QUINSTREET (QNST)·Q2 2026 Earnings Summary

QuinStreet Beats on EPS but Stock Drops 4% as Investors Digest HomeBuddy Deal

February 5, 2026 · by Fintool AI Agent

QuinStreet (NASDAQ: QNST) delivered a clean beat across revenue, earnings, and EBITDA in Q2 FY2026, posting record quarterly revenue of $287.8 million. However, shares fell 4.1% on earnings day as investors weighed the integration of HomeBuddy and the company's path to its 10% EBITDA margin target.

Did QuinStreet Beat Earnings?

QuinStreet beat consensus estimates across all key metrics:

Values retrieved from S&P Global

Revenue grew 2% year-over-year, while adjusted EBITDA increased 8% YoY to $21.0 million. GAAP net income was $50.2 million ($0.87 per diluted share), inflated by a $48.3 million tax valuation allowance release.

The company generated $21.6 million in operating cash flow and closed the quarter with $107 million in cash and no bank debt.

What Changed From Last Quarter?

HomeBuddy Acquisition Closed: The most significant development was completing the HomeBuddy acquisition in early January. HomeBuddy "has mastered the technology and execution of auction-driven exclusive leads, a product in high demand by large segments of the home services client market and one that we did not yet have."

Home Services Momentum: Home Services revenue reached $71.0 million, up 13% YoY from $62.7 million, now representing 25% of total revenue.

Auto Insurance Strength: Auto Insurance demand "remained strong again in fiscal Q2, with sequential performance besting historical seasonality trends." Auto insurance grew 6% sequentially versus the September quarter, significantly outpacing typical seasonality.

AI Progress: Management highlighted progress applying AI across the business, with Valenti emphasizing they "expect to disproportionately benefit from AI due to our structured proprietary integrations and data."

Revenue by Segment

Financial Services, which includes Auto Insurance, saw a slight YoY decline but remains the dominant revenue driver at 75% of total revenue.

What Did Management Guide?

QuinStreet raised its fiscal 2026 outlook to include the HomeBuddy contribution:

CEO Doug Valenti emphasized that "HomeBuddy is purely additive to our previous outlook" — the company still expects full fiscal year revenue and adjusted EBITDA (excluding HomeBuddy) to grow at least 10% and 20%, respectively.

The near-term milestone goal remains reaching 10% quarterly adjusted EBITDA margin this fiscal year, even excluding HomeBuddy's expected accretive impact.

How Did the Stock React?

QNST shares fell 4.1% on earnings day, closing at $11.06 from the prior close of $11.53.

The stock has been under pressure, trading 57% below its 52-week high and below both its 50-day ($14.33) and 200-day ($15.27) moving averages.

Historical Beat/Miss Trend

QuinStreet has established a strong beat streak over the past two years:

Values retrieved from S&P Global

The company has beaten revenue estimates in 7 of the last 8 quarters and EPS estimates in all 8 quarters.

Margin Progression

Adj. EBITDA Margin calculated from S&P Global data

Management's goal of 10% adjusted EBITDA margin by fiscal year-end appears achievable given Q3 guidance implies margins of 8.0-9.0%.

Key Management Commentary

CEO Doug Valenti struck an optimistic tone:

"Fiscal Q2 was another productive and successful quarter. We exceeded our outlook for both revenue and adjusted EBITDA, and we continued to make good progress on needle-moving initiatives across the business. We see the setup for continued long-term revenue growth and margin performance as better than ever."

On AI opportunities:

"We expect AI to lead to increased opportunities in our already big and fast-growing markets, and we expect to disproportionately benefit from AI due to our structured proprietary integrations and data and to our long history of successfully applying AI as a competitive advantage."

On HomeBuddy:

"We are even more excited about the potential for HomeBuddy than we were about [our prior highly successful acquisitions]. Our total addressable market opportunity is enormous and growing, and we continue to deliberately, contiguously, and successfully expand our footprint."

Q&A Highlights

AI Positioning and Market Fears

When asked about AI disruption concerns, CEO Doug Valenti was emphatic that the fears are "pretty clearly overblown":

"Don't take my word for it. Jensen Huang, who knows more about AI than any of us will ever know, said it's just illogical to him. AI is much more likely to enhance or utilize the value-add business models and tools, software, and otherwise out there than it is to replace them. The CEO of Google just said basically the same thing yesterday."

On traffic trends specifically:

"We haven't seen any negative trends... We have a record amount of volume with Google on that platform. Most of the searches now involve AI-based answers and searches. It's only created more opportunity for us to get deeper and have more places to run our campaigns."

Valenti emphasized QuinStreet's data moat:

"We at QuinStreet have literally billions of dollars of proprietary data. We have spent billions generating that data through media campaigns that are extraordinarily complex with permutations into the billions when you combine all the variables."

HomeBuddy Cross-Sell Strategy

On why HomeBuddy is strategically transformative:

"They already do $140-ish million in revenue. They're all in that media [social, display, native]. They do it very successfully... Every client wants more. The supply side is media. Having the ability to scale dramatically in that media ecosystem is enormous."

Auto Insurance Outlook

On the path forward for auto insurance growth:

"Returning to a more normalized growth rate, which we would consider to be between 10% and 20% year-over-year, is probably on the not-too-distant horizon... These sophisticated auto insurance carriers are extraordinarily adept at adapting and adjusting and navigating and moving forward."

R&D Initiatives and New Products

On the progress of new higher-margin initiatives:

"QRP and 360 are both growing very rapidly. Together, we'll represent well north of $10 million in revenue, high variable margin revenue this fiscal year. We're getting near the tail end of our heavy lift in R&D spending for those products."

On agent-driven insurance expansion:

"We're up to about a $100 million revenue run rate there now... But there's a heck of a lot more to come. We're expanding our footprint into another one of the quarters, which is the agent-driven side of P&C."

Q4 Seasonality Explained

On why Q4 guidance implies a "hockey stick":

"There is seasonality in the home services business. The March quarter's one of the weakest quarters... And then the activity grows pretty dramatically. The two strongest quarters are the June and September quarter."

Risks and Concerns

Auto Insurance Concentration: While Auto Insurance demand remains strong, the segment represents the bulk of Financial Services revenue, creating concentration risk.

Acquisition Integration: HomeBuddy adds complexity and execution risk. Management must demonstrate accretive integration while pursuing margin expansion.

Regulatory Environment: The company flagged potential impacts from "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."

Stock Disconnect: Despite consistent beats and raised guidance, the stock continues to trade significantly below its 52-week high, suggesting investors may be skeptical of the growth trajectory or valuation.

Forward Catalysts

1. HomeBuddy Integration — First full quarter contribution expected in Q3 FY26, with potential synergies driving EBITDA above the expected $30M+
2. 10% EBITDA Margin Target — Management aims to achieve this milestone in Q4 FY26, even excluding HomeBuddy's accretive impact
3. Agent-Driven Insurance Expansion — Now at ~$100M run rate with "hundreds of millions of dollars of new revenue opportunity" ahead
4. R&D Initiatives Maturing — QRP and 360 products transitioning from heavy investment to "scale and profitability era"
5. Home Services Seasonality — June quarter (Q4) is historically strongest for home services, supporting guidance "hockey stick"

Summary

QuinStreet delivered a solid Q2 FY2026 with beats across all key metrics and record quarterly revenue. The HomeBuddy acquisition positions the company for accelerated Home Services growth, while Auto Insurance demand remains robust. CEO Valenti used the earnings call Q&A to directly address AI disruption concerns, arguing that QuinStreet's billions in proprietary data and structured integrations make it a beneficiary rather than a victim of AI trends. Despite the strong results and raised guidance, the stock fell 4% as investors appear focused on execution risk and the path to 10% EBITDA margins. With R&D initiatives like QRP and 360 products nearing the end of their heavy investment phase and moving toward profitability, the company appears positioned to achieve its margin goals.

---

Report generated by Fintool AI Agent. Data from SEC filings and S&P Global.