Earnings Call Presentation · 2018-07-31 · This presentation and the accompanying oral presentation contain “forward-looking”statements that are based on our management’sbeliefs

Copyright (c) 2018 Quotient Technology Inc. All Rights Reserved. Quotient, the Quotient logo, Quotient Retailer iQ, Ahalogy and Muse are trademarks or registered trademarks of Quotient Technology Inc. and its subsidiaries in the United States and other countries. Other marks are

the property of their respective owners.

Copyright © 2018 Quotient Technology Inc. All Rights Reserved.

Earnings Call Presentation

Q2 2018



Forward Looking Statements

This presentation and the accompanying oral presentation contain “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management, including our

projections regarding future financial performance, our expectations regarding the effects of our strategy which is focused on both growth and operational efficiency, our current expectations with respect to revenues and Adjusted

EBITDA, projections for our third quarter and fiscal year 2018, including our expectations regarding our operating expenses, our plans for our future investments and expansion, our expectations with respect to consumers’, retailers’

and consumer packaged goods companies’ (CPGs’) future demand and behavior, the continued growth of the Retailer iQ platform, our expectations regarding the future demand and behavior of consumers, retailers and CPGs,

including the shift to digital and a digital convergence in marketing, our expectations regarding our integrated marketing solutions, our expectations regarding the potential audience reach of its platforms, our expectations regarding its

data-driven promotions and media offerings, our expectations regarding Ahalogy and the influencer marketing spend of CPGs, the growth potential of Quotient Analytics and the expected benefits, our expectations regarding, our

expectations regarding our access to and use of shopper data for our solutions and our data relationships, our expectations regarding the performance of campaigns delivered through our solutions, our expectations regarding retailer

partnerships; our expectations regarding our pricing strategies; and our expectations regarding our product mix. The Company operates in a very competitive and rapidly changing environments, and new risks may emerge from time

to time. It is not possible for the Company’s management to predict all risks, nor can it assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ

materially from those contained in any forward-looking statements the Company may make. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate

indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available to the Company’s management at the date of this presentation and its

management’s good faith belief as of such date with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the

forward-looking statements. Important factors that could cause such differences include, but are not limited to, the Company’s financial performance, including its revenues, margins, costs, expenditures, growth rates and operating

expenses, and its ability to generate positive cash flow and become profitable; the amount and timing of digital promotions by CPGs, which are affected by budget cycles, economic conditions and other factors; the company’s ability

to negotiate fee arrangements with CPGs and retailers; the Company’s ability to maintain and expand the use by consumers of digital promotions on its platforms; the Company’s ability to effectively manage its growth and to adapt to

changing market conditions; the performance of the Company’s various products; the Company’s ability to successfully integrate acquired companies into its business; and the Company’s ability to develop and launch new services

and features. These factors, together with those described in greater detail in the Company’s annual report on Form 10-Q filed with the SEC on May 4, 2018 and in the Company’s future quarterly reports on Form 10-Q, annual reports

on Form 10-K and other filings made with the SEC, may cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by our forward-looking statements. The Company

disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise and does not assume responsibility for the accuracy and completeness

of the forward-looking statements. In addition to the U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. The non-GAAP measures have limitations as analytical tools and you should not consider

them in isolation or as a substitute for an analysis of our results under U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example,

other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for

comparison. The Company considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the company, exclusive of unusual events or factors that do not

directly affect what we consider to be our core operating performance, and are used by the Company's management for that purpose. The use of non-GAAP measures is further discussed in the accompanying press release, which

has been furnished to the SEC on Form 8-K and posted on the Company’s website. The press release also defines our non-GAAP financial measure of Adjusted EBITDA. A reconciliation between GAAP and non-GAAP measures can

also be found in the accompanying press release and in the Appendix hereto. A reconciliation of Adjusted EBITDA, a non-GAAP guidance measure, to a corresponding GAAP measure is not available on a forward-looking basis

without unreasonable efforts due to the high variability and low visibility of certain (income) expense items that are excluded in calculating Adjusted EBITDA.



Business

HighlightsMir Aamir, President & CEO



Q2 2018 Highlights

Total revenue was $89.5M, up 20% Y/Y

Revenue from Retailer iQ + Media grew +40% Y/Y

Adjusted EBITDA was$12.9M, flat Y/Y

Digital media revenue grew 77% Y/Y

Transactions grew 20% Y/Y to 954 million

Digital paperless transactions grew 31% Y/Y

Quotient Digital Commerce Technology



The Digital Convergence

• CPGs spend ~$225 Billion

annually in marketing

• Competitive pressures

serve as catalyst for

convergence

• Data and integrated

solutions are key

DIGITAL

CONVERGENCE

E-COMMERCE

OMNI CHANNEL

MEASUREMENT

PROMOTIONS

MEDIA

DATA



Retailers Drive Growth

on Retailer iQ

Total Transactions up 20%

Paperless Transactions

up 31%





Integrating Digital Promotions

and Media at Scale

Leading Influencer Marketing Platform

100M+ Verified Buyer Auduence for Media Targeting1

100% Guaranteed Audience Reach

Data Driven

Ideas

MuseTM

Custom Branded

Content

Brandables

Verified Audience

Guaranteed Reach

Source 1: BlueKai (2018)



Ahalogy: Premium Content on Social



Delivering

KPI-Driven

Programs

Up to $6Return on CPG ad spending1

Average 1.4X Lift

vs. Industry Norms2

Average 74%Viewability3

Viewability

Store Visits

ROAS

Source: 1 10 IRI Lift Analyses from 2017; 2 Quotient performance versus 186 Placed store visitation lift studies; 3 Moat (Jan-June 2018)



Performance Media Advantage:

Drives Sales in Mid-Low Funnel

Valuable Key Assets

Retailer Audience Data

Dynamic Mobile Creative

Retail Ad Inventory

Measurement

Technology

Coupons.com Audience



Quotient Analytics



Desktop

Digital Circular

Email

Retail

Properties

Across

Publishing Network

Integrated Marketing Solution

Digital Circular

Email

App

Coupons.com

Offsite

Dynamic Content

12



Financial Review

Ron J. Fior, CFO



• Total Revenue: $89.5 million, up 20% YoY

• Total Transactions: 954 million in the quarter, up 20% YoY, driven by continued strength in

Retailer iQ and reflecting our ability to increase scale on the platform

• GAAP Net Loss: ($4.7) million, and included ($3.3) million in convertible debt interest expense and

($0.7) in acquisition-related costs

• Adjusted EBITDA: $12.9 million, flat YoY due to gross margin pressures resulting from shift in our

product mix, offset by increased revenues and continued leverage in operating expenses

• Ended the quarter with a cash and investment balance of $358.0 million, down $23.3 million from

Q1 2018. Excluding cash used for Ahalogy acquisition, stock buyback program and investments in

multi-year, exclusive partnerships, we generated approximately $10.1 million in Cash from Operations

Q2 2018 Financial Summary



$58.4 $58.1 $63.4 $63.8 $60.9

$16.1 $23.9$29.7 $23.0 $28.6

Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018

Quarterly Trend ($M)

Promotions Media

REVENUE

4% y/y

Revenue $74.5 $82.0 $93.1 $86.8 $89.5

QoQ 3% 10% 14% -7% 3%

YoY 11% 23% 23% 20% 20%

77% y/y



Revenue Split

73% of Total Revenue Growing +40% over Q2’17

Total promotion revenue in Q2’18, excluding Specialty Retail, grew 9% over Q2’17

$M Q1'17 Q2'17 Q3'17 Q4'17 FY Y/Y %

% of

Total Q1'18 Q2'18 Y/Y %

% of

Total

Digital Print 15.4 17.2 16.6 17.3 66.5 -13% 21% 15.8 15.6 -10% 17%

Retailer iQ 31.2 30.6 33.0 35.7 130.5 57% 41% 40.2 36.8 20% 41%

Others 2.0 2.4 2.2 2.2 8.7 1% 2% 1.7 2.3 -1% 3%

Total Promo Revenue from CPGs 48.6 50.2 51.8 55.2 205.7 22% 64% 57.7 54.7 9% 61%

Specialty Retail 8.8 8.2 6.3 8.2 31.5 -28% 10% 6.1 6.2 -23% 7%

Total Promotion 57.4 58.4 58.1 63.4 237.2 12% 74% 63.8 60.9 4% 68%

Media 15.2 16.1 23.9 29.7 84.9 35% 26% 23.0 28.6 77% 32%

Total Revenues 72.6 74.5 82.0 93.1 322.1 17% 100% 86.8 89.5 20% 100%

20182017



50%

55%

60%

65%

70%

75%

Q2'17 Q3'17 Q4'17 Q1'18 Q2'18

Significant Y/Y Revenue Growth in Retailer iQ + Media

Retailer iQ + Media Revenue as % of Total Revenue

Average revenue growth rate calculated based off of average quarterly revenue year over year growth rate



CPGs Continue to Spend More

Based on 2017 Top CPGs (U.S. revenue only)

25%

26%

27%

23%

24%

25%

26%

27%

28%

1H 2017 2H 2017 1H 2018

Top 10 Retailer iQ customers increase as % of total promotion revenue

• Q2 revenue grew 24% y/y



Revenue Growth From Top 10 Media Customers

• Q2 revenue from top 10 media

customers up 160% y/y

• Growth drivers include QMX,

Crisp, and opportunities in

shopper marketing

Based on Q2 2018 top 10 media customers (U.S. revenue only)



Transactions

• Q2 YoY growth of 20%, driven by

31% growth in digital paperless,

offset by 19% decline in digital

print

• Volume of transactions drive

scale and demand on platform

Transactions Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018

QoQ 0% 24% -2% 6% -7%

YoY 48% 45% 40% 29% 20%

793

987 971 1,027954

Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018

(M)

Digital Print Digital Paperless



Gross Margin

• GAAP Q2 FY18 includes

$3.8M in amortization of

intangible assets and $0.6M in

SBC expense

• QoQ decrease due to product

mix as a greater proportion of

our revenue came from media

Non-GAAP Gross Margin excludes stock-based compensation expense, amortization of acquired intangible assets, and

restructuring charges. A reconciliation table for the periods presented can be found in the Appendix section of this presentation

59.7%53.4%

46.7%

63.8%57.1%

51.6%

Q2-2017 Q1-2018 Q2-2018

GAAP Non-GAAP



Operating Expenses

• QoQ improvement in Non-GAAP

OpEx expense due to continued

operating efficiencies and cost

management and decrease in FICA

expense

• Significant improvement YoY of

• Op Ex as % of Revenue due to 20%

revenue growth, coupled with

continued cost management and

efficiencies

Non-GAAP operating expenses exclude stock-based compensation, any

net change in fair value of escrowed shares and contingent consideration,

amortization of acquired intangible assets, enterprise resource planning

“ERP” software implementation costs, acquisition related costs, and

restructuring charges. A reconciliation table of the period presented can

be found in the Appendix section of this presentation.

Q2 FY18 GAAP Op Ex: $44.2M, down from $55.2M in Q1 FY18, and $50.1M in Q2 FY17

Q2 FY18 Non-GAAP Op Ex: $35.4M down from $39.4M in Q1 FY18, and $36.3M in Q2 FY17

26% 25% 21%

14%12%

11%

9%8%

8%

49%45%

40%

Q2-2017 Q1-2018 Q2-2018

Non-GAAP

Sales & Marketing Research & Development Gen'l and Administrative



Adjusted EBITDA

Adjusted EBITDA, a non-GAAP financial measure, is net income (loss)

adjusted for stock-based compensation, change in fair value of escrowed

shares and contingent consideration, net, interest expense, other (income)

expense net, provision for (benefit from) income taxes, depreciation,

amortization and other, which includes: enterprise resource planning ("ERP")

software implementation costs, certain acquisition related costs and

restructuring charges. A reconciliation table of the periods presented can be

found in the Appendix section of this presentation.

$13.0

$12.5

$13.9

$11.9

$12.9

Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018

Margin 17% 15% 15% 14% 14%

• Q2 FY18 flat YoY due to increased

pressure in gross margin resulting

from shift in our product mix as a

greater proportion of our revenue

came from media, offset by increased

revenues and continued leverage in

operating expenses



Guidance

FY2018

Q3 Full Year

Low High Low High

Revenue ($M) $101.0 $105.0 $390.0 $405.0

YoY Growth 23% 28% 21% 26%

Q3 Full Year

Adjusted EBITDA ($M) $13.0 $15.0 $58.0 $65.0

Margin 13% 14% 15% 16%



Thank You



Appendix

Reconciliation Tables



Reconciliation of Non-GAAP Gross Margin



Reconciliation of Non-GAAP Operating Expense

* Non-GAAP operating expenses excludes changes in fair value of

escrowed shares and contingent consideration, stock-based

compensation, amortization of acquired intangible assets, restructuring

charges, acquisition related costs, and enterprise resource planning

("ERP") software implementation costs.



Reconciliation of Net Loss to Adjusted EBITDA



Copyright © 2018 Quotient Technology Inc. All Rights Reserved.

Making Sales Happen.

Documents

Earnings Call Presentation · 2018-07-31 · This presentation and the accompanying oral presentation contain “forward-looking”statements that are based on our management’sbeliefs