Quinstreet, Inc (NASDAQ: QNST) reported Q3 EPS of $0.13, $0.07 worse than the analyst estimate of $0.20. Revenue for the quarter came in at $128.66 million versus the consensus estimate of $132.08 million.

"QuinStreet business fundamentals and financial position remain strong and resilient, despite coronavirus," stated Doug Valenti, CEO of QuinStreet. "We remain highly confident in our business opportunity, strategies and initiatives. We are also confident in our ability to navigate near-term disruptions caused by coronavirus. Our recent execution has been outstanding. And our balance sheet is strong, with cash approaching $100 million and no bank debt."

"Fiscal Q3 results were impacted by coronavirus-related drops in client marketing budgets and consumer traffic. Those effects accelerated during the quarter. Year-over-year growth in revenue excluding divested businesses went from 20% in January to 9% in March. Adjusted EBITDA margin similarly softened from 10% in January to an average of 6% in February and March, due to the same effects."

"Our Insurance client vertical has been performing best in the face of coronavirus. Auto insurance, our biggest business, grew 30% year-over-year."

"QRP also continues to progress well, and promises to be one of the most exciting business opportunities in the history of the Company, with a strong value proposition for agency clients, and big scale and SaaS-like margins for QuinStreet. Among its many advantages, QRP increases agent productivity, and helps agencies more effectively work remotely and serve consumers online. Launched QRP clients already represent over $6 million dollars in estimated annual revenue opportunity once fully ramped. Signed and near-signed clients (not yet launched) represent $12 million of additional estimated annual revenue opportunity. The balance of clients in the advanced pipeline (not yet at signing stage) represent $36 million more of estimated annual revenue opportunity. That means we believe we already have line-of-sight to over $50 million of estimated annual QRP revenue. We believe the full pipeline and market represent an estimated revenue opportunity of well over $100 million per year."

"We made good progress on strategic initiatives in the quarter, narrowing our business footprint by successfully divesting our B2B client vertical in a sale to TechnologyAdvice, a B2B technology-focused firm headquartered in Nashville, Tennessee, and by also selling or spinning off all of our Brazil operations. As you would probably expect, the Goldman Sachs-led process to review strategic alternatives has paused due to current market uncertainties."

"Our main focus areas and objectives during the pandemic period include: best serving the needs of clients and media partners to maintain long-term market position and share; making progress on key new product, media and business expansion initiatives; preserving cash and cash flow; and finally, but second to none of the others, protecting our employees from health risks and economic uncertainty."

"Turning to our outlook, we expect revenue growth and EBITDA to continue to be impacted by coronavirus-related disruption and uncertainty. We expect continued volatility in client budgets and media, particularly in non-Insurance client verticals. Forecasting specifics in these uncertain and unprecedented times is challenging. Our current estimate is for fiscal Q4 revenue excluding divested businesses to be down between 5% and 10% year-over-year. Adjusted EBITDA and cash flow margins are expected to be in the lower single-digits as we absorb full quarter effects of coronavirus-related drops in top-line leverage and media efficiency. We will look to avoid layoffs during this pandemic that would be required to offset those drops. It seems unjust and bad corporate citizenship to layoff productive employees just to increase already positive profits and cash flow, especially given our strong balance sheet, not to mention the fact that those layoffs would also have the effect of slowing progress on important longer-term initiatives."

"Looking post-coronavirus, we are confident and enthusiastic about our strategy to narrow and focus our efforts on a smaller number of our biggest and best long-term business opportunities. Those opportunities will include a heavier mix of QRP and likely other high-margin technology products, with deeper integrations into clients and networks. We still expect annual revenue of well over $400 million in the new format, even before our plan to aggressively invest in the remaining businesses. We also expect revenue and EBITDA growth to be more predictable and even faster than our pre-coronavirus footprint, which in turn we expect to drive greater shareholder value. Trailing twelve-months revenue for our go-forward core financial services and home services businesses was $414 million through March 31, representing a three-year compound annual growth rate of 34%."

For earnings history and earnings-related data on Quinstreet, Inc (QNST) click here.