Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, ladies and gentlemen, and thank you for attending today's TechTarget Report First Quarter 2023 Financial Results Conference Call. My name is Danielle, and I will be the moderator for today's call. All lines will be muted during the presentation portion of today’s call, with an opportunity for questions and answers at the end. [Operator Instructions].

It is now my pleasure to hand the conference over to our host, Charlie Rennick, General Counsel.

Charlie. proceed, may You

Charlie Rennick

and Danielle, good you, afternoon. Thank

here Michael Cotoia, me our Financial today and are Chairman; Executive Chief our Strakosch, Officer. our Noreck, Greg Dan Joining 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 our website on it our update announced, we advance in posted in of and business of provide an X-K. the call, the

Following introductory team be Greg's the remarks, will available management questions. your to answer

made guarantees these Any uncertainties which and factual, considered our forward-looking results Actual of from are Q&A, materially by forward-looking statements during be not risks to are today future our statements. not performance. based TechTarget that may forecast differ statements, and subject may including on are statements. assumptions from forward-looking These are the and

with the to speak order after Forward-looking call, discussed section events this update of except statements reflect risks date obligation the TechTarget including uncertainties, call, filings as statements forward-looking any by arise involve required or law. SEC. to that number of a and this in undertakes Factors Risk as may and of the no These revise conference those of our in only statements

extent financial may to measures the with certain we without of Finally, also in efforts these refer measures unreasonable shareholder non-GAAP financial letter. most the measures accordance certain to prepared not available to accompanies GAAP. GAAP of A our reconciliation comparable

I'll turn to the that, call Greg. With over

Greg Strakosch

revenues. growth. Free which was of million, which million, XX%. represents flow $XX.X Longer-term a of of $XX.X EBITDA was $XX.X XX% Adjusted was approximately revenue GAAP XX% XX% cash approximately of total revenue was Charlie. million, Thanks, Great. revenue. is decrease

we wasn't besieged by which The technology layoffs in increased that our and customers. leading demand, weak budget negative enough, continues the among the technology quarter, If failed believe sentiment costs. to bank challenging widespread market be

macro environment. reflect these Our challenging results

questions. call now will to I the open

Operator

from the Patterson comes of question first The line KeyBanc. Justin Instructions] [Operator of

You may proceed.

Justin Patterson

teased you can of curious, can, thoughts right Great. from just AI Two, business? you of on start out some if the of we the some letter, you into kind of I'm frame some flowing the investments it seeing Thank I now. benefits your the think bit. much. AI you're very And when do making First, that in a into

around in Thank for And that about you guidance How reinvestment think then you. few just guidance? one right we guardrails now. the EBITDA the of control EBITDA secondarily, noted about this thinking should is annual areas you year, market the just can’t

Michael Cotoia

Great.

Justin, Mike. this is

of time, several around working AI In we Paul accelerate benefits run AI We framework recently for terms the really and some the but that quite technology see And strategy. key AI our been AI we appointment in opportunity see some areas the to business. an our help initiatives, announced we'll the see to of business. of with we've opportunities

very and right a important And think thin I content see being current Web, content, the across lot note announcements you're it's needs. disseminated what of to really there's going a addressing around of now AI. lot is entire not specific that concerns And to

So be market. dilution, the going to in it, that's to out be call there's content going and there a,

competitive advantage. publishers it's for content TechTarget, and believe like strategic But we providers a

day We out. have help to a insights, do technology lot supply them day of buyers in that the and insights, relevant research content, relevant we their

next business content coming XX in providing up their research. strong when year, buyers, years, for we've really help they're doing been them So to technology

account extracted been that invested, content the level. level, we've and buying able to at we've their Out and really valuable of the gather maintain we've insights at

action the product opportunity a, that portfolio and product our in help And against to insights customers the so the deliver, suite. what the we is we see can

our trigger customers in content and very against have them phone their and we'll of years, for able specific very know, deliveries the we conversations the to and a the data we're now of to insightful you help be But that e-mail strategic, them strategies. action to in as outreach, action So campaigns. steps kind to mercy provided at next

enablement you As something TechTarget for is business a we've and it's know, some BrightTalk very our in that content around ESG and us, opportunity strong made investments together. and

our leverage strategy an with the those AI we our content have analyst as effective capabilities from to be customers and help have buyers. to and content provide content strategy that side. to that Well, effective the strategy with We engage on them need that provided content editorial our also, and pilot well will and able

demographic this we've about And change. talked continues before, key that to buying

that's think this buyers about that relevant. want. not wanted mentioned means a to really of over X, our X make we decisions technology earnings They rely can't which experience, call on XX% and relevant in figure all a repless content content I acquisitions thin, fooled recent they they broad-based, last by that X, be

have customers publisher power be help a to insights. a able us data empower So proprietary as will our effective first-party and strategy that with in to and for content place we as tying their insights being help those an community

excited that opportunity. about we're So

right of terms EBITDA technology now. is the really In important, market for understand really margin we It's year. the that challenged

that so the you and announcements Valley throughout. collapse VC-backed, can that costs, on on front. layoffs the them Silicon XX,XXX-plus on many all then just it's the you And tackle challenging budget think see technology that of had focused, Bank of customers, I it's all through

to in we've need But make we the -- still downturns of sure that managed in terms past. EBITDA,

investments make really good We have to still the playbook very effective a there's right we believe right areas. in the a opportunity

some AI. one what them the and product can around other around have in doing. call enhancements about I some of mentioned the just talk we we're We One of

that So we we're sure to want make opportunistic. being

spending a and our our of that. job do manage will will for XX playbook We on years, we part discretionary as we have good like

that. We track have a record on

batteries, In we're EBITDA XX% terms margin. of assuming about

ballpark assume right that's right think with the the the strategy. and -- guidance to I those updated the go-forward are

Justin Patterson

Mike. you, Thank Great.

Operator

of the Reilly Josh from next Needham. of The comes question line

Rob Morelli

influencing Hi, Bank, think we this carrying Thanks Rob of about on from for Marelli the with Josh. impact the of should And And on Silicon topic improved customers? on question. base? things how startups? to these have exposure then of quarter the remind can trends confidence subsequent with among us SVB the Kind Thanks. end taking you is customer of the to your Valley venture-backed

Michael Cotoia

Yes, great question.

focused customers of XX,XXX them is Silicon know, lot lot those were believe Valley, the serve, terms a In a I firms. as XXX% they were over you of market. of the which And VC-backed enterprise-type they on

terms several segmentation. has evolved business nice in Our of years customer way over the last our in a

ago, our accounts. of customers. the below through look top was we business If X,XXX XX% have you global close XX XX at our guided today, years that's And to And business XX%.

enterprise in segmentations You can span imagine across all BXB customer sizes side. like we and the

The the I in was. we in We noted when economy no it Bank, that on economy, -- Silicon the the technology-specific started QX, say as Valley challenging macro QX, was that. surprises and there's environment

see by can You the layoffs.

You can lot day seeing of Silicon market. out, see carried into Valley the still and centers by and uncertainty and Bank is we're in QX. a cuts that to which brought of the day another amount

those VC-backed serve, base that customers good which imagine customer of can software-based those you for we a if serves smaller have our we So customers, organizations. size

VCs uncertainty make jitteriness. check a challenging where the over lot decisions around They spending, right I companies see ready item There's want of to don't these sure all And another the through are cuts. hand went period. right expenses, line now in they a of you a think that very to the making discretionary lot making

those that to in we be our of customer we always As premium player items line to across want market, our are the intent firms. strive that scrutinized a includes VC-backed data, content all investment, base, purchase our and get premium and the because of player segments first-party

way the all caused economy. seen read And So a in through Everything the and negative technology we you've believe that. I we've to results Good that, landscape. seen you've that another think step.

to we're with working I We're the with performance now the the -- also something say BXB sector right bank about customers and the it. on. that. that our where and say most in invest dealing It's market, sure is sound have the investors, with gross if they tech market that and dealing XXX talk sector strong of very we of long-term out XXX enterprise is you sector would in probably would we're the tech talk think long-term XXX to also to ability we enterprise markets. would the that the make viewpoint I So see

that's So for important us.

we're through yes, So the managing a market. downturn in

to business enterprise that aligned tech, Our to XXX% is pain. going are we feel BXB so

bit probably I that's also that worse as that talk around, we making think when upside, I little mentioned and But well. earlier. market we that those investments the why a capture feel we're turns others to

Rob Morelli

impact bringing at those last the in within of you in were marketing? Got some started guys have as there's Have it. of then see of you And their at layouts Thanks. kind and started they mentioned, And products your Thanks. sales tech industry. champions new opportunities? to as the jobs they you land

Michael Cotoia

of that budget the company this uncertainty, not are challenging. that cautious your some Again, so may are of caught still be spending now people with it we're the in then looking people -- you're hesitant. lets you uncertain Well, very that And jobs, the very makes are for that have. those whole staying were even in the very about move

with good customer, tell us goes will uncertainty. I get that's we in. has brand, those that of very might that see if have a folks pockets will to have good for good you this, tell happening. Typically, recognition So is this I we we us customers. -- mood and bring pickups and terms laid call see. in -- a to some they some our and we you relationships you the in off really that, on happened, another does somebody have listen, some But And focused And can and

to you very The terms investment folks a that thing hesitant more part the those yet, making the clarity have And have of landed and job remained looking the into of additional to that for make jobs that of market. job right or a sure that some not layup visibility Until in in weren't now. just see and that we spend their are their job. folks they're want

Rob Morelli

Got it. color. Thanks the for

Operator

The Bryan from you. question Bergin comes Thank TD Cowen. of next

You may proceed.

Bryan Bergin

it. wanted second comment Hi, Thank visibility on macro ask you. I you a that guys. half the can of outlook here the outlook assumptions question year. this your to through curious, embedded the Good I'm afternoon. the you've of and to in kind on

insights And any current be where 'XX still? that have qualified I around much to point or Thanks. at of so how is go Just in the a would outlook guess, work get this you you relative versus visibility typically your signed to pipeline year?

Michael Cotoia

look and look we half, then right at we Yes. what Thanks, we Bryan. at take have I I the now. like -- a second mean, we mentioned, look booked mean, QX, as you

into. visibility dynamics at have We We it. all look those on

that behavior the seeing like environment, current the with like account customers. we're into taking are also We

turns Like Silicon that be -- that if there yes, collapse, number. thing the understand Now positive, people I to said, is going nobody to counted hoping to some that. want enterprise to that Valley don't every could upside were improved. aligned think that be that there's we in But right? there be And space. think sure more to I so for tech people They XXX% time going I fully the make in for we're Bank

enterprise We XXX% the to tech space. are aligned

So we see that.

terms that, having even, is the the we and is QX ramps really we're QX seen we typically, conversations look at in But pretty have -- up. cycles of QX, QX that QX where what you've

is months determine out six really to going hard think now. QX into I right

our we what of five the pretty it changed. of now in is hasn't very last changes pretty market months, lot it's that what and because tech or it's fast. a we providing are the -- consistent in terms with pullback, see But So guidance six

-- to ball, on market in say a don't you based what tech lot uncertainty, hard seen think now, get there's and of lot right crystal genes things this. when because a I like on want doubt it's but So will give of a better we've the I is to

Bryan Bergin

It makes Okay. a And sense. No, complete follow-up. understood. then just

new for Engine. product the capabilities Priority letter So talks shareholder about

you're a some with integrations platforms workflows. and Can tease bit related focused on what kind out So there? working just more I on you of other that think,

Michael Cotoia

Yes, absolutely.

see over may X.X announcements a in of we two to you'll next terms lot of months we're once months what doing. some So the

A customers other allow really on. intent the platforms, not leverage number only Let data is and me automation power focused on, the prospect homegrown going our providers, their first-party at integrations are tech-enabled a, of give campaigns. what's that ATM it you some feedback and within platform our CRM within level, to will on proprietary other platforms, and it's one, account that lot sales and temp but an marketing whether marketing platforms

make data, have to Priority key that data in it's it's that in as because us or it's XYZ really proprietary the Engine power platform, or if throughout other access us. with customers to campaigns that for is sure whether important our really our that's So whether the nurturing supply, as well community have CRM and they the programmatic we customers their platforms or the important of for working partners the some

We're a and and that including also releasing help Priority will real-time features marketing going have relevant and be that enhanced improve very e-mail as against. about they how will sales to tool, action workflow specific direct Engine information can alerts

that For the website your organization work they pages website only was today, example, and but and being on what not to your on were XYZ website. able sales team marketing your on

target team through automation side, organizations to respective then being became able very reps able sales time push to and territory, unique, platform, buying within out provides an that marketer's -- the again, information a reps individual the at trigger laid-out whether and can easy being new it's the to and our also engage sales ways marketing active or with they award in to of them outreach, say member side. message, appropriate or So initiative technology promote on to marketing in workflows, their the level, very prospect tangible, out that that those on on it's -- to prospect the that own your you the on their that to actually whether personalize another and this sales sell the

the that this out marketing with as salesforce the make to analysis investments, the identified want identify workflow. Why we this our show, the we've tighter becoming we within that automation we've to around prior and TechTarget investments CRM past about that are customers' up all an we TechTarget we investments, because our data bringing well our in this opportunity opportunity the to sure talked opportunity announcing salesforce customers' We've is can integration customer are and and we bidirectional tied in data, salesforce.

we right post-opportunity we've departments. and identified customer accelerated that how in then And it. have our sales So creation date, front of marketing opportunity

really those key. So are

marketing updating And last time customers for excited we can our is, important again, investments thing and show both then which and really this talent within TechTarget that be dashboards users, enhancing and lines. for, one visualization our they've the the and sales really activity I'm working. around we'll It's made are

platform, buy, on which really identified have have your trigger you this been visualization in the when we've engaged it's steps quite announcing to with months, look So a buyers the most our progress last is actionable nine next we've of how It's some and visualization relevant a that. time, them, again right important. is is the back be on and and how here customers how you out in the TechTarget investments and buyers, that stuff working roll we'll for front the in

across marketing to attribution data honing to usage enable our their and that to the on to use leverage their focus to go they and and So market, investments as platform reliance see Those and sales a, increase our product are are can three any of areas and that see, the Priority platforms you show customers, our with ROI. really in in Engine we investments. results, all

Bryan Bergin

Okay. I on appreciate detail the all that.

side other investments next where on into it, standpoint? are a follow-up on a from at point here the potentially of able to, you're made you've the leverage margin you a Just this, year

Michael Cotoia

Yes.

and and this margin the around a we've and long-term first-party is others it when couple on what down this market, as data that seen, which long has, key market sets expansion content sale tech put impact worse departments, five investments term the and strong and other where turn is so our of still marketing areas. with that going the talking sales been that to right it for in growth be economy enterprise effective the years. their we strategy we've to for departments, last turns, other revenue all some make help a product, goal the the well know, And BXB data, modernizing is Our now, investments market the everybody about more make will leveraging getting than it marketing

Bryan Bergin

Okay. Thank you.

Operator

Bruce from of the comes of line Lake question next Markets. Street Goldfarb The Capital

You may proceed.

Bruce Goldfarb

taking call. for thanks my Hi,

shareholder like you highlighted technologies your that a Just areas in or targeting? investments. question strategic have Are the a a you for certain sort of letter, list there like of kind shopping

Michael Cotoia

some investments and Priority In around we're terms making Engine them, ROI. our investment. of was question making investments, We're the tracking tank seeing the one Bruce. last around on content enablement we platform some just capabilities services. content and We're around integration about That's usage, concentrated of around also discussed, in investments the

the seen and seen with technology relevant time on wants and and today's the BXB less So reps and time. we've buyer, their want time dealing content sales throughout vendors on time business that working spend and enterprise with we've their on to market buyer more research

leveraging And our so we to BrightTALK and investments to we content to well will ESG, who and engage of as attract our some really our key. an time customers have the through sure thoughtful then with content is about AI content our help the customers to helping buyers access put information buyers as together accelerate that right have those TechTarget the at right making that effective capabilities with strategy relevant talked around

me? I And other content just of always to rely say Because miss an technology will guys the can not at strategy, effective we hear we're at, want on buyers have reps They technology vendors. look in vendors not information looking time. because their do investments would that on on you then strategy, out want -- that this content to and do have thoughtful the a

Bruce Goldfarb

Yes, yes.

Michael Cotoia

our capabilities content, always investments other sets. prospects across is making the we're and technology-enabled data we're Okay. evaluating our that and And audience M&A the M&A

continue we're that. So going work to to on

Bruce Goldfarb

Great. year basis, you. last compare sales this then year? customer sort you sales metrics, And versus of how Thank same-store same would like for a

Michael Cotoia

do we we is disclose what Well, basis. an that annual on

in next So February as numbers, our on that and that we February well. was report will

it annual we an basis. on So do

Bruce Goldfarb

you. Thank Great. questions. are Those my all

Operator

line from of the comes question Kash next Goldman The of Rangan Sachs.

proceed. may You

Jacob Staffel

This is late question. little to taking Jacob the the I'm on for Kash. for Thanks party. a

if I there TechTarget? and are offering? to thing more more on a And something the into down mean apparent touch offers? has around this Can it become widespread, something we AI it color the has check implications how become lot to differentiator Are mean right, a competitive have like, day. you generative moat working One on topical your around saw and of XX% cases what a touched like other wanted already. TechTarget I apologize provide use seemingly was So the lot might I that? that of product viewing you you are implement as then close a or any I

Michael Cotoia

have Yes, problem had absolutely, we earlier, no this I this. Yes, Jack. but readdressing up brought

In TechTarget this been competitive years. and over terms leveraging thoughtful origination of a publishers market of content, investments AI, in like right AI the our workflow have relevant, And course advantage see actually, our we've in content we companies in of several and of now.

over And Yes, big proprietary might tenant in in to quality engaged, huge publishers are spent on That's space. has traffic. are then trying quick not can there in quality. competitive we relevant get to this that really thoughtful and have and recent companies use more that paid that sites other anglers in say be content powerful first-party a content providers very other believe sites, years the and investing extract purchase our audience advantage or attract very and a

competitive. we side, that on very feel So

rolling inside products. absolutely insights those purchase our terms to our purchase out and intent at embedding we're customers of our leveraging going are of proprietary first-party intent in Now be in will help

our example, to at that always of sure hand follow our have we is customers, being for done. or when sure hard off. So the relied, been up, that make making everything that's you they're And leveraging have mercy data,

vendors whose rep, to specific to then a trigger buying sales action and this, Mr. needs information this and address communicate We're outreaching team outreach first-party pain figures do technology insights Because in rep, to they're terms really recipe, going To sales they're to insightful recipe, points, very they sure provide on want that. this and and their X, smart. need as say, that. they X spending the member It's this, point, are leverage their trying buyers, be relevant. to information relevant, able They you to are you to our point these to pain purchases. of want and make their address good Mr. X, have entry with understand to insights really be when

data. have We that

Now going to data we're putting that customers' sure beneficial. on that our to be make workflow, acting that's

content The be to other enablement help thing help is that's accelerate services. to going our able

marketing power the customers. buying Our and the to we for every critical be personalized, insights on strategy that's content content marketing that to generate targeted marketing, side customers the need to technology and our side, going take field have, help teams be to is our product specific, able and more for scale help at

Jacob Staffel

more Okay. a AI can associated easily thinking content service unique own generative using phase quick makes I we the maybe area if about offers my TechTarget their be sense? guess sort out how that does that customer technologies, that should business in? though, that, and just that of a of Like, generate perspective, from follow-up, if

Michael Cotoia

not technology. are publishers produced Customers of It content. Yes.

content, have most and all at and content It's relevant professionals to technology community where at the to around you, it's specific don't going the no has the marry into up be BrightTALK going buyers. that our engagement, one you It's real. I'll fool vendor going be be has we to content, insights market access And trusted. So the [ph] to the tell that. we're can't relevant, million XXX also peer-to-peer we XX segments up deep looking

trusted content. buyers of So sources want

great a that. reputation on have We

going to that as and and content will independent served be really invest original in serve thoughtful So publishers my providers again, go in space. to I'm content strategic well and back this statement,

Jacob Staffel

you Thank so appreciate I Mike. that much, color. Okay.

Operator

There are registered currently time. this questions no at additional

Thank you for today's question-and-answer of time our conclude will participating. as call. well that as So

lines. You will your disconnect now

TechTarget (TTGT) 9 May 232023 Q1 Earnings call transcript