QuinStreet, Inc. (NASDAQ:QNST) Q1 2024 Earnings Call Transcript

And we’ve gotten — taken their inputs, and we’ve done a bottoms up estimate based on also media availability and expected traffic patterns and pricing. And we’ve put together our best bottoms up, and that is a big part of what results and the range we gave you for the year. We know you can do math, so we won’t bore you what you would have figured out anyway, which is based on our guidance, even at the bottom end, we’ll be doing actually an average of about $185 million a quarter in the second half of the fiscal year. As I said, probably a little bit of a ramp from Q3 to Q4 given what we’re hearing from the insurers. To give you a little bit more detail on that, this might be help answer your question, to bracket it maybe a little bit for you.

We expect auto insurance — we do not expect auto insurance in the March quarter, even though we expect to do $180 million in revenue in that quarter on average, but the other quarter — and the second quarter — I’m sorry, that and the fourth fiscal quarter our second calendar quarter up to $180 million, $185 million. We don’t expect our insurance to reach the same level we did last March quarter. So, this coming March quarter, despite the big jump in our revenue, we are not projecting that our auto insurance revenue will be as high as it was last March quarter, and we expect a ramp from the March quarter to the June quarter. But even in the June quarter, we don’t expect yet that auto insurance revenue will reach the revenue levels of auto insurance last March quarter.

So, we’re not going way out on a limb here. It’s going to be a big step-up, but it’s only a big step-up because we’re down so low in auto insurance, and then a multiyear low, as you know. And I would remind you that the peak auto insurance quarter for us revenue wise was a couple of years ago in the March quarter, and that was $90 million. And the last March quarter’s revenue — auto insurance revenue, which I said we’re not going to get to in the March or the June quarters based on our current forecast, was $63 million. And so, we got a long way to go to keep — get back to the peak, which we expect to do over the next couple of years, maybe shorter time than that. But we’re — the step function up is well in line with what you would assume to be kind of reasonable expectations of a revamp, particularly given relative to, again, a year ago and peak, if that’s helpful.

Jim Goss: Okay. A couple more things, if I might. When education was your dominant business and you hit a wall, you did have a rebound develop in some of these other areas. And I’m wondering, as Greg was saying, with the potential to do more within certain areas and/or other areas within home services as well as some of the financial areas, did you see some internal competition among your various sectors trying to become that next great thing, even though you’re hoping to have that return in the auto area, and then you’re running on more cylinders? And, also, are there other insurance areas within these multi line carriers you deal with who — that would benefit from the same sort of technology you employ, even though they might not be required, like auto insurance or that sort of thing, but that might offer some other opportunity within those companies.

Doug Valenti: I’d say that we have a number of next great things going on. We just grew — our non-insurance business is 18%. We’ve grown 19% on a compound annual growth rate basis, and they’ve all grown at strong double-digits. That’s not being carried by any one of those client verticals. We’ve said, I think, a number of times that home services may well be our biggest addressable market. And as Greg has pointed out, pretty straightforward path to continuing growth there by growing the service areas or the trades we’re currently in, and then adding other trades or service areas. And we see a good strong opportunity and path there. So certainly, we expect continued great growth and strength in home services. Also, in our other financial services verticals, non-insurance financial services verticals, I think Greg pointed out, would be 33% year-over-year in the quarter.