TechTarget Q4 2024 Earnings Call Transcript

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June 4, 2025
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Operator

Hello, everyone, and thank you for joining the Informa Tech Target reports 2024 full year financial results. My name is Sami, and I'll be coordinating your call today. I'll now hand over to your host, Charles Renick, General Counsel at Informa Tech Targets, to begin. Please go ahead, Charles.

Charlie Rennick
Charlie Rennick
General Counsel & Corporate Secretary at TechTarget

Thank you, Sami, and good morning, everyone. The speakers joining us here today are Gary Nugent, our Chief Executive Officer and Dan Norick, our Chief Financial Officer. Before turning the call over to Gary, we would like to remind everyone on the call of our earnings release process. As previously announced, in order to provide you with an update on our business in advance of the call, we have posted a press release to the Investor Relations section of our website and furnished it on an eight ks. You can also find these materials with the SEC free of charge at the SEC's website, www.sec.gov.

Charlie Rennick
Charlie Rennick
General Counsel & Corporate Secretary at TechTarget

The corresponding webcast as well as a replay of this conference call will be made available on the Investor Relations section of our website. Following Gary's remarks, the management team will be available to answer questions. Any statements made today by Informa Tech Target that are not factual, including during the Q and A, may be considered forward looking statements. These forward looking statements, which are subject to risks and uncertainties, are based on assumptions and are not guarantees of our future performance. Actual results may differ materially from our forecast and from these forward looking statements.

Charlie Rennick
Charlie Rennick
General Counsel & Corporate Secretary at TechTarget

Forward looking statements involve a number of risks and uncertainties, including those discussed in the Risk Factors section of our most recent periodic report filed on Form 10 ks. These statements speak only as of the date of this call, and Informant Tech Target undertakes no obligation to revise or update any forward looking statements in order to reflect events that may arise after this conference call, except as required by law. Finally, we may also refer to certain financial measures not prepared in accordance with GAAP. A reconciliation of certain of these non GAAP financial measures to the most comparable GAAP measures to the extent available without unreasonable effort accompanies our press release. And with that, I'll turn the call over to Gary.

Gary Nugent
Gary Nugent
CEO at TechTarget

Thank you, Charlie. Good morning from Boston, Massachusetts, and thank you for investing the time to join us today and for your patience whilst we work through the InformaTech target 2024 audit and preparations for the 10 ks filing. We filed our full set of 2024 financial statements and the annual report on Form 10 ks last week on May 28, which is available at ww.informatectarget.com. Reported results for 2024 reflect the structure of the combination comprising twelve months contribution from the Informa Tech digital businesses and around one month contribution from the legacy Tech Target business being the period from completion of the transaction on 12/02/2024 through to the year end. On this basis, reported revenues were $285,000,000 with a GAAP net loss of $117,000,000 The latter reflecting the contribution period of TechTarget, acquisition and integration costs and non cash impairments at the point of combination.

Gary Nugent
Gary Nugent
CEO at TechTarget

Adjusted EBITDA was $31,000,000 On a combined company basis, assuming the combination was in effect from 01/01/2024, we delivered full year revenues of $490,000,000 in line with the previous guidance. This equates to broadly flat underlying performance for the year, reflecting the subdued market backdrop with activity levels impacted by geopolitical tensions and macroeconomic uncertainties. The combined company net loss was $166,000,000 and combined company adjusted EBITDA was $82,000,000 The latter included certain non recurring operating costs relating to the combination, including an allocation of the Informa Group's central costs to the Informa Tech digital businesses in 2024, a portion of which are included in the transitional service agreements entered into on the closing date. Our financial position at the year end was strong with cash, cash equivalents and short term investments of around $354,000,000 and around $416,000,000 of outstanding convertible senior notes. Given the subdued market backdrop, I would describe our performance in 2024 as robust, holding revenues while improving margins.

Gary Nugent
Gary Nugent
CEO at TechTarget

And if you let me turn to the future, our combined business sits at the intersection of two attractive and dynamic markets, technology and B2B marketing, representing a $20,000,000,000 addressable market. Through this combination, we are creating the scale, talent and operating platform to nurture and build specialist audiences and deliver increasing value for clients. And I am excited and optimistic about the opportunity that we have ahead of us and how that can translate into value for our other stakeholders too, including our shareholders and our 2,000 or so colleagues at Informa Target. In 2025, the foundation year for Informa Tech Target, our focus is on combining our strengths across brands, products, go to market and talent to position the business for long term growth. The combination program to successfully integrate the legacy companies is well underway with all executive and senior leadership appointments completed and reporting lines and responsibilities confirmed.

Gary Nugent
Gary Nugent
CEO at TechTarget

The restructuring of our sales organization has been accelerated including a unified go to market strategy that gives increased focus to our largest customer accounts through dedicated service teams. Product strategy work is advancing well, including a repositioning of the Netline product to address the volume end of the demand market and reshaping the intelligence and advisory portfolio to better meet the needs of our evolving customer requirements. We are tracking well ahead of year one operating cost synergy target of $5,000,000 with a high degree of confidence in our ability to meet or beat the $45,000,000 overall run rate synergies targeted by year three. The business environment remains subdued, but our guidance remains in line with previous commentary with a target for broadly flat like for like revenues and an increase in adjusted EBITDA for the year, supported by the over delivery of combination synergies and non recurrence of one off combination costs that were included within the 2024 results. Beyond the near term market dynamics and the foundation year, we remain confident in the medium term growth opportunities for Informa Tech Target underpinned by innovation and growth in technology and the increasing demand for more efficient data driven B2B digital services.

Gary Nugent
Gary Nugent
CEO at TechTarget

A final note, we will update our investor presentation following today's call, which again you will find on www.informatectarget.com. Thank you. I will now pass the call back to our moderator, Sami, and open the call for any questions.

Operator

Thank you very much. Our first question comes from Joshua Riley from Needham.

Joshua Reilly
Senior Analyst at Needham & Company

Maybe to start off with now, we haven't had call in a while, so I think it would be helpful to get an update on how AI is impacting your business, the risks and opportunities and and maybe touch on the trends you're seeing with the average number of white papers and webinars that customers are reading and watching before, making a b to b tech purchase today versus a year or ago or more when, there was less proliferation of, GenAI tool?

Gary Nugent
Gary Nugent
CEO at TechTarget

Hi, Josh. Thanks for the question. Let me maybe think about this or break this down into sort of three component parts. The first thing of course is that AI as a technology is a market in and of itself for our company, for our business. So in other words, we are in a position to inform and educate and connect the market, the buy side of the market about AI technologies and how they can be applied to business.

Gary Nugent
Gary Nugent
CEO at TechTarget

And of course, within the business, end up also the AI companies who are providing products and services and technologies to then actually reach those audiences, reach those buyers and decision makers. So that is in and of itself a market for us and one that we're addressing with enthusiasm. You then got the second thing I think which is how do we apply AI to our business and first and foremost to improve upon our effectiveness and our efficiency. And again, we have a number of initiatives across the business to do so. We can see this in many areas of our business in our research and intelligence and advisory capabilities and our editorial and audience development capabilities and indeed in our marketing and sales capabilities in our go to market.

Gary Nugent
Gary Nugent
CEO at TechTarget

And we are applying that to our business to improve our efficiency and to improve our effectiveness and indeed to improve quality. And we then have the matter of applying AI to actually improve the products and bring new products and services to market. And of course, you will have at the latter half of last year, you will have heard TechTarget and Mike talk about the application of AI to the Priority Engine product to actually help the sales use cases engage with their customers is a good example of that. And then maybe finally to your point about how AI is impacting the way in which the marketplace discovers content and consumes content and is informed and educated. I would say that but obviously there will be, I think, I mean, the the the application of generative AI in particular is changing that landscape.

Gary Nugent
Gary Nugent
CEO at TechTarget

But certainly what we are seeing is that when customers are or when buyers to be precise, when buyers are in the market and are looking to make large capital decisions, significant investments in their business, they are needing deep research into the subject and are looking for content which comes from authoritative and unbiased and known sources. And so we're not really seeing any changes in the pattern of that, what I would call, serious buyer research.

Joshua Reilly
Senior Analyst at Needham & Company

Got it. That's very helpful. Appreciate that. You mentioned in the release that the cost synergies are on plan or ahead of expectations in terms of timing. As you've now had some time to review the combined company, can you just comment on how you feel about the total $45,000,000 in cost and revenue synergies in both terms of timing?

Joshua Reilly
Senior Analyst at Needham & Company

And then is that still a total number that you're comfortable with going forward?

Gary Nugent
Gary Nugent
CEO at TechTarget

I can confirm that I am comfortable with the total number, and it's certainly our intention to meet or exceed that over the period. And I think we will try certainly on the if you recall the synergies of $45,000,000 are broken down into both cost synergies and revenue synergies. In particular, we feel confident in our ability to accelerate the cost synergy side of that equation. And on the revenue synergy side of that equation, we're confident that we will be on track.

Joshua Reilly
Senior Analyst at Needham & Company

Got it. And then maybe I'll just throw one more out there. You talked about some short term disruption to the business in January and February. Maybe you can just discuss, you know, what what happened there and how you remedied that, pretty quickly within a quarter to be executing moving forward? Thanks, guys.

Gary Nugent
Gary Nugent
CEO at TechTarget

Thank you, Jake. Largely, that's about us approaching implementing a combination plan, Josh. Obviously, when we bring two companies together, there's lots of work to be done on processes, on systems, on the operating model and organization design. I talked earlier on about us accelerating our go to market strategy and the adjustments in the sales organization, etcetera, etcetera. There's obviously an element of disruption associated with that, but we felt that it was important that we get ahead of the curve and that we execute with pace and get ourselves into the position to anticipate the market opportunity.

Joshua Reilly
Senior Analyst at Needham & Company

Thank you.

Operator

Our next question comes from Jason Kreyer from Craig Hallum. Your line is open. Please go ahead.

Jason Kreyer
Senior Research Analyst at Craig-Hallum Capital Group LLC

Wonderful. Thank you. Thank you for taking my questions. So, Gary, you talked about kind of a subdued market that you're seeing right now. So I'm wondering if you could just give more details on what that means, maybe more external. You talked about kind of the internal disruption, but know, more details on the macro would be great. And then just as a follow-up, your guidance kinda called for, you know, more of a decline in the near term with, you know, more momentum as we get into the back half of the year. Can you talk about what gives you the confidence in that and what you're hearing from customers that gets you to that conclusion? Thank you.

Gary Nugent
Gary Nugent
CEO at TechTarget

Yes, of course, Jason. Thank you for the question. I think I mean, I would use the we use the term subdued market and I think that is reflective of what we experienced in 2024 as well. So I suppose what we're really seeing is that we're seeing a continuation of the pattern in 2024 and that's why it reflected that. So neither would say a significant improvement or for that matter of deterioration would be my description of that.

Gary Nugent
Gary Nugent
CEO at TechTarget

In terms of what gives me confidence in improving in the back half of the year, it's largely around the investments that we're making. So The Us pressing ahead with our combination and putting getting ourselves in a position to anticipate the market more effectively in the second half of the year through our new go to market model, through the product strategy and the product roadmap that we've created. And generally leveraging, if you like, thesis that was the combination in the first place, which is that in bringing these two companies together, we create a company that has breadth and scale. And in doing so, that breadth and scale will play out in the marketplace and win out in the marketplace, particularly with the larger customers in the market who have scale requirements and then we have the ability to meet those scale requirements.

Jason Kreyer
Senior Research Analyst at Craig-Hallum Capital Group LLC

Gary, can you call out any opportunities in the near term where you think, you know, the the in the early stages of this integration, you can see more success with the cross sell or areas where you're already seeing success with cross sell?

Gary Nugent
Gary Nugent
CEO at TechTarget

I can tell you that at present, I would say we'd describe that in two ways. We've certainly seen, what I would describe as tactically success with the cross sell as we've taken the customer relationships that we had from both sides of the combination and leveraging them to drive incremental revenues and incremental sales and incremental revenues. And we've already seen some success of that throughout the first quarter. I think separate and distinct from that there was what I would describe as maybe more of the strategic cross sell, which is actually our ability to put much larger proposals in front of And therefore, we are seeing and we've had one or two really interesting examples of us putting larger sized proposals in front of our customers and our customers buying into that. And of course, their ability to increase our average deal size with our customer base over time is an important part of our strategy.

Jason Kreyer
Senior Research Analyst at Craig-Hallum Capital Group LLC

All right. Thank you. Appreciate it.

Operator

Our next question comes from Eric Martinuzzi from Lake Street. Your line is open. Please go ahead.

Eric Martinuzzi
Senior Research Analyst at Lake Street Capital

About a third of your business is subscription or at least that's the number I have from might have been 2023. I'm not sure if that still applies for the 2024 numbers. But just wondering if you could comment on how renewals, went, over the past quarter or so in comparison to a year ago and whether, you know, kind of a net revenue retention or gross renewals. Just curious to know how the subscription business has gone.

Gary Nugent
Gary Nugent
CEO at TechTarget

Thank you, Eric. And the the largest element of our subscription business is in the intelligence and the advisory space. And I would say, if I recall really year on year, the value based renewal rates are holding flat as I would say year on year with my observation. Similarly then I think we have other subscriptions in the brand to demand portfolio.

Gary Nugent
Gary Nugent
CEO at TechTarget

And I would say a little bit flat year on year to a little bit down from a value perspective in some areas. But generally speaking, I'm comfortable in the quality of the product and our ability to drive growth in those products over the long term of the year.

Eric Martinuzzi
Senior Research Analyst at Lake Street Capital

Okay. And that also I assume is the better you're expecting better in the second half of twenty five than in the first half?

Gary Nugent
Gary Nugent
CEO at TechTarget

I think I would expect so, yes. But I would say that in terms of growing the subscription businesses, holding the renewal rates is obviously a strong part of that strategy and improving them modestly. But really, I think the acquisition of new customers and growing the base within our existing customers, what would what I would describe is new upsell to the subscription or new subscription customers as a core part of the strategy.

Eric Martinuzzi
Senior Research Analyst at Lake Street Capital

Okay. And then you talked about in the on the product side repositioning Netline to the volume end of the market. How has that process been going?

Gary Nugent
Gary Nugent
CEO at TechTarget

Certainly, we're very encouraged with the q one, experience of taking that product to that end of the marketplace and the market acceptance.

Eric Martinuzzi
Senior Research Analyst at Lake Street Capital

Alright. And then what exactly do you mean by the reshaping of the intelligence and advisory portfolio to better meet evolving customer demand? Could you give an example?

Gary Nugent
Gary Nugent
CEO at TechTarget

This this was largely about us, taking the portfolio of, of services, in particular the intelligence services within the intelligence and advisory portfolio and what I mean, maybe what you may describe as packaging them into a fewer number of larger packages and then also aligning those packages with the segments in the marketplace that we see. The segments being enterprise IT, consumer, industrial and telecommunications and service providers. So it's really about product packaging and taking packages, which I think were more suited to the needs and the requirements of the marketplace. In addition to that, then in bringing the enterprise strategy group business and joining that with the Omnia and the wards and the Canalys business and intelligence and advisory, we've now created two consulting capabilities, one which is the strategy consulting capability and the other which is the go to market strategy consulting capability. And I think that creates a much cleaner offering in the marketplace to those corporate strategists and analyst relations, product business unit leaders, product managers, and product marketers.

Eric Martinuzzi
Senior Research Analyst at Lake Street Capital

Got it. And then lastly, Dan, what can you tell us about the latest for the cash and debt balances, either a March 31 update of the or maybe even the May update on cash and debt?

Dan Noreck
Dan Noreck
CFO at TechTarget

Sure, Eric. I mean, from a net debt position, we are fundamentally in the same place. Right? Because we use the cash that was on hand, plus we drew down a hundred and $35,000,000 on the revolving line of credit to fund the repayment of the convertible notes. But fundamentally, the net debt position is the same.

Eric Martinuzzi
Senior Research Analyst at Lake Street Capital

Got it. Thank you.

Dan Noreck
Dan Noreck
CFO at TechTarget

Yep.

Operator

We currently have no further questions. And with that, we would like to thank you all for joining us today. This concludes today's call. You may now disconnect your lines.

Executives
    • Charlie Rennick
      Charlie Rennick
      General Counsel & Corporate Secretary
    • Gary Nugent
      Gary Nugent
      CEO
    • Dan Noreck
      Dan Noreck
      CFO
Analysts
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Key Takeaways

  • In 2024, Informa Tech Target reported revenues of $285 million, a GAAP net loss of $117 million and adjusted EBITDA of $31 million; on a combined basis, revenues were $490 million with adjusted EBITDA of $82 million.
  • The company ended the year with a strong liquidity position of approximately $354 million in cash and equivalents versus $416 million in convertible senior notes.
  • Integration is tracking ahead of its $5 million first-year synergy target, and management remains confident in meeting or exceeding the $45 million run-rate cost and revenue synergies by year three.
  • For 2025, guidance calls for flat like-for-like revenues and an increase in adjusted EBITDA, supported by over-delivered synergies and the non-recurrence of one-off combination costs.
  • All executive and senior leadership appointments are complete, a unified go-to-market strategy is live, and product repositioning—such as aligning Netline with high-volume demand—remains on track to drive growth.
AI Generated. May Contain Errors.
Earnings Conference Call
TechTarget Q4 2024
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