8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8‑K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (date of earliest event reported)
August 2, 2019

Quotient Technology Inc.

(Exact name of Registrant as specified in its charter)

Delaware	001-36331	77-0485123
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)
400 Logue Avenue Mountain View, California 94043
(Address of principal executive offices)
	(650) 605-4600
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00001 par value per share	QUOT	New York Stock Exchange

Item 2.02 Results of Operations and Financial Condition

On August 6, 2019 Quotient Technology Inc. (the “Company”) issued a press release regarding its financial results for the second quarter ended June 30, 2019. A copy of the Press Release is furnished as Exhibit 99.1 to this current report.

The information set forth under Item 2.02 and in the press release attached hereto shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

Item 5.02 Departure of Directors and Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Departure of Principal Executive Officer and Director

On August 2, 2019, Mr. Mir Aamir stepped down as the Company’s President and Chief Executive Officer.  In connection with his departure, Mr. Aamir resigned from the Board of Directors of the Company (the “Board”) effective August 2, 2019.  Mr. Aamir’s departure is not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

 

Consistent with the terms of the Company’s Change of Control and Severance Agreement with Mr. Aamir filed with the Securities and Exchange Commission (the “SEC”) on November 8, 2016 (the “Aamir Severance Agreement”), Mr. Aamir will be eligible to receive: (i) a lump sum payment (less applicable withholding taxes) equal to twelve months of base salary continuation (excluding bonus or any pro ration thereof) and (ii) a taxable lump-sum payment (less applicable withholding taxes) in an amount equal to the monthly COBRA premium that Mr. Aamir would be required to pay to continue his group health coverage in effect on the date of Mr. Aamir’s termination of employment, multiplied by 12.

In addition, Mr. Aamir has agreed to provide certain transition and strategic consulting services to the Company on an as-needed basis through December 31, 2020, unless earlier terminated by mutual agreement, or by the Company or Mr. Aamir under certain circumstances.  As consideration for the consulting services to be provided by Mr. Aamir, the Company agreed to provide for the continued vesting of his outstanding equity awards during the term of the arrangement.

The foregoing benefits are subject to the terms and conditions of the Aamir Severance Agreement, including Mr. Aamir’s timely execution of an effective separation agreement and release of claims against the Company following the termination date.

Appointment of Principal Executive Officer

On August 2, 2019, the Board appointed Steven Boal as its Chief Executive Officer (“CEO”), effective as of August 2, 2019. Mr. Boal will also become Chairman of the Board.

Mr. Boal, age 53, founded the Company in 1998. Mr. Boal has served as the Executive Chairman of the Board since September 2017, Chairman of the Board from February 2017 until September 2017 and has been a member of the Board since 1998. Mr. Boal served as the CEO from 1998 until September 2017 and as President of the Company from 1998 until September 2015. Prior to founding Quotient, Mr. Boal served as Vice President of Business Development for Integral Development Corporation, a privately held financial software company. Mr. Boal holds a B.A. from the State University of New York at Albany.

In connection with his appointment as CEO, Mr. Boal’s annual base salary will increase from $400,000 to $500,000.

There are no family relationships between Mr. Boal and any director or executive officer of the Company, and he has no indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K, other than those disclosed under the section “Certain Relationships and Related Party Transactions” in the Company’s definitive proxy statement for the Company’s 2019 annual meeting of stockholders filed with the SEC on April 22, 2019.

Departure of Director and Appointment and Compensation of President

On August 5, 2019, the Board appointed Scott Raskin as President of the Company, effective as of August 5, 2019.

In connection with this appointment, Mr. Raskin resigned as a member of the Board, effective August 5, 2019.  Mr. Raskin’s departure from the Board is not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Mr. Raskin, age 57, has served on the Board since February 2017 and as Lead Independent Director since November 2017.  From June 2019 to August 2019, Mr. Raskin served as an operating partner with Khosla Ventures, a venture capital firm. Mr. Raskin served as the President and Chief Executive Officer at Spigit Inc. (formerly known as Mindjet), a provider of innovation management software from June 2006 until December 2018 (Spigit was acquired in December 2018). Prior to joining Spigit, Mr. Raskin served as President and Chief Operating Officer, from May 2001 to June 2006, at Telelogic AB, a publicly traded, international software company. Additionally, Mr. Raskin served as Chairman of the board of directors of Neology, a private company since June 2019. Mr. Raskin served as the Chairman of the board of directors of MariaDB, a Finnish private company, since January 2015. From January 2012 to July 2014, Mr. Raskin also served on the board of directors of Cision AB, a Swedish, publicly traded company, where he was also a member of the compensation committee of its board of directors. Mr. Raskin holds a B.B.A. from the University of Texas.

Offer Letter with Mr. Raskin

In connection with Mr. Raskin’s appointment as President, Mr. Raskin has entered into an offer letter (the “Offer Letter”) with the Company. Pursuant to the Offer Letter, Mr. Raskin will be paid an annual base salary of $450,000 and will be eligible for an annual bonus of up to 100% of Mr. Raskin’s base salary, pro rated for any partial year served. Mr. Raskin will also be eligible for the Company’s standard benefits programs.

Pursuant to the Offer Letter, subject to the approval of the Board or its Compensation Committee (the “Compensation Committee”), Mr. Raskin will be granted restricted stock units (“RSUs”) to acquire shares of the Company’s common stock (“Common Stock”) with a value of $4,000,000 pursuant to the Company’s 2013 Equity Incentive Plan (the “2013 Plan”) and an award agreement. The RSUs will be scheduled to vest as to 25% of the RSUs on the one year anniversary of September 1, 2019 (the “Vesting Commencement Date”), and as to 6.25%% of the RSUs every three (3) months thereafter on the anniversary date of the Vesting Commencement Date.

Subject to the approval of the Board or the Compensation Committee, Mr. Raskin will also be granted an option (the “Stock Option”) to purchase shares of Common Stock with a value of $4,000,000 pursuant to the 2013 Plan and an award agreement with an exercise price equal to the fair market value of the Common Stock on the date of grant. The Stock Option will be scheduled to vest as to 25% of the shares subject to the Stock Option on the one-year anniversary of the Vesting Commencement Date, and as to 1/48 of the shares subject to the Stock Option each month thereafter.

Mr. Raskin entered into the Company’s standard form of indemnification agreement, a copy of which was previously filed on February 14, 2014 as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No. 333-193692) and the Company’s form of Change of Control Severance Agreement, as further described below.

There are no family relationships between Mr. Raskin and any director or executive officer of the Company, and he has no indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

The foregoing description of the Offer Letter does not purport to be complete and is qualified in its entirety by reference to the Change of Control Agreement, a copy of which will be filed with the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2019.

Change of Control Agreement with Mr. Raskin

In connection with Mr. Raskin’s appointment, the Company also entered into a Change of Control Severance Agreement with Mr. Raskin.

Pursuant to the Change of Control Agreement, if Mr. Raskin’s employment with the Company is terminated without Cause (as such term is defined in the Change of Control Agreement) and not by reason of death or Disability (as such term is defined in the Change of Control Agreement), or, if Mr. Raskin terminates his employment with the Company for Good Reason (as such term is defined in the Change of Control Agreement), and, in any event, such termination does not occur within three months before or twelve months after a Change of Control (as such term is defined in the Change of Control Agreement) of the Company (the “Change of Control Period”), then provided Mr. Raskin signs and does not a revoke a separation agreement and release of claims in favor of the Company and subject to the terms of the Change of Control Agreement, Mr. Raskin will receive the following: (i) a lump-sum payment (less applicable withholding taxes) equal to 100% of the Mr. Raskin’s annual base salary as in effect immediately prior to Mr. Raskin’s termination date, and (ii) a taxable lump-sum payment (less applicable withholding taxes) in an amount equal to the monthly COBRA premium that Mr. Raskin would be required to pay to continue Mr. Raskin’s group health coverage in effect on the date of Mr. Raskin’s termination of employment, multiplied by 12. In addition, if his employment with the Company is terminated without Cause and not by reason of death or Disability, or if he terminates his employment with the Company for Good Reason, in each case before the first anniversary of his start date, 25% of the shares subject to Mr. Raskin’s then-outstanding and unvested Equity Awards (as such term is defined in the Change of Control Agreement) will accelerate and become exercisable, to the extent applicable.

Pursuant to the terms of the Change of Control Agreement, if Mr. Raskin’s employment with the Company is terminated by the Company without Cause and not by reason of death or Disability or he terminates his employment with the Company for Good Reason, and, in any event, such termination occurs during the Change of Control Period, then provided Mr. Raskin signs and does not revoke a separation agreement and release of claims in favor of the Company and subject to the terms of the Change of Control Agreement, Mr. Raskin will receive the following: (i) a lump-sum payment (less applicable withholding taxes) equal to 150%, of Mr. Raskin's annual base salary as in effect immediately prior to Mr. Raskin’s termination date or, if greater, at the level in effect immediately prior to the Change of Control; (ii) a lump-sum payment (less applicable withholding taxes) equal to 150% of Mr. Raskin’s annual bonus for the year of termination at target level, as in effect immediately prior to Mr. Raskin’s termination date, or if greater, at the level in effect immediately prior to the Change of Control; (iii) a taxable lump-sum payment (less applicable withholding taxes) in an amount equal to the monthly COBRA premium that Mr. Raskin would be required to pay to continue Mr. Raskin’s group health coverage in effect on the date of Mr. Raskin’s termination of employment, multiplied by 18; and (iv) 100% of the Mr. Raskin’s then-outstanding and unvested Equity Awards will become vested in full and in the case of stock options and stock appreciate rights, will become exercisable.

In the event that the severance and other benefits payable to Mr. Raskin constitutes “parachute payments” under Section 280G of the U.S. tax code and would be subject to the applicable excise tax, then Mr. Raskin’s severance benefits will be either (A) delivered in full or (B) delivered to such lesser extent which would result in no portion of such benefits being subject to the excise tax, whichever results in the receipt by Mr. Raskin on an after-tax basis of the greatest amount of benefits.

The foregoing description of the Change of Control Agreement does not purport to be complete and is qualified in its entirety by reference to the Change of Control Agreement, a copy of which will be filed with the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2019.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1        Press Release, dated August 6, 2019.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Quotient Technology Inc.
By:	/s/ Ronald Fior
	Ronald Fior
	Chief Financial Officer and Treasurer

Date: August 6, 2019

EX-99.1

Exhibit 99.1

Quotient Technology Inc. Reports Second Quarter 2019 Financial Results; Announces Executive Management Changes

Delivered $104.7 million in revenue, up 17% over Q2 2018

Media revenue grew 65% over Q2 2018

Generated $14.1 million in cash from operations in Q2 2019

Steven Boal, Founder & Executive Chairman, returns as CEO; board member Scott Raskin named President

Company revises full-year guidance

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--August 6, 2019--Quotient Technology Inc. (NYSE: QUOT), the leading provider of CPG and retailer marketing technology and data-driven digital promotions and media, today reported financial results for the second quarter ended June 30, 2019.

The company also announced that Steven Boal, Founder and Executive Chairman, has returned to Quotient as Chief Executive Officer and Chairman of Quotient, replacing Mir Aamir who will remain with the company as an advisor during a transitionary period. In addition, Scott Raskin has resigned from our board of directors and assumed the role of Company President.

“I am thrilled to be back as Quotient’s CEO. I want to thank Mir for his passion and dedication as he helped chart the strategic course for our continued growth. I also want to welcome Scott Raskin to the team. I’ve known Scott for 15 years. He’s served on our board of directors for the past two years and brings exceptional leadership and direct experience in scaling high-growth, disruptive businesses,” said Steven Boal, Founder and CEO.

“We delivered 17% total revenue growth in the second quarter. Our lowered forecast for the second half of this year is attributed to reduced spend from three CPG customers and delays on a few planned product launches. Despite this, our business fundamentals remain strong, and the continued shift to digital marketing provides opportunity for continued growth going forward.”

Second Quarter 2019 Financial Results

• Total revenue was $104.7 million in Q2 2019, an increase of 17% over Q2 2018.
• GAAP net loss for Q2 2019 was $3.9 million, compared to net loss of $4.7 million in Q2 2018.
• Adjusted EBITDA was $11.7 million in Q2 2019, compared to $12.9 million in Q2 2018.
• $14.1 million in cash from operations was generated in Q2 2019, compared to $10.1 million in Q2 2018.

Adjusted EBITDA, a non-GAAP measure, is reconciled to the corresponding GAAP measure at the end of this release.

Business Highlights

Brands and retailers target shoppers across digital marketing channels

Social Influencer Marketing:

• Studies show that marketers are relying more on influencers, with marketing spend in this area increasing. A worldwide survey of CMOs found that 30.5% are increasing their focus on influencers as part of the advertising media mix.¹
• Ahalogy, a Quotient brand, was selected by KAO USA Inc. to power social media for its well-known brand, Jergens Skincare, including development and execution of all paid and organic social media activity.

Retail Performance Media (“RPM”):

• Promotions revenue from retailer specific CPG coupons, a key strategic and competitive advantage of ours, increased 53% over Q2 last year as brands leverage our RPM network to deliver targeted media and promotions to millions of shoppers. Quotient’s RPM platform has the ability to target nearly 100% of U.S. households.

Strategic partnership with Nielsen brings third-party measurement and insights to brands and retailers

• Brands and retailers will soon be able to seamlessly connect to Nielsen’s insights and measurement solution for third-party measurement verification on digital media programs deployed with Quotient Audiences. Third-party validation is an important step as brands build their digital marketing strategies and allocate budgets to the most effective sales channels.
• In addition, Nielsen will provide its customers with seamless access to more than 2,500 CPG-ready buyer segments through the Nielsen Marketing Cloud connected to Quotient Audiences.
• Quotient Audiences is a data-powered audience solution that provides brands more effective ways to deliver digital advertising tied directly to sales. The solution offers unparalleled scale and depth of consumer purchase history and intent to construct targetable shopper segments for use in digital advertising across all platforms.

Repurchased Shares In Stock Buyback Program

The Company also announced the completion of its stock buyback program on July 16, 2019 with the repurchase of approximately 5.5 million shares of its common stock for approximately $60.1 million including transaction costs.

Business Outlook

As of today, Quotient is providing the following business outlook.

For the third quarter 2019, total revenue is expected to be in the range of $108.0 million to $112.0 million. Adjusted EBITDA for the third quarter 2019 is expected to be in the range of $11.0 million to $13.0 million.

For the full year 2019, total revenue is expected to be in the range of $422.0 million to $432.0 million. Adjusted EBITDA for the full year 2019 is expected to be in the range of $42.0 million to $48.0 million.

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 and expenses items that are excluded in calculating Adjusted EBITDA.

Conference Call Information

Management will host a conference call and live webcast to discuss the Company’s financial results and business outlook today at 4:30 p.m. EST/ 1:30 p.m. PST. Questions that investors would like to see asked during the call should be sent to ir@quotient.com.

To access the call, please dial (833) 227-5842, or outside the U.S. (647) 689-4069, with Conference ID# 1742668 at least five minutes prior to the 1:30 p.m. PST start time. The live webcast and accompanying presentation can be accessed on the Investor Relations section of the Company website at: http://investors.quotient.com/. A replay of the webcast will be available on the website following the conference call.

Use of Non-GAAP Financial Measure

Quotient has presented Adjusted EBITDA, a non-GAAP financial measure, in this press release, because it is a key measure used by Quotient’s management and Board of Directors to understand and evaluate core operating performance and trends, to prepare and approve its annual budget, to develop short and long-term operational plans, and to determine bonus payouts. In particular, Quotient believes that the exclusion of certain items of income and expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of its core business. Additionally, Adjusted EBITDA is a key financial metric used by the compensation committee of our Board of Directors in connection with the determination of compensation for our executive officers. Accordingly, Quotient believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating Quotient’s operating results in the same manner as Quotient’s management and Board of Directors.

Quotient defines Adjusted EBITDA as net income (loss) adjusted for interest expense, provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation, change in fair value of escrowed shares and contingent consideration, net, other income (expense) net, charges related to certain acquisition related costs, restructuring charges, and Enterprise Resource Planning (“ERP”) Software implementation costs. We exclude these items because we believe that these items do not reflect expected future operating expenses. Additionally, certain items are inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our current or past operating performance.

Quotient’s use of Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of Quotient’s financial results as reported under GAAP. Some of these limitations are:

• Although depreciation and amortization are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect capital expenditure requirements for such replacements or for new capital expenditure requirements; and
• Adjusted EBITDA does not reflect: (i) changes in, or cash requirements for, working capital needs; (ii) interest and tax payments that may represent a reduction in cash available to Quotient; (iii) the effects of stock-based compensation, amortization of acquired intangible assets, interest expense, other income (expense) net, provision for (benefit from) income taxes, change in fair value of escrowed shares and contingent consideration, net, charges related to certain acquisition related costs, restructuring charges, and ERP software implementation costs. Other companies, including companies in its industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.

This non-GAAP financial measure is not intended to be considered in isolation from, as substitute for, or as superior to, the corresponding financial measures prepared in accordance with GAAP. Because of these and other limitations, Adjusted EBITDA should be considered along with other GAAP-based financial performance measures, including various cash flow metrics, net income (loss), and Quotient’s other GAAP financial results.

For a reconciliation of this non-GAAP financial measure to the nearest comparable GAAP financial measure, see “Reconciliation of Net Loss to Adjusted EBITDA” included in this press release.

Forward-Looking Statements

This press release contains forward-looking statements concerning the Company’s current expectations and projections about future events and financial trends affecting its business. Forward looking statements in this press release include the Company’s current expectations with respect to revenues and Adjusted EBITDA for the third quarter and fiscal year 2019; the Company’s expectations for its solutions, partnerships, product launches, specialty retail, and privacy regulations; the Company’s expectations regarding the future demand and behavior of consumers, retailers and CPGs; and the Company’s expectations with respect to its future investments and growth and ability to leverage its investments and operating expenses. Forward-looking statements are based on the Company’s current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, the Company’s ability to generate positive cash flow and become profitable; the amount and timing of digital marketing spend by CPGs, which are affected by budget cycles, economic conditions and other factors; the Company’s ability to timely launch products; the Company’s ability to adapt to changing market conditions and data regulations, including the Company’s ability to adapt to changes in consumer habits and consumer data privacy concerns, 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 promotions and offers on its platforms; the Company’s ability to execute its media strategy; the Company’s ability to effectively manage its growth; the performance of the Company’s various solutions; the Company's ability to successfully integrate acquired companies into its business; the Company’s ability to develop and launch new services and features; CPGs’ receptivity to the Company’s packaged solutions; our expectations regarding growth drivers; and other factors identified in the Company’s filings with the Securities and Exchange Commission (the “SEC”), including its Quarterly Report on Form 10-Q filed with the SEC on May 10, 2019 and future filings and reports by the Company. Quotient 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.

About Quotient Technology Inc.

Quotient Technology is a leading digital promotions, media and analytics company that delivers personalized digital coupons and ads - informed by proprietary shopper and online engagement data - to millions of shoppers daily. We use our proprietary Promotions, Media, Audience and Analytics Cloud Platforms and services to seamlessly target audiences, optimize performance, and deliver measurable, incremental sales for CPG and retail marketers.

We serve hundreds of CPGs and retailers nationwide, including Clorox, Procter & Gamble, General Mills, Unilever, Albertsons Companies, CVS, Dollar General and Ahold-Delhaize USA. Quotient is based in Mountain View, California, and has offices in Bangalore, Cincinnati, New York, Paris and London. Visit www.quotient.com for more information.

Quotient, the Quotient logo, and Ahalogy 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.

Source: Quotient Technology Inc.

Footnote:

(1) eMarketer: Global Influencer Marketing 2019

QUOTIENT TECHNOLOGY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
	June 30, 2019			December 31, 2018
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	253,578		$	302,028
Short-term investments		—			20,738
Accounts receivable, net		108,374			112,108
Prepaid expenses and other current assets		12,978			10,044
Total current assets		374,930			444,918
Property and equipment, net		15,890			15,579
Intangible assets, net		70,106			81,724
Goodwill		118,821			118,821
Other assets		7,840			1,311
Total assets	$	587,587		$	662,353
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	22,338		$	17,060
Accrued compensation and benefits		9,850			13,107
Other current liabilities		41,527			53,255
Deferred revenues		10,302			8,686
Contingent consideration related to acquisitions		26,001			—
Total current liabilities		110,018			92,108
Other non-current liabilities		6,950			3,622
Contingent consideration related to acquisitions		3,015			28,963
Convertible senior notes, net		160,868			155,719
Deferred tax liabilities		1,754			1,854
Total liabilities		282,605			282,266
Stockholders’ equity:
Common stock		1			1
Additional paid-in capital		665,665			703,023
Accumulated other comprehensive loss		(799	)		(844	)
Accumulated deficit		(359,885	)		(322,093	)
Total stockholders’ equity		304,982			380,087
Total liabilities and stockholders’ equity	$	587,587		$	662,353

QUOTIENT TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenues	$	104,691		$	89,545		$	202,798		$	176,311
Costs and expenses:
Cost of revenues (1)		64,106			47,769			120,929			88,222
Sales and marketing (1)		23,870			20,530			49,393			44,360
Research and development (1)		8,699			12,122			19,069			24,748
General and administrative (1)		12,835			11,528			26,458			22,920
Change in fair value of escrowed shares and contingent consideration, net		(3,009	)		—			53			7,350
Total costs and expenses		106,501			91,949			215,902			187,600
Loss from operations		(1,810	)		(2,404	)		(13,104	)		(11,289	)
Interest expense		(3,470	)		(3,326	)		(6,909	)		(6,634	)
Other income (expense), net		1,508			1,270			3,039			2,208
Loss before income taxes		(3,772	)		(4,460	)		(16,974	)		(15,715	)
Provision for income taxes		134			200			160			302
Net loss	$	(3,906	)	$	(4,660	)	$	(17,134	)	$	(16,017	)
Net loss per share, basic and diluted	$	(0.04	)	$	(0.05	)	$	(0.18	)	$	(0.17	)
Weighted-average shares used to compute net loss per share, basic and diluted		92,558			93,643			93,406			93,180
(1) The stock-based compensation expense included above was as follows:
	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Cost of revenues	$	562		$	579		$	1,164		$	1,119
Sales and marketing		1,825			1,735			3,563			3,335
Research and development		1,073			1,862			2,439			3,689
General and administrative		4,576			4,063			8,918			7,892
Total stock-based compensation	$	8,036		$	8,239		$	16,084		$	16,035

QUOTIENT TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(17,134	)	$	(16,017	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		15,632			10,507
Stock-based compensation		16,084			16,035
Amortization of debt discount and issuance cost		5,150			4,883
Allowance for doubtful accounts		366			49
Deferred income taxes		160			302
Change in fair value of escrowed shares and contingent consideration, net		53			7,350
Other non-cash expenses		1,219			34
Changes in operating assets and liabilities:
Accounts receivable		3,368			(10,741	)
Prepaid expenses and other current assets		(2,779	)		(1,967	)
Accounts payable and other current liabilities		3,349			(3,152	)
Accrued compensation and benefits		(3,249	)		(4,535	)
Deferred revenues		1,616			1,109
Net cash provided by operating activities		23,835			3,857
Cash flows from investing activities:
Purchases of property and equipment		(4,729	)		(2,327	)
Purchases of intangible assets		(14,811	)		(6,500	)
Acquisitions, net of cash acquired		—			(20,947	)
Purchases of short-term investments		—			(50,175	)
Proceeds from maturity of short-term investment		20,738			59,902
Net cash provided by (used in) investing activities		1,198			(20,047	)
Cash flows from financing activities:
Proceeds from issuances of common stock under stock plans		3,063			4,515
Payments for taxes related to net share settlement of equity awards		(6,461	)		(8,240	)
Repurchases and retirement of common stock under share repurchase program		(69,879	)		(6,734	)
Principal payments on promissory note and capital lease obligations		(229	)		(156	)
Net cash used in financing activities		(73,506	)		(10,615	)
Effect of exchange rates on cash and cash equivalents		23			6
Net decrease in cash and cash equivalents		(48,450	)		(26,799	)
Cash and cash equivalents at beginning of period		302,028			334,635
Cash and cash equivalents at end of period	$	253,578		$	307,836

QUOTIENT TECHNOLOGY INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(Unaudited, in thousands)
	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net loss	$	(3,906	)	$	(4,660	)	$	(17,134	)	$	(16,017	)
Adjustments:
Stock-based compensation		8,036			8,239			16,084			16,035
Depreciation, amortization and other (1)		8,509			7,033			17,053			12,652
Change in fair value of escrowed shares and contingent consideration, net		(3,009	)		—			53			7,350
Interest expense		3,470			3,326			6,909			6,634
Other (income) expense, net		(1,508	)		(1,270	)		(3,039	)		(2,208	)
Provision for income taxes		134			200			160			302
Total adjustments	$	15,632		$	17,528		$	37,220		$	40,765
Adjusted EBITDA	$	11,726		$	12,868		$	20,086		$	24,748

(1) For the three and six months ended June 30, 2019, Other includes certain acquisition related costs of $0.6 million, and $1.4 million, respectively. For the three and six months ended June 30, 2018, Other includes certain acquisition related costs of $0.7 million for each of the respective periods, restructuring charges of $0.2 million and $1.4 million, respectively, and ERP software implementation costs related to service agreements of zero and $0.05 million, respectively.

Contacts

Investor Relations Contact:
Stacie Clements, 650-605-4535
Vice President, Investor Relations
ir@quotient.com
or
Media Contact:
Randy Zane
rzane@quotient.com