Quotient Technology (QUOT) Reports In-Line Q1 EPS, Revenues Miss; Offers 2Q & FY20 Revenue Guidance Below Consensus

Quotient Technology (NYSE: QUOT) reported Q1 EPS of ($0.19), in-line with the analyst estimate of ($0.19). Revenue for the quarter came in at $98.8 million versus the consensus estimate of $106.07 million.

Q1 2020 Summary

• During March quick and dramatic shifts in consumer shopping behaviors took effect as shoppers stocked pantries, cooked more in home, opted for eCommerce grocery delivery, and prepared for shelter-in-place mandates. These unexpected behaviors created short-term challenges for consumer packaged goods manufacturers (“CPGs”) and retailers, bringing emptied store shelves and stressed supply chains. As a result, in mid-March many on-going marketing campaigns were paused or delayed in order to align inventory levels to new shopper demands.
• COVID-19 impacts Q1 2020 revenue. January and February delivered revenue as expected. Impacts from the effects of COVID-19 started in mid-March as brands and retailers paused or delayed marketing campaigns, primarily in media. We expect to see continued impact from the effects of COVID-19 in the second quarter, as brands and retailers adjust marketing schedules and campaigns in light of the current environment. We are now seeing many brands rebook campaigns for the end of Q2 and beginning of Q3 2020.
• Adjusted EBITDA was $5.1 million, above the top end of our range. Q1 Adjusted EBITDA benefited from a higher proportion of promotions revenue coupled with a focus on cost controls within the quarter that lowered total operating expenses.

“We are grateful to be able to serve our CPGs, retail partners and shoppers during this difficult time. Grocery and household products are an essential component of any household, and Quotient is putting savings in the hands of shoppers when they need it most,” said Steven Boal, CEO. “Brands and retailers continue to re-align marketing campaigns, adjusting for changing shopper behaviors, growth in eCommerce and short-term supply chain challenges. However, we believe these events will accelerate the shift to digital. Consumers have choices when it comes to which brands they purchase and where they shop, making promotions and advertising a priority to maintain and grow market share.”

GUIDANCE:

Quotient Technology sees Q2 2020 revenue of $80-90 million, versus the consensus of $111.61 million.

Quotient Technology sees FY2020 revenue of $430-470 million, versus the consensus of $476.5 million.

• Beginning April 1, 2020, we have modified the way we deliver a portion of our media business, and no longer control certain services before they are transferred to our customers. This change has driven a portion of our media revenues to be recognized net of certain costs starting April 1, 2020, whereas in FY 2019 and Q1 2020 this portion of revenue was recognized on a gross basis. As a result of the modification, our projected growth rates appear negatively impacted for 2020 over the comparative periods in 2019, with the exception of Q1 2020. We also expect gross margins to increase, with no direct impact to our Net Income/Loss or Adjusted EBITDA.
• As of today, Quotient is providing the following business outlook. Given uncertainty around the effects of COVID-19, we are expanding our ranges.
• For the second quarter 2020, total revenue is expected to be in the range of $80.0 million to $90.0 million. Adjusted EBITDA for the second quarter of 2020 is expected to be in the range of $0.0 million to $3.0 million.
• For the full year 2020, total revenue is expected to be in the range of $430.0 million to $470.0 million. Adjusted EBITDA for the full year 2020 is expected to be in the range of $40.0 million to $55.0 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.

For earnings history and earnings-related data on Quotient Technology (QUOT) click here.

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