TechTarget, Inc. (NASDAQ: TTGT) today announced financial
results for the three months ended September 30, 2011.
“Despite the continued challenging macro-economic conditions, we
are pleased to report revenue is up 18% and adjusted EBITDA is up
39% for the third quarter,” said Greg Strakosch, CEO of TechTarget.
“The investments that we have made in our new Activity
Intelligence™ product platform and direct international operations
continue to pay off.”
Total Q3 2011 revenues increased 18% to $25.9 million compared
to Q3 2010. Q3 2011 online revenue increased by 15% to $21.8
million compared to Q3 2010. Online revenues represented 84% of
total Q3 2011 revenues. Q3 2011 events revenue increased by 32% to
$4.1 million compared to Q3 2010 and represented 16% of total Q3
2011 revenues.
Adjusted EBITDA (earnings before interest, other income and
expense, income taxes, depreciation, and amortization, as further
adjusted to eliminate stock-based compensation) for Q3 2011
increased 39% to $5.4 million compared to $3.9 million for Q3
2010.
Total gross profit margin increased for Q3 2011 to 73%, compared
to 72% for Q3 2010. Online gross profit margin increased for Q3
2011 to 75%, compared to 74% for Q3 2010. Events gross profit
margin increased for Q3 2011 to 64%, compared to 63% for Q3
2010.
Net income was $1.0 million for Q3 2011 compared to a net loss
of $0.6 million in Q3 2010. Adjusted net income (net income
adjusted to eliminate amortization, stock-based compensation
expense and the related income tax impact of these charges) for Q3
2011 was $2.6 million compared to $2.1 million for Q3 2010. Net
income per basic share for Q3 2011 was $0.03 compared to a net loss
per basic share of $0.01 for Q3 2010. Adjusted net income per share
(adjusted net income divided by adjusted weighted average diluted
shares outstanding) for Q3 2011 was $0.06 compared to $0.05 for Q3
2010.
The Company’s balance sheet and financial position remain
strong. As of September 30, 2011, the Company’s cash, cash
equivalents and investments totaled $56.3 million, working capital
is $60.4 million, and the Company has no outstanding bank debt.
Recent Company Highlights
- Announced the release of TechTarget
Social Engage™, an innovative new social media platform that
enables technology buyers to collaborate with other buyers
simultaneously across different online media. Dell was the first
customer to take advantage of this platform for their “The power to
do more” campaign.
- Announced the launch of three new
websites aimed at the cloud market. The sites are:
SearchCloudProvider.com™. SearchCloudSecurity.com™ and
SearchCloudStorage.com™. These new sites build on the Company’s
existing portfolio of cloud and virtualization media by targeting
the specific areas of cloud computing that are experiencing the
most rapid growth and are in need of the most resources. These
sites complement the existing properties in the TechTarget cloud
and virtualization portfolio which include:
SearchCloudComputing.com™, SearchServerVirtualization.com™,
SearchVirtualDesktop.com™, SearchVirtualStorage.com™ and
BrianMadden.com™.
- Was the official media sponsor for the
fifth consecutive year at VMworld for the “Best of VMworld” Award
program in Las Vegas in September and for the second consecutive
year in Copenhagen in October.
Financial Guidance
In the fourth quarter of 2011, the Company expects total
revenues to be within the range of $28.7 million to $30.1 million;
online revenues within the range of $26.0 million to $27.0 million;
events revenues within the range of $2.7 million to $3.1 million
and adjusted EBITDA to be within the range of $8.5 million to $9.5
million.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference
call at 5:00 p.m. (Eastern Time) today (November 9, 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 888-679-8035 (US callers) or
617-213-4848 (International callers) ten minutes prior to the
call and referencing participant pass code 70165315 for both
domestic and international callers. Participants may pre-register
for the call at:
https://www.theconferencingservice.com/prereg/key.process?key=PKY9Y7T7L.
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 November 9, 2011 at 8:00 p.m. ET through
December 9, 2011 at 11:59 p.m. ET. To listen to the replay, dial
888-286-8010 and use the pass
code 52553994. International callers should dial
617-801-6888 and also use the pass code 52553994 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. SearchCloudProvider.com, SearchCloudComputing.com,
SearchServerVirtualization.com, SearchCloudSecurity.com,
SearchCloudStorage.com, SearchVirtualDesktop.com,
SearchVirtualStorage.com, BrianMadden.com and TechTarget Social
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 EndedSeptember
30,
Nine Months EndedSeptember
30,
2011 2010 2011 2010 (Unaudited)
Revenues: Online $ 21,763 $ 18,878 $ 66,294 $ 58,065 Events
4,129 3,123 10,266 10,052 Total revenues
25,892 22,001 76,560 68,117 Cost of revenues: Online(1) 5,547 4,921
16,873 15,043 Events(1) 1,488 1,149 3,607
3,459 Total cost of revenues 7,035 6,070
20,480 18,502 Gross profit 18,857 15,931 56,080
49,615 Operating expenses: Selling and marketing(1) 10,182 8,984
28,997 27,815 Product development(1) 1,874 2,087 5,690 6,623
General and administrative(1) 3,105 3,567 10,362 11,671
Restructuring charge — — 384 — Depreciation 692 592 2,001 1,759
Amortization of intangible assets 955 1,126
3,030 3,401 Total operating expenses 16,808 16,356 50,464
51,269 Operating income (loss) 2,049 (425 ) 5,616 (1,654 ) Interest
income, net 20 79 32 270 Income (loss)
before provision for income taxes 2,069 (346 ) 5,648 (1,384 )
Provision for income taxes 1,106 266 2,942
1,122 Net income (loss) $ 963 $ (612 ) $ 2,706 $ (2,506 )
Net income (loss) per common share: Basic $ 0.03 $ (0.01 ) $ 0.07 $
(0.06 ) Net income (loss) per common share: Diluted $ 0.02 $ (0.01
) $ 0.07 $ (0.06 ) Weighted average common shares outstanding:
Basic 38,511 43,209 38,261 42,878
Weighted average common shares outstanding: Diluted 40,008
43,209 40,578 42,878
(1) Amounts include stock-based
compensation expense as follows:
Cost of online revenues $ 65 $ (38 ) $ 197 $ 136 Cost of events
revenues 22 23 64 69 Selling and marketing 1,149 1,708 3,389 5,172
Product development 111 104 317 420 General and administrative 361
785 1,687 3,369
TECHTARGET, INC. Reconciliation of
Net Income (Loss) to Adjusted EBITDA (in $000’s)
For the Three Months
EndedSeptember 30,
For the Nine Months
EndedSeptember 30,
2011 2010 2011 2010 (Unaudited)
Net income (loss) $ 963 $
(612 )
$ 2,706 $ (2,506 )
Interest income, net (20 ) (79 ) (32 ) (270 ) Provision for income
taxes 1,106 266 2,942 1,122 R Restructuring charge - - 384 -
Depreciation 692 592 2,001 1,759 Amortization of intangible assets
955 1,126 3,030 3,401
EBITDA
3,696 1,293 11,031
3,506 Stock-based compensation expense 1,708
2,582 5,654 9,166
Adjusted EBITDA $
5,404 $ 3,875 $ 16,685 $
12,672
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
EndedSeptember 30,
For the Nine Months
EndedSeptember 30,
2011 2010 2011 2010 (Unaudited)
Net income (loss) $ 963 $
(612 )
$ 2,706 $ (2,506 )
Amortization of intangible assets 955 1,126 3,030 3,401
Restructuring charge - - 384 - Stock-based
compensation expense 1,708 2,582 5,654 9,166 Impact of income taxes
(1,028 ) (1,002 ) (3,481 ) (3,115 )
Adjusted net income $ 2,598 $
2,094 $ 8,293 $ 6,946
Net income (loss) per diluted share $ 0.02
$ (0.01 )
$ 0.07 $ (0.06
) Weighted average diluted shares outstanding
40,008 43,209 40,578
42,878 Adjusted net income per share
$ 0.06 $ 0.05 $ 0.20
$ 0.15 Adjusted weighted average diluted shares
outstanding 40,008 45,459
40,578 45,029 Options, warrants and restricted
stock, treasury method included in adjusted weighted average
diluted shares above - 2,250 - 2,151
Weighted average diluted shares outstanding
40,008 43,209 40,578
42,878 TECHTARGET, INC. Financial Guidance
for the Three Months Ended December 31, 2011 (in $000's)
For the Three MonthsEnded
December 31, 2011
Range Revenues $ 28,700 $
30,100 Adjusted EBITDA $ 8,500
$ 9,500 Depreciation, amortization and stock-based
compensation $ 3,325 $ 3,325 Interest and other income, net $ 20 $
20 Provision for income taxes $ 2,650 $ 3,160
Net income
$ 2,545 $ 3,035
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