TechTarget reports weaker Q4 earnings in ‘very challenging IT environment’
The tech media company TechTarget reported its year-end earnings this afternoon after the bell, as the company looks to transition to a purchase intent data provider. Overall revenue fell 8 percent in Q4, with total revenue for the year down 4 percent. Adjusted EBITDA fell 38 percent in the quarter.
“Our strategy to transform our business into a provider of purchase intent data continues to make excellent progress, despite a very challenging IT environment,” the company said in its shareholder letter.
“The lynchpin of our strategy is our Priority Engine and Deal DataTM offerings. Revenue from these combined product lines more than tripled in Q4 2016 compared to Q4 2015 and overall 2016 versus 2015. We had 48 new customers for Priority Engine and Deal Data in the quarter. Very importantly, revenue in the quarter derived from long term contracts represented 15% of online revenue, which is an important part of our overall growth strategy. We believe that we can drive that number to at least 20% in 2017 and at least 25% in 2018.”
TechTarget’s change in strategy means that it will be exiting the events market.
“When we went public in 2007, events represented 25% of our revenue. In 2016, events represented less than 5% of our revenue. Over the years, secular trends have created headwinds. Technology vendors have shifted their budgets away from events towards more efficient online marketing vehicles and it has become more difficult to motivate attendees to abandon the convenience of the web to travel to events. With the secular trends continuing, we concluded that the opportunity costs outweighed the benefits. We believe we will see gains from the increased focus this will provide,” CEO Michael Cotoia and Executive Chairman Greg Strakosch said in the shareholder letter.
Here are the financials: