Financial Data and Key Metrics Changes - Total revenue grew 32% year over year in Q4 and 78% for the full fiscal year 2025, reaching $1,100,000,000 [4][5][11] - Adjusted EBITDA increased by 101% in Q4 and approximately 300% for the full fiscal year, amounting to $81,300,000 [4][5][11] - The company ended Q4 with over $100,000,000 in cash and no bank debt, indicating a strong balance sheet [5][11] Business Line Data and Key Metrics Changes - Auto insurance revenue surged 62% year over year in Q4, while home services revenue grew 21% [4][10] - For the full fiscal year, financial services represented 75% of total revenue, growing 108% year over year to $817,200,000, while home services accounted for 24% of revenue, growing 24% [10][11] Market Data and Key Metrics Changes - The auto insurance market showed renewed demand, with expectations of strong sequential revenue growth in Q1 [6][9] - The company noted that carrier spending growth moderated in the second half of the fiscal year due to tariff uncertainties, but some clients began to reaccelerate spending [6][7] Company Strategy and Development Direction - The company plans to continue investing aggressively in media capacity and products to capitalize on pent-up demand in auto insurance [8][9] - The outlook for fiscal Q1 is projected at approximately $280,000,000 in revenue and $20,000,000 in adjusted EBITDA, with a full fiscal year 2026 revenue growth expectation of about 10% and adjusted EBITDA growth of about 20% [9][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's competitive advantages and financial strength to pursue long-term market opportunities [5][6] - The management highlighted that the auto insurance market is expected to see significant spending increases as tariff impacts become clearer [7][8] Other Important Information - The company is launching a new version of its media optimization platform, QMP, in home services, which is expected to enhance growth and operational efficiency [42][66] - The company is also focusing on margin expansion initiatives, with expectations for adjusted EBITDA margins to grow faster than revenue [34][52] Q&A Session Summary Question: Can you walk through carrier spend trends across Q4? - Management noted consistent spending levels in Q4, with indications of increased spending as the quarter progressed and expectations for further increases in Q1 and Q4 of the calendar year [16][18] Question: Can you discuss the assumptions in the initial 2026 guidance? - The guidance is characterized as conservative, reflecting strong carrier economics and potential for increased spending in the second half of the calendar year [20][22] Question: What are the trends with the carrier base? - The company observed strong activity across its carrier base, with more carriers spending over $1,000,000 per month than ever before [26][28] Question: Can you elaborate on margin expansion initiatives? - Management highlighted strong progress in margin expansion initiatives, including optimization of existing media and new media capacity growth [34][36] Question: How are tariffs impacting the home services segment? - Management indicated no significant impact from tariffs on home services spending levels, with expectations for continued growth [41][44] Question: What is the mix of media sources and contributions from acquisitions? - The company refrained from disclosing specific media mix details but noted successful acquisitions that expanded media sourcing capabilities [45][46] Question: What is driving the sequential margin compression in Q1? - The compression is attributed to media capacity catching up with increasing demand, with ongoing investments to build new capacity [51][52] Question: How are other financial services verticals performing? - All financial services verticals grew year over year, with personal loans undergoing a margin optimization program [53][54] Question: How will a lower interest rate environment affect home services growth? - A lower interest rate environment is expected to support growth in home services due to increased home buying activity [58][59] Question: Where are investments in product development being directed? - Investments are focused on QRP, home services financing, and improvements in core technologies, including a new unified contact platform [60][66]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) QuinStreet reported strong financial results for Q4 and FY2025, with significant year-over-year growth in revenue, GAAP net income, adjusted net income, and adjusted EBITDA. The company also generated substantial operating cash flow for the full fiscal year [Fiscal Fourth Quarter and Full Year 2025 Financial Performance](index=1&type=section&id=Fiscal%20Fourth%20Quarter%20and%20Full%20Year%202025%20Financial%20Performance) QuinStreet reported strong financial results for Q4 and FY2025, with significant year-over-year growth in revenue, GAAP net income, adjusted net income, and adjusted EBITDA. The company also generated substantial operating cash flow for the full fiscal year | Metric | Q4 FY25 | Q4 FY24 | YoY Change (Q4) | FY25 | FY24 | YoY Change (FY) | | :-------------------------- | :-------- | :-------- | :-------------- | :--------- | :--------- | :-------------- | | Revenue | $262.1M | $198.3M | +32% | $1.1B | $613.5M | +78% | | GAAP Net Income | $3.2M | ($2.2M) | N/A | $4.7M | ($31.3M) | N/A | | GAAP Diluted EPS | $0.06 | ($0.04) | N/A | $0.08 | ($0.57) | N/A | | Adjusted Net Income | $14.7M | $6.5M | +126% | $51.4M | $6.3M | +716% | | Adjusted Diluted EPS | $0.25 | $0.11 | +127% | $0.88 | $0.11 | +700% | | Adjusted EBITDA | $22.1M | $11.0M | +101% | $81.3M | $20.4M | +299% | | FY25 Operating Cash Flow | N/A | N/A | N/A | $85.0M | N/A | N/A | | FY25 Cash & Equivalents | N/A | N/A | N/A | $101.1M | N/A | N/A | [CEO Commentary and Strategic Outlook](index=1&type=section&id=CEO%20Commentary%20and%20Strategic%20Outlook) CEO Doug Valenti highlighted strong revenue growth and margin expansion in FY25, driven by investments and early contributions from new initiatives. He noted renewed demand in Auto Insurance, despite moderation in H2 FY25 due to tariff uncertainties, and anticipates strong sequential growth in Q1 FY26. The company plans continued aggressive investment to capitalize on pent-up demand in Auto Insurance and expects further margin expansion in FY26 - Full year revenue grew **78%** and Adjusted EBITDA grew **299%**, reflecting ongoing investments and early contributions from new market and product initiatives[7](index=7&type=chunk) - Renewed demand from Auto Insurance clients was a key driver for FY25 success, with some clients re-accelerating spending, leading to an expectation of strong sequential Auto Insurance revenue growth in FYQ1[7](index=7&type=chunk) - The company expects FYQ1 revenue of approximately **$280 million** and Adjusted EBITDA of about **$20 million**. For full fiscal year 2026, revenue is projected to grow about **10%** and Adjusted EBITDA about **20%**, with continued margin expansion efforts[7](index=7&type=chunk) [Key Performance Indicators (Exhibit 99.1)](index=1&type=section&id=Key%20Performance%20Indicators%20(Exhibit%2099.1)) Exhibit 99.1 reiterated key financial and operational achievements for Q4 and FY25, emphasizing strong revenue growth, significant improvement in net income and adjusted EBITDA, and a healthy balance sheet with expectations for continued margin expansion in FY26 - FYQ4 Revenue increased **32% YoY** to **$262 million**, accompanied by strong margin growth[9](index=9&type=chunk) - FYQ4 Auto Insurance revenue surged **62% YoY**, while Home Services revenue grew **21%**[9](index=9&type=chunk) - FY25 Revenue reached **$1.1 billion**, a **78% YoY** increase, and Net Income improved to **$4.7 million** from a **$31.3 million** net loss in FY24[9](index=9&type=chunk) - FY25 Adjusted EBITDA grew **299%** to **$81.3 million** from **$20.4 million** in FY24, with expectations for continued margin expansion in FY26[9](index=9&type=chunk) - The company maintains strong cash flows and a healthy balance sheet, with over **$100 million** in cash and no bank debt[9](index=9&type=chunk) [Company Overview](index=3&type=section&id=Company%20Overview) QuinStreet, Inc. is a leading provider of performance marketplaces and technologies, primarily serving the financial services and home services industries [About QuinStreet](index=3&type=section&id=About%20QuinStreet) QuinStreet, Inc. is a leading provider of performance marketplaces and technologies, primarily serving the financial services and home services industries. The company specializes in online marketplace solutions that connect consumers with relevant brands and products - QuinStreet, Inc. is a leader in performance marketplaces and technologies for the financial services and home services industries[10](index=10&type=chunk) - The company pioneers online marketplace solutions to match searchers with brands in digital media, providing consumers with information and tools to select products and brands[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) This section defines several non-GAAP financial measures and explains their rationale for complementing GAAP results, offering additional insights into operating performance and resource allocation [Definitions and Rationale](index=3&type=section&id=Definitions%20and%20Rationale) This section defines several non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted Net Income per Share, Free Cash Flow, and Normalized Free Cash Flow. It explains that these measures are provided to complement GAAP results, offering additional insights into operating performance, resource allocation, and ongoing operating trends, though they should not be considered substitutes for GAAP - Adjusted EBITDA is defined as net income (loss) adjusted for taxes, depreciation, amortization, stock-based compensation, interest, acquisition costs, contingent consideration, litigation/tax settlement, and restructuring costs[11](index=11&type=chunk) - Adjusted Net Income is defined as net income (loss) adjusted for amortization, stock-based compensation, acquisition costs, contingent consideration, litigation/tax settlement, restructuring costs, and impairment of investment, net of estimated taxes[11](index=11&type=chunk) - Free Cash Flow is defined as net cash provided by operating activities less capital expenditures and internal software development costs, while Normalized Free Cash Flow further adjusts for changes in operating assets and liabilities[11](index=11&type=chunk)[17](index=17&type=chunk) - These non-GAAP measures are considered relevant and useful for analyzing operating performance, internal planning, resource allocation, and evaluating operational strategies, and are widely used by investors and analysts in the industry[12](index=12&type=chunk)[13](index=13&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) - The company cannot provide a quantitative reconciliation for Adjusted EBITDA guidance to GAAP without unreasonable efforts due to high variability and low visibility of certain items[15](index=15&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) QuinStreet's financial statements reflect significant improvements in net income and cash flow for FY25, driven by strong revenue growth and effective cost management [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows an increase in total assets and stockholders' equity from June 30, 2024, to June 30, 2025, primarily driven by a significant increase in cash and cash equivalents. Total liabilities also increased during the period | Balance Sheet Item (in thousands) | June 30, 2025 | June 30, 2024 | YoY Change | | :-------------------------------- | :------------ | :------------ | :--------- | | Cash and cash equivalents | $101,078 | $50,488 | +100.2% | | Accounts receivable, net | $135,804 | $111,786 | +21.5% | | Total current assets | $245,526 | $169,087 | +45.2% | | Total assets | $431,107 | $368,546 | +17.0% | | Total current liabilities | $163,044 | $126,398 | +29.0% | | Total liabilities | $187,063 | $151,721 | +23.3% | | Total stockholders' equity | $244,044 | $216,825 | +12.6% | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) QuinStreet demonstrated strong operational improvement, moving from a net loss in Q4 and FY24 to net income in Q4 and FY25. This was driven by substantial revenue growth and improved gross profit margins, despite increases in operating expenses | Income Statement Item (in thousands) | Q4 FY25 | Q4 FY24 | YoY Change (Q4) | FY25 | FY24 | YoY Change (FY) | | :----------------------------------- | :----------- | :----------- | :-------------- | :----------- | :----------- | :-------------- | | Net revenue | $262,054 | $198,321 | +32.1% | $1,093,711 | $613,514 | +78.3% | | Gross profit | $27,850 | $17,433 | +59.8% | $110,871 | $46,246 | +139.7% | | Operating income (loss) | $3,876 | ($1,439) | N/A | $6,193 | ($28,065) | N/A | | Net income (loss) | $3,206 | ($2,164) | N/A | $4,707 | ($31,331) | N/A | | Diluted EPS | $0.06 | ($0.04) | N/A | $0.08 | ($0.57) | N/A | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company significantly increased cash generated from operating activities in both Q4 and FY25, leading to a substantial net increase in cash and cash equivalents for the full fiscal year, contrasting with a decrease in the prior year. Investing activities continued to use cash, while financing activities also resulted in a net cash outflow | Cash Flow Item (in thousands) | Q4 FY25 | Q4 FY24 | YoY Change (Q4) | FY25 | FY24 | YoY Change (FY) | | :---------------------------------------- | :----------- | :----------- | :-------------- | :----------- | :----------- | :-------------- | | Net cash provided by operating activities | $29,897 | $16,554 | +80.6% | $84,980 | $12,039 | +605.9% | | Net cash used in investing activities | ($3,056) | ($3,648) | -16.2% | ($11,443) | ($22,735) | -49.7% | | Net cash used in financing activities | ($7,611) | ($2,025) | +275.8% | ($22,996) | ($12,511) | +83.8% | | Net increase (decrease) in cash | $19,263 | $10,886 | +76.9% | $50,591 | ($23,189) | N/A | | Cash, cash equivalents at end of period | $101,094 | $50,503 | +100.2% | $101,094 | $50,503 | +100.2% | [Non-GAAP Reconciliations](index=10&type=section&id=Non-GAAP%20Reconciliations) This section provides reconciliations of GAAP net income to various non-GAAP measures, highlighting significant improvements in adjusted net income, adjusted EBITDA, and free cash flow for FY25 [Reconciliation of Net Income (Loss) to Adjusted Net Income](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20Net%20Income) QuinStreet's Adjusted Net Income and Adjusted Diluted Net Income per Share saw substantial year-over-year increases for both the fourth quarter and the full fiscal year 2025, reflecting the exclusion of certain non-cash and non-recurring items from GAAP net income | Metric (in thousands, except per share) | Q4 FY25 | Q4 FY24 | YoY Change (Q4) | FY25 | FY24 | YoY Change (FY) | | :-------------------------------------- | :----------- | :----------- | :-------------- | :----------- | :----------- | :-------------- | | Net income (loss) | $3,206 | ($2,164) | N/A | $4,707 | ($31,331) | N/A | | Adjusted net income | $14,676 | $6,541 | +124.4% | $51,440 | $6,303 | +716.1% | | Adjusted diluted net income per share | $0.25 | $0.11 | +127.3% | $0.88 | $0.11 | +700.0% | [Reconciliation of Net Income (Loss) to Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20EBITDA) Adjusted EBITDA experienced significant growth in both Q4 and FY25, more than doubling in the quarter and nearly quadrupling for the full year, indicating strong operational performance when excluding non-cash and certain non-recurring expenses | Metric (in thousands) | Q4 FY25 | Q4 FY24 | YoY Change (Q4) | FY25 | FY24 | YoY Change (FY) | | :-------------------- | :----------- | :----------- | :-------------- | :----------- | :----------- | :-------------- | | Net income (loss) | $3,206 | ($2,164) | N/A | $4,707 | ($31,331) | N/A | | Adjusted EBITDA | $22,134 | $11,030 | +100.7% | $81,263 | $20,365 | +299.0% | [Reconciliation of Cash Provided by Operating Activities to Free Cash Flow and Normalized Free Cash Flow](index=12&type=section&id=Reconciliation%20of%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow%20and%20Normalized%20Free%20Cash%20Flow) QuinStreet achieved positive Free Cash Flow and Normalized Free Cash Flow for both Q4 and FY25, with substantial year-over-year improvements, particularly for the full fiscal year, demonstrating enhanced cash-generating capacity | Metric (in thousands) | Q4 FY25 | Q4 FY24 | YoY Change (Q4) | FY25 | FY24 | YoY Change (FY) | | :---------------------------------------- | :----------- | :----------- | :-------------- | :----------- | :----------- | :-------------- | | Net cash provided by operating activities | $29,897 | $16,554 | +80.6% | $84,980 | $12,039 | +605.9% | | Free cash flow | $26,842 | $12,906 | +107.9% | $73,538 | ($4,686) | N/A | | Normalized free cash flow | $18,767 | $7,159 | +162.1% | $69,291 | $2,326 | +2877.3% | [Revenue Disaggregation](index=13&type=section&id=Revenue%20Disaggregation) QuinStreet's revenue growth in Q4 and FY25 was significantly driven by both Financial Services and Home Services segments, with Financial Services remaining the largest contributor [Revenue by Segment](index=13&type=section&id=Revenue%20by%20Segment) Both Financial Services and Home Services segments contributed significantly to QuinStreet's revenue growth in Q4 and FY25. Financial Services remained the largest segment and showed robust growth, while Home Services also delivered solid performance | Revenue Segment (in thousands) | Q4 FY25 | Q4 FY24 | YoY Change (Q4) | FY25 | FY24 | YoY Change (FY) | | :----------------------------- | :----------- | :----------- | :-------------- | :----------- | :----------- | :-------------- | | Financial Services | $186,608 | $136,870 | +36.3% | $817,157 | $392,579 | +108.1% | | Home Services | $71,696 | $59,309 | +20.9% | $261,794 | $211,944 | +23.5% | | Other Revenue | $3,750 | $2,142 | +75.1% | $14,760 | $8,991 | +64.2% | | Total net revenue | $262,054 | $198,321 | +32.1% | $1,093,711 | $613,514 | +78.3% | [Additional Information](index=1&type=section&id=Additional%20Information) This section provides important legal disclaimers regarding forward-looking statements, investor contact details, and information for accessing the financial results conference call [Legal Notice Regarding Forward-Looking Statements](index=5&type=section&id=Legal%20Notice%20Regarding%20Forward-Looking%20Statements) This section serves as a legal disclaimer, identifying forward-looking statements within the press release and outlining various risks and uncertainties that could cause actual results to differ materially from those projected. It also directs readers to SEC filings for more information - The press release contains forward-looking statements identified by words like 'estimate', 'will', 'believe', 'expect', 'intend', 'outlook', 'potential', 'promises' and similar expressions[19](index=19&type=chunk) - Actual results may differ materially due to factors such as client marketing spend, visitor conversion, data privacy risks, regulatory changes, competition, intellectual property rights, and counterparty risks[19](index=19&type=chunk) - More information on potential factors affecting the business and financial results can be found in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC[19](index=19&type=chunk) [Investor Relations Contact](index=5&type=section&id=Investor%20Relations%20Contact) Provides contact information for investor relations inquiries - Investor Contact: Robert Amparo, (347) 223-1682, ramparo@quinstreet.com[20](index=20&type=chunk) [Conference Call Details](index=1&type=section&id=Conference%20Call%20Details) Details for accessing the conference call and live webcast to discuss the financial results, including dial-in numbers and webcast link, along with replay information - A conference call and live webcast were scheduled for August 7, 2025, at 2:00 p.m. PT[8](index=8&type=chunk) - Domestic dial-in: +1 800-717-1738; International dial-in: +1 646-307-1865. Webcast available at http://investor.quinstreet.com[8](index=8&type=chunk) - A replay of the call is available by dialing +1 844-512-2921 (domestic) or +1 412-317-6671 (international) using passcode 1170966[8](index=8&type=chunk)

Group 1 - QuinStreet (QNST) shares have increased by 8.1% over the past four weeks, closing at $16.06, with a mean price target of $28.40 indicating a potential upside of 76.8% [1] - The mean estimate consists of five short-term price targets with a standard deviation of $5.90, where the lowest estimate of $19 suggests an 18.3% increase, and the highest estimate of $35 indicates a potential surge of 117.9% [2] - Analysts show a consensus that QNST will report better earnings than previously estimated, with a positive trend in earnings estimate revisions correlating with potential stock price increases [4][11] Group 2 - The Zacks Consensus Estimate for QNST has increased by 31.4% due to two estimates moving higher and one moving lower over the last 30 days [12] - QNST holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, suggesting a strong potential upside [13] - While price targets can be misleading, the direction indicated by the consensus price target may serve as a useful guide for potential price movements [10][13]

Group 1 - QuinStreet (QNST) closed at $15.88, with a 1.4% gain over the past four weeks, and a mean price target of $28.40 suggests a 78.8% upside potential [1] - The mean estimate includes five short-term price targets with a standard deviation of $5.90, indicating variability; the lowest estimate of $19 represents a 19.7% increase, while the highest target of $35 suggests a 120.4% surge [2] - Analysts show strong agreement on QNST's ability to report better earnings, with a positive trend in earnings estimate revisions correlating with potential stock upside [4][11] Group 2 - The Zacks Consensus Estimate for the current year has increased by 31.4% over the past month, with two estimates rising and one falling [12] - QNST holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating strong potential for near-term upside [13] - While consensus price targets may not be reliable for predicting exact gains, they can provide a directional guide for price movement [10][13]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company presents its unaudited condensed consolidated financial statements for the three and nine months ended March 31, 2025, showing significant revenue growth and a return to net income. Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $81,815 | $50,488 | | Total current assets | $228,384 | $169,087 | | Total assets | $417,235 | $368,546 | | Total current liabilities | $156,674 | $126,398 | | Total liabilities | $181,760 | $151,721 | | Total stockholders' equity | $235,475 | $216,825 | Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net revenue | $269,842 | $168,587 | $831,657 | $415,193 | | Gross profit | $27,862 | $14,311 | $83,021 | $28,813 | | Operating income (loss) | $4,912 | $(5,332) | $2,317 | $(26,626) | | Net income (loss) | $4,416 | $(7,048) | $1,501 | $(29,167) | | Diluted EPS | $0.08 | $(0.13) | $0.03 | $(0.53) | Condensed Consolidated Statements of Cash Flows (Nine Months Ended Mar 31, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $55,083 | $(4,517) | | Net cash used in investing activities | $(8,387) | $(19,086) | | Net cash used in financing activities | $(15,385) | $(10,485) | | Net increase (decrease) in cash | $31,328 | $(34,075) | | Cash at end of period | $81,831 | $39,617 | - The company operates as one reportable segment, as the chief operating decision maker reviews financial information on a consolidated basis[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's strong performance, highlighting a significant 100% YoY revenue increase for the nine-month period, driven by a 147% surge in the financial services vertical, particularly the insurance business. [Management Overview](index=29&type=section&id=Management%20Overview) QuinStreet is a leader in performance marketplaces for financial and home services, focusing on sustainable revenue growth and long-term market opportunity. - The company's primary financial objective is to create sustainable revenue growth at target profitability levels, not to maximize short-term profits[83](index=83&type=chunk) Revenue Contribution by Vertical (Three and Nine Months Ended Mar 31, 2025) | Vertical | % of Net Revenue (Q3 2025) | % of Net Revenue (9M 2025) | | :--- | :--- | :--- | | Financial Services | 74% | 76% | | Home Services | 24% | 23% | | Other | 2% | 1% | - A single client in the financial services vertical accounted for **27% of net revenue** for the three months ended March 31, 2025. For the nine-month period, two clients accounted for **23% and 13% of net revenue**, respectively[86](index=86&type=chunk) - The auto insurance industry, a key part of the financial services vertical, began to recover in calendar 2024 due to rate increases and optimizations, leading to increased advertising spending and a return to net income for the company starting in the quarter ended March 31, 2025[88](index=88&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) For the third quarter of fiscal 2025, net revenue grew 60% year-over-year to $269.8 million, driven by a 78% increase in the Financial Services vertical. Net Revenue by Vertical (in thousands) | Vertical | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :--- | :--- | :--- | :--- | :--- | | Financial Services | $199,724 | $112,250 | $630,549 | $255,708 | | Home Services | $65,448 | $53,908 | $190,098 | $152,636 | | Total Net Revenue | $269,842 | $168,587 | $831,657 | $415,193 | - The increase in gross profit margin for both the three and nine-month periods was attributed to a decrease in personnel cost and depreciation as a percentage of net revenue, partially offset by a higher revenue mix from the financial services vertical, which has a higher media cost[116](index=116&type=chunk)[117](index=117&type=chunk) - General and administrative expenses for the nine months ended March 31, 2025, increased by **$17.3 million (75%) YoY**, primarily due to a **$12.4 million adjustment** to the fair value of contingent consideration related to an acquisition and a **$1.9 million increase** in stock-based compensation[124](index=124&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company's principal liquidity source was $81.8 million in cash and cash equivalents, with strong cash from operations. - As of March 31, 2025, principal sources of liquidity consisted of cash and cash equivalents of **$81.8 million**[127](index=127&type=chunk) Cash Flow Summary (Nine Months Ended Mar 31, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $55,083 | $(4,517) | | Net cash used in investing activities | $(8,387) | $(19,086) | | Net cash used in financing activities | $(15,385) | $(10,485) | - The **$55.1 million** in cash from operations for the nine months ended March 31, 2025, was primarily driven by net income of **$1.5 million** and non-cash adjustments of **$57.4 million** (including **$24.5 million stock compensation** and **$12.4 million change in fair value of contingent consideration**), offset by a **$3.8 million use of cash** for working capital[131](index=131&type=chunk)[132](index=132&type=chunk) - As of March 31, 2025, approximately **$16.8 million** remained available for stock repurchases under the authorized program[129](index=129&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure stems from interest rate fluctuations on its cash and cash equivalents, which management deems not material. - The company's main market risk is interest rate risk on its cash and cash equivalents, which are held in money market funds with maturities of 90 days or less[142](index=142&type=chunk)[143](index=143&type=chunk) - Management believes the exposure to interest rate changes is not material, and a hypothetical **1% decline** in interest rates would not have a material effect on the financial statements[143](index=143&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting. - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[144](index=144&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[145](index=145&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business, none of which are expected to have a material adverse effect on its financial position. - The company is involved in legal proceedings from time to time in the ordinary course of business[147](index=147&type=chunk) - Management does not believe that any pending legal proceedings will have a material adverse effect on the company's financial position, results of operations, and cash flows[147](index=147&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company outlines significant risks including client concentration, reliance on third-party media, data privacy concerns, regulatory changes, and the need to adapt to new technologies like AI. - A substantial portion of revenue is generated from a limited number of clients. One client accounted for **27% of net revenue** for the three months ended March 31, 2025, and two clients accounted for **23% and 13%** for the nine-month period[156](index=156&type=chunk) - The company is exposed to significant data privacy and security risks, including cyber-attacks and ransomware. A failure to protect personal information could lead to significant expenses, regulatory action, and reputational damage[160](index=160&type=chunk)[161](index=161&type=chunk) - The business is highly dependent on internet search companies and third-party media partners. Changes in search engine algorithms or the loss of key media sources could significantly harm revenue[158](index=158&type=chunk)[166](index=166&type=chunk) - The business is subject to a complex and evolving regulatory environment, including the TCPA for telemarketing, state privacy laws (e.g., CCPA), and new FCC rules, which could increase costs and legal risks[173](index=173&type=chunk)[174](index=174&type=chunk)[178](index=178&type=chunk) - Failure to adapt to rapidly changing technologies, including the successful implementation and management of Artificial Intelligence (AIML), could render services obsolete and harm the company's competitive position[189](index=189&type=chunk)[190](index=190&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=84&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales or purchases of its equity securities during the quarter ended March 31, 2025. - There were no unregistered sales of equity securities during the period[266](index=266&type=chunk) - The company made no purchases of its own equity securities during the period[267](index=267&type=chunk) [Defaults Upon Senior Securities](index=84&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported that there were no defaults upon its senior securities during the reporting period. - None[268](index=268&type=chunk) [Mine Safety Disclosures](index=84&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business. - Not Applicable[269](index=269&type=chunk) [Other Information](index=84&type=section&id=Item%205.%20Other%20Information) The company disclosed that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the third quarter of fiscal 2025. - During the three months ended March 31, 2025, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement[270](index=270&type=chunk) [Exhibits](index=85&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL financial data files. - The filing includes CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906[272](index=272&type=chunk) - The filing includes Inline XBRL Instance Document, Taxonomy Extension Schema, and Cover Page Interactive Data File[272](index=272&type=chunk)

Core Viewpoint - QuinStreet, Inc. reported its fiscal third quarter 2025 financial results during a conference call, highlighting key financial metrics and future outlook [1][2]. Financial Results - The company discussed both GAAP and non-GAAP financial measures, with a reconciliation provided in the earnings press release available on their Investor Relations website [4]. Conference Call Participants - The conference call included key participants such as the CEO Doug Valenti and CFO Greg Wong, along with analysts from various research firms [1][2]. Forward-Looking Statements - The discussion included forward-looking statements that involve risks and uncertainties, with a reminder that actual results may differ from projections [3].

Company Performance - QuinStreet reported quarterly earnings of $0.21 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.06 per share a year ago [1] - The company posted revenues of $269.84 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.02%, and up from $168.59 million year-over-year [2] - QuinStreet has surpassed consensus revenue estimates three times over the last four quarters [2] Stock Movement and Outlook - QuinStreet shares have declined approximately 23.1% since the beginning of the year, compared to a 4.7% decline in the S&P 500 [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $0.25 on revenues of $253.22 million, and for the current fiscal year, it is $0.88 on revenues of $1.08 billion [7] Industry Context - The Internet - Delivery Services industry, to which QuinStreet belongs, is currently ranked in the bottom 19% of over 250 Zacks industries, indicating potential challenges [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact QuinStreet's performance [5][6]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 60% year over year, reaching $269.8 million in fiscal Q3 [5][9] - Adjusted EBITDA increased by 145%, amounting to $19.4 million [5][9] - Adjusted net income was $12.4 million, translating to $0.21 per share [9] Business Line Data and Key Metrics Changes - Financial services client vertical revenue grew 78% year over year, contributing $199.7 million, with auto insurance specifically up 165% [5][10] - Home services revenue increased by 21% year over year, achieving a new quarterly record of $65.4 million [5][10] - Other revenue accounted for $4.7 million [10] Market Data and Key Metrics Changes - The company ended the quarter with over $80 million in cash and no bank debt, indicating a strengthened financial position [6][10] - The outlook for full fiscal year revenue is projected between $1.065 billion and $1.105 billion, implying at least 18% growth year over year in fiscal Q4 [7][11] Company Strategy and Development Direction - The company aims to maintain double-digit year-over-year revenue and profit growth in both the short and long term [6][7] - Focus areas include expense and cash flow management, margin expansion, and maintaining a strong balance sheet [6][8] - The company is investing in new product, media, and client expansion initiatives to fuel future performance [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to perform well regardless of macroeconomic conditions, emphasizing strong market opportunities and competitive advantages [12] - There is a cautious outlook regarding tariffs and their potential impact on client spending, leading to a wider range in fiscal Q4 guidance [7][11] Other Important Information - The company is adapting its media strategy to focus on proprietary media, which has shown higher margins compared to third-party sources [20][22] - New product initiatives are expected to contribute positively to margins, particularly in the personal loans and home services sectors [24][70] Q&A Session Summary Question: Insights into conversations with auto carriers regarding profitability and tariffs - Management noted that auto carriers are currently in a stable spending mode, with no material reductions in spending observed due to tariffs [16][18] Question: Approach to margin expansion versus investments - The company is focusing on top-line leverage and new media initiatives to sustain margin improvements while continuing to invest in growth [19][20] Question: Impact of tariffs on home services - Management indicated that while some clients are concerned about tariffs, there have been no significant reductions in spending [31][32] Question: Confidence in growth for fiscal year 2026 - Management expressed confidence in maintaining double-digit growth, despite uncertainties related to tariffs [45] Question: Performance of auto insurance business sequentially - The auto insurance business saw a sequential decline due to an exceptionally strong prior quarter, but overall spending remains stable [50][66] Question: Trends across different auto insurance carriers - The company has seen a broader engagement with more clients spending significant budgets online, indicating a positive trend in the market [58][60]

[Financial Highlights and Outlook](index=1&type=section&id=Financial%20Highlights%20and%20Outlook) This section provides an overview of QuinStreet's strong Q3 FY2025 financial performance and its maintained full fiscal year 2025 outlook [Q3 FY2025 Performance Summary](index=1&type=section&id=Q3%20FY2025%20Performance%20Summary) QuinStreet achieved strong Q3 FY2025 results with 60% revenue growth and 145% adjusted EBITDA growth, driven by Financial Services and Home Services segments Q3 FY2025 Key Financial Metrics | Metric | Q3 FY2025 | YoY Change | | :--- | :--- | :--- | | Revenue | $269.8 million | +60% | | GAAP Income | $4.4 million | N/A (from loss) | | GAAP Diluted EPS | $0.08 | N/A (from loss) | | Adjusted Net Income | $12.4 million | +260% | | Adjusted Diluted EPS | $0.21 | +250% | | Adjusted EBITDA | $19.4 million | +145% | | Operating Cash Flow | $30.1 million | +632% | Q3 FY2025 Revenue Growth by Vertical (YoY) | Client Vertical | YoY Growth | | :--- | :--- | | **Total Revenue** | **+60%** | | Financial Services | +78% | | - Auto Insurance | +165% | | Home Services | +21% | - The company strengthened its balance sheet, ending the quarter with **$81.8 million** in cash and cash equivalents and no bank debt[5](index=5&type=chunk)[6](index=6&type=chunk)[9](index=9&type=chunk) [Fiscal Year 2025 Outlook](index=1&type=section&id=Fiscal%20Year%202025%20Outlook) The company maintains its FY2025 outlook, projecting revenue between $1.065 billion and $1.105 billion and adjusted EBITDA between $80 million and $85 million Full Fiscal Year 2025 Outlook | Metric | Outlook Range | | :--- | :--- | | Revenue | $1.065 billion - $1.105 billion | | Adjusted EBITDA | $80 million - $85 million | - The outlook implies significant Q4 year-over-year growth: - Revenue growth of at least **18%** - Adjusted EBITDA growth of at least **89%**[6](index=6&type=chunk) - The outlook range for Q4 is wider than usual to account for risks and potential volatility related to tariffs and client spending[6](index=6&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents the company's condensed consolidated balance sheets, statements of operations, and cash flows for the reported periods [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to $417.2 million, driven by higher cash and accounts receivable, with total equity rising to $235.5 million Balance Sheet Summary (in thousands) | Account | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | **$228,384** | **$169,087** | | Cash and cash equivalents | $81,815 | $50,488 | | Accounts receivable, net | $137,241 | $111,786 | | **Total Assets** | **$417,235** | **$368,546** | | **Total Liabilities** | **$181,760** | **$151,721** | | **Total Stockholders' Equity** | **$235,475** | **$216,825** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q3 FY2025, net revenue increased 60% to $269.8 million, resulting in an operating income of $4.9 million and net income of $4.4 million, reversing prior-year losses Statement of Operations Summary - Three Months Ended March 31 (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net revenue | $269,842 | $168,587 | | Gross profit | $27,862 | $14,311 | | Operating income (loss) | $4,912 | $(5,332) | | Net income (loss) | $4,416 | $(7,048) | | Diluted net income (loss) per share | $0.08 | $(0.13) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q3 FY2025, the company generated $30.1 million in operating cash flow, leading to a net increase in cash of $24.0 million and a quarter-end balance of $81.8 million Statement of Cash Flows Summary - Three Months Ended March 31 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $30,111 | $4,113 | | Net cash used in investing activities | $(3,013) | $(9,709) | | Net cash used in financing activities | $(3,110) | $(320) | | Net increase (decrease) in cash | $23,981 | $(5,918) | | Cash at end of period | $81,831 | $39,617 | [Non-GAAP Financial Measures & Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section explains the company's use of non-GAAP financial measures and provides reconciliations to their most directly comparable GAAP counterparts [Explanation of Non-GAAP Measures](index=3&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses non-GAAP measures like adjusted EBITDA, adjusted net income, and free cash flow to provide insights into core operational performance by excluding certain non-recurring items - The company provides non-GAAP measures like **adjusted EBITDA**, **adjusted net income**, and **free cash flow** as a complement to **GAAP results**[10](index=10&type=chunk) - These measures are used to analyze operating performance, for internal planning, and to evaluate operational strategies, as they exclude items not indicative of core activities like **stock-based compensation**, **amortization**, and certain **non-recurring charges**[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk) - A **reconciliation** of non-GAAP measures to the most directly comparable GAAP measures is provided, though a forward-looking reconciliation for guidance is not provided due to high variability of certain items[14](index=14&type=chunk)[17](index=17&type=chunk) [Reconciliation of Net Income (Loss) to Adjusted Net Income](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20%28Loss%29%20to%20Adjusted%20Net%20Income) GAAP net income of $4.4 million for Q3 FY2025 was reconciled to an adjusted net income of $12.4 million, primarily by adding back non-cash expenses Reconciliation to Adjusted Net Income - Three Months Ended March 31 (in thousands) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | **Net income (loss)** | **$4,416** | **$(7,048)** | | Amortization of intangible assets | $2,305 | $2,678 | | Stock-based compensation | $7,073 | $6,734 | | Other adjustments | $1,455 | $2,307 | | Tax impact of non-GAAP items | $(2,894) | $(1,235) | | **Adjusted net income** | **$12,355** | **$3,436** | | **Adjusted diluted net income per share** | **$0.21** | **$0.06** | [Reconciliation of Net Income (Loss) to Adjusted EBITDA](index=11&type=section&id=Reconciliation%20of%20Net%20Income%20%28Loss%29%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q3 FY2025 significantly increased to $19.4 million, reconciled from GAAP net income by adding back non-cash and non-operating expenses Reconciliation to Adjusted EBITDA - Three Months Ended March 31 (in thousands) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | **Net income (loss)** | **$4,416** | **$(7,048)** | | Interest and other expense, net | $19 | $2,272 | | (Benefit from) provision for income taxes | $477 | $(556) | | Depreciation and amortization | $5,969 | $6,225 | | Stock-based compensation | $7,073 | $6,734 | | Other adjustments | $1,455 | $307 | | **Adjusted EBITDA** | **$19,409** | **$7,934** | [Reconciliation to Free Cash Flow](index=12&type=section&id=Reconciliation%20to%20Free%20Cash%20Flow) The company generated $27.1 million in free cash flow for Q3 FY2025, a significant improvement, derived from $30.1 million in operating cash flow less capital expenditures and software development costs Reconciliation to Free Cash Flow - Three Months Ended March 31 (in thousands) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $30,111 | $4,113 | | Capital expenditures | $(639) | $(1,211) | | Internal software development costs | $(2,374) | $(2,488) | | **Free cash flow** | **$27,098** | **$414** | [Revenue Details](index=13&type=section&id=Revenue%20Details) This section provides a detailed disaggregation of the company's net revenue by client vertical [Disaggregation of Revenue](index=13&type=section&id=Disaggregation%20of%20Revenue) Total net revenue for Q3 FY2025 was $269.8 million, primarily driven by strong growth in the Financial Services and Home Services segments Disaggregation of Revenue - Three Months Ended March 31 (in thousands) | Segment | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Financial Services | $199,724 | $112,250 | +78% | | Home Services | $65,448 | $53,908 | +21% | | Other Revenue | $4,670 | $2,429 | +92% | | **Total net revenue** | **$269,842** | **$168,587** | **+60%** |

Company: QuinStreet (QNST) - QuinStreet shares increased by 8.6% to close at $15.97, following a broader market rally after President Trump's announcement regarding tariffs [1] - The stock had previously experienced a 15.3% loss over the past four weeks [1] - The upcoming quarterly earnings are expected to be $0.21 per share, reflecting a year-over-year increase of 250%, with revenues projected at $269.9 million, up 60.1% from the previous year [2] - The consensus EPS estimate for QuinStreet has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [3] Industry: Internet - Delivery Services - QuinStreet is part of the Zacks Internet - Delivery Services industry, which includes other companies like MakeMyTrip [3] - MakeMyTrip's consensus EPS estimate is $0.42, showing a year-over-year change of 10.5%, but it currently holds a Zacks Rank of 4 (Sell) [4]