Investor Presentation - s1.q4cdn.comLeading Influencer Marketing Platform 100M+ Verified Buyer...

Copyright © 2018 Quotient Technology Inc. All Rights Reserved. Quotient, the Quotient logo, Coupons.com logo, Quotient Retailer iQ, QMX, Ahalogy and Elevaate 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.

Investor Presentation

November 2018

Copyright © 2018 Quotient Technology Inc. All Rights Reserved. Quotient, the Quotient logo, Coupons.com logo, Quotient Retailer iQ, QMX, Ahalogy and Elevaate 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.

2

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 current expectations with respect to revenues and Adjusted EBITDA for the fourth quarter and fiscal year

2018; our expectations for our offerings, partnerships, pricing strategies and platforms; our expectations regarding the future demand and behavior of consumers,

retailers and CPGs; and our expectations with respect to our future investments and growth and ability to leverage our investments and operating expenses. Forward-

looking statements are based on our 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, our 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; our ability to adapt to changing market conditions, including our ability to adapt to changes in consumer habits,

our ability to negotiate fee arrangements with CPGs and retailers; our ability to maintain and expand the use by consumers of digital promotions on our platforms; our

ability to execute our media strategy; our ability to effectively manage our growth; the performance of our various products; our ability to successfully integrate acquired

companies into our business; our ability to develop and launch new services and features; and other factors identified in our filings with the Securities and Exchange

Commission (the "SEC"), including our quarterly report on Form 10-Q filed with the SEC on August 3, 2018 and future filings and reports by us, including our Quarterly

Report on Form 10-Q for the quarter ended September 30, 2018. We disclaim 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. We consider 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 our 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 our 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 EB ITDA, 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.



CPGs and Retailers Shift

to Digital Strategies

• CPGs spend ~$225 Billion

annually in marketing

• Integrated, data-driven

solutions are key

• Competitive pressures serve

as catalyst for convergence

3

DIGITAL

E-COMMERCE

OMNI CHANNEL

MEASUREMENT

PROMOTIONS

MEDIA

DATA



Consumer shift from offline to online, particularly

to mobile

Increased need for personalized and targeted

marketing messages

Retailers driving digital marketing activities due

to increased competitive landscape

CPGs need to drive sales through greater

efficiency and higher ROI

Market Drivers

4



Large & Growing Market

5

Media Advertising~$9B estimated spend in 2018 on

digital advertising, and growing3

CPGs spend $225B+ in MarketingShifting dollars to digital channels brings efficiency and closed-loop measurement

Promotions~300B national offers distributed annually1

~$200B in Trade Promotions spent annually2

(1) Number of CPG coupons distributed based on NCH CPG Coupon Trends Year-End 2016 Report; (2) Trade Budget: Goldman Sachs November 2015 report: Trade Budgets at a Tipping Point; (3) eMarketer 2018: U.S. CPG and Consumer Products Industry StatPack 2018

(4) Shopper Marketing: U.S. Brand Activation Marketing Forecast (2016-2020): Key Findings Report. Association of National Advertisers and PQ Media, April 2016

Shopper MarketingRetailer specific media + promotions~$19B4



Source: eMarketer

CPG Digital Ad Spend

Digital

Ad Type

72%

Display 25%

Search

3%

Other

2 0 1 6 2 0 1 7 2 0 1 8 F 2 0 1 9 F

$6.3

$7 .9

$9 .4

$11

US CPG AND CONSUMER PRODUCTS

DIGITAL AD SPENDING(Billions)



Digital Growth Drives Scale

7

Broad Retailer Reach

• National Coverage

• Representing ~$400B of CPG

retail sales

• Multi-channel: grocery, drug

dollar, mass and club retailers

• Rich demographic, shopper data

Deep CPG Relationships

• ~700 Customers

• ~2000 brands

Shopper Data Drives Engine

• 70M+ shoppers registered on

programs powered by Retailer iQ

• +20M monthly average visitors to

Coupons.com mobile web + app

• Represents ~50% of U.S

households



Our Partners

8

CPGs Retailers



Powerful Network Effect

9

Demandfor digital coupon

by consumers

Supplyof digital

coupons/budgets

from CPG’s

Demand Driven From:• RIQ implementations

• Retailer Marketing drives users to digital

coupon programs

• Coupons.com app & mobile web

Supply Driven From:• CPG budget shift from offline to digital

• Better ROI on marketing spend



QUOTIENT PROMOTIONS SOLUTIONS

QUOTIENT MEDIA SOLUTIONS

QUOTIENT DATA SOLUTIONS

QUOTIENT RETAILER

PERFORMANCE MEDIAQUOTIENT AD TECH

Quotient Ad Server

Quotient DSP

Quotient eCommerce

QUOTIENT MEDIA SERVICES

Quotient AOR

QUOTIENT PRIVATE MARKETPLACES (PMP)

QUOTIENT CONTENT SERVICES

Influencer

Creative; Dynamic - Targeted

Brand Pages

QUOTIENT ANALYTICS

QUOTIENT AUDIENCES

QUOTIENT PROMOTIONS NETWORK

QUOTIENT SOCIAL + INFLUENCER

Strategy Pillars



Quotient Promotions - Retailer iQ

11

Real-time

Email/SMS

Engagement

Digital

Offers

Digital

Shopping List

Digital

Receipts

Digital

Circular

Targeted

Media

Reporting &

Analytics

Personalization… Personalization…

Data on Shoppers Transactions/Digital Use, Products, Promotions, Pricing



12

CRM Solution For CPG Brands



Coupons.com

Display

Social

Display

Social

Influencer

Retailer.com

Display

Sponsored

Search &

Product Ads

Programmatic

DisplayAudience Data

Ad Tech

Media

Services

Private

Marketplace

Creative

Content

Measurement



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



+2 More Retailers

Launching Soon

Quotient As Exclusive Retailer Media Partner

~ $150

Billion5 Retailer Partners’

Collective Annual

Sales



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)



17

Ecommerce Sales

Search and Sponsored Product

Media Technology

• Shoppers are initiating more of their trips

directly on retailer websites

• Brands shifting search budgets to a higher

performing medium tied to product sales

• Brands can optimize for sales performance

with proprietary algorithms, flexible bidding

models, and rich analytics

ice cream



Quotient

Analytics



Delivering

KPI-Driven

Programs

Up to $6Return on CPG ad spending1

Average 1.4X Lift

vs. Industry Norms2

Average 74%Coupons.com 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)



20

WhyQuotient?

ConsumersPlan, shop and save on favorite

brands at preferred stores

Personalized, relevant experience

CPGsMulti-channel, national shopper reach

Drives efficient marketing spend and

profitable sales

RetailersProvides digital platform to reach and

engage shoppers

Drives increased sales in competitive

retail environment



Financial Highlights

21



22

Business

Model

CPG $$$

GROSS MARGIN

PROMOTIONS MEDIA

PARTNERO&O RETAILERO&O

DISPLAY &

IMPRESSIONSTRANSACTIONS

TAC / DIST FEEDIST FEE

TOTALTOTAL

GROSS PROFIT

OTHER COSTS

PAID REVENUE SHARE &

OTHER 3RD PARTY FEES

CONSUMER ENGAGEMENT

NETWORK DISTRIBUTION

PLATFORM SOLUTION

REVENUE

PUBLISHER



Revenue $82.0 $93.1 $86.8 $89.5 $103.6

QoQ 10% 14% -7% 3% 16%

YoY 23% 23% 20% 20% 26%

$58.1 $63.4 $63.8 $60.9 $63.3

$23.9$29.7 $23.0 $28.6

$40.3

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

Quarterly Trend ($M)

Promotions Media

23

Revenue

9% y/y

69% y/y



24

Revenue Split

76% of Total Revenue Growing +39% over Q3’17

Total promotion revenue in Q3’18, excluding Specialty Retail, grew 12% over Q3’17

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

% of

Total Q1'18 Q2'18 Q3'18 Y/Y %

% of

Total

Digital Print 15.4 17.2 16.6 17.3 66.5 -13% 21% 15.8 15.6 16.9 2% 16%

Retailer iQ 31.2 30.6 33.0 35.7 130.5 57% 41% 40.2 36.8 38.5 17% 37%

Others 2.0 2.4 2.2 2.2 8.7 1% 2% 1.7 2.3 2.5 11% 3%

Total Promo Revenue from CPGs 48.6 50.2 51.8 55.2 205.7 22% 64% 57.7 54.7 57.9 12% 56%

Specialty Retail 8.8 8.2 6.3 8.2 31.5 -28% 10% 6.1 6.2 5.4 -14% 5%

Total Promotion 57.4 58.4 58.1 63.4 237.2 12% 74% 63.8 60.9 63.3 9% 61%

Media 15.2 16.1 23.9 29.7 84.9 35% 26% 23.0 28.6 40.3 69% 39%

Total Revenues 72.6 74.5 82.0 93.1 322.1 17% 100% 86.8 89.5 103.6 26% 100%

20182017

Digital print revenue includes revenue from digital print and set up fees



25

Top 10 Retailer iQ Customers Continue To Grow

• Q3’18 Top 10 Retailer iQ customers

grew Retailer iQ revenue 18% y/y

Based on Q3 2018 Top Retailer iQ Customers

10%

23%

27%

0%

5%

10%

15%

20%

25%

30%

2016 YTD 2017 YTD 2018 YTD

Top 10 Retailer iQ customers as % of total promotion revenue



26

Growth In Top 10 Media Customers

• Q3’18 Top 10 customers grew

revenue 86% y/y

• Growth drivers include QMX,

Crisp, Retailer Performance

Marketing, and Ahalogy

Based on Q3 2018 Top Media Customers (U.S. revenue only)



27

Transactions

• Q3 YoY growth of 4%, driven by

9% growth in digital paperless,

offset by 20% decline in digital

print

• Volume of transactions drive

scale and demand on platform

987 971 1,027954

1,026

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

(M)

Digital Print Digital Paperless

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

QoQ 24% -2% 6% -7% 8%

YoY 45% 40% 29% 20% 4%



28

Operating Expenses

• QoQ improvement in Non-GAAP

OpEx expense due to continued

operating efficiencies and cost

management, with some expenses

getting pushed out to Q4

• Significant improvement YoY of Op

Ex as % of Revenue due to 26%

revenue growth, coupled with

continued cost management and

efficiencies

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

Q3 FY18 GAAP Op Ex: $52.0M compared to $44.2M in Q2 FY18

Q3 FY18 Non-GAAP Op Ex: $37.3M compared to $35.4M in Q2 FY18



29

Adjusted EBITDA

Adjusted EBITDA, a non-GAAP financial measure, is net 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.

• 32% increase in Q3 FY18 Y/Y due to

26% revenue growth and continued

leverage in operating expenses,

offset by decline in gross margins

due to product mix

$12.5$13.9

$11.9$12.9

$16.4

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

Margin 15% 15% 14% 14% 16%



Guidance

FY2018

Q4 Full Year

Low High Low High

Revenue ($M) $115.0 $120.0 $395.0 $400.0

YoY Growth 24% 29% 23% 24%

Q4 Full Year

Adjusted EBITDA ($M) $18.0 $20.0 $59.0 $61.0

Margin 16% 17% 15% 15%



Thank You



AppendixScreen Shot Examples & Reconciliation Tables



33

Coupons.com



34

Digital Coupons

in Retailers’

Marketing and

Merchandising

Programs



35

Personalized Email

Marketing



36

Personalized Digital

Circular



37

Use screen shots from Risa

Shopper Marketing



| Influencer Marketing on Social



Digital Drives Efficiency in Trade Spend

Offline Non-Targeted Digital & Targeted

Customer Type $ Spent# of Boxes

Sold$ Spent

# of Boxes

Sold

Always buys Flakes $1 1 $0 1

Sometimes buys Flakes $1 1 $0.50 1

Sometimes buys Flakes $1 1 $0.50 1

Never buys Flakes $0 0 $2 1

Total $3 3 $3 4



40

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

Q3 FY 17 Q2 FY 18 Q3 FY 18

Revenues 81,950$ 89,545$ 103,591$

Sales and marketing expenses 22,002 20,530 22,782

(less) Stock-based compensation (1,832) (1,735) (1,689)

(less) Amortization of acquired intangible assets (101) (200) (438)

(less) Restructuring charges — (64) (204)

Non-GAAP Sales and marketing expenses 20,069$ 18,531$ 20,451$

Non-GAAP Sales and marketing percentage 24% 21% 20%

Research and development 12,255 12,122 11,974


(less) Restructuring charges — (151) (379)

Non-GAAP Research and development expenses 10,361$ 10,109$ 9,687$

Non-GAAP Research and development percentage 13% 11% 9%

General and administrative expenses 11,702 11,528 12,574


(less) Restructuring charges - (33) (289)

(less) Acquisiton related costs (419) (693) (824)

(less) ERP software implementation costs (473) — —

Non-GAAP General and administrative expenses 6,577$ 6,739$ 7,209$

Non-GAAP General and administrative percentage 8% 8% 7%

Non-GAAP Operating expenses* 37,007$ 35,379$ 37,347$

Non-GAAP Operating expense percentage 45% 40% 36%

QUOTIENT TECHNOLOGY INC.

RECONCILIATION OF OPERATING EXPENSES TO NON-GAAP OPERATING EXPENSES

(Unaudited, in thousands)



41

Reconciliation of Net Loss to Adjusted EBITDA

QUOTIENT TECHNOLOGY INC.

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA AND TRANSACTION DATA

(Unaudited, in thousands)

Q3 FY 17 Q4 FY 17 Q1 FY 18 Q2 FY 18 Q3 FY 18

Net income (loss) $ (10,827) $ 4,182 $ (11,357) $ (4,660) $ (7,805)

Adjustments:

Stock-based compensation 8,480 7,950 7,796 8,239 8,420

Depreciation, amortization and other (1) 5,496 6,883 5,619 7,033 8,801

Change in fair value of escrowed shares and

contingent consideration, net 9,700 (5,500) 7,350 — 4,692

Interest expense — 1,589 3,308 3,326 3,373

Other (income) expense, net (276) (391) (938) (1,270) (1,267)

Provision for (benefit from) income taxes (107) (768) 102 200 195

Total adjustments $ 23,293 $ 9,763 $ 23,237 $ 17,528 $ 24,214

Adjusted EBITDA (1) $ 12,466 $ 13,945 $ 11,880 $ 12,868 $ 16,409

Adjusted EBITDA Margin (2) 15% 15% 14% 14% 16%

(1) 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, and depreciation, amortization and other, which includes: enterprise

resource planning ("ERP") software implementation costs and certain acquisition related costs of $0.5 million and $0.4 million, respectively, during Q3 FY 17; ERP software

implementation costs and restructuring charges of $0.2 million and $2.1 million, respectively, during Q4 FY 17; ERP software implementation costs and restructuring charges of

$0.05 million and $1.2 million, respectively, during Q1 FY 18; certain acquisition related costs and restructuring charges of $0.7 million and $0.2 million, respectively, during Q2

FY 18; and certain acquisition related costs and restructuring charges of $0.8 million and $1.3 million, respectively, during Q3 FY 18.

(2) Adjusted EBITDA margin is the ratio of Adjusted EBITDA and Revenues.



Making Sales Happen.

Investor Presentation - s1.q4cdn.comLeading Influencer Marketing Platform 100M+ Verified Buyer...

Documents

Transcript of Investor Presentation - s1.q4cdn.comLeading Influencer Marketing Platform 100M+ Verified Buyer...