TechTarget Inc [TTGT] Filings

10-Q 1 ttgt-20230930.htm 10-Q 10-Q

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 September 30, 2023

☐ 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

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 November 6, 2023 the registrant had 28,384,199 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 September 30, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Income and Comprehensive Income for the three and nine months ended September 30, 2023 and 2022	4
	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
	Signatures	42

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

TechTarget, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)


	September 30, 2023			December 31, 2022
Assets	(Unaudited)			(Unaudited)
Current assets:
Cash and cash equivalents	$	212,106		$	344,523
Short-term investments		97,392			20,210
Accounts receivable, net of allowance for doubtful accounts of $5,333 and $4,494 respectively		43,342			60,359
Prepaid expenses and other current assets		5,583			5,745
Total current assets		358,423			430,837
Property and equipment, net		24,411			22,507
Goodwill		192,500			192,227
Intangible assets, net		89,415			95,517
Operating lease assets with right-of-use		18,015			20,039
Deferred tax assets		4,094			2,945
Other assets		742			645
Total assets	$	687,600		$	764,717
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,915		$	3,298
Current operating lease liabilities		4,011			4,099
Accrued expenses and other current liabilities		6,886			10,935
Accrued compensation expenses		1,374			4,643
Income taxes payable		3,389			7,827
Contract liabilities		18,083			27,086
Total current liabilities		38,658			57,888
Non-current operating lease liabilities		17,602			20,371
Convertible senior notes		409,951			455,694
Deferred tax liabilities		12,381			13,290
Total liabilities		478,592			547,243
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; 58,628,120 and 57,919,501 shares issued, respectively; 28,384,199 and 29,023,093 shares outstanding, respectively		59			58
Treasury stock, at cost; 30,243,921 and 28,896,408 shares, respectively		(329,077	)		(278,876	)
Additional paid-in capital		459,960			425,458
Accumulated other comprehensive loss		(8,367	)		(9,537	)
Retained earnings		86,433			80,371
Total stockholders’ equity		209,008			217,474
Total liabilities and stockholders’ equity	$	687,600		$	764,717

See accompanying Notes to Condensed Consolidated Financial Statements.

TechTarget, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share data)


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	57,128		$	77,412		$	172,671		$	224,453
Cost of revenue(1)		18,250			19,118			54,006			56,715
Amortization of acquired technology		700			654			2,067			2,097
Gross profit		38,178			57,640			116,598			165,641
Operating expenses:
Selling and marketing(1)		23,944			25,982			73,615			75,035
Product development(1)		2,700			2,791			7,766			8,990
General and administrative(1)		7,383			8,520			23,007			24,051
Depreciation, excluding depreciation of $996, $704, $2,760 and $1,980, respectively, included in cost of revenue		2,180			1,847			6,275			5,279
Amortization		1,502			120			4,501			4,109
Total operating expenses		37,709			39,260			115,164			117,464
Operating income		469			18,380			1,434			48,177
Interest and other income (expense), net		2,791			(109	)		8,463			(1,653	)
Gain from early extinguishment of debt		5,033			-			5,033			-
Income before provision for income taxes		8,293			18,271			14,930			46,524
Provision for income taxes		6,551			3,430			8,868			12,104
Net income	$	1,742		$	14,841		$	6,062		$	34,420
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on investments (net of tax provision effect of $6, $(7), $(16) and $(66), respectively)	$	21		$	(24	)		(58	)	$	(231	)
Foreign currency translation gain (loss)		(2,459	)		(6,456	)		1,228			(16,188	)
Other comprehensive income (loss)		(2,438	)		(6,480	)		1,170			(16,419	)
Comprehensive income (loss)	$	(696	)	$	8,361		$	7,232		$	18,001
Net income per common share:
Basic	$	0.06		$	0.50		$	0.21		$	1.16
Diluted	$	0.06		$	0.46		$	0.21		$	1.06
Weighted average common shares outstanding:
Basic		28,073			29,637			28,295			29,640
Diluted		28,206			33,934			28,484			34,226

(1)

Amounts include stock-based compensation expense as follows:


Cost of revenue	$	877	$	744	$	2,529	$	2,153
Selling and marketing	$	7,064	$	6,290	$	22,445	$	16,886
Product development	$	419	$	391	$	1,308	$	1,222
General and administrative	$	3,166	$	3,289	$	10,204	$	9,243

See accompanying Notes to Condensed Consolidated Financial Statements.

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, 2022	57,919,501	$58	28,896,408	$(278,876)	$425,458	$(9,537)	$80,371	$217,474
Issuance of common stock from exercise of options	2,500	—	—	—	18	—	—	18
Issuance of common stock from restricted stock awards	91,152	—	—	—	—	—	—	—
Purchase of common stock through stock buyback	—	—	581,295	(25,000)	—	—	—	(25,000)
Impact of net settlements	912	—	912	—	(177)	—	—	(177)
Excise Tax on repurchased shares	—	—	—	—	(206)	—	—	(206)
Stock-based compensation expense(1)	—	—	—	—	14,176	—	—	14,176
Comprehensive income:
Unrealized gain on investments	—	—	—	—	—	63	—	63
Unrealized gain on foreign currency exchange	—	—	—	—	—	2,029	—	2,029
Net income	—	—	—	—	—	—	1,645	1,645
Balance, March 31, 2023	58,014,065	$58	29,478,615	$(303,876)	$439,269	$(7,445)	$82,016	$210,022
Issuance of common stock from employee stock purchase plan	22,017	—	—	—	650	—	—	650
Issuance of common stock from restricted stock awards	650	—	—	—	—	—	—	—
Purchase of common stock through stock buyback	—	—	737,369	(25,000)	—	—	—	(25,000)
Excise Tax on repurchased shares	—	—	—	—	(250)	—	—	(250)
Stock-based compensation expense	—	—	—	—	12,684	—	—	12,684
Comprehensive income (loss):
Unrealized loss on investments	—	—	—	—	—	(142)	—	(142)
Unrealized gain on foreign currency exchange	—	—	—	—	—	1,658	—	1,658
Net income	—	—	—	—	—	—	2,675	2,675
Balance, June 30, 2023	58,036,732	$58	30,215,984	$(328,876)	$452,353	$(5,929)	$84,691	$202,297
Issuance of common stock from exercise of options	—	—	—	—		—	—	—
Issuance of common stock from restricted stock awards	563,451	1	—	—	(1)	—	—	—
Purchase of common stock through stock buyback	—	—			—	—	—	—
Impact of net settlements	27,937	—	27,937	—	(4,374)	—	—	(4,374)
Excise Tax on repurchased shares	—	—	—	(201)	456			255
Stock-based compensation expense	—	—	—	—	11,526	—	—	11,526
Comprehensive income (loss):
Unrealized gain on investments	—	—	—	—	—	21	—	21
Unrealized loss on foreign currency exchange	—	—	—	—	—	(2,459)	—	(2,459)
Net income	—	—	—	—	—	—	1,742	1,742
Balance, September 30, 2023	58,628,120	$59	30,243,921	$(329,077)	$459,960	$(8,367)	$86,433	$209,008

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 loss:
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		—		—		—			—

TechTarget Inc [TTGT] Filings
10-Q	[2023-11-08]
10-Q	[2023-08-08]
10-Q	[2023-05-09]
10-K	[2023-02-28]
10-Q	[2022-11-09]
10-Q	[2022-08-04]
10-Q	[2022-05-10]
10-K	[2022-02-28]
10-Q	[2021-11-03]
10-Q	[2021-08-04]
10-Q	[2021-05-05]
10-K	[2021-03-01]
10-Q	[2020-11-04]
10-Q	[2020-08-05]
10-Q	[2020-05-06]
10-K	[2020-03-16]
10-Q	[2019-11-06]
10-Q	[2019-08-07]
10-Q	[2019-05-08]
10-K	[2019-03-13]
10-Q	[2018-11-07]
10-Q	[2018-08-08]
10-Q	[2018-05-09]
10-K	[2018-03-13]
10-Q	[2017-11-08]
10-Q	[2017-08-09]
10-Q	[2017-05-10]
10-K	[2017-03-10]
10-Q	[2016-11-09]
10-Q	[2016-08-09]
10-Q	[2016-05-09]
10-K	[2016-03-11]
10-Q	[2015-11-09]
10-Q	[2015-08-07]
10-Q	[2015-05-11]
10-K	[2015-03-13]
10-Q	[2014-11-07]
10-Q	[2014-08-08]
10-Q	[2014-05-12]
10-K	[2014-03-17]
10-Q	[2013-11-12]
10-Q	[2013-08-09]
10-Q	[2013-05-10]
10-K	[2013-03-18]
10-Q	[2012-11-09]
10-Q	[2012-08-09]
10-Q	[2012-05-10]
10-K	[2012-03-15]