QUINSTREET, INC Q4 FY2025 earnings call

• Fiscal Q4 was a quarter of strong revenue growth and continued margin expansion, with total revenue growing 32% year-over-year and adjusted EBITDA 101%.
• Full fiscal year 2025 saw revenue grow 78% to $1.1 billion and adjusted EBITDA 299% to $81 million.
• Balance sheet remained strong with over $100 million in cash and no bank debt.
• Auto Insurance revenue grew 62% year-over-year in Q4, Home Services revenue grew 21%.
• Pipeline of growth and margin expansion initiatives is innovative. Carrier spend in auto insurance had moderated but started reaccelerating in Q1.
• Home Services is expected to grow 15%-20% year-over-year, with launch of QMP media optimization platform expected to drive faster growth.

In Q4, total revenue was $262.1 million, with Financial Services client vertical representing 71% of Q4 revenue, growing 36% year-over-year to $186.6 million. Home Services client vertical represented 27% of Q4 revenue, growing 21% year-over-year to $71.7 million. Other revenue was $3.8 million. For full fiscal year 2025, revenue was $1.1 billion, with Financial Services client vertical representing 75% of full fiscal year revenue, growing 108% year-over-year to $817.2 million. Home Services client vertical represented 24% of full fiscal year revenue, growing 24% year-over-year to $261.8 million. Other revenue was $14.8 million. Adjusted EBITDA for full fiscal year 2025 was $81.3 million.

• Expect revenue in fiscal Q1 to be about $280 million and adjusted EBITDA to be about $20 million.
• Initial view for full fiscal year 2026 is revenue will grow about 10% and adjusted EBITDA will grow about 20%.

• Tariff uncertainties impacting carrier spending levels.
• Carriers holding back spending due to continued uncertainties with tariffs.

Q: Walk through carrier spend trends across Q4 and what you're hearing from carriers amid some of this reacceleration into Q1?

A: Douglas Valenti said Q4 spending levels were steady then began increasing, with carriers expected to continue increasing spend into current quarter, driven by strong economics and getting clarity on tariffs but still holding back a bit. Greg Wong added auto insurance business grew 62% YOY in Q4, excluding largest carrier, it still grew 60% YOY.

Q: Assumptions in the initial 2026 guidance and thoughts on budget flush dynamic?

A: Douglas Valenti said 2026 guidance is conservative, and carriers entering second half of calendar year with strong economics, potential for budget flush as they're profitable.

Q: Trends with carrier base and spending across entire base?

A: Douglas Valenti said broad-based participation with more carriers spending over $1 million per month, and excluding largest carrier, auto insurance business still grew 60% YOY. Greg Wong added to that.

Q: Margin expansion initiatives in Q4 and translation over next several quarters?

A: Douglas Valenti said margin expansion initiatives are progressing, including optimization of existing media, growing new media capacity, and new product market opportunities in auto insurance with higher margins.

Q: Impact of tariffs on Home Services?

A: Douglas Valenti said no impact expected on Home Services outlook, which is expected to grow 15%-20% YOY, with launch of QMP media optimization platform to drive faster growth.

Q: Media sources and acquisitions?

A: Douglas Valenti said acquisition of Aqua Vida Media is successful, allowing more media outside Google, and they're continuing to invest in media sources.

Q: Sequential margin compression in Q1?

A: Douglas Valenti said it's due to media capacity catching up with auto insurance demand and need to optimize, but initiatives to address it are ongoing.

Q: Growth in financial services beyond auto insurance?

A: Douglas Valenti said other verticals like personal loans, credit cards, and banking grew YOY, with personal loans in margin optimization phase but expected to grow nicely.

Q: Impact of lower interest rates on Home Services?

A: Douglas Valenti said lower interest rates likely supportive of more home buying activity, positive for Home Services growth.

Q: Product development investments?

A: Douglas Valenti said investments in QRP, 360 Finance in Home Services, and next version of QMP media optimization platform, all aimed at scaling and enhancing margins.