Executive Summary

Record revenue of $285.9M (+2% YoY) with adjusted EPS $0.22 and adjusted EBITDA $20.5M; both revenue and adjusted EBITDA exceeded company outlook, while GAAP diluted EPS was $0.08 .
Versus S&P Global consensus, revenue beat by ~2% and adjusted (“Primary”) EPS beat by ~159%; QNST also beat revenue and EPS in Q4 and Q3, with a small revenue miss in Q3 offset by a large EPS beat* .
Q2 FY26 guidance: revenue $270–$280M and adjusted EBITDA $19–$20M; full-year FY26 outlook nudged to “at least” +10% revenue and “at least” +20% adjusted EBITDA growth (tone-up from prior “about” targets) .
Catalysts: Board authorized a new $40M share repurchase program; company repurchased $7M in Q1 and another $10M post-quarter, and emphasized AI-driven efficiency and margin expansion initiatives .

What Went Well and What Went Wrong

What Went Well

Record quarterly revenue, strong adjusted profitability despite heavy investments: “We delivered record revenue and exceeded our outlook for both revenue and adjusted EBITDA” .
Auto Insurance strength and Home Services momentum: Auto Insurance demand remained strong; Home Services grew double-digit to a record level .
Strategic progress on AI and new products: “We expect to disproportionately benefit from AI... already adding revenue and expanding margins” and QRP/360 Finance expected to grow >100% and materially contribute to profitability .

What Went Wrong

Mix-driven gross margin compression and seasonality: Q1 gross margin eased vs prior quarter; Q2 outlook embeds normal December seasonal softness .
Tariff uncertainty tempering the pace of carrier spend ramp: management noted carriers are cautious pending clarity, delaying the “next leg up” in auto insurance marketing spend .
Non-insurance Financial Services softness YoY due to prior-year promo comp: non-insurance FS declined ~10% YoY as Q1 FY25 included a large limited-time credit card offer .

Financial Results

Metric	Q3 FY2025	Q4 FY2025	Q1 FY2026
Revenue ($USD Millions)	$269.842	$262.054	$285.853
GAAP Diluted EPS ($)	$0.08	$0.06	$0.08
Adjusted Diluted EPS ($)	$0.21	$0.25	$0.22
Gross Profit ($USD Millions)	$27.862	$27.850	$26.940
Gross Margin (%)	10.3%	10.6%	9.4%
Adjusted EBITDA ($USD Millions)	$19.409	$22.134	$20.523
Adjusted EBITDA Margin (%)	7.2%	8.4%	7.2%
Net Income ($USD Millions)	$4.416	$3.206	$4.535
Net Income Margin (%)	1.6%	1.2%	1.6%

Segment revenue breakdown

Segment Revenue ($USD Millions)	Q3 FY2025	Q4 FY2025	Q1 FY2026
Financial Services	$199.724	$186.608	$207.475
Home Services	$65.448	$71.696	$78.378
Other Revenue	$4.670	$3.750	N/A (consolidated into Home Services)

KPIs

KPI	Q3 FY2025	Q4 FY2025	Q1 FY2026
Operating Cash Flow ($USD Millions)	$30.111	$29.897	$19.601
Free Cash Flow ($USD Millions)	$27.098	$26.842	$15.509
Cash & Equivalents ($USD Millions)	$81.815	$101.078	$101.298
Accounts Receivable, Net ($USD Millions)	$137.241	$135.804	$149.981
Share Repurchases ($USD Millions)	$0	$0	$6.745; +$10 subsequent to quarter-end

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q2 FY2026	N/A	$270–$280	New
Adjusted EBITDA ($USD Millions)	Q2 FY2026	N/A	$19–$20	New
Revenue Growth (YoY)	FY2026	“About” +10%	“At least” +10%	Tone raised (floor established)
Adjusted EBITDA Growth (YoY)	FY2026	“About” +20%	“At least” +20%	Tone raised (floor established)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 FY25 and Q4 FY25)	Current Period (Q1 FY26)	Trend
AI/technology initiatives	Building proprietary media, private exchange model; QMP upgrade; QRP and 360 Finance scaling	“Dozens of new AI projects... adding revenue and expanding margins”	Strengthening
Tariffs/macro	Carriers cautious; broader Q4 guidance range due to tariff uncertainty; sequential auto down vs exceptional Dec quarter	“Uncertainty... delaying another significant inflection up”; some tariff rates increased for certain countries	Persistent headwind; clarity pending
Auto Insurance spend breadth	Increased number of carriers >$1M/month; broadening beyond top carriers	Broadening, record client counts at high spend levels	Expanding participation
Margin expansion	Media optimization, proprietary media >2x margin, higher-margin products, efficiency; aiming for ~7–8% adjusted EBITDA margin baseline	Targeting 10% quarterly adjusted EBITDA margin in FY26; auto insurance margins up >2 pts since July, targeting +5 pts FY26	Positive slope
Home Services demand	Record quarters, new trades, resilient despite tariff concerns in pockets	Robust demand; record revenue; continued double-digit growth	Stable-to-strong
Capital allocation	Strong cash, opportunistic buybacks; focus on growth/M&A	New $40M buyback; $7M repurchased in Q1, $10M post-quarter	More active repurchase posture

Management Commentary

CEO: “We delivered record revenue and exceeded our outlook for both revenue and adjusted EBITDA... We expect total Company revenue to grow at double-digit rates, on average, for many years to come” .
CEO on AI: “We expect to disproportionately benefit from AI due to our structured proprietary data… already adding revenue and expanding margins” .
CFO: “Financial services represented 73% of Q1 revenue… Auto Insurance grew 16% sequentially and 4% YoY; Home Services grew 15% YoY to a record $78.4M” .
CEO on margin goals: “Near-term next milestone goal of reaching 10% quarterly adjusted EBITDA margin in this fiscal year” .
CEO on repurchases: “Board… authorized a new $40 million share repurchase program” .

Q&A Highlights

Media investments and margin drivers: Proprietary campaigns scaled “well beyond break-even,” auto margins up ~2 pts since July; targeting +5 pts this fiscal year via new media and products .
Tariffs: No new tariffs, limited resolution; carriers spending strongly but cautiously; broadening spend across carriers, record number >$1M/month .
Segment dynamics: Non-insurance FS softness tied to last year’s one-off promo; Home Services strong, limited by execution capacity more than demand .
Seasonality and Q2 outlook: December quarter typically declines sequentially; guidance embeds normal seasonality (rev $270–$280M; adj. EBITDA $19–$20M) .
Capital allocation: $7M buyback in Q1; +$10M post-quarter; new $40M authorization; disciplined prioritization of growth investments, accretive M&A, and buybacks .

Estimates Context

Metric	Q3 FY2025	Q4 FY2025	Q1 FY2026
Revenue Actual ($USD Millions)	$269.842	$262.054	$285.853
Revenue Consensus Mean ($USD Millions)*	$270.359	$255.841	$279.913
Surprise vs Consensus (%)*	-0.2%	+2.4%	+2.1%
Primary EPS Actual ($)*	$0.21	$0.25	$0.22
Primary EPS Consensus Mean ($)*	$0.056	$0.118	$0.085
Surprise vs Consensus (%)*	+275.0%	+111.3%	+158.8%

Values retrieved from S&P Global.*

Note: Company reports adjusted EBITDA of $20.5M in Q1; S&P “EBITDA Consensus Mean” may reflect a standardized EBITDA definition and is not directly comparable to company-reported adjusted EBITDA .

Key Takeaways for Investors

Revenue and adjusted EPS beats vs consensus for Q1 continue the 2H FY25 trend; the beat magnitude on EPS underscores operating leverage despite investment spend* .
Near-term headwind remains tariff uncertainty dampening the pace of carrier budget ramp, but management sees significant pent-up Auto Insurance demand; watch for inflection as clarity improves .
Margin expansion levers are tangible: proprietary media, higher-margin products (QRP, 360 Finance), and efficiency; management targets 10% adjusted EBITDA margin within FY26 .
Home Services growth is durable with record revenue and strong demand; execution capacity (not demand) is the limiting factor .
Guidance implies normal December seasonality; FY26 outlook tone improved to “at least” +10% revenue and “at least” +20% adjusted EBITDA growth .
Capital returns resume with a new $40M buyback authorization, supported by >$100M cash and no bank debt; opportunistic repurchases could support shares into FY26 .
Trading: Near term, focus on Auto Insurance momentum and Q2 seasonal step-down; medium term, watch AI-driven productivity, margin progression toward 10%, and tariff clarity as key narrative drivers .

Additional Notes and Cross-References

Non-GAAP definitions and reconciliations provided (adjusted EBITDA, adjusted net income, adjusted EPS, FCF, normalized FCF) .
Disaggregation: Q1 revenue split Financial Services $207.5M (down ~2% YoY) and Home Services $78.4M (+~15% YoY); “Other” consolidated under Home Services to reflect operations .
Other relevant press release: participation at Evercore ISI Insurance Conference on Nov 18 (investor engagement) .

QUINSTREET, INC (QNST)·Q1 2026 Earnings Summary