TechTarget, Inc. (NASDAQ: TTGT) today announced financial
results for the three months and year ended December 31,
2010.
“We delivered a quarter with excellent financial results,” said
Greg Strakosch, CEO of TechTarget. “We are seeing the benefits of
the investments we made during the downturn. In particular, our
investments in our Activity Intelligence™ Platform and our
International offerings are performing especially well.”
Total Q4 2010 revenues increased 16% to $26.9 million compared
to Q4 2009. Q4 2010 online revenue increased by 21% to $24.3
million compared to Q4 2009. Online revenues represented 90% of
total Q4 2010 revenues. Q4 2010 events revenue decreased by 17% to
$2.6 million compared to Q4 2009 and represented 10% of total Q4
2010 revenues. Total 2010 revenues increased 10% to $95.0 million
compared to 2009. Total 2010 online revenue increased by 14% to
$82.3 million compared to 2009. Online revenues represented 87% of
total 2010 revenues. Total 2010 events revenue decreased by 10% to
$12.7 million compared to 2009 and represented 13% of total 2010
revenues.
Total gross profit margin increased for both Q4 2010 and full
year 2010 to 78% and 76%, respectively, compared to 73% and 71% for
Q4 2009 and full year 2009, respectively. Online gross profit
margin increased for both Q4 2010 and full year 2010 to 79% and
77%, respectively, compared to 75% and 73% for Q4 2009 and full
year 2009, respectively.
Net income was $1.3 million for Q4 2010 compared to a net loss
of $0.8 million in Q4 2009. Adjusted net income (net income
adjusted to eliminate amortization, stock-based compensation
expense, and the related income tax impact of these charges) for Q4
2010 was $3.2 million compared to $2.2 million for Q4 2009. Net
income per basic share was $0.03 compared to a net loss per basic
share of $0.02 for Q4 2009. Adjusted net income per share (adjusted
net income divided by adjusted weighted average diluted shares
outstanding) for Q4 2010 was $0.07 compared to $0.05 for Q4 2009.
Net loss was $1.2 million for full year 2010 compared to a net loss
of $5.1 million for the full year 2009. Adjusted net income for the
full year 2010 was $8.5 million compared to $7.5 million for the
full year 2009. Net loss per basic share was $0.03 compared to a
net loss per basic share of $0.12 for the full year 2009. Adjusted
net income per share (adjusted net income divided by adjusted
weighted average diluted shares outstanding) for the full year 2010
was $0.19 compared to $0.17 for the full year 2009.
Adjusted EBITDA (earnings before interest, other income and
expense, taxes, depreciation, and amortization, as further adjusted
to eliminate stock-based compensation expense) for Q4 2010
increased 73% to $7.1 million compared to $4.1 million for Q4 2009.
Adjusted EBITDA for full year 2010 increased 42% to $19.8 million
compared to $13.9 million for the full year 2009.
The Company’s balance sheet and financial position remain
strong. As of December 31, 2010, the Company’s cash, cash
equivalents and investments totaled $50.1 million, working capital
is $61.8 million, and the Company has no outstanding bank debt.
Recent Company Highlights
- On December 10th, the Company completed
a self-tender offering resulting in the Company purchasing 5.9
million shares at $6 per share. 4 million shares were tendered by
Polaris Venture Partners, thus reducing the Company’s VC overhang.
The Company funded the self-tender from the Company’s cash balance.
The tender is accretive to earnings per share and the Company now
has 37.0 million shares outstanding.
- The Company’s international
geo-targeted results grew in excess of 50% in both Q4 and 2010.
Geo-targeted revenues accounted for approximately 8% of revenues in
2010 versus approximately 5% of revenues in 2009. The Company now
has direct international operations in Europe, India and
China.
- The Company’s investment in its
Activity Intelligence Platform continues to pay off. Over 100
customers took advantage of the product offering in Q4, resulting
in market share gains for the Company.
Financial Guidance
In the first quarter of 2011, the Company expects total revenues
to be within the range of $22.5 million to $23.5 million; online
revenues within the range of $20.5 million to $21.3 million; events
revenues within the range of $2.0 million to $2.2 million and
adjusted EBITDA to be within the range of $3.6 million to $4.4
million.
For the full year 2011, the Company expects online revenue to
grow approximately 14% and event revenues to be roughly flat
compared to 2010. The Company expects adjusted EBITDA to grow
approximately 33% compared to 2010 and expects adjusted EBITDA
margin for 2011 to be approximately 25%.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference
call at 5:30 p.m. (Eastern Time) today (February 17, 2011).
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) 680-0865 (US callers) or
617-213-4853 (International callers) ten minutes prior to the
call and referencing participant pass code 20532996 for both
domestic and international callers. Participants may pre-register
for the call at:
https://www.theconferencingservice.com/prereg/key.process?key=PQJKJ96BF.
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 February 17, 2011 at 9:30 p.m. ET
through March 24, 2011 at 11:59 p.m. ET. To listen to the
replay, dial 888-286-8010 and use the pass
code 82232117. International callers should dial
617-801-6888 and also use the pass code 82232117 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, other income and expense, 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 one of the principal financial metrics 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, Inc. (www.techtarget.com) (NASDAQ: TTGT) is a
leading global technology media company with more than 90
technology-specific websites, 9 million registered members, and
more than 10 years of groundbreaking accomplishments. Our extensive
editorial and vendor-sponsored content fulfills the needs of tech
pros looking for in-depth coverage of technology topics throughout
their buying process and positions us to meet the needs of
technology marketers targeting qualified technology audiences.
Outside of North America, TechTarget runs 23 websites and has
offices in London, Mumbai and Beijing.
(C) 2011 TechTarget, Inc. All rights reserved.
TechTarget and the TechTarget logo are registered trademarks of
TechTarget. Activity Intelligence is a trademark of TechTarget. All
other trademarks are the property of their respective owners.
TECHTARGET, INC.
Consolidated Statements of
Operations
(in $000's, except per share
amounts)
For the Three Months Ended
December 31,
For the Twelve Months Ended
December 31,
2010 2009 2010 2009
Revenues: (unaudited) (unaudited) Online $ 24,265 $ 20,071 $ 82,330
$ 72,345 Events 2,627 3,161 12,679
14,152 Total revenues 26,892 23,232 95,009
86,497 Cost of revenues: Online (1) 5,131 4,933
19,033 19,378 Events (1) 816 1,323 4,066
5,600 Total cost of revenues 5,947 6,256
23,099 24,978 Gross profit 20,945 16,976
71,910 61,519 Operating expenses: Selling and marketing (1)
9,195 7,989 35,667 32,685 Product development (1) 1,950 2,113 8,103
8,664 General and administrative (1) 4,494 5,888 19,328 18,844
Depreciation 630 675 2,389 2,219 Amortization of intangible assets
1,122 1,152 4,523 4,714 Total operating
expenses 17,391 17,817 70,010 67,126
Operating income (loss) 3,554 (841 ) 1,900 (5,607 )
Interest income, net
52 73 322 267 Other expense, net (146 ) - (146
) - Income (loss) before provision for (benefit from)
income taxes 3,460 (768 ) 2,076 (5,340 ) Provision for
(benefit from) income taxes 2,136 59 3,258
(224 ) Net income (loss) $ 1,324 $ (827 ) $ (1,182 )
$ (5,116 ) Net income (loss) per common share: Basic $ 0.03
$ (0.02 ) $ (0.03 ) $ (0.12 ) Diluted $ 0.03 $ (0.02 ) $ (0.03 ) $
(0.12 ) Weighted average common shares outstanding: Basic
42,450 42,134 42,771 41,865 Diluted
44,935 42,134 42,771 41,865
(1) Amounts include stock-based
compensation expense as follows:
Cost of online revenues $ 37 $ 47 $ 173 $ 454 Cost of events
revenues 18 (23 ) 87 94 Selling and marketing 1,208 1,227 6,380
6,025 Product development 100 183 520 535 General and
administrative 472 1,697 3,841 5,515
TECHTARGET, INC.
Reconciliation of Net Income
(Loss) to Adjusted EBITDA
(in $000’s)
For the Three Months
EndedDecember 31,
For the Years EndedDecember 31, 2010
2009 2010 2009
(unaudited)
(unaudited)
Net income (loss) $ 1,324 $
(827 ) $ (1,182 ) $
(5,116 ) Interest income, net 52 73 322 267 Other
expense, net 146 - 146 - Provision for (benefit from) income taxes
2,136 59 3,258 (224 ) Depreciation 630 675 2,389 2,219 Amortization
of intangible assets 1,122 1,152 4,523 4,714
EBITDA
5,306 986 8,812 1,326 Stock-based
compensation expense 1,835 3,131 11,001 12,623
Adjusted
EBITDA $ 7,141 $ 4,117 $
19,813 $ 13,949
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
EndedDecember 31,
For the Twelve Months
EndedDecember 31,
2010 2009 2010
2009
(unaudited)
(unaudited)
Net income (loss) $ 1,324 $ (827
) $ (1,182 ) $ (5,116
) Amortization of intangible assets 1,122 1,152 4,523 4,714
Stock-based compensation expense 1,835 3,131 11,001 12,623 Impact
of income taxes 1,034 1,250 5,806 4,693
Adjusted net income $ 3,247 $
2,206 $ 8,536 $ 7,528
Net income (loss) per diluted share $ 0.03
$ (0.02 ) $ (0.03 )
$ (0.12 ) Weighted average diluted
shares outstanding 44,935 42,134
42,771 41,865 Adjusted net
income per share $ 0.07 $ 0.05
$ 0.19 $ 0.17 Adjusted weighted
average diluted shares outstanding 44,935
43,945 45,005 43,191 Options,
warrants and restricted stock, treasury method included in adjusted
weighted average diluted shares above - 1,812
2,234 1,326
Weighted average diluted shares
outstanding 44,935 42,134
42,771 41,865 TECHTARGET, INC.
Financial Guidance for the Three Months Ended March 31, 2011
(in $000's) For the Three Months
Ended March 31, 2011
Range Revenues $ 22,500 $
23,500 Adjusted EBITDA $ 3,600
$ 4,400 Depreciation, amortization and stock-based
compensation 3,845 3,845 Interest and other income, net 25 25
Provision for income taxes 250 600
Net loss
$ (470 )
$ (20 )
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