Doug Valenti: I think it’s a mixed bag really, Mark. Higher for longer is not a bad thing for home services. We believe an industry report suggests that consumers are spending more on their existing home. And so I’m kind of vertical by vertical. And credit cards, higher for longer is not a bad thing. Our core credit cards consumer is a prime consumer in our mix. And so those consumers are in very good shape. And the higher interest rates for longer, I assume the banks are making a lot of money on the outstanding balances. They have a lot of money to continue marketing. And in personal loans, we have seen that the higher for longer is having an effect on the demand for and the underwriting models of the lenders. And so I think we’ve talked about this in past quarters, but we’ve seen less demand for lending, but more demand for other credit solutions.
And we are the strongest in the industry at other credit solutions. And we, once again this past quarter, way outperformed the results reported by everybody else that we know in our industry in that business. And it doesn’t really affect much in our insurance except that to the extent that it puts pressure on consumers at the low end, which it does, we see increased shopping for auto insurance. And that continues to be a dynamic we are seeing. There’s a J.D. Powers puts out a report. They just put out their most recent report on insurance shopping habits a couple weeks ago. And it was the highest level of shopping behavior by consumers for auto insurance they’d ever seen in their history of their report. Not surprising given how far and fast, their rates have come up on insurance.
And so I guess net overall, pretty good for QuinStreet’s profile.
Mark Hagen: Fair enough. Thank you guys.
Doug Valenti: Thank you.
Operator: Your next question is from the line of Jason Kreyer from Craig-Hallum. Please go ahead.
Cal Bartyzal: Great. Thank you. This is Cal Bartyzal on for Jason. Just to start kind of as this as autos kind of picked up actually just kind of speak to any pockets where spend has yet to return and how these eventually coming back. That expectation contributes to confidence in this being a long duration tailwind of auto resurgence?
Doug Valenti: And we’ve got a lot of data points on. First of all, we now have more — last year was pretty concentrated ramp from mainly the biggest player in the channel and they were under 60%-something I think of auto insurance revenue in the third quarter and we’re reporting mid to high 90s combined ratios. This year on that same client as well under 50% of revenue, although still very strong. And it’s really because we have more other clients, other carriers now spending over $1 million a month with us than we’ve had in the history of the company. I mean we’ve got a much broader footprint with much bigger spend from log — and not more carriers fund. And so — and that — and then we have activity-wise every one of those carriers is asking for a lot more than we can actually deliver right now.
So, we’re running more — working on the other side of the market ramp — media ramp that we are the client demand ramp at this point because our — the breadth of our relationships, the breadth of the demand, breadth of our products, and again as I said, the demand for those clients. So, — and then you have the combined ratio reporting. Combined ratio is being reported this year. R&D, E&O in the mid-80s to low 90s, which again lower is better than what you thought combined ratios insurance. And that’s from all the significant players who make — who report their with their combined ratio results publicly. So, you’ve got better fundamental underlying economics, broader footprint with more clients with more demand from all those clients and higher spending from other clients and big indications smaller clients for coming quarters and years.
So, we really don’t have any indications of anything but not just sustainability, but acceleration of the ramp going forward.
Cal Bartyzal: Perfect. Thank you. And then it just looks like you guys have been broadening out the home services offering recently with some new verticals. Can you just kind of talk to the ambition for vertical expansion there in home services and what opportunities you’re seeing in broadening out this offering?
Doug Valenti: We were in maybe 14 or 15 verticals with some level of presence. We think we can be in dozens. I can’t be more precise than that because sooner we have hypotheses about which we can be and we don’t really know until we start doing more work and analysis and actually start doing some testing. Of the 14 or so — and I think so but more than that actually if you count everything that we’re in now only two or at any reasonable scale. I wouldn’t go into those even mature. One of them I think represents 40% of total services revenue or something in that vicinity. So, we’re actually relatively constant. It happens to be the one we’ve been in the longest on really in a meaningful way. And so those two vectors are going to continue to continue to be getting into more trades.
But right now we’re more focused on scaling the trades we’re already in and that scaling is a matter of focusing our efforts and initiatives and teams as well as on in our growth getting signing more clients getting more media that can be efficient with that client and that client base then going sign more. But still more clients are getting more median kind of working our way up that with we’ve got to work both sides of the market as we talked about earlier comments and I think it was Pat that asked the question that there is a sequencing and then iterating aspect to that as you kind of work your way up to media efficiency. Now we don’t have any concerns about being able to do that. It just is something that does take some time. So I wonder if you want to have as many a lot of trades going on at once so you can know you’re going to have different ones have different stages to every different growth rates and profitability.
We think we’re pretty good at that.
Cal Bartyzal: All right. Very helpful. Thank you.
Doug Valenti: You bet.
Operator: [Operator Instructions] Your next question is from the line of Chris Sakai from Singular Research. Please go ahead.
Chris Sakai: Hi, Doug and Greg. I just got one question on looks like back in last quarter you had 2024 revenue growth about 5% to 15%, but now you’re guiding for Q4 revenue of $180 million to $190 million which puts the year of revenue growth there about 2.5% to 4.5%. So I want to know I mean what what’s going on why is there a somewhat of a guide lower now for the year revenue growth. Please help me understand. Thanks.
