Exhibit 99.2 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 2 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 3 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 4 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 5 |
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Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 10 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 11 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 12 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 13 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 14 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 15 |
Steven Boal | Pamela Strayer |
Chief Executive Officer | Chief Financial Officer |
● | We delivered revenue of $83.5 million, down 20% over Q2 2019 |
● | Adjusted EBITDA was $4.4 million, representing a 5.2% margin |
● | GAAP gross margin was 39.2%, compared to 38.8% in Q2 2019 |
● | Non-GAAP gross margin was 47.2%, compared to 44.4% in Q2 2019 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 16 |
● | GAAP operating expenses were 58.1% of revenue, compared to 40.5% of revenue in Q2 2019 |
● | Non-GAAP operating expenses were flat compared to the prior year at $36.8 million and 44.1% of revenue, compared to 35.2% of revenue in Q2 2019 |
● | We recorded a GAAP net loss of $19.1 million, compared to a loss of $3.9 million in Q2 2019. The increase in GAAP net loss from prior year is due primarily to lower revenues resulting from COVID-19 as well as a $3.8 million charge for the increase in fair value of contingent consideration compared to a benefit of $3 million in the prior year. Net Loss Per Share in the quarter was $0.21, compared to $0.04 in Q2 2019 |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 17 |
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● | Oppenheimer’s 23rd Annual Technology, Internet and Communications Virtual Conference, August 11-12, 2020 |
● | D.A Davidson’s 19th Annual Software and Internet Services Virtual Conference, September 9, 2020 |
● | Collier’s 2020 Virtual Institutional Investor Conference, September 10, 2020 |
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Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 23 |
QUOTIENT TECHNOLOGY INC. | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands) | |||||||
June 30, 2020 | December 31, 2019 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 211,872 |
| $ | 224,764 |
| |
Accounts receivable, net |
| 94,311 |
|
| 125,304 |
| |
Prepaid expenses and other current assets |
| 23,991 |
|
| 22,026 |
| |
Total current assets |
| 330,174 |
|
| 372,094 |
| |
Property and equipment, net |
| 15,340 |
|
| 13,704 |
| |
Operating lease right-of-use-assets |
| 16,851 |
|
| 7,211 |
| |
Intangible assets, net |
| 55,319 |
|
| 69,752 |
| |
Goodwill |
| 128,427 |
|
| 128,427 |
| |
Other assets |
| 1,098 |
|
| 750 |
| |
Total assets | $ | 547,209 |
| $ | 591,938 |
| |
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 12,308 |
| $ | 19,116 |
| |
Accrued compensation and benefits |
| 7,801 |
|
| 15,232 |
| |
Other current liabilities |
| 47,200 |
|
| 50,032 |
| |
Deferred revenues |
| 13,011 |
|
| 10,903 |
| |
Contingent consideration related to acquisitions |
| 3,207 |
|
| 27,000 |
| |
Total current liabilities |
| 83,527 |
|
| 122,283 |
| |
Other non-current liabilities |
| 17,572 |
|
| 7,119 |
| |
Contingent consideration related to acquisitions |
| 10,239 |
|
| 9,220 |
| |
Convertible senior notes, net |
| 171,589 |
|
| 166,157 |
| |
Deferred tax liabilities |
| 1,937 |
|
| 1,937 |
| |
Total liabilities |
| 284,864 |
|
| 306,716 |
| |
Stockholders’ equity: | |||||||
Common stock |
| 1 |
|
| 1 |
| |
Additional paid-in capital |
| 684,285 |
|
| 671,060 |
| |
Accumulated other comprehensive loss |
| (1,160 | ) |
| (916 | ) | |
Accumulated deficit |
| (420,781 | ) |
| (384,923 | ) | |
Total stockholders’ equity |
| 262,345 |
|
| 285,222 |
| |
Total liabilities and stockholders’ equity | $ | 547,209 |
| $ | 591,938 |
|
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 24 |
QUOTIENT TECHNOLOGY INC. | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(Unaudited, in thousands, except per share data) | |||||||||||||||
Three Months Ended |
| Six Months Ended | |||||||||||||
2020 |
| 2019 |
| 2020 |
| 2019 | |||||||||
Revenues | $ | 83,455 |
| $ | 104,691 |
| $ | 182,242 |
| $ | 202,798 |
| |||
Costs and expenses: | |||||||||||||||
Cost of revenues (1) |
| 50,731 |
|
| 64,106 |
|
| 111,842 |
|
| 120,929 |
| |||
Sales and marketing (1) |
| 23,814 |
|
| 23,870 |
|
| 48,848 |
|
| 49,393 |
| |||
Research and development (1) |
| 8,621 |
|
| 8,699 |
|
| 19,214 |
|
| 19,069 |
| |||
General and administrative (1) |
| 12,268 |
|
| 12,835 |
|
| 27,358 |
|
| 26,458 |
| |||
Change in fair value of contingent consideration |
| 3,766 |
|
| (3,009 | ) |
| 4,226 |
|
| 53 |
| |||
Total costs and expenses |
| 99,200 |
|
| 106,501 |
|
| 211,488 |
|
| 215,902 |
| |||
Loss from operations |
| (15,745 | ) |
| (1,810 | ) |
| (29,246 | ) |
| (13,104 | ) | |||
Interest expense |
| (3,610 | ) |
| (3,470 | ) |
| (7,184 | ) |
| (6,909 | ) | |||
Other income, net |
| 187 |
|
| 1,508 |
|
| 767 |
|
| 3,039 |
| |||
Loss before income taxes |
| (19,168 | ) |
| (3,772 | ) |
| (35,663 | ) |
| (16,974 | ) | |||
Provision for (benefit from) income taxes |
| (35 | ) |
| 134 |
|
| 195 |
|
| 160 |
| |||
Net loss | $ | (19,133 | ) | $ | (3,906 | ) | $ | (35,858 | ) | $ | (17,134 | ) | |||
Net loss per share, basic and diluted | $ | (0.21 | ) | $ | (0.04 | ) | $ | (0.40 | ) | $ | (0.18 | ) | |||
Weighted-average shares used to compute net loss per share, basic and diluted |
| 90,112 |
|
| 92,558 |
|
| 89,875 |
|
| 93,406 |
| |||
(1) The stock-based compensation expense included above was as follows: | |||||||||||||||
Three Months Ended |
| Six Months Ended | |||||||||||||
2020 |
| 2019 |
| 2020 |
| 2019 | |||||||||
Cost of revenues | $ | 387 |
| $ | 562 |
| $ | 822 |
| $ | 1,164 |
| |||
Sales and marketing |
| 1,323 |
|
| 1,825 |
|
| 2,725 |
|
| 3,563 |
| |||
Research and development |
| 839 |
|
| 1,073 |
|
| 1,720 |
|
| 2,439 |
| |||
General and administrative |
| 4,457 |
|
| 4,576 |
|
| 9,265 |
|
| 8,918 |
| |||
Total stock-based compensation | $ | 7,006 |
| $ | 8,036 |
| $ | 14,532 |
| $ | 16,084 |
|
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 25 |
QUOTIENT TECHNOLOGY INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited, in thousands) | |||||||
Six Months Ended | |||||||
2020 |
| 2019 | |||||
Cash flows from operating activities: | |||||||
Net loss | $ | (35,858 | ) | $ | (17,134 | ) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization |
| 17,843 |
|
| 15,632 |
| |
Stock-based compensation |
| 14,532 |
|
| 16,084 |
| |
Amortization of debt discount and issuance cost |
| 5,432 |
|
| 5,150 |
| |
Allowance for credit losses |
| 263 |
|
| 366 |
| |
Deferred income taxes |
| 195 |
|
| 160 |
| |
Change in fair value of contingent consideration |
| 4,226 |
|
| 53 |
| |
Other non-cash expenses |
| 1,442 |
|
| 1,219 |
| |
Changes in operating assets and liabilities: | |||||||
Accounts receivable |
| 30,730 |
|
| 3,368 |
| |
Prepaid expenses and other current assets |
| (2,470 | ) |
| (2,779 | ) | |
Accounts payable and other current liabilities |
| (7,551 | ) |
| 3,349 |
| |
Payments for contingent consideration and bonuses |
| (15,418 | ) |
| — |
| |
Accrued compensation and benefits |
| (7,478 | ) |
| (3,249 | ) | |
Deferred revenues |
| 2,108 |
|
| 1,616 |
| |
Net cash provided by operating activities |
| 7,996 |
|
| 23,835 |
| |
Cash flows from investing activities: | |||||||
Purchases of property and equipment |
| (4,689 | ) |
| (4,729 | ) | |
Purchases of intangible assets |
| — |
|
| (14,811 | ) | |
Proceeds from maturity of short-term investment |
| — |
|
| 20,738 |
| |
Net cash (used in) provided by investing activities |
| (4,689 | ) |
| 1,198 |
| |
Cash flows from financing activities: | |||||||
Proceeds from issuances of common stock under stock plans |
| 1,762 |
|
| 3,063 |
| |
Payments for taxes related to net share settlement of equity awards |
| (3,327 | ) |
| (6,461 | ) | |
Repurchases and retirement of common stock under share repurchase program |
| — |
|
| (69,879 | ) | |
Principal payments on promissory note and capital lease obligations |
| (91 | ) |
| (229 | ) | |
Payments for contingent consideration |
| (14,582 | ) |
| — |
| |
Net cash used in financing activities |
| (16,238 | ) |
| (73,506 | ) | |
Effect of exchange rates on cash and cash equivalents |
| 39 |
|
| 23 |
| |
Net decrease in cash and cash equivalents |
| (12,892 | ) |
| (48,450 | ) | |
Cash and cash equivalents at beginning of period |
| 224,764 |
|
| 302,028 |
| |
Cash and cash equivalents at end of period | $ | 211,872 |
| $ | 253,578 |
|
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 26 |
QUOTIENT TECHNOLOGY INC. | |||||||||||||||
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended |
| Six Months Ended | |||||||||||||
2020 |
| 2019 |
| 2020 |
| 2019 | |||||||||
Net loss | $ | (19,133 | ) | $ | (3,906 | ) | $ | (35,858 | ) | $ | (17,134 | ) | |||
Adjustments: | |||||||||||||||
Stock-based compensation |
| 7,006 |
|
| 8,036 |
|
| 14,532 |
|
| 16,084 |
| |||
Depreciation, amortization and other (1) |
| 9,345 |
|
| 8,509 |
|
| 19,939 |
|
| 17,053 |
| |||
Change in fair value of contingent consideration |
| 3,766 |
|
| (3,009 | ) |
| 4,226 |
|
| 53 |
| |||
Interest expense |
| 3,610 |
|
| 3,470 |
|
| 7,184 |
|
| 6,909 |
| |||
Other income, net |
| (187 | ) |
| (1,508 | ) |
| (767 | ) |
| (3,039 | ) | |||
Provision for (benefit from) income taxes |
| (35 | ) |
| 134 |
|
| 195 |
|
| 160 |
| |||
Total adjustments | $ | 23,505 |
| $ | 15,632 |
| $ | 45,309 |
| $ | 37,220 |
| |||
Adjusted EBITDA | $ | 4,372 |
| $ | 11,726 |
| $ | 9,451 |
| $ | 20,086 |
|
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 27 |
QUOTIENT TECHNOLOGY INC. | ||||||||||||
RECONCILIATION OF GROSS MARGIN TO NON-GAAP GROSS MARGIN | ||||||||||||
(Unaudited, in thousands) | ||||||||||||
Q2 FY 19 | Q1 FY 20 | Q2 FY 20 | ||||||||||
Revenues | $ | 104,691 | $ | 98,787 | $ | 83,455 | ||||||
Cost of revenues (GAAP) | $ | 64,106 | $ | 61,111 | $ | 50,731 | ||||||
(less) Stock-based compensation | (562 | ) | (435 | ) | (387 | ) | ||||||
(less) Amortization of acquired intangible assets | (5,377 | ) | (6,325 | ) | (6,278 | ) | ||||||
(less) Restructuring charges | — | (82 | ) | — | ||||||||
Cost of revenues (Non-GAAP) | $ | 58,167 | $ | 54,269 | $ | 44,066 | ||||||
Gross margin (GAAP) | $ | 40,585 | $ | 37,676 | $ | 32,724 | ||||||
Gross margin percentage (GAAP) | 38.8 | % | 38.1 | % | 39.2 | % | ||||||
Gross margin (Non-GAAP)* | $ | 46,524 | $ | 44,518 | $ | 39,389 | ||||||
Gross margin percentage (Non-GAAP) | 44.4 | % | 45.1 | % | 47.2 | % |
* Non-GAAP gross margin excludes stock-based compensation, amortization of acquired intangible assets and restructuring charges. |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 28 |
QUOTIENT TECHNOLOGY INC. | ||||||||||||
RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES | ||||||||||||
(Unaudited, in thousands) | ||||||||||||
Q2 FY 19 | Q1 FY 20 | Q2 FY 20 | ||||||||||
Revenues | $ | 104,691 | $ | 98,787 | $ | 83,455 | ||||||
Sales and marketing expenses | 23,870 | 25,034 | 23,814 | |||||||||
(less) Stock-based compensation | (1,825 | ) | (1,402 | ) | (1,323 | ) | ||||||
(less) Amortization of acquired intangible assets | (510 | ) | (916 | ) | (914 | ) | ||||||
(less) Restructuring charges | — | (526 | ) | — | ||||||||
Non-GAAP Sales and marketing expenses | $ | 21,535 | $ | 22,190 | $ | 21,577 | ||||||
Non-GAAP Sales and marketing percentage | 21 | % | 22 | % | 26 | % | ||||||
Research and development | 8,699 | 10,593 | 8,621 | |||||||||
(less) Stock-based compensation | (1,073 | ) | (881 | ) | (839 | ) | ||||||
(less) Restructuring charges | — | (283 | ) | — | ||||||||
Non-GAAP Research and development expenses | $ | 7,626 | $ | 9,429 | $ | 7,782 | ||||||
Non-GAAP Research and development percentage | 7 | % | 10 | % | 9 | % | ||||||
General and administrative expenses | 12,835 | 15,090 | 12,268 | |||||||||
(less) Stock-based compensation | (4,576 | ) | (4,808 | ) | (4,457 | ) | ||||||
(less) Restructuring charges | — | (591 | ) | — | ||||||||
(less) Acquisiton related costs | (598 | ) | (226 | ) | (387 | ) | ||||||
Non-GAAP General and administrative expenses | $ | 7,661 | $ | 9,465 | $ | 7,424 | ||||||
Non-GAAP General and administrative percentage | 7 | % | 10 | % | 9 | % | ||||||
Non-GAAP Operating expenses* | $ | 36,822 | $ | 41,084 | $ | 36,783 | ||||||
Non-GAAP Operating expense percentage | 35 | % | 42 | % | 44 | % |
* Non-GAAP operating expenses excludes changes in fair value of contingent consideration, stock-based compensation, amortization of acquired intangible assets, restructuring charges, and acquisition related costs. |
Q2 2020 FINANCIAL RESULTS AND BUSINESS UPDATES | 29 |