10-Q 1 ttgt-20220630.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

Commission File Number: 1-33472

 

 

img109050689_0.jpg 

 

TECHTARGET, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

04-3483216

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

275 Grove Street Newton, Massachusetts

02466

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (617) 431-9200

Former name, former address and formal fiscal year, if changed since last report: Not applicable

 

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 Par Value

TTGT

Nasdaq Global Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of August 1, 2022, the registrant had 29,507,362 shares of common stock, $0.001 par value per share, outstanding.

 

 

 


 

TABLE OF CONTENTS

 

Item

 

 

 

Page

 

 

 

 

 

PART I.

 

FINANCIAL INFORMATION

 

 

Item 1.

 

Financial Statements (unaudited)

 

3

 

 

Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021

 

3

 

 

Condensed Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2022 and 2021

 

4

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021

 

5

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021

 

7

 

 

Notes to Condensed Consolidated Financial Statements

 

8

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

23

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

35

Item 4.

 

Controls and Procedures

 

36

 

 

 

 

 

PART II.

 

OTHER INFORMATION

 

 

Item 1.

 

Legal Proceedings

 

37

Item 1A.

 

Risk Factors

 

37

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

37

Item 6.

 

Exhibits

 

38

 

 

Signatures

 

39

 

 

 

2


 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

TechTarget, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

June 30,
2022

 

 

December 31,
2021

 

Assets

 

(Unaudited)

 

 

(Unaudited)

 

Current assets:

 

 

 

 

 

 

Cash

 

$

374,144

 

 

$

361,623

 

Short-term investments

 

 

19,907

 

 

 

20,076

 

Accounts receivable, net of allowance for doubtful accounts of $3,347 and $2,514 respectively

 

 

60,176

 

 

 

51,095

 

Prepaid taxes

 

 

 

 

 

51

 

Prepaid expenses and other current assets

 

 

6,142

 

 

 

5,266

 

Total current assets

 

 

460,369

 

 

 

438,111

 

Property and equipment, net

 

 

20,903

 

 

 

18,720

 

Goodwill

 

 

192,819

 

 

 

197,073

 

Intangible assets, net

 

 

100,043

 

 

 

110,390

 

Operating lease assets with right-of-use

 

 

21,520

 

 

 

23,339

 

Deferred tax assets

 

 

3,424

 

 

 

474

 

Other assets

 

 

633

 

 

 

893

 

Total assets

 

$

799,711

 

 

$

789,000

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

7,680

 

 

$

3,783

 

Current operating lease liability

 

 

3,696

 

 

 

4,073

 

Accrued expenses and other current liabilities

 

 

14,126

 

 

 

16,638

 

Accrued compensation expenses

 

 

2,834

 

 

 

14,540

 

Income taxes payable

 

 

5,034

 

 

 

474

 

Contract liabilities

 

 

37,003

 

 

 

30,492

 

Total current liabilities

 

 

70,373

 

 

 

70,000

 

Non-current operating lease liability

 

 

21,833

 

 

 

24,021

 

Convertible senior notes

 

 

454,442

 

 

 

453,194

 

Other liabilities

 

 

 

 

 

2,779

 

Deferred tax liabilities

 

 

14,661

 

 

 

16,249

 

Total liabilities

 

 

561,309

 

 

 

566,243

 

Leases and contingencies (see Note 9)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding

 

 

 

 

 

 

Common stock, $0.001 par value; 100,000,000 shares authorized; 57,276,651 and 57,144,740 shares issued, respectively; 29,507,362 and 29,633,898 shares outstanding, respectively

 

 

57

 

 

 

57

 

Treasury stock, at cost; 27,769,289 and 27,510,842 shares, respectively

 

 

(217,288

)

 

 

(199,796

)

Additional paid-in capital

 

 

406,933

 

 

 

383,436

 

Accumulated other comprehensive income (loss)

 

 

(9,641

)

 

 

298

 

Retained earnings

 

 

58,341

 

 

 

38,762

 

Total stockholders’ equity

 

 

238,402

 

 

 

222,757

 

Total liabilities and stockholders’ equity

 

$

799,711

 

 

$

789,000

 

See accompanying Notes to Condensed Consolidated Financial Statements.

3


 

TechTarget, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share data)

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

 

2022

 

 

2021

 

2022

 

 

2021

 

 

 

(Unaudited)

 

 

(Unaudited)

 

(Unaudited)

 

 

(Unaudited)

 

Revenue

 

$

78,876

 

 

$

63,711

 

$

147,041

 

 

$

116,680

 

Cost of revenue(1)

 

 

19,751

 

 

 

17,114

 

 

37,597

 

 

 

32,282

 

Amortization of acquired technology

 

 

698

 

 

 

776

 

 

1,443

 

 

 

1,541

 

Gross profit

 

 

58,427

 

 

 

45,821

 

 

108,001

 

 

 

82,857

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing(1)

 

 

24,798

 

 

 

22,099

 

 

49,053

 

 

 

43,705

 

Product development(1)

 

 

3,081

 

 

 

2,534

 

 

6,199

 

 

 

5,457

 

General and administrative(1)

 

 

7,689

 

 

 

6,208

 

 

15,531

 

 

 

12,643

 

Depreciation, excluding depreciation of $654, $446, $1,276 and $827, respectively, included in cost of revenue

 

 

1,767

 

 

 

1,388

 

 

3,432

 

 

 

2,609

 

Amortization

 

 

1,977

 

 

 

1,658

 

 

3,989

 

 

 

3,288

 

Total operating expenses

 

 

39,312

 

 

 

33,887

 

 

78,204

 

 

 

67,702

 

Operating income

 

 

19,115

 

 

 

11,934

 

 

29,797

 

 

 

15,155

 

Interest and other income (expense), net

 

 

(984

)

 

 

(486

)

 

(1,544

)

 

 

(1,182

)

Income before provision for income taxes

 

 

18,131

 

 

 

11,448

 

 

28,253

 

 

 

13,973

 

Provision for income taxes

 

 

5,716

 

 

 

6,328

 

 

8,674

 

 

 

7,043

 

Net income

 

$

12,415

 

 

$

5,120

 

$

19,579

 

 

$

6,930

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on investments (net of tax provision effect of $(39), $0, $(59) and $0, respectively)

 

$

(138

)

 

$

 

 

(207

)

 

$

 

Foreign currency translation adjustments

 

 

(7,037

)

 

 

575

 

 

(9,732

)

 

 

1,609

 

Other comprehensive income (loss)

 

 

(7,175

)

 

 

575

 

 

(9,939

)

 

 

1,609

 

Comprehensive income

 

$

5,240

 

 

$

5,695

 

$

9,640

 

 

$

8,539

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.42

 

 

$

0.18

 

$

0.66

 

 

$

0.25

 

Diluted

 

$

0.38

 

 

$

0.17

 

$

0.61

 

 

$

0.24

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

29,574

 

 

 

28,152

 

 

29,641

 

 

 

28,146

 

Diluted

 

 

34,265

 

 

 

32,144

 

 

34,344

 

 

 

32,121

 

 

(1)
Amounts include stock-based compensation expense as follows:

 

Cost of revenue

 

$

770

 

 

$

384

 

$

1,409

 

 

$

896

 

Selling and marketing

 

 

5,529

 

 

 

3,535

 

 

10,596

 

 

 

7,058

 

Product development

 

 

351

 

 

 

121

 

 

831

 

 

 

776

 

General and administrative

 

 

2,485

 

 

 

1,972

 

 

5,954

 

 

 

3,882

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

4


 

TechTarget, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share and per share data)

(Unaudited)

 

 

Common Stock

 

 

Treasury Stock

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Number of
Shares

 

 

$0.001
Par Value

 

 

Number of
Shares

 

 

Cost

 

 

Additional
Paid-In
Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Retained
Earnings

 

 

Total
Stockholders’
Equity

 

Balance, December 31, 2021

 

 

57,144,740

 

 

$

57

 

 

 

27,510,842

 

 

$

(199,796

)

 

$

383,436

 

 

$

298

 

 

$

38,762

 

 

$

222,757

 

Issuance of common stock from restricted stock awards

 

 

122,571

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of common stock through stock buyback

 

 

 

 

 

 

 

 

4,614

 

 

 

(323

)

 

 

 

 

 

 

 

 

 

 

 

(323

)

Impact of net settlements

 

 

1,340

 

 

 

 

 

 

1,340

 

 

 

 

 

 

(4,382

)

 

 

 

 

 

 

 

 

(4,382

)

Stock-based compensation expense(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,744

 

 

 

 

 

 

 

 

 

18,744

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(69

)

 

 

 

 

 

(69

)

Unrealized loss on foreign currency exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,695

)

 

 

 

 

 

(2,695

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,164

 

 

 

7,164

 

Balance, March 31, 2022

 

 

57,268,651

 

 

$

57

 

 

 

27,516,796

 

 

$

(200,119

)

 

$

397,798

 

 

$

(2,466

)

 

$

45,926

 

 

$

241,196

 

Issuance of common stock from restricted stock awards

 

 

8,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase of common stock through stock buyback

 

 

 

 

 

 

 

 

252,493

 

 

 

(17,169

)

 

 

 

 

 

 

 

 

 

 

 

(17,169

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,135

 

 

 

 

 

 

 

 

 

9,135

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized loss on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(138

)

 

 

 

 

 

(138

)

Unrealized loss on foreign currency exchange

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,037

)

 

 

 

 

 

(7,037

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,415

 

 

 

12,415

 

Balance, June 30, 2022

 

 

57,276,651

 

 

$

57

 

 

 

27,769,289

 

 

$

(217,288

)

 

$

406,933

 

 

$

(9,641

)

 

$

58,341

 

 

$

238,402

 

 

5


 

TechTarget, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share and per share data)

(Unaudited)

 

 

Common Stock

 

 

Treasury Stock

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Number of
Shares

 

 

$0.001
Par Value

 

 

Number of
Shares

 

 

Cost

 

 

Additional
Paid-In
Capital

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Retained
Earnings

 

 

Total
Stockholders’
Equity

 

Balance, December 31, 2020

 

 

55,633,155

 

 

$

56

 

 

 

27,510,552

 

 

$

(199,796

)

 

$

363,055

 

 

$

1,611

 

 

$

37,580

 

 

$

202,506

 

Reclassification due to the adoption of ASU 2020-06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30,500

)

 

 

 

 

 

233

 

 

 

(30,267

)

Issuance of common stock from restricted stock awards

 

 

24,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of net settlements

 

 

290

 

 

 

 

 

 

290

 

 

 

 

 

 

(370

)

 

 

 

 

 

 

 

 

(