qnst-10q_20200331.htm
false 2020 Q3 0001117297 --06-30 Large Accelerated Filer 0 0.00 0 us-gaap:OtherAssetsNoncurrent us-gaap:OtherAssetsNoncurrent P3Y P3Y P4Y P12Y P3Y6M P4Y4M24D P4Y3M18D P4Y3M18D 0 0 0001117297 2019-07-01 2020-03-31 xbrli:shares 0001117297 2020-05-06 iso4217:USD 0001117297 2020-03-31 0001117297 2019-06-30 iso4217:USD xbrli:shares 0001117297 2020-01-01 2020-03-31 0001117297 2019-01-01 2019-03-31 0001117297 2018-07-01 2019-03-31 0001117297 us-gaap:CostOfSalesMember 2020-01-01 2020-03-31 0001117297 us-gaap:CostOfSalesMember 2019-01-01 2019-03-31 0001117297 us-gaap:CostOfSalesMember 2019-07-01 2020-03-31 0001117297 us-gaap:CostOfSalesMember 2018-07-01 2019-03-31 0001117297 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-03-31 0001117297 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-03-31 0001117297 us-gaap:ResearchAndDevelopmentExpenseMember 2019-07-01 2020-03-31 0001117297 us-gaap:ResearchAndDevelopmentExpenseMember 2018-07-01 2019-03-31 0001117297 us-gaap:SellingAndMarketingExpenseMember 2020-01-01 2020-03-31 0001117297 us-gaap:SellingAndMarketingExpenseMember 2019-01-01 2019-03-31 0001117297 us-gaap:SellingAndMarketingExpenseMember 2019-07-01 2020-03-31 0001117297 us-gaap:SellingAndMarketingExpenseMember 2018-07-01 2019-03-31 0001117297 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-03-31 0001117297 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-03-31 0001117297 us-gaap:GeneralAndAdministrativeExpenseMember 2019-07-01 2020-03-31 0001117297 us-gaap:GeneralAndAdministrativeExpenseMember 2018-07-01 2019-03-31 0001117297 us-gaap:CommonStockMember 2019-12-31 0001117297 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001117297 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001117297 us-gaap:RetainedEarningsMember 2019-12-31 0001117297 2019-12-31 0001117297 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001117297 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001117297 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001117297 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001117297 us-gaap:CommonStockMember 2020-03-31 0001117297 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001117297 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001117297 us-gaap:RetainedEarningsMember 2020-03-31 0001117297 us-gaap:CommonStockMember 2018-12-31 0001117297 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001117297 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001117297 us-gaap:RetainedEarningsMember 2018-12-31 0001117297 2018-12-31 0001117297 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001117297 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001117297 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001117297 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001117297 us-gaap:CommonStockMember 2019-03-31 0001117297 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001117297 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001117297 us-gaap:RetainedEarningsMember 2019-03-31 0001117297 2019-03-31 0001117297 us-gaap:CommonStockMember 2019-06-30 0001117297 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001117297 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001117297 us-gaap:RetainedEarningsMember 2019-06-30 0001117297 us-gaap:CommonStockMember 2019-07-01 2020-03-31 0001117297 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2020-03-31 0001117297 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-01 2020-03-31 0001117297 us-gaap:RetainedEarningsMember 2019-07-01 2020-03-31 0001117297 us-gaap:CommonStockMember 2018-06-30 0001117297 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001117297 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0001117297 us-gaap:RetainedEarningsMember 2018-06-30 0001117297 2018-06-30 0001117297 us-gaap:CommonStockMember 2018-07-01 2019-03-31 0001117297 us-gaap:AdditionalPaidInCapitalMember 2018-07-01 2019-03-31 0001117297 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-07-01 2019-03-31 0001117297 us-gaap:RetainedEarningsMember 2018-07-01 2019-03-31 0001117297 us-gaap:EmployeeStockOptionMember 2019-07-01 2020-03-31 qnst:Client 0001117297 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2020-01-01 2020-03-31 0001117297 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-07-01 2020-03-31 0001117297 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-03-31 0001117297 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2018-07-01 2019-03-31 xbrli:pure 0001117297 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember qnst:ClientTwoMember 2018-07-01 2019-06-30 0001117297 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember qnst:ClientTwoMember 2020-01-01 2020-03-31 0001117297 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember qnst:ClientTwoMember 2018-07-01 2019-03-31 0001117297 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember qnst:ClientTwoMember 2019-07-01 2020-03-31 0001117297 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2018-07-01 2019-06-30 0001117297 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2019-07-01 2020-03-31 0001117297 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2018-07-01 2019-03-31 0001117297 2019-07-01 0001117297 us-gaap:FinancialServiceMember 2020-01-01 2020-03-31 0001117297 us-gaap:FinancialServiceMember 2019-01-01 2019-03-31 0001117297 us-gaap:FinancialServiceMember 2019-07-01 2020-03-31 0001117297 us-gaap:FinancialServiceMember 2018-07-01 2019-03-31 0001117297 qnst:EducationServiceMember 2020-01-01 2020-03-31 0001117297 qnst:EducationServiceMember 2019-01-01 2019-03-31 0001117297 qnst:EducationServiceMember 2019-07-01 2020-03-31 0001117297 qnst:EducationServiceMember 2018-07-01 2019-03-31 0001117297 us-gaap:ServiceOtherMember 2020-01-01 2020-03-31 0001117297 us-gaap:ServiceOtherMember 2019-01-01 2019-03-31 0001117297 us-gaap:ServiceOtherMember 2019-07-01 2020-03-31 0001117297 us-gaap:ServiceOtherMember 2018-07-01 2019-03-31 0001117297 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-03-31 0001117297 us-gaap:EmployeeStockOptionMember 2019-01-01 2019-03-31 0001117297 us-gaap:EmployeeStockOptionMember 2018-07-01 2019-03-31 0001117297 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-03-31 0001117297 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-03-31 0001117297 us-gaap:RestrictedStockUnitsRSUMember 2019-07-01 2020-03-31 0001117297 us-gaap:RestrictedStockUnitsRSUMember 2018-07-01 2019-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:MoneyMarketFundsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:MoneyMarketFundsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member us-gaap:MoneyMarketFundsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member us-gaap:MoneyMarketFundsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member us-gaap:MoneyMarketFundsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MoneyMarketFundsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member qnst:PostClosingPaymentsRelatedToAcquisitionsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member qnst:PostClosingPaymentsRelatedToAcquisitionsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member qnst:PostClosingPaymentsRelatedToAcquisitionsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember qnst:PostClosingPaymentsRelatedToAcquisitionsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member qnst:PostClosingPaymentsRelatedToAcquisitionsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member qnst:PostClosingPaymentsRelatedToAcquisitionsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member qnst:PostClosingPaymentsRelatedToAcquisitionsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember qnst:PostClosingPaymentsRelatedToAcquisitionsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member qnst:ContingentConsiderationRelatedToAcquisitionsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member qnst:ContingentConsiderationRelatedToAcquisitionsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member qnst:ContingentConsiderationRelatedToAcquisitionsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember qnst:ContingentConsiderationRelatedToAcquisitionsMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member qnst:ContingentConsiderationRelatedToAcquisitionsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member qnst:ContingentConsiderationRelatedToAcquisitionsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member qnst:ContingentConsiderationRelatedToAcquisitionsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember qnst:ContingentConsiderationRelatedToAcquisitionsMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherCurrentLiabilitiesMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherCurrentLiabilitiesMember 2019-06-30 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherNoncurrentLiabilitiesMember 2020-03-31 0001117297 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherNoncurrentLiabilitiesMember 2019-06-30 0001117297 qnst:PartnershipAgreementMember 2015-07-01 2016-06-30 0001117297 qnst:PartnershipAgreementMember 2020-03-31 0001117297 qnst:PartnershipAgreementMember 2019-06-30 0001117297 qnst:PartnershipAgreementMember 2020-01-01 2020-03-31 0001117297 qnst:PartnershipAgreementMember 2019-07-01 2020-03-31 0001117297 qnst:PartnershipAgreementMember 2019-01-01 2019-03-31 0001117297 qnst:PartnershipAgreementMember 2018-07-01 2019-03-31 0001117297 2020-02-14 2020-02-14 0001117297 us-gaap:NotesReceivableMember 2020-02-14 2020-02-14 0001117297 us-gaap:OtherOperatingIncomeExpenseMember 2020-01-01 2020-03-31 0001117297 us-gaap:OtherOperatingIncomeExpenseMember 2019-07-01 2020-03-31 0001117297 qnst:QuinStreetBrasilOnlineMarketingMidiaLtdaQSBAndVEMMLLCVEMMMember qnst:EuroDemandDoBrasilServicosDeGeracaoDeLeadsLtdaEDBMember 2019-07-01 2020-03-31 0001117297 qnst:AmOneCorporationMember 2018-10-01 2018-10-01 0001117297 qnst:CloudControlMediaLLCMember 2019-04-15 2019-04-15 0001117297 qnst:MyBankTrackerComLLCMember 2019-05-14 2019-05-14 0001117297 qnst:AmOneCorporationMember us-gaap:CustomerRelationshipsMember 2018-10-01 0001117297 qnst:CloudControlMediaLLCMember us-gaap:CustomerRelationshipsMember 2019-04-15 0001117297 qnst:MyBankTrackerComLLCMember us-gaap:CustomerRelationshipsMember 2019-05-14 0001117297 qnst:AmOneCorporationMember qnst:WebsiteTradeDomainNamesMember 2018-10-01 0001117297 qnst:CloudControlMediaLLCMember qnst:WebsiteTradeDomainNamesMember 2019-04-15 0001117297 qnst:MyBankTrackerComLLCMember qnst:WebsiteTradeDomainNamesMember 2019-05-14 0001117297 qnst:AmOneCorporationMember qnst:AcquiredTechnologyAndOthersMember 2018-10-01 0001117297 qnst:CloudControlMediaLLCMember qnst:AcquiredTechnologyAndOthersMember 2019-04-15 0001117297 qnst:MyBankTrackerComLLCMember qnst:AcquiredTechnologyAndOthersMember 2019-05-14 0001117297 qnst:AmOneCorporationMember qnst:NetAssetsMember 2018-10-01 0001117297 qnst:CloudControlMediaLLCMember qnst:NetAssetsMember 2019-04-15 0001117297 qnst:MyBankTrackerComLLCMember qnst:NetAssetsMember 2019-05-14 0001117297 qnst:AmOneCorporationMember 2018-10-01 0001117297 qnst:CloudControlMediaLLCMember 2019-04-15 0001117297 qnst:MyBankTrackerComLLCMember 2019-05-14 0001117297 qnst:AmOneCorporationMember us-gaap:CustomerRelationshipsMember 2018-10-01 2018-10-01 0001117297 qnst:CloudControlMediaLLCMember us-gaap:CustomerRelationshipsMember srt:MinimumMember 2019-04-15 2019-04-15 0001117297 qnst:MyBankTrackerComLLCMember us-gaap:CustomerRelationshipsMember srt:MinimumMember 2019-05-14 2019-05-14 0001117297 qnst:CloudControlMediaLLCMember us-gaap:CustomerRelationshipsMember srt:MaximumMember 2019-04-15 2019-04-15 0001117297 qnst:MyBankTrackerComLLCMember us-gaap:CustomerRelationshipsMember srt:MaximumMember 2019-05-14 2019-05-14 0001117297 qnst:AmOneCorporationMember qnst:WebsiteTradeDomainNamesMember 2018-10-01 2018-10-01 0001117297 qnst:CloudControlMediaLLCMember qnst:WebsiteTradeDomainNamesMember 2019-04-15 2019-04-15 0001117297 qnst:MyBankTrackerComLLCMember qnst:WebsiteTradeDomainNamesMember 2019-05-14 2019-05-14 0001117297 qnst:AmOneCorporationMember qnst:AcquiredTechnologyAndOthersMember 2018-10-01 2018-10-01 0001117297 qnst:AmOneCorporationMember 2019-01-01 2019-03-31 0001117297 qnst:AmOneCorporationMember 2018-07-01 2019-03-31 0001117297 us-gaap:AcquisitionRelatedCostsMember qnst:AmOneCorporationCloudControlMediaLLCAndMyBankTrackeRComLLCMember srt:ProFormaMember 2018-07-01 2019-03-31 0001117297 us-gaap:CustomerRelationshipsMember 2020-03-31 0001117297 us-gaap:MediaContentMember 2020-03-31 0001117297 qnst:WebsiteTradeDomainNamesMember 2020-03-31 0001117297 qnst:AcquiredTechnologyAndOthersMember 2020-03-31 0001117297 us-gaap:CustomerRelationshipsMember 2019-06-30 0001117297 us-gaap:MediaContentMember 2019-06-30 0001117297 qnst:WebsiteTradeDomainNamesMember 2019-06-30 0001117297 qnst:AcquiredTechnologyAndOthersMember 2019-06-30 0001117297 srt:MaximumMember 2017-07-31 0001117297 srt:MaximumMember 2017-10-31 0001117297 qnst:JulyTwoThousandSeventeenStockRepurchaseProgramMember 2020-01-01 2020-03-31 0001117297 qnst:JulyTwoThousandSeventeenStockRepurchaseProgramMember 2019-07-01 2020-03-31 0001117297 qnst:JulyTwoThousandSeventeenStockRepurchaseProgramMember 2018-07-01 2019-06-30 0001117297 qnst:JulyTwoThousandSeventeenStockRepurchaseProgramMember 2020-03-31 0001117297 qnst:TwoThousandTenIncentivePlanMember 2020-03-31 0001117297 qnst:DirectorsPlanMember 2020-03-31 qnst:Segment 0001117297 country:US 2020-01-01 2020-03-31 0001117297 country:US 2019-01-01 2019-03-31 0001117297 country:US 2019-07-01 2020-03-31 0001117297 country:US 2018-07-01 2019-03-31 0001117297 us-gaap:NonUsMember 2020-01-01 2020-03-31 0001117297 us-gaap:NonUsMember 2019-01-01 2019-03-31 0001117297 us-gaap:NonUsMember 2019-07-01 2020-03-31 0001117297 us-gaap:NonUsMember 2018-07-01 2019-03-31 0001117297 country:US 2020-03-31 0001117297 country:US 2019-06-30 0001117297 us-gaap:NonUsMember 2020-03-31 0001117297 us-gaap:NonUsMember 2019-06-30 0001117297 us-gaap:SubsequentEventMember 2020-04-30 2020-04-30

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2020

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                 to               

Commission File No. 001-34628

 

QuinStreet, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

Delaware

 

77-0512121

(State or Other Jurisdiction of

 

(I.R.S. Employer

Incorporation or Organization)

 

Identification No.)

 

950 Tower Lane, 6th Floor

 

Foster City, California

94404

(Address of principal executive offices)

(Zip Code)

650-578-7700

Registrant’s telephone number, including area code

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Common Stock, par value $0.001 per share

 

QNST

 

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

 

 

Accelerated filer

 

 

 

 

 

 

 

 

 

 

 

Non-accelerated filer

 

 

 

 

Smaller reporting company

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Number of shares of common stock outstanding as of May 6, 2020: 51,952,548

 

 


 

QUINSTREET, INC.

INDEX

 

PART I. FINANCIAL INFORMATION

 

 

 

 

 

Item 1. Financial Statements

 

3

 

 

 

Condensed Consolidated Balance Sheets at March 31, 2020 and June 30, 2019

 

3

 

 

 

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2020 and 2019

 

4

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended March 31, 2020 and 2019

 

5

 

 

 

Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended March 31, 2020 and 2019

 

6

 

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2020 and 2019

 

8

 

 

 

Notes to Condensed Consolidated Financial Statements

 

9

 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

22

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

31

 

 

 

Item 4. Controls and Procedures

 

31

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

Item 1. Legal Proceedings

 

32

 

 

 

Item 1A. Risk Factors

 

32

 

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

54

 

 

 

Item 3. Defaults Upon Senior Securities

 

54

 

 

 

Item 4. Mine Safety Disclosures

 

54

 

 

 

Item 5. Other Information

 

54

 

 

 

Item 6. Exhibits

 

55

 

 

 

SIGNATURES

 

56

 


PART I. FINANCIAL INFORMATION

 

 

ITEM 1. FINANCIAL STATEMENTS

QUINSTREET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

 

 

 

March 31,

 

 

June 30,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

97,139

 

 

$

62,522

 

Receivable, net

 

 

73,367

 

 

 

75,628

 

Prepaid expenses and other assets

 

 

8,754

 

 

 

5,228

 

Total current assets

 

 

179,260

 

 

 

143,378

 

Property and equipment, net

 

 

5,748

 

 

 

5,410

 

Operating lease right-of-use assets

 

 

10,113

 

 

 

 

Goodwill

 

 

81,179

 

 

 

82,544

 

Other intangible assets, net

 

 

30,185

 

 

 

35,118

 

Deferred tax assets, noncurrent

 

 

48,944

 

 

 

52,149

 

Other assets, noncurrent

 

 

5,083

 

 

 

6,012

 

Total assets

 

$

360,512

 

 

$

324,611

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

40,065

 

 

$

37,093

 

Accrued liabilities

 

 

41,923

 

 

 

36,878

 

Deferred revenue

 

 

100

 

 

 

761

 

Other liabilities

 

 

8,808

 

 

 

8,967

 

Total current liabilities

 

 

90,896

 

 

 

83,699

 

Operating lease liabilities, noncurrent

 

 

9,758

 

 

 

 

Other liabilities, noncurrent

 

 

10,651

 

 

 

18,083

 

Total liabilities

 

 

111,305

 

 

 

101,782

 

Commitments and contingencies (See Note 12)

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Common stock: $0.001 par value; 100,000,000 shares authorized; 51,938,074 and 50,518,460 shares issued and outstanding at March 31, 2020 and June 30, 2019

 

 

52

 

 

 

50

 

Additional paid-in capital

 

 

299,427

 

 

 

289,768

 

Accumulated other comprehensive loss

 

 

(249

)

 

 

(366

)

Accumulated deficit

 

 

(50,023

)

 

 

(66,623

)

Total stockholders' equity

 

 

249,207

 

 

 

222,829

 

Total liabilities and stockholders' equity

 

$

360,512

 

 

$

324,611

 

 

See notes to condensed consolidated financial statements

 

 

 

3


QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net revenue

 

$

128,663

 

 

$

116,225

 

 

$

373,378

 

 

$

333,190

 

Cost of revenue (1)

 

 

114,210

 

 

 

98,350

 

 

 

332,717

 

 

 

286,078

 

Gross profit

 

 

14,453

 

 

 

17,875

 

 

 

40,661

 

 

 

47,112

 

Operating expenses: (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product development

 

 

3,250

 

 

 

2,864

 

 

 

10,205

 

 

 

9,164

 

Sales and marketing

 

 

2,116

 

 

 

2,019

 

 

 

7,071

 

 

 

6,346

 

General and administrative

 

 

5,076

 

 

 

13,919

 

 

 

16,399

 

 

 

24,362

 

Operating income (loss)

 

 

4,011

 

 

 

(927

)

 

 

6,986

 

 

 

7,240

 

Interest income

 

 

43

 

 

 

80

 

 

 

169

 

 

 

215

 

Interest expense

 

 

(177

)

 

 

(96

)

 

 

(566

)

 

 

(194

)

Other income (expense), net

 

 

10,491

 

 

 

(8

)

 

 

10,225

 

 

 

40

 

Income (loss) before income taxes

 

 

14,368

 

 

 

(951

)

 

 

16,814

 

 

 

7,301

 

(Provision for) benefit from income taxes

 

 

(449

)

 

 

1,892

 

 

 

(214

)

 

 

51,763

 

Net income

 

$

13,919

 

 

$

941

 

 

$

16,600

 

 

$

59,064

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.27

 

 

$

0.02

 

 

$

0.32

 

 

$

1.20

 

Diluted

 

$

0.26

 

 

$

0.02

 

 

$

0.31

 

 

$

1.12

 

Weighted-average shares used in computing net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

51,807

 

 

 

49,907

 

 

 

51,353

 

 

 

49,349

 

Diluted

 

 

53,439

 

 

 

52,932

 

 

 

53,416

 

 

 

52,681

 

 

(1)

Cost of revenue and operating expenses include stock-based compensation expense as follows:

 

Cost of revenue

 

$

978

 

 

$

1,621

 

 

$

5,815

 

 

$

5,161

 

Product development

 

 

185

 

 

 

319

 

 

 

1,187

 

 

 

1,147

 

Sales and marketing

 

 

152

 

 

 

218

 

 

 

1,131

 

 

 

931

 

General and administrative

 

 

554

 

 

 

792

 

 

 

3,084

 

 

 

2,701

 

 

See notes to condensed consolidated financial statements

 

4


QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

March 31,

 

 

March 31,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net income

 

$

13,919

 

 

$

941

 

 

$

16,600

 

 

$

59,064

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

70

 

 

 

 

 

 

117

 

 

 

23

 

Total other comprehensive income

 

 

70

 

 

 

 

 

 

117

 

 

 

23

 

Comprehensive income

 

$

13,989

 

 

$

941

 

 

$

16,717

 

 

$

59,087

 

 

See notes to condensed consolidated financial statements

5


QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2019

 

 

51,636,757

 

 

$

52

 

 

$

298,080

 

 

$

(319

)

 

$

(63,942

)

 

$

233,871

 

Issuance of common stock upon exercise of stock options

 

 

151,625

 

 

 

 

 

 

689

 

 

 

 

 

 

 

 

 

689

 

Release of restricted stock, net of share settlement

 

 

149,692

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,884

 

 

 

 

 

 

 

 

 

1,884

 

Withholding taxes related to release of restricted stock, net of share settlement

 

 

 

 

 

 

 

 

(1,226

)

 

 

 

 

 

 

 

 

(1,226

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,919

 

 

 

13,919

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

70

 

 

 

 

 

 

70

 

Balances at March 31, 2020

 

 

51,938,074

 

 

$

52

 

 

$

299,427

 

 

$

(249

)

 

$

(50,023

)

 

$

249,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2018

 

 

49,771,433

 

 

$

50

 

 

$

282,493

 

 

$

(357

)

 

$

(70,980

)

 

$

211,206

 

Issuance of common stock upon exercise of stock options

 

 

112,683

 

 

 

 

 

 

505

 

 

 

 

 

 

 

 

 

505

 

Release of restricted stock, net of share settlement

 

 

163,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

2,966

 

 

 

 

 

 

 

 

 

2,966

 

Withholding taxes related to release of restricted stock, net of share settlement

 

 

 

 

 

 

 

 

(1,365

)

 

 

 

 

 

 

 

 

(1,365

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

941

 

 

 

941

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balances at March 31, 2019

 

 

50,047,641

 

 

$

50

 

 

$

284,599

 

 

$

(357

)

 

$

(70,039

)

 

$

214,253

 

 

See notes to condensed consolidated financial statements

6


QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at June 30, 2019

 

 

50,518,460

 

 

$

50

 

 

$

289,768

 

 

$

(366

)

 

$

(66,623

)

 

$

222,829

 

Issuance of common stock upon exercise of stock options

 

 

667,651

 

 

 

1

 

 

 

3,804

 

 

 

 

 

 

 

 

 

3,805

 

Release of restricted stock, net of share settlement

 

 

751,963

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

11,269

 

 

 

 

 

 

 

 

 

11,269

 

Withholding taxes related to release of restricted stock, net of share settlement

 

 

 

 

 

 

 

 

(5,413

)

 

 

 

 

 

 

 

 

(5,413

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,600

 

 

 

16,600

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

117

 

 

 

 

 

 

117

 

Balances at March 31, 2020

 

 

51,938,074

 

 

$

52

 

 

$

299,427

 

 

$

(249

)

 

$

(50,023

)

 

$

249,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balance at June 30, 2018

 

 

48,146,384

 

 

$

48

 

 

$

277,761

 

 

$

(380

)

 

$

(129,103

)

 

$

148,326

 

Issuance of common stock upon exercise of stock options

 

 

814,069

 

 

 

1

 

 

 

5,628

 

 

 

 

 

 

 

 

 

5,629

 

Release of restricted stock, net of share settlement

 

 

1,087,188

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Stock-based compensation expense