TechTarget, Inc. (NASDAQ: TTGT) today announced financial results for the third quarter ended September 30, 2008. Total revenues for the third quarter increased by 8% to $25.2 million compared to $23.3 million for the comparable prior year quarter. Online revenues increased by 27% to $18.6 million compared to $14.7 million for the third quarter of 2007 and represented 74% of total revenues. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization, as further adjusted for stock-based compensation) for the third quarter decreased by 23% to $4.4 million compared to $5.7 million for the comparable prior year quarter.
“Despite a deteriorating macro environment, online revenues grew 27%, demonstrating the strength of our business model and strong leadership position. As the economy works through the current macro conditions, our primary focus will continue to be growing market share,” said Greg Strakosch, Chairman and CEO of TechTarget. “We are well positioned for the downturn due to our strong balance sheet and positive cash flows.”
Total gross profit margin for the quarter was 67% compared to 70% for the comparable prior year quarter. Online gross profit margin for the quarter was 71% compared to 74% for the comparable prior year quarter.
Net loss for the quarter was $314,000 compared to net income of $1.8 million for the comparable prior year quarter. Adjusted net income (net income adjusted for amortization and stock-based compensation, as further adjusted for the related income tax impact) was $2.5 million compared to $3.9 million for the comparable prior year quarter. Net loss per basic and diluted share for the quarter was ($0.01) compared to net income per basic and diluted share of $0.05 and $0.04, respectively, for the comparable prior year quarter. Adjusted net income per share (adjusted net income divided by adjusted weighted average diluted shares outstanding) for the quarter was $0.06 compared to $0.09 for the comparable prior year quarter. As of September 30, 2008, TechTarget had $67.1 million of cash, cash equivalents and short and long-term investments. Outstanding bank debt was $3.8 million as of the end of the quarter.
Recent Company Highlights
- Launched SearchDisasterRecovery.com™ to support the information requirements of IT professionals researching which Disaster Recovery solutions to purchase.
- Launched PrinterComparison.com™ to support the information requirements of people in the process of purchasing printers. The site provides product information aimed at the enterprise, SMB and consumer markets. PrinterComparison.com is the sixth site under the TechnologyGuide.com™ banner.
- Hired Michael Carroll as Senior Vice President and Group Publisher of TechnologyGuide.com. Carroll joined TechTarget from IDG, where he was Senior Vice President and Group Publisher for the online and print editions of PC World and MacWorld.
- Released a joint research project with Google, which is based on results of a survey completed by more than 2,200 IT professionals examining the online search behaviors of enterprise IT professionals when researching and purchasing technology solutions. The results show that 97% of IT professionals use online resources frequently during their purchase process. In addition to the research report, TechTarget and Google are conducting a 6-city road show to share the results with IT marketers.
- Hosted the TechTarget Online ROI Summit in San Francisco on October 2nd. Hundreds of customers and prospects attended to hear best practices including case studies from HP, Oracle, SAS and CDW.
- Partnered with VMware to run the “Best of VMworld Awards” at VMworld, which was held in Las Vegas in September and attracted more than 10,000 attendees.
Financial guidance
In the fourth quarter of 2008, the Company expects total revenues to be within the range of $25.0 million to $26.0 million and adjusted EBITDA to be within the range of $4.3 million to $5.1 million.