Q4 2026 QuinStreet Inc Earnings Call

August 6, 2026

Operator: Good day, welcome to QuinStreet's Fiscal Q4 and Full Year 2026 Financial Results Conference Call. Today's conference is being recorded. Following prepared remarks, there will be Q&A session. At this time, I would like to turn the conference over to Vice President of Investor Relations and Finance, Robert Amparo. Mr. Amparo, you may begin.

Operator: Good day and welcome to QuinStreet's Fiscal Q4 and Full Year 2026 Financial Results Conference Call. Today's conference is being recorded. Following prepared remarks, there will be Q&A session. At this time, I would like to turn the conference over to Vice President of Investor Relations and Finance, Robert Amparo. Mr. Amparo, you may begin.

Speaker #1: day, and welcome to QUINSTREET's fiscal fourth quarter and full year 2026 financial results conference call. Today's conference is being recorded. Following prepared remarks, there will be Q&A session, at this time I would like to turn the conference over to Vice President of Investor Relations and Finance, Robert Amparo.

Speaker #1: Mr. Amparo, you may begin.

Speaker #2: Thank you, operator. And thank you, everyone, for joining us as we report QUINSTREET's fiscal fourth quarter and full year 2026 financial results. Joining me on the call today are Chief Executive Officer Doug Valenti and Chief Financial Officer Greg Wong.

Robert Amparo: Thank you, operator, thank you everyone for joining us as we report QuinStreet's fiscal Q4 and full year 2026 financial results. Joining me on the call today are Chief Executive Officer, Doug Valenti, and Chief Financial Officer, Greg. Before we begin, I would like to remind you that the following discussion will contain forward-looking statements. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those projected by such statements and are not guarantees of future performance. Factors that may cause results to differ from our forward-looking statements are discussed in our recent SEC filings, including our most recent 8-K filing made today and our most recent 10-Q filing. Forward-looking statements are based on assumptions as of today. The company undertakes no obligation to update these statements. Today, we will be discussing both GAAP and non-GAAP measures.

Speaker #2: Before we begin, I would like to remind you that the following discussion will contain forward-looking statements. Forward-looking statements involve a number of risks and uncertainties that may cause actual results to differ materially from those projected by such statements, and are not guarantees of future performance.

Speaker #2: Factors that may cause results to differ from our forward-looking statements are discussed in our recent SEC filings, including our most recent 8-K filing made today and our most recent 10-Q filing.

Robert Amparo: Factors that may cause results to differ from our forward-looking statements are discussed in our recent SEC filings, including our most recent 8-K filing made today and our most recent 10-Q filing. Forward-looking statements are based on assumptions as of today. The company undertakes no obligation to update these statements. Today, we will be discussing both GAAP and non-GAAP measures.

Speaker #2: Forward-looking statements are based on assumptions as of today and the company undertakes no obligation to update these statements. Today, we will be discussing both GAAP and non-GAAP measures.

Speaker #2: A reconciliation of GAAP to non-GAAP financial measures is included in today's earnings press release, which is available on our investor relations website at investor.quinstreet.com.

Robert Amparo: A reconciliation of GAAP to non-GAAP financial measures is included in today's earnings press release, which is available on our investor relations website at investor.quinstreet.com. With that, I will turn the call over to Doug Valenti. Please go ahead, sir.

Speaker #2: With that, I will turn the call over to Doug Valenti. Please go ahead, sir.

Speaker #3: Thank you, Rob. Welcome, everyone. Fiscal Q4 was another record quarter. We delivered strong performance and progress across the business. To close out a record fiscal year for QUINSTREET, we grew quarterly revenue 43% year over year.

Doug Valenti: Thank you, Rob. Welcome, everyone. Fiscal Q4 was another record quarter. We delivered strong performance and progress across the business to close out a record fiscal year for QuinStreet. We grew quarterly revenue 43% year over year, with strength in both financial services and home services. Adjusted EBITDA was up 87% year over year in the quarter. Adjusted EBITDA margin was 11.1% in the quarter, a 270 basis point expansion over the year-ago period. Full fiscal year 2026 revenue grew 18% year over year to $1.3 billion. Full fiscal year adjusted EBITDA grew 38% year over year to $112.5 million, an 8.7% margin and a 130 basis point expansion year over year. Over the past two years, we have more than doubled revenue while expanding margins, growing adjusted EBITDA by over 450%. We have also delivered strong cash flows and maintained a conservative and flexible balance sheet.

Speaker #3: With strength in both financial services and home services, adjusted EBITDA was up 87% year over year in the quarter. Adjusted EBITDA margin was 11.1% in the quarter.

Speaker #3: A 270 basis point expansion over the year ago period. Full fiscal year 2026 revenue grew 18% year over year, to 1.3 billion dollars. Full fiscal year adjusted EBITDA grew 38% year over year, to 112.5 million dollars.

Doug Valenti: Full fiscal year 2026 revenue grew 18% year-over-year to $1.3 billion. Full fiscal year adjusted EBITDA grew 38% year-over-year to $112.5 million, an 8.7% margin and a 130 basis point expansion year-over-year. Over the past two years, we have more than doubled revenue while expanding margins, growing adjusted EBITDA by over 450%. We have also delivered strong cash flows and maintained a conservative and flexible balance sheet.

Speaker #3: An 8.7% margin and a 130 basis point expansion year over year. Over the past two years, we have more than doubled revenue while expanding margins.

Speaker #3: Growing adjusted EBITDA by over 450%. We have also delivered strong cash flows, and maintained a conservative and flexible balance sheet. Going forward, we expect to be able to continue to grow revenue at strong double-digit rates.

Doug Valenti: Going forward, we expect to be able to continue to grow revenue at strong double-digit rates. We are early in the penetration and footprint of our addressable markets, which we estimate to be well over $100 billion per year in total opportunity, and to be themselves growing at double-digit rates. Carrier demand and economics in auto insurance are exceptionally strong, and our footprint of clients and products is expanding rapidly. In home services, our trade growth and new trade expansion programs are going well. Client demand is exceptionally strong, and the addition of HomeBuddy, whose integration has gone very well, has given us much valued new scale capacity to meet demand. The home services client vertical is now running well over half a billion dollars per year in revenue.

Speaker #3: We are early in the penetration and footprint of our adjustable markets. Which we estimate to be well over 100 billion dollars per year in total opportunity.

Speaker #3: And to be themselves growing at double-digit rates. Carrier demand and economics in auto insurance are exceptionally strong. And our footprint of clients and products is expanding rapidly.

Speaker #3: In home services, our trade growth and new trade expansion programs are going well. Client demand is exceptionally strong. And the addition of HomeBuddy—whose integration has gone very well—has given us much valued new-scale capacity to meet demand.

Doug Valenti: In home services, our trade growth and new trade expansion programs are going well. Client demand is exceptionally strong, and the addition of HomeBuddy, whose integration has gone very well, has given us much valued new scale capacity to meet demand. The home services client vertical is now running well over half a billion dollars per year in revenue.

Speaker #3: The home services client vertical is now running well over half a billion dollars per year in revenue. We are also making good progress on growth initiatives in our other earlier-stage client verticals and products.

Doug Valenti: We are also making good progress on growth initiatives in our other earlier-stage client verticals and products, all of which are targeting big, attractive market opportunities. Those businesses already generated over $200 million in revenue last fiscal year. Our revenue growth generally will continue to be driven by the relentless shift of marketing budgets to digital, and in digital to our performance marketplaces, whose microeconomics drive unparalleled media efficiency at scale for our clients. Our customer retention rates continue to be extraordinarily high, and the vast majority of our double-digit organic revenue growth comes from existing clients shifting and allocating more budgets to our marketplace solutions. We see the shift to digital and performance marketing as still early and accelerating, and we are driving market growth by expanding and innovating new products and media capacity, and by uniquely and consistently delivering results at scale for clients.

Speaker #3: All of which are targeting big attractive market opportunities. Those businesses already generated over 200 million dollars in revenue last fiscal year. Our revenue growth generally will continue to be driven by the relentless shift of marketing budgets to digital and in digital to our performance marketplaces—whose microeconomics drive unparalleled media efficiency at scale for our clients.

Speaker #3: Our customer extraordinarily high. And the vast majority of our double-digit organic revenue growth comes from existing clients shifting and allocating more budgets to our marketplace solutions.

Doug Valenti: Our customer retention rates continue to be extraordinarily high, and the vast majority of our double-digit organic revenue growth comes from existing clients shifting and allocating more budgets to our marketplace solutions. We see the shift to digital and performance marketing as still early and accelerating, and we are driving market growth by expanding and innovating new products and media capacity, and by uniquely and consistently delivering results at scale for clients.

Speaker #3: We see the shifts to digital and performance marketing as still early and accelerating. And we are driving market growth by expanding and innovating new products and media capacity.

Speaker #3: And by uniquely and consistently delivering results at scale for clients. Strategically, we expect to continue to be a disciplined and effective acquirer and consolidator, just as we have always been and as has been most recently demonstrated by our exceptional results with AM1, Modernize, Aquavita Media, and HomeBuddy.

Doug Valenti: Strategically, we expect to continue to be a disciplined and effective acquirer and consolidator, just as we have always been, and as has been most recently demonstrated by our exceptional results with Amway, Modernize, Aqua Vida Media, and HomeBuddy. Our key operating competitive advantage continues to be our industry-leading technologies, including our core AI optimization algorithms. We are implementing dozens of new AI applications to accelerate performance and productivity across the business, and we are already seeing significant positive results from those AI applications, and we are broadening and accelerating those projects. As we grow revenue, we expect to continue to expand margins driven by, one, growth of owned and operated media. Two, a mix shift to higher margin products and verticals. Three, top-line leverage from increased revenue scale, combined with continuous improvement in productivity and cost efficiency. Turning to our outlook.

Speaker #3: Our key operating competitive advantage continued to be our industry-leading technologies. Including our core AI optimization algorithms. We are implementing dozens of new AI applications to accelerate performance and productivity across the business.

Doug Valenti: We are implementing dozens of new AI applications to accelerate performance and productivity across the business, and we are already seeing significant positive results from those AI applications, and we are broadening and accelerating those projects. As we grow revenue, we expect to continue to expand margins driven by, one, growth of owned and operated media. Two, a mix shift to higher margin products and verticals. Three, top-line leverage from increased revenue scale, combined with continuous improvement in productivity and cost efficiency.

Speaker #3: And we are already seeing significant positive results from those AI applications. And we are broadening and accelerating those projects. As we grow revenue, we expect to continue to expand margins.

Speaker #3: Driven by, one, growth of owned and operated media; two, a mix shift to higher-margin products and verticals; and three, top-line leverage from increased revenue scale combined with continuous improvement in productivity and cost efficiency.

Speaker #3: Turning to our outlook. We expect revenue in fiscal Q1, which began on July 1st, to be between 370 and 380 million dollars. Implying 31% growth year over year at the midpoint of the range.

Doug Valenti: Turning to our outlook. We expect revenue in fiscal Q1, which began on 1 July, to be between $370 to $380 million, implying 31% growth year over year at the midpoint of the range. We expect adjusted EBITDA to be between $38 to $40 million, implying 90% growth, a 10.4% margin, and a 320 basis point margin expansion year over year at the midpoint of the range. Our initial outlook for full fiscal year 2027 is that we expect revenue of $1.45 to $1.55 billion, implying 16% growth year over year at the midpoint of the range.

Doug Valenti: We expect revenue in fiscal Q1, which began on 1 July, to be between $370 to $380 million, implying 31% growth year over year at the midpoint of the range. We expect adjusted EBITDA to be between $38 to $40 million, implying 90% growth, a 10.4% margin, and a 320 basis point margin expansion year over year at the midpoint of the range. Our initial outlook for full fiscal year 2027 is that we expect revenue of $1.45 to $1.55 billion, implying 16% growth year over year at the midpoint of the range. We expect adjusted EBITDA to be between $150 to $160 million, implying 38% growth, a 10.3% margin, and another 160 basis point margin expansion year over year at the midpoint of the range. That is on top of last year's 130 basis point adjusted EBITDA margin expansion. Obviously, the new fiscal year is young.

Speaker #3: We expect adjusted EBITDA to be between $38 million and $40 million, implying 90% growth, a 10.4% margin, and a 320 basis point margin expansion.

Speaker #3: Year over year. At the midpoint of the range. Our initial outlook for Q4 full fiscal year 2027 is that we expect revenue of 1.45 to 1.55 billion dollars.

Speaker #3: Implying 16% growth year over year at the midpoint of the range. We expect adjusted EBITDA to be between 150 and 160 million dollars. Implying 38% growth.

Doug Valenti: We expect adjusted EBITDA to be between $150 to $160 million, implying 38% growth, a 10.3% margin, and another 160 basis point margin expansion year over year at the midpoint of the range. That is on top of last year's 130 basis point adjusted EBITDA margin expansion. Obviously, the new fiscal year is young. As the year progresses, we believe that there may be opportunities to grow revenue and expand margins even further, just as we found last fiscal year. If so, we will, of course, refine our outlook accordingly. With that, I'll turn the call over to Greg.

Speaker #3: A 10.3% margin. And another 160 basis point margin expansion year over year at the midpoint of the range. That is on top of last year's 130 basis point adjusted EBITDA margin expansion.

Speaker #3: Obviously, the new fiscal year is young. As the year progresses, we believe that there may be opportunities to grow revenue and expand margins even further.

Doug Valenti: As the year progresses, we believe that there may be opportunities to grow revenue and expand margins even further, just as we found last fiscal year. If so, we will, of course, refine our outlook accordingly. With that, I'll turn the call over to Greg.

Speaker #3: Just as we found last fiscal year. If so, we will of course refine our outlook accordingly. With that, I'll turn the call over to Greg.

Speaker #2: Thank you, Doug. Hello and thanks to everyone for joining us today. Q4 was a strong finish to a record year for QUINSTREET. As we delivered yet another quarter of strong double-digit revenue growth and expanded adjusted EBITDA margins.

Greg Wong: Thank you, Doug. Hello, and thanks to everyone for joining us today. Q4 was a strong finish to a record year for QuinStreet, as we delivered yet another quarter of strong double-digit revenue growth and expanded adjusted EBITDA margins. For the June quarter, total revenue grew 43% year over year and was $373.9 million. Adjusted net income was $29 million, or $0.50 per share. Adjusted EBITDA grew 87% year over year to $41.4 million and came in at an 11.1% margin, a 270 basis point expansion over the year ago quarter. Looking at revenue by client vertical, our financial services client vertical represented 62% of Q4 revenue and grew 24% year over year to $232.3 million, a record revenue quarter for that business. Auto insurance remained strong in the quarter and grew 37% year over year.

Speaker #2: For the June quarter, total revenue grew 43% year over year. And was 373.9 million dollars. Adjusted net income was 29 million dollars or 50 cents per share.

Speaker #2: Adjusted EBITDA grew 87% year over year to 41.4 million dollars. And came in at an 11.1% margin. A 270 basis point expansion over the year ago quarter.

Speaker #2: Looking at revenue by client vertical, our financial services client vertical represented 62% of Q4 revenue and grew 24% year over year to 232.3 million dollars.

Greg Wong: Looking at revenue by client vertical, our financial services client vertical represented 62% of Q4 revenue and grew 24% year over year to $232.3 million, a record revenue quarter for that business. Auto insurance remained strong in the quarter and grew 37% year over year. Our home services client vertical represented 38% of Q4 revenue and grew 88% year over year to $141.6 million. Also another record revenue quarter for that business. Full fiscal year 2026 revenue grew 18% year over year.

Speaker #2: A record revenue quarter for that business. Auto insurance remained strong in the quarter. And grew 37% year over year. Our home services client vertical represented 38% of Q4 revenue and grew 88% year over year to 141.6 million dollars.

Greg Wong: Our home services client vertical represented 38% of Q4 revenue and grew 88% year over year to $141.6 million. Also another record revenue quarter for that business. Full fiscal year 2026 revenue grew 18% year over year. EBITDA grew 38% year over year to $112.5 million. Turning to the balance sheet, we ended the quarter with $128 million in cash equivalents and net debt of $22 million. We also repurchased $14.6 million worth of shares in the quarter and $31.4 million worth of shares for the year. We continue to have a measured approach to capital allocation, focused on maximizing long-term shareholder value, and we will continue to prioritize, one, investing in new products and initiatives for future growth and margin expansion. Two, accretive acquisitions. Three, share repurchases at attractive levels.

Speaker #2: Also another record revenue quarter for that business. Full fiscal year 2026 revenue grew 18% year over year EBITDA grew 38% year over year to 112.5 million dollars.

Greg Wong: EBITDA grew 38% year over year to $112.5 million. Turning to the balance sheet, we ended the quarter with $128 million in cash equivalents and net debt of $22 million. We also repurchased $14.6 million worth of shares in the quarter and $31.4 million worth of shares for the year. We continue to have a measured approach to capital allocation, focused on maximizing long-term shareholder value, and we will continue to prioritize, one, investing in new products and initiatives for future growth and margin expansion. Two, accretive acquisitions. Three, share repurchases at attractive levels.

Speaker #2: Turning to the balance sheet, we ended the quarter with 128 million dollars in cash and equivalents and net debt of 22 million dollars. We also repurchased 14.6 million dollars worth of shares in the quarter and 31.4 million dollars worth of shares for the year.

Speaker #2: We continue to have a measured approach to capital allocation. Focused on maximizing long-term shareholder value. And we will continue to prioritize: one, investing in new products and initiatives for future growth and margin expansion; two, accretive acquisitions; and three, share repurchases at attractive levels.

Speaker #2: Turning to our outlook, as Doug mentioned, we expect revenue in fiscal Q1 to be between 370 and 380 million dollars. And adjusted EBITDA to be between 38 and 40 million dollars.

Greg Wong: Turning to our outlook, as Doug mentioned, we expect revenue in fiscal Q1 to be between $370 and 380 million and adjusted EBITDA to be between $38 and 40 million. We expect revenue in full fiscal year 2027 to be between $1.45 and 1.55 billion and adjusted EBITDA to be between $150 and 160 million. This is our initial view on fiscal 2027, and we will, of course, provide updates to our expectations as the year progresses. In closing, fiscal 2026 was another record year for QuinStreet, our outlook has never been more promising. Over the past two years, we've more than doubled our revenue and more than quadrupled adjusted EBITDA. We believe that our market opportunities are still in their early innings and have never been bigger, we will continue to invest against those opportunities in fiscal 2027 and beyond.

Speaker #2: And we expect revenue in full fiscal year 2027 to be between 1.45 and 1.55 billion dollars. And adjusted EBITDA to be between 150 and 160 million dollars.

Speaker #2: This is our initial view on fiscal 2027. And we will of course provide updates to our expectations as the year progresses. In closing, fiscal 2026 was another record year for QUINSTREET.

Greg Wong: In closing, fiscal 2026 was another record year for QuinStreet, our outlook has never been more promising. Over the past two years, we've more than doubled our revenue and more than quadrupled adjusted EBITDA. We believe that our market opportunities are still in their early innings and have never been bigger, we will continue to invest against those opportunities in fiscal 2027 and beyond. With that, I'll turn it over to the operator for Q&A.

Speaker #2: And our outlook has never been more promising. Over the past two years, we've more than doubled our revenue. And more than quadrupled adjusted EBITDA.

Speaker #2: We believe that our market opportunities are still in their early innings. And have never been bigger and we will continue to invest against those opportunities in fiscal 2027 and beyond.

Speaker #2: With that, I'll turn it over to the operator for Q&A.

Greg Wong: With that, I'll turn it over to the operator for Q&A.

Speaker #1: Thank you. At this time, we will start the Q&A session. Ladies and gentlemen, we will now conduct the question and answer session. If you have a question, please press the star key followed by one on your touchstone phone.

Operator: Thank you. At this time, we will start the Q&A session. Ladies and gentlemen, we will now conduct a question and answer session. If you have a question, please press the star key followed by one on your touch-tone phone. You will hear a one-tone prompt acknowledging your request. Your questions will be polled in the order they are received. If you would like to decline from the polling process, please press pound. Please ensure you lift the handset if you are using a speakerphone before pressing any keys. One moment please for your first question. The first question comes from Jason Kreyer with Craig-Hallum. Please go ahead.

Speaker #1: You will hear a one-tone prompt acknowledging your request. Your questions will be polled in the order they are received. If you would like to decline from the polling process, please press pound.

Speaker #1: Please ensure you lift the handset if you are using a speakerphone before pressing any keys. One moment, please. For your first question. The first question comes from Jason Crayer with Greg Hallum.

Operator: One moment please for your first question. The first question comes from Jason Kreyer with Craig-Hallum. Please go ahead.

Speaker #1: Please go ahead.

Speaker #4: Exceptional quarter, guys. Good work. I want to start out on home services. You had a very healthy step up in revenue there. Wondering if you can just talk about the performance in terms of progress in existing verticals, new verticals, new media channels.

Jason Kreyer: Exceptional quarter, guys. Good work.

Doug Valenti: Thank you, Jason.

Jason Kreyer: Wanted to start out on Home Services. You had a very healthy step-up in revenue there. Wondering if you can just talk about the performance in terms of progress in existing verticals, new verticals, new media channels. Just any additional color there is appreciated.

Speaker #4: Any additional color there is appreciated.

Speaker #2: Sure, Jason. Kind of all of the above. The Homebody integration and synergy capture programs have gone very well. We have strong demand from existing clients and existing verticals.

Doug Valenti: Sure, Jason. Kind of all of the above. The HomeBuddy integration and synergy capture programs have gone very well. We have strong demand from existing clients in existing verticals. We made good progress in opening up and beginning to build new verticals. We have had strong growth in new media channels in broadening out our media footprint. I'd say that there's really not a cylinder in that business that we're not firing on. As you know, it's an exceptionally big market opportunity and requires real sophisticated execution. I think things are going about as well as we could possibly expect there. We are super excited about the future in that business.

Speaker #2: We made good progress in opening up and beginning to build new verticals. We have had strong growth in new media channels. In broadening out our media footprint, I'd say that it's really not a cylinder in that business, and we're not firing on all cylinders.

Speaker #2: And it's, as you know, it's an exceptionally big market opportunity and requires real sophisticated execution. And I think we're I think things are going as bad as well as we could possibly expect there.

Doug Valenti: As you know, it's an exceptionally big market opportunity and requires real sophisticated execution. I think things are going about as well as we could possibly expect there. We are super excited about the future in that business.

Speaker #2: And we are super excited about the future in that business.

Speaker #4: Perfect. Good to hear. Doug, as you wrapped up, you kind of teased out opportunities to grow revenue faster and expand margins further. Just wanted to see if you can if there's anything what different levers you can pull for upside or perhaps kind of some new development areas that you're looking into.

Jason Kreyer: Good to hear. Doug, as you wrapped up, you kind of teased out opportunities to grow revenue faster and expand margins further. Just wanted to see if you can expand on if there's anything exciting, what different levers you can pull for upside or perhaps, kind of some new development areas that you're looking into. Thanks.

Speaker #4: Thanks.

Speaker #2: Sure, Jason. Well, in just the beginning of a fiscal year, so we have a lot of initiatives that we're early in or in that add up to a lot of opportunities.

Doug Valenti: Sure, Jason. Well, it's the beginning of a fiscal year, so we have a lot of initiatives that we're early in or in that add up to a lot of opportunities. Given that it's the beginning of the fiscal year, we usually don't count on all of those working out. I would say that our internal plans and things that we expect ourselves to accomplish this year would add up to considerably more than we're, at this point, willing to commit to the shareholder base. It's our job to go deliver on those. They're everywhere. They're across the business in terms of opportunities to better scale certain product programs and media programs, client budgets, vertical and trade expansions like we talked about for Home Services.

Speaker #2: Given that it's the beginning of the fiscal year, we usually don't count on all of those working out. But I would say that our internal plans and things that we expect ourselves to accomplish this year would add up to considerably more than we're at this point willing to commit to the shareholder base.

Speaker #2: And it's our job to go deliver on those. And they're everywhere. They're across the business. In terms of opportunities to better scale certain product programs and media programs, client budgets, vertical and trade extent trade expansions like we talked about for home services.

Doug Valenti: They're across the business in terms of opportunities to better scale certain product programs and media programs, client budgets, vertical and trade expansions like we talked about for Home Services. Pretty much across the board, earlier in the year, we're going to be heavier in terms of our risk adjustment to those things because they're just by definition more uncertainty because we're not as far along yet. I can't think of one of the businesses where we don't believe in our internal planning process we have more opportunity than we're yet willing to fully commit to, given it's just, again, earlier in the year.

Speaker #2: So I'm pretty much across the board. Earlier in the year, we're going to be heavier in terms of our risk adjustment to those things.

Doug Valenti: Pretty much across the board, earlier in the year, we're going to be heavier in terms of our risk adjustment to those things because they're just by definition more uncertainty because we're not as far along yet. I can't think of one of the businesses where we don't believe in our internal planning process we have more opportunity than we're yet willing to fully commit to, given it's just, again, earlier in the year.

Speaker #2: Because it just by definition more uncertainty because we're not as far along yet. But I can't think of one of the businesses where we don't believe in our internal planning process.

Speaker #2: We have more opportunity than we're yet willing to fully commit to given it's just a just again, earlier in the year.

Speaker #4: Is QRP a part of that or can you just give any updates on how QRP has progressed?

Jason Kreyer: Is QRP a part of that, or can you just give any updates on how QRP has progressed?

Speaker #2: Yeah, QRP has done exceptionally well. QRP and 360 Finance are two big product initiatives both grew extraordinarily fast last fiscal year. Much, much faster than overall company revenue, which is already pretty fast.

Doug Valenti: Yeah. QRP has done exceptionally well. QRP and 360 Finance are two big product initiatives. Both grew extraordinarily fast last fiscal year, much, much faster than overall company revenue, which is already pretty fast. Together this year, we would expect those two businesses to do over $20 million in revenue. They're pretty close to the same size, which is interesting. Yeah, those businesses have both scaled nicely, continue to have a lot more opportunity in front of them than behind them. Of course, we're getting good leverage, good margin leverage from them because they are getting to decent scale, and we're past the heavy investment period, more into the market penetration expansion period for those products. We love both those products in terms of value proposition, market opportunity, competitive advantage, client demand, expected long-term importance to the channel, and importance to the business model.

Speaker #2: And together this year, we would expect those two businesses to do over $20 million in revenue. And they're pretty close to the same size.

Speaker #2: Which is interesting. But yeah, those businesses have both scaled nicely, continue to have a lot more opportunity in front of them than behind them.

Speaker #2: But of course, we're getting good leverage good margin leverage from them. Because they are getting to decent scale and we're past the heavy investment period more into the market penetration expansion period for those products.

Doug Valenti: Of course, we're getting good leverage, good margin leverage from them because they are getting to decent scale, and we're past the heavy investment period, more into the market penetration expansion period for those products. We love both those products in terms of value proposition, market opportunity, competitive advantage, client demand, expected long-term importance to the channel, and importance to the business model.

Speaker #2: But we love both those products in terms of value proposition, market opportunity, competitive advantage. Client demand, expected long-term importance to the channel and importance to the business model.

Doug Valenti: We continue to be extraordinarily bullish on those products, and they're making good progress.

Speaker #2: We continue to be extraordinarily bullish on those products and they're making good progress.

Speaker #4: That's great. Thanks, Doug. Thanks, guys.

Jason Kreyer: That's great. Thanks, Doug. Thanks, guys.

Speaker #2: Thank you, Jason.

Doug Valenti: Thank you, Jason.

Speaker #1: Thank you. The next question comes from Nave Kahn with B. Riley Securities. Please go ahead.

Operator: Thank you. The next question comes from Nav Khan with B. Riley Securities. Please go ahead.

Speaker #5: Hi there. This is Ethan Waddell calling in for Novad. Thanks for taking my questions. To start, with this $100 billion a year opportunity, growing at double digits, how would you think of the relative cadence of growth for home services versus financial services?

Ethan Waddell: Hi there. This is Ethan Waddell calling in for Nav. Thanks for taking my questions. To start.

Ethan Widell: Hi there. This is Ethan Waddell calling in for Nav. Thanks for taking my questions. To start.

Doug Valenti: Sure

Ethan Waddell: With this $100 billion a year opportunity, growing at double digits, how would you think of the relative cadence of growth for Home Services versus Financial Services?

Ethan Widell: With this $100 billion a year opportunity, growing at double digits, how would you think of the relative cadence of growth for Home Services versus Financial Services?

Speaker #2: That's kind of hard to say. As you see, they're both growing very rapidly and they both have they're both enormous markets and we have great footprints and a lot of vectors for scale in them.

Doug Valenti: It's kind of hard to say. As you see, they're both growing very rapidly and they're both enormous markets, and we have great footprints and a lot of vectors for scaling them. I'm not going to bias one way or the other. I think they both can grow at very strong double digits for as far as we can see into the future. I think they're both great businesses for us. Again, great market opportunities, and we're investing in both of them to continue to grow them as rapidly as we can reasonably and profitably do so.

Speaker #2: So I can't really I'm not going to bias one way or the other. I think they both can grow at very strong double digits for as far as we can see into the future.

Speaker #2: So, I think they're both great businesses for us—great again, great market opportunities—and we're investing in both of them to continue to grow them as rapidly as we can reasonably and profitably do so.

Speaker #5: Okay. And then maybe can you characterize just with the homebody integration, working kind of what the margin profile looks like going forward between those two?

Ethan Waddell: Okay. Then maybe can you characterize just with the HomeBuddy integration working, what the margin profile looks like going forward between those two?

Ethan Widell: Okay. Then maybe can you characterize just with the HomeBuddy integration working, what the margin profile looks like going forward between those two?

Speaker #2: Between homebody I mean, sorry, between home services and financial services?

Doug Valenti: Between HomeBuddy, I mean, sorry, between Home Services and Financial Services?

Speaker #5: Right.

Ethan Waddell: Right.

Ethan Widell: Right.

Speaker #2: Yeah, home services is a higher kind of media margin business than financial services. So our biggest cost is, of course, media and it's the biggest component of cost at the gross margin line, if you will.

Doug Valenti: Yeah. Home Services is a higher kind of media margin business than Financial Services. Our biggest cost is, of course, media, and it's the biggest component of cost at the gross margin line, if you will. The Home Services business, though, has more costs below the media line per dollar of revenue than the Financial Services business. Net-net, they're both very attractive contribution margins, which would be the next line, of course, to us. I would say that Home Services overall is probably a little bit better than Financial Services, not hugely better. It's better at the contribution line than Financial Services at this point. Both of them well exceed our targets for making sure that we can maintain and hopefully build on our current double-digit margin profile.

Speaker #2: The home services business, though, has more costs below the media line for a dollar of revenue than the financial services business. So net-net, they're both very attractive contribution margins, which would be the next line, of course, to us.

Speaker #2: I would say that home services overall is probably a little bit better. Then financial services, but not hugely better. But it's better at the contribution line.

Doug Valenti: It's better at the contribution line than Financial Services at this point. Both of them well exceed our targets for making sure that we can maintain and hopefully build on our current double-digit margin profile.

Speaker #2: Then financial services at this point. But both of them well exceed our targets for make sure making sure that we can maintain and hopefully build on our current double digit margin profile.

Speaker #5: All right. Makes sense. I appreciate the color. Thank you.

Ethan Waddell: All right. Makes sense. I appreciate the color. Thank you.

Ethan Widell: All right. Makes sense. I appreciate the color. Thank you.

Speaker #2: You bet.

Doug Valenti: You bet.

Speaker #1: Thank you. The next question comes from Luke Hardin with Northland Securities. Please go ahead.

Operator: Thank you. The next question comes from Luke Harding with Northland Securities. Please go ahead.

Speaker #6: Yeah, hey guys. Thanks for taking the questions and congrats on a really nice quarter here to finish the year. Wanted to kind of shift over to the financial services side, kind of specifically in auto.

Luke Harding: Yeah. Hey, guys. Thanks for taking the questions, and congrats on a really nice Q4 here to finish the year.

Luke Horton: Yeah. Hey, guys. Thanks for taking the questions, and congrats on a really nice Q4 here to finish the year.

Doug Valenti: Thank you.

Luke Harding: Wanted to kind of shift over to the Financial Services side, kind of specifically in auto. You said grew 37% year over year. I guess, can you kind of siphon between how much of that growth is coming from just carrier budgets and increased spending versus any market share gains? How do you think about the durability of that demand as we head into 2027 or fiscal '27?

Luke Horton: Wanted to kind of shift over to the Financial Services side, kind of specifically in auto. You said grew 37% year over year. I guess, can you kind of siphon between how much of that growth is coming from just carrier budgets and increased spending versus any market share gains? How do you think about the durability of that demand as we head into 2027 or fiscal '27?

Speaker #6: You said grew 37% year over year. I guess, can you kind of cite for between how much of that growth is coming from just carrier budgets and increased spending versus any market share gains?

Speaker #6: And kind of how do you think about the durability of that demand as we head into 2027 or fiscal 27?

Speaker #2: Sure. I think it's the growth in auto insurance right now is primarily being driven by growth in demand. From the carriers and continued pretty high shopping levels by consumers because of their need to seek out and find ways to save money.

Doug Valenti: Sure. I think the growth in auto insurance right now is primarily being driven by growth in demand from the carriers and continued pretty high shopping levels by consumers because of their need to seek out and find ways to save money as they fight inflation in other parts of their budget. If you look at the others that have reported that are in that industry, we kind of all grew very similar rates. I don't think we or they took as much share as we did grew out our existing footprints. Some of those footprints don't have a lot of overlap. That's going to be the case. There's not a lot of direct competition between several of us. We have one competitor where there's more direct competition, but not nearly as much as there used to be as both of our media footprints have shifted.

Speaker #2: As they fight inflation and other parts of their other parts of their budget. If you look at the others that have reported that are in that industry, we kind of all grew very similar rates.

Speaker #2: So I don't think we I don't think we or they took as much share as we did grew out our existing footprints. And some of those footprints don't have a lot of overlap.

Doug Valenti: Some of those footprints don't have a lot of overlap. That's going to be the case. There's not a lot of direct competition between several of us. We have one competitor where there's more direct competition, but not nearly as much as there used to be as both of our media footprints have shifted. Of course, the basis of competition is primarily in media supply because the client demand is really in excess of what most of us can deliver anyway. That's where that is.

Speaker #2: So that's going to be the case. There's not a lot of direct competition between several of us. We have one competitor where there's more direct competition, but not nearly as much as there used to be as the as our both of our media footprints have shifted.

Speaker #2: And of course, the basis of competition is primarily in media. Supply because the client demand is really in excess of what most of us can deliver anyway.

Doug Valenti: Of course, the basis of competition is primarily in media supply because the client demand is really in excess of what most of us can deliver anyway. That's where that is. In terms of the durability of demand, the carriers are in an exceptionally good financial position. Their loss ratios are at great margin. They are really hungry for demand because of that. Their loss ratios are inclusive of many of them already having lowered rates in a lot of places from where they had peaked kind of coming out of the post-COVID period. If you look on balance at the health of the carriers, their margins, their demand, where they are on rates relative to where they were, and fears that they would have to lower rates, which they've already done.

Speaker #2: So that's where that is. In terms of the durability of demand, the carriers are an exceptionally good financial and an exceptionally good financial position.

Doug Valenti: In terms of the durability of demand, the carriers are in an exceptionally good financial position. Their loss ratios are at great margin. They are really hungry for demand because of that. Their loss ratios are inclusive of many of them already having lowered rates in a lot of places from where they had peaked kind of coming out of the post-COVID period. If you look on balance at the health of the carriers, their margins, their demand, where they are on rates relative to where they were, and fears that they would have to lower rates, which they've already done.

Speaker #2: They're loss ratios are at great margin. They are really hungry for demand because of that. Their loss ratios are inclusive of many of them already having lowered rates.

Speaker #2: In a lot of places, from where they had peaked, kind of coming out of the post-COVID period. And so if you look on balance at the health of the carriers their margins their demand where they are on rates relative to where they were and fears that they would have to lower rates, which they've already done, I think one of the big carriers has said they've lowered rates in like 68% of their markets or something like that over the past couple of years.

Doug Valenti: I think one of the big carriers has said they've lowered rates in like 68% of their markets or something like that over the past couple of years. That would all add up to great durability and a lot of long-term strength. They had the big disruption coming out of COVID because of kind of hidden inflation and increased frequency. Years before that, they had a big disruption because of the higher incident rates associated with distracted driving and self-driving and sensing technologies which increased costs to repair We don't know of anything else big like that in front of us, and it looks like more of a return to what was much more normal prior to those two events.

Speaker #2: I think we're in they're in extraordinary that would all add up to great durability. And a lot of long-term strength. They had the big disruption coming out of COVID because of kind of hidden inflation and increased frequency.

Speaker #2: And years before that, they had a big disruption because of the higher incident rates associated with distracted driving and self-driving and sensing technologies which increased costs to repair we don't know of anything else big like that in front of us.

Doug Valenti: We don't know of anything else big like that in front of us, and it looks like more of a return to what was much more normal prior to those two events. That was a pretty soft market right now, which is a good thing in insurance, and the hard markets being much less disrupted than they were, those two generationally big adjustments, again, coming out of COVID. Durability looks good. The long term looks good. The carriers are all getting more sophisticated in digital, which is great news for us.

Speaker #2: And it looks like the more of a return to what was much more normal prior to those two to events and that was a soft pretty soft market right now, which is a good thing in insurance.

Doug Valenti: That was a pretty soft market right now, which is a good thing in insurance, and the hard markets being much less disrupted than they were, those two generationally big adjustments, again, coming out of COVID. Durability looks good. The long term looks good. The carriers are all getting more sophisticated in digital, which is great news for us. There's still a lot more budget not in digital that should be in digital, and there's a lot of budget in digital that should be in performance. Again, we're seeing the general trend lines continue to be from offline to digital, once in digital, going to performance, because that's where you can get the scale and the efficiency for those dollars spent.

Speaker #2: And the hard markets being much less disruptive than they were those two generally generationally big adjustments again coming out of COVID. So durability looks good.

Speaker #2: The long-term looks good. The carriers are all getting more sophisticated in digital, which is great news for us. There's still a lot more budget not in digital that should be in digital.

Doug Valenti: There's still a lot more budget not in digital that should be in digital, and there's a lot of budget in digital that should be in performance. Again, we're seeing the general trend lines continue to be from offline to digital, once in digital, going to performance, because that's where you can get the scale and the efficiency for those dollars spent.

Speaker #2: And there's a lot of budget in digital that should be in performance and again, we're seeing the general trend lines continue to be from offline to digital once in digital going to performance because that's where you can get the scale and the efficiency.

Speaker #2: For those dollars spent.

Speaker #6: Got then just how much work is left on the homebody integration? Are there any sort of synergies you've unlocked or any learnings from the integration process here?

Luke Harding: Got it. That's very helpful. Then, how much work is left on the HomeBuddy integration? Are there any sort of synergies you've unlocked or any learnings from the integration process here? I guess, do you feel like you're in a good spot there where the appetite for additional M&A is strong, and what sort of criteria would you be looking for?

Luke Horton: Got it. That's very helpful. Then, how much work is left on the HomeBuddy integration? Are there any sort of synergies you've unlocked or any learnings from the integration process here? I guess, do you feel like you're in a good spot there where the appetite for additional M&A is strong, and what sort of criteria would you be looking for?

Speaker #6: And I guess, do you feel like you're in a good spot there where the appetite for additional M&A is strong and what sort of criteria would you be looking for?

Speaker #2: Yeah, the homebody acquisition in terms of more synergies we'll always find more and we're excited to be continuing to identify places we can capture more.

Doug Valenti: Yeah. The HomeBuddy acquisition, in terms of more synergies, we'll always find more. We're excited to be continuing to identify places we can capture more. We're not fully through the programs to capture the ones that we had identified when we'd made the acquisition in the first place. We will find more, but we have also had great progress capturing synergies on the client side, synergies on the media side, synergies on the product side, cost synergies in terms of overlapping resources. We've captured a lot of it, and there's still considerably more to be captured in all of those areas. In terms of more M&A, yes, we have capacity and appetite for more. We have a pretty active pipeline right now of attractive opportunities.

Speaker #2: And we're not fully through the program to capture the ones that we had identified when we made the acquisition in the first place. So we will find more, but we have also had great progress capturing synergies on the client side, synergies on the media side, synergies on the product side.

Speaker #2: Cost synergies in terms of overlapping resources and we've captured a lot of it. And there's still considerably more to be captured in all of those areas.

Doug Valenti: We've captured a lot of it, and there's still considerably more to be captured in all of those areas. In terms of more M&A, yes, we have capacity and appetite for more. We have a pretty active pipeline right now of attractive opportunities. I would say that probably before the end of the calendar year, we're likely to close at least one more, maybe two.

Speaker #2: In terms of more M&A, yes, we have capacity and appetite for more. We have a pretty active pipeline right now. Of attractive opportunities, I would say that probably within the before the end of the calendar year, we'll likely to close at least one more maybe two I don't think any of those will be anywhere near the size of homebody, but I think we have some very attractive opportunities that we expect would be highly accretive and give us more capacity for more growth and/or more margin expansion.

Doug Valenti: I would say that probably before the end of the calendar year, we're likely to close at least one more, maybe two. I don't think any of those will be anywhere near the size of HomeBuddy, but I think we have some very attractive opportunities that we expect would be highly accretive and give us more capacity for more growth and/or more margin expansion. It's been a part of us forever, and it'll continue to be a big part of us, that being an active, effective acquirer.

Doug Valenti: I don't think any of those will be anywhere near the size of HomeBuddy, but I think we have some very attractive opportunities that we expect would be highly accretive and give us more capacity for more growth and/or more margin expansion. It's been a part of us forever, and it'll continue to be a big part of us, that being an active, effective acquirer.

Speaker #2: So we'll it's been a part of us forever and it'll continue to be a big part of us that being an active effective acquirer.

Speaker #6: Got it. Thanks. Thanks for taking the questions. Congrats again on a really nice quarter.

Luke Harding: Got it. Thanks for taking the questions. Congrats again on a really nice quarter.

Luke Horton: Got it. Thanks for taking the questions. Congrats again on a really nice quarter.

Speaker #2: Thank you.

Doug Valenti: Thank you.

Speaker #1: Thank you. The next question comes from L. Niber with Lake Street Capital Markets. Please go ahead.

Operator: Thank you. The next question comes from Elle Niebur with Lake Street Capital Markets. Please go ahead.

Speaker #7: Hey guys, thanks for taking my question. Just one from me. So, you've highlighted numerous AI initiatives across the platform. Which AI applications are already having the greatest measurable impact on your revenue growth or margins today?

Elle Niebur: Hey, guys. Thanks for taking my question. Just one from me. You've highlighted numerous AI initiatives across the platform. Which AI applications are already having the greatest measurable impact on your revenue growth or margins today? Where do you expect the next leg of economic benefit to come from over the next 12 months?

Elle Niebuhr: Hey, guys. Thanks for taking my question. Just one from me. You've highlighted numerous AI initiatives across the platform. Which AI applications are already having the greatest measurable impact on your revenue growth or margins today? Where do you expect the next leg of economic benefit to come from over the next 12 months?

Speaker #7: And then where do you expect the next leg of economic benefit to come from over the next 12 months?

Speaker #2: Sure, L. I would say that the places where we're probably, right now, having the biggest direct impact are in coding, as many, many people are.

Doug Valenti: Sure, Elle. I would say that the places where we're probably right now having the biggest direct impact are in coding, as many people are. We have a lot of coding, whether it be on the core infrastructure on our platform or creative generation for our ad campaigns, where we've had enormously positive productivity impacts or in the design of other parts of our consumer interface. Those are having a big direct impact, and we're capturing synergies there. We're capturing synergies and productivity increases in contact centers, where AI is allowing us to pre-qualify consumers without having to have a representative involved. To better qualify those consumers and to have a more efficient consumer experience. We have less costs and greater qualification of those consumers and greater productivity and conversion of those consumers.

Speaker #2: And we have a lot of coding, whether it be on the core infrastructure on our platform or creative generation for our ad campaigns where we've had enormously positive productivity impacts or in the design of our other parts of our consumer interface.

Speaker #2: So those are having a big direct impact and we're capturing synergies there. We're capturing synergies and productivity increases in contact centers where AI is allowing us to pre-qualify consumers without having to have a representative involved.

Doug Valenti: We're capturing synergies and productivity increases in contact centers, where AI is allowing us to pre-qualify consumers without having to have a representative involved. To better qualify those consumers and to have a more efficient consumer experience. We have less costs and greater qualification of those consumers and greater productivity and conversion of those consumers.

Speaker #2: And we've and to better qualify those consumers and to have a more efficient consumer experience. So we're getting we have less costs and greater qualification of those consumers and greater productivity and conversion of those consumers.

Speaker #2: I would say that and internally as far as analytics folks are able to use AI to do more direct analytics without having to involve analysts, which saves us labor costs plus allows us to focus those analysts on harder problems.

Doug Valenti: I would say that internally, as far as analytics, folks are able to use AI to do more direct analytics without having to involve analysts, which saves us labor costs, but also allows us to focus those analysts on harder problems, bigger problems or bigger opportunities. Again, there are dozens of places, and so those are the examples of specific places where we're having big impacts. I think in the long run, we'll have all of those continuing to help us to be more productive, and then we will likely have more traffic from the AI platforms. We are integrated with OpenAI in most of our verticals now. In our two biggest verticals, auto insurance and home services, of course. There's a lot of activity there.

Speaker #2: Bigger problems or bigger opportunities. And we have and again, there are dozens of places and so those are the examples and specific places where we're having big impacts.

Speaker #2: I think in the long run, we'll have all of those continuing to help us to be more productive. And then we will likely have more traffic from the AI platforms.

Doug Valenti: I think in the long run, we'll have all of those continuing to help us to be more productive, and then we will likely have more traffic from the AI platforms. We are integrated with OpenAI in most of our verticals now. In our two biggest verticals, auto insurance and home services, of course. There's a lot of activity there. The platforms themselves, ad platforms, aren't where they need to be yet for us to get big scale out of them, but they will be.

Speaker #2: We are integrated with OpenAI and most of our verticals now and our two biggest verticals, auto insurance and home services, of course. There's a lot of activity there.

Speaker #2: The platforms themselves, ad platforms aren't where they need to be yet for us to get big scale out of them, but they will be.

Doug Valenti: The platforms themselves, ad platforms, aren't where they need to be yet for us to get big scale out of them, but they will be. They have very strong user bases, very big scale user bases. We can see a path to those platforms, the LLMs, to being very big new channels of high quality, high intent, well-qualified media for our marketplaces, and we are super excited about that. That's one that's more relatively small now, but we're in there working on it as early and as big as anybody is, and we expect those to be exceptionally big in the future, if you wanted to pick out the one that's probably biggest in the future.

Speaker #2: And they have a very strong user base. Very big-scale user base. And we can see a path to those platforms—the LLMs—to being very big, new channels of high-quality, high-intent, well-qualified media for our marketplaces.

Doug Valenti: They have very strong user bases, very big scale user bases. We can see a path to those platforms, the LLMs, to being very big new channels of high quality, high intent, well-qualified media for our marketplaces, and we are super excited about that. That's one that's more relatively small now, but we're in there working on it as early and as big as anybody is, and we expect those to be exceptionally big in the future, if you wanted to pick out the one that's probably biggest in the future.

Speaker #2: And we are super excited about that. So that's one that's more relatively small now, but we're in there working on it as early and as big as anybody is.

Speaker #2: And we expect those to be exceptionally big in the future if you wanted to pick out the one that's probably biggest in the future.

Speaker #2: But we have proprietary a big value proposition business model with a lot of proprietary relationships, data, integrations, workflows. And there's kind of not a place in our business model that you can't apply smart AI to do it better or more efficiently.

Doug Valenti: We have a big value proposition business model with a lot of proprietary relationships, data, integrations, workflows, and there's kind of not a place in our business model that you can't apply smart AI to do it better or more efficiently. That's where the vast majority of the long-term value creation is going to be from AI, and I think we're a prime example and a perfect business model for doing that, and we're hard at it.

Speaker #2: And that's where the vast majority of the long-term value creation is going to be from AI and I think we're a prime example and a perfect business model for doing that.

Speaker #2: And we're hard at it.

Speaker #7: Awesome. Thanks for taking my question. Congrats on the quarter.

Elle Niebur: Awesome. Thanks for taking my question. Congrats on the quarter.

Elle Niebuhr: Awesome. Thanks for taking my question. Congrats on the quarter.

Speaker #2: Thank you, L.

Doug Valenti: Thank you, Elle.

Speaker #1: Thank you. The next question comes from Patrick Shaw with Barrington Research. Please go ahead.

Operator: Thank you. The next question comes from Patrick Sholl with Barrington Research. Please go ahead.

Speaker #8: Hi. Thanks for taking the question. Congrats on the really strong quarter and the really impressive guidance.

Patrick Sholl: Hi. Thanks for taking the question and congrats on the really strong quarter and the really impressive guidance.

Speaker #2: Thank you, Pat.

Doug Valenti: Thank you, Pat.

Speaker #8: Just—yeah, just following up on what you said about, sorry, on the growth of the health of the carrier budgets and the move from digital to performance.

Patrick Sholl: Just following up on what you said about the growth of the health of the carrier budgets and the moving from digital to performance. Could you talk about where performance's share within their digital budgets stands currently, and how you see that evolving over time? Certainly growing, but just a little bit more color around that.

Speaker #8: Could you talk about where performance's share within their digital budgets stands currently, and where you see that evolving over time?

Speaker #8: Certainly growing, but could we get just a little bit more color around that?

Speaker #2: Yeah, for the vast majority of carriers, they spend they still don't spend the majority of their budget in digital despite the fact that the majority of consumers begin and end their shopping in digital.

Doug Valenti: Yeah, for the vast majority of carriers, they still don't spend the majority of their budget in digital, despite the fact that the majority of consumers begin and end their shopping in digital. Start there. Then within digital, we still have many carriers who spend more not in performance in digital than they do in performance in digital. What we have seen over time, particularly with the most successful carriers, is that that's the opposite of where they go eventually. Eventually, they spend most of their budgets in digital and most of that digital budget in performance, or at least they max out what they can spend in performance within the allocation to other parts of digital.

Speaker #2: So start there. So and then within digital, we still have carriers who spend many carriers who spend more and not in performance in digital than they do in performance in digital.

Speaker #2: And what we have seen over time, particularly with the most successful carriers, is that that's kind of the opposite of where they go eventually.

Speaker #2: Eventually, they spend most of their budgets in digital and most of that digital budget in performance or at least they max out what they can spend in performance within the allocation to other parts of digital.

Doug Valenti: Eventually, they spend most of their budgets in digital and most of that digital budget in performance, or at least they max out what they can spend in performance within the allocation to other parts of digital. The answer is, in terms of specific numbers and share, it's too complicated because of the various carriers and the various channels and all that for us to have our arms fully around that.

Speaker #2: And so the answer is that, in terms of specific numbers and share, it's too complicated because of the various carriers and the various channels and all that for us to have our arms fully around that. But as we talk to each carrier, I can tell you, there's not one carrier that we don't know that we serve.

Doug Valenti: The answer is, in terms of specific numbers and share, it's too complicated because of the various carriers and the various channels and all that for us to have our arms fully around that. As we talk to each carrier, I can tell you there's not one carrier that we serve, and we serve all the big carriers, that isn't trying to put more into digital and more into performance. There's not one of those carriers who today isn't under-indexed to both digital and within digital to performance. If you asked me to give you my best ballpark estimate of how far we are in that overall transition, I would say 20% of the way there, maybe. That's probably being aggressive as I look ahead and look at the channel evolving and those budgets following that evolution.

Doug Valenti: As we talk to each carrier, I can tell you there's not one carrier that we serve, and we serve all the big carriers, that isn't trying to put more into digital and more into performance. There's not one of those carriers who today isn't under-indexed to both digital and within digital to performance. If you asked me to give you my best ballpark estimate of how far we are in that overall transition, I would say 20% of the way there, maybe.

Speaker #2: And we serve all the big carriers. That isn't trying to put more into digital. And more into performance. And there's not one of those carriers who today isn't under-indexed to both digital and within digital to performance.

Speaker #2: And if you asked me to give you my best ballpark estimate of how far we are in that overall transition, I would say we're about 20% of the way there, maybe.

Speaker #2: And that's probably being aggressive. As I look ahead and consider the channel evolving and those budgets following that evolution.

Doug Valenti: That's probably being aggressive as I look ahead and look at the channel evolving and those budgets following that evolution.

Speaker #8: Okay. And then just on the guidance, could you maybe talk a little bit about the expectations between the two main categories? Financial services and home services and the different maybe pro forma for the acquisition of HomeBuddy and how those you expecting the growth of those two segments to contribute to the full year guidance.

Patrick Sholl: Okay. Then just on the guidance, could you maybe talk a little bit about the expectations between the two main categories, financial services and home services, and the different pro forma for the acquisition of HomeBuddy and how you're expecting the growth of those two segments to contribute to the full-year guidance?

Speaker #2: I think we expect them and Greg, correct me if I'm wrong, we expect them to we expect home services to grow faster in the first half mainly because of the HomeBuddy effect.

Doug Valenti: I think we expect them, Greg, correct me if I'm wrong. We expect Home Services to grow faster in the H1, mainly because of the HomeBuddy effect.

Doug Valenti: I think we expect them, Greg, correct me if I'm wrong. We expect Home Services to grow faster in the H1, mainly because of the HomeBuddy effect. I think in the H2, we expect both businesses to grow at pretty strong double digits and not too dissimilar from one another. Greg, make sure that I got that totally right.

Speaker #2: And I think in the second half, we expect both businesses to grow pretty strong double digits and not too dissimilar from one another. And Greg, make sure that I got that totally right.

Doug Valenti: I think in the H2, we expect both businesses to grow at pretty strong double digits and not too dissimilar from one another. Greg, make sure that I got that totally right.

Speaker #8: Yeah, that's right. That's right. Okay, thank you.

Greg Wong: Yeah, that's right.

Patrick Sholl: Okay. Thank you.

Speaker #2: Thank you.

Doug Valenti: Thank you.

Speaker #1: Thank you. At this time, there are no more questions. Thank you, everyone, for taking the time to join QuinStreet's earnings call. Replay information is available in the earnings press release issued this afternoon.

Operator: Thank you. At this time, there are no more questions. Thank you everyone for taking the time to join QuinStreet's earnings call. Replay information is available on the earnings press release issued this afternoon. This concludes today's call. Thank you.

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