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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-34628

QuinStreet, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware		77-0512121
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)


950 Tower Lane, 12th Floor
Foster City, California	94404
(Address of principal executive offices)	(Zip Code)

650-578-7700

Registrant’s telephone number, including area code

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

     Title of Each Class

     Trading Symbol

     Name of Each Exchange on Which Registered

     Common Stock, par value $0.001 per share
 
     QNST
 
     The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Number of shares of common stock outstanding as of January 31, 2026: 56,993,939

QUINSTREET, INC.

INDEX


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements		3

Condensed Consolidated Balance Sheets at December 31, 2025 and June 30, 2025		3

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended December 31, 2025 and 2024		4

Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended December 31, 2025 and 2024		5

Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2025 and 2024		7

Notes to Condensed Consolidated Financial Statements		9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		20

Item 3. Quantitative and Qualitative Disclosures About Market Risk		29

Item 4. Controls and Procedures		29

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		30

Item 1A. Risk Factors		30

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		55

Item 3. Defaults Upon Senior Securities		56

Item 4. Mine Safety Disclosures		56

Item 5. Other Information		56

Item 6. Exhibits		57

SIGNATURES		58

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

QUINSTREET, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)


	December 31,			June 30,
	2025			2025
Assets
Current assets:
Cash and cash equivalents	$	106,962		$	101,078
Accounts receivable, net of allowances and reserves of $3,297 and $1,902 as of December 31, 2025 and June 30, 2025		152,388			135,804
Prepaid expenses and other assets		8,626			8,644
Total current assets		267,976			245,526
Property and equipment, net		16,590			16,818
Operating lease right-of-use assets		8,486			9,620
Goodwill		125,056			125,056
Intangible assets, net		24,651			28,475
Deferred tax assets, noncurrent		45,164			—
Other assets, noncurrent		5,110			5,612
Total assets	$	493,033		$	431,107

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	70,833		$	62,247
Accrued liabilities		97,279			87,225
Other liabilities		9,282			13,572
Total current liabilities		177,394			163,044
Operating lease liabilities, noncurrent		6,377			7,382
Other liabilities, noncurrent		14,822			16,637
Total liabilities		198,593			187,063
Commitments and contingencies (See Note 9)
Stockholders' equity:
Common stock: $0.001 par value; 100,000,000 shares authorized; 56,992,446 and 57,159,734 shares issued and outstanding as of December 31, 2025 and June 30, 2025		58			58
Additional paid-in capital		365,592			369,958
Accumulated other comprehensive loss		(268	)		(268	)
Accumulated deficit		(70,942	)		(125,704	)
Total stockholders' equity		294,440			244,044
Total liabilities and stockholders' equity	$	493,033		$	431,107

See notes to condensed consolidated financial statements

QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)

(Unaudited)


	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2025			2024			2025			2024
Net revenue	$	287,845		$	282,596		$	573,698		$	561,815
Cost of revenue (1)		260,123			255,842			519,036			506,656
Gross profit		27,722			26,754			54,662			55,159
Operating expenses: (1)
Product development		8,316			8,710			16,475			17,330
Sales and marketing		4,937			5,083			9,663			9,227
General and administrative		13,222			14,349			22,488			31,197
Operating income (loss)		1,247			(1,388	)		6,036			(2,595	)
Interest income		87			3			90			17
Interest expense		(70	)		(126	)		(138	)		(250	)
Other income (expense), net		46			(83	)		41			(181	)
Income (loss) before income taxes		1,310			(1,594	)		6,029			(3,009	)
Benefit from income taxes		48,917			45			48,733			94
Net income (loss)	$	50,227		$	(1,549	)	$	54,762		$	(2,915	)

Comprehensive income (loss):
Net income (loss)	$	50,227		$	(1,549	)	$	54,762		$	(2,915	)
Other comprehensive income (loss):
Foreign currency translation adjustment		—			—			—			—
Comprehensive income (loss)	$	50,227		$	(1,549	)	$	54,762		$	(2,915	)

Net income (loss) per share:
Basic	$	0.88		$	(0.03	)	$	0.96		$	(0.05	)
Diluted	$	0.87		$	(0.03	)	$	0.94		$	(0.05	)

Weighted-average shares used in computing net income (loss) per share:
Basic		56,959			56,335			57,159			56,079
Diluted		57,919			56,335			58,345			56,079

(1)

Cost of revenue and operating expenses include stock-based compensation expense as follows:


Cost of revenue	$	3,801	$	3,337	$	7,376	$	6,212
Product development		1,546		1,236		2,999		2,282
Sales and marketing		1,318		1,325		2,599		2,420
General and administrative		2,887		3,154		5,781		6,545

See notes to condensed consolidated financial statements

QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)


															Accumulated
												Additional			Other						Total
	Common Stock					Treasury Stock						Paid-in			Comprehensive			Accumulated			Stockholders’
	Shares			Amount		Shares			Amount			Capital			Loss			Deficit			Equity
Balances at September 30, 2025		57,367,521		$	58		—		$	—		$	368,078		$	(268	)	$	(121,169	)	$	246,699
Release of restricted stock, net of share settlement		284,230			—		—			—			—			—			—			—
Stock-based compensation expense		—			—		—			—			9,552			—			—			9,552
Withholding taxes related to release of restricted stock, net of share settlement		—			—		—			—			(2,383	)		—			—			(2,383	)
Repurchase of common stock		—			—		(659,305	)		(9,655	)		—			—			—			(9,655	)
Retirement of treasury stock		(659,305	)		—		659,305			9,655			(9,655	)		—			—			—
Net income		—			—		—			—			—			—			50,227			50,227
Balances at December 31, 2025		56,992,446		$	58		—		$	—		$	365,592		$	(268	)	$	(70,942	)	$	294,440


												Accumulated
									Additional			Other						Total
	Common Stock				Treasury Stock				Paid-in			Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital			Loss			Deficit			Equity
Balances at September 30, 2024		56,127,603	$	56		—	$	—	$	351,807		$	(268	)	$	(131,777	)	$	219,818
Issuance of common stock upon exercise of stock options		513		—		—		—		7			—			—			7
Release of restricted stock, net of share settlement		339,366		1		—		—		(1	)		—			—			—
Stock-based compensation expense		—		—		—		—		9,052			—			—			9,052
Withholding taxes related to release of restricted stock, net of share settlement		—		—		—		—		(3,076	)		—			—			(3,076	)
Net loss		—		—		—		—		—			—			(1,549	)		(1,549	)
Balances at December 31, 2024		56,467,482	$	57		—	$	—	$	357,789		$	(268	)	$	(133,326	)	$	224,252


															Accumulated
												Additional			Other						Total
	Common Stock					Treasury Stock						Paid-in			Comprehensive			Accumulated			Stockholders’
	Shares			Amount		Shares			Amount			Capital			Loss			Deficit			Equity
Balances at June 30, 2025		57,159,734		$	58	—			$	—		$	369,958		$	(268	)	$	(125,704	)	$	244,044
Issuance of common stock upon exercise of stock options		200			—		—			—			3			—			—			3
Release of restricted stock, net of share settlement		811,926			—		—			—			—			—			—			—
Issuance of common stock under the employee stock purchase plan		142,331			—		—			—			1,331			—			—			1,331
Stock-based compensation expense		—			—		—			—			18,755			—			—			18,755
Withholding taxes related to release of restricted stock, net of share settlement		—			—		—			—			(7,658	)		—			—			(7,658	)
Repurchase of common stock		—			—		(1,121,745	)		(16,797	)		—			—			—			(16,797	)
Retirement of treasury stock		(1,121,745	)		—		1,121,745			16,797			(16,797	)		—			—			—
Net income		—			—		—			—			—			—			54,762			54,762
Balances at December 31, 2025		56,992,446		$	58		—		$	—		$	365,592		$	(268	)	$	(70,942	)	$	294,440


												Accumulated
									Additional			Other						Total
	Common Stock				Treasury Stock				Paid-in			Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital			Loss			Deficit			Equity
Balances at June 30, 2024		55,473,439	$	55	—		$	—	$	347,449		$	(268	)	$	(130,411	)	$	216,825
Issuance of common stock upon exercise of stock options		40,863		—		—		—		171			—			—			171
Release of restricted stock, net of share settlement		810,992		2		—		—		(2	)		—			—			—
Issuance of common stock under the employee stock purchase plan		142,188		—		—		—		1,198			—			—			1,198
Stock-based compensation expense		—		—		—		—		17,473			—			—			17,473
Withholding taxes related to release of restricted stock, net of share settlement		—		—		—		—		(8,500	)		—			—			(8,500	)
Net loss		—		—		—		—		—			—			(2,915	)		(2,915	)
Balances at December 31, 2024		56,467,482	$	57		—	$	—	$	357,789		$	(268	)	$	(133,326	)	$	224,252

See notes to condensed consolidated financial statements

QUINSTREET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended
	December 31,
	2025			2024
Cash Flows from Operating Activities
Net income (loss)	$	54,762		$	(2,915	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation		18,755			17,459
Depreciation and amortization		10,749			12,679
Change in the fair value of contingent consideration		2,800			11,194
Provision for sales returns and doubtful accounts receivable		1,762			1,793
Non-cash lease expense		72			83
Deferred income taxes		(568	)		(154	)
Release of tax valuation allowance		(48,263	)		—
Other adjustments, net		(745	)		(247	)
Changes in assets and liabilities:
Accounts receivable		(18,346	)		(40,367	)
Prepaid expenses and other assets		520			(4,262	)
Accounts payable		9,393			7,222
Accrued liabilities		10,333			22,487
Net cash provided by operating activities		41,224			24,972
Cash Flows from Investing Activities
Capital expenditures		(2,063	)		(884	)
Internal software development costs		(5,499	)		(4,490	)
Net cash used in investing activities		(7,562	)		(5,374	)
Cash Flows from Financing Activities
Proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan		1,334			1,369
Payment of withholding taxes related to release of restricted stock, net of share settlement		(7,658	)		(8,500	)
Post-closing payments and contingent consideration related to acquisitions		(4,614	)		(5,144	)
Repurchase of common stock		(16,797	)		—
Net cash used in financing activities		(27,735	)		(12,275	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(44	)		24
Net increase in cash, cash equivalents and restricted cash		5,883			7,347
Cash, cash equivalents and restricted cash at beginning of period		101,094			50,503
Cash, cash equivalents and restricted cash at end of period	$	106,977		$	57,850
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	$	106,962		$	57,835
Restricted cash included in other assets, noncurrent		15			15
Total cash, cash equivalents and restricted cash	$	106,977		$	57,850
Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	$	422		$	223
Supplemental Disclosure of Non-cash Investing and Financing Activities
Purchases of property and equipment included in accrued liabilities		463			1,143
Retirement of treasury stock (See Note 10)		(16,797	)		—

See notes to condensed consolidated financial statements

QUINSTREET, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. The Company

QuinStreet, Inc. (the “Company”) is a leader in performance marketplaces and technologies for the financial services and home services industries. The Company was incorporated in California in April 1999 and reincorporated in Delaware in December 2009. The Company specializes in customer acquisition for clients in high value, information-intensive markets or “verticals,” including financial services and home services. The corporate headquarters are located in Foster City, California, with additional offices throughout the United States, India and Mexico. The majority of the Company’s operations and revenue are in North America.

2. Summary of Significant Accounting Policies

Basis of Presentation

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

Unaudited Interim Financial Information

The accompanying condensed consolidated financial statements and the notes to the condensed consolidated financial statements as of December 31, 2025 and for the three and six months ended December 31, 2025 and 2024 are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025, as filed with the SEC on August 21, 2025. The condensed consolidated balance sheet at June 30, 2025 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of the Company’s condensed consolidated balance sheet at December 31, 2025, its condensed consolidated statements of operations and comprehensive income (loss), stockholders’ equity for the three and six months ended December 31, 2025 and 2024 and condensed consolidated statements of cash flows for the six months ended December 31, 2025 and 2024. The results of operations for the three and six months ended December 31, 2025 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2026, or any other future period.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of commitments and contingencies at the date of the financial statements and reported amounts of revenue and expenses during the period. On an ongoing basis, management evaluates these estimates, judgments and assumptions, including those related to revenue recognition, stock-based compensation, goodwill, long-lived assets, contingencies, credit losses of accounts receivable, and income taxes. The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. In addition, the Company may engage third-party valuation specialists to assist with the preparation of certain of its valuations. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates, and such differences could affect the results of operations reported in future periods.

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period’s presentation. Amounts previously presented as “Other Revenue” were reclassified into “Home Services” in the Disaggregation of Revenue table within Note 3, Revenue.

Accounting Policies

The significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025. There have been no material changes to our significant accounting policies as of and for the six months ended December 31, 2025.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures (ASU 2023-09) to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company will adopt the guidance for its fiscal year ending June 30, 2026, which will result in additional disclosure in the notes to the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2023-09) to expand the disclosure requirements for income statement expenses. In January 2025, the FASB issued ASU 2025-01, to further clarify the effective date. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06) to make targeted improvements to the accounting for internal-use software. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its financial statement disclosures.

ASU’s not included in the Company's disclosures were assessed and determined to be not applicable or material to the Company’s condensed consolidated financial statements or disclosures.

3. Revenue

Disaggregation of Revenue

The following table presents the Company’s net revenue disaggregated by vertical (in thousands):


	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2025		2024		2025		2024
Net revenue:
Financial Services	$	216,797	$	219,934	$	424,273	$	430,825
Home Services and Other Revenue		71,048		62,662		149,425		130,990
Total net revenue	$	287,845	$	282,596	$	573,698	$	561,815

Contract Balances

The contract liabilities representing client deposits from the Company’s contracts with its clients were $1.2 million and $1.3 million as of December 31, 2025 and June 30, 2025.

The Company’s contract liabilities result from payments received in advance of revenue recognition and advance consideration received from clients, which precede the Company’s satisfaction of the associated performance obligation. The changes in the liability balances during the six months ended December 31, 2025 was related to advance consideration received from clients of $2.1 million, offset by revenue recognized of $2.0 million.

Accounts Receivable and Allowances

The allowance for credit losses on accounts receivable was $0.9 million and $0.9 million as of December 31, 2025 and June 30, 2025. The revenue reserve was $2.4 million and $1.0 million as of December 31, 2025 and June 30, 2025. The total allowance for credit losses and revenue reserve was $3.3 million and $1.9 million as of December 31, 2025 and June 30, 2025.

Concentrations of Credit Risk

The Company had one client that accounted for 22% of net revenue for the three months ended December 31, 2025, and 21% of net revenue for the six months ended December 31, 2025. The Company had two clients that accounted for 23% and 18% of net revenue for the three months ended December 31, 2024, and 21% and 16% for the six months ended December 31, 2024. The Company had two clients that accounted for 18% and 12% of net accounts receivable as of December 31, 2025, and 16% and 13% of net accounts receivable as of June 30, 2025.

4. Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by using the weighted-average number of shares of common stock outstanding, including potential dilutive shares of common stock assuming the dilutive effect of outstanding stock options, unvested restricted stock units, and shares issuable related to the employee stock purchase plan (“ESPP”) using the treasury stock method.

The following table presents the calculation of basic and diluted net income (loss) per share:


	Three Months Ended					Six Months Ended
	December 31,					December 31,
	2025		2024			2025		2024
	(In thousands, except per share data)					(In thousands, except per share data)
Numerator:
Net income (loss)	$	50,227	$	(1,549	)	$	54,762	$	(2,915	)
Denominator:
Weighted average shares of common stock used in computing basic net income (loss) per share		56,959		56,335			57,159		56,079
Weighted average effect of dilutive securities		960		—			1,186		—
Weighted average shares of common stock used in computing diluted net income (loss) per share		57,919		56,335			58,345		56,079
Net income (loss) per share:
Basic (1)	$	0.88	$	(0.03	)	$	0.96	$	(0.05	)
Diluted (1)	$	0.87	$	(0.03	)	$	0.94	$	(0.05	)

Securities excluded from weighted average shares of common stock used in computing diluted net income (loss) per share because the effect would have been anti-dilutive: (2)		3,229		4,962			1,905		5,032

(1)

Diluted net loss per share for the three and six months ended December 31, 2024 do not reflect any potential common stock relating to stock options, restricted stock units, or shares issuable related to the ESPP due to net loss incurred. The assumed issuance of any additional shares would be anti-dilutive.

(2)

These weighted shares relate to anti-dilutive stock options, restricted stock units, and shares issuable related to the ESPP as calculated using the treasury stock method and could be dilutive in the future.

5. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. The Company estimates and categorizes the fair value of its financial instruments by applying the following hierarchy:

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to directly access.

Level 2 — Valuations based on quoted prices for similar assets or liabilities; valuations for interest-bearing securities based on non-daily quoted prices in active markets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments consist principally of cash equivalents, accounts receivable, accounts payable, post-closing payments and contingent consideration related to acquisitions. The recorded values of the Company’s accounts receivable and accounts payable approximate their current fair values due to the relatively short-term nature of these accounts.

The following table presents the fair value of the Company’s financial instruments (in thousands):


	December 31, 2025								June 30, 2025
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	12	$	—	$	—	$	12	$	407	$	—	$	—	$	407
Liabilities:
Post-closing payments related to acquisitions	$	—	$	4,817	$	—	$	4,817	$	—	$	10,179	$	—	$	10,179
Contingent consideration related to acquisitions		—		—		16,358		16,358		—		—		13,558		13,558
Total	$	—	$	4,817	$	16,358	$	21,175	$	—	$	10,179	$	13,558	$	23,737

Reported as:
Cash and cash equivalents							$	12							$	407
Other Liabilities:
Current							$	9,157							$	13,572
Noncurrent								12,018								10,165
Total							$	21,175							$	23,737

There were no transfers between Level 1, Level 2, and Level 3 during the periods presented.

Cash Equivalents

All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents on the Company’s condensed consolidated balance sheets. The valuation technique used to measure the fair value of money market funds included using quoted prices in active markets for identical assets and are classified as Level 1 within the fair value hierarchy.

Post-Closing Payments Related to Acquisitions

The post-closing payments are future payments related to the acquisition of BestCompany.com, LLC (“BestCompany”) and Aqua Vida, LLC (“AquaVida”) in fiscal year 2024. The last installment payment for Modernize, Inc. (“Modernize”) of $5.5 million was completed during the first quarter of fiscal year 2026. As the fair value of the Company’s post-closing payments was determined based on installments stipulated in the terms of the acquisition agreements and discount rates observable in the market, the post-closing payments are classified as Level 2 within the fair value hierarchy.

Contingent Consideration Related to Acquisitions

The contingent consideration consists of the estimated fair value of future payments related to the Company’s acquisition of AquaVida. The AquaVida contingent consideration is based upon a percentage of margin achieved and is uncapped over a four-year period. The fair value of the contingent consideration is determined using the real options technique which incorporates various estimates, including projected net revenue, projected media margin, volatility and discount rates. As certain of these inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. Significant changes in the projected net revenue, projected media margin, or discount rates would have a material impact on the fair value of the contingent consideration. The change in contingent consideration liability from the acquisition date to the final amount paid will be recognized in earnings at each reporting date. The Company recorded an increase of $2.8 million to the fair value of the contingent consideration of AquaVida for the three and six months ended December 31, 2025, which is included in general and administrative expenses on the Company’s condensed consolidated statements of operations and comprehensive income. The fair value of the contingent consideration of AquaVida increased from $2.1 million at the acquisition date to $16.4 million as of December 31, 2025.

The following table represents the changes in the contingent consideration during the three and six months ended December 31, 2025 (in thousands):


	Three Months Ended		Six Months Ended
	December 31,		December 31,
	2025		2025
Balance at the beginning of period	$	13,558	$	13,558
Changes in fair value during the period		2,800		2,800
Payments made during the period		—		—
Balance at the end of period	$	16,358	$	16,358

6. Goodwill and Intangible Assets, Net

Goodwill

As of December 31, 2025 and June 30, 2025, the Company had goodwill of $125.1 million. There were no impairments to goodwill during the three and six months ended December 31, 2025.

Intangible Assets, Net

Intangible assets, net, consisted of the following (in thousands):


	December 31, 2025							June 30, 2025
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Amount		Amortization			Amount		Amount		Amortization			Amount
Customer/publisher/advertiser relationships	$	93,511	$	(79,313	)	$	14,198	$	93,511	$	(76,353	)	$	17,158
Content		43,106		(43,106	)		—		43,106		(43,106	)		—
Website/trade/domain names		25,422		(20,877	)		4,545		25,422		(20,601	)		4,821
Acquired technology and others		43,014		(37,106	)		5,908		43,014		(36,518	)		6,496
Total	$	205,053	$	(180,402	)	$	24,651	$	205,053	$	(176,578	)	$	28,475

Amortization of intangible assets was $1.5 million and $3.8 million for the three and six months ended December 31, 2025, and $2.5 million and $4.9 million for the three and six months ended December 31, 2024.

Future amortization expense for the Company’s intangible assets as of December 31, 2025 was as follows (in thousands):


Fiscal Year Ending June 30,	Amortization
2026 (remaining six months)	$	3,063
2027		5,864
2028		5,281
2029		4,234
2030		1,524
Thereafter		4,685
Total

QUINSTREET, INC 10-Q