Quotient Technology Inc. Announces Fourth Quarter and Full Year 2020 Results

February 10, 2021 4:05 PM EST

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Fourth Quarter 2020

Record Quarterly Revenue of $142.5M, up 20% over Q4 2019
Signed First New Retail Partnership in Automotive Vertical

Full Year 2020

Revenue of $445.9M, up 2% over 2019
Added Four Partnerships in Core Verticals

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- Quotient Technology Inc. (NYSE: QUOT), the leading digital media and promotions technology company that creates cohesive omnichannel brand-building and sales-driving opportunities to deliver valuable outcomes for consumer-packaged goods (CPGs) manufacturers, retailers and consumers, today reported financial results for the fourth quarter ended December 31, 2020. Quotient’s complete fourth quarter and full year 2020 financial results and management commentary can be found by accessing the Company’s stockholder letter under Key Resources on the overview page of the investor relations website.

Additional Financial Highlights:

Q4 2020

  • GAAP Net Loss of $25.3M
  • Adjusted EBITDA of $17.9M

FY 2020

  • GAAP Net Loss of $65.4M
  • Adjusted EBITDA of $46.0M

“2020 was a year of progress for Quotient and I am pleased that we ended strong with another record setting quarter in Q4,” said Steven Boal, CEO. “The foundation we built last year has propelled us forward in 2021. With current market tailwinds like the shift to digital, combined with our growth drivers and our dedicated and focused team, we are already witnessing increased demand for our solutions in Q1 2021 and look forward to the opportunities ahead of us.”

Recently, our Board of Directors authorized a stock buyback program of up to $50.0 million of Quotient’s common stock, effective February 16, 2021, through a new 10B5-1 plan that expires on February 16, 2022.

Additionally, Quotient is moving its company headquarters from California to Utah in 2021.

Conference Call Information

The Company has posted a stockholder letter and an earnings presentation on the Investor Relations section of the Company’s 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.

To access the call, we encourage you to pre-register to eliminate long wait times using this link: Quotient Q4 2020 Earnings Pre Registration. After registering, a confirmation will be sent via email and will include dial-in details and a unique PIN code for entry to the call. Registration will be open through the live call. We suggest registering at least 15 minutes before the start of the call to receive your unique PIN code. You may also access the call and register with a live operator by dialing (866) 270-1533, or outside the U.S. (412) 317-0797, at least 15 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 reports its financial statements in accordance with generally accepted accounting principles in the United States (GAAP) and the rules of the SEC. To supplement its financial statements presented in accordance with GAAP, Quotient provides investors in this press release with Adjusted EBITDA, a non-GAAP financial measure. Quotient believes that this non-GAAP measure provides 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 this metric can provide a useful measure for period-to-period comparisons of its core business as well as a useful comparison to peer companies.

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, change in fair value of contingent consideration, certain acquisition-related costs, loss contingency/settlement related to a contract dispute, and restructuring charges. We exclude these items because we believe these items 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 our current or past operating performance.

There are a number of limitations related to the use of this non-GAAP financial measure. Quotient compensates for these limitations by providing specific information regarding the GAAP amount excluded from this non-GAAP financial measure and evaluating this non-GAAP financial measure together with its relevant GAAP financial measure.

This non-GAAP financial measure is 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, 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 regarding demand for the Company's solutions, market dynamics causing a shift to digital solutions and growth drivers. 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 to digital solutions; 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 impacts of the ongoing COVID-19 pandemic, which may continue to significantly impact our business, plans and results of operations, as well as the value of our common stock; the Company's expectations regarding growth drivers; and other factors identified in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including its Quarterly Reports on Form 10-Q filed with the SEC on November 6, 2020 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 (NYSE: QUOT) is the leading digital media and promotions technology company that creates cohesive omnichannel brand-building and sales-driving opportunities to deliver valuable outcomes for advertisers, retailers and consumers. The Quotient 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 and retailers, including Clorox, Procter & Gamble, General Mills, Unilever, Albertsons Companies, CVS, Dollar General and Peapod Digital Labs, a company of Ahold Delhaize USA. Quotient is headquartered in Mountain View, California, 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)

 

 

December 31,
2020

 

December 31,
2019

 

(unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

222,752

 

 

$

224,764

 

Accounts receivable, net

137,649

 

 

125,304

 

Prepaid expenses and other current assets

18,547

 

 

22,026

 

Total current assets

378,948

 

 

372,094

 

Property and equipment, net

17,268

 

 

13,704

 

Operating leases right-of-use-assets

16,222

 

 

7,211

 

Intangible assets, net

44,898

 

 

69,752

 

Goodwill

128,427

 

 

128,427

 

Other assets

1,029

 

 

750

 

Total assets

$

586,792

 

 

$

591,938

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

15,959

 

 

$

19,116

 

Accrued compensation and benefits

14,368

 

 

15,232

 

Other current liabilities

70,620

 

 

50,032

 

Deferred revenues

12,027

 

 

10,903

 

Contingent consideration related to acquisitions

8,524

 

 

27,000

 

Total current liabilities

121,498

 

 

122,283

 

Other non-current liabilities

18,314

 

 

7,119

 

Contingent consideration related to acquisitions

20,930

 

 

9,220

 

Convertible senior notes, net

177,168

 

 

166,157

 

Deferred tax liabilities

1,853

 

 

1,937

 

Total liabilities

339,763

 

 

306,716

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock

1

 

 

1

 

Additional paid-in capital

698,333

 

 

671,060

 

Accumulated other comprehensive loss

(1,001

)

 

(916

)

Accumulated deficit

(450,304

)

 

(384,923

)

Total stockholders' equity

247,029

 

 

285,222

 

Total liabilities and stockholders' equity

$

586,792

 

 

$

591,938

 

 

 

 

 

 

 

 

 

QUOTIENT TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2020

 

2019

 

2020

 

2019

Revenues

$

142,529

 

 

$

118,532

 

 

$

445,887

 

 

$

436,160

 

Cost of revenues(1)

92,469

 

 

72,219

 

 

277,914

 

 

263,606

 

Gross Margin

50,060

 

 

46,313

 

 

167,973

 

 

172,554

 

Operating Expenses:

 

 

 

 

 

 

 

Sales and marketing(1)

31,124

 

 

27,541

 

 

104,527

 

 

101,244

 

Research and development(1)

11,358

 

 

10,771

 

 

40,316

 

 

39,076

 

General and administrative(1)

14,720

 

 

14,227

 

 

54,177

 

 

58,328

 

Change in fair value of contingent consideration

14,446

 

 

519

 

 

20,234

 

 

1,571

 

Total operating expenses

71,648

 

 

53,058

 

 

219,254

 

 

200,219

 

Loss from operations

(21,588

)

 

(6,745

)

 

(51,281

)

 

(27,665

)

Interest expense

(3,691

)

 

(3,539

)

 

(14,521

)

 

(13,955

)

Other income, net

432

 

 

1,009

 

 

1,140

 

 

5,223

 

Loss before income taxes

(24,847

)

 

(9,275

)

 

(64,662

)

 

(36,397

)

Provision for (benefit from) income taxes

458

 

 

285

 

 

719

 

 

660

 

Net loss

$

(25,305

)

 

$

(9,560

)

 

$

(65,381

)

 

$

(37,057

)

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

$

(0.28

)

 

$

(0.11

)

 

$

(0.72

)

 

$

(0.41

)

 

 

 

 

 

 

 

 

Weighted-average shares used to compute net loss per share, basic and diluted

91,300

 

 

89,123

 

 

90,412

 

 

91,163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The stock-based compensation expense included above was as follows:

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2020

 

2019

 

2020

 

2019

Cost of revenues

$

479

 

 

$

521

 

 

$

1,743

 

 

$

2,193

 

Sales and marketing

1,399

 

 

1,816

 

 

5,311

 

 

6,812

 

Research and development

1,108

 

 

1,225

 

 

3,831

 

 

4,804

 

General and administrative

4,364

 

 

4,883

 

 

17,486

 

 

18,328

 

Total stock-based compensation

$

7,350

 

 

$

8,445

 

 

$

28,371

 

 

$

32,137

 

QUOTIENT TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

 

Year Ended December 31,

 

2020

 

2019

 

(unaudited)

 

 

Cash flows from operating activities:

 

 

 

Net loss

$

(65,381

)

 

$

(37,057

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

Depreciation and amortization

36,352

 

 

31,437

 

Stock-based compensation

28,371

 

 

32,137

 

Amortization of debt discount and issuance cost

11,011

 

 

10,438

 

Allowance for credit losses

888

 

 

1,227

 

Deferred income taxes

719

 

 

660

 

Change in fair value of contingent consideration, net

20,234

 

 

1,571

 

Impairment of capitalized software development costs

 

 

3,579

 

Other non-cash expenses

3,275

 

 

2,392

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(13,232

)

 

(7,142

)

Prepaid expenses and other current assets

3,164

 

 

(11,145

)

Accounts payable and other current liabilities

15,554

 

 

(62

)

Payments for contingent consideration and bonuses

(15,418

)

 

 

Accrued compensation and benefits

(197

)

 

1,567

 

Deferred revenues

1,125

 

 

2,216

 

Net cash provided by operating activities

26,465

 

 

31,818

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

(8,351

)

 

(9,021

)

Purchases of intangible assets

(3,018

)

 

(14,811

)

Acquisitions, net of cash acquired

 

 

(13,730

)

Purchases of short-term investments

 

 

 

Proceeds from maturity of short-term investment

 

 

20,738

 

Net cash used in investing activities

(11,369

)

 

(16,824

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Proceeds from issuance of common stock under stock plans

5,002

 

 

5,017

 

Payments for taxes related to net share settlement of equity awards

(7,203

)

 

(9,838

)

Repurchases and retirement of common stock under share repurchase program

 

 

(87,097

)

Principal payments on promissory note and capital lease obligations

(391

)

 

(317

)

Payments for contingent consideration

(14,582

)

 

 

Net cash used in financing activities

(17,174

)

 

(92,235

)

Effect of exchange rates on cash and cash equivalents

66

 

 

(23

)

Net decrease in cash and cash equivalents

(2,012

)

 

(77,264

)

Cash and cash equivalents at beginning of period

224,764

 

 

302,028

 

Cash and cash equivalents at end of period

$

222,752

 

 

$

224,764

 

QUOTIENT TECHNOLOGY INC.

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2020

 

2019

 

2020

 

2019

Net loss

$

(25,305

)

 

$

(9,560

)

 

$

(65,381

)

 

$

(37,057

)

Adjustments:

 

 

 

 

 

 

 

Stock-based compensation

7,350

 

 

8,445

 

 

28,371

 

 

32,137

 

Depreciation and amortization

9,830

 

 

8,177

 

 

36,352

 

 

31,437

 

Acquisition related costs and other(1)

7,872

1,091

12,361

7,670

 

Change in fair value of contingent consideration

14,446

 

 

519

 

 

20,234

 

 

1,571

 

Interest expense

3,691

 

 

3,539

 

 

14,521

 

 

13,955

 

Other income, net

(432

)

 

(1,009

)

 

(1,140

)

 

(5,223

)

Provision for income taxes

458

 

 

285

 

 

719

 

 

660

 

 

 

 

 

 

 

 

 

Total adjustments

$

43,215

 

 

$

21,047

 

 

$

111,418

 

 

$

82,207

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

17,910

 

 

$

11,487

 

 

$

46,037

 

 

$

45,150

 

 

 

 

 

 

 

 

 

(1) For the three and twelve months ended December 31, 2020, other includes restructuring charges of zero and $1.5 million, respectively, and loss contingency and settlement of $6.8 million and $8.8 million, respectively, related to a contract dispute. For the three and twelve months ended December 31, 2019, other includes restructuring charges of zero and $4.3 million, respectively.

 

Investor Relations Contact:
Christine Marchuska
Director of Investor Relations
cmarchuska@quotient.com
Phone: 917-232-0852

Source: Quotient Technology Inc.



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