TechTarget, Inc. (NASDAQ: TTGT) today announced financial
results for the three months ended June 30, 2010.
Total Q2 2010 revenues increased 15% to $25.1 million compared
to Q2 2009. Q2 2010 online revenue increased by 16% to $20.6
million compared to Q2 2009, representing the highest quarterly
online revenues achieved by the Company in its history. Online
revenues represented 82% of total Q2 2010 revenues. Q2 2010 events
revenue increased by 13% to $4.4 million compared to Q2 2009 and
represented 18% of total Q2 2010 revenues.
“Despite the continuing macro challenges, our efforts to
increase market share are paying off as we posted record quarterly
online revenues” said Greg Strakosch, CEO of TechTarget. “We are
pleased that while maintaining an aggressive investment plan, we
were able to grow adjusted EBITDA by 63% in the quarter and
generate an adjusted EBITDA margin of 25%.”
Total Q2 2010 gross profit margin increased to 76% compared to
71% for Q2 2009. Q2 2010 online gross profit margin increased to
77% compared to 73% for Q2 2009, the highest online gross margin
achieved by the Company since 2007.
Net income was $0.4 million for Q2 2010 compared to a net loss
of $0.5 million in Q2 2009. Adjusted net income (net income
adjusted for amortization and stock-based compensation, as further
adjusted for the related income tax impact) for Q2 2010 was $3.9
million compared to $2.2 million for Q2 2009. Net income per basic
share was $0.01 compared to a net loss per basic share of $(0.01)
for Q2 2009. Adjusted net income per share (adjusted net income
divided by adjusted weighted average diluted shares outstanding)
for Q2 2010 was $0.09 compared to $0.05 for Q2 2009.
Adjusted EBITDA (earnings before interest, taxes, depreciation,
and amortization, as further adjusted for stock-based compensation)
for Q2 2010 increased 63% to $6.3 million compared to $3.9 million
for Q2 2009.
The Company’s balance sheet and financial position remain
strong. As of June 30, 2010, the Company’s cash and
investments totaled $77.8 million and the Company has no
outstanding bank debt.
Recent Company Highlights
- Grew international geo-targeted
revenues by more than 50%. International geo-targeted revenue
represented approximately 8% of revenue in the quarter. A year ago,
international geo-targeted represented approximately 5% of revenue.
119 customers ran geo-targeted advertising programs in the first
half of 2010 versus 44 a year ago.
- Launched SearchDataManagement.co.uk™, a
comprehensive, problem-solving website for UK-based and
English-speaking European enterprise information technology (IT)
and business professionals who lead their companies’ data
management (DM) and business intelligence (BI) efforts. Launching
with 63,000 members, SearchDataManagement.co.uk is
TechTarget’s fourth UK-targeted website and SearchDataManagement.co.uk joins
TechTarget’s leading portfolio of business intelligence market
websites that include SearchDataManagement.com™, SearchBusinessAnalytics.com™ and the
BeyeNETWORK™.
- Made good progress on
SearchHealthIT.com, which officially launched in March of 2010 and
is already conducting campaigns for approximately 30 advertisers
including HP, Dell, Symantec, RIM, CDW and Brocade. The site has
experienced robust traffic growth, including hosting over 600
health IT professionals who attended the site’s first virtual
seminar titled “The New Wave of Health Care IT”.
- Released new
"Custom Nurturing" offering to allow large lead
generation customers to cultivate leads more effectively
through the purchase decision cycle. Programs with “Custom
Nurturing” can set up email-based campaigns that send
customized follow-up messages to leads generated in TechTarget
programs based not only on demographic profile or the specific
action taken in the program, but also based on the lead's
subsequent activity throughout the TechTarget network.
Financial Guidance
In the third quarter of 2010, the Company expects total revenues
to be within the range of $22.1 million to $23.1 million; online
revenues within the range of $19.6 million to $20.4 million; events
revenues within the range of $2.5 million to $2.7 million and
adjusted EBITDA to be within the range of $4.0 million to $4.5
million.
The Company is re-affirming the following annual guidance that
it provided on May 10, 2010. The Company expects the annual online
growth rate to be in the mid-teens and, based on running less
multi-day events in 2010, for events revenue to decline between 15%
and 20%. The Company expects annual adjusted EBITDA margins of 19%
to 23%.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference
call at 5:30 p.m. (Eastern Time) today (August 9, 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) 713-4214 (US callers) or
617-213-4866 (International callers) ten minutes prior to the
call and referencing participant pass code 70574557 for both
domestic and international callers. Participants may pre-register
for the call at:
https://www.theconferencingservice.com/prereg/key.process?key=
PHUEQJ97G. 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 August 9, 2010 at 8:30 p.m. ET
through August 23, 2010 at 11:59 p.m. ET. To listen to the
replay, dial 888-286-8010 and use the pass
code 88127511. International callers should dial
617-801-6888 and also use the pass code 88127511 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 EBITDA margin, 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. The term “adjusted
EBITDA margin” refers to a financial measure which we define as
adjusted EBITDA as a percentage of total revenues. 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
of the 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 EBITDA margin, 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 EBITDA margin, 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 80 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
BeyeNETWORK™, SearchDataManagement.co.uk™, SearchDataManagement.com™, and
SearchBusinessAnalytics.com
are trademarks, of TechTarget. All other trademarks are the
property of their respective owners.
TECHTARGET, INC. Consolidated Balance Sheets (in
$000's) June 30,
December31,
2010 2009 (Unaudited) Assets Current
assets: Cash and cash equivalents $ 18,523 $ 20,884 Short-term
investments 51,961 50,496 Accounts receivable, net of allowance for
doubtful accounts 26,917 16,623 Prepaid expenses and other current
assets 1,819 1,929 Deferred tax assets 697 2,399
Total current assets 99,917 92,331 Property and equipment,
net 5,916 3,760 Long-term investments 7,314 11,177 Goodwill 90,222
88,958 Intangible assets, net of accumulated amortization 11,968
12,528 Deferred tax assets 6,904 5,182 Other assets 125
127 Total assets $ 222,366 $ 214,063
Liabilities
and Stockholders' Equity Current liabilities: Accounts payable
$ 3,287 $ 3,106 Accrued expenses and other current liabilities
2,175 2,910 Accrued compensation expenses 1,371 808 Income taxes
payable 281 398 Deferred revenue 9,337 8,402 Total
current liabilities 16,451 15,624 Long-term liabilities:
Other liabilities 3,329 575 Total liabilities 19,780
16,199 Commitments and contingencies - -
Stockholders' equity: Common stock 43 42 Additional paid-in capital
240,223 233,555 Warrants - 2 Accumulated other comprehensive (loss)
income (43 ) 8 Accumulated deficit (37,637 ) (35,743
) Total stockholders' equity 202,586 197,864 Total
liabilities and stockholders' equity $ 222,366 $ 214,063
TECHTARGET, INC.
Consolidated Statements of
Operations
(in $000's, except per share
amounts)
For the Three Months
EndedJune 30,
For the Six Months
EndedJune 30,
2010 2009 2010 2009 (Unaudited)
Revenues: Online $ 20,626 $ 17,801 $ 39,187 $ 34,083 Events
4,447 3,936 6,929 6,126 Total revenues
25,073 21,737 46,116 40,209 Cost of
revenues: Online (1) 4,792 4,776 9,328 9,656 Events (1)
1,302 1,455 2,166 2,536 Total cost of revenues
6,094 6,231 11,494 12,192 Gross
profit 18,979 15,506 34,622 28,017 Operating expenses:
Selling and marketing (1) 8,991 8,023 17,904 15,539 Product
development (1) 2,021 2,194 4,206 4,275 General and administrative
(1) 4,804 4,064 10,299 7,983 Depreciation 642 498 1,167 1,034
Amortization of intangible assets 1,140 1,181
2,275 2,396 Total operating expenses 17,598
15,960 35,851 31,227 Operating income (loss)
1,381 (454 ) (1,229 ) (3,210 ) Interest income, net
84 174 191 64
Income (loss) before provision for
(benefit from)income taxes
1,465 (280 ) (1,038 ) (3,146 )
Provision for (benefit from)income
taxes
1,019 263 856 (295 ) Net income
(loss) $ 446 $ (543 ) $ (1,894 ) $ (2,851 ) Net income
(loss) per common share: Basic and diluted $ 0.01 $ (0.01 ) $ (0.04
) $ (0.07 ) Weighted average common shares outstanding:
Basic 42,944 41,760 42,712 41,757
Diluted 45,053 41,760 42,712 41,757 (1)
Amounts include stock-based compensation expense as follows: Cost
of online revenue $ 86 $ 78 $ 174 $ 312 Cost of events revenue 20
36 46 53 Selling and marketing 1,535 1,478 3,464 2,806 Product
development 155 132 316 263 General and administrative 1,359 917
2,584 1,810
TECHTARGET, INC. Reconciliation of Net
Income (Loss) to Adjusted EBITDA (in $000’s)
For the Three Months
EndedJune 30,
For the Six Months
EndedJune 30,
2010 2009 2010
2009 (Unaudited) Net income (loss)
$ 446 $ (543 ) $
(1,894 ) $ (2,851 ) Interest
income, net 84 174 191 64 Provision for (benefit from) income taxes
1,019 263 856 (295 ) Depreciation 642 498 1,167 1,034 Amortization
of intangible assets 1,140 1,181 2,275
2,396
EBITDA 3,163 1,225
2,213 220 Stock-based compensation expense
3,155 2,641 6,584 5,244
Adjusted
EBITDA $ 6,318 $ 3,866 $
8,797 $ 5,464
TECHTARGET, INC.
Reconciliation of Net Income
(Loss) to Adjusted Net Income and Net Income (Loss) per Diluted
Share to Adjusted Net
Income per Share
(in $000's, except per share
amounts)
For the Three Months
EndedJune 30,
For the Six Months
EndedJune 30,
2010 2009 2010
2009 (Unaudited) Net income (loss)
$ 446 $ (543 ) $
(1,894 ) $ (2,851 ) Amortization
of intangible assets 1,140 1,181 2,275 2,396 Stock-based
compensation expense 3,155 2,641 6,584 5,244 Impact of income taxes
875 1,096 1,975 2,019
Adjusted net
income $ 3,866 $ 2,183 $
4,990 $ 2,770 Net income (loss) per
diluted share $ 0.01 $ (0.01
) $ (0.04 ) $ (0.07
) Weighted average diluted shares outstanding
45,053 41,760 42,712
41,757 Adjusted net income per share
$ 0.09 $ 0.05 $ 0.11
$ 0.06
Adjusted weighted average
diluted sharesoutstanding
45,053 42,764 44,813
42,643
Options, warrants and restricted
stock, treasurymethod included in adjusted weighted averagediluted
shares above
- 1,004 2,101 886
Weighted
average diluted shares outstanding 45,053
41,760 42,712 41,757
TECHTARGET, INC.
Financial Guidance for the Three Months Ended September 30,
2010 (in $000's)
For the Three
MonthsEnded September 30,2010
Range Revenues $ 22,100 $
23,100 Adjusted EBITDA $ 4,000
$ 4,500 Depreciation, amortization and stock-based
compensation 4,728 4,728 Interest income, net 84 84 Provision for
income taxes 337 542
Net loss $
(981 ) $ (686 )
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