TechTarget, Inc.

Good afternoon. Thank you for attending the TechTarget Reports first quarter 2024 conference call-in webcast. My name is Cameron, and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for quick questions and answers at the end. And I would now like to pass the conference over to your host, Charles Reining, with the General Counsel. You may proceed.

Thank you, Cameron, and good afternoon, everyone. The speakers joining us here today are Greg Straykosch, our Executive Chairman, Mike Katoya, our Chief Executive Officer, and Dan Norick, our Chief Financial Officer. Before turning the call over to Greg, we would like to remind everyone on the call of our earnings release process. As previously announced, in order to provide you with an update on our business in advance of the call, we have posted our shareholder letter on the Investor Relations section of our website and furnished it on an AK. You can also find these materials with SEC free of charge at the SEC's website at www.sec.gov. The corresponding webcast, as well as a replay of this conference call, will be made available on the investor relations section of our website. Following Greg's introductory remarks, the management team will be available to answer questions. Any statements made today by TechTarget 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 reports on Forms 10Q and 10K. These statements speak only as of the date of this call, and TechTarget undertakes no obligation to revise or update 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, the most comparable GAAP measures, to the extent available without unreasonable effort, accompanies our shareholder letter. With that, I'll turn the call over to Greg.

Great. Thank you, Charlie. On January 10th, we entered into a definitive agreement with Informa to combine TechTarget with Informa Tech's digital business. The combined company will have increased scale with over 8,000 customers, in over 20 countries. First party purchase intent data from over 220 leading digital brands and a permissioned audience of over 50 million people. The combination increases our TN by 10 times as we will enter 18 new vertical markets with the unique end to end solution across our clients go to market. We've been pleased with the progress we've made over the past four months, and we are on track to have this transaction closed during the second half of 2024. The combination creates a company with a strong financial profile. We expect 2024 pro forma revenues to be over $500 million. Within five years, we expect revenue to grow to over $1 billion and with at least 35% EBITDA margins. We structured the deal so our shareholders will get some immediate benefit by paying out $11.79 per share in cash and long-term benefit by providing the opportunity for shareholders to participate in the long-term value creation through a 43% stake going forward. In regards to our first quarter, we are pleased to report revenues above consensus, and we believe our investments and product offerings are and will continue to pay off. We are forecasting Q2 revenues to be in the range of $57 million to $59 million, which represents a 12% sequential increase from Q1 and roughly flat year over year. We see that as support for a stabilized business with some signs of a return to normal seasonality. This reflects a macro technology environment in which customers remain cautious regarding their sales and marketing investment levels. We expect this dynamic to continue throughout 2024 because of uncertainty surrounding inflation, interest rates, the presidential election, and geopolitical issues. We expect a better macro environment in 2025 and 2026, which is good timing as the combined company will have additional scale to take advantage of the recovery. I will now open the call to questions.