TechTarget, Inc. (TTGT) on Q2 2024 Results - Earnings Call Transcript
Operator: Good afternoon. Thank you for attending today's TechTarget Reports Second Quarter 2024 Conference Call and Webcast. My name is [Gela], and I'll be moderator for today [Operator Instructions]. I would now like to pass the conference over to our host, Charlie Rennick. Charlie, you may proceed. Charlie Rennick: Thank you, [Gela], and good afternoon, everyone. The speakers joining us here today are Greg Strakosch, our Executive Chairman; Mike Cotoia, our Chief Executive Officer; and Dan Noreck, our Chief Financial Officer. Before turning the call over to Greg, we would like to remind everyone on the call of our earnings release process. As previously announced, in order to provide you with an update on our business in advance of the call, we posted our shareholder letter on the Investor Relations section of our Web site and furnished it on an 8-K. You can also find these materials at the SEC free of charge at the SEC's Web site at www.sec.gov. A corresponding webcast as well as a replay of this conference call will be made available on the Investor Relations section of our Web site. Following Greg's introductory remarks, the management team will be available to answer questions. Any statements made today by TechTarget that are not factual, including during the Q&A, may be considered forward-looking statements. These forward-looking statements, which are subject to risks and uncertainties, are based on assumptions and are not guarantees of our future performance. Actual results may differ materially from our forecast and from these forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including those discussed in the Risk Factors section of our most recent periodic reports on Form 10-Q and 10-K. These statements speak only as of the date of this call and TechTarget undertakes no obligation to revise or update any forward-looking statements in order to reflect events that may arise after this conference call, except as required by law. Finally, we may also refer to certain financial measures not prepared in accordance with GAAP. A reconciliation of certain of these non-GAAP financial measures to the most comparable GAAP measures to the extent available without unreasonable efforts accompanies our shareholder letter. And with that, I'll turn the call over to Greg. Greg Strakosch: Great. Thank you, Charlie. We are pleased to report strong performance for the second quarter of 2024 with revenue exceeding our target and increasing 14% sequentially and 1% year-over-year. As we noted in our first quarter shareholder letter, customers continue to be cautious about their budget in this ongoing pressure on surrounding high interest rates, inflation, international tension and the upcoming presidential election. This trend continued in the second quarter as technology vendors implemented additional discretionary expense reductions, layoffs and other cost cutting measures. In our experience, investors reward technology companies for revenue growth and low interest rate environment, which in turn incentivizes technology vendors to invest in sales and marketing. We continue to make meaningful progress across our business and are confident that the investments we are making today and our combination with Informa Tech's digital businesses will position TechTarget as a leading comprehensive solution in a growing yet fragmented market and drive continued performance and value for our shareholders, customers, partners and employees. I will now open the call to questions. Operator: [Operator Instructions] Our first question comes from Justin Patterson with the company, KeyBanc. Justin Patterson: Could you talk first just on the macro side, some of the trends you're starting to see in Q3. How has the environment changed versus what you saw over the course of Q2? And then secondarily, could you also elaborate more on the opportunity around TechTarget Market Monitor and how you're going to market there? Mike Cotoia: In terms of macro trends, Q3 versus Q2, I'd say it's very similar in terms of what we've experienced really over the last four quarters, continued interest rates being high, inflation, as Greg mentioned in the shareholder letter, international tensions and then we have an upcoming presidential election. None of these are catalyst to really explode and help out the market. In terms of how we're navigating through this, I think we've done a really good job in terms of our product development, our product portfolio, how we engage with the talents, our product offerings and our value proposition that can really benefit our customers across their entire go-to-market strategy from their strategy to content creation, positioning to brand and content, all the way to demand and intent. We have a lot of different avenues to walk into a customer even during a downturn. So when a customer might not be ready to do XYZ, there's an opportunity to drive value through other areas of the business. So I think it's pretty consistent from Q2 to Q3. And in terms of Market Monitor, that was one of our priority engine releases that helps our clients really understand the real time dynamics in the markets that they serve, in the markets that they go after. So that will include the types of accounts and buying teams that are currently actively researching their respective topics and technologies. We can then provide to them the topics that are generating the most interest within those segments, provides competitive and market insights, we can show top performing content and how that resonates. So as you can see, that really helps our customers mobilize and focus on the top of talents, top prospects, top customers with the market insights that TechTarget can deliver with their go-to-market strategy. Operator: Our next question comes from Joshua Reilly with the company, Needham. Joshua Reilly: Once again, nice job in a pretty challenging macro environment. So if you look at the layoffs that you've seen across a lot of your customers, a lot of your kind of champions within these customers have been displaced over the last 18 months. Are you seeing any stability in their ability to land positions at new potential customers and bring you guys back into their go-to-market process, or is there still too much fragmentation and uncertainty with some of these employees getting new positions? Mike Cotoia: Josh, we see customers that have been impacted by layoffs. And so far to date, we've seen them land in other positions. And typically when that happens, that's a good thing for TechTarget, they bring us in, they understand our value proposition. And I don't want to say we're the first company they call, but I'm going to guess we're on top of the dial when they make that phone call. So right now, we're seeing them get impacted, we've seen them land in new positions, and then we see them call us and bring us in. So that really hasn't changed over the last few quarters. Joshua Reilly: And then as you -- I know you're going to be describing this more at the September Analyst Day, but as you've had some more time to review the assets of Informa Tech, maybe just a couple of things. Any updated thoughts around the timeline to close the transaction? And then secondarily, any updated thoughts or confidence around the synergies and combined growth trajectory when the deal closes? Mike Cotoia: What I'd say in the combination, we continue to make good progress in the combination. We did file the S-4 back at the end of June timeframe. We're on track. We've scheduled an investor morning on September 19th. And yes, we've got to understand the assets of Informa Tech, I know the asset, the people, the business, how they work in our proposed operating model going forward. We've done a lot of diligence on that, on both sides. So we’ve expanded and laid out a proposed operating model. We've looked at the executive team, what we call executive minus one, executive minus one. So we've made all the right moves to make sure that we're ready for the close, which we expect to be on time. In terms of the synergies, what we say here, we still feel very confident on the numbers that we stated. It was $25 million in expense and $20 million in revenue over the course of the couple of years post close and we still feel very confident in those numbers. Operator: Our next question comes from Bruce Goldfarb with the company, Lake Street Capital Markets. Bruce Goldfarb: Greg, Michael, congratulations on your results. Can you comment on demand trends, what are you seeing international versus North America? Mike Cotoia: I think you see a little bit of -- we've been pretty consistent, Bruce, in terms of -- if you go back to last August, a year ago today when we had our earnings call, we said we feel that we're going to be navigating the bottom right now. We hit the bottom, we're going to be navigating through that. And I think that's pretty consistent across the board, what you see in the US, you also see internationally. You might see some areas in some regions internationally that might be pinched a little tougher because some companies, a lot of the larger organizations are trying to centralize their budget where they might want to manage everything out of North America and then allocate it to the respective fields, but have access to it in a centralized manner. So I think what we see here in the United States, we see across EMEA as well as APAC. Again, there are -- some of the APAC regions, we're going to APAC, you see some of the consolidation and centralization of projects coming back to the global headquarters. A lot of those companies are based in the US but it's fairly consistent across the board. Bruce Goldfarb: And then are you seeing -- in terms of seasonal trends, are you seeing any signs of a Q4 budget flush? And for the second half of the year, are you seeing any -- is there a probability we'll see more long term contracts? Mike Cotoia: What I can tell you is that it was good to see -- when we look at the business, when we see signs of seasonality trends to us at the positive side. So from Q1 to Q2, our revenue grew sequentially 14%. We had a year-over-year increase of 1% of revenue. But that Q1 to Q2 was, again, something that we had predicted back in February and May when we made -- when we laid out the budget, that's a good sign. And that -- historically, we see Q1 being the lowest quarter, Q2 happen to jump, Q3 off slightly from Q2 and then the ramp up in Q4. So based on what we've seen so far, we like the size in terms of the seasonality, historical timelines that are coming back in the business. And as you recall, we didn't see that last year. It was pretty flat throughout the quarter. It's roughly $57 million to $58 million every quarter. So it was a good sign. I don't want to predict what we'll see in Q4. Again, we have high interest rates, inflation, international tensions and upcoming presidency. But typically, we have seen when interest rates get cut, investors really reward our technology customers around growth and you see technology companies invest more in sales and marketing. What we're seeing today is what we've seen in the last year and half, so a lot of investments with our companies on R&D. And that R&D has to turn into ROI. And so one of the triggers that we see or one of the catalysts we've historically seen is a cut in interest rate. Bruce Goldfarb: And then in terms of product road map, where do you expect to invest post the Informa Tech combination after close? Mike Cotoia: Well, I'll tell you what we're investing now for TechTarget because it shouldn't really change [indiscernible] [these days] much. As you saw in Q2, we announced our account intent [fees]. So again, it's a priority engine based offering that has continuous stream of our first party account insights into CRM and ABM systems. So this is a separately purchased subscription that plugs into our clients' current workflows. And clients can identify, they can engage and convert target accounts to programmatic and social advertising. We do lot of prioritization, ABM segmentation and creation, and it's really valuable insights for sellers. We also announced a partnership with 6sense Revenue AI platform for our joint customers. With 6sense and TechTarget have a lot of joint customers, it needs our account insight phase through a direct integration right in the success as revenue AI platform to easily leverage our first party insights. It actually drives value for both offerings. So you can expect to see more integrations around ABM platforms and other types of platforms that organizations have. And previous -- Justin brought up Market Monitor and what we're seeing on that how many insights. Again, so this is all offshoots of priority engine and [indiscernible] the road map is to consolidate all the offerings into a platform to create unified solution for clients to manage. So as we've talked about, we really can help -- and we bring value to our customers across their entire go-to-market strategy from intelligence and advisory, with their strategy and their product marketing positioning on the way to brand and content to intent and demand that converts and drives that revenue and that demand for the R&D investments that our customers made. That's going to be very consistent, plan on continue to accelerate those opportunities and making sure we have a unified platform to bring all of our solutions together for our customers to leverage across their go-to-market. Operator: Our next question comes from Bhavin Shah with the company, Deutsche Bank. Bhavin Shah: First one, just kind of in the past, you guys talked about the opportunity to benefit from the replication of third party cookies. Now that kind of seems like it's no longer happening from the Google side. Do you have to kind of adjust your go-to-market messaging or anything kind of as you go forward? Mike Cotoia: First of all, market has been educated over the last couple of years, several years. We got in the value of first party versus third party. So if anything, Google sort of caught between a rock and a hard place in terms of what they have to do and what they've been doing with regulators across the EU and across the United States. But across -- but over the last two years, the conversations with marketers, it’s really clear that first party insights or permission based audience are really the quality and the go-to sorts of to drive impact. So what I’ve learned and what we [indiscernible] that they go into sort of come in this in-between where they're going to have to be very transparent on the options of whether you want to have your cookies tracked and not tracked. And I don't know about you but I'm going to bet with a lot of those folks that have that option present it right in front of them, while they're doing the research, they're going to click now on that. So things may change a little bit. But I think we've actually benefited for the last couple of years of education, what's going on in the market and the value of first party data and permission based audiences. Bhavin Shah: And just a quick follow-up. I noted in the shareholder letter that you guys didn't discuss kind of 2024 guidance. Should we kind of rely upon that or is that no longer valid? Mike Cotoia: Well, we are very confident that we're going to be closing the transaction with Informa Tech in early Q4. Therefore, it's really not going to be an actual number that is going to be moved going forward. Our go forward focus is going to be on the combined companies coming together in Q4 moving forward. So we just thought we don't want to cause confusion in the market on that. We want to make sure that, that was communicated and published on our Q3 numbers today. Operator: At this time there are no other questions registered in the queue. Thank you for your participation and enjoy the rest of your day.
TechTarget, Inc. (NASDAQ: TTGT) Under Investigation Amid Accounting Errors
TechTarget, Inc. (NASDAQ: TTGT) is currently under the microscope as the Rosen Law Firm launches an investigation into allegations of misleading business information. This scrutiny comes in the wake of TechTarget's announcement on April 18, 2025, revealing that certain financial statements were unreliable due to accounting errors. These inaccuracies, involving goodwill impairment, changes in contingent consideration, and amortization of intangibles, have significantly impacted related tax matters, leading to a notable 12.7% drop in TechTarget's stock on April 21, 2025.
The Rosen Law Firm, renowned for its prowess in securities class actions, is gearing up for a class action to recoup investor losses. They propose a contingency fee arrangement, ensuring that investors are not burdened with out-of-pocket fees. The firm boasts an impressive record, highlighted by securing the largest securities class action settlement against a Chinese company and reclaiming hundreds of millions for investors.
Amidst this turmoil, TechTarget is poised to unveil its quarterly earnings on July 1, 2025. Wall Street analysts have pegged the earnings per share at $0.08, with anticipated revenue hovering around $106.2 million. This forthcoming earnings release is laden with expectations, as it unfolds amidst the ongoing investigation, placing additional pressure on TechTarget to either meet or surpass market expectations to restore investor confidence.
As of now, TechTarget's stock stands at $7.02, marking a 0.57% decline with a $0.04 change. The stock has seen a day's fluctuation between $6.96 and $7.29. Over the past year, it peaked at $35.10 and dipped to a low of $6.51. The company's market capitalization is estimated at approximately $501.9 million, with a trading volume of 483,423 shares on the NASDAQ exchange.
The upcoming earnings report is pivotal for TechTarget as it navigates through the investigation and aims to stabilize its stock. Investors are keenly awaiting the company's performance update and any news regarding the investigation's progress, which could significantly sway TechTarget's market standing and investor sentiment.
TechTarget, Inc. (NASDAQ: TTGT) Quarterly Earnings and Investigation Update
- TechTarget, Inc. (NASDAQ:TTGT) is set to release its quarterly earnings with an estimated EPS of $0.08 and projected revenue of $106.2 million.
- The company is currently under investigation by the Rosen Law Firm for potential misleading business information.
TechTarget, Inc. (NASDAQ:TTGT), a provider of online content and marketing services for technology companies, is poised to announce its quarterly earnings on Thursday, June 26, 2025. Wall Street analysts have set the earnings per share (EPS) expectation at $0.08, with a projected revenue of approximately $106.2 million.
Currently, TechTarget is the subject of an investigation by the Rosen Law Firm for potential securities claims. This investigation stems from allegations that the company may have disseminated misleading business information to the public, leading to a class action being prepared to recover investor losses.
Despite the ongoing legal scrutiny, TechTarget's revenues for the first five months of 2025 have reportedly met the guidance provided for the first half of the year. This financial update was shared ahead of Informa PLC's Annual General Meeting Trading Update, noting that Informa PLC holds a majority stake in TechTarget.
The price-to-sales (P/S) ratio stands at 2.29, suggesting that investors are willing to pay $2.29 for every dollar of sales. Additionally, the enterprise value to sales ratio is 2.96, and the enterprise value to operating cash flow ratio is 11.23.
The company's debt-to-equity ratio is 1.72, pointing to a higher level of debt compared to equity. However, TechTarget boasts a strong current ratio of 10.49, indicating a robust ability to cover short-term liabilities with short-term assets.
TechTarget, Inc. (NASDAQ:TTGT) Financial Overview and Market Position
- TechTarget, Inc. (NASDAQ:TTGT) is set to release its quarterly earnings on June 19, 2025, with an estimated EPS of $0.08 and projected revenue of $106.2 million.
- Despite its reliance on debt, as indicated by a debt-to-equity ratio of 1.72, investor confidence is reflected in a price-to-sales ratio of 2.11.
TechTarget, Inc. (NASDAQ:TTGT) is a prominent player in the technology media and purchase intent-driven marketing and sales services industry. The company provides specialized online content and services that help technology vendors reach targeted audiences. As a majority shareholder, Informa PLC plays a significant role in TTGT's operations and strategic direction. TTGT's competitors include companies like Gartner and Forrester Research, which also offer technology-related insights and services.
On June 19, 2025, TTGT is set to release its quarterly earnings, with Wall Street estimating an earnings per share (EPS) of $0.08 and projected revenue of approximately $106.2 million. This comes after Informa TechTarget announced that its revenues for the first five months of 2025 align with the guidance for the first half of the year. This update precedes Informa PLC's Annual General Meeting Trading Update on June 17, 2025.
The price-to-sales ratio of 2.11 suggests that investors are still willing to pay $2.11 for every dollar of sales, showing some confidence in the company's revenue-generating potential. TTGT's financial structure reveals a debt-to-equity ratio of about 1.72, indicating a higher reliance on debt compared to equity. This could pose risks if the company cannot manage its debt effectively. However, the current ratio of approximately 10.49 suggests strong liquidity, meaning TTGT is well-positioned to cover its short-term liabilities. The enterprise value to sales ratio of 2.77 and enterprise value to operating cash flow ratio of 10.53 provide additional insights into the company's valuation and cash flow efficiency.
Informa TechTarget, Inc. (NASDAQ:TTGT) Quarterly Earnings Preview
- Informa TechTarget, Inc. (NASDAQ:TTGT) is set to release its quarterly earnings with an anticipated EPS of $0.02 and revenue of $104.2 million.
- The company reported a revenue of $285 million in 2024, with a combined revenue of $490 million, despite a negative P/E ratio of -17.71.
- TTGT's financial ratios indicate a moderate investor confidence and strong liquidity, with a price-to-sales ratio of 2.34 and a current ratio of 10.49.
Informa TechTarget, Inc. (NASDAQ:TTGT) is a key player in the B2B technology sector, known for accelerating growth through its innovative solutions. The company focuses on providing insights and strategies to help businesses thrive in the tech industry. As TTGT prepares to release its quarterly earnings on June 12, 2025, Wall Street anticipates an earnings per share of $0.02 and a revenue of approximately $104.2 million.
In 2024, TTGT reported a revenue of $285 million, with a combined company revenue reaching $490 million, as highlighted by Business Wire. Despite these figures, TTGT has a negative price-to-earnings (P/E) ratio of -17.71, indicating that the company is currently experiencing losses. This negative P/E ratio is consistent with a negative earnings yield of -5.65%, reflecting the company's current financial challenges.
TTGT's price-to-sales ratio is about 2.34, suggesting that investors are willing to pay $2.34 for every dollar of sales. This indicates a moderate level of investor confidence in the company's sales potential. Additionally, the enterprise value to sales ratio is approximately 3.01, which reflects the company's valuation relative to its sales. This ratio helps investors understand how much they are paying for the company's sales.
The company's enterprise value to operating cash flow ratio is around 11.43, indicating how many times the operating cash flow can cover the enterprise value. This ratio provides insight into the company's ability to generate cash flow relative to its valuation. TTGT's debt-to-equity ratio is approximately 1.72, showing that it has more debt than equity, which could be a concern for investors. However, the current ratio is a robust 10.49, indicating strong liquidity and the ability to cover short-term liabilities.
Informa TechTarget, Inc. (NASDAQ:TTGT) Quarterly Earnings Preview
Informa TechTarget, Inc. (NASDAQ:TTGT) is a key player in the B2B technology sector, known for accelerating growth. The company is set to release its quarterly earnings on June 5, 2025. Wall Street anticipates earnings per share of $0.02 and revenue of approximately $98.9 million. This follows a strong performance in 2024, where TTGT reported a revenue of $285 million.
The price-to-sales ratio of 2.46 suggests that investors are willing to pay $2.46 for every dollar of sales, reflecting some confidence in the company's sales potential. The enterprise value to sales ratio of 3.13 provides further insight into TTGT's valuation relative to its sales. This ratio helps investors understand how the market values the company's sales. Additionally, the enterprise value to operating cash flow ratio of 11.86 indicates how many times the operating cash flow can cover the enterprise value, offering a perspective on the company's cash flow efficiency.
TTGT's financial health is also highlighted by its debt-to-equity ratio of 1.72, showing a higher proportion of debt compared to equity. This ratio is crucial for understanding the company's financial leverage. On the liquidity front, TTGT boasts a strong current ratio of 10.49, indicating its ability to cover short-term liabilities with short-term assets, which is a positive sign for investors.
As TTGT looks to the future, the company aims to strengthen its foundations in areas such as brands, products, go-to-market strategies, and talent development. This strategic focus is expected to support its growth trajectory and address the challenges highlighted by its current financial metrics.
TechTarget, Inc. (NASDAQ: TTGT) Financial Overview and Challenges
- TechTarget, Inc. (NASDAQ: TTGT) reported an EPS of $0.23, surpassing estimates but fell short on revenue expectations with $60.88 million.
- Despite financial challenges, TTGT shows strong liquidity with a current ratio of 10.49 and has a debt-to-equity ratio of 1.72.
TechTarget, Inc. (NASDAQ: TTGT) is a provider of specialized online content and marketing services targeting technology vendors. It competes with industry giants like Gartner and Forrester Research. On May 29, 2025, TTGT announced its earnings, showcasing an EPS of $0.23, which significantly exceeded the analysts' expectations of $0.02. However, the company's revenue of $60.88 million did not meet the anticipated $98.90 million.
Despite the positive EPS outcome, TTGT is navigating through some challenges. The company was notified by Nasdaq on May 27, 2025, regarding its failure to timely file its Quarterly Report, posing a risk to its listing status.
Further analysis of TTGT's financial metrics reveals a mixed picture. The price-to-sales ratio stands at 2.55, indicating the premium investors are willing to pay for each dollar of sales. The enterprise value to sales ratio is 3.22, offering insights into the company's valuation in relation to its revenue. Additionally, the enterprise value to operating cash flow ratio of 12.23 illustrates the multiple at which the operating cash flow covers the enterprise value.
TTGT's debt-to-equity ratio of 1.72 points to a relatively high level of debt. However, the robust current ratio of 10.49 indicates strong liquidity, suggesting that TTGT is well-positioned to cover its short-term liabilities with its current assets.
TechTarget, Inc. (NASDAQ: TTGT) Faces Challenges Despite Earnings Beat
- TechTarget, Inc. (NASDAQ:TTGT) reported earnings per share of $0.23, surpassing estimates but with revenue falling short.
- The company is under investigation by Pomerantz LLP for potential securities fraud, following a deficiency notification from Nasdaq.
TechTarget, Inc. (NASDAQ:TTGT), a provider of specialized online content and marketing services for technology vendors, operates in a competitive landscape, with peers like Gartner and Forrester Research. On May 22, 2025, TTGT reported earnings per share of $0.23, significantly surpassing the estimated $0.02. However, its revenue of approximately $60.88 million fell slightly short of the estimated $62 million.
Despite the positive earnings surprise, TTGT faces challenges. Pomerantz LLP is investigating potential securities fraud or other unlawful business practices by the company and certain officers or directors. This follows TTGT's disclosure on April 18, 2025, of a deficiency notification from Nasdaq for failing to file its Annual Report on time. This news led to a 12.75% drop in TTGT's stock price, closing at $7.12 on April 21, 2025.
TTGT's financial metrics reveal more about its current situation. The company has a price-to-sales ratio is 2.37, meaning investors pay $2.37 for every dollar of sales. The enterprise value to sales ratio is 3.04, and the enterprise value to operating cash flow ratio is 11.52, reflecting its valuation relative to cash flow.
TTGT's debt-to-equity ratio is 1.72, showing a higher level of debt compared to equity. However, the current ratio is a strong 10.49, indicating robust liquidity and the ability to cover short-term liabilities. These financial metrics provide insight into TTGT's financial health and challenges.
