TechTarget, Inc. (NASDAQ: TTGT) today announced financial
results for the three months ended June 30, 2011.
“Despite the cautious economic environment, we were able to grow
online revenue 17% in the quarter,” said Greg Strakosch, CEO of
TechTarget. “We are able to grow substantially faster than the
market due to share gains from our new Activity Intelligence™
platform and continued robust growth of geo-targeted revenues
outside the US.”
Total Q2 2011 revenues increased 12% to $28.1 million compared
to Q2 2010. Q2 2011 online revenue increased by 17% to $24.2
million compared to Q2 2010. Online revenues represented 86% of
total Q2 2011 revenues. Q2 2011 events revenue decreased by 11% to
$3.9 million compared to Q2 2010 and represented 14% of total Q2
2011 revenues.
Adjusted EBITDA (earnings before interest, other income and
expense, income taxes, depreciation, and amortization, as further
adjusted to eliminate stock-based compensation and restructuring
charges) for Q2 2011 increased 20% to $7.6 million compared to $6.3
million for Q2 2010.
Total gross profit margin increased for Q2 2011 to 75%, compared
to 74% for Q2 2010. Online gross profit margin increased for Q2
2011 to 76%, compared to 75% for Q2 2010. Events gross profit
margin remained flat at 69% for Q2 2011 and Q2 2010.
Net income was $1.8 million for Q2 2011 compared to $0.4 million
in Q2 2010. Adjusted net income (net income adjusted to eliminate
amortization, stock-based compensation expense, restructuring
charges and the related income tax impact of these charges) for Q2
2011 was $4.0 million compared to $3.9 million for Q2 2010. Net
income per basic share for Q2 2011 was $0.05 compared to $0.01 for
Q2 2010. Adjusted net income per share (adjusted net income divided
by adjusted weighted average diluted shares outstanding) for Q2
2011 was $0.10 compared to $0.09 for Q2 2010.
The Company’s balance sheet and financial position remain
strong. As of June 30, 2011, the Company’s cash, cash equivalents
and investments totaled $54.4 million, working capital is $45.2
million, and the Company has no outstanding bank debt.
Recent Company Highlights
- Announced a major upgrade to its
Activity Intelligence suite of products and services; TechTarget’s
new Activity Intelligence Dashboard gives marketers and sales
representatives an industry-changing view of their prospects with
Enhanced Contact Profiles™ and Account Intelligence™ activity
details including insights on the research activities of technology
buying teams across entire companies.
- Announced the TechTarget Engage™
portfolio, which includes both demand and brand-focused offerings
that accelerate IT user interaction with key marketer content
assets, such as white papers, videos and webcasts. The TechTarget
Engage solutions also provide opportunities for the integration of
key social streams and communities.
- Announced alliance with RapidBuyr, the
only national and local daily deals site specifically for small and
mid-sized businesses, to provide daily deals on business products
and services to TechTarget members. Under the initial terms of the
alliance, TechTarget will be RapidBuyr’s exclusive partner in the
business-to-business (BtoB) technology media segment.
- Recognized for the 5th time by The
Boston Business Journal as one of the Best Places to Work in
Massachusetts. The honor recognizes TechTarget’s achievements in
creating a positive work environment that attracts and retains
employees through a combination of employee satisfaction, working
conditions and company culture. Other companies recognized in this
year’s list include; Accenture, Comcast, Digitas, and
Microsoft.
Financial Guidance
In the third quarter of 2011, the Company expects total revenues
to be within the range of $25.3 million to $26.7 million; online
revenues within the range of $21.5 million to $22.5 million; events
revenues within the range of $3.8 million to $4.2 million and
adjusted EBITDA to be within the range of $5.0 million to $6.0
million. When compared to the third quarter of 2010, these expected
results translate into total revenue growth of approximately 15% to
21% and adjusted EBITDA growth of 29% to 55% for the third quarter
of 2011.
The Company is re-affirming the annual guidance for the full
year 2011 that it raised on May 9, 2011 as follows: online revenue
growth to be approximately 15%, event revenue growth to be
approximately 5%, adjusted EBITDA growth to be approximately 37%
and adjusted EBITDA margin to be approximately 25%.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference
call at 5:00 p.m. (Eastern Time) today (August 8, 2011).
Supplemental financial information and prepared remarks for the
conference call will be posted to the Investor Information 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) 679-8034 (US callers) or
617-213-4847 (International callers) ten minutes prior to the
call and referencing participant pass code 67413952 for both
domestic and international callers. Participants may pre-register
for the call at:
https://www.theconferencingservice.com/prereg/key.process?key=P9ARFELQH.
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 8, 2011 at 7:30 p.m. ET through
September 9, 2011 at 11:59 p.m. ET. To listen to the replay, dial
888-286-8010 and use the pass
code 85703272. International callers should dial
617-801-6888 and also use the pass code 85703272 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 and restructuring charges. 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, stock-based compensation and
restructuring charges, 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 over 100
technology-specific websites, 10 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, Enhanced Contact Profiles,
Account Intelligence and TechTarget Engage are trademarks 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) Three Months
Ended
June 30,
Six Months Ended
June 30,
2011 2010 2011 2010 (Unaudited)
Revenues: Online $ 24,151 $ 20,626 $ 44,531 $ 39,187 Events
3,951 4,447 6,137 6,929 Total revenues 28,102
25,073 50,668 46,116
Cost of revenues:
Online(1) 5,720 5,180 11,326 10,122 Events(1) 1,242
1,373 2,119 2,311 Total cost of revenues 6,962
6,553 13,445 12,433
Gross profit
21,140 18,520 37,223 33,683
Operating expenses:
Selling and marketing(1) 10,184 9,420 18,815 18,831 Product
development(1) 1,870 2,180 3,816 4,535 General and
administrative(1) 3,458 3,757 7,257 8,104 Restructuring charge 384
- 384 - Depreciation 668 642 1,309 1,167 Amortization of intangible
assets 989 1,140 2,075 2,275 Total
operating expenses 17,553 17,139 33,656 34,912
Operating income (loss)
3,587 1,381 3,567 (1,229 ) Interest income, net 6 84
12 191 Income (loss) before provision for
income taxes 3,593 1,465 3,579 (1,038 )
Provision for income taxes
1,775 1,019 1,836 856 Net income (loss)
$ 1,818 $ 446 $ 1,743 $ (1,894 ) Net income (loss) per common
share: Basic $ 0.05 $ 0.01 $ 0.05 $ (0.04 ) Net income (loss) per
common share: Diluted $ 0.04 $ 0.01 $ 0.04 $ (0.04 ) Weighted
average common shares outstanding: Basic 38,332
42,944 38,136 42,712 Weighted average common shares
outstanding: Diluted 40,691 45,053 40,863
42,712
(1) Amounts include stock-based
compensation expense as follows:
Cost of online revenues $ 62 $ 86 $ 132 $ 174 Cost of events
revenues 20 20 42 46 Selling and marketing 1,082 1,535 2,240 3,464
Product development 100 155 206 316 General and administrative 682
1,359 1,326 2,584
TECHTARGET, INC.
Reconciliation of Net Income
(Loss) to Adjusted EBITDA
(in $000’s)
For the Three Months Ended
June 30,
For the Six Months Ended
June 30,
2011 2010 2011 2010 (Unaudited)
Net income (loss) $ 1,818 $
446 $ 1,743 $ (1,894 )
Interest income, net (6 ) (84 ) (12 ) (191 ) Provision for income
taxes 1,775 1,019 1,836 856 R Restructuring charge 384 - 384
- Depreciation 668 642 1,309 1,167 Amortization of intangible
assets 989 1,140 2,075 2,275
EBITDA 5,628 3,163
7,335 2,213 Stock-based compensation expense
1,946 3,155 3,946 6,584
Adjusted
EBITDA $ 7,574 $ 6,318 $
11,281 $ 8,797
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 Ended
June 30,
For the Six Months Ended
June 30,
2011 2010 2011 2010 (Unaudited)
Net income (loss) $ 1,818 $
446 $ 1,743 $ (1,894 )
Amortization of intangible assets 989 1,140 2,075 2,275
Restructuring charge 384 - 384 -
Stock-based compensation expense 1,946 3,155 3,946 6,584 Impact of
income taxes (1,143 ) (875 ) (2,453 )
(1,975 )
Adjusted net income $ 3,994 $
3,866 $ 5,695 $ 4,990
Net income (loss) per diluted share $ 0.04
$ 0.01 $ 0.04 $ (0.04
) Weighted average diluted shares outstanding
40,691 45,053 40,863
42,712 Adjusted net income per share
$ 0.10 $ 0.09 $ 0.14
$ 0.11 Adjusted weighted average diluted shares
outstanding 40,691 45,053
40,863 44,813
Options, warrants and restricted stock,
treasurymethod included in adjusted weighted averagediluted shares
above
- - - 2,101
Weighted average
diluted shares outstanding 40,691
45,053 40,863 42,712
TECHTARGET, INC. Financial Guidance for the
Three Months Ended September 30, 2011 (in $000's)
For the Three Months
Ended September 30, 2011
Range Revenues $ 25,300 $
26,700 Adjusted EBITDA $ 5,000
$ 6,000 Depreciation, amortization and stock-based
compensation $ 3,425 $ 3,425 Interest and other income, net $ 25 $
25 Provision for income taxes $ 792 $ 1,287
Net income
$ 808 $ 1,313
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