TTGT - Earnings call transcript Q2 2020

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Operator

Good afternoon. Welcome to TechTarget’s Second Quarter 2020 Earnings Release Conference Call. [Operator Instructions]. Please note that this event is being recorded. I would now like to turn the conference over to Charlie Rennick, General Counsel. ahead. go Please

Charles Rennick

and Tate, Thank good you, afternoon.

here Executive our me our Financial Greg and Strakosch, Mike Cotoia, Chief are Chairman; Officer. our Noreck, Joining Dan today Chief Officer; Executive

call of our release like the Before I earnings to on call everyone process. would turning the to over remind Greg,

an As previously section letter shareholder on you furnished on Investor Relations to order our with the website on it our update announced, we advance in posted in of and business of provide an X-K. the call, the

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

Greg Strakosch

COVID-XX, extremely challenges the Charlie. continues TechTarget to Despite well. you, Thank by significant Great. perform created

QX, to EBITDA XX%, grew XX% free and XXXX, $XX.X XX% QX, in in Long-term the flow EBITDA X%, same to in X%, grew Adjusted quarter was million. quarter. year, XX% cash up in representing to of was XXXX. revenue Gross contracts of XX% adjusted adjusted QX, represented from last the million. compared $XX.X XXXX. in in XXXX, was XX% from XX% revenue EBITDA Adjusted QX margin XXXX margin QX, up million, For $XX.X

proud to unexpected the ourselves the the a will and We that responded lot are way a difficult company team and grateful even customers our in us stronger has believe TechTarget future. very we and of make challenges. We’ve about learned these

optimistic more competitive are than ever We our position. about

As technology to to first companies make is increasing sales and compliant data there smarter, continue marketing their more enterprise organizations party on rely is trillion new data of efficient, for with demand that that and we company will the now large privacy I best are dollar IT advantage questions. take to and to believe regulations. in open call opportunity We this positioned market. the the growing competitive

Operator

[Operator Instructions].

is question ahead. Kreyer first Go from Our Craig-Hallum. Jason from

Jason Kreyer

gentlemen. Thank you. afternoon Good

little ask a converge do why mean a You can you’re letter, view Or if those and lagging few just bit but the see market, internationally? spend figures you wouldn’t reason kind fundamental we next domestic do what behind currently see covered the time a is delta wanted talking about you over domestic of quarters? just more on little that. just the I the seeing I you this shareholder in international, to between bit

Mike Cotoia

I Thanks Jason, question, these during for Mike. this hope well times. your is doing and are the family you

talk domestic the international let’s first. of terms market, about the international market In and

are in cookies, operated to Number process, markets. compliance out very for which as when to pertains earlier, owned opt-in in the competitive We leveraging I international well are policies third well Number that versus out registration the good They bode two, things us, market, to several well our there especially XXXX. as GDPR see bodes for that be us in and opt-in. and continue one, sites companies and advantage mentioned phase for fits members there registered consent Greg continue for growth us. Every one market, and party us those is our of other based. think Google and are in it will a

a good So events lot really in regional well that’s to there intent-driven partners the companies as EMEA marketing events. deal EMEA a their going and COVID impacted international by as you’ll pandemic not that I many, be that the I APJ, do be the are international field can across as advantage budget I’d the we APJ, to had And their field tied markets. of in online would continuous also budget, with would and and international OEMs, to GOs our markets lot are face-to-face they their this to see competitive then that of for a have in more starting COVID. what campaigns, throughout market, globe, and smaller transition international say also as purchase call say vendors us channel throughout adversely where

management the When things would the are pulled earlier the name where and accounts. global global the we companies we that legacy but to the of hardware in over that accounts of Now enhancements the the they long I digital our strong is or I led ahead or up a face-to-face of the in couple transition. driven in would many say, they very sales between the States. the GOs times, not all are legacy as I data transition they the markets team marketing other with a starting are drive pullback of but the think all in trying and that EMEA to pull across the instances, in of focus pullback in as really go in budget will times the sales some back marketing of to of I many on probably across well that to other the of by APJ, States, for do their to organizations. also terms pulled North purchase market, bode regions, the should a regions, said management, made around still recession U.S. America, think back whole these early to back in initiatives, United collaboration changed In some from term. and intent time events, saw well some back I have better and and brand become say was we innings but for We during us, these TAM, individual that they only in a I pandemic like the and opportunities. where lot don’t now board, U.S. the many internationally into, United

Jason Kreyer

all appreciate I the color Okay. there.

that are like turnover higher just expected those favor customers. renewal, in? of has to rates or customers but bit, come of in churn falling kind I term up the you them little to with resulting of as alluded any, You kind of or where longer a of the contracts fall Is kind out this been mean, for some

Mike Cotoia

we for like annual would the acquisition terms a the in again multiyear pandemic into I probably you will first or also this, or commitments. be get to situation know scrutiny, harder get It’s revenue, pullback Yeah, product aren’t Priority long-term that this. on most asking which of customer is say the you Engine – because has new like when like from up But a year-over-year.

to in are of turnover, in well don’t seeing for terms like strategy, XX Engine, unique, like has a that that Priority we’re and strong multiyear through times seeing our to we churn content bode the it up years dollars audience out. know So, or What and investing important been to an pretty consistent. And us, they with sign members. for the for very providing this, enterprise has point has is TechTarget of deal to well us. or in relationship where business community want very really I’d still resilient of annual describe is people as that’s information today the relevant Millions model technology of that our even fairly

phase do as So, it great with at going feel the be some apt accelerate look position we’re into revenue we get to content that we try long-term they later to of once the be through, going a as looking long-term to uncertainty they we on, the but this do the at to are a election marketing, to month three pandemic, pandemic, are campaigns, more customers a in deals. an we lot through of navigate will again and six second

Jason Kreyer

sounds Thank the you time. for Perfect, great.

Operator

is question James. next Aaron Kessler Go ahead. from from Our Raymond

Aaron Kessler

Express, can, strength just maybe into on seeing then A And you. vertical Maybe that you greater the linearity Thank any Priority of you of talk thank couple and saw roll updates kind any areas are Also, just demand questions. you would out the Services? throughout maybe about, maybe Engine QX if maybe, Hey, Cloud July. you. for finally customers, that from then of there? you

Mike Cotoia

buying of exact to continue there the order I don’t know these. that they lot answer markets that first, in in areas, - a terms I’ll said. Aaron, to be as Intelligence, Learning, on hot are of you Management, But the in that are Sure. seeing Cloud, markets vertical see, are we we pretty the as And going if even side. side Artificial interest terms are as that. activity of Recovery, the mentioned, Disaster well would Security, Machine Threats, you that include, Information vendor and

Predictive, markets back Central, AI, we Learning, in a recall, Data a they’ve February Sciences. did you got aligned their great audience, following. Science with Machine a really We and for As of that great which the audience acquired Data company,

well. continue and believe segments do those we So will that to grow

you that. get Priority a What fit to we’ve Priority for a smaller period we’ve to of pandemic impact continued we’re that might a of terms when lot the be seen on that In Engine of in, Express. Express, obviously it seen on a Engine companies where that, better we’ve execute

a also are is that different that that year, be the you way from would which a normal up the roughly, between product a that between level and pullback, solutions Priority which our see it’s I year. You to know $XX,XXX Priority different ideas for also Express, with they Engine, opened up but closer Engine levels again. like is entry What two, seen of as recall, we’ve is $XXX,XXX too, of and is features say would little our might you bit we’ve learned we some able a entry points. to discussions those our signs point multiple that the build there functionalities want to customers, What all that picking

some Engine Priority as that. a build additional to opt starting and we’re opportunities on So,

and a sign So, Express, may I’d and some learned we’ve say to on, it customers seen options. open seeing adapt a expand door execution, Priority other we’ve we’re lot, Engine

asking approximately of the assume Is QX. QX that being In terms were asking? you what revenue to linear, that QX you I the are same, the

Aaron Kessler

customer the went just last the just or few were we the as post-pandemic, kind and as how we of maybe Yes, demand you what just through seeing quarter kind of throughout went months. changed through

Mike Cotoia

of would what we whole you But, they what? little our maybe a lighter focus They three and of this, the didn’t are in how our -powered our do solutions observed new; book, an in pulled defense for importance been on customers in group elements, we Okay, end could want customers: would TechTarget than range and at backed well only some our be watching on could the then maybe they audiences going it’s didn’t knew saw been say saw of back to bit their not were stay branding to pulled of sports really through it’s talking, they ball, can into you be stay funded, on first intent it I to they to they the but our on drastic, and the has that those when customers downturn, from What into seen they defense the a a but to customers that, the they QX that intent, And really that. all to of Priority and whether great. and opportunistic, were provided expense our marketing, the and their real front saw they’ve I were that, different I needed that by Historically, cash and we’ve QX. wanted to of tell try they say, thing, again solutions, every they’re they’ve to want mode. complete and we know very would on belly-up still type anything would are know of play back is pandemic, were of really, there about knew hold and again vehicles, purchase us, data, really and coming serve, May has front we their We needed opportunity pandemic, flow, through, be commitments. Engine types to the what they did sides say analogy, maybe small, story, markets, both to the we customers, which very and customers that through you knew whether continue anything to saw and there bad There that. invest they audience their they shorter offense content a were that to but would be whether been it’s looking where solutions not of

still There customers, I we’re we in So, seeing owned from our having but for members and our members and able this customers consistent QX you who are front over being uncertainty about comments and uncertainty. proving pretty prospects is with been there think, help Greg’s earlier operated sites, of our and us stay regulated their of to having of, opt-in to letter period really it has well talked shareholder the now. out as know in customers

Aaron Kessler

Thank Great. update. for you that

Operator

from Stonegate Go Marco Capital Markets. question Our ahead. next Rodriguez, is

Marco Rodriguez

guys. I a could slightly bit a, QX, Good little Wondering talk questions. maybe afternoon, more my just if different taking about Thanks from for perspective.

just could the how well. What you July of that, to QX, comparison was X% aggregate other? the June And then and if if revenue go quarter. but kind can May in April, in wondering also frame up did each through to months as the of growth compared all looks how I look there? Just like you mean profiles the

Mike Cotoia

the had guess of looking do You what kind things think We know wave? navigate know people classified this, at would question that a quarterly annual I down all is our do gives out and and as QX disclosure hope of board I would say the breakdowns, to March get, we into to Marco, because were finishing this, changed but through break that. say, around on invested through some they early quarter, April were customers and if in And type we giving think still conversations, would could have at may in March, is next know if we plans, not across consistent their too, you disclose the all a, I a I those we’re they we’re their things mentality, pretty through in terms and I with the break quickly quarterly were seeing - on say do planed plans, that very as figures, not you least I there we without because mean into COVID-XX, big and going monthly to I election mark, plans. here get I’m right? uncertainty they know we away of that, revenue. typically again see monthly always I going an We’re at, might looking QX November. second you color. trying are

We’re looking of things. at lot a different

want people to things So, get I settled. think see

months. or to it behavior three biggest drastic, the - mindset annual wasn’t the and could was you say I I’d six next to to months multiyear through navigate So, shift, it see but need the

hope as been into I that’s and we provides head I enough so, consistent, QX. throughout say, the would that quarter And And color.

Marco Rodriguez

Okay, thanks.

The I quarterly, movement then at main you percent it was XX%. year I then QX was subscriptions to you annual revenues driver? at of know contract said think QX, was the the XX%. that this more look So, of in it from a long-term helpful. as type that’s If revenue, In the something

of talk But or sort just some that, a the obviously annual either cancellations. does level of that quarterly? that about if a maybe is to from you So, move function can imply of bit churn little

Mike Cotoia

overall math equation. is, thing the say, denominator QX higher, number much XX% of revenue it in it’s higher. The was would I was a

that the million look $XX.X a off at it’s in number a XX%, QX, at look $XX.X of you million you that’s XX%, when when again, number. off So,

QX you If to of up from XXXX, it compare XX% it’s to XX%.

So, seeing we’re growth on that.

we’re for right position of doing and bullish mindset. have and XX%, actually wouldn’t they that will our well, I that’s going long-term quarterly next market we’re of still revenue our a outlook. completely I say think what shift, know over to So, a to, in the get terms and believe the you in to now We to XX% long-term very couple years very we

Marco Rodriguez

I it. are the on product terms to if Okay, the And then Or progressing of the is are of will? expecting? pushed just got things still launches, anything being you there right, in you new kind timeline

Mike Cotoia

Yea, great question.

still we’re couple it we and in in are product with We now the beta and history. working over launches, working Priority ahead next on our lot about probably full do right steam update are plan workflow, some data launch I transition. attribution, We would into app updates. talked and say, to And on, release biggest a we months. including short version customers to connected of our fall, the some on to May, the but that access Priority for having better ready our focus focus the our a for integrated on having the Salesforce.com, the Engine big really customers’ We’ll be of having customers’ Engine’s

Engine it So even level. customers the ranking prioritizing within lot field sales and their force. reps and outside inside does for the a Today, is Priority and our of account at

So, marketing it contact at information have sales a They strategy, more field whatever and net markers reps level. have ABM new strategy. is. the want an reps Inside

his we’re accounts provide going contacts all do individual but we across prioritizing territory and ranking reps and/or view active Now, in Salesforce.com. to the prospects or sales and a the within her be view, now, within own that now

the at end and back then on have we major of have our got feedback us development user some we’ve we’re excited come and the to good back of as upgraded from work on provided into insights that They and So know interface. efforts release them that the to you team customers gone the new our We’ve really that. that part are, September. ideas some

Marco Rodriguez

I color Understood. appreciate the and really the you, time. Thank

Mike Cotoia

Thanks.

Operator

Go Street Goldfarb Bruce is question Markets. next from Capital Lake ahead. from Our

Bruce Goldfarb

results on there. largest and marketing your COVID great intentions their customers the saying of and year? end the mid-size the and despite Congratulations you. What impact spending about Thank are throughout

Mike Cotoia

a you our transition to customers I all mid-market in be purchase data-led opened of there’s terms think, are events, back it know dynamic so never the gone to marketing know be And, you that of and intent that up at good. largest, going what to first I to in pre-COVID. past that this have - been much they really understand on initiatives studies. Bruce, spent it’s going for going was come think to money those is face-to-face that look we -

a and take there able folks will massive these four them some I talk as dollars, of what are said, think some away there previously to these a those or lot tucked COVID, times presidential are I on months those marketing ways invest like second the were five find a navigate third through in, event and be a will events, being is spent there’s uncertainty, you that know your about, I of next there say, dollars, to dollars they of for and programs. wave, taking data-driven, intent-driven purchase to sales but we wave, enablement were also online is election, trying they and

different about see a break. talk at IT for X% healthy spend the maybe that down being XXXX analysts stats. in rebounding look having we So We and and year

the But is, are I they through having longer customers. we’re a really just we’re navigating know, have some or that our in XX front through through the content, throughout, They seeing we’re registration And through opt-in United are we day to windows. know also GDPR audience, a You we lot of how staying importance staying but windows, day the of whether audience built it’s consent They and good to front staying that’s audience. stay They that, their close their know a with know close have for know XX base. we compliant well, that them. in and conversations XX bet regulations you as outlooks are our they States. navigating CCPA are of because they

be very this time through with think our I we’ll So, good navigating customers.

Bruce Goldfarb

Summit. that virtual facilitation? were Memory helping guys to any you and I saw conference in out the you, Thank Great. with intent Flash expand

Mike Cotoia

up do good audience. a that terms in with the that’s we don’t of of have got VPS at things Yeah, We’ve of, and our or couple we customers providers help platforms, a VPS looking who have some sign question. an as are

So, to their now promote that they’re reaching get to virtual audience, attendance out to their them and to trade shows. attendees help us

that the So, opportunities. we that’s in are of of VPS at terms type and looking something webinar

Bruce Goldfarb

you line other so in fall in Engine know last refresh, or of XXXX? initiatives Priority or top And, update, in rollout Great. my question the any is, or the to pricing the to, product the in addition sales drive

Mike Cotoia

with as new following - of we think a increase You I go know, year. with follows will always the you’ll some rollouts price it into these, products, the of they the see

Bruce Goldfarb

Okay.

Mike Cotoia

a And intelligence a you know and functionality as there are we’ve know some offering. recognition Again, and around, pretty Engine awarded, industry destination powerful sites, been tool. we’re you features marketing in of the that lot Priority sales

going as into the So, as and intent functionality as we increase. the as bring, XXXX that but and comes it we we’re partnerships side, for But, get the deeper that insights on this we features talk to some a to well can the with out. marketing we’ve side sales on historically that’s how the not additional yet, well increase sales of laid as bring price bear, the in typically about price

Bruce Goldfarb

I great again, Thank that’s congrats all results. you, on Great. the And had.

Mike Cotoia

Thank you.

Operator

from Securities National question next Klee Allen is Go ahead. Corporation. from Our

Allen Klee

joined apology My late. I afternoon. that Good

continue, good on least that’s some positive, at? somebody the reasons the in international that can but at that might letter the side. of you think shareholder So, the the have something talk your pretty that you asked in you that, should this, amount about Do that news future for looked

Mike Cotoia

hey good I from you. It’s hear Allen, Mike. to Sure, do.

IT a enterprise, the us our that space. international and a obviously, two; on we few was privacy world there’s place but have the sites. regulations bodes a well know do opt-in well. really lot technology process, Number regulations bode is days I own will say and a and during it not of ago. we privacy than of compliance spearheaded, things that to – operate and market, you look at XX different to as know now there’s XXX an Number But GDPR. we is the BXB registration period one; You And the and, for limited

you So, phasing rely our and we going third-party be all on I competitors, know out in to own A lot a customers, and own Google data. that we capture, XXXX. cookies, websites, first-party our and should operate lot say, we of is know all that of of

we So we as that face-to-face you short look events, there too, at what be too, competitive it any what Right come an are and four would may could face-to-face, regions, gone, would marketing mean seminars, be not channel to lot breakfasts, way APAC, level they or long-term pre-COVID. a a was, whatever or their talking now that spend back a about they at by a the back in field EMEA what they it budget term of in was lunch-and-learn, they opinion, so OEM I is, advantage. has those throughout have but, – of they are before whether COVID channel the coming are those seeing, fraction were we’re regional my events, on opportunity are that three and again, that my partners,

drive and numbers. revenue be to hit pipeline be still and able need have budgets those to So going that’s to drive generate a people to their spent, and

events. allow a investment deep owning their talking to of transition of members again, investment, having its having our your editorial I’m content very all in puts so which onto international sites, attracts us lot position in members, these and customers your and And to a operating budget, wide a and sites, great opt-in and

see earlier, those really short-term TechTarget. and a So, the but benefit – think was are I long-term now, question, think we potentially I that’s a great I that’s right that asked the provides very answer for that I think and

Allen Klee

just happen not you. just Okay. of it? year? for new its gets that a you purchases, think beginning guess, new But, And the is the to a the of release that it’s new a just existing get an that most thank last around Is of you Well, you’re of my your understanding purchase customer them. way Priority I that, that When given, do Engine, clarification. question my if

Mike Cotoia

updated and we that. throughout I think and UI, using, at subscription, lot tweaks. you for them is - always impactful, it’s but them what not the are we minor into don’t customers existing can updates we doing, they have and charge be just a look switch it if that’s year, a if major This pretty that’s over or updates the we’re customers’ and our announcement, might And charge, of new into of and they want take there’s as we that there charge that. the where all will adopted mentioned, end are increase year the and a time a And laid next December year, lot, into additional that, to the you full advantage features of like frame, get functions for there, that we renewals into price be of, more our this be in know price and you will there. out will get

Allen Klee

Very good.

so you, did much. that Thank well. explain You

Mike Cotoia

Thank you.

Operator

for you presentation. session. This has attending today’s now conference Thank concludes The our concluded. question-and-answer

You disconnect. now may

TechTarget (TTGT) 9 Aug 202020 Q2 Earnings call transcript