QuinStreet Inc. (NASDAQ:QNST), the internet content & Information Company, topped earnings and revenue estimates for the second quarter, leading the stock to rally 34% during Thursday’s trading session. The stock is up more than 166% in the last twelve months.
Source Image: finviz.com
The company has topped revenue estimate by $12.28 million for the second quarter. Its revenues increased 33% year over year to $87.5 million in the second quarter. Moreover, the company has set strong foot-holds for the future growth. In Q2, QuinStreet has acquired the auto insurance, home insurance, mortgage, and technology assets of Katch, LLC.
Higher Revenues Are Supporting Earnings
Companies who seek growth invest significantly in marketing and research & development activities. Thus, the pressure is always higher on margins and earnings.
QuinStreet has posted big losses in the last couple of years. However, significant growth in revenue and the effective cost-cutting strategies led it to generate positive earnings for the first time in past several years.
Doug Valenti, QuinStreet CEO said: “Momentum in our business continues to be propelled by the roll-out and execution of the product and media strategies developed over the past few years, and by clients shifting more spending to digital media and performance marketing.”
The company generated earnings of $1.9 million in the second quarter, compared to the negative earnings of 1 million in the past year quarter.
Cash Generation Is Strong to Fund Investments
The company expects to sustain the momentum in the following quarters. QuinStreet now expects to generate revenue growth of 20% for the full-year, with adjusted EBITDA margin of about 8%.
QuinStreet’s cash generating potential strengthened following strong revenue and earnings growth. With operating cash flow of $7.3 million and free cash flow of more than $5 million in the second quarter, QuinStreet is in a position to invest significantly in growth opportunities.
It ended the quarter with $42.4 million in cash and no debt. Thus, the company appears in a position to fund the latest acquisition of auto insurance, home insurance, mortgage, and technology assets of Katch, LLC for 14 million.
Featured Image: quinstreet.com
