TechTarget Announces Record Second Quarter 2007 Financial Results
Online revenues increase to record $16.3 million; up 27 percent over prior year quarter
Needham, MA – August 7, 2007 – TechTarget, Inc. (NASDAQ: TTGT) today announced financial results for the second quarter ended June 30, 2007. Total revenues for the second quarter increased by 19% to $24.6 million over the $20.7 million for the comparable prior year quarter. Online revenues increased by 27% to $16.3 million over the comparable prior year quarter, and represented 66% of total revenues. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization, as adjusted for stock based compensation) increased by 31% to $7.6 million compared to $5.8 million for the comparable prior year quarter.
“Q2 was a productive quarter for TechTarget. We completed our IPO and delivered record revenues and profits” said Greg Strakosch, Chairman and CEO of TechTarget. “Our online revenue growth was especially strong and we continue to improve our operating margins,” Mr. Strakosch added.
Adjusted EBITDA margin increased to 30.7% compared to 27.8% for the comparable prior year quarter. Net income for the quarter was $2.71 million compared to $2.37 million for the comparable prior year quarter, representing an increase of 14%. Earnings per basic and diluted share were $0.06 and $0.05, respectively, for the quarter compared to $(0.03) and $(0.03), respectively, for the comparable prior year quarter. As of June 30, 2007, TechTarget had $102.8 million of cash, cash equivalents and short term investments, and bank debt of $7.5 million.
Recent Company Highlights
- Completed Initial Public Offering in May, raising $83.2 million. The underwriters were Morgan Stanley, Lehman Brothers, Cowen and Company and RBC Capital Markets. TechTarget was added to the Russell 2000 and Russell 3000 indices in June.
- Acquired TechnologyGuide.com™, a company with a portfolio of Internet content sites that provide product reviews, price comparisons and user forums for mobile technology products such as laptops and smartphones. TechTarget will operate the TechnologyGuide.com sites, which include NotebookReview.com™ (notebook computers), Brighthand.com™ (smartphones) and TabletPCReview.com™. TechnologyGuide.com is an ideal addition because IT professionals purchase a large volume of laptops, smartphones and mobile computing devices, so TechTarget now offers additional, complementary, in-depth content for our audience. In many cases the leading advertisers in these markets already advertise these products on other TechTarget sites, so we now have an even more targeted offering.
- Launched three new segments on 2020Software.com. The three segments are Project Management, Backup Software and UTM/Integrated Security.
- Launched Virtual Trade Shows, a new online product offering that allows vendors to have virtual booths, enabling real time communication adjacent to relevant content such as webcasts. The inaugural Virtual Trade Show was titled “Server Virtualization: How to Consolidate, Optimize, Manage”. CA was the exclusive sponsor.
- On the International front, our media partners in Germany, Spain and Australia launched four new sites, SearchDataCenter.de, ITCIO.es, SearchVOIP.au, SearchCIO.au. The Company also entered into a content licensing partnership with Questex that covers Indonesia, Philippines, Thailand and Singapore.
Third quarter 2007 financial guidance
In the third quarter of 2007, the Company expects revenues to be within the range of $22.6 million to $23.6 million and adjusted EBITDA to be within the range of $5.0 million to $6.0 million.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference call at 5:00 pm (Eastern Time) today (August 7, 2007). The public is invited to listen to a live web cast of TechTarget’s conference call, which can be accessed on the Investor Relations section of our website at http://investor.techtarget.com/. We ask that participants please access the conference call at least 10 minutes prior to the time the conference call is set to begin. The conference call can also be heard via telephone by dialing 800-289-0544 or 913-981-5533 five minutes prior to the call and referencing conference code 9239480. For those investors unable to participate in the live conference call, a replay of the conference call will be available via telephone beginning August 7, 2007 at 8:00 p.m. ET through August 21, 2007. To listen to the replay, call 888-203-1112 and use the passcode: 9239480. International callers should dial 719-457-0820 and enter the passcode: 9239480 to listen to the replay. The Webcast replay will also be available on http://investor.techtarget.com/ during the same period.
Non-GAAP Financial Measures
This press release and the accompanying tables include a discussion of adjusted EBITDA and adjusted EBITDA Margin, both 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 for 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. 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 and adjusted EBITDA Margin may not be comparable to the definitions as reported by other companies. We believe adjusted EBITDA and adjusted EBITDA Margin are relevant and useful information to our investors as these measures are an integral 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. 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. Further information about these matters, as well as others, can be found in our Registration Statement on Form S-1 filed with the Securities and Exchange Commission. 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.
TechTarget, a leading online Information Technology (IT) media company, provides IT companies with ROI-focused marketing programs to generate leads, shorten sales cycles, and grow revenues. With its network of 42 technology-specific Web sites and over 5 million registered members, TechTarget is a primary Web destination for IT professionals researching which 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 vendor-sponsored webcasts and Podcasts for the IT market. Its Web sites are complemented by numerous invitation-only events and three magazines. TechTarget provides proven branding and lead generation programs to over 1,000 advertisers including Cisco, Dell, EMC, HP, IBM, Intel, Microsoft, SAP and Symantec.
© 2007 TechTarget, Inc. All rights reserved. TechTarget and the TechTarget logo are registered trademarks, and NotebookReview.com, Brighthand.com, TabletPCReview.com and TechnologyGuide.com are trademarks, of TechTarget, Inc. All other trademarks are the property of their respective owners.