
each a non-GAAP financial measure. Quotient believes that these
non-GAAP measures provide investors with additional useful
information used by Quotient’s management and Board of Directors
for financial and operating decision making. In particular,
Quotient believes that the exclusion of certain income and expenses
in calculating these metrics can provide useful measures for
period-to-period comparisons of its core business as well as a
useful comparison to peer companies.
Quotient defines non-GAAP Gross Profit as revenue less cost of
revenues adjusted for stock-based compensation, amortization of
acquired intangible assets, certain business transformation and
strategic initiatives costs, expenses related to legal settlements,
and restructuring charges; and defines non-GAAP Gross Margin as
non-GAAP Gross Profit divided by Revenue.
Quotient defines Adjusted EBITDA as net income (loss) adjusted
for interest expense, provision for (benefit from) income taxes,
other (income) expense, net, depreciation and amortization,
stock-based compensation, impairment of certain long-lived and
right-of-use assets, shareholder activism response costs, expenses
related to legal settlements, restructuring charges, and certain
business transformation and strategic initiatives costs. In
addition, Quotient defines Adjusted EBITDA Margin as the ratio of
Adjusted EBITDA and revenues; and non-GAAP operating expenses as
operating expenses adjusted for stock-based compensation,
amortization of acquired intangible assets, restructuring charges,
impairment of certain long-lived and right-of-use assets,
shareholder activism response costs, expenses related to legal
settlements, and certain business transformation and strategic
initiatives costs.
Quotient excludes certain GAAP items from these measures because
it believes these items are not indicative of ordinary results of
operations and do not reflect expected future operating expenses.
Additionally, certain items are inconsistent in size and
frequency—making it difficult to contribute to a meaningful
evaluation of Quotient's current or past operating performance.
There are a number of limitations related to the use of these
non-GAAP financial measures. Quotient compensates for these
limitations by providing specific information regarding the GAAP
amount excluded from these non-GAAP financial measures and
evaluating these non-GAAP financial measures together with their
relevant GAAP financial measures.
These non-GAAP financial measures are not intended to be
considered in isolation from, as substitute for, or as superior to
the corresponding financial measure prepared in accordance with
GAAP. Because of these and other limitations, the non-GAAP
financial measures used in this press release should be considered
along with other GAAP-based financial performance measures,
including various cash flow metrics, net income (loss) and
Quotient’s other GAAP financial results.
For a reconciliation of these non-GAAP financial measures to the
nearest comparable GAAP financial measures, see “Reconciliation of
Net Loss to Adjusted EBITDA and Adjusted EBITDA Margin”,
"Reconciliation of Gross Profit to Non-GAAP Gross Profit", and
"Reconciliation of Operating Expenses to Non-GAAP Operating
Expenses" included in this press release.
Forward-Looking Statements
This press release contains a forward-looking statement
consisting of the pending acquisition of Quotient (the “Company”)
by Neptune Parent. This forward-looking statement is based on the
Company’s current plans, objectives, expectations and intentions
and inherently involves significant risks and uncertainties. Actual
outcomes and the timing of events could differ materially from
those anticipated in such a forward-looking statement as a result
of these risks and uncertainties, which include those identified in
the Company’s filings with the SEC, including its Annual Report on
Form 10-K filed with the SEC on March 16, 2023, its Form 10-K/A
Amendment No. 1 filed with the SEC on April 28, 2023, its Schedule
14A (Definitive Proxy Statement Regarding the Special Meeting of
Stockholders of Quotient to Consider and Vote on the Pending
Acquisition by Neptune Parent) filed with the SEC on July 31, 2023,
and future filings and reports by the Company. The Company
disclaims any obligation to update information contained in these
forward-looking statements whether as a result of new information,
future events, or otherwise and does not assume responsibility for
the accuracy and completeness of the forward-looking
statements.
About Quotient Technology Inc.
Quotient Technology (NYSE: QUOT) is a leading digital media and
promotions technology company for advertisers, retailers and
consumers. Quotient's omnichannel platform is powered by exclusive
consumer spending data, location intelligence and purchase intent
data to reach millions of shoppers daily and deliver measurable,
incremental sales.
Quotient partners with leading advertisers, publishers and
retailers, including Clorox, Procter & Gamble, Unilever, CVS,
Dollar General, Ahold Delhaize USA, Amazon and Microsoft. Quotient
is headquartered in Salt Lake City, Utah, and has offices across
the US as well as in Bangalore, Paris, London and Tel Aviv. For
more information visit www.quotient.com.
Quotient and the Quotient logo are trademarks or registered
trademarks of Quotient Technology Inc. and its subsidiaries in the
United States and other countries. Other marks are the property of
their respective owners.
QUOTIENT TECHNOLOGY
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
June 30,
2023
December 31,
2022
(unaudited)
Assets
Current assets:
Cash and cash equivalents
44,900
56,891
Accounts receivable, net
69,093
98,049
Prepaid expenses and other current
assets
26,435
19,791
Total current assets
140,428
174,731
Property and equipment, net
32,065
28,773
Operating lease right-of-use-assets
12,703
14,475
Intangible assets, net
2,567
4,494
Goodwill
128,427
128,427
Other assets
10,050
12,259
Total assets
$
326,240
$
363,159
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
28,930
$
30,027
Accrued compensation and benefits
6,296
12,060
Other current liabilities
44,141
53,255
Deferred revenues
20,059
15,519
Short-term debt
2,750
2,750
Total current liabilities
102,176
113,611
Operating lease liabilities
18,454
21,221
Other non-current liabilities
740
468
Long-term debt
47,197
48,034
Deferred tax liabilities
2,030
2,030
Total liabilities
170,597
185,364
Stockholders’ equity:
Common stock
1
1
Additional paid-in capital
724,605
713,201
Accumulated other comprehensive loss
(1,742
)
(1,756
)
Accumulated deficit
(567,221
)
(533,651
)
Total stockholders’ equity
155,643
177,795
Total liabilities and stockholders’
equity
$
326,240
$
363,159
QUOTIENT TECHNOLOGY
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited, in thousands,
except per share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Revenues
$
65,706
$
69,251
$
124,973
$
147,707
Cost of revenues (1)
34,778
37,267
65,148
86,345
Gross profit
30,928
31,984
59,825
61,362
Operating Expenses:
Sales and marketing (1)
22,326
21,459
40,289
43,395
Research and development (1)
6,632
7,072
12,066
16,828
General and administrative (1)
15,414
42,869
36,608
65,577
Total operating expenses
44,372
71,400
88,963
125,800
Net loss from operations
(13,444
)
(39,416
)
(29,138
)
(64,438
)
Interest expense
(2,854
)
(1,179
)
(5,192
)
(2,333
)
Other (expense) income, net
153
(417
)
59
(381
)
Net loss before income taxes
(16,145
)
(41,012
)
(34,271
)
(67,152
)
Provision for (benefit from) income
taxes
(247
)
2,346
(701
)
2,512
Net loss
$
(15,898
)
$
(43,358
)
$
(33,570
)
$
(69,664
)
Net loss per share, basic and diluted
$
(0.16
)
$
(0.45
)
$
(0.34
)
$
(0.73
)
Weighted-average shares used to compute
net loss per share, basic and diluted
98,424
95,369
97,941
95,148
(1) The stock-based compensation expense
included above was as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Cost of revenues
$
280
$
500
$
502
$
1,032
Sales and marketing
510
812
1,141
1,703
Research and development
345
674
603
1,641
General and administrative
2,466
15,141
9,222
18,493
Total stock-based compensation
$
3,601
$
17,127
$
11,468
$
22,869
QUOTIENT TECHNOLOGY
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited, in
thousands)
Six Months Ended
June 30,
2023
2022
Cash flows from operating
activities:
Net loss
$
(33,570
)
$
(69,664
)
Adjustments to reconcile net loss to net
cash used in by operating activities:
Depreciation and amortization
9,047
9,231
Stock-based compensation
11,468
22,869
Impairment of long-lived and right-of-use
assets
—
11,448
Amortization of debt discount and issuance
cost
879
548
Allowance (recovery) for credit losses
(177
)
1,222
Other non-cash expenses
3,480
3,368
Changes in operating assets and
liabilities:
Accounts receivable
29,134
78,915
Prepaid expenses and other assets
(6,451
)
(2,031
)
Accounts payable and other liabilities
(12,957
)
(28,944
)
Payments for contingent consideration and
bonuses
—
(19,008
)
Accrued compensation and benefits
(5,757
)
(6,283
)
Deferred revenues
4,540
(7,741
)
Net cash used in operating activities
(364
)
(6,070
)
Cash flows from investing
activities:
Purchases of property and equipment
(9,615
)
(8,161
)
Net cash used in investing activities
(9,615
)
(8,161
)
Cash flows from financing
activities:
Proceeds from issuances of common stock
under stock plans
1,332
824
Proceeds from borrowing on line of
credit
40,000
—
Repayment of line of credit
(40,000
)
—
Payments for taxes related to net share
settlement of equity awards
(1,922
)
(3,499
)
Principal payments on term loan
(1,375
)
—
Principal payments on promissory note and
finance lease obligations
—
(98
)
Payments for contingent consideration
—
(5,686
)
Net cash used in financing activities
(1,965
)
(8,459
)
Effect of exchange rates on cash and cash
equivalents
(47
)
215
Net decrease in cash and cash
equivalents
(11,991
)
(22,475
)
Cash and cash equivalents at beginning of
period
56,891
237,417
Cash and cash equivalents at end of
period
$
44,900
$
214,942
QUOTIENT TECHNOLOGY
INC.
RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
(Unaudited, in
thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
$
%
$
%
$
%
$
%
Net Loss ($) / Loss Margin (%) (2)
$
(15,898
)
(24
%)
$
(43,358
)
(63
%)
$
(33,570
)
(27
%)
$
(69,664
)
(47
%)
Adjustments:
Stock-based compensation
3,601
6
%
17,127
25
%
11,468
9
%
22,869
15
%
Depreciation and amortization
4,829
7
%
4,670
7
%
9,047
7
%
9,231
6
%
Other (1)
8,024
12
%
16,349
24
%
13,445
11
%
23,970
16
%
Interest expense
2,854
4
%
1,179
2
%
5,192
4
%
2,333
2
%
Other expense (income), net
(153
)
—
417
—
(59
)
—
381
—
Provision for (benefit from) income
taxes
(247
)
—
2,346
3
%
(701
)
—
2,512
2
%
Total adjustments
$
18,908
29
%
$
42,088
61
%
$
38,392
31
%
$
61,296
41
%
Adjusted EBITDA ($) / Adjusted EBITDA
Margin (%) (2)
$
3,010
5
%
$
(1,270
)
(2
%)
$
4,822
4
%
$
(8,368
)
(6
%)
(1) For the three and six months ended
June 30, 2023, Other includes $6.9 million and $9.1 million,
respectively, related to certain business transformation and
strategic initiatives costs which include $4.1 million and $4.7
million respectively, of costs incurred in the transition and
replacement of Coupons.com with Shopmium as our direct-to-consumer
offering in the U.S.; $0.7 million and $3.4 million, respectively,
related to restructuring charges, $0.3 million and $0.7 million,
respectively, consisting of expenses related to legal settlements
and $0.1 million and $0.2 million, respectively, related to
shareholder activism response costs. For the three and six months
ended June 30, 2022, Other includes a charge of $5.3 million and
$11.4 million, respectively, related to the impairment of certain
long-lived and right-of-use assets; $3.7 million and $5.1 million,
respectively, related to shareholder activism response costs; $4.8
million in both respective periods related to legal settlements;
and $2.6 million and $2.7 million, respectively, related to
restructuring charges. Restructuring charges primarily relate to
severance for impacted employees.
(2) Profit (Loss) Margin and Adjusted
EBITDA Margin is the ratio of Profit (Loss) to Revenues and
Adjusted EBITDA to Revenues.
QUOTIENT TECHNOLOGY
INC.
RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
(Unaudited, in
thousands)
Q2 FY 22
Q3 FY 22
Q4 FY 22
Q1 FY 23
Q2 FY 23
Net Income (loss)
$
(43,358
)
$
(7,167
)
$
320
$
(17,672
)
$
(15,898
)
Adjustments:
Stock-based compensation
17,127
4,980
4,604
7,867
3,601
Depreciation and amortization
4,670
4,797
3,901
4,218
4,829
Other (1)
16,349
7,919
3,962
5,421
8,024
Interest expense
1,179
1,837
1,471
2,338
2,854
Other (income) expense, net
417
(200
)
(1,209
)
94
(153
)
Provision for (benefit from) income
taxes
2,346
(2,138
)
148
(454
)
(247
)
Total adjustments
$
42,088
$
17,195
$
12,877
$
19,484
$
18,908
Adjusted EBITDA (1)
$
(1,270
)
$
10,028
$
13,197
$
1,812
$
3,010
Adjusted EBITDA Margin (2)
(2
%)
14
%
19
%
3
%
5
%
(1) Adjusted EBITDA, a non-GAAP financial
measure, is net income (loss) adjusted for stock-based
compensation, depreciation and amortization, interest expense,
other (income) expense, net, provision for (benefit from) income
taxes, and other, which includes: charge of $4.8 million for
expenses related to legal settlements; $5.3 million related to the
impairment of certain long-lived and right-of-use assets, $3.7
million related to shareholder activism response costs, and
restructuring charges of $2.6 million during Q2 FY22; charge of
$5.0 million for expenses related to legal settlements, $2.8
million related to restructuring charges, and $0.1 million related
to shareholder activism response costs during Q3 FY22; charge of
$3.4 million related to restructuring charges, $1.3 million related
to certain business transformation and strategic initiatives costs
which includes $1.0 million related to the launch and scaling of
Shopmium in the U.S. to replace coupons.com as our
direct-to-consumer offering, $0.5 million related to a recovery of
expenses related to legal settlements and $0.2 million shareholder
activism response costs recovery during Q4 FY22; charge of $2.8
million related to certain business transformation and strategic
initiatives costs which includes $0.6 million of costs incurred in
the transition and replacement of Coupons.com with Shopmium as our
direct-to-consumer offering in the U.S., $2.1 million related to
restructuring charges, $0.4 million in expenses related to legal
settlements and $0.1 million related to shareholder activism
response costs during Q1 FY23; charge of $6.9 million related to
certain business transformation and strategic initiative costs
which includes $4.1 million of costs incurred in the transition and
replacement of Coupons.com with Shopmium as our direct-to-consumer
offering in the U.S., charge of $0.7 million related to
restructuring charges, charge of $0.3 million in expenses related
to legal settlements and $0.1 million related to shareholder
activism response costs.
(2) Adjusted EBITDA margin is the ratio of
Adjusted EBITDA and Revenues.
QUOTIENT TECHNOLOGY
INC.
RECONCILIATION OF GROSS PROFIT
TO NON-GAAP GROSS PROFIT
(Unaudited, in
thousands)
Q2 FY 22
Q1 FY 23
Q2 FY 23
Revenues
$
69,251
$
59,267
$
65,706
Cost of revenues (GAAP)
$
37,267
$
30,370
$
34,778
(less) Stock-based compensation
(500
)
(222
)
(280
)
(less) Amortization of acquired intangible
assets
(2,219
)
(610
)
(609
)
(less) Business transformation and
strategic initiatives costs
—
(11
)
(121
)
(less) Expenses related to legal
settlements
—
(208
)
—
(less) Impairment of certain long-lived
and right-of-use assets
(1,434
)
—
—
(less) Restructuring charges
(75
)
22
—
Cost of revenues (Non-GAAP)
$
33,039
$
29,341
$
33,768
Gross profit (GAAP)
$
31,984
$
28,897
$
30,928
Gross margin percentage (GAAP)
46.2
%
48.8
%
47.1
%
Gross profit (Non-GAAP)*
$
36,212
$
29,926
$
31,938
Gross margin percentage (Non-GAAP)
52.3
%
50.5
%
48.6
%
* Non-GAAP gross profit excludes
stock-based compensation, amortization of acquired intangible
assets, certain business transformation and strategic initiatives
costs, expenses related to legal settlements and restructuring
charges.
QUOTIENT TECHNOLOGY
INC.
RECONCILIATION OF OPERATING
EXPENSES TO NON-GAAP OPERATING EXPENSES
(Unaudited, in
thousands)
Q2 FY 22
Q3 FY 22
Q4 FY 22
Q1 FY 23
Q2 FY 23
Revenues
$
69,251
$
70,336
$
70,723
$
59,267
$
65,706
Sales and marketing expenses
21,459
19,939
20,745
17,963
22,326
(less) Stock-based compensation
(812
)
(777
)
(733
)
(631
)
(510
)
(less) Amortization of acquired intangible
assets
(354
)
(354
)
(354
)
(354
)
(354
)
(less) Business transformation and
strategic initiatives costs
—
—
(928
)
(572
)
(4,278
)
(less) Restructuring charges
(131
)
(762
)
(1,595
)
120
64
Non-GAAP Sales and marketing expenses
$
20,162
$
18,046
$
17,135
$
16,526
$
17,248
Non-GAAP Sales and marketing
percentage
29
%
26
%
24
%
28
%
26
%
Research and development
7,072
4,899
4,572
5,434
6,632
(less) Stock-based compensation
(674
)
(411
)
(361
)
(258
)
(345
)
(less) Business transformation and
strategic initiatives costs
—
—
(54
)
(37
)
(91
)
(less) Restructuring charges
(170
)
(246
)
(108
)
(15
)
(42
)
Non-GAAP Research and development
expenses
$
6,228
$
4,242
$
4,049
$
5,124
$
6,154
Non-GAAP Research and development
percentage
9
%
6
%
6
%
9
%
9
%
General and administrative expenses
42,869
16,401
12,908
21,194
15,414
(less) Stock-based compensation
(15,141
)
(3,350
)
(3,085
)
(6,756
)
(2,466
)
(less) Restructuring charges
(2,240
)
(1,411
)
(1,037
)
(2,820
)
(744
)
(less) Impairment of long-lived and
right-of-use assets
(3,895
)
—
—
—
—
(less) Business transformation and
strategic initiatives costs
—
—
(173
)
(1,596
)
(2,437
)
(less) Shareholder activism response
costs
(3,654
)
(51
)
250
(127
)
(119
)
(less) Expenses related to legal
settlements
(4,750
)
(5,000
)
500
(177
)
(256
)
Non-GAAP General and administrative
expenses
$
13,189
$
6,589
$
9,363
$
9,718
$
9,392
Non-GAAP General and administrative
percentage
19
%
9
%
13
%
16
%
14
%
Non-GAAP Operating expenses*
$
39,579
$
28,877
$
30,547
$
31,368
$
32,794
Non-GAAP Operating expense percentage
57
%
41
%
43
%
53
%
50
%
* Non-GAAP operating expenses excludes
stock-based compensation, amortization of acquired intangible
assets, restructuring charges, impairment of certain long-lived and
right-of-use assets, shareholder activism response costs, expenses
related to legal settlements and certain business transformation
and strategic initiatives costs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230808385184/en/
Investor Relations: Drew Haroldson The Blueshirt Group for
Quotient ir@quotient.com
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