Q3 2020 Quotient Technology Inc Earnings Call

On the line annualized revenue.

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Hi, quotient Dot com alongside our press release and earnings presentation.

Before we begin please note that during this call you will hear forward looking statements.

Is forward looking statements include projections for fourth quarter and full year 2020, our ability to manage our business and liquidity and to catch your marketing dollars during and after the global pandemic expansion of a retail partnerships launch of our national rebates platform.

South section of the stockholders leather issue today and in the earnings presentation size posted on the company's website.

With that I will now turn it over to Stephen.

Thank you Christine Hello, everyone and welcome to our 232020 earnings call. This was a historical quarter for a company cause we delivered record setting revenue of $121.1 million up 5% year over year and up 45% over last quarter on a GAAP basis.

Stang in their business and a highly engaging way for consumers.

I'm pleased to announce that the two retailers, we signed last quarter, Hi, V and Rite aid have both gone live with our solutions.

Ivy launched retailer IQ quotient digital coupon platform.

Our digital out of home offering allows brands to measure campaign effectiveness may quick changes as needed and dynamically connect with consumers using digital display channels in ways that were not possible before.

Expanding our distribution and digital out of home to in store brand advertisers now have the ability to influence consumers right at the point of purchase.

Strategies and prioritizing retail media is another prominent growth driver for us.

Quotient retail performance media gives retailers an advantage in the market by providing them with a powerful digital platform offering high performing targeted marketing solutions that result in increased sales and incremental revenues to the retailer without the cost and time of building out their own platform.

As we begin the fourth quarter, our bookings are strong and our public commentary from many of our CPG customers points to increase spending for the rest of this year and into next year. However, the pandemic is still a global challenge and parts of our country are experiencing spike with the potential for increased closures it is difficult to per.

Fixed costs would increase in headcount.

Last year at the midpoint.

Pandemic, we believe that we are well positioned to take advantage of market trends that favor digital promotions and marketing we look forward to discussing more with you in two weeks at our Investor day, including our continued path to profitable and sustainable growth with the presentation of our long term financial model.

And with that I will turn the call over to questions.

Operator.

Ladies and gentlemen at this time, we will begin the question and answer session.

I ask a question you May press Star then one using a touch screen telephone. If you are using a speakerphone you ask you. Please pick up the handset before pressing the keys.

Withdraw your question you May press Star two.

Once again that is star and then one to ask a question.

We will pause momentarily to assemble the roster.

It's one one.

So we haven't we haven't forecasted 21 yet.

At our Investor day, coming up we plan to roll out a longterm model, but what I can tell you is that the conversations are continuing the speed.

You know our our CPG customers are acutely aware the decline of that vehicle and the want from retail to shift more of their dollars to digital. So you know to stay tuned for a couple of weeks on that but but all signs of pretty positive there.

Okay and then.

Go at it one other angle so in the last couple of calls.

Called out four or five things that could accelerate the business.

In 2021.

Okay.

Are you less optimistic about the ability to accelerate revenue growth because of the covid spike or some other changes in the business.

No not at all you know all of those factors that we talked about are still.

Are still top of mind, so we talked about retail our engagement and pushing for fixed percentages of spend moving over to digital we've talked about decline of the F. Aside we've talked about.

Digital retailers coming on board, which you've just seen us do that we've talked about stepping into non core verticals, which we expect to be able to announce.

Impacts, but keep in mind, the gross to net change happened in Q2.

Down in Q1, so we booked an author roughly 10 million in Q1, and so it was it was roughly $10 million per quarter business. What's the run rate, So 33 million impact of the gross to net.

I'm starting in Q2 2020.

Okay. Thank you. That's that's very helpful. So I am just trying to.

So no real change there you're just trying to pointed out from a.

You Didnt exit any incremental media business. This quarter I guess is is to somebody.

It's fair to say right. That's fair to say Thats correct. So you are just trying to get a comparison year over year from an organic and back it out okay I understand right.

I'm trying to.

Connect.

Or trying to get a sense of you know its business improved sequentially month to month throughout the quarter.

In July we couldn't have done that great August probably was a lot of fair amount better in September was a lot better I mean, your run rate exiting the quarter.

Tend to be a lot better than started in the quarter and you indicated bookings for October were very strong how Hollywood revenues to be flat sequentially.

Yeah. So you know in setting guidance for Q4.

Right.

Consistent with what we said in the past demand has picked up in the second half significantly from where it was in the first half and our bookings pipeline is strong.

But we do see uncertainties, yet from the global pandemic and so we wanted to remain cautious with our outlook.

Put something out there that we could achieve app bookings and pipeline that we're seeing are weighted heavily towards media and thats been pretty consistent with what we've seen since the pandemic hit break promotion spend is the first to be impacted and several of our largest CPG customers are still concerned about supply chains and havent really.

Return to pre pandemic spending so the softness in the <unk> and the numbers are really around promo.

Well, we could end up having a strong quarter in promo the pandemic is leading us to be a bit more conservative on on the guide.

I'm sure you've seen many other companies kind of report good results in the third quarter with some cautious optimism in the fourth quarter. So that's that's what was chosen to do here.

Okay and just on on.

Net basis or just overall did did you lose any RPM partners recently.

Well, yes, so so one very small the smallest of our partners one small retailer came off our platform.

They're experimenting with another solution right now and it was not a material or meaningful contributor to our economics.

Okay. Thanks much sure.

Sure.

Once again, if you would like to ask a question. Please press Star then one.

Our next question comes from Samuel Nielsen from Oppenheimer. Please go ahead with your question.

We hope you'll be able to participate in closing we look forward to the future and are excited to finally see division. We created taking hold is the acceleration of the shift the digital is here. Thank you again everyone.

Ladies and gentlemen, without will conclude today's conference call with you. Thank you for attending you may now disconnect your lines.