What QuinStreet (QNST) Said on Its Q1 Earnings Call

Key Points

• Record first-quarter results: Revenue rose 46% year over year to $416.7 million and adjusted EBITDA increased 108% to $42.7 million, driven by auto insurance and home services growth.
• Full-year outlook raised: QuinStreet expects fiscal 2027 revenue of $1.5 billion to $1.6 billion and adjusted EBITDA of $155 million to $165 million.
• AI and expansion plans: The company is developing partnerships with AI platforms and shopping agents, and acquired home-services referral platform Get The Referral for a high-single-digit-million-dollar upfront amount.

QuinStreet NASDAQ: QNST reported record revenue and adjusted earnings for its fiscal first quarter of 2027, driven by demand from auto insurers and growth in home services, and raised its outlook for the full year.

Revenue increased 46% from a year earlier to $416.7 million in the September quarter, while adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 108% to $42.7 million. Adjusted net income was $29.2 million, or $0.50 per share.

Chief Executive Officer Doug Valenti said the company continued to see broadening demand from auto insurance carriers. He also highlighted growth in the Modernize home services business, the integration of HomeBuddy and an expanding product portfolio for contractors.

Insurance and Home Services Drive Growth

Financial services revenue rose 31% to $271 million, accounting for 65% of total revenue. Within that vertical, auto insurance revenue grew 42% and was running at more than $800 million annually, Valenti said.

Valenti said demand was strong across carriers and insurance risk categories, with approximately eight carrier clients spending more than $1 million a month with QuinStreet. He said demand exceeded the company’s capacity to fill it and that QuinStreet was working to increase capacity.

Home services revenue rose 86% to $145.7 million, representing 35% of total revenue. Both financial services and home services posted record quarterly revenue, Chief Financial Officer Greg Wong said.

The company’s adjusted EBITDA margin expanded to 10.2%, up 300 basis points from a year earlier. Valenti said the improvement reflected operating leverage, expense controls, margin initiatives and a greater contribution from home services. He said the company was also applying artificial intelligence and other tools to improve productivity, but did not quantify the contribution of each factor.

In other financial services businesses, Valenti said credit cards posted strong year-over-year growth, while banking or source-of-funds revenue declined from a year earlier amid uncertainty about interest rates. He said that business subsequently saw strong sequential growth. Personal loans had recently been flatter, although it also grew sequentially during the quarter, he said.

Full-Year Outlook Raised

For fiscal 2027, QuinStreet now expects revenue of $1.5 billion to $1.6 billion and adjusted EBITDA of $155 million to $165 million. At the midpoints, those ranges imply year-over-year growth of 20% and 42%, respectively, Valenti said. Executives said there could be opportunities for further revenue growth and margin expansion, while noting that it was still early in the fiscal year.

For the December quarter, the company forecast revenue of $360 million to $380 million and adjusted EBITDA of $32 million to $33 million. Wong said the business typically declines sequentially in that quarter because of holiday-related changes in client staffing and budgets, a tighter media market and shifts in consumer shopping behavior.

Wong said the outlook does not include an auto insurance budget flush like those seen in the December quarters of the past two years. Such spending could occur again, he said, but the company is not counting on it.

AI Channels and Acquisition Plans

Valenti said QuinStreet expects to serve as a “control layer” between clients and emerging AI platforms and shopping agents, providing integrations, structured data and workflows while helping address security, compliance and brand concerns. He said direct access by AI shopping agents to client systems would pose risks, including the possibility that products would be compared primarily on price.

Among current AI-related channels, Valenti said QuinStreet was participating in advertising inventory associated with Google’s AI-driven search results. He said the quality of traffic from those results was as good as or better than the company had seen from Google Search historically, and that its paid search volume had increased. QuinStreet relies primarily on paid search rather than search engine optimization in that environment, he said.

Valenti also said QuinStreet was integrated with OpenAI’s advertising platform across virtually all of its verticals. He described that platform as still relatively small and less productive than Google’s offering, while saying QuinStreet was working closely with it. Consumer shopping agents remain an even smaller channel in the company’s verticals, he said.

QuinStreet ended the quarter with $141.5 million in cash and $10 million in net debt. Wong said current capital-allocation priorities include growth initiatives and acquisitions.

Valenti disclosed that QuinStreet recently acquired home services company Get The Referral, a platform that helps contractors generate referrals from existing customers. He said the transaction totaled in the high single-digit millions of dollars, with an opportunity for the seller to potentially double that amount over time through earnouts. The company also has an active acquisition pipeline, with home services among its priorities, he said.

About QuinStreet (NASDAQ:QNST)

QuinStreet, Inc is a performance marketing and online marketplace company that connects consumers with brands and service providers. The company uses digital media, data, and technology to help businesses acquire customers and generate leads through channels such as search, social media, display advertising, and other online marketing platforms.

QuinStreet operates vertical marketplaces in areas including insurance, financial services, home services, and business services. Its platforms help consumers research products and services, compare available options, and connect with providers, while giving advertisers tools to reach consumers who are actively seeking information or purchasing opportunities.

Founded in 1999, QuinStreet is headquartered in Foster City, California, and primarily serves the U.S.

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