TechTarget Reports Third Quarter Financial Results

Announces Plan to Commence Self-Tender of Up to 10 Million Shares at $6

TechTarget, Inc. (NASDAQ: TTGT) today announced financial results for the three months ended September 30, 2010.

Total Q3 2010 revenues decreased 5% to $22.0 million compared to Q3 2009. Q3 2010 online revenue increased by 4% to $18.9 million compared to Q3 2009. Online revenues represented 86% of total Q3 2010 revenues. Q3 2010 events revenue decreased by 36% to $3.1 million compared to Q3 2009 and represented 14% of total Q3 2010 revenues.

The Company also announced that it expects to commence tomorrow a self-tender for up to 10 million shares at $6 per share. The Company will pay for the shares tendered from cash, cash equivalents and investments, which, as of September 30, was equal to approximately $85 million. If more than approximately 6.7 million shares are purchased, the Company expects to evaluate a possible debt financing following the completion of the tender offer.

“While IT marketing budgets were soft in Q3 due to the macro economic conditions, we’ve seen a healthy uptick since Labor Day that we believe will result in 15% to 19% online revenue growth in Q4,” said Greg Strakosch, CEO of TechTarget. “We are especially pleased with progress we are continuing to make outside the U.S. as that annual revenue growth was in excess of 50% for 2010 over 2009 and we have acquired direct operations in China and Australia. We are also pleased to announce our planned tender offer. We are very bullish on our prospects and believe this is an excellent use of our cash,” added Strakosch.

Total Q3 2010 gross profit margin increased to 74% compared to 72% for Q3 2009. Q3 2010 online gross profit margin increased to 76% compared to 74% for Q3 2009.

Net loss was $0.6 million for Q3 2010 compared to a net loss of $1.4 million in Q3 2009. Adjusted net income (net income adjusted to eliminate amortization, stock-based compensation expense, and the related income tax impact of these charges) for Q3 2010 was $2.1 million compared to $2.5 million for Q3 2009. Net loss per basic share was $(0.01) compared to a net loss per basic share of $(0.03) for Q3 2009. Adjusted net income per share (adjusted net income divided by adjusted weighted average diluted shares outstanding) for Q3 2010 was $0.05 compared to $0.06 for Q3 2009.

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization, as further adjusted to eliminate stock-based compensation expense) for Q3 2010 decreased 11% to $3.9 million compared to $4.4 million for Q3 2009.

The Company’s balance sheet and financial position remain strong. As of September 30, 2010, the Company’s cash, cash equivalents and investments totaled $84.9 million and the Company has no outstanding bank debt.

Recent Company Highlights

  • Included in The Boston Globe’s Top Places to Work all three years that The Boston Globe has run the program. 100 companies were named to the list. TechTarget was ranked #13 on the Best Midsize Employer List. TechTarget was also ranked #6 for Work-Life Balance and #8 for Management.
  • Introduced Activity Intelligence™, a groundbreaking, comprehensive platform of products and services that provides the benefit of being able to view all of the specific interactions information technology buyers have online during their buying process with content from multiple sources, including social communities, within the TechTarget network of sites. The result of messaging our audience in this manner is that TechTarget has achieved a 3x increase in audience response rates.
  • Acquired a controlling interest in Keji Wangtuo Information Technology Co. Ltd. (TechTarget-China), an existing TechTarget partner since 2008 that runs Chinese-language versions of 11 of TechTarget’s most popular websites in Mandarin dedicated to information technology buyers in China,™,™,™,™ and™.
  • Took over the operations of three TechTarget websites that have been operating in Australia and New Zealand for the past four years from our partner, Westwick-Farrow Media, which is based in Sydney.
  • Partnered with VMWare to run the Official Awards program at VMWorld in September in San Francisco and at VMWorld Europe in Denmark in October.

Financial Guidance

In the fourth quarter of 2010, the Company expects total revenues to be within the range of $25.5 million to $26.5 million; online revenues within the range of $23.1 million to $23.9 million; events revenues within the range of $2.4 million to $2.6 million and adjusted EBITDA to be within the range of $6.6 million to $7.4 million.

Based on this guidance, the Company expects the annual online growth rate to be in the low teens and, based on running less multi-day events in 2010, for events revenue to decline between 11% and 12%. The Company expects annual adjusted EBITDA margins of approximately 21% .

Conference Call and Webcast

TechTarget will discuss these financial results in a conference call at 5:30 p.m. (Eastern Time) today (November 8, 2010). 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 The conference call can also be heard via telephone by dialing (888) 713-4217 (US callers) or 617-213-4869 (International callers) ten minutes prior to the call and referencing participant pass code 26640414 for both domestic and international callers. Participants may pre-register for the call at: 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 8, 2010 at 9:30 p.m. ET through December 8, 2010 at 11:59 p.m. ET. To listen to the replay, dial 888-286-8010 and use the pass code 88241832. International callers should dial 617-801-6888 and also use the pass code 88241832 to listen to the replay. The webcast replay will also be available for replay on 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, 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 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. 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: our plan to commence a self-tender offer; 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.

Click here to view TechTarget, Inc. Consolidated Balance Sheets, Consolidated Statements of Operations and Reconciliation of GAAP to Non-GAAP Measures

TechTarget ( (NASDAQ: TTGT) is a leading global technology media company with more than 80 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.

© 2010 TechTarget, Inc. All rights reserved. TechTarget and the TechTarget logo are registered trademarks of TechTarget. Activity Intelligence™,™,™,™,™ and™ are trademarks of TechTarget.   All other trademarks are the property of their respective owners.


This release does not constitute an offer to buy or the solicitation of an offer to sell shares of TechTarget common stock.  The tender offer referred to above is being made only pursuant to the Offer to Purchase, Letter of Transmittal and related materials that TechTarget will shortly be distributing to its stockholders and filing with the Securities and Exchange Commission.  Stockholders and investors should read carefully the Offer to Purchase, Letter of Transmittal and related materials because they contain important information, including the various terms of, and conditions to, the tender offer.  Stockholders and investors may obtain a free copy of the tender offer statement on Schedule TO, the Offer to Purchase, Letter of Transmittal and other documents that TechTarget will shortly be filing with the Securities and Exchange Commission at the Commission’s website at, the investor information section of TechTarget’s website at or by calling Georgeson Inc., the information agent for the tender offer, toll-free at (800) 248-7690.

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Garrett Mann
Senior Director of Corporate Communications


[email protected]

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