TTGT - Earnings call transcript Q3 2017

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Operator

Good day and welcome to the TechTarget third quarter 2017 earnings release conference call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Charles Rennick, General Counsel. sir. ahead, go Please

Charles Rennick

Rachel. you, Thank

process. turning the Chairman, to Strakosch, Executive earnings to everyone call Mike Cotoia, over release our and of want the Greg our on our call Before CEO, remind I

the update joining As previously announced, shareholder today we business furnished order call our to letter call, on us on advance the X-K. posted Relations it on section website Noreck, with of of Dan provide in have our the you in on an Also our the an is Investor and CFO.

SEC. A These undertakes the no and Mike's with TechTarget reconciliation of future today Please also team We Greg results our most not and update are to materially forward-looking Following them. from in to not differ of to refer refer GAAP accordance available and that quarterly forward-looking statements performance. may Actual in and answer With date non-GAAP accompanies prepared based financial TechTarget as of measures comparable questions. remarks, the financial to call reports obligation factual letter. the to that, made of on management assumptions Mike. our forecast. statements These our the will considered be statements. may Any be shareholder may risk call turn are Greg? our these measures I'll measures factors not over are this speak GAAP. only and to your the annual filed with statements our Greg by guarantees

Gregory Strakosch

the in revenues QX XXXX. of the makes the XXXX revenues Adjusted XX% data is in XXXX a up Deal and XXXX XX% of longer-term a which organization presents EBITDA XX revenue had XX% Deal QX The QX QX investments the be are been in to of and over that customers about margin the and largest XXXX. have disruptions in XXXX year, Engine at headwinds Alert provider intent end early customers derived still EBITDA temporary were becoming XXX.We is are versus XX% versus purchase XXXX. and weakened IP versus and in sales we from QX months Deal transition some new $X.X XX% IP of us is opportunity beyond. up The QX was believe will to divestitures budgets innings. in us behind marketing faced marketing the data-driven dollar Data from XXXX. XXX% or in were optimistic Data and that years we've of customers' to of that Charlie. year-to-date XXXX. caused Online Deal acquisitions up was of abating. Priority transition temporary Many adjusted XXXX. up nine and Alert the large contracts. our We XX% in you, Priority very Thank XXXX paying past a QX million, very were off, are up QX first The which this over has customers significant our of versus Revenues by two making Engine was number and

up than increases. will I a grow questions. spending While now IT we the market and are that we to when gain the upside spending market continue overall to call significant share challenge, IT confident with faster will remains open overall

Operator

Instructions]. [Operator

with comes ahead. Brian go question Fitzgerald Please from Jefferies. The first

Brian Fitzgerald

question type do The Europe of with in data it that is in consumer in then, trends It going, the it – rollout around GDPR way guys. how anything are ask upcoming the we Thanks, particular question seeing to that I and no growth, really internationally? a opt-in to growth impact any you're dynamic way about just you was at it guys. the looking protections. with that's in And the what has second driving you're around XXXX. wanted kind there, seeing shouldn't think international of

As thoughts out? it a into the matter of as fact, Any on you might roll they regulations privacy for even a turn tailwind guys.

Michael Cotoia

Hey, It's Cotoia. Mike Brian.

of regards those to through some have you transactions some – it to some getting major to primarily your of as those our that Greg starting trend gone or a terms global that acquisitions, in those of see terms little alleviate accounts. back question pretty trends, some normality. bit see In starting four further global relates And significant accounts had first that to – in we're relates of through even we're mentioned, it as headwinds navigate if those dive to

So, that absolutely now the But had and Alert. global Deal has been driving IP been of adoption really what's an the right business. impact on rollout our global business

As you new APJ fairly in remember, out. the markets and and broken that we've that's EMEA

become So, the better And organizations. each we that data-driven Alert with numbers sales purchase vendors we're and very to are North And similarly can they deal marketing intent IP hitting showing that craving specific the the America, data, so market. that. Deal are for

terms In GDPR, with agree I of you.

with think, competitive I We we could to of I advantage all, anything, fully think, and us. are focused. compete some well with if consumer enterprise we that that that first are as compliant organizations – as a be

than opportunity GDPR to challenges they and it we will terms that think So, create I as tailwinds a clear we because have have. may compliant very that few some for well. But we in been are us forward look more we've

Brian Fitzgerald

Mike. Thanks,

Operator

Needham. go The next Jinjin Please from Qian ahead. with question comes

Jinjin Qian

I may. lot. questions, Two a Thanks if

further other in are trying go-to-market quarter regarding to customers additional And leverage of your to companies we general, just to partnership add wins any to with this customer acceleration sense going contributed of DiscoverOrg, is Hoover's. as base? shall that get partnerships of First in expect how a such has with terms you this the customer how kind and to strategy new your X,XXX their and, space, in ZoomInfo of

customers preliminary XX% your you growth provide? terms on Any the for much your business? depends on you Second recovery of trend year Thanks. And in core can any next top is that the spending, year-over-year IT the core guidance how in update of revenue. see of

Michael Cotoia

the Jinjin, inked we start doing I we're customers. ago. sure to partnership. Okay. question was is of Mike. only want make what first DiscoverOrg months That regarding getting couple the really, And is of front this our is recently this will in with

in see XXXX. the will XXXX some will we So, benefit primary benefit beyond. But be in and

members as that if the Priority Find to behavior that those customers platform So, recall Engine as prospects. you rank our based and their them is on intent active prioritize well sites. we their team to accounts offer and within allows our on accounts

the was that will the to really will technology allow in buying allow reach to inside us and we the and We reach partnership our segment by to it The with attractive – customers by they of have enhanced DiscoverOrg contact within order was accounts team database are entire with their do that do geo. and accurate most their expand technology reason – what – prospects. expand

So, we on think are synergies marketing of organizations. there. organizations. on there focus primarily good very a They heavily focus sales the lot We the

going strategy being some go marketing advantageous reach back for key as very both expand customers such able as is an account-based into marketing, to team our together, well ABM, allow to customers to to and sales of our to they head us. So, XXXX their as as marketing buying strategies, the and entire marketing

customers explore In partnerships additional we give feedback terms we are our partnerships, based of always that on us. additional data looking will the and

the DiscoveryOrg announced Data The install in back customers was help IT already who that June. that their as base organization. really were So, us within extension with and who their to remember, the partnership really account. HG technology the you out in we our And the identify were competitors around partners helps contact

spending. Gartner's So, we're have report, that the some next And directly an And with lot IT we're projecting But you announced at for but – we IT X%. we be was selective, IT – a of to the have I trends additional of we as spending still below then, we momentum tied trends, challenged. We're if expect that to enterprise terms year. very latest think in of some the look spending still XXXX will organization. later have IT partnerships on

X.X%. coming around was it think I

acquisitions, business, XX% focus the that coming that, data X% strong mentioned same the of whole feel stays with transactions below, the turn on spending are, the IT of the headwind if to momentum well it on we the of in at that earlier had So, double-digit be, we Greg our that side got even growth even the some of we and global out with accounts terms I that feel EBITDA growth. say, to as see of subscription these the A, or business, will want revenue

Gregory Strakosch

beneficiary IT a the Greg. To would that. be is to This point, of spending expect increases, significant we if

in cover point improvements platform. more. corporate part data will that if lower because reinvestment. might Engine with So, partnerships to of a we But I'll intent spending will cash tax our tax capital lot expensing spur repatriation through, expect just he of first Priority do on people reform said, and of of as just of that strategy make make rate Priority customers' believe IT year, it our the is one And additional the well. the help to there goes purchase Engine, the data additional And then, a

using. using, shop Engine, sales into system integrates use to into automation for be whatever all as datasets Engine. Priority system would know, So, a one-stop marketing And you whatever different automation right you're become want then customers the would you're integrated Priority right that force

integrate Marketo, Eloqua, with salesforce.com, cetera. directly HubSpot, we et So, Pardot,

Jinjin Qian

guys. Thanks,

Operator

comes next go from question Allen Klee Sidoti. Please ahead. The with

Allen Klee

with give Yes, is and how IT buy commentary both that to hi. and doing Can overall? getting on how the some you're business core to tracking relative us you customers

Michael Cotoia

I'll of this color, give if okay. accounts Allen, some break Mike. this versus down terms to Yeah. you non-global is that's in global

headwinds leveling – the in the But with those accounts or dealing account, they we the accounts whether you sales that are trends IP especially a on little Alert, is starting major on is opportunities or global accounts. are it's side, to some our transition Priority we're see off What core we're data. non-global with – some On through where if gen. lead seen deal investing which earlier, and we've mentioned we're a you're ten business, we been the name seeing that, can have Engine brand qualified And as them. and global bit the four a Deal of the seeing

on core, non-global low single been non-global digits. If investment their Alert you're IP a relatively and to core to accounts has Deal likely down spend flat that are account, more invest the in

Deal your core If down is greater. you're in you're and account investing us with much non-global Alert, a not spend IP

been then product, show our elements of with And lead go the it's marketing our how teams now continue that because we back and it's core sales our branding that the our on are, very effective with our to will direction given platform execute with actually some to services clients strategies So, hand-in-hand data the data data. content a them and marketing on. and customers surround been client to clear and the hook to they and products, can content that going data their plan we're work product

Gregory Strakosch

getting solutions reinforce IP and customers we're the customers The from each other. – that those core, Deal feedback Alert of use both our

So, core if and have IP more you use success IP and Deal more some will have Alert will your success. your Alert Deal core,

know, every non-IP to core that's positive So, spend way their And other nicely best the that, IP we're as that's we interesting as grow is that customers telling for core both the the of solutions. much using IP is the Alert. the Deal you Deal number higher also XXXX. continue on But story said, another point to trend Mike metrics the to ROI in by that's and, for Alert been that about quarter, the customers Alert growing Deal as maximize than

Allen Klee

core you to customers remind you Could IP have me relative Alert Deal customers? just how many

Gregory Strakosch

We have customers customers. about Deal about XXX IP X,XXX overall and Alert

Allen Klee

Thank you very much.

Operator

The with Group. comes from Craig-Hallum ahead. question Malouf Mike Please go Capital next

Mike Malouf

with Can you're taking questions. sense going million of in I back tread sheet. you looks given to a At just a us stock, your – rate cash you of or cash. all almost buying off to this it obviously Thanks sort want Great. on like the of million give lot I $XX know cash? the here. my of have flow, start water $XX uses for balance free the loan, million $XX just

that during tender? given shares So, just successful just buying as thought originally weren't many kind is plan, you as I'm of wondering, Thanks. some that there back as you

Michael Cotoia

Yeah.

$XX And left about said, executing. $XX million on debt have million we on About about in year payments. So, buyback, we we've due million you next plan against got XXXX in our which debt. those then, as is $X

that's at how So, kind over looking spending year money of the we're the or next so.

Mike Malouf

lot. a Thanks great. Okay,

Operator

Street. Lake The with Martinuzzi go next question ahead. Eric comes Please from

Eric Martinuzzi

Yeah.

other are having what it's expand people any in the – you to kind do side, on a good of and In Just that do content? their of Do there's have sales ITDA not guess, to do where you a words, the product satisfy why experience get certain within point curious force? deal part that's subscribers on place, obviously, fresh I have the – with getting get enough we the verticals, we they're content [indiscernible]. some frustration to

Gregory Strakosch

of So, of future have – you're in future to talking in functionality. about terms terms growth

Eric Martinuzzi

worried you've to something certain got out other words, content in that, the expand got that's to to to In expenses associated not it me, these you – own deals order maybe are right. guys and on end, because you've it's got satisfy issue, chase an a your point, seems but side Right, years I'm just down demand. about the with creation you've at

Gregory Strakosch

Yeah.

I'd all, of first rates penetration very our are still low. say So,

very a strategy. most in still it's innings of of early data at our customers So, adopting terms

would and of many our customers all segments in their they're multiple segments say, I yet. for not of have example, So,

to of customers have a that, an way strategy. segments Another that tackle in marketing lot are account-based multiple

cut can data intent purchase well. as we that So, way the

is We'll to feedback robust. functionality continue customers. very introduce We based product roadmap a on have new from which

opportunities of bringing screen really front not of a up couple many we've the one we've a radar that from runway. our a plenty – us. And now. so, of lot two issue on partnerships We that's been for Data, There's quarter. already doing That's so than really quarters. HG less also DiscoverOrg, the runway have growth think is I right of announced. you're – only in

Eric Martinuzzi

in Okay. growth And Obviously, I'm driven? wondering, XXXX. then, logos. that being adding new talked about how double-digit you is you're

steps Are there driving footprint. those now? increase? the You're expanding What's your taken Is of any price element growth there? being double-digit a

Michael Cotoia

Great. This is Mike.

seeing was QX. there's few consistent reported our one, for numbers In And areas. very online growth just double-digit what are guidance a for the terms of we Number growth, in double-digit we QX.

catalyst. that the off went and rearview the of putting of If provides accounts global little leveling you our those transactions a also the in of that take mirror, bit through

core XX% be XX%, down at we We of and QX. mentioned reported in digits QX As core were earlier, in look Greg business QX even our to we're online XXXX, XX%. if – just business, single our you down projecting

IP So, strategy. We've a when lay Deal the that double-digit off stabilize development it you and really does level growth core sales Alert, for and see out spend added you new the team. a growth see in rep also

the after new cross-sell as going products. as IP and logos with are Deal our and upsell they leading So, well they're Priority other Engine Alert and

that to feel with well not have And contend to we so, next event – got year. that on information revenue you've as will any we as based remember,

before. was canceled that So, if we in business February, events recall a back the $X roughly you XXXX, and the year in million

as we we So, anniversary of will that head XXXX. out into

as QX set double momentum So, for in mid really IP the rearview QX growth digits, the transactions with as of some overall looking with high major stabilizing, some of well these of XXXX. online and it mirror core – being in we've does us what the up growth in good terms the Deal Alert, guided of

Gregory Strakosch

Yeah.

Michael Cotoia

And Alert I IP there's would basically of say, Deal components five growth.

subscriptions. annual of We're have we obviously a those. selling So, lot

selling So, of those lot recognize revenue now, we're we're we'll selling in that XXXX. a

We are as healthy, you've continue healthy rates is to very which clip customers add seen. at new also helping. a Renewal

categories. Alert success have We're increase do core. price having implement success IP then, to cross-selling we And also in upselling also are people more XXXX. Deal also a to We having plans

to Deal next with all will IP very So, Alert we're for factors those year. fast growth the of contribute expecting

Eric Martinuzzi

my Got questions. it. taking Thanks for

Operator

presentation. Thank This attending conference. session for you question-and-answer concludes our and today's the

You may disconnect. now

TechTarget (TTGT) 8 Nov 172017 Q3 Earnings call transcript