-Company seeks to raise $250 million.
-Operating Income stayed basically flat in the $21-$26 million per year range for 4 fiscal years, 2005 - 2008, while Net Revenue grew more consistently. Some of this margin compression is likely due to the companies efforts to diversify its business from the sales-side.
-Success in sales-side diversifyication has been limited. "Our top three clients accounted for 32% and 28% of our net revenue for the fiscal year 2009 and the first three months of fiscal year 2010, respectively." "DeVry Inc., our largest client, accounted for approximately 19% and 13% of our net revenue for fiscal year 2009 and the first three months of fiscal year 2010." This is despite many, many acquisitions to help in this effort. Some concern here
-Buy-side concentration is not disclosed in any detail. I believe there is less risk relating to losing one or two important buy-side clients, and buy-side risk is more likely related to a general increase in media costs with an improved economy (and continued competition driving media costs up). There is a possibility that the recent jump in Operating Income will evaporate once media prices return to more normal prices.
-Operating Income jumped significantly to $34.7 million in 2009, but I believe this is more attributable to the economy then the companies execution. Media prices dropped significantly, and the companies largest vertical (secondary education) is typically strong in a down market.
-Company has given no guidance in regards to valuation, however for illustrative purposes at a $1 billion dollar valuation (again for purposes of illustration only), this would represent a multiple of 3.8 times their last fiscal year's revenue and 17.6 times their last fiscal year's adjusted EBITDA.
-Operating Income stayed basically flat in the $21-$26 million per year range for 4 fiscal years, 2005 - 2008, while Net Revenue grew more consistently. Some of this margin compression is likely due to the companies efforts to diversify its business from the sales-side.
-Success in sales-side diversifyication has been limited. "Our top three clients accounted for 32% and 28% of our net revenue for the fiscal year 2009 and the first three months of fiscal year 2010, respectively." "DeVry Inc., our largest client, accounted for approximately 19% and 13% of our net revenue for fiscal year 2009 and the first three months of fiscal year 2010." This is despite many, many acquisitions to help in this effort. Some concern here
-Buy-side concentration is not disclosed in any detail. I believe there is less risk relating to losing one or two important buy-side clients, and buy-side risk is more likely related to a general increase in media costs with an improved economy (and continued competition driving media costs up). There is a possibility that the recent jump in Operating Income will evaporate once media prices return to more normal prices.
-Operating Income jumped significantly to $34.7 million in 2009, but I believe this is more attributable to the economy then the companies execution. Media prices dropped significantly, and the companies largest vertical (secondary education) is typically strong in a down market.
-Company has given no guidance in regards to valuation, however for illustrative purposes at a $1 billion dollar valuation (again for purposes of illustration only), this would represent a multiple of 3.8 times their last fiscal year's revenue and 17.6 times their last fiscal year's adjusted EBITDA.
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-Disclosure: I do not now, nor how I ever, worked for or represented Quinstreet or their interests in any regard. These thoughts are mine, not theirs.
-Disclosure: I was formerly a founding executive and early investor at Adchemy, which is considered by some to be a Quinstreet competitor.
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