TechTarget, Inc. (NASDAQ: TTGT) today announced financial
results for the three months and year ended December 31,
2009.
“We are pleased that we posted online revenue growth in Q4 and
finished the quarter above our expectations. For 2010, we are
forecasting double digit online revenue growth” said Greg
Strakosch, CEO of TechTarget. “It appears that the worst of the
downturn is behind us and we believe that our strong competitive
and financial position will result in healthy growth rates to the
top and bottom lines.”
Total Q4 2009 revenues decreased 13% to $23.2 million compared
to Q4 2008. Excluding Q4 2008 print revenue, total Q4 2009 revenues
decreased 10% compared to Q4 2008. Q4 2009 online revenue increased
by 2% to $20.1 million compared to Q4 2008 and represented 86% of
total Q4 2009 revenues. Total 2009 revenues decreased 17% to $86.5
million compared to 2008. Excluding 2008 print revenue, total 2009
revenues decreased by 14% compared to 2008. Total 2009 online
revenue decreased by 7% to $72.3 million compared to 2008 and
represented 84% of total 2009 revenues.
Total gross profit margin increased for both Q4 2009 and full
year 2009 to 73% and 71%, respectively, compared to 70% and 68%,
for Q4 2008 and full year 2008, respectively. Online gross profit
margin increased for both Q4 2009 and full year 2009 to 75% and
73%, respectively, compared to 73% and 72% for Q4 2008 and full
year 2008, respectively.
Net loss for Q4 2009 was $0.8 million compared to net income of
$0.4 million for Q4 2008. Adjusted net income (net income adjusted
for amortization and stock-based compensation, as further adjusted
for the related income tax impact) for Q4 2009 was $2.2 million
compared to $2.9 million for Q4 2008. Net loss per basic share for
Q4 2009 was $0.02 compared to net income per share of $0.01 for Q4
2008. Adjusted net income per share (adjusted net income divided by
adjusted weighted average diluted shares outstanding) for the Q4
2009 was $0.05 compared to $0.07 for Q4 2008. Net loss for full
year 2009 was $5.1 million compared to net income of $1.8 million
for full year 2008. Adjusted net income for 2009 was $7.5 million
compared to $11.6 million for 2008. Net loss per basic share for
full year 2009 was $0.12 compared to net income per basic share of
$0.04 for full year 2008. Adjusted net income per share for full
year 2009 was $0.17 compared to $0.27 for full year 2008.
Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, and restructuring charge, as further adjusted for
stock-based compensation) for Q4 2009 was $4.1 million compared to
$6.1 million for Q4 2008. Q4 2009 adjusted EBITDA was reduced by
$1.2 million as a result of professional fees related to the
investigation activities associated with an improper accounting
practice previously disclosed. Adjusted EBITDA for full year 2009
was $13.9 million compared to $21.0 million for 2008. Full year
2009 adjusted EBITDA was reduced by $1.8 million as a result of
professional fees related to the restatement of prior periods and
investigation activities associated with the improper accounting
practice previously disclosed.
The Company’s balance sheet and financial position remain
strong. As of December 31, 2009, the Company’s cash and
investments totaled $82.6 million and its bank term loan has been
paid off in full. As of December 31, 2009, the Company’s net
cash, defined as cash and investments less bank debt, increased by
$16.0 million compared to December 31, 2008.
Recent Company Highlights
• Acquired ebizQ.net™, a leading website for business and
information technology (IT) decision makers focused on Business
Process Management (BPM) and Service-Oriented Architecture (SOA).
ebizQ.net is an online community with more than 100,000 members
that provides original editorial and independent content from
leading industry analysts and experts via blogs, webinars,
podcasts, white papers, and virtual events. The addition of
ebizQ.net to the TechTarget network of technology websites
complements the Company’s existing web properties, such as
SearchSOA.com™, providing a one-stop shop for IT and Line of
Business professionals researching new products and technologies
around these disciplines and marketers trying to reach them.
• Launched SearchHealthIT.com™, a new website and online social
community for healthcare information technology (IT) professionals
researching products and technologies for HITECH Electronic Health
Record (EHR) regulatory compliance. SearchHealthIT.com launched
with 184,000 existing members in the healthcare field, representing
two-thirds of all US hospitals, with forty-one percent of these
members working at large facilities.
• Formed a strategic partnership with Emagine Médias SARL, the
parent company of LeMagIT.fr (www.lemagit.fr), to improve the
ability of technology marketers to reach the best technology
prospects in the French language market.
• Acquired RTFM-ed.co.uk™, a leading UK based website in the
server virtualization market. RTFM-ed.co.uk brings together one of
the most active communities of professionals looking for detailed
technical information on server and desktop virtualization. Adding
RTFM enhances the Company’s offerings in the virtualization space
through the in-depth, virtualization-specific coverage offered to
information technology professionals.
• Released a new research report in conjunction with Google. The
report is titled “The Google/TechTarget Behavioral Research
Project: Phase 2” and is follow-up research on the behavioral
search habits of IT buyers online during the Purchase Process.
TechTarget and Google are also conducting a road show to present
this research to IT marketers.
Financial Guidance
In the first quarter of 2010, the Company expects total revenues
to be within the range of $19.7 million to $20.7 million; online
revenues within the range of $17.5 million to $18.3 million; events
revenues within the range of $2.2 million to $2.4 million; and
adjusted EBITDA to be within the range of $1.6 million to $2.4
million. This adjusted EBITDA guidance includes the following
non-recurring items: $300,000 of costs associated with the
investigation into the now concluded accounting matter; and
$400,000 of expense associated with the move into the Company’s new
facility and exit of its previous corporate headquarters.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference
call at 5:30 pm (Eastern Time) today (March 10, 2010).
Supplemental financial information and prepared remarks for the
conference call will be posted to the Investor Relations section of
our website simultaneously with this press release.
NOTE: The
prepared remarks will not be read on the conference call. The
conference call will include only brief remarks followed by
questions and answers.
The public is invited to listen to a live webcast of
TechTarget’s conference call, which can be accessed on the Investor
Relations section of our website at
http://investor.techtarget.com/. The conference call can also be
heard via telephone by dialing (888) 680-0890 (US callers) or
617-213-4857 (International callers) ten minutes prior
to the call and referencing participant pass code 55195073 for both
domestic and international callers. Participants may pre-register
for the call at:
https://www.theconferencingservice.com/prereg/key.process?key=
PLFQNC6FB. Pre-registrants will be issued a pin number to use when
dialing into the live call which will provide quick access to the
conference by bypassing the operator upon connection. (Due to the
length of the above URL, it may be necessary to copy and paste it
into your Internet browser’s URL address field. You may also need
to remove an extra space in the URL if one exists.)
For those investors unable to participate in the live conference
call, a replay of the conference call will be available via
telephone beginning March 10, 2010 at 8:00 p.m. ET
through March 24, 2010 at 11:59p.m. ET. To listen to the
replay, dial 888-286-8010 and use the pass
code 81644675. International callers should dial
617-801-6888 and also use the pass code 81644675 to listen to the
replay. The webcast replay will also be available for replay on
http://investor.techtarget.com/ during the same period.
Non-GAAP Financial
Measures
This release and the accompanying tables include a discussion of
adjusted EBITDA, adjusted net income and adjusted net income per
share, all of which are non-GAAP financial measures which are
provided as a complement to results provided in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”). The term “adjusted EBITDA” refers to a financial
measure that we define as earnings before net interest, income
taxes, depreciation, and amortization, as further adjusted to
exclude stock-based compensation and restructuring charges. The
term “adjusted net income” refers to a financial measure which we
define as net income adjusted for amortization, and stock-based
compensation, as further adjusted for the related income tax impact
for the specific adjustments. The term “adjusted net income per
share” refers to a financial measure which we define as adjusted
net income divided by adjusted weighted average diluted shares
outstanding. These non-GAAP measures should be considered in
addition to results prepared in accordance with GAAP, but should
not be considered a substitute for, or superior to, GAAP results.
In addition, our definition of adjusted EBITDA, adjusted net income
and adjusted net income per share may not be comparable to the
definitions as reported by other companies. We believe adjusted
EBITDA, adjusted net income and adjusted net income per share are
relevant and useful information because it provides us and
investors with additional measurements to compare the Company’s
operating performance. These measures are part of our internal
management reporting and planning process and are primary measures
used by our management to evaluate the operating performance of our
business, as well as potential acquisitions. The components of
adjusted EBITDA include the key revenue and expense items for which
our operating managers are responsible and upon which we evaluate
their performance. In the case of senior management, adjusted
EBITDA is used as the principal financial metric in their annual
incentive compensation program. Adjusted EBITDA is also used for
planning purposes and in presentations to our board of directors.
Adjusted net income is useful to us and investors because it
presents an additional measurement of our financial performance,
taking into account depreciation, which we believe is an ongoing
cost of doing business, but excluding the impact of certain
non-cash expenses and items not directly tied to the core
operations of our business. Furthermore, we intend to provide these
non-GAAP financial measures as part of our future earnings
discussions and, therefore, the inclusion of these non-GAAP
financial measures will provide consistency in our financial
reporting. A reconciliation of these non-GAAP measures to GAAP is
provided in the accompanying tables.
Forward Looking Statements
Certain matters included in this press release may be considered
to be “forward-looking statements” within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934, as
amended by the Private Securities Litigation Reform Act of 1995.
Those statements include statements regarding the intent, belief or
current expectations of the company and members of our management
team. All statements contained in this press release, other than
statements of historical fact, are forward-looking statements,
including those regarding: guidance on our future financial results
and other projections or measures of our future performance; our
expectations concerning market opportunities and our ability to
capitalize on them; and the amount and timing of the benefits
expected from acquisitions, from new products or services and from
other potential sources of additional revenue. Investors and
prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ
materially from those contemplated by such forward-looking
statements. These statements speak only as of the date of this
press release and are based on our current plans and expectations,
and they involve risks and uncertainties that could cause actual
future events or results to be different than those described in or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, those relating to:
market acceptance of our products and services; relationships with
customers, strategic partners and our employees; difficulties in
integrating acquired businesses; and changes in economic or
regulatory conditions or other trends affecting the Internet,
Internet advertising and information technology industries. These
and other important risk factors are discussed or referenced in our
Annual Report on Form 10-K filed with the Securities and
Exchange Commission, under the heading “Risk Factors” and
elsewhere, and any subsequent periodic or current reports filed by
us with the SEC. Except as required by applicable law or
regulation, we do not undertake any obligation to update our
forward-looking statements to reflect future events or
circumstances.
About TechTarget
TechTarget, a leading online technology media company, gives
technology providers ROI-focused marketing programs to generate
leads, shorten sales cycles, and grow revenues. With its network of
more than 60 technology-specific websites and more than 8.5 million
registered members, TechTarget is a primary Web destination for
technology professionals researching products to purchase. The
company is also a leading provider of independent, peer and vendor
content, a leading distributor of white papers, and a leading
producer of webcasts, podcasts, videos and virtual trade shows for
the technology market. Its websites are complemented by numerous
invitation-only events. TechTarget provides proven lead generation
and branding programs to top advertisers including Cisco, Dell,
EMC, HP, IBM, Intel, Microsoft, SAP and Symantec.
(C) 2010 TechTarget, Inc. All rights reserved.
TechTarget and the TechTarget logo are registered trademarks, and
eBizQ.net, SearchHealthIT.com, SearchSOA.com and RTFM-ed.co.uk are
trademarks, of TechTarget. All other trademarks are the property of
their respective owners.
TECHTARGET,
INC.Consolidated Balance Sheets(in $000’s)
December 31, 2009 2008 Assets
Current assets: Cash and cash equivalents $ 20,884 $ 24,130
Short-term investments 50,496 42,863 Accounts receivable, net of
allowance for doubtful accounts 15,816 17,622 Prepaid expenses and
other current assets 2,736 6,251 Deferred tax assets 2,399 2,959
Total current assets 92,331 93,825 Property and equipment,
net 3,760 3,904 Long-term investments 11,177 2,575 Goodwill 88,958
88,958 Intangible assets, net of accumulated amortization 12,528
17,242 Other assets 127 139 Deferred tax assets 5,182 3,369
Total assets $ 214,063 $ 210,012
Liabilities and
Stockholders’ Equity Current liabilities: Accounts payable $
3,106 $ 3,404 Accrued expenses and other current liabilities 2,910
2,908 Accrued compensation expenses 808 702 Current portion of bank
term loan payable — 3,000 Income taxes payable 398 — Deferred
revenue 8,402 8,749 Total current liabilities 15,624 18,763
Long-term liabilities: Other liabilities 575 312 Total liabilities
16,199 19,075 Commitments — — Stockholders’ equity:
Preferred stock — — Common stock 42 42 Additional paid-in capital
233,555 221,597 Warrants 2 2 Accumulated other comprehensive income
(loss) 8 (77 ) Accumulated deficit (35,743 ) (30,627 ) Total
stockholders’ equity 197,864 190,937 Total liabilities and
stockholders’ equity $ 214,063 $ 210,012
TECHTARGET, INC.Consolidated
Statements of Operations(in $000’s, except share and per
share amounts)
For the Three Months Ended December 31, For the
Years Ended December 31, 2009 2008 2009
2008 (Unaudited) Revenues: Online $ 20,071 $ 19,672 $
72,345 $ 77,373 Events 3,161 6,043 14,152 22,786 Print — 955 —
4,385 Total revenues 23,232 26,670 86,497 104,544 Cost of
revenues: Online (1) 4,933 5,292 19,378 21,404 Events (1) 1,323
2,453 5,600 9,531 Print (1) — 398 — 2,156 Total cost of revenues
6,256 8,143 24,978 33,091 Gross profit 16,976 18,527 61,519
71,453 Operating expenses: Selling and marketing (1) 7,819
7,991 32,002 33,481 Product development (1) 2,113 2,555 8,664
10,995 General and administrative (1) 6,058 3,747 19,527 14,663
Depreciation 675 522 2,219 2,406 Amortization of intangible assets
1,152 1,235 4,714 5,306 Restructuring charge — 1,494 — 1,494 Total
operating expenses 17,817 17,544 67,126 68,345 Operating
(loss) income (841 ) 983 (5,607 ) 3,108 Interest income, net
73 506 267 1,440 (Loss) income before provision for income
taxes (768 ) 1,489 (5,340 ) 4,548 Provision for (benefit
from) income taxes 59 1,048 (224 ) 2,784 Net (loss) income $
(827 ) $ 441 $ (5,116 ) $ 1,764 Net (loss) income per common
share: Basic $ (0.02 ) $ 0.01 $ (0.12 ) $ 0.04 Diluted $ (0.02 ) $
0.01 $ (0.12 ) $ 0.04 Weighted average common shares
outstanding: Basic 42,133,698 41,632,246 41,864,789 41,424,920
Diluted 42,133,698 42,701,208 41,864,789 43,439,619 (1)
Amounts include stock-based compensation expense as follows: Cost
of online revenue $ 47 $ 6 $ 454 $ 407 Cost of events revenue (23 )
(9 ) 94 91 Cost of print revenue — 1 — 6 Selling and marketing
1,057 1,017 5,342 4,813 Product development 183 53 535 473 General
and administrative 1,867 774 6,198 2,881
TECHTARGET,
INC.Reconciliation of Net (Loss) Income to Adjusted
EBITDA(in $000’s)
For the Three Months Ended December 31,
For the Years EndedDecember 31, 2009
2008 2009 2008 (Unaudited)
Net (loss) income $ (827
) $ 441 $ (5,116 )
$ 1,764 Interest income, net 73 506 267 1,440
Provision for (benefit from) income taxes 59 1,048 (224 ) 2,784
Depreciation 675 522 2,219 2,406 Amortization of intangible assets
1,152 1,235 4,714 5,306
EBITDA 986 2,740
1,326 10,820 Stock-based compensation expense 3,131
1,842 12,623 8,671 Restructuring charges — 1,494 — 1,494
Adjusted EBITDA $ 4,117 $ 6,076
$ 13,949 $ 20,985
TECHTARGET,
INC.Reconciliation of Net (Loss) Income to Adjusted Net
Income andNet (Loss) Income per Diluted Share to
Adjusted Net Income per Share(in $000’s, except share and
per share amounts)
For the Three Months Ended December 31,
For the Years Ended December 31, 2009
2008 2009 2008 (Unaudited)
Net (loss) income $ (827 ) $
441 $ (5,116 ) $ 1,764
Amortization of intangible assets 1,152 1,235 4,714 5,306
Stock-based compensation expense 3,131 1,842 12,623 8,671 Impact of
income taxes 1,250 648 4,693 4,095
Adjusted net income
$ 2,206 $ 2,870 $ 7,528
$ 11,646 Net (loss) income per diluted
share $ (0.02 ) $ 0.01
$ (0.12 ) $ 0.04
Weighted average diluted shares outstanding
42,133,698 42,701,208 41,864,789
43,439,619 Adjusted net income per share
$ 0.05 $ 0.07 $ 0.17
$ 0.27 Adjusted weighted average diluted shares
outstanding 43,945,307 42,701,208
43,191,243 43,439,619 Options, warrants and
restricted stock, treasury method included in adjusted weighted
average diluted shares above 1,811,609 — 1,326,454 —
Weighted average diluted shares outstanding
42,133,698 42,701,208 41,864,789
43,439,619
TECHTARGET, INC.Financial
Guidance for the Three Months Ended March 31, 2010(in
$000’s)
For the Three Months EndedMarch 31, 2010
Range Revenues $ 19,700 $
20,700 Adjusted EBITDA $ 1,600
$ 2,400 Depreciation, amortization and stock-based
compensation 4,929 4,929 Interest income, net 177 177 Benefit from
income taxes (650 ) (322 )
Net loss $ (2,502
) $ (2,030 )
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