QuinStreet(QNST) - 2026 Q2 - Quarterly Report

Financial Performance - Net revenue increased by $5.2 million, or 2%, for the three months ended December 31, 2025, compared to the same period in 2024, driven by an $8.4 million increase in home services revenue[109]. - Gross profit for the three months ended December 31, 2025, was $27.7 million, representing a gross profit margin of 10%, compared to 9% in the same period of 2024[108]. - Operating expenses decreased by $1.7 million, or 6%, for the three months ended December 31, 2025, compared to the same period in 2024, primarily due to lower general and administrative expenses[113]. - The company recorded a benefit from income taxes of $48.9 million for the three months ended December 31, 2025, compared to $45 thousand in the same period of 2024[119]. - The net income for the six months ended December 31, 2025, was $54.8 million, with a net increase in cash from changes in working capital of $1.9 million[129]. Revenue Sources - Financial services client vertical represented 75% and 74% of net revenue for the three and six months ended December 31, 2025, respectively[82]. - One client in the financial services vertical accounted for 22% of net revenue for the three months ended December 31, 2025[83]. - Revenue from the home services client vertical is subject to seasonal trends, typically rising in spring and summer[90]. - Revenue from the home services client vertical increased by $18.4 million, or 14%, for the six months ended December 31, 2025, compared to the same period in 2024[110]. Costs and Expenses - Cost of revenue primarily consists of media and marketing costs, personnel costs, and amortization of intangible assets[95]. - Cost of revenue increased by $4.3 million, or 2%, for the three months ended December 31, 2025, primarily due to increased media and marketing costs[111]. - General and administrative expenses decreased by $8.7 million, or 28%, for the six months ended December 31, 2025, compared to the same period in 2024[117]. - Operating expenses are classified into product development, sales and marketing, and general and administrative categories[96]. Strategic Acquisitions - The company completed several strategic acquisitions, including Homebuddy in January 2026 and BestCompany in fiscal year 2024[87]. - The company completed the acquisition of HomeBuddy for $115.0 million in cash, with an obligation for an additional $75.0 million in post-closing payments[123]. Financing and Cash Flow - Cash and cash equivalents as of December 31, 2025, totaled $107.0 million, with an additional $150 million revolving credit facility established in January 2026[122]. - The company entered into a new $150 million revolving credit facility in January 2026[139]. - As of January 31, 2026, the company had borrowings of $70.0 million under its revolving credit facility[143]. - Net cash provided by operating activities was $41.2 million for the six months ended December 31, 2025, compared to $25.0 million for the same period in 2024, representing a 64.8% increase[128]. - Cash used in investing activities was $7.6 million for the six months ended December 31, 2025, compared to $5.4 million for the same period in 2024[131]. - Cash used in financing activities was $27.7 million for the six months ended December 31, 2025, compared to $12.3 million for the same period in 2024[133]. Regulatory and Market Challenges - The business is challenged by limited availability of high-quality media and increased competition, impacting revenue generation[84]. - Regulatory changes, such as amendments to the Telephone Consumer Protection Act, may impact revenue and profitability[93]. Shareholder Activities - The company repurchased 1,121,745 shares of common stock at an average price of $14.94 per share, totaling $16.8 million during the six months ended December 31, 2025[124]. - As of December 31, 2025, the company fully utilized the $40.0 million authorized for repurchase under the 2022 Stock Repurchase Program[124]. Other Information - The company has no outstanding borrowing agreements as of December 31, 2025, but may incur interest expenses related to future acquisitions[99]. - The company did not have any material relationships with unconsolidated entities or financial partnerships during the periods presented[136]. - There were no material changes in the company's contractual obligations as of December 31, 2025[138]. - Interest income for the three months ended December 31, 2025, was $87 thousand, while interest expense was $(70) thousand[107].