Quinstreet (QNST) swung to a net profit for the quarter ended Mar. 31, 2017. The company has made a net profit of $0.58 million, or $ 0.01 a share in the quarter, against a net loss of $3.26 million, or $0.07 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $2.61 million, or $0.06 a share compared with $1.22 million or $0.03 a share, a year ago.
Revenue during the quarter went down marginally by 2.51 percent to $79.20 million from $81.24 million in the previous year period. Gross margin for the quarter expanded 226 basis points over the previous year period to 12.46 percent. Operating margin for the quarter period stood at positive 0.53 percent as compared to a negative 3.91 percent for the previous year period.
Operating income for the quarter was $0.42 million, compared with an operating loss of $3.17 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $5.19 million compared with $3.54 million in the prior year period. At the same time, adjusted EBITDA margin improved 219 basis points in the quarter to 6.55 percent from 4.36 percent in the last year period.
"Fiscal Q3 was in line with our expectations and outlook," commented Doug Valenti, chief executive officer of QuinStreet. "We saw strong double-digit sequential revenue growth in all of our client verticals: Financial Services grew 23%, Education grew 18%, and Other Home Services, Business-to-Business Technology grew 17%. We delivered on our commitment to rapidly expand adjusted EBITDA margin and operating cash flow in the quarter. We are pleased to have achieved adjusted EBITDA margin of 7% and operating cash flow of $6.2 million, resulting in a net cash position of $42 million.
Operating cash flow improves significantlyQuinstreet has generated cash of $8.28 million from operating activities during the nine month period, up 948.92 percent or $7.49 million, when compared with the last year period. The company has spent $2.69 million cash to meet investing activities during the nine month period as against cash outgo of $4.24 million in the last year period. It has incurred net capital expenditure of $2.56 million on net basis during the nine month period, down 39.71 percent or $1.68 million from year ago period.
The company has spent $17.53 million cash to carry out financing activities during the nine month period as against cash outgo of $2.11 million in the last year period.
Cash and cash equivalents stood at $41.74 million as on Mar. 31, 2017, down 23.83 percent or $13.06 million from $54.80 million on Mar. 31, 2016.
Working capital declines
Quinstreet has witnessed a decline in the working capital over the last year. It stood at $43.88 million as at Mar. 31, 2017, down 24.41 percent or $14.17 million from $58.05 million on Mar. 31, 2016. Current ratio was at 1.91 as on Mar. 31, 2017, down from 2.09 on Mar. 31, 2016.
Days sales outstanding went down to 48 days for the quarter compared with 50 days for the same period last year.
At the same time, days payable outstanding was almost stable at 25 days for the quarter, when compared with the previous year period.
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