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| Statement |
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| We -- as Matt mentioned, our promotions business continued to demonstrate strength, while media was impacted by a decline in managed services due to in-housing and our strategic shift away from low-margin managed services media products |
| We see certainly strong momentum in quarter 2 for our promo bookings |
| This transition, as we have communicated in prior quarters, is intended to deliver a superior margin profile and scale quotient relative to our legacy model |
| On the top line, promotions continued to deliver growth with our network performance becoming stronger |
| We saw our savings deliver grow by 22%, again, outpacing overall retail sales and promotions growth of 7.9% as reported by NielsenIQ, demonstrating our ability to capture share and expand our addressable market |
| In Q1, we saw the underlying fundamentals of our network and platform continue to strengthen with activators on our network up 15% year-over-year and redemption is up 14% |
| We believe that each of these internal key performance metrics demonstrate the positive momentum for our network as we grow the reach of our audience, and we deliver results for brands |
| On the top line, we expect to achieve this growth rate through steady organic growth in our promotions product family and scaling up our strategic growth initiatives within our other product families, such as Digital Out-of-Home and Shopmium |
| In closing, I'm very proud of our company's transformation journey so far and very excited about the positive momentum that is building up and in my view, we are laying solid groundwork towards achieving our long-term financial growth of revenue growth in the mid-teens gross margin north of 60% and EBITDA margin north of 20% |
| As a result, we are seeing growth in content on our platform, given our ability to programmatically deliver offers to consumers, increasing performance and reducing waste and promotion spend for brands |
| Further, we continue to see meaningful improvement in adjusted EBITDA driven by our focus on growing higher-margin products and our proven cost performance |
| If you recall, this expansion is one of our key strategic growth initiatives for the promotion business, driving revenues at higher margins |
| I'm excited about the strong commercial momentum that we are witnessing across our promotions as well as our Digital Out-of-Home products, as Matt has pointed out |
| We continue to strengthen our cash management processes, leading to greater visibility into elements of our cash cycle and helping drive further optimization of our working capital |
| In Q1, we brought 92 net new brands onto our promotions network and our pipeline growth is ahead of our historical norms with particular strength in the promotions business |
| Gross margin improvement was primarily driven by the adoption of net revenue recognition, a shift towards higher-margin products and cost reduction actions including efficiency-driven improvements to our operations and delivery functions |
| And as the revenue grows, we will see that gross margin percentage become better and better through the year |
| I think that gives us a very strong position to continue to help brands move volume and help consumers save |
| We saw our gross billings double in Q1 2023 over the same period a year ago, demonstrating the strength of our product as well as showing the potential for what we believe is one of our core long-term growth drivers for Quotient |
| Combined with our solid cash and liquidity position, we believe we are well positioned to continue funding our transformation and fueling our growth |
| And we think that gives us a unique opportunity to continue to help brands deliver savings to the American consumer, across all possible touch points, whether that's through their retail royalty app, whether it's through one of our publishing partners, whether that's through their favorite shopping list app, we've really become very agnostic and shifted our network to truly be a promotional ad server, allowing us to deliver savings to consumers, across multiple touch points and however they shop |
| In particular, I'm pleased with the strong momentum we demonstrated on profitability in the first quarter with positive adjusted EBITDA of $1.8 million versus a loss of $7 million in the prior year comparable period |
| In particular, I'm proud that we achieved positive adjusted EBITDA in first quarter of this year versus the loss posted in first quarter of last year |
| Our Q1 results demonstrate the work we started last year to strengthen the financial fundamentals of the company and our continued focus on improving our financial processes |
| The hard work of transitioning to a technology provider is progressing and our financial fundamentals continue to strengthen |
| We were named a finalist in the best digital out-of-home campaign category, which recognized our successful campaign with the clothing retailer H&M USA, as well as the best multichannel experience and the best digital media campaign categories for our summer snacking campaign with Mondelez |
| That being said, you are correct to point out that there are some positive tailwinds out there in the macro environment for us, right? Inflation levels remain elevated, which means we're seeing a lot more consumer engagement and demand for our offers, which is why we see our savings deliver grow |
| And so certainly seeing some positive tailwinds there as they look to kind of leverage more of a digital promotion, which can be targeted and programmatic to help them move volume and move units more efficiently and more effectively |
| We certainly see some strength in Q2, just looking at the savings delivered we had out there in Q1 |
| Our 2Q revenue guidance reflects this momentum and is supported by a pipeline that is trending ahead of seasonal norms |
| Statement |
|---|
| From a macro perspective, we are seeing brands face pressure on volume as we begin to lap their price increases from last year as price sensitivity is creating headwinds for our consumers |
| We see CPGs facing a lot of pressure on volume |
| High 70%, 80%, and that is the reason why the gross profit declined and you have less growth -- less fixed cost of goods sold absorption in the first quarter |
| It seems like this year, I hate to say you're fearful to say it could be different |
| Our revenue is $11 million short versus fourth quarter, which is normal seasonality that we have in the business |
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