QUINSTREET, INC – 10-Q – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – InsuranceNewsNet

The following dialogue and evaluation of our monetary situation and outcomes of
operations ought to be learn together with our condensed consolidated
monetary statements and associated notes showing elsewhere on this Quarterly
Report on Form 10-Q and our Annual Report on Form 10-Okay for the fiscal 12 months ended
June 30, 2021, filed with the Securities and Exchange Commission ("SEC").

This Quarterly Report on Form 10-Q comprises "ahead-wanting statements" that
contain dangers and uncertainties, in addition to assumptions that, if they don't
materialize or in the event that they show incorrect, might trigger our outcomes to vary
materially from these expressed or implied by such ahead-wanting statements.
The statements contained on this Quarterly Report on Form 10-Q that aren't
purely historic are ahead-wanting statements throughout the which means of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements are sometimes
recognized by means of phrases akin to, however not restricted to, "anticipate,"
"consider," "anticipate," "can," "proceed," "might," "estimate," "anticipate," "intend,"
"outlook," "might," "will," "plan," "mission," "search," "ought to," "goal," "will,"
"would," and comparable expressions or variations meant to determine
ahead-wanting statements. These statements mirror the beliefs and assumptions
of our administration based mostly on info at present out there to administration. Such
ahead-wanting statements are topic to dangers, uncertainties and different
necessary components that would trigger precise outcomes and the timing of sure
occasions to vary materially from future outcomes expressed or implied by such
ahead-wanting statements. Factors that would trigger or contribute to such
variations embody, however aren't restricted to, these recognized in "Part II -Item
1A. Risk Factors" under, and people mentioned within the sections titled "Special
Note Regarding Forward-Looking Statements" and "Risk Factors" included in our
Annual Report on Form 10-Okay for the fiscal 12 months ended June 30, 2021, filed with
the SEC. Furthermore, such ahead-wanting statements communicate solely as of the date
of this report. Except as required by legislation, we undertake no obligation to replace
any ahead-wanting statements to mirror occasions or circumstances after the date
of such statements.

Management Overview

We are a pacesetter in efficiency marketplaces and applied sciences for the monetary
providers and residential providers industries. We concentrate on buyer acquisition for
purchasers in excessive worth, info-intensive markets or "verticals," together with
monetary providers and residential providers. Our purchasers embody a number of the world's
largest corporations and types in these markets. The majority of our operations
and income are in North America.

We ship measurable and price-efficient advertising and marketing outcomes to our purchasers,
usually within the type of certified inquiries akin to clicks, leads, calls,
functions, or clients. Clicks, leads, calls, and functions can then
convert right into a buyer or sale for purchasers at a charge that ends in an
acceptable advertising and marketing value to them. We are usually paid by purchasers once we
ship certified inquiries within the type of clicks, leads, calls, functions,
or clients, as outlined by our agreements with them. References to the supply
of consumers means a sale or accomplished buyer transaction (e.g., funded loans,
certain insurance coverage insurance policies or buyer appointments with purchasers). Because we bear
the prices of media, our applications should end in enticing advertising and marketing prices to
our purchasers at media prices and margins that present sound monetary outcomes for
us. To ship clicks, leads, calls, functions, and clients to our purchasers,
typically we:

• personal or entry focused media by enterprise preparations (e.g., income

sharing preparations with on-line writer companions, giant and small) or by

buying media (e.g., clicks from main engines like google);

• run ads or different types of advertising and marketing messages and applications in that

media that end in shopper or customer responses, usually within the type of

clicks (by a shopper to additional qualification or matching steps, or to

on-line consumer functions or choices), leads (e.g., shopper contact

info), calls (from a shopper or to a shopper by our owned and

operated or contracted name facilities or by that of our purchasers or their

      brokers), functions (e.g., for enrollment or a monetary product), or
      clients (e.g., funded private loans); and

• constantly search to show purchasers and consumer choices to guests or

shoppers that end result within the most variety of shoppers discovering options

that may meet their wants and to which they may take motion to reply,

leading to media shopping for effectivity (e.g., by segmenting media or site visitors

in order that probably the most applicable purchasers or consumer choices will be displayed or

“matched” to every section based mostly on match, response charges or conversion charges);

• by expertise and analytics, search to optimize a mix of

aims to fulfill the utmost variety of purchasing or researching guests

or shoppers, ship on consumer advertising and marketing aims, successfully compete

for on-line media, and generate a sound monetary consequence for us.

Our main monetary goal has been and stays creating income progress
from sustainable sources, at goal ranges of profitability. Our main
monetary goal is to not maximize brief-time period earnings, however moderately to realize
goal ranges of profitability

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whereas investing in varied progress initiatives, as we proceed to consider we’re
within the early phases of a giant, lengthy-time period market alternative.

Our enterprise derives its internet income primarily from charges earned by the
supply of certified inquiries akin to clicks, leads, calls, functions, or
clients. Through a vertical focus, focused media presence and our expertise
platform, we're capable of ship focused, measurable advertising and marketing outcomes to our
purchasers.

Our monetary providers consumer vertical represented 72% and 73% of internet income
for the three and 9 months ended March 31, 2022 and 76% and 74% of internet
income for the three and 9 months ended March 31, 2021. Our house providers
consumer vertical represented 27% and 26% of internet income for the three and 9
months ended March 31, 2022 and 23% of internet income for each the three and 9
months ended March 31, 2021. Other income, which primarily consists of efficiency
advertising and marketing company and expertise providers, represented 1% of internet income for each
the three and 9 months ended March 31, 2022 and 2021. In addition, income
acknowledged from our former schooling consumer vertical represented 0% and a pair of% of
internet income for the three and 9 months ended March 31, 2021. We generated the
majority of our income from gross sales to purchasers in the United States.

One consumer in our monetary providers consumer vertical accounted for 19% and 16%
of our internet income for the three and 9 months ended March 31, 2022 and 26%
and 25% of our internet income for the three and 9 months ended March 31, 2021.
No different consumer accounted for 10% or extra of our internet income for the three and
9 months ended March 31, 2022 and 2021.

Trends Affecting our Business

COVID-19

We proceed to observe the impacts from the COVID-19 pandemic which will
unfavorably have an effect on our enterprise, akin to reductions in consumer spending on
advertising and marketing and promoting, drops in media availability or efficiency,
deteriorating shopper spending, fluctuations in rates of interest, and credit score
high quality of our receivables. The COVID-19 pandemic has affected and will proceed
to have an effect on our enterprise operations, together with our staff, purchasers, publishers,
enterprise companions, and communities, and there's substantial uncertainty within the
nature and diploma of its continued results over time. For instance, inside our
monetary providers consumer vertical, sure strains of enterprise, akin to credit score
playing cards and banking, have seen and will proceed to see reductions in close to-time period
demand for our providers because of weakening financial and employment situations, and
the uncertainty over the size and depth of the financial downturn. While we
skilled progress in our credit score-pushed companies, forecasting the timeline for
full restoration nonetheless stays difficult. The extent to which the COVID-19
pandemic impacts our enterprise going ahead will depend upon quite a few evolving
components we can't reliably predict, together with the period and scope of the
pandemic; enterprise and people' actions in response to the pandemic; additional
actions taken by governmental authorities to restrict the human and financial influence
of the pandemic (e.g., stimulus funds); the event, efficacy and
distribution of vaccines for COVID-19; and the influence on financial exercise
together with the size and depth of the financial downturn or monetary market
instability. These components might adversely influence shopper, enterprise, and
authorities spending in addition to our purchasers' skill to pay for our providers on
an ongoing foundation. While there's optimism that the pandemic will come to an finish
with the event and prevalence of vaccines, there are nonetheless important
uncertainties. For instance, the resurgence of circumstances because of emergence and
persistency of recent variants to COVID-19 and the financial influence because of various
ranges of restrictions imposed by every state in the United States. Refer to Risk
Factors (Part II, Item 1A of this Form 10-Q) for a dialogue of those components
and different dangers.

Client Verticals

Our monetary providers consumer vertical has been challenged by numerous
components prior to now, together with the restricted availability of top of the range media at
acceptable margins attributable to the acquisition of media sources by rivals,
elevated competitors for prime quality media and adjustments in search engine
algorithms. These components might influence our enterprise sooner or later once more. To offset
this influence, we've got enhanced our product set to offer higher segmentation,
matching, transparency and proper pricing of media which have enabled higher
monetization to offer higher entry to prime quality media sources. Moreover,
we've got entered into strategic partnerships and acquisitions to extend and
diversify our entry to high quality media and consumer budgets. Our monetary providers
consumer vertical additionally advantages from extra spending by purchasers in digital media and
efficiency advertising and marketing as digital advertising and marketing continues to evolve.

In addition, inside our monetary providers consumer vertical, we derive a
important quantity of income from auto insurance coverage carriers and the monetary
outcomes depend upon the efficiency of the auto insurance coverage trade. For instance,
climate-associated catastrophes and different occasions have prior to now led to brief-time period
will increase in insurance coverage trade consumer loss ratios, which decreased our purchasers'
promoting spending and thereby had a cloth antagonistic impact on our enterprise.
More not too long ago, and particularly beginning within the first half of fiscal

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12 months 2022, the auto insurance coverage trade has skilled comparable challenges, which
has affected and will proceed to have an effect on our operations and monetary ends in
the auto insurance coverage enterprise.

On July 1, 2020, we accomplished the acquisition of Modernize, a number one house
enchancment efficiency advertising and marketing firm, to broaden our buyer and media
relationships within the house providers consumer vertical. Our house providers consumer
vertical has been increasing over the previous a number of years, primarily pushed by
profitable execution of progress initiatives and synergies with the Modernize
acquisition.

Acquisitions and Divestitures

Acquisitions have traditionally been, and proceed to be, an necessary factor of
our total company technique and use of capital. We have accomplished a number of
strategic acquisitions prior to now, together with the acquisitions of Modernize,
Mayo Labs and FCE accomplished in fiscal 12 months 2021, and the acquisitions of AmOne
Corp. ("AmOne"), CloudControlMedia, LLC ("CCM") and MyBankTracker.com, LLC
("MBT") accomplished in fiscal 12 months 2019.

Furthermore, on account of the choice to slim our focus to the most effective
performing companies and market alternatives, we accomplished a sequence of
enterprise divestitures prior to now two fiscal years, together with the divestiture of
our former schooling consumer vertical accomplished in fiscal 12 months 2021, and the
divestitures of our former B2B consumer vertical, our companies in Brazil
consisting of QuinStreet Brasil Online Marketing e Midia Ltda ("QSB") and VEMM,
LLC ("VEMM") together with its pursuits in Euro-Demand Do Brasil Serviços de
Geração de Leads Ltda ("EDB"), and our mortgage enterprise accomplished in fiscal
12 months 2020.

Development, Acquisition and Retention of High Quality Targeted Media

One of the first challenges of our enterprise is discovering or creating media that
is top quality and focused sufficient to draw prospects for our purchasers at
prices that present a sound monetary consequence for us. In order to develop our
enterprise, we should be capable to discover, develop, or purchase and retain high quality
focused media on a value-efficient foundation. Consolidation of media sources,
adjustments in search engine algorithms and elevated competitors for out there
media has, throughout some durations, restricted and will proceed to restrict our skill to
generate income at acceptable margins. To offset this influence, we've got developed
new sources of media, together with getting into into strategic partnerships with different
advertising and marketing and media corporations and acquisitions. Such partnerships embody
takeovers of efficiency advertising and marketing capabilities for big net media properties;
backend monetization of unmatched site visitors for purchasers with giant media buys; and
white label merchandise for different efficiency advertising and marketing corporations. We have additionally
targeted on rising our income from name middle, e mail, cellular and social media
site visitors sources.

Seasonality

Our outcomes are topic to important fluctuation on account of seasonality.
In specific, our quarters ending December 31 (our second fiscal quarter) are
usually characterised by seasonal weak spot. In our second fiscal quarters,
there's typically decrease availability of media in the course of the vacation interval on a
value-efficient foundation and a few of our purchasers have decrease budgets. In our quarters
ending March 31 (our third fiscal quarter), this pattern typically reverses with
higher media availability and infrequently new budgets initially of the 12 months for
our purchasers with fiscal years ending December 31.

Our outcomes are additionally topic to fluctuation on account of seasonality in our
purchasers' enterprise. For instance, income in our house providers consumer vertical is
topic to cyclical and seasonal traits, as the patron demand for house
providers usually rises in the course of the spring and summer time seasons and declines
in the course of the fall and winter seasons. Other components affecting our purchasers'
companies embody macro components akin to credit score availability available in the market,
rates of interest, the energy of the economic system and employment.

Regulations

Our income has fluctuated partially on account of federal, state and
trade-based mostly laws and creating requirements with respect to the
enforcement of these laws. Our enterprise is affected instantly as a result of we
function web sites and conduct telemarketing and e mail advertising and marketing, and not directly
affected as our purchasers alter their operations on account of regulatory
adjustments and enforcement exercise that have an effect on their industries.

Clients in our monetary providers vertical have been affected by legal guidelines and
laws and the elevated enforcement of recent and pre-current legal guidelines and
laws. The impact of those laws, or any future laws, might
proceed to end in fluctuations within the quantity and mixture of our enterprise with
these purchasers.

An instance of a regulatory change which will have an effect on our enterprise is the modification
of the Telephone Consumer Protection Act (the "TCPA") that impacts telemarketing
calls. Our purchasers might make enterprise selections based mostly on their very own experiences
with the TCPA no matter our merchandise and compliance practices. Those
selections might negatively have an effect on our income and profitability.

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Basis of Presentation

Net Revenue

Our enterprise generates income primarily from charges earned by the supply
of certified inquiries akin to clicks, leads, calls, functions, or clients.
We ship focused and measurable outcomes by a vertical focus, which
consists of our monetary providers consumer vertical and our house providers consumer
vertical. All remaining companies that aren't important sufficient for separate
reporting are included in different income. Our income acknowledged in the course of the 9
months ended March 31, 2021 additionally included the income generated from our former
schooling consumer vertical, which was divested within the first quarter of fiscal
12 months 2021.

Cost of Revenue

Cost of income consists primarily of media and advertising and marketing prices, personnel
prices, amortization of intangible property, depreciation expense and amenities
expense. Media and advertising and marketing prices consist primarily of charges paid to 3rd-occasion
publishers, media house owners or managers, or to strategic companions which can be instantly
associated to a income-producing occasion and of pay-per-click on, or PPC, advert purchases
from Internet search corporations. We pay these third-occasion publishers, media
house owners or managers, strategic companions and Internet search corporations on a
income-share, a value-per-lead, or CPL, or value-per-click on, or CPC, foundation.
Personnel prices embody salaries, inventory-based mostly compensation expense, bonuses,
commissions and associated taxes and worker profit prices. Personnel prices are
primarily associated to people related to sustaining our servers and
web sites, our name middle operations, our editorial workers, consumer administration,
inventive staff, content material, compliance group and media buying analysts. Costs
related to software program incurred within the growth part or obtained for
inside use are capitalized and amortized to value of income over the
software program's estimated helpful life.

Operating Expenses

We classify our working bills into three classes: product growth,
gross sales and advertising and marketing and common and administrative. Our working bills
consist primarily of personnel prices and, to a lesser extent, skilled
providers charges, amenities charges and different prices. Personnel prices for every
class of working bills typically embody salaries, inventory-based mostly
compensation expense, bonuses, commissions and associated taxes and worker
profit prices.

Product Development. Product growth bills consist primarily of personnel
prices, amenities charges {and professional} providers charges associated to the event
and upkeep of our merchandise and media administration platform. We are
constraining bills typically to the extent practicable.

Sales and Marketing. Sales and advertising and marketing bills consist primarily of personnel
prices, amenities charges {and professional} providers charges. We are constraining
bills typically to the extent practicable.

General and Administrative. General and administrative bills consist
primarily of personnel prices of our finance, authorized, worker advantages and
compliance, technical help and different administrative personnel, accounting and
authorized skilled providers charges, amenities charges and dangerous debt expense. We are
constraining bills typically to the extent practicable.

Interest and Other Income (Expense), Net

Interest and different earnings (expense), internet, consists primarily of curiosity
expense, curiosity earnings, and different earnings and expense. Interest expense is
associated to imputed curiosity on put up-closing funds associated to our
acquisitions. We haven't any borrowing agreements excellent as of March 31, 2022;
nonetheless curiosity expense might enhance if, amongst different issues, we enter right into a
new borrowing settlement to handle liquidity or make further acquisitions
by debt financing. Interest earnings represents curiosity earned on our money
and money equivalents, which can enhance or lower relying on market
rates of interest and the quantities invested. Other earnings and expense consists of positive factors
and losses on international foreign money trade, positive factors and losses on divestitures of
subsidiaries, consumer verticals and property that weren't thought-about to be
strategically necessary to our enterprise, and different non-working objects.

Benefit from (Provision for) Income Taxes

We are topic to tax in the United States in addition to different tax jurisdictions or
nations wherein we conduct enterprise. Earnings from our restricted non-U.S.
actions are topic to native nation earnings tax and could also be topic to U.S.
earnings tax.

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Critical Accounting Policies, Estimates and Judgments

In presenting our consolidated monetary statements in conformity with U.S.
typically accepted accounting ideas, or GAAP, we're required to make
estimates and assumptions that have an effect on the reported quantities of property and
liabilities, disclosures of contingent property and liabilities as of the date of
the monetary statements, and reported quantities of income and bills throughout
the reporting interval.

Some of the estimates and assumptions we're required to make relate to issues
which can be inherently unsure as they pertain to future occasions. We base these
estimates and assumptions on historic expertise or on varied different components
that we consider to be affordable and applicable underneath the circumstances. On an
ongoing foundation, we rethink and consider our estimates and assumptions. Actual
outcomes might differ considerably from these estimates.

We consider that the crucial accounting insurance policies listed under contain our extra
important judgments, assumptions and estimates and, due to this fact, might have the
best potential influence on our consolidated monetary statements.
  • Revenue recognition;


  • Valuation of goodwill and intangible property;


  • Stock-based compensation;


  • Business mixture;


  • Income taxes; and


  • Valuation of lengthy-lived property.

For additional info on our crucial and different important accounting
insurance policies and estimates, see Part II, Item 7 “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” of our Annual Report
on Form 10-Okay for the 12 months ended June 30, 2021, filed with the SEC.

Recently Issued Accounting Standards

See Note 2, Summary of Significant Accounting Policies, to our condensed
consolidated monetary statements.

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Results of Operations

The following desk units forth our condensed consolidated statements of
operations for the durations indicated:

                              Three Months Ended March 31,                         Nine Months Ended March 31,
                             2022                      2021                      2022                       2021
                           (In 1000's, besides percentages)                   (In 1000's, besides percentages)
Net income          $ 150,658       100.0 %   $ 153,052       100.0 %   $ 435,597       100.0 %    $ 427,289       100.0 %
Cost of income
(1)                    136,567        90.6       132,665        86.7       393,626        90.4        375,334        87.8
Gross revenue            14,091         9.4        20,387        13.3        41,971         9.6         51,955        12.2
Operating
bills: (1)
Product
growth              5,509         3.8         4,905         3.2        14,995         3.4         14,776         3.5
Sales and
advertising and marketing                2,033         1.3         2,768         1.8         7,773         1.8          8,303         1.9
General and
administrative           5,489         3.6         6,460         4.2        21,758         5.0         19,931         4.7
Operating earnings
(loss)                   1,060         0.7         6,254         4.1        (2,555 )      (0.6 )        8,945         2.1
Interest earnings              7           -             5           -             7           -             40           -

Interest expense (277 ) (0.1 ) (301 ) (0.2 )

   (817 )      (0.2 )         (947 )      (0.2 )
Other earnings
(expense), internet              45           -           (28 )         -            51           -         16,695         3.9
Income (loss)
earlier than earnings
taxes                      835         0.6         5,930         3.9        (3,314 )      (0.8 )       24,733         5.8
Benefit from
(provision for)
earnings taxes             1,395         0.9          (893 )      (0.6 )       3,009         0.7         (4,549 )      (1.1 )
Net earnings (loss)    $   2,230         1.5 %   $   5,037         3.3 %   $    (305 )      (0.1 )%   $  20,184         4.7 %




(1) Cost of income and working bills embody inventory-based mostly compensation
expense as follows:

Cost of income     $   491         0.3 %   $ 2,261         1.5 %   $ 4,579         1.1 %   $ 7,006         1.6 %
Product
growth             203         0.1         576         0.4       1,497         0.3       1,768         0.4
Sales and
advertising and marketing                18           -         584         0.4       1,477         0.3       1,896         0.4
General and
administrative          699         0.5       1,435         0.9       4,337         1.0       4,521         1.1


Gross Profit

                    Three Months Ended           Nine Months Ended          Three          Nine
                         March 31,                   March 31,             Months         Months
                    2022          2021          2022          2021        % Change       % Change
                                    (In 1000's)
Net income       $ 150,658     $ 153,052     $ 435,597     $ 427,289            (2 %)           2 %
Cost of income     136,567       132,665       393,626       375,334             3 %            5 %
Gross revenue      $  14,091     $  20,387     $  41,971     $  51,955           (31 %)         (19 %)


Net Revenue

Net income decreased by $2.4 million, or 2%, for the three months ended March
31, 2022 in comparison with the three months ended March 31, 2021. Revenue from our
monetary providers consumer vertical decreased by $8.0 million, or 7%, primarily
because of a lower in income in our insurance coverage enterprise related to decreased
spending by insurance coverage carriers to handle profitability issues attributable to
increased incident charges, inflation, and better prices to restore and change
automobiles. This is offset by a rise in income in our credit score-pushed
companies because of some financial restoration from the influence of the COVID-19
pandemic. Revenue from our house providers consumer vertical elevated by $5.7
million, or 16%, primarily on account of elevated consumer budgets and
profitable integration of the Modernize acquisition. Other income, which
primarily consists of efficiency advertising and marketing company and expertise providers,
contributed $1.7 million of income for the three months ended March 31, 2022,
which was roughly flat as in comparison with $1.7 million of income for the
three months ended March 31, 2021.

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Net income elevated by $8.3 million, or 2%, for the 9 months ended March
31, 2022 in comparison with the 9 months ended March 31, 2021. Revenue from our house
providers consumer vertical elevated by $16.9 million, or 17%, primarily as a
results of elevated consumer budgets and profitable integration of the Modernize
acquisition. Revenue from our monetary providers consumer vertical elevated by
$1.7 million, or 1%, primarily because of a rise in income in our
credit score-pushed companies because of some financial restoration from the influence of the
COVID-19 pandemic. This is offset by a lower in income in our insurance coverage
enterprise related to decreased spending by insurance coverage carriers to handle
profitability issues attributable to increased incident charges, climate-associated
catastrophes, inflation, and better prices to restore and change automobiles. Other
income, which primarily consists of efficiency advertising and marketing company and expertise
providers, contributed $4.7 million of income for the 9 months ended March
31, 2022, as in comparison with $3.5 million of income for the 9 months ended March
31, 2021. The divestiture of our former schooling consumer vertical, accomplished in
the primary quarter of fiscal 12 months 2021, resulted in a lower in income by
$11.6 million for the 9 months ended March 31, 2022, as in comparison with the 9
months ended March 31, 2021.

Cost of Revenue and Gross Profit Margin

Cost of income elevated by $3.9 million, or 3%, for the three months ended
March 31, 2022 in comparison with the three months ended March 31, 2021, primarily
pushed by elevated media and advertising and marketing prices of $3.0 million, elevated
amortization of intangible property of $0.3 million, and elevated personnel prices
of $0.1 million. Gross revenue margin, which is the distinction between internet
income and price of income as a proportion of internet income, was 9% and 13% for
the three months ended March 31, 2022 and 2021. The lower in gross revenue
margin was primarily attributable to elevated media and advertising and marketing prices as a
proportion of income.

Cost of income elevated by $18.3 million, or 5%, for the 9 months ended
March 31, 2022 in comparison with the 9 months ended March 31, 2021, primarily
pushed by elevated media and advertising and marketing prices of $17.3 million related to
increased income volumes and elevated amortization of intangible property of $0.5
million, offset by decreased personnel prices together with inventory-based mostly compensation
expense of $0.2 million. Gross revenue margin was 10% and 12% for the 9 months
ended March 31, 2022 and 2021. The lower in gross revenue margin was primarily
attributable to elevated media and advertising and marketing prices as a proportion of income.

Operating Expenses

                               Three Months Ended          Nine Months Ended           Three            Nine
                                    March 31,                  March 31,              Months           Months
                                2022          2021         2022          2021        % Change         % Change
                                               (In 1000's)

Product growth $ 5,509 $ 4,905 $ 14,995 $ 14,776

              12 %              1 %
Sales and advertising and marketing               2,033        2,768         7,773        8,303             (27 %)            (6 %)

General and administrative 5,489 6,460 21,758 19,931

             (15 %)             9 %
Operating bills           $   13,031     $ 14,133     $  44,526     $ 43,010              (8 %)             4 %


Product Development Expenses

Product growth bills elevated by $0.6 million, or 12%, for the three
months ended March 31, 2022 in comparison with the three months ended March 31, 2021,
primarily because of elevated personnel prices of $0.3 million and elevated
skilled providers prices of $0.2 million.

Product growth bills have been roughly flat for the 9 months ended
March 31, 2022 in comparison with the 9 months ended March 31, 2021.

Sales and Marketing Expenses

Sales and advertising and marketing bills decreased by $0.7 million, or 27%, for the three
months ended March 31, 2022 in comparison with the three months ended March 31, 2021,
primarily because of decreased personnel prices together with inventory-based mostly compensation
expense of $0.7 million.

Sales and advertising and marketing bills decreased by $0.5 million, or 6%, for the 9
months ended March 31, 2022 in comparison with the 9 months ended March 31, 2021,
primarily because of decreased personnel prices together with inventory-based mostly compensation
expense of $0.7 million.

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General and Administrative Expenses

General and administrative bills decreased by $1.0 million, or 15%, for the
three months ended March 31, 2022 in comparison with the three months ended March 31,
2021, primarily because of decreased personnel prices together with inventory-based mostly
compensation expense of $0.9 million.

General and administrative bills elevated by $1.8 million, or 9%, for the
9 months ended March 31, 2022 in comparison with the 9 months ended March 31,
2021, primarily because of an adjustment to contingent consideration of $2.7 million
recorded within the second quarter of fiscal 12 months 2022 and elevated amenities
expense of $0.3 million, offset by decreased skilled providers prices of $1.5
million.

Benefit from (Provision for) Income Taxes

                                        Three Months Ended                Nine Months Ended
                                            March 31,                         March 31,
                                      2022              2021             2022            2021
                                                          (In 1000's)
Benefit from (provision for)
earnings taxes                      $      1,395       $      (893 )   $      

3,009 $ (4,549 )

As of March 31, 2022, we've got not recorded any important valuation allowance
changes based mostly on the knowledge and proof out there on the time.
However, if there are unfavorable adjustments to precise working outcomes or to
projections of future earnings, we might decide that it's extra seemingly than not
that such deferred tax property might not be realizable.

We recorded a profit from earnings taxes of $1.4 million and $3.0 million for the
three and 9 months ended March 31, 2022 and a provision for earnings taxes of
$0.9 million and $4.5 million for the three and 9 months ended March 31,
2021. The change from an earnings tax provision to an earnings tax profit was
primarily as a result of adjustments within the quantity of pre-tax earnings or loss and the
Company's estimated annual efficient tax charge.

Liquidity and Capital Resources

As of March 31, 2022, our principal sources of liquidity consisted of money and
money equivalents of $109.5 million and money we anticipate to generate from future
operations. Our money and money equivalents are maintained in extremely liquid
investments with remaining maturities of 90 days or much less on the time of
buy. We consider our money equivalents are liquid and accessible.

Our brief-time period and lengthy-time period liquidity necessities primarily come up from our
working capital necessities, capital expenditures, inside software program
growth prices, repurchases of our widespread inventory, and acquisitions from time
to time. Our acquisitions additionally might have deferred buy value parts and
contingent consideration which requires us to make a sequence of funds
following the acquisition cut-off date. Our main working money necessities
embody the fee of media prices, personnel prices, prices of knowledge
expertise programs and workplace amenities. Our skill to fund these necessities
will depend upon our future money flows, that are decided, partially, by future
working efficiency and are, due to this fact, topic to prevailing world
macroeconomic situations together with the influence of COVID-19, and monetary,
enterprise and different components, a few of that are past our management. Even although we
might not want further funds to fund anticipated liquidity necessities, we might
nonetheless elect to acquire debt financing or subject further fairness securities for
different causes.

We consider that our principal sources of liquidity shall be ample to fulfill
our at present anticipated money necessities by at the very least the following 12 months.

The following desk summarizes our money flows for the durations indicated:

                                               Nine Months Ended
                                                   March 31,
                                              2022          2021
                                                (In 1000's)

Net money offered by working actions $ 20,981 $ 36,203
Net money utilized in investing actions (6,775 ) (35,062 )
Net money utilized in financing actions (15,052 ) (5,385 )

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Operating Activities

Cash flows from working actions are primarily the results of our internet (loss)
earnings adjusted for depreciation and amortization, inventory-based mostly compensation
expense, positive factors and losses on divestitures of companies, and adjustments in working
capital parts.

Cash offered by working actions was $21.0 million for the 9 months
ended March 31, 2022, in comparison with money offered by working actions of $36.2
million
for the 9 months ended March 31, 2021.

Cash offered by working actions for the 9 months ended March 31, 2022
consisted of a internet lack of $0.3 million, offset by non-money changes of $24.4
million, and a internet lower in money from adjustments in working capital of $3.1
million. The non-money changes primarily consisted of depreciation and
amortization expense of $12.7 million, inventory-based mostly compensation expense of $11.9
million, an adjustment to contingent consideration of $2.7 million, and an
enhance in deferred tax property of $2.8 million because of profit from earnings taxes
recorded for the primary three quarters of fiscal 12 months 2022. The adjustments in
working capital accounts have been primarily attributable to a lower in accrued
liabilities of $8.2 million and a lower in accounts payable of $5.4 million,
offset by a lower in accounts receivable of $9.8 million. The decreases in
accounts receivable, accrued liabilities and accounts payable have been primarily due
to decrease income ranges within the month ended March 31, 2022 as in comparison with the
month ended March 31, 2021, and the timing of receipts and funds.

Cash offered by working actions for the 9 months ended March 31,
2021 consisted of a internet earnings of $20.2 million, non-money changes of $14.6
million and a internet enhance in money from adjustments in working capital of
$1.4 million. The non-money changes primarily consisted of inventory-based mostly
compensation expense of $15.2 million, depreciation and amortization expense of
$12.0 million, and a lower in deferred tax property of $4.3 million because of
provision for earnings taxes recorded for the primary three quarters of fiscal 12 months
2021, offset by a internet disposition achieve of $16.6 million acknowledged from the
divestiture of our former schooling consumer vertical accomplished within the first
quarter of fiscal 12 months 2021. The adjustments in working capital accounts have been
primarily attributable to a rise in accrued liabilities of $9.8 million, a
lower in pay as you go bills and different property of $5.1 million, and a rise
in accounts payable of $1.0 million, offset by a rise in accounts
receivable of $14.5 million. The will increase in accounts payable and accrued
liabilities have been as a result of timing of funds. The lower in pay as you go bills
and different property was as a result of refund of an unamortized pay as you go expense of $5.3
million. The enhance in accounts receivable was as a result of timing of receipts.

Investing Activities

Cash flows from investing actions typically embody capital expenditures,
capitalized inside software program growth prices, acquisitions sometimes,
enterprise divestitures, and funding in fairness securities.

Cash utilized in investing actions was $6.8 million for the 9 months ended
March 31, 2022, in comparison with money utilized in investing actions of $35.1 million
for the 9 months ended March 31, 2021.

Cash utilized in investing actions within the 9 months ended March 31, 2022 was
primarily because of capital expenditures and inside software program growth prices of
$5.9 million, and $1.0 million money paid on the closing of an immaterial
acquisition accomplished within the second quarter of fiscal 12 months 2022.

Cash utilized in investing actions within the 9 months ended March 31, 2021 was
primarily because of funds for the acquisitions of Modernize, Mayo and FCE, internet
of money acquired, of $49.3 million, funding in fairness securities of $4.0
million, and capital expenditures and inside software program growth prices of
$3.7 million, offset by $20.0 million of money obtained from the divestiture of
our former schooling consumer vertical accomplished within the first quarter of fiscal
12 months 2021, and $1.9 million of money obtained from the divestiture of our former
B2B consumer vertical accomplished within the third quarter of fiscal 12 months 2020.

Financing Activities

Cash flows from financing actions typically embody put up-closing funds
associated to our acquisitions, withholding taxes associated to the discharge of
restricted inventory, internet of share settlement, and proceeds from the train of
inventory choices.

Cash utilized in financing actions was $15.1 million for the 9 months ended
March 31, 2022, in comparison with money utilized in financing actions of $5.4 million
for the 9 months ended March 31, 2021.

Cash utilized in financing actions within the 9 months ended March 31, 2022 was
because of fee of put up-closing funds and contingent consideration associated to
acquisitions of $9.8 million, fee of withholding taxes associated to the
launch of restricted inventory, internet of share settlement of $6.6 million, offset by
proceeds from the train of inventory choices of $1.3 million.


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Cash utilized in financing actions within the 9 months ended March 31, 2021 was
as a result of fee of withholding taxes associated to the discharge of restricted
inventory, internet of share settlement of $6.5 million, and fee of put up-closing
funds and contingent consideration associated to acquisitions of $3.0 million,
offset by proceeds from the train of inventory choices of $4.2 million.

Off-Balance Sheet Arrangements

During the durations introduced, we didn't have any materials relationships with
unconsolidated entities or monetary partnerships, akin to entities usually
known as structured finance or particular objective entities, which might have
been established for the aim of facilitating off-stability sheet preparations
or different contractually slim or restricted functions.

Contractual Obligations

Our contractual obligations primarily include working leases, put up-closing
funds and contingent consideration funds acknowledged from our acquisitions.
These contractual obligations influence our brief-time period and lengthy-time period liquidity and
capital useful resource wants. There have been no materials adjustments in our contractual
obligations as introduced in Part II, Item 7 Management's Discussion and Analysis
of Financial Condition and Results of Operations included in our Annual Report
on Form 10-Okay for our fiscal 12 months ended June 30, 2021.



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