QuinStreet (NASDAQ:QNST) executives said fiscal second-quarter 2026 results came in ahead of management’s outlook and pointed to continued momentum in auto insurance demand and expanding opportunities in home services, including the addition of a newly acquired business.
On the company’s earnings call, CEO Doug Valenti said QuinStreet “exceeded our outlook for both revenue and Adjusted EBITDA” and added that the company continues to make progress on “needle-moving initiatives across the business.” CFO Greg Wong said the December quarter marked the company’s “second consecutive quarter of record revenue” despite being “typically our seasonally lowest revenue quarter.”
Quarterly results and vertical performance
By client vertical, Wong said financial services represented 75% of Q2 revenue and declined 1% year-over-year to $216.8 million. Home services represented 25% of revenue and grew 13% year-over-year to $71 million.
Within financial services, management emphasized continued strength in auto insurance demand on a sequential basis. Wong said auto insurance grew 6% sequentially versus the September quarter, “significantly outpacing typical seasonality,” while year-over-year revenue was down 2% due to a difficult comparison against what he described as “an unprecedented surge of insurance carrier spending” in the prior-year period. Wong also noted that non-insurance financial services—including personal loans, credit cards, and banking—grew 10% year-over-year.
Valenti said the company continues to expect “further significant growth in auto insurance revenue and margin in coming quarters and years,” citing client and marketplace fundamentals and an expanding “product, market, and media” footprint.
Home services, HomeBuddy acquisition, and seasonality
Valenti said the home services business continues to grow at double-digit rates and is “now running at close to $300 million per year in revenue,” and that with the HomeBuddy acquisition it would be between $400 million and $500 million per year. He described home services as QuinStreet’s “largest addressable market” and said the outlook remains “strongly positive short and long term.”
Wong and Valenti discussed the HomeBuddy acquisition, which closed about a month after quarter-end in early January. Wong detailed the deal terms, including:
- $115 million paid at closing, funded with $45 million in cash and $70 million drawn from a new $150 million revolving credit facility
- $75 million of post-closing payments payable equally over four years
Wong reiterated management’s expectation, previously communicated when the deal was announced, that HomeBuddy will generate $30 million or more of Adjusted EBITDA in the first 12 months after closing, adding that the company is working on capturing synergies “to drive that number even higher.”
Valenti said HomeBuddy adds a product QuinStreet did not previously have: auction-driven exclusive leads. He also emphasized HomeBuddy’s track record building large-scale campaigns in social and native channels, which he said expands media sources to meet client demand. In response to an analyst question, Valenti called the media footprint expansion “probably the most exciting part” of the combination, saying HomeBuddy brings “demonstrated ability to build these campaigns at scale” in social, native, and display—an area QuinStreet historically approached differently than search-driven marketing.
Management also addressed seasonality in home services when asked about implied Q4 acceleration. Valenti said seasonality is “pretty significant” and affects both the legacy business and HomeBuddy, with the March quarter among the weakest due to weather and the June and September quarters typically the strongest. He said this dynamic contributes to the company’s quarterly outlook patterns.
AI, traffic trends, and company positioning
Asked about AI-related disruption concerns and traffic trends, Valenti said the company has seen “only net positive trends” and “no negative trends,” adding that QuinStreet has “a record amount of volume” on Google and that AI-based answers and searches have “only created more opportunity” to run campaigns.
Valenti argued that fears of AI-driven disintermediation are “pretty clearly overblown” for many business models, and he positioned QuinStreet as benefiting from AI due to proprietary data, integrations, and technology. He said QuinStreet has applied AI in its “core marketplace algorithms function” since 2008 and continues to expand AI use across the business. He also said the company does not rely on commodity data or simple aggregation, which he suggested could be more vulnerable to AI substitution.
In a later exchange, Valenti said QuinStreet is not seeing difficulty attracting or retaining talent. On traffic mix, he said the company is seeing more traffic from SEM (paid search) around AI-based searches and described QuinStreet as “very, very successful” in SEM. He said QuinStreet has “not much by way of SEO” and that the company intentionally deemphasized SEO years ago; he added that SEO has been stable but not material.
Balance sheet, taxes, capital allocation, and margin priorities
Wong said the company ended the quarter with $107 million in cash and equivalents and no bank debt (prior to the subsequent HomeBuddy-related draw on the new revolving credit facility).
He also noted that the quarter’s GAAP tax provision included a one-time, non-cash $48 million benefit related to reversing a valuation allowance against deferred tax assets established in fiscal 2023. Wong said the reversal was required by GAAP as QuinStreet expects to return to a three-year cumulative profit position by the end of the fiscal year, and he emphasized the benefit is excluded from non-GAAP results.
On capital allocation, Wong said QuinStreet intends to remain “rigorously disciplined,” prioritizing investment in new products and initiatives, accretive acquisitions, and share repurchases at attractive levels.
Management reiterated a near-term milestone of reaching a 10% quarterly Adjusted EBITDA margin in fiscal 2026 even excluding HomeBuddy’s impact. Wong outlined three margin levers: expanding higher-margin media capacity for auto insurance demand, shifting mix toward higher-margin products and businesses, and capturing operating leverage through scale and efficiency initiatives.
Outlook
Valenti said QuinStreet continues to expect, excluding HomeBuddy, full-year revenue growth of at least 10% and Adjusted EBITDA growth of at least 20%, consistent with prior outlook, and reiterated the view that HomeBuddy is “purely additive and accretive.”
Including HomeBuddy, management guided to:
- Fiscal Q3 revenue of $330 million to $340 million
- Fiscal Q3 Adjusted EBITDA of $26.5 million to $30.5 million
- Fiscal 2026 revenue of $1.25 billion to $1.3 billion
- Fiscal 2026 Adjusted EBITDA of $110 million to $115 million
During Q&A, Valenti also discussed initiatives aimed at expanding the insurance footprint beyond direct-carrier clicks into leads, calls, and agent-driven models, and said the company is making progress in commercial and small business opportunities as well. He said certain newer products such as “360” and “QRP” are growing rapidly and, together, are expected to represent “well north of $10 million” in high variable-margin revenue this fiscal year, with the company nearing the end of heavier R&D spending for those products.
About QuinStreet (NASDAQ:QNST)
QuinStreet, Inc operates a technology-based performance marketing platform that connects companies with prospective customers across multiple verticals. The company specializes in data-driven lead generation for financial services, education, insurance, healthcare, and home services firms. By leveraging proprietary targeting algorithms and real-time analytics, QuinStreet manages customized digital marketing campaigns to optimize customer acquisition and retention for its clients.
Through a portfolio of consumer-facing websites and comparison platforms, QuinStreet delivers targeted visitors who are actively researching products and services.
