Q1 2020 Earnings Call
Ladies and gentlemen, you're currently on.
First quarter fiscal 2020 financial results conference call at this time.
All participants will be entering shortly thank you for your patience.
<unk>.
Please standby.
Good day, ladies and gentlemen, and welcome to the Quinstreet first quarter fiscal 2020 financial results Conference call today's call is being recorded.
At this time I would like to hand things over to Erica Abrams. Please go ahead.
Thank you Lisa good afternoon, ladies and gentlemen, thank you for joining yesterday.
Airport Quinstreet first quarter fiscal 2020 financial results.
Jamie on the call today are just watching.
Great long.
Industry.
This call is being simultaneously webcast on the Investor Relations section of our website at Www Dot Quinstreet Dot com.
Before we get started I would like to remind you that the following discussion contains forward looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially from those projected by such statements are not guarantees of future performance.
Does that make the results to differ from our forward looking statements are discussed in our recent filings, including our most recent 10-K filing made on August 29 2019.
Looking statements are based on assumptions as of today.
Many undertakes no obligation to update these days.
Today, we will be discussing both GAAP and non-GAAP measures reconciliation of GAAP to non-GAAP financial measures are included in today's earnings press release, which is available on our Investor Relations website.
I will turn the call leverage and Doug Ceos Quinstreet. Please go ahead.
Thank you Eric.
And thank you all for joining us today.
As projected we set another revenue record in fiscal Q1.
Revenue in our financial services client vertical ex mortgage grew 32% year over year.
Most importantly, the changes we announced last quarter to improve execution and regained momentum are already paying off.
And we expect accelerating positive effects on the business from those changes as we move forward.
We are maintaining our full fiscal year outlook for both both revenue and EBITDA.
Let me give anymore color on the EBITDA outlook since it implies that we expect higher margins throughout the rest of the year.
First our gross margin in Q1 reflected relatively heavy investment in new media opportunities for our fast growing financial services businesses.
We have already made good progress optimizing those sources to a higher media margin in Q2.
And we expect those investments in new media opportunities to contribute to continued strong revenue growth.
Investments in new media opportunities, where we test and ramped new sources, then go to recycle of margin and performance optimization.
Our an ongoing parts of our business model as many of you know.
Second with respect to gross margin and EBITDA.
We're seeing a mix shift to higher margin businesses I.
Our fastest growing at scale client vertical businesses have higher than average gross margins and now represent almost 200 million Dollarss annual revenue.
We expect the mix shifts trend to higher margin client verticals to continue throughout this fiscal year.
Finally, with respect to gross margin and EBITDA.
We're in the early stages of ramping new businesses with SAS slide margins, including but not limited to Q RP.
The insurance agency Radian management platforms developed in partnership with our largest insurance client.
We expect those businesses to be an increasing part of our mix as of year progresses and into the future.
As noted in our press release, we have retained Goldman Sachs to lead a process to review strategic alternatives.
Also as noted in the press release, we will undertake a broad review of potential alternatives to enhancing shareholder value.
We have not set a timetable for the conclusion of our review of strategic alternatives and.
Following this earnings call, we do not intend to provide updates until we determine that further disclosure is necessary or appropriate.
There can be no assurances that the review of strategic alternatives will result in a transaction.
Other outcome.
We're pleased that we delivered record revenue in Q1 and accelerated year over year growth.
Our initiatives to improve execution have already had a strong positive impact across the business and as a result, we feel confident in delivering strong results in Q2.
Let me reiterate that we remain enthusiastic.
And confident about our long term market opportunity.
Assets and capabilities.
And as I said earlier, we are maintaining our outlook for both revenue and EBITDA for full fiscal year 2020.
With that as important backdrop.
Given increased M&A and other activity in our markets.
And inbound interest.
We believe that the time and window of opportunity our right to assess our mix of businesses.
Structure.
And independence in light of delivering the best value to shareholders.
With that I'll turn the call over to Greg.
Thank you Doug.
Hello, and thanks to everyone for joining us today.
Q1 was a good start to our fiscal year with revenue, increasing 12% year over year to $126.6 million another record revenue quarter.
The changes store operating structure that we announced last quarter had been paying off as evidenced by a return to double digit revenue growth.
Adjusted EBITDA was $9.4 million or something like 5% of revenue.
Adjusted net income for the first quarter was $6.2 million or 12 cents per share on a fully diluted basis.
In the quarter, we grew our cash balance by $8 million the closed the quarter was $70.5 million of cash and equivalents.
Looking at revenue by client vertical.
Financial services client vertical represented 73% of Q1 revenue.
Grew at 20% year over year to $92.9 million.
Excluding mortgage financial services business grew 32% year over year.
Revenue from our largest call. It represented 18% of total revenue in the first quarter.
The reduction in concentration was due primarily to more aggressive spend by other insurance clients in a marketplace.
A record number of insurance clients spent $1 million or more a month in the quarter with us.
We expect the trend of more clients spending more budget in our marketplace is to continue as they shift more budget to digital.
And more digital spend to performance marketplaces.
Our relationship and commitment to our largest client pardon no way diminished nor is there demand for the results from our marketplaces.
Our education client vertical represented 14% of Q1 revenue and declined 22% year over year to $17.4 million.
The year over year decline was due to the collapse of Dream Center Education Holdings, a large education client and that will continue to be a tough year over year comparable until we lap this customer loss at the end of November .
Our other client vertical which includes home services and B to B.
Represented the remaining 13% to Q1 revenue grew 25% year over year to $16.3 million.
Moving onto adjusted EBITDA.
We remain focused on expanding profitability.
The first quarter included relatively heavy media investment in our financial services client vertical.
As is typical in our business media optimization follows that investment and we've already seen good progress and optimizing those investments to I or media margin.
We're maintaining our outlook for full fiscal year 2020 EBITDA.
EBITDA margins are they coming quarters are expected to expand due to further media optimizations.
An increasing mix shift to higher margin businesses.
And the ramping up new businesses with SAS like margins, including but not limited to Q R. P.
Turning to the balance sheet, we grew our cash balance by $8 million in the quarter.
We began the quarter was $62.5 million.
Generated $9.5 million, an operating cash flow.
Offset by $1 million of Capex to close the core was $70.5 million of cash and equivalents.
Normalized free cash flow for the quarter was $8 million or 6% of revenue.
Most of our adjusted EBITDA drops to normalized free cash flow due to the low capital requirements of our business model.
In summary, we continued to be excited about our opportunity and business model and believe we're well positioned to continued to deliver double digit revenue growth.
And expanding margins for the rest of fiscal 2020 and beyond.
With that certainly call over the operator QNX.
Thank you, Sir ladies and gentlemen, if he would like asking question.
Our one on your telephone keypad.
Speakerphone. Please make sure your mute button is turned off to a like your signal to reach our equipment.
Once again every one of these star one if you have a question today.
First question will come from Jim Goss Barrington Research.
Okay has known guys.
The other thing Jim.
Hi, with this strategic review I assume you can say whatever you can say on this call. It plays and I'm just wondering usually that implies principally looking at a sale or a breakup or something that does it also extend to anything on the table like potentially being a buyer.
The things it or is it.
Really only a just trying to.
Sometimes which we have right now.
Oh, we're gonna look at a broad range of all options Jim.
So it doesn't imply any single pass.
Or ordinary instead of pads. So we're we're gonna take a very broad look we think we've hired one of the best financial advisors in the world to help US do that we think there could be a lot of opportunities are in a lot of different areas. So I think as we said in the press release and then as I said boards intention is should we take a very broad view the range of auctions to come.
And can help us to.
Make sure that were you're delivering on the best possible path to shareholder value.
Okay operationally.
You talked about the heavy investment in new media opportunities there.
The revenues for both where we might have expected that to the gross profit was lower because the cost of revenues were higher and the margin EBITDA margin was lower than expected I would just wondering if.
That's is those are all trends, we should be baking into a mile carrying out over the next.
A couple of quarters like this 7.4% to Greg mentioned was Oh, Yeah, we thought maybe 9.4%. So I'm just wondering for you to ratchet those down because of higher costs.
No media and whatever else you're looking into.
It was of course there.
Right No. We we would not recommended you take those into account in your modeling is as I said in my remarks, I think Greg reiterated in his.
I don't recall, when we guided to year or we did not guide the quarter. The we don't control those are those expectations directly as you know as we look at the year, we feel very good about hitting the outlook that we provided last quarter for this fiscal year, which I think was.
10%, adjusted EBITDA margins and growth into 10% to 15% range on revenue.
We will make investments periodically and media opportunities.
That's part of our business model, we have to know make higher investments. This past quarter. Then we might have and then you typical quarter, we're going to do that opportunistically, when we see and have the opportunities.
But again as we look at the year when you combine to things we talked about in terms of already having optimized a lot of that media tour higher gross margin.
Plus the fact that we're continuing to see a mix shift or higher than average margin businesses, which represent.
You know almost half of our revenue now or about $200 million year in revenue.
And then to ramping up some of our SaaS margin products, including Q RP, which are not in any of our estimates at this point because again, we haven't done it before but.
On that particular product, we expect the first four contracts for Q RP.
Pretty significant agency partners to be done by the end of December .
And we have a pipeline now an active pipeline on that product that represents several million dollars a month and revenue opportunity for the company is that essentially you know 90 plus percent margins again that was not in our initial outlook either so we expect that that's that will be a that.
We will have contributions for that business this year so.
Again long way of saying no we would not a read anything into the 70% except that the timing of the investments and media happen to be last quarter, we still feel good about the year, we still feel good about the trajectory on revenue and EBITDA for the year.
And and again try to give us some color on that just to make sure that you understood why we felt that way.
I appreciate that the 10% number was this or when I was looking at.
And then finally the in terms of mortgages I know that's been a self spot. Despite the fact that a mortgage rates at the low and that's persistent you haven't really seen any up.
Take even uptick even though.
It's been a good environment for that particular vertical.
We have I think we're making good progress are recovering and and put the foundation and began to rebuild our mortgage business I feel good about the past where on but it's still down pretty dramatically versus.
Versus year ago, Yeah, the market reset.
What is significant as everyone knows we've talked about and on many of our our oh than other folks are industry have talked about.
And it shut down a lot of capacity at many of the mortgage companies was reduced its going to take them a lot to rebuild that capacity, if they're going to it for those that are going to try.
And a lot of the media also went away for the same reasons. It got efforts and media got shifted to other verticals. So it's it's a relatively long cycle to come back from of disruption that wasn't that significant.
I don't think a word down and out mortgage forever, but I think it's going to be a relatively long cycle back and we were still down pretty dramatically year over year due to those factors in the last quarter.
And I don't know when we lap that.
Pretty soon I guess in the next couple of quarters, we'll lap it again.
But I don't think again I think we're only mortgage should be taken us to go or in the near future, but I also don't think mortgages down enough forever I think we'll rebuild it.
I feel good about our progress doing that and our plan to do that in or or products. There, but a mortgage is still down was still down quite a bit your earlier in the quarter.
All right. Thanks to appreciate it.
Thank you Jim.
A reminder, everyone.
A question up next is John Campbell Stevens.
Hey, guys good afternoon.
Hey, John .
So yeah I guess, if this last time when you're talking about strategic review I suppose again, all our questions with no holding back so so first.
I guess, Doug what was the Ah Ah moment or kind of that pits in the that made you feel compelled or the board felt compelled to run a more I guess official strategic review process.
Isn't there a number factors that that came into play.
Obviously as you know there's been a lot of activity in our industry over the past couple of years and really at an increasing rate and scale, particularly on the M&A side.
We've had inbound interest and as a public company of course board felt like it's our responsibility to what do we have things like that happened in a serious way to make sure we stepped back and and take a big picture view of.
Of how we make sure we handle those kind of things in how we get on a path to ensuring.
The best possible outcome for the shareholders.
We think the timing is pretty good I mean, as we sorted through those two things we looked at the factor there's good momentum in the business. We're recovering the momentum that we felt like we dipped a little bit the into last fiscal year's you know we feel like we're really recover that momentum we have a lot of great things going on that's a good economy interest rates are low.
If we're going to go through this nows the time to go through it don't wait till you know the bottom falls out of the economy or interest rates started spike in or other things might affect us. So we feel like if you're gonna be.
You're gonna be prudent and thoughtful.
About doing something like this to you know that the timing is pretty good now rather than waiting and having things turned against just so we thought that was a factor and I say that the fourth factors.
Is that we're seeing.
And a lot of this has come through all of our partnership discussions you know that's been a big growing part of our business really strong growing interest.
And performance marketing and recognition and performance marketing is absolutely key to the future of monetization of media.
And and and memberships and and.
And.
You know any anytime you have traffic online and so I think you look at all those things together, we kind of step back and said you know it's maybe nothing comes to this but we we know there's reason for us to step back and take a look lets take back in <unk> and take a great look at and make sure we do it right and do it and this window. If this is in fact, a window and again I think.
We're fortunate enough and we've been working with Goldman on some other things were forced stuff to have been able to partner with you know certainly in my view one of the one of the greatest financial advisors in the world to help us through that so I I guess it just feels like it's the right thing to do at this time spurred by a lot of activity in end and some inbound interest that we.
We have to try to sort through and again as I said, a the wonders ride and I think the timing is right from an industry in interest standpoint.
Okay that makes a lot of sense I appreciate that on then I.
I guess, Greg on the gross margin pressure in the quarter, how much of that was it was an one versus the media investments you called out.
Is it mostly media investment.
Yes. It is mostly media investments if you look at it from a year over year perspective, John a lot of it actually is.
Incremental headcount that we didnt have last year associated with that I am on acquisitions.
That said, we did investing pretty significantly in new media in financial services.
Sure.
Brought down what we what we call our media margins that would cover those incremental costs. So yeah I look at it is really.
Investment into media in financial services.
That makes sense and remind us again, just typically what the those kinda contracted.
Oh, what's the duration you look like on some of those media purchases.
Most of these are not media purchases. Most of these are our revenue share deals. So and this one. These in particular were revenue share deals in a couple of cases I think when they have committed short term, but in general we don't make long term commitments to buy traffic.
We will sometimes do that it for early into a deal.
But typically it's a rev share and.
And we are and you know what would we have this on our mix all the time will very often go into a new media area.
And find out did it in order to hold our position, while we reiterate up to the margin we want will guarantee a certain amount to the to the partner over a period of time until we get to the point, where we can shift over to the Rev share model in this case, we just had.
Some media that we were pushing really hard and couple of our fast growing businesses.
We felt like.
The media was gonna be what's going to perform better faster than it did.
We still would have made those investments anyway, because we think during the important to expanding that media footprint in those businesses. It's just timing wise it took us a little bit longer and we didn't get to the margin profile. We wanted as fast as we wanted to.
We're getting that we're getting it there now and door. We've got those media sources out so I wouldn't think of it as any kind of long term commitment is typically very short term if at all and then use cases. It was very short term just happened to hit US you know pretty hard.
Typically hard last quarter, let me be clear, though we would we we're going to make media investments the timing of this one just affected.
EBITDA last quarter, maybe a little bit more than certainly.
Expectations showed but doesn't change our outlook for the year and we you know and again, we're going to make meet investments as we go but I don't expect it to be investments to alter our enthusiasm or optimism for our outlook for the year either.
To be clear you know, we've never been our businesses not accessing low margin business. We were we are happy to invest and all margin business upfront. If we know that we can optimize it up to acceptable margins overtime and that's what we tried to Santa prepared remarks, as we've seen that we've seen that you'd see we've seen those margins start creeping up and that's going to.
Hello impact the rest of the or what the margins on that on the businesses that had those those where they are infected by that media that some of those businesses amongst some of those barges already up five points, that's right. So and that's pretty significant chunk of business. So we're again, it's pretty short cycle. It just you know because of the timing it in.
I, just want to which we can't always choose.
No. It makes a quarter looked weaker than may have been expected, but it does not affect our view of the year at all.
So basically some it's similar to the upfront investments you had it looks like and they WL back in the day.
Yes, a similar it's just a short term cycle you you know were guaranteeing a little bit for the media, while we sorted out and they reiterated up and anyway, then it either works and we you know we run with an expanded which is part of what sees our business and has for 20 years or we cut it out if we find that we in fact.
Can't optimize it again to be clear when optimization is is what rate does it does it convert for what clients doesn't match, what's the right price for it how do we segmented to get the best match rates all the stuff that you know we do as you know its part when we say optimization. That's what we're talking about so it's a kind of thing that you know it makes our business tick everyday.
Okay.
Helpful. Thanks, guys.
Thank you John .
Next is Jason Kreyer Craig Hallum.
Hey, guys. Thanks for taking my questions apologies I hopped on late so if you if you've covered some of this stuff again sorry for.
Spending more time out of here, but just on those new nowhere as Jason you talk.
Is there anything new that you haven't gone after in the past or are these specific to any particular industries that you participate in.
Not.
In any of our particular verticals. We there's this different mix a media the decent ticker investments were in a vertical where we are one of our biggest verticals, where we have great presence in some types of media and not as great a presence and some others, where we think there's a lot of opportunity.
We began expanding into some of those areas, where we think there's a lot of opportunity but are newer to this particular vertical and what we found what does that they did not you know that our expectations for the key performance metrics of that media, which take a while to see because there's a relatively those a little bit of a longer cycle time in that vertical were not what we expected.
We learned a lot from it we cut some back out we now have optimized others and I think now we're in a position to really effectively ramp that segment of media for that vertical which is what we that's what the investment was all about was figure. It out. So then you know.
How to optimize it whether you can optimize it and how big you can grow at so it's it was a segment of media this relatively new for that vertical but as one we're very familiar with and other verticals and it will work. We just had to find the right mix and the right approach to a to work in it.
Got it thank you and I wanted to switch gears into Q RP. Some of the commentary you made there can you just give us kind of a snapshot of where that stands today and how you're thinking about the progression of Brad and then what are the factors that go into that progression. I mean are you at the mercy if somebody's external parties.
You talked about having a backlog there and so I'm wondering what keeps that backlog from being recognized sooner than later.
Sure and again remember call we haven't done this before and this exact way, but let me tell you will you know <unk>, let me tell you what we know.
We have a very deep pipeline at this point a very active discussions those that pipeline in active discussions or this is worth companies that do a lot of quoting in the independent agent channel of course, because that's what this product is for.
That pipeline represent several million dollars a month in revenue opportunity for us and that's just the active pipeline. We as you know we size that overall market.
To be over 100 million quotes and you can assume that are our average pricing as an introductory pricing is about a dollar quote the it we expect that active pipeline that there for contracts that will get will get done by the end of December .
I will represent pretty meaningful revenue opportunity because are pretty decent size agencies.
We are in terms of Windows will go live that's the part we haven't done yet so we're not exactly sure but the products ready.
Integrations are pretty straight forward most of these partners, though will want to put the product in place and running parallel to the existing systems for a while while they tested and train and make sure. It works the way they expected to work in that their agents are trained on it. So I don't expect it to be a a you know.
Good day, they switch terms or the revenue coming.
But I expected to be you know the the pilot clients a win fairly well fairly fast so lot of value to these clot. These partners where this platform. It you know our pilot partner I believe estimated that he had improved the productivity this agents by 40%.
Which is massive and doesn't surprise me given the efficiencies in the platform. So we there's a lot of a it's a very compelling value proposition is big value add for the agencies. Our carrier partners are rare very supportive and.
And I want this roll down because the benefits it provides to them so.
That's kind of the state of play in there as we've said before we don't know exactly what the ramp looks like we haven't done it before.
But obviously you know as we'll keep reporting to you as we make incremental progress in each step and right now that the two best metrics are.
Deep active discussion pipeline, which represents $7 million per month in revenue as we as we estimated based on the metrics I told you in terms are really quotes and and and rate per quote.
And then for contracts added that pipeline ends, but pipelines probably got.
30 or 40.
A pretty significant players in it.
We expect for those contracts to be signed it by the end of December which means we will be an active you know.
Ah install if you will and and testing and ramp mode. Beginning the first of the year. This kind of a turn on a switch. This is obviously a SaaS product all they have to do as ever log in Oh, if we get very little data from them to get it lives. So we don't expect it does this isn't a long.
Installation or integration process. So you know, we'll keep you posted but I would expect live revenue happening.
And Ah you know the in the end of our fiscal third quarter.
The first calendar first quarter.
And I think it only ramps from there.
Okay.
The great color in there so thank you for all of that.
And maybe one more for me probably a great question. Just wondering if you can unpack that 20% growth that you saw in financial services.
Are there any you know any call outs that that surprised you are 80 industries within there that that outperformed our underperformed.
Not besides mortgage them and we don't want to give the into it and you know we've said this for several quarters, we'd rather not break it down any further within the various verticals but.
You know the I think the big call out or two big call outs. One is overall grew 20% an ex mortgage produced 32%, which means that anymore and I guess are there. So we're calling on mortgages as a as particularly bad but I think overall French served in the French services vertical growing 32% Exa you know the mortgage business, which is kinda on its on its can.
We feel pretty good about right.
Okay fair enough thanks, guys.
Thank you Jason.
And once again, everyone. Please press star one if you have a question next step is crystacomm singular research.
Hi, Doug and Greg I'm, just had a question on I guess the these.
And the sort of improvement.
Operational improvements that you're doing.
I wanted to see you know you could.
Sort of us.
The fire how you know how these effect or margin you know next quarter and then.
The year.
Yeah there.
There are really a number of changes we talked about three of them on our last call. The consolidation of our media organizations back into a functional group centralized function group run by Tim Stevens.
We're seeing great progress there in terms of execution improvements in execution.
In the against the business, we have already seen positive impact on margin from those activities and most of our businesses, including very important in insurance.
We consolidate it we created a new layer over accountability in the various business verticals, we did and that we're seeing great ownership from that new leadership level.
And real ownership or their numbers and a clarity in terms of their execution initiatives, that's been going well. The third thing we talked about last time was there since last reporting and more transparent reporting into initiatives, where detailed report into initiatives. We have that's been going well, we continue to review that as a group.
Every.
Every Tuesday, now and our executive sessions and I feel like we have a better visibility better clarity I'm better shared vision and shared view of the progress and the expectations a of the various initiatives a force initiative that we added since the last call. We see we did re centralized.
And not made this final decision yet last time, but we did recently so I was all the product resources out of the verticals back into a central functional team.
I would say that that maybe the most exciting.
Moving we made in terms of how fast.
Who is our head of product has a got her arms around.
That's set of initiatives and that function and has really inflected the progress and you know we have a lot of product opportunities here when I say product, it's really the implementation of the segmentation matching and algorithmic platforms in the various verticals and all the things around that.
To make those businesses work better and we have an early indications from that including a couple of a big tests on some of 'em initiatives, there have gone very well and imply.
Good strong contributions to margin.
Already had tens of thousands of dollars per month in margin opportunity, but that's on various tests that were scale much more dramatically than that so I wouldn't say all I mean, I'm not displeased with any of it I'm actually very pleased and I'm extraordinarily happy that it happens so fast and that we're seeing some.
Much impact so quickly.
Okay, great. Thanks to that and one other question I have is.
You know I mean, you've addressed before but you guys are you guys have 70 million of cash you know there on the balance sheet, a where you guys any plants about or any sort of acquisitions or or can you can you further comments on that.
Yeah, we'll we'll continue to be opportunistic about acquisitions, Chris as we have been you know am one is has been a big success for us by bank trackers been a big success for us before that cloud controlled media was a big success for us. So we'll continue to be opportunistic and have a high standard for acquisitions and I feel like the track record. We've had some last couple of years.
There's there's a being selected that making acquisitions that worked great. I think that's that's going to continue to be our number one priority.
Investing and you know just and finding ways to invest aggressively into business and that.
Can be throughout the acquisitions or could be in product areas, where we might capitalize some product development. We have a couple of those going on I say second priority would be just making sure. We maintain a very conservative financial profile $70 million, there's a lot of cash, but given our size, it's not that much cash and so will you know what we do generate cash so were.
Where you know we keep doing that in the third would be we have demonstrated historically, we will continue to to.
To to demonstrate that you know if there are other way so use that cash to benefit shareholders and to generate shareholder value will we will consider those and do those things where it makes sense, but we don't have any near term plans.
To do anything by way of buybacks or dividends.
Particularly given the process, we just center.
But you know obviously in the historically, we've been willing to do that we've demonstrated we'll do that and.
We will continue to be mindful of that but it's a it's a third priority you know first and foremost invest in a in the business smartly, which we feel like Weve demonstrated and we will continue to do second make sure we maintain a good conservative financial profile so that.
We we are we take on operational complexity of enough financial complexity answered you know be mindful of there could be other waste use cash to help to shareholders, which we have been and we will be.
Okay, alright, thanks, thanks for that.
Thank you Chris.
Next question will come from Adam Klauber William Blair.
Oh, good afternoon, guys. Thanks.
Adam.
A couple of different questions, how much to cloud control media and bank track or add to revenue this quarter.
It's very hard to say, we integrate those businesses those are base, we integrated those assets immediately enter the businesses. So a hard to say because of the way we integrated them, they're not really run as separate entities and B I don't have those numbers in front of me we dealt [noise].
Those are integrated it's fully it's not really break out of all I would say if you look at club control media, though for example.
It was.
Very minimal inorganic growth a lot of the growth that we saw the cloud controlled media was taking RQ MP platform, which is very effective for media buying across the channel and applying that to their existing client base and we saw a lot of organic growth or that you don't recall, that's the that was the main.
Premise of that deal was accelerating the rollout of our new products and.
In particular Q on T. as a channel management platform and I think we now have eight clients.
Q on P., which is great, but as Greg said, it's a that wouldn't be clear cut your media revenue that'd be QM p. revenue out of Quinstreet, So and that revenue is going to ramp relatively slowly.
As we get more and more spend to those platforms, but represents very very attractive.
Long term business for us.
Okay.
Then as far the the mortgage headwind from what you said that sounds like it was roughly eight to 9 million this quarter.
Any sense of will be that level next quarter will be materially lower next quarter, just not look for an exact number but just any sense, whether there'll be a pretty good mortgage headwind next quarter.
Okay.
Yes, I think.
Adam I think mortgage is going to as Doug said it before I think.
We are feel positive about the progress, we're making towards really rebuilding up that business. It has been painful for us I think it'll continue to be a tough comp for us for a few more quarters.
And that's kind of how I characterize where we are and mortgage it's not going away. We're working on it we're happy with the progress in terms of where we are going to rebuilding that but I think it will continue to be a tough call for the next two quarters.
Okay next quarter won't look that much different than this quarter in terms of its impact adding to your point I think going to be similar impact next quarters as a as I had this quarter.
Okay.
And then just follow falling that on a thought next quarters.
Is your seasonally low corridor any puts and takes we should think about going to that seasonally low quarter that will help or hurt.
What's traditionally up a tougher quarter.
Yeah, we expected to be season will be seasonally down I don't know I think it'll be on the.
Lower end.
Possibly of our historic seasonally down we've got good momentum in a number the businesses.
But I don't think they're there shouldn't be any surprises it's ah.
We expect as I said in the prepared remarks is going to good strong quarter for us.
Okay. Okay. Thanks.
And then with think you RP the cure p. ramp up.
Yeah, when the agents transfer over again that they'll test the system, but when you when they transfer over his expectation.
Ill use your system for 100% other quotes.
100% of the auto quotes at least.
We think eventually we don't know again since we haven't done it before we don't know over what period of time, a once you use our system, it's hard not to want to use it for 100% your quotes because it's just so much simpler.
And is so much easier.
Less cumbersome for the agents to use and.
And auto is the first product, but we'll I think home home now rolls through the platform as of December .
And so.
Initially auto but to be auto and home as of December . So yeah. We think eventually yes, we just don't know exactly at what rate they they against chain day, they will transition because again, we just haven't done it before once we get data and we see if you have and do it I think we'll go do a better job of of modeling and then communicating that.
Are you guys.
Okay.
And then as far as your annual guidance, you reaffirmed and that's great. Obviously this quarter you know is better.
Is that is that mainly on the annual being a little conservative is it recognition that you've still got this big mortgage headwind, how should we think about that bit of that disparity.
So we feel good about it you know where we've we've just ran a re forecast of everything.
Based on.
Q1, actuals Q2 s latest forecast and everything we know now.
Oh, and we know a lot more now than we did going into the year and and.
The answer is we still feel really good about the annual guide.
Okay. Okay, and then last question was Goldman actually hired was that just very recently it was on a month ago two months ago.
We've been working with them for.
A couple of months on a less formal basis.
As they have been working with us on various partnerships.
And then nights in terms of retaining them.
For this process the board formally approved that.
Formally approved it yesterday, but made the decision to do it at the board meeting, which was a week or so ago right.
Okay very helpful. Thanks, guys like.
Thank you.
And ladies and gentlemen, there no further questions that does conclude today's conference.
I will be available 39, seven PM central time this evening.
80.
1112, and entering passcode two five to one 319. This replay will run through November 14, 2019, seven PM Central time once again, everyone. Thank you for your patience you may now disconnect.