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QI

QUINSTREET, INC (QNST)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 2025 delivered strong growth and margin expansion: revenue $262.1M (+32% YoY), GAAP diluted EPS $0.06, adjusted EPS $0.25, adjusted EBITDA $22.1M .
  • Results beat Wall Street consensus: revenue $262.1M vs $255.8M; primary EPS $0.25 vs $0.12; EBITDA $26.8M vs $22.1M. Bold beat on EPS and revenue; EBITDA ahead of consensus as well (Values retrieved from S&P Global)*.
  • Auto insurance momentum continued (+62% YoY) with broad-based carrier demand; Home Services posted another record quarter (+21% YoY) .
  • FY2026 initial outlook: revenue +~10%, adjusted EBITDA +~20%; Q1 FY2026 guide revenue ~$280M, adjusted EBITDA ~$20M. Management expects margins to expand over the year and highlighted ongoing investment in media capacity and new products as catalysts .

What Went Well and What Went Wrong

What Went Well

  • Auto Insurance reaccelerating spend and broad participation: “We had more carriers spending over $1,000,000 per month with us this past quarter than we have ever had… eight or nine carriers” .
  • Margin expansion initiatives gaining traction: new proprietary media and product footprints with higher margin profiles (e.g., a new business at ~$8M/month with margins ~3x core click marketplace) .
  • Home Services resilience and operational excellence: “We do not see [tariffs] having an effect at all on our outlook… grow 15–20%” and QMP media optimization platform rollout to accelerate scaling .

What Went Wrong

  • Media supply/demand mismatch pressured near‑term margins; Q1 guide implies lower adjusted EBITDA margin baseline (~7%) due to investments to build capacity and optimization needs .
  • Tariff uncertainties kept some carriers “guarded” and damped the pace of ramp despite strong carrier economics, creating volatility risk in spend patterns .
  • Elevated operating expenses in G&A (+$12.4M vs $7.8M YoY) reflecting scaling and investments, partially muting operating leverage in the quarter .

Financial Results

Headline metrics vs prior quarters

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Millions)$282.6 $269.8 $262.1
GAAP Diluted EPS ($)$(0.03) $0.08 $0.06
Adjusted EPS ($)$0.20 $0.21 $0.25
Adjusted EBITDA ($USD Millions)$19.4 $19.4 $22.1
Gross Margin (%)9.5%*10.3%* 10.6%*
EBITDA Margin (%)6.9%*7.2%*10.2%*
Net Income Margin (%)(1.0%)*1.6%*1.2%*
*Values retrieved from S&P Global

Segment revenue breakdown

Segment ($USD Millions)Q2 2025Q3 2025Q4 2025
Financial Services$219.9 $199.7 $186.6
Home Services$59.6 $65.4 $71.7
Other$3.1 $4.7 $3.8

Operating cash and liquidity KPIs

KPIQ2 2025Q3 2025Q4 2025
Cash from Operations ($USD Millions)$38.7 $30.1 $29.9
Cash & Equivalents, End of Period ($USD Millions)$57.9 $81.8 $101.1

Non-GAAP adjustments: Adjusted net income and adjusted EBITDA exclude amortization, stock-based comp, contingent consideration fair value changes, litigation settlement, restructuring, and acquisition costs (with tax effects), consistent with company definitions .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q1 FY2026N/A~$280New guide
Adjusted EBITDA ($USD Millions)Q1 FY2026N/A~$20New guide
Revenue Growth (%)FY2026N/A~+10%New framework
Adjusted EBITDA Growth (%)FY2026N/A~+20%New framework
Adjusted EBITDA margin trajectoryFY2026Targeting expansion (prior commentary)Expect expansion from ~7% baselineMaintained/clarified

Note: FY2025 outlook was maintained in Q3 (revenue $1.065–$1.105B, adj. EBITDA $80–$85M) and achieved in Q4 (revenue $1.094B, adj. EBITDA $81.3M) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q2 2025; Q-1: Q3 2025)Current Period (Q4 2025)Trend
Auto Insurance demandUnprecedented surge; broadened client base; sequential moderation from Dec quarter; strong YoY growth (FS +208%, Auto +615%) Gradual reacceleration; more carriers spending $1M+/mo; strong sequential auto growth expected in Q1 Improving breadth and momentum
Tariffs/macroAnticipated uncertainty; wider Q4 outlook range; no spend reductions yet Still guarded spend; expect pent‑up demand and moderate tariff levels; potential budget flush in calendar Q4 Uncertainty easing; potential tailwinds
Margin expansionTargeting ~10% adj. EBITDA; optimizing media; proprietary media growth; fee-based/private exchange shifts Multiple initiatives progressing; new footprints at 3x margin; Opex flat YoY to amplify leverage Positive trajectory
Media capacity/supplySupply catching up after surge; owned & operated and partners shifting back to auto Still building capacity; optimization and investment pressuring near-term margins Near-term headwind; improving capacity
Regulatory (TCPA/FCC)Stayed regulations; testing improved contact strategies; lower HS headwind vs prior assumptions No incremental Q4 changes highlightedNeutral, processes improved
Product/Tech initiativesQRP and 360 Finance scaling; proprietary media via Aquavita; broader agent channel push QRP ~100% YoY growth; 360 Finance 3–10x growth target; new unified call/contact platform; QMP rollout in Home Services Accelerating execution

Management Commentary

  • “We grew total revenue 32% year over year and adjusted EBITDA 101… Fiscal year 2025… revenue 78% to $1,100,000,000 and adjusted EBITDA 299% to $81,000,000” .
  • “We ended the quarter with over $100,000,000 in cash and we have no bank debt” .
  • “We expect revenue in fiscal Q1 to be about $280,000,000 and adjusted EBITDA to be about $20,000,000… full fiscal year 2026 revenue will grow about 10% and adjusted EBITDA… about 20%” .
  • “We had more carriers spending over $1,000,000 per month with us this past quarter than… ever” .
  • “One… new business just got to about $8,000,000 per month… margin profile… three times that of the core… click marketplace… QRP grew at over 100% last year, and we expect it to grow about 100% again this year” .

Q&A Highlights

  • Carrier spend trends: stable early Q4, increasing into quarter; indications of further increases into Q1 and calendar Q4 as tariff clarity improves .
  • Margin outlook: near-term compression to ~7% adjusted EBITDA margin in Q1 from 8.4% in Q4 due to media capacity catch-up and investment; expect expansion through FY2026 as initiatives mature .
  • Breadth of demand: eight or nine carriers at $1M+/month; auto growth >60% YoY excluding the largest carrier, underscoring broad participation .
  • Home Services: minimal tariff impact anticipated; QMP rollout to reduce friction and support faster growth .
  • Product investments: continued focus on QRP (agency channel digitization) and 360 Finance (contractor POS financing), both accretive to margins; unified call/contact platform rebuild to improve remarketing efficiency .

Estimates Context

MetricConsensus (Q4 2025)Actual (Q4 2025)Surprise
Revenue ($USD Millions)$255.8$262.1 Beat (+$6.3M)
Primary EPS ($)$0.12$0.25 Beat (+$0.13)
EPS Normalized ($)$0.246$0.25 Inline/Beat (+$0.004)
EBITDA ($USD Millions)$22.1$26.8Beat (+$4.7M)
Values retrieved from S&P Global*

Implications: Broad-based auto insurance demand and improved media optimization drove the revenue/EPS beat; EBITDA ahead of consensus reflects higher GAAP EBITDA versus adjusted EBITDA reported, aided by operating leverage and lower non-GAAP adjustments. Given FY2026 guide and Q1 sequential auto growth, Street models likely need to raise near-term auto revenue and revisit margin expansion pacing in FY2026 .

Key Takeaways for Investors

  • Broadening carrier demand and improving tariff clarity are catalysts for auto revenue reacceleration in Q1 and potentially calendar Q4; proprietary media and fee-based models underpin margin expansion .
  • Expect near-term margin dip (Q1) due to capacity investments, followed by expansion across FY2026 as initiatives scale; Opex flat YoY supports operating leverage .
  • Home Services continues to execute with QMP rollout and new trades; minimal tariff impact expected; a steady mid‑teens to ~20% growth profile provides diversification .
  • Product adjacencies (QRP, 360 Finance) are scaling and accretive to margins, broadening TAM beyond direct-to-carrier click marketplace .
  • Liquidity remains strong ($101.1M cash, no bank debt), enabling continued investment through cycles and potential opportunistic M&A/partnerships .
  • Estimate revisions: raise Q1 revenue and auto exposure; model FY2026 revenue +~10% and EBITDA +~20% with margin expansion trajectory; anchor EPS on adjusted metrics given non-GAAP exclusions .
  • Trading lens: near-term print and guide provide upside narrative in auto and margins; watch tariff developments and media capacity normalization as key swing factors .
Footnotes:
* Values retrieved from S&P Global