Earnings call transcript Q2 2023

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Operator

Good afternoon and thank you for joining the TechTarget Report Second Quarter 2023 Conference Call and Webcast. My name is Kate, and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end.

I would now like to pass the call over to our host, Charles Rennick, with TechTarget.

You may proceed.

Charles Rennick

good and Kate, you, afternoon. Thank

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

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

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

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

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

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

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

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

Greg Strakosch

Thank you, Charlie.

technology market quarter. the our XXXX despite the macro that continued weakness hit pleased in the we QX are We during forecast

a environment like early to it say is seeing recovery, believe we the too feels While stabilizing. that we it's are

our guidance previous We XXXX. maintaining are for

strong these upswing. historically, for sheet we've eventual for balance the business market wishes to and down leadership a of nobody While and reinvest the using by our optimize cycles advantage taken downturn,

in off and our are We things customers, that are pay right shareholders currently the that the future. will for we optimistic employees doing

I the for call will up questions. now open

Operator

Absolutely.

the begin Justin The session. with will from KeyBanc. [Operator of line the be will We Patterson Instructions] now question-and-answer first question

is now line Your open.

Justin Patterson

good I tease Great. and just much you out Thank left you Greg wanted very just on. and that to afternoon. point team,

mentioned, you as opportunity view reposition the an really to that know downturns shareholders you business. long-time As TechTarget

how As out of a did about if the we of think come categories we lean out little macro. seeing this like growth know in downturn, AI teased the bit? you into what hit And should TechTarget, pace that bit just you letter you're these a the you then especially more out there, this to on but numbers quarter. love choppy still it's question, about second just little Obviously, for

You reaffirm the did guide.

seeing signs bad you're as little of anymore. more just not if a curious Thank things getting stabilization you. Just and

Mike Cotoia

invest this to Great. back back normalized in and through the navigating to terms that's we growth. Yes, growth, Justin, us taking seen help the we've opportunity going the double-digit downturn past we'll accelerate to get in with which what into business, of believe

to you this of macro, reallocate against is the and right with So our making we're product that we're during and has around And of resources the internally pivot lot playbook the areas then as right there's doing really aggressive on right of rollouts, always been we're focused things and being as a priorities. a sure part the sure well. making timing initiatives to feature that downturn, asked

macro seeing but are in – seeing the we some noted tremendously, we letter, improving signs of stabilization. we As the don't

of really when. there's their double-digit growth a a market flight that to, growth around proximity. data, intelligence, four, And and might used need think we to goes we're take for incremental and time, it's back, moving typically we three, that's not As first-party with margin quality the will they're more we five the navigate matter we that back alignment of see year expansion. of But if, a this. as forward to one into this And slowdown, And level EBITDA matter pipeline. at overall point, mentioned through when expanding companies what it prospect to feed last quarters margins at went to going

Justin Patterson

Thank you.

Operator

The you. will of from be the Needham with Thank line question & Josh Company. next Reilly

Your line open. is now

Rob Marelli

This the Josh. for is Hi. taking Rob for Marelli Thanks on question.

XX% incrementally given in trends cycle of the think still year With normal about seasonality be the in we seasonality? from the Is it that QX revenue in second to challenging, a half how sequential the increase Will QX? should place?

Mike Cotoia

at this it, year, a look the Yes. at and right. current you think it's Well, take look of conditions, as macro a sort changed I we bit little

reaffirmed So $XXX million like any overall to the this $XX pretty year in in million I million guidance $XX you – major we've swings we that $XXX of million at don't to QX. revenue if been think QX terms and see to look of I EBITDA, in

that making end an on and and as that into on going in to content tell our products, to into organization the but working does versus on, kind back It's focused the growth we're around the investments what pipeline QX XXXX. side, really I then the customers of around building of you that making need investments we're see go think QX. the focus some Gen we're AI that, opportunities we're really to the on year the it will early

build the that best at to and pipeline level. the account is And through quality data, insights prospect way quality

side, out the we the reconcile marry what you the what really to align had announced back based going seeing. which you range that and in QX range can you We're terms to May. in is So on of that plugging with for we can guidance, that well line numbers gave on in analyst it we

at I how look would So right now. that's it

Rob Marelli

upselling Thanks. we've is existing versus most acquisition challenged TechTarget Got gaining it. set use environment. One product of for new in you and heard would in customers business How retention? position That's helpful thing are color. cases the the new competitors cases terms customer current from the

Mike Cotoia

this spending, Yes. been can cases type the Because market, What think business talk to tech I'd pullback is math, we when a challenge. new in I always is logos net customers, there's see new say and layoffs But of on and as time, in and that customers down a in you like things this our to pipeline. point this engage it and trustworthy during to cycle on and a when really comes that. up believable need every back been happens again, goes a build there's

bear And so I will when think three that that on are that. there happens, things fruit

markets through And back particular they the they're to our product to investments customers innovation level flight Number very we net what intelligence. our terms will we check going land to there's make and cleansing the ROI a in going think of through be alignment Two, expand, get through customers. on new through there believe three, sure make are really to our cycle, and one, We prospect all be always driving as existing expense the acquisition. logo that. and I boxes this your protect be to

that So to we'll in see that hopefully XXXX. is sooner rather we're than planning this later, go something but

Rob Marelli

you. Thank it. Got

Operator

Thank question the Bhavin line will from be with next you. of The Shah Deutsche Bank.

now is open. line Your

Bhavin Shah

Great. Thanks questions. for taking my

a seeing after of changes customer other today. customers, kind elaborate difference in following Engine little what customers maybe cohort of improvement, any versus from play you Priority from you're the maybe Can be up any of and kind more Just you're seen marketing-focused quarter perspective, a would product on just from you bit seeing what of stabilization, some terms saw you've small on solutions? perspective your of And kind of more that helpful. to kind larger a of then even kind

Mike Cotoia

Sure.

also enabling our want on really data and with largest level. previous leverage we on own prospect key it integration sales one July XX, first-party that that, with launches Salesforce our talked prospect data, focus our to ABM this first-party one customers CRM So announced calls, data force priority we're third-party we Number to of TechTarget's new using we three account on their own data and customers really really was was about the data-driven system, four with or that our focused account to their what level on. And first-party but at within Bhavin, There data align are are TechTarget's sync and in earnings engine. who Connector. our their with platforms allow along first-party areas

workflows, the focus on should cadences, all understand and to you really only their want the sets can combine ABM on account outreach sales level, at but with – helps you That because based which not data strategies, activity. that prospects

a big So that's been pretty enhancement us. for

countless We accounts the help within also to on shortcut most launched data. new to territories interface the a reps UI/UX critical have side, sales a our

view click. favorite the prospects conversation. a view engaged have and example, right who their favorite with CRM. quicker of and some in of them contacts add their can or of their They some now them, store to identify context can actually can marketing they and content front accounts it to have They one For more

key other because us was to the engaged that journey our for we buyers launched is across really account what the want TechTarget thing in when within they show account those The we network, how are how It's are with reps visualization. and doing our the clients, when they become a engage researching, also researching, is sales when lead. And are accounts. what they and to been

your sales is the or that are doing. insights seeing. that help teams is this outreach is doing what show we TechTarget. now are marketing have So your done what them This have This with we not investments

really a accountable. big attribution, about all everybody launch. it's So visualization was and hauling That

the dashboards. and members that and We have creation close against as so accelerating make from been close those consent-based to opportunities providing prospect And prospect about want as data working we and are getting we in created a buying as are marketing we're attribution how show created level, and one efforts back that then how as the that as in are sure the to well can visualization lots. well much spend teams them new opportunity opportunity we and see accounts marketing and and opportunities that level transparency date have our updated GDPR, been look they that impact of that through

about deal, a that why win lot So that why we a lose a insights you might do can you there's with more around deal.

the that's So of road part map.

mean the and position I products, of expanded. today of has versus really In terms opportunities products – a probably other good in breadth we're our marketing

So we have in our different value walk and to customers. for show avenues

need priority if should want buyer for but strategy content doesn't should they positioning have example, their sign a a choose their we in customer they a choppy walk today macro solution, validation, economic a why content for around products, about enablement year choose – subscription, to So content can one, an with showing services. strategy, two in into technology up and

capabilities but FastReg, one which walk with click we’ve permission to to only help can to re-launched database there customers our own webinar promote our promote whole not where in their our updated We members, based. and the customer’s to walk branding database that prospects are demand information elements, elements. opted into based and our from We marketing about content register generation on we in our that already elements, know

our have a created reason where accounts, now pods says, Z, opportunity about we’ve that pain but an we is with and a accounts Y a that at accounts, points so a within have engaged of seen but when revamp set, engage would this and services content I enablement customer capability larger commit we end-to-end some and have those deliver or last strategic need. capability to entering are they quarter, can’t X, point value. a say they needs organization the sales has we that BrightTALK shiny value with bringing these TechTarget demand and So problems I how some we that I our or all talked ESG, a these a customer set, to which and we

So we’re on seeing that. some signs

think close think of very I very call, clients. existing as else on lot clients. mentioned being to – to a the our They in somebody front are want staying clients their of be existing their I

back as see think can as penetration to to this focus, logo expand. stabilization continues land you’ll flight go to net growth, market and from as new well I turn a

Bhavin Shah

insightful Super detail.

AI the know investments we a on side maybe more How kind quick and generative follow-up lot of about opportunity the of about the GenAI? the content things do making you’re I Just of and the the letter a leveraging in think and offer opportunity on Thanks. to of there. leveraging kind being able AI. creation on some you some of features talked articles

Mike Cotoia

question. That’s a Yes. great

are came was look And we experience. and in of vendors. constituents So There market around of I insightful of tech wants millennials. questions got with buyers, get in the get buying They look want study a serve the on markets seen lot the we buyers to up stage XXXX wanted Business to mean, And the their and stage you that’s that AI. technology at towards when Review generative content. driving that at rep you demographics side, content. the buyer, serve, free engaged a technology a the we all we’ve GenAI, of the really buyer millennials the XX% at millennial relevant Harvard deep end technology

We unbelievable Google TechTarget, alignment, that market the information. to an and go up. why serving people of – organic organic We an buyers remember search, we serve our opportunity when it’s you dominate we’re serve our and because content

those around the roadmap, GenAI are serve which part of one set customers that set going to we of all So particular is this, researchers who’s hired come knowledge AI to help topic running continue site, content go as insights things on, our that the and to a dominate TechTarget we through able worked at. our Strategic the up be on to capability Paul up Generative to type we’ve that looking Google, Healey, when to Strategy prompt based we’re

And think investments BXB say that lack of else I content, in they that there’s of in serve and this like of their area, can content tech I’ll nobody because this, our investments strong up. can in enterprise

for we my research everything in go with? community, for? content else that Google, buyer, as questions. are what can end reading few we I X, else I which I from insights, a our prompted, I get and served articles help search a our TechTarget strategy Ask community, enterprise buyer. now. is right there up group on content, to up Z, What Y, I a market looking you if and can protected Then go up Vendor So content, serve you BrightTALK I’m

a to productize for more our provides it capabilities flip and So then drives better more experience. at the it And the more to side, us engagement, customers insights end.

Bhavin Shah

taking for Thanks questions. Great. my

Operator

line Cowen. Bergin question with be from the TD next of will The Bryan

Your line is open. now

Bryan Bergin

a kind the Hi I of just wanted Thank stabilization. guys. click you. double afternoon. of Good to on feeling start

feeling? it about just So of sense comfort a slower can contractually confidence your the outlook you Is as a give that what’s, leads Is in Is touch? revenue calling, us actual result just talk in of in full the Can get it committed year? I a little within bit more funnel? that well more sales signings? a you guess, it level to

Mike Cotoia

conversations is, we customers, our teams, Yes. We stated shareholder But tell disclose committed. sales seen feel through we with with don’t contractually the conversations here’s more what can we’ve Bryan, in teams, success you the have what what letter, the our of the I like, customer there’s a stabilization.

a have the now As branding us creating earlier, reason about not of the but a a entry the the database, deal. of into to offerings little three there’s and some increasing a year, mentioned sign, cutting, minutes cost again, value beginning you get saw of also didn’t at around that customers want that to it’s a one know, to leads, around our fall. breadth People we – year messaging, still the few on a other it’s free points ago around was giving of there But I going bit or are talked as even activities. we engage two door bring might our or to layoffs to

pulled had of sales come back, lot those an have in So fruition we we they that bookings trend that seen that our a those and we’re don’t but committed it, more I signage. we’re in looked seeing where say, force you past or a some We’ve of if of percentage may it, the would quarter seen in terms forecasting certain to have got too. the disclose deals we’ve in seeing

we’re last XX want XX, trending that are we’ve optimistic. this, So seen out the to cautiously the of but early, days don’t over signs it’s say I

Bryan Bergin

Okay.

priorities? to as anything cash conversion good be cash free free off, the on deployment? hear. And mindful flow for M&A to capital just versus How and relates that’s to Okay, then it as a allocation, cash repo flow, maybe of flow, EBITDA given off active capital first cash on second maybe large sense of position about share appetite can allocation that here, more And half? you you us just give just you’re feeling generate

Dan Noreck

Yes.

change real no strategy. So in

at looking at buybacks and We’re shareholder said opportunities buybacks. we’re we letter, in share and potential as M&A looking

there. to continue opportunistic be fronts we’ll So on both

Bryan Bergin

Thanks.

Operator

be Thank Street the Capital. next from with of will Bruce Lake The question line you. Goldfarb

now is open. line Your

Bruce Goldfarb

and on for Thank taking results, the environment. you. given macro Thanks current my congrats your questions especially

Mike Cotoia

Bruce. Thanks,

Bruce Goldfarb

– you Have demand impacted a guys have you recovery seen in by Bank? of from that the were collapse accounts Valley Silicon

Mike Cotoia

still that on I say run in months, X.X going to Well, is, so repercussions report would I on any we there’s we some don’t issues would but down, tell that. that. I break that’s say cash What haven’t collection it would we you Bruce,

We’re are. still engaged as they with conversations

Some amount you’re jammed to costs people, I get budget, of want halt. are then accounts VC-backing, those like at spending, when companies. to of of But grow a of you good they’re all their to the those watching running accounts or all don’t all a say and brakes

very careful as investments can ROI you what believe You ROI. and to getting about X.X and you’re March is sure X we on on you that four, your that. that, are conversations into this only our the navigate to that make want attribute you to spend are continue collapse I

right of have have everything. and been should solutions We the right than front could you products might in it everything need do But the you you what breadth do? we’re you? to we might here’s accomplish? products help What you do of they appetite need put collapse. where now and And do their get be to you, then would but those pre-SVB I conversations versus, What can the how to need in right with fit going wanted that to say, for bigger not been

opportunity, up seen terms that to four It’s adverse date. plus conversations we’re an But going of forward early. we right since impact it’s now. still March Xth months think in haven’t see and I fairly go So but this pick and gradually,

Bruce Goldfarb

a – significant you. guess, guess in do believe I macro could a increase Thank XXXX? that And you I guess? base install improvement macro, the I price support assuming in the

Mike Cotoia

don’t to that now. want I answer right

If launching a on on road, I’d when that doing a in not ball, you today we’re we’re a don’t say price coming launches and price But crystal I by quarter, and have might warrant feature would then have we you week functionality which it ask But I the this there careful we’re and know let we’ll taking be down increase. by week, quarter and the very depends increase. it. me also yet November

Bruce Goldfarb

have then like with your change seen you assisted in And of search, arrival any rankings search AI the ChatGPT?

Mike Cotoia

No, – we rankings we see grow. tech. to rankings dominate our our search continue – continue BXB say, in search we enterprise have I’ll a

to search Our like enterprise site traffic XXX%. our was AI

If AI you or generative type in number GenAI generative is what is GenAI is what one. TechTarget or ranked or AI?

a know the of have but hundreds it’s ranked I are articles, known don’t We exact, lot organically. that

and Google to well So continue differentiator really drive will continue trusted offer. And and on we communities and sourced we and do they to Microsoft what key really publishers, researchers that. a to from that’s

Bruce Goldfarb

then Do mean, quarter. have at buyback And you. one you think current appetite on current during guys last price? the And my active the I active thank stock you Great. you or do were you’ll is, you’ll think prices, be

Dan Noreck

opportunistic. record. going – we’re been said, mean, going I And that’s our I to Yes, to track like we’re be to continue

I so, us the I to that wouldn’t would course strategy. to on And continue – expect pay

Bruce Goldfarb

thanks again. taking my Congrats And questions. Great. you. Thank for

Mike Cotoia

Bruce. Thanks

Operator

the question Ragnan next you. will Kash of line The Sachs. from Thank Goldman be with

Your now line is open.

Jacob Staffel

the for Thanks Kash. for on Jacob question. is this guys, taking Hey

Just be maybe me. Does expenses the processes mean and potential operations in And to rifts? appropriate. reducing wanted on an eye one helpful. meant by your go-to-market that that? ask slowdown anything proving on the what’s using you more streamlining with touch organization and letter around Can your really what might optimize to by that were was I from meant so shareholder

Mike Cotoia

one as focus Jacob, those real the probably few made And a on reporting, streamlining couple this was and so we on customer experience. of aware, last that the the things a big well you’re the systems, efficiencies, acquisitions year we there years, disparate the had over systems.

for force we sales had instances. we – three example so So had different

one. that integrated we’ve continue We – into

driving rift. we We deliver we we’re we And making or customers it, plan projects way We’re the that count, to our efficiencies, properly priorities can also to what we’re want looking data plan and and which them those with some tools streamlining reallocate make our that to on We other we workflow by we sure resources the those at right we then we’re plan that align at don’t to The of but sure are believe management have. opportunities meant staffed other most and a priorities. solutions. that. head that, we way capture on that’s we take those

Jacob Staffel

Awesome. Thank you so much.

Operator

you call. you. Q&A conference you may today’s Thank That concludes At this your disconnect lines. your participation. now Thank and today’s time, session for

TechTarget (TTGT) 8 Aug 232023 Q2 Earnings call transcript