QuinStreet(QNST)2025-02-07 21:38Revenue Composition - Financial services client vertical represented 78% and 77% of net revenue for the three and six months ended December 31, 2024, compared to 58% for both periods in 2023[84]. - Home services client vertical accounted for 21% and 22% of net revenue for the three and six months ended December 31, 2024, down from 40% for both periods in 2023[84]. - Two clients in the financial services vertical contributed 23% and 18% of net revenue for the three months ended December 31, 2024[85]. - Revenue from the insurance business increased by 159.9 million, or 130%, for the three months ended December 31, 2024, compared to the same period in 2023, driven by a 208% increase in revenue from the financial services client vertical[112]. - Gross profit for the three months ended December 31, 2024, was 6.9 million in the same period of 2023[111]. - Gross profit margin improved to 9% for the three months ended December 31, 2024, compared to 6% for the same period in 2023[115]. - Cash provided by operating activities for the six months ended December 31, 2024, was 8.6 million for the same period in 2023[130]. - The net loss for the six months ended December 31, 2024, was 42.8 million[131]. Costs and Expenses - Cost of revenue increased by 28.1 million, an increase of 54% compared to 6.7 million, or 88%, for the three months ended December 31, 2024, primarily due to an adjustment to the fair value of contingent consideration[122]. Strategic Initiatives - The company completed strategic acquisitions, including BestCompany and AquaVida in fiscal year 2024, to enhance its market position[89]. - The business model relies on delivering qualified inquiries such as clicks, leads, calls, applications, or customers, which are essential for generating revenue[83]. - The company aims for sustainable revenue growth while maintaining target profitability levels, rather than maximizing short-term profits[82]. Market and Regulatory Environment - Revenue from the auto insurance industry began to increase in calendar 2024 due to rate increases and product optimizations, positively impacting overall revenue[87]. - Seasonal fluctuations affect revenue, particularly with lower media availability during the holiday period and increased demand for home services in spring and summer[93][94]. - The company faces challenges in acquiring high-quality media due to increased competition and changes in search engine algorithms, prompting strategic partnerships and acquisitions[86][90]. - Regulatory changes, such as amendments to the Telephone Consumer Protection Act, may impact revenue and profitability due to their effects on client operations[97]. Cash and Financing - Cash and cash equivalents as of December 31, 2024, were 16.8 million remaining available for stock repurchases as of December 31, 2024, from a previously authorized program[128]. - Cash used in investing activities was 9.4 million in the same period of 2023[133]. - Cash used in financing activities was 10.2 million for the same period in 2023[135]. - Cash used in financing activities in 2024 included 40.4 million, attributed to higher revenue levels[131]. - The company did not have any material off-balance sheet arrangements during the periods presented[138]. - There have been no material changes in the company's contractual obligations as of June 30, 2024[140]. - The company is primarily exposed to interest rate risk, but believes it does not have material exposure due to the short-term nature of its investments[143].