TechTarget, Inc. (NASDAQ: TTGT) today announced financial results for the three months and year ended December 31, 2007. Total revenues for the fourth quarter increased by 23% to $28.4 million compared to $23.1 million for the comparable prior year quarter. Online revenues increased by 23% to $19.0 million compared to $15.4 million for the comparable prior year quarter. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization, as adjusted for stock-based compensation) increased by 13% to $8.4 million compared to $7.4 million for the comparable prior year quarter.

Total revenues for 2007 increased by 20% to $94.7 million compared to $79.0 million for 2006. Online revenues, which represented 67% of total revenues, increased by 24% to $63.7 million compared to $51.2 million for 2006. In 2007, adjusted EBITDA increased by 22% to $24.6 million compared to $20.1 million for 2006.

“We are pleased to deliver another quarter and year of strong growth both on the top and bottom line,” said Greg Strakosch, Chairman and CEO of TechTarget. "Our primary focus during the quarter was the acquisition of KnowledgeStorm. We finalized due diligence, closed the transaction and made tremendous progress integrating KnowledgeStorm into TechTarget. We’re confident that this acquisition has expanded our competitive lead and allows us to further scale the business.”

Gross profit margin increased for both the quarter and year to 73% and 70%, respectively, compared to 71% and 69%, respectively, as compared to the comparable prior year periods. Online gross profit margin continued to demonstrate high operating leverage, increasing for both the quarter and year to 77% and 76%, respectively, compared to 76% and 75%, respectively, as compared to comparable prior year periods. Adjusted EBITDA margin was 30% and 26%, respectively, for the fourth quarter of 2007 and 2007.

Net income for the quarter was $2.8 million, unchanged from the prior year quarter. Net income for 2007 was $8.2 million, an increase of 14% compared to 2006. Earnings per basic and diluted share for the quarter and year were $0.07 and $0.06 and $0.15 and $0.13, respectively, compared to earnings per basic and diluted share of $0.00 and ($0.46) in the fourth quarter of 2006 and 2006, respectively. As of December 31, 2007, TechTarget had $62 million of cash, cash equivalents and short term investments, and bank debt of $6 million.

Additionally, as separately disclosed, the Company will be restating certain of its filings as a result of overstatements of its provision for income taxes in 2007; the restatement results in increases in net income of $534,000 and $290,000 for the quarters ended June 30, 2007 and September 30, 2007, respectively.

Recent Company Highlights

• Integrated KnowledgeStorm product offerings with TechTarget’s product offerings. Introduced a new lead generation program that combines the TechTarget and KnowledgeStorm offerings called FlexROI™. We sold more than 70 FlexROI programs in the first 60 days since the launch.
• Made significant progress integrating the KnowledgeStorm employee base and reducing expenses. Material sales and operational efficiencies have allowed us to reduce the expense base against the KnowledgeStorm business by approximately 50%, which equates to an annual projected reduction of approximately $8 million. At year end, approximately half of the KnowledegeStorm employees had been integrated into the TechTarget workforce, increasing our capabilities against product development, product management and search engine optimization and marketing. Expense reductions have primarily come from selling & marketing and general and administration.
• Launched five new websites. We expect to launch at least ten new websites in 2008. This is expected to contribute to organic growth in the second half of 2008, 2009 and beyond. We launched our first direct websites outside the United States, SearchStorage.co.UK and SearchSecurity.co.UK. Charter advertisers include Brocade and EqualLogic. Consistent with our sub-segmentation strategy we launched SearchVMWare.com, to provide more specific coverage of VMWare-related topics that were previously covered on our fast-growing SearchServerVirtualization.com site. Charter advertisers include VMWare, Intel, Dell and Red Hat. We also launched SearchFinancialSecurity.com and ConstructionSoftwareReview.com as part of our ongoing strategy to expand into vertical industries.
• Continued to optimize our web sites for search engines. Visits from search engines were up approximately 40% in the quarter. Our success in attracting a growing amount of search engine traffic, as well as the large amount of direct visits to our sites, allows us to attract over 90% of our new registered members with minimal incremental expenses.

Financial guidance for Fiscal Year 2008 and the First Quarter of 2008

For the fiscal year 2008, the Company expects revenue to grow between 25% - 29% and be within the range of $118.0 and $122.0 million and adjusted EBITDA to grow between 34% - 42% and to be within the range of $33.0 - $35.0 million. The Company expects its online growth rate to be approximately 40% in 2008.

For the first quarter of 2008, the Company expects revenues to be within the range of $23.0 million to $24.0 million and adjusted EBITDA to be within the range of $3.0 million to $3.8 million.