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Quotient Technology Inc. Reports Fourth Quarter and Full Year 2019 Financial ResultsQuotient Technology Inc. (NYSE: QUOT), the leading digital promotions, media and analytics company for CPG and retail marketing, today reported financial results for the fourth quarter and full year ended December 31, 2019. "I couldn't be more pleased with how we ended the year, as we continued to grow our core business, deliver new products and expand our network. Over the last six months, we've strengthened our leadership team and established key operating priorities to drive the business forward. We believe we are now on course for steady growth in revenues, gross margin and Adjusted EBITDA," said Steven Boal, CEO. Boal added, "Retailers and brands are now moving quickly to drive omni-channel initiatives forward. This dynamic has created a tailwind for our growth, as CPGs plan to stop spending in offline free-standing inserts and aim to meet retailers' asks for more digital marketing spend." Fourth Quarter 2019 Financial Results
Full Year 2019 Financial Results
Adjusted EBITDA, a non-GAAP measure, is reconciled to the corresponding GAAP measure at the end of this release. 2019 Business Highlights Expanded Retail Network and Shopper Demand
Launched New Products and Partnerships
Acquired Ubimo, a Leading Data and Media Activation Company
Business Outlook Starting on April 1, 2020 we will modify the way we deliver a portion of our media business and will no longer control certain services before they are transferred to our customers. This change will drive a portion of our media revenues to be recognized net of certain costs in Q2, Q3 and Q4 of 2020, whereas in FY2019 these revenues were recognized on a gross basis. As a result of these changes, we expect gross margins to increase, with no direct impact to our Net Income or Adjusted EBITDA. Our Q1 2020 outlook, detailed below, is not impacted by these changes. Our full year 2020 outlook below reflects these changes and projects revenue from this portion of our media business on a net basis effective April 1, 2020. Had we not made these changes the projected 2020 revenues would have been approximately $33.0 million higher, which would have resulted in revenue growth of approximately 20% as compared to 2019. As of today, Quotient is providing the following business outlook. For the first quarter 2020, total revenue is expected to be in the range of $106.0 million to $109.0 million. Adjusted EBITDA for the first quarter of 2020 is expected to be in the range of $1.0 million to $3.0 million. For the full year 2020, total revenue is expected to be in the range of $485.0 million to $495.0 million. Adjusted EBITDA for the full year 2020 is expected to be in the range of $58.0 million to $62.0 million. Adjusted EBITDA is expected to grow throughout the year with the fourth quarter Adjusted EBITDA margin forecasted to be in the high teens. 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 5:00 p.m. ET/ 2:00 p.m. PT. Questions that investors would like to see asked during the call should be sent to [email protected]. To access the call, please dial (833) 227-5842, or outside the U.S. (647) 689-4069, with Conference ID# 3786324 at least five minutes prior to the 2:00 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 Measures Quotient has presented Adjusted EBITDA 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 as well as a useful comparison to peer companies. 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. Forward-Looking Statements 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 first quarter and fiscal year 2020; the Company's ability to grow revenues, gross margin and Adjusted EBITDA; developments with its solutions, partnerships, product launches; the benefits of the Ubimo acquisition; CPGs' plans to stop spending in offline free-standing inserts; the impact of the Company's shift to recognize certain media services on a net basis; the future demand and behavior of consumers, retailers and CPGs; and the Company's 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 and shifts in CPG spend in offline free-standing inserts; 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 November 8, 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 the 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, and Tel Aviv. Visit www.quotient.com for more information. Quotient, the Quotient logo and Ubimo 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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