TechTarget: ‘We believe we hit the bottom of the cycle’
NEWTON, Mass.–(BUSINESS WIRE)–Technology media company TechTarget, Inc. today announced financial results for the three months ended June 30, 2013.
“We believe we hit the bottom of the cycle in Q1 of 2013. While the IT market remains weak, the healthy growth that we are experiencing with our International operations and new IT Deal Alert™ service is providing light at the end of the tunnel,” said Greg Strakosch, TechTarget CEO. “We expect improved results in the second half of 2013, which will create the foundation for our forecasted return to growth in 2014.”
Total Q2 2013 revenues decreased 12% to $23.1 million compared to Q2 2012. Q2 2013 online revenue also decreased by 12% to $20.4 million compared to Q2 2012. Online revenues represented 88% of total Q2 2013 revenues. Q2 2013 events revenue decreased by 18% to $2.7 million compared to Q2 2012 and represented 12% of total Q2 2013 revenues.
Adjusted EBITDA (earnings before interest, other income and expense, income taxes, depreciation and amortization, as further adjusted to eliminate stock-based compensation) for Q2 2013 decreased 57% to $2.7 million compared to $6.3 million for Q2 2012.
The Company generated $0.6 million of cash in the quarter.
Total gross profit margin for Q2 2013 was 69%, compared to 73% for Q2 2012. Online gross profit margin decreased to 70% for Q2 2013, compared to 74% for Q2 2012. Events gross profit margin decreased to 60% for Q2 2013, as compared to 65% for Q2 2012.
Net loss was $0.9 million for Q2 2013 compared to a net income of $2.0 million in Q2 2012. Adjusted net income (net income adjusted to eliminate amortization, stock-based compensation expense and the related income tax impact of these charges) for Q2 2013 was $1.0 million compared to $3.3 million for Q2 2012. Net loss per basic share was $0.02 for Q2 of 2013 compared with net income per basic share of $0.05 for Q2 of 2012. Adjusted net income per share (adjusted net income divided by adjusted weighted average diluted shares outstanding) for Q2 2013 was $0.03 compared to $0.08 for Q2 2012.
The Company’s balance sheet and financial position remain strong. As of June 30, 2013, the Company’s cash, cash equivalents and investments totaled $62.5 million, and the Company had no outstanding bank debt.
In the quarter, the Company purchased 362,988 shares at an average price of $4.44 on the open market reducing the outstanding share count to 38,337,851 shares as of June 30, 2013.
Recent Company Highlights
- International geo-targeted online revenue grew by more than 35% in the quarter. International geo-targeted revenue represented 30% of online revenues in the quarter. The Company saw healthy growth in both EMEA and APAC. The Company also launched direct operations for Germany.
- Launched our second IT Deal Alert offering called Qualified Sales Opportunities. In Q2, we had approximately 25 customers using IT Deal Alert. In Q3, we expect we will have over 50 customers and IT Deal Alert revenue will account for approximately 5% of online revenue. We expect IT Deal Alert will make a meaningful contribution to growth, revenue and profit in 2014.
- Won 5 National Online Editorial Awards from The American Society of Business Publication Editors. The 5 awards made TechTarget the top overall digital award winner in the IT publishing industry. This recognition is important as TechTarget leads the IT industry in producing independent, high-quality, in-depth content for serious IT professionals.
In the third quarter of 2013, the Company expects total revenues to be within the range of $21.6 million to $22.7 million; online revenues within the range of $18.5 million to $19.5 million; events revenues within the range of $3.1 million to $3.2 million, and adjusted EBITDA to be within the range of $1.7 million to $2.7 million.