QuinStreet Reports Record Results for Third Quarter Fiscal 2026

Record quarterly revenue of $346 million, up 28% year-over-year Quarterly Net Income of $7.4 million, up 67% year-over-year Record quarterly Adj. EBITDA of $29.6 million, up 53% year-over-year Expect new quarterly revenue record and continued margin expansion in Fiscal Q4 Strong balance sheet and cash flow FOSTER CITY, Calif.--(BUSINESS WIRE)--May 7, 2026-- QuinStreet, Inc. (Nasdaq: QNST), a leader in performance marketplaces and technologies for the financial services and home services industries, today announced financial results for the fiscal third quarter ended March 31, 2026. For the fiscal third quarter, the Company reported revenue of $346.1 million, up 28% year-over-year. GAAP net income for the fiscal third quarter was $7.4 million, or $0.13 per diluted share. Adjusted net income for the fiscal third quarter was $17.8 million, or $0.31 per diluted share. Adjusted EBITDA for the fiscal third quarter was $29.6 million, up 53% year-over-year. For the fiscal third quarter, the Company generated $36.9 million in operating cash flow and closed the quarter with $102.0 million in cash and cash equivalents. “Fiscal Q3 was another quarter of strong performance and progress for QuinStreet,” commented Doug Valenti, CEO of QuinStreet. “We grew revenue 28% and Adj. EBITDA 53% year-over-year, both to new Company records. Our core business is strong, and we are making good progress on initiatives that we expect to continue to deliver strong revenue growth and margin expansion in Fiscal Q4 and beyond.” “We delivered record Auto Insurance revenue in Fiscal Q3 due to strong carrier demand and high levels of consumer shopping activity. Carriers continue to report strong results. We are confident that our full market opportunity in Auto Insurance is still in its early innings.” “Home Services also delivered a record quarter with revenue run-rates now approaching half a billion dollars annually. The work to integrate HomeBuddy and fully capture synergies from that acquisition is going well.” “Our success continues to be driven mainly by our industry-leading technologies, including our core AI optimization algorithms. We have also expanded the application of AI to dozens of other areas of the business to continue to drive improvements in performance and productivity. And we are seeing strong growth in revenue from AI media, including with Google and as an early participant with OpenAI’s advertising platform. We have been, and expect to continue to be, an AI winner.” “Turning to our outlook, we expect revenue in fiscal Q4, to be between $350 and $370 million, up sequentially to yet another new quarterly record, and implying at least 34% growth year-over-year. We expect adjusted EBITDA to be between $37 and $43 million, also up sequentially to yet another new quarterly record, reflecting continued margin expansion, and implying at least 67% growth year-over-year,” concluded Valenti. Conference Call Today at 2:00 p.m. PT The Company will host a conference call and corresponding live webcast at 2:00 p.m. PT. To access the conference call dial +1 800-717-1738 (domestic) or +1 646-307-1865 (international). A replay of the conference call will be available beginning approximately two hours after the completion of the call by dialing +1 844-512-2921 (domestic) or +1 412-317-6671 (international) and using passcode #1164108. The webcast of the conference call will be available live and via replay on the investor relations section of the Company's website at http://investor.quinstreet.com. About QuinStreet QuinStreet, Inc. (Nasdaq: QNST) is a leader in performance marketplaces and technologies for the financial services and home services industries. QuinStreet is a pioneer in delivering online marketplace solutions to match searchers with brands in digital media, and is committed to providing consumers with the information and tools they need to research, find and select the products and brands that meet their needs. Non-GAAP Financial Measures and Definitions of Client Verticals This release and the accompanying tables include a discussion of adjusted EBITDA, adjusted net income, adjusted diluted net income per share and free cash flow and normalized free cash flow, all of which are non-GAAP financial measures that are provided as a complement to results provided in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The term "adjusted EBITDA" refers to a financial measure that we define as net income (loss) less provision for income taxes, depreciation expense, amortization expense, stock-based compensation expense, interest and other expense, net, acquisition costs, contingent consideration adjustment, litigation settlement expense, tax settlement expense, and restructuring costs. The term "adjusted net income" refers to a financial measure that we define as net income (loss) adjusted for amortization expense, stock-based compensation expense, acquisition costs, contingent consideration adjustment, litigation settlement expense, tax settlement expense, restructuring costs, and impairment of investment, net of estimated taxes. The term "adjusted diluted net income (loss) per share" refers to a financial measure that we define as adjusted net income divided by weighted average diluted shares outstanding. The term “free cash flow” refers to a financial measure that we define as net cash provided by operating activities, less capital expenditures and internal software development costs. The term “normalized free cash flow” refers to free cash flow less changes in operating assets and liabilities. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. In addition, our definition of adjusted EBITDA, adjusted net income, adjusted diluted net income per share and free cash flow and normalized free cash flow may not be comparable to the definitions as reported by other companies. We believe adjusted EBITDA, adjusted net income and adjusted diluted net income per share are relevant and useful information because they provide us and investors with additional measurements to analyze the Company's operating performance. Adjusted EBITDA is useful to us and investors because (i) we seek to manage our business to a level of adjusted EBITDA as a percentage of net revenue, (ii) it is used internally by us for planning purposes, including preparation of internal budgets; to allocate resources; to evaluate the effectiveness of operational strategies and capital expenditures as well as the capacity to service debt, (iii) it is a key basis upon which we assess our operating performance, (iv) it is one of the primary metrics investors use in evaluating Internet marketing companies, (v) it is a factor in determining compensation, (vi) it is an element of certain financial covenants under our historical borrowing arrangements, and (vii) it is a factor that assists investors in the analysis of ongoing operating trends. In addition, we believe adjusted EBITDA and similar measures are widely used by investors, securities analysts, ratings agencies and other interested parties in our industry as a measure of financial performance, debt-service capabilities and as a metric for analyzing company valuations. We use adjusted EBITDA as a key performance measure because we believe it facilitates operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures (affecting interest expense), tax positions (such as the impact of changes in effective tax rates or fluctuations in permanent differences or discrete quarterly items), non-recurring charges, certain other items that we do not believe are indicative of core operating activities (such as litigation settlement expense, tax settlement expense, acquisition costs, contingent consideration adjustment, restructuring costs and other income and expense) and the non-cash impact of depreciation expense, amortization expense and stock-based compensation expense. With respect to our adjusted EBITDA guidance, the Company is not able to provide a quantitative reconciliation to the most directly comparable GAAP financial measure without unreasonable efforts due to the high variability, complexity and low visibility with respect to certain items such as taxes, and income and expense from changes in fair value of contingent consideration from acquisitions. We expect the variability of these items to have a potentially unpredictable and potentially significant impact on future GAAP financial results, and, as such, we also believe that any reconciliations provided would imply a degree of precision that would be confusing or misleading to investors. Adjusted net income and adjusted diluted net income per share are useful to us and investors because they present an additional measurement of our financial performance, taking into account depreciation, which we believe is an ongoing cost of doing business, but excluding the impact of certain non-cash expenses (stock-based compensation, amortization of intangible assets, and contingent consideration adjustment), non-recurring charges and certain other items that we do not believe are indicative of core operating activities. We believe that analysts and investors use adjusted net income and adjusted diluted net income per share as supplemental measures to evaluate the overall operating performance of companies in our industry. Free cash flow is useful to investors and us because it represents the cash that our business generates from operations, before taking into account cash movements that are non-operational, and is a metric commonly used in our industry to understand the underlying cash generating capacity of a company’s financial model. Normalized free cash flow is useful as it removes the fluctuations in operating assets and liabilities that occur in any given quarter due to the timing of payments and cash receipts and therefore helps investors understand the underlying cash flow of the business as a quarterly metric and the cash flow generation potential of the business model. We believe that analysts and investors use free cash flow multiples as a metric for analyzing company valuations in our industry. We intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables. Legal Notice Regarding Forward Looking Statements This press release and its attachments contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties. Words such as "estimate", "will”, "believe", “expect”, "intend", “outlook”, "potential", “promises” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include the statements in quotations from management in this press release, as well as any statements regarding the Company's anticipated financial results, growth and strategic and operational plans and results of analyses on impairment charges. The Company's actual results may differ materially from those anticipated in these forward-looking statements. Factors that may contribute to such differences include, but are not limited to: the Company’s ability to maintain and increase client marketing spend; the Company's ability, whether within or outside the Company’s control, to maintain and increase the number of visitors to its websites and to convert those visitors and those to its third-party publishers' websites into client prospects in a cost-effective manner; the Company's exposure to data privacy and security risks; the impact of changes in industry standards and government regulation including, but not limited to investigation enforcement activities or regulatory activity by the Federal Trade Commission, the Federal Communications Commission, the Consumer Finance Protection Bureau and other state and federal regulatory agencies; the impact of changes in our business, our industry, and the current economic and regulatory climate on the Company’s quarterly and annual results of operations; the Company's ability to compete effectively against others in the online marketing and media industry both for client budget and access to third-party media; the Company’s ability to protect our intellectual property rights; and the impact from risks relating to counterparties on the Company's business. More information about potential factors that could affect the Company's business and financial results are contained in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission ("SEC"). Additional information will also be set forth in the Company's quarterly report on Form 10-Q for the fiscal year ended March 31, 2026, which will be filed with the SEC The Company does not intend and undertakes no duty to release publicly any updates or revisions to any forward-looking statements contained herein. QUINSTREET, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) March 31, June 30, 2026 2025 Assets Current assets: Cash and cash equivalents $ 102,042 $ 101,078 Accounts receivable, net 184,780 135,804 Prepaid expenses and other assets 8,358 8,644 Total current assets 295,180 245,526 Property and equipment, net 16,907 16,818 Operating lease right-of-use assets 7,763 9,620 Goodwill 261,798 125,056 Intangible assets, net 71,520 28,475 Deferred tax assets, noncurrent 44,885 — Other assets, noncurrent 6,291 5,612 Total assets $ 704,344 $ 431,107 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 90,289 $ 62,247 Accrued liabilities 133,482 87,225 Post-closing payments, current 25,461 13,572 Total current liabilities 249,232 163,044 Operating lease liabilities, noncurrent 5,627 7,382 Post-closing payments, noncurrent 60,422 10,165 Debt, noncurrent 70,000 — Other liabilities, noncurrent 8,672 6,472 Total liabilities 393,953 187,063 Stockholders' equity: Common stock 58 58 Additional paid-in capital 374,181 369,958 Accumulated other comprehensive loss (268 ) (268 ) Accumulated deficit (63,580 ) (125,704 ) Total stockholders' equity 310,391 244,044 Total liabilities and stockholders' equity $ 704,344 $ 431,107 QUINSTREET, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 2026 2025 2026 2025 Net revenue $ 346,137 $ 269,842 $ 919,835 $ 831,657 Cost of revenue (1) 304,801 241,980 823,837 748,636 Gross profit 41,336 27,862 95,998 83,021 Operating expenses: (1) Product development 10,221 8,850 26,696 26,180 Sales and marketing 7,989 5,140 17,652 14,367 General and administrative 12,859 8,960 35,347 40,157 Operating income 10,267 4,912 16,303 2,317 Interest income 3 3 93 20 Interest expense (2,102 ) (66 ) (2,240 ) (316 ) Other income (expense), net 16 44 57 (137 ) Income before income taxes 8,184 4,893 14,213 1,884 (Provision for) benefit from income taxes (822 ) (477 ) 47,911 (383 ) Net income $ 7,362 $ 4,416 $ 62,124 $ 1,501 Net income per share: Basic $ 0.13 $ 0.08 $ 1.09 $ 0.03 Diluted $ 0.13 $ 0.08 $ 1.07 $ 0.03 Weighted-average shares used in computing net income per share: Basic 57,205 56,696 57,174 56,282 Diluted 58,038 58,657 58,242 58,321 (1) Cost of revenue and operating expenses include stock-based compensation expense as follows: Cost of revenue $ 3,442 $ 2,682 $ 10,818 $ 8,894 Product development 1,426 1,042 4,425 3,324 Sales and marketing 1,129 980 3,728 3,400 General and administrative 2,493 2,369 8,274 8,914 QUINSTREET, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 2026 2025 2026 2025 Cash Flows from Operating Activities Net income $ 7,362 $ 4,416 $ 62,124 $ 1,501 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 8,490 7,073 27,245 24,532 Depreciation and amortization 5,888 5,969 16,637 18,648 Change in the fair value of contingent consideration 1,850 1,200 4,650 12,394 Provision for sales returns and doubtful accounts receivable 577 (100 ) 2,339 1,693 Non-cash lease expense (income) (50 ) (48 ) 22 35 Deferred income taxes (206 ) 432 (774 ) 278 Release of tax valuation allowance 395 — (47,868 ) — Other adjustments, net 826 77 81 (170 ) Changes in assets and liabilities, net of effects of business acquisitions: Accounts receivable (26,579 ) 13,219 (44,925 ) (27,148 ) Prepaid expenses and other assets 1,865 1,747 2,385 (2,515 ) Accounts payable 16,481 479 25,874 7,701 Accrued liabilities 20,033 (4,353 ) 30,366 18,134 Net cash provided by operating activities 36,932 30,111 78,156 55,083 Cash Flows from Investing Activities Business acquisitions, net of cash acquired (105,263 ) — (105,263 ) — Capital expenditures (537 ) (639 ) (2,600 ) (1,523 ) Internal software development costs (2,625 ) (2,374 ) (8,124 ) (6,864 ) Other investing activities 1,001 — 1,001 — Net cash used in investing activities (107,424 ) (3,013 ) (114,986 ) (8,387 ) Cash Flows from Financing Activities Proceeds from borrowings under revolving credit facility 70,000 — 70,000 — Payment of revolving credit facility upfront fees (1,846 ) — (1,846 ) — Proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan 1,870 2,554 3,203 3,923 Payment of withholding taxes related to release of restricted stock, net of share settlement (1,771 ) (2,821 ) (9,429 ) (11,323 ) Post-closing payments and contingent consideration related to acquisitions (2,684 ) (2,843 ) (7,298 ) (7,985 ) Repurchase of common stock — — (16,796 ) — Net cash provided by (used in) financing activities 65,569 (3,110 ) 37,834 (15,385 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 3 (7 ) (41 ) 17 Net (decrease) increase in cash, cash equivalents and restricted cash (4,920 ) 23,981 963 31,328 Cash, cash equivalents and restricted cash at beginning of period 106,977 57,850 101,094 50,503 Cash, cash equivalents and restricted cash at end of period $ 102,057 $ 81,831 $ 102,057 $ 81,831 Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets Cash and cash equivalents $ 102,042 $ 81,815 $ 102,042 $ 81,815 Restricted cash included in other assets, noncurrent 15 16 15 16 Total cash, cash equivalents and restricted cash $ 102,057 $ 81,831 $ 102,057 $ 81,831 QUINSTREET, INC. RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 2026 2025 2026 2025 Net income $ 7,362 $ 4,416 $ 62,124 $ 1,501 Amortization of intangible assets 2,630 2,305 6,454 7,241 Stock-based compensation 8,490 7,073 27,245 24,532 Contingent consideration adjustment 1,850 1,200 4,650 12,394 Restructuring costs 358 186 613 565 Litigation settlement expense 496 58 761 557 Acquisition costs 2,269 11 4,908 116 Tax valuation allowance — — (48,263 ) — Tax impact of non-GAAP items (5,664 ) (2,894 ) (13,650 ) (10,142 ) Adjusted net income $ 17,791 $ 12,355 $ 44,842 $ 36,764 Adjusted diluted net income per share $ 0.31 $ 0.21 $ 0.77 $ 0.63 Weighted average shares used in computing adjusted diluted net income per share 58,038 58,657 58,242 58,321 QUINSTREET, INC. RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (In thousands) (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 2026 2025 2026 2025 Net income $ 7,362 $ 4,416 $ 62,124 $ 1,501 Interest and other expense, net 2,083 19 2,090 433 Provision for (benefit from) income taxes 822 477 (47,911 ) 383 Depreciation and amortization 5,888 5,969 16,637 18,648 Stock-based compensation 8,490 7,073 27,245 24,532 Contingent consideration adjustment 1,850 1,200 4,650 12,394 Restructuring costs 358 186 613 565 Litigation settlement expense 496 58 761 557 Acquisition costs 2,269 11 4,908 116 Adjusted EBITDA $ 29,618 $ 19,409 $ 71,117 $ 59,129 QUINSTREET, INC. RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW AND NORMALIZED FREE CASH FLOW (In thousands) (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 2026 2025 2026 2025 Net cash provided by operating activities $ 36,932 $ 30,111 $ 78,156 $ 55,083 Capital expenditures (537 ) (639 ) (2,600 ) (1,523 ) Internal software development costs (2,625 ) (2,374 ) (8,124 ) (6,864 ) Free cash flow 33,770 27,098 67,432 46,696 Changes in operating assets and liabilities (11,800 ) (11,092 ) (13,700 ) 3,828 Normalized free cash flow $ 21,970 $ 16,006 $ 53,732 $ 50,524 QUINSTREET, INC. DISAGGREGATION OF REVENUE (In thousands) (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 2026 2025 2026 2025 Net revenue: Financial Services $ 231,821 $ 199,724 $ 656,094 $ 630,549 Home Services 114,316 70,118 263,741 201,108 Total net revenue $ 346,137 $ 269,842 $ 919,835 $ 831,657 View source version on businesswire.com: https://www.businesswire.com/news/home/20260507472786/en/ Investor Contact: Robert Amparo (347) 223-1682 [email protected] Source: QuinStreet, Inc.