TechTarget (TTGT) Q1 2025 Earnings Call Transcript

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Adjusted EBITDA: $31 million in adjusted EBITDA, reflecting underlying earnings generated by the reported structure in 2024

Subscription Renewal Rates: Value-based renewal rates in intelligence and advisory remained flat year-on-year for the period referenced

Other Brand to Demand subscriptions were flat to slightly down in value year-on-year for the period referenced

Sales Organization: Restructuring accelerated, with a unified go-to-market strategy emphasizing largest customer accounts

Duct Strategy: NetLine repositioned for higher-volume segment, and Intelligence & Advisory offerings consolidated into fewer, larger packages aligned by key industry segments

Cross-Sell gress: Tactical success with cross-sell and initial execution of larger combined posals, contributing to increased average deal size

AI Initiatives: Company applies AI to operational efficiency, duct enhancements (such as integration into Priority Engine for sales use cases), and market education on AI nologies

Net Debt Position : CFO Daniel Noreck stated, "fundamentally, the net debt position is the same" after repayment of convertible notes and use of revolving credit

SUMMARYTarget (TTGT -0. 07%) management confirmed the combination with Informa duced a strong cash position and integration gress, supported by leadership appointments and restructured reporting lines

Major integration milestones were during the quarter, and cost discipline was demonstrated

CEO Nugent said, We are tracking well ahead of our year 1 operating cost synergy target of $5 million and have a high degree of confidence in our ability to meet or exceed the $45 million overall run-rate synergies targeted by year 3 (non-GAAP)

The integration duced successful tactical and strategic cross-selling, with several larger posals accepted by key customers and an upsizing of average deal value

Subscription renewal rates in the intelligence and advisory segments remained stable year-on-year

AI's market impact spans three key areas: direct vertical opportunity, operational ductivity, and duct enhancement, but no material shift in serious buyer re behavior was reported

INDUSTRY GLOSSARYAdjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for nonrecurring and non-cash items, used for operating performance assessment

Run-rate synergies: Expected recurring annualized savings or incremental value created by the combination or integration of two companies, once integration is fully realized

NetLine: A demand generation duct positioned for high-volume B2B lead dery within the combined company's duct suite

Priority Engine: A prietary platform incorporating AI to imve sales targeting and customer engagement for enterprise nology decisions

Full Conference Call TranscriptGary Nugent, our Chief Executive Officer; and Dan Noreck, our Chief Financial Officer

Before turning the call over to Gary, we would to remind everyone on the call of our earnings release cess

As previously announced, in order to vide you with an on our in advance of the call, we have posted a press release to the Investor Relations section of our website and furnished it on an 8-K

You can also find these materials with the SEC free of charge at the SEC's website, www

The corresponding webcast as well as a replay of this conference call will be made available on the Investor Relations section of our website

Ing Gary's remarks, the management team will be available to answer questions

Any statements made today by Informa Target that are not factual, including during the Q&A, may be considered forward-looking statements

These forward-looking statements, which are subject to risks and uncertainties, are based on assumptions and are not guarantees of our future performance

Actual results may differ materially from our forecast and from these forward-looking statements

Forward-looking statements involve a number of risks and uncertainties, including those discussed in the Risk Factors section of our most recent periodic report filed on Form 10-K

These statements speak only as of the date of this call, and Informa Target undertakes no obligation to revise or any forward-looking statements in order to reflect events that may arise after this conference call, except as required by law

Finally, we may also refer to certain financial measures not prepared in accordance with GAAP

A reconciliation of certain of these non-GAAP financial measures to the most comparable GAAP measures, to the extent available without unreasonable effort, accompanies our press release

And with that, I'll turn the call over to Gary

Gary Nugent: Thank you, Charlie

On this basis, reported revenues were $285 million with a GAAP net loss of $117 million, the latter reflecting the contribution period of Target, acquisition and integration costs, and noncash impairments at the point of combination

This equates to broadly flat underlying performance for the year, reflecting the subdued market backdrop, with activity levels impacted by geopolitical tensions and macroeconomic uncertainties

Through this combination, we are creating the scale, talent, and operating platform to nurture and build specialist audiences and der increasing value for clients

The combination gram to successfully integrate the legacy companies is well underway, with all executive and senior leadership appointments and reporting lines and responsibilities confirmed

The restructuring of our sales organization has been accelerated, including a unified go-to-market strategy that gives increased focus to our largest customer accounts through dedicated service teams

Duct strategy work is advancing well, including a repositioning of the NetLine duct to address the volume end of the demand market and reshaping the Intelligence & Advisory portfolio to better meet the needs of our evolving customer requirements

Beyond the near-term market dynamics and the foundation year, we remain confident in the medium-term growth opportunities for Informa Target, underpinned by innovation and growth in nology and the increasing demand for more efficient data-driven B2B digital services

A final note, we will our investor presentation ing today's call, which again, you will find on www

I will now pass the call back to our moderator, Sami, and open the call for any questions

Operator: [Operator Instructions] Our first question comes from Joshua Reilly from Needham

Joshua Reilly: All right

Maybe to start off with, we haven't had a call in a while, so I think it would be helpful to get an on how AI is impacting your, including the risks and opportunities

And maybe touch on the trends you're seeing with the average number of white papers and webinars that customers are reading and watching before making a B2B purchase today versus a year ago or more when there was less liferation of gen AI tools

Gary Nugent: Josh, thank you for the question

Let me maybe think this or break this down into of 3 component parts

The first thing, of course, is that AI as a nology is a market, in and of itself, for our company, for our

So in other words, we are in the position to inform and educate and connect the market, the buy side of the market, AI nologies and how they can be applied to

And of course, we're in the then of also the AI companies, who are viding ducts and services and nologies, to then actually reach those audiences, reach those buyers and decision-makers

So that is, in and of itself, a market for us and one that we're addressing with enthusiasm

You've then got the second thing, I think, which is how do we apply AI to our, first and foremost, to imve upon our effectiveness and our efficiency

And again, we have a number of initiatives across the to do so

We can see this in many areas of our, in our re, in intelligence and advisory capabilities, in our editorial and audience development capabilities, and indeed, in our marketing and sales capabilities and our go-to-market

And we are applying that to our to imve our efficiency and to imve our effectiveness and indeed, to imve quality

We then have the matter of applying AI to actually imve the ducts and bring new ducts and services to market

And of course, in the latter half of last year, you will have heard Target and Mike talk the application of AI to the Priority Engine duct to actually help the sales use cases, engage with their customers, as a good example of that

And then maybe finally, to your point how AI is impacting the way in which the marketplace discovers content and consumes content and is informed and educated

I would say that obviously, there will be, I think -- I mean, the application of generative AI, in particular, is changing that landscape

But certainly, what we are seeing is that when customers are -- or when buyers, to be precise, when buyers are in the market and are looking to make large capital decisions, significant investments in their, they are needing deep re into the subject and are looking for content which comes from authoritative and unbiased and known sources

And so we're not really seeing any changes in the pattern of that, what I would call, serious buyer re

Joshua Reilly: Got it

You mentioned in the release that the cost synergies are on plan or ahead of expectations in terms of timing

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

Gary Nugent: I can confirm that I am comfortable with the total number, and it's certainly our intention to meet or exceed that over the period

In particular, we feel confident in our ability to accelerate the cost synergy side of that equation

On the revenue synergy side of that equation, we're confident that we will be on track

Joshua Reilly: Got it

And then maybe I'll just throw one more out there

You talked some short-term disruptions to the in January and February

Maybe you can just discuss what happened there and how you remedied that pretty quickly within a quarter to be executing moving forward

Gary Nugent: Largely, that's us apaching -- implementing a combination plan, Josh.