Quotient Technology Inc. (NYSE: QUOT), the leading digital promotions, media and analytics company for CPG and retail marketing, today reported financial results for the third quarter ended September 30, 2019.
The Company also announced today that Pamela Strayer was named Chief Financial Officer, effective November 11, 2019. Ron Fior, current CFO, will help through a transition period and plans to retire at the end of the year.
"I've enjoyed working with Ron and I'd like to take a moment to thank him for his contributions and wish him well in his retirement," said Steven Boal, CEO. "I'd also like to welcome Pam Strayer to the team. Pam brings solid finance and public company leadership experience to Quotient, and we're thrilled to have her join us as we head into 2020, which is shaping up to be a most exciting year."
"We believe we are at a tipping point in the industry and I couldn't be more excited for our opportunity over the next few years," continued Mr. Boal. "Through collaborative planning, CPGs and retailers are starting to make digital-first strategies a priority. In some cases, Quotient RPM retailers are now requiring CPGs to commit up to 1.5% of their gross sales to be spent on digital marketing and merchandising. And we expect, over the course of 2020, promotion dollars spent in the free-standing insert (FSI) to significantly decline, as large CPGs plan to shift out of the FSI entirely. Given the scale of our platform today, we believe Quotient sits in a prime position to help meet these digital-first initiatives and deliver a great omni-channel experience to shoppers."
Third Quarter 2019 Financial Results
Adjusted EBITDA, a non-GAAP measure, is reconciled to the corresponding GAAP measure at the end of this release.
Expanded Platform and Solutions for Brand Marketers and Retailers
Signed a Definitive Agreement to Acquire Ubimo
The Company also announced today that it has entered into an agreement to purchase Israel-based Ubimo, a leading data and media activation company. Through its demand-side platform (DSP), we expect Ubimo to bring best-in-class technology to further strengthen Quotient's targeted digital media solutions, improve campaign performance and cost efficiencies, and accelerate the development of Quotient's self-service platform.
Repurchased Shares in Stock Buyback Program
During the three and nine months ended September 30, 2019, the Company repurchased approximately 1.3 million and 8.1 million shares of its common stock for approximately $14.6 million and $85.5 million, respectively, including transaction costs, and completed its May 2019 stock buyback program. In August 2019, the Company's Board of Directors approved a new $50.0 million buyback program.
Investor Day 2019
Quotient will host an Investor Day in New York, NY on Wednesday, November 13, 2019, from 9:00am ET to 2:30pm ET. A live and archived webcast will be available on the Investor Relations section of the Company website at: http://investors.quotient.com/.
As of today, Quotient is providing the following business outlook.
For the fourth quarter 2019, total revenue is expected to be in the range of $107.4 million to $111.4 million. Adjusted EBITDA for the fourth quarter 2019 is expected to be in the range of $9.3 million to $11.3 million.
For the full year 2019, total revenue is expected to be in the range of $425.0 million to $429.0 million. Adjusted EBITDA for the full year 2019 is expected to be in the range of $43.0 million to $45.0 million.
A reconciliation of Adjusted EBITDA, a non-GAAP guidance measure, to a corresponding GAAP measure is not available on a forward-looking basis without unreasonable efforts due to the high variability and low visibility of certain income and expenses items that are excluded in calculating Adjusted EBITDA.
Conference Call Information
The Company has posted prepared remarks and an earnings presentation on the Investor Relations section of the Company website at: http://investors.quotient.com/. Management will host a conference call and live webcast to discuss the highlights of the quarter and address questions today at 4:30 p.m. ET/ 1:30 p.m. PT.
Questions that investors would like to see asked during the call should be sent to firstname.lastname@example.org.
To access the call, please dial (833) 227-5842, or outside the U.S. (647) 689-4069, with Conference ID# 7093684 at least five minutes prior to the 1:30 p.m. PT start time. The live webcast and all accompanying materials can be accessed on the Investor Relations section of the Company website at: http://investors.quotient.com/. A replay of the webcast will be available on the website following the conference call.
Use of Non-GAAP Financial Measure
Quotient has presented Adjusted EBITDA, a non-GAAP financial measure, in this press release, because it is a key measure used by Quotient's management and Board of Directors to understand and evaluate core operating performance and trends, to prepare and approve its annual budget, to develop short and long-term operational plans, and to determine bonus payouts. In particular, Quotient believes that the exclusion of certain items of income and expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of its core business. Additionally, Adjusted EBITDA is a key financial metric used by the compensation committee of our Board of Directors in connection with the determination of compensation for our executive officers. Accordingly, Quotient believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating Quotient's operating results in the same manner as Quotient's management and Board of Directors.
Quotient defines Adjusted EBITDA as net income (loss) adjusted for interest expense, provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation, change in fair value of escrowed shares and contingent consideration, net, other income (expense) net, charges related to certain acquisition related costs, restructuring charges, impairment of capitalized software development costs, and Enterprise Resource Planning ("ERP") Software implementation costs. We exclude these items because we believe that these items do not reflect expected future operating expenses. Additionally, certain items are inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our current or past operating performance.
Quotient's use of Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of Quotient's financial results as reported under GAAP. Some of these limitations are:
This non-GAAP financial measure is not intended to be considered in isolation from, as substitute for, or as superior to, the corresponding financial measures prepared in accordance with GAAP. Because of these and other limitations, Adjusted EBITDA 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 this non-GAAP financial measure to the nearest comparable GAAP financial measure, see "Reconciliation of Net Loss to Adjusted EBITDA" included in this press release.
This press release contains forward-looking statements concerning the Company's current expectations and projections about future events and financial trends affecting its business. Forward looking statements in this press release include the Company's current expectations with respect to revenues and Adjusted EBITDA for the fourth quarter and fiscal year 2019; the Company's expectations for its solutions, partnerships, product launches, Ubimo acquisition, CPGs' plans to exit FSI, and privacy regulations; the Company's expectations regarding the future demand and behavior of consumers, retailers and CPGs; and the Company's expectations with respect to its future investments and growth and ability to leverage its investments and operating expenses. Forward-looking statements are based on the Company's current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, the Company's ability to generate positive cash flow and become profitable; the amount and timing of digital marketing spend by CPGs, which are affected by budget cycles, economic conditions and other factors; the Company's ability to timely launch products; the Company's ability to adapt to changing market conditions and data regulations, including the Company's ability to adapt to changes in consumer habits and consumer data privacy concerns, the Company's ability to negotiate fee arrangements with CPGs and retailers; the Company's ability to maintain and expand the use by consumers of promotions and offers on its platforms; the Company's ability to execute its media strategy; the Company's ability to effectively manage its growth; the performance of the Company's various solutions; the Company's ability to successfully integrate acquired companies into its business; the Company's ability to develop and launch new services and features; CPGs' receptivity to the Company's packaged solutions; our expectations regarding growth drivers; and other factors identified in the Company's filings with the Securities and Exchange Commission (the "SEC"), including its Quarterly Report on Form 10-Q filed with the SEC on August 9, 2019 and future filings and reports by the Company. Quotient 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 is a leading digital promotions, media and analytics company that delivers personalized digital coupons and ads - informed by proprietary shopper and online engagement data - to millions of shoppers daily. We use our proprietary Promotions, Media, Audience and Analytics Cloud Platforms and services to seamlessly target audiences, optimize performance, and deliver measurable, incremental sales for CPG and retail marketers. We serve hundreds of CPGs and retailers nationwide, including Clorox, Procter & Gamble, General Mills, Unilever, Albertsons Companies, CVS, Dollar General and Ahold-Delhaize USA. Quotient is based in Mountain View, California, and has offices in Bangalore, Cincinnati, New York, Paris and London. Visit www.quotient.com for more information.
Quotient, the Quotient logo, Muse, and Ahalogy 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.
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