TechTarget, Inc.

The speakers joining us here today are Gary Nugent, our chief executive officer, and Dan Norick, our chief financial officer. Before turning the call over to Gary, 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 posted a press release to the investor relations section of our website and furnished it on an AK. You can also find these materials at the SEC free of charge at the SEC's website, www.sec.gov. A corresponding webcast as well as a replay of this conference call will be made available on the investor relations section of our website. Following Gary's remarks, the management team will be available to answer questions. Any statements made today by Informatech targets 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. An Informatech target 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 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.

Thank you very much, Charles. And of course, welcome and thank you all for joining the call today. As always, investing the time is very much appreciated. If I may, a few words of context or introductions. First and foremost, to be clear, what we're going to talk about today are preliminary Q1 2025 results. They are subject to final review by our independent registered accountants. The matter that's outstanding is the conclusion on impairment and the consequent income tax expenses associated. Therefore, what you will have seen in our release is effectively a range, a high and a low, as it's described. both on the subject of the impairment and the income tax expenses. It is our aim to file the Q1Q shortly after the July 4th holiday and from there we expect that our Q2Q will be filed on or before the 14th of August which will put us back on schedule. In that Q2, as you'll have seen in the release, in those Q2 filings, we do anticipate recording a further non-cash goodwill impairment, which reflects the current depressed market capitalization. If I can then just talk about the headlines of those preliminary results, I would just say, first of all, the first headline really is that the Q1 revenues were in line with our expectations in our previous guidance. On a combined company basis, Revenues declined by 6% year on year. And as we've highlighted, we see improving momentum as we go through the second quarter to the end of the first half, and we're expecting a mid-single-digit decline at the half year. In those Q1 results, we posted an adjusted EBITDA of $3 million. The second highlight is that we were reaffirming our full-year guidance. Our full year guidance being that revenues will be broadly flat on a year-on-year basis, on a combined company basis, and that we will post improving adjusted EBITDAs of $85 million plus. The third highlight I would describe as really a bit of an update on the combination program and the fact that we are combining at pace as we seek to lay the foundations and for growth as we move forward in time for the future years and in particular that those initial foundations focused on establishing leadership and reporting lines across the organization to ensure that we gave colleagues clarity early on and establishing our new operating model as a business and then from there The next phase was really about us looking at the product strategy and the product roadmap and the product portfolio and then simplifying our go to market structure and ensuring that we had clear market priorities and clear product priorities as we move forward. On that go to market structure and those priorities, we talk about our focus on our key client accounts and the investments that we've made to ensure that those customers are effectively addressed and giving us the opportunity to uncover, identify, and address, and then deliver against new business opportunities, new growth opportunities within those customers, and improve the client experience. We also similarly talk about a market focus and a priority for us in addressing the cybersecurity sector. And then the last thing I would say about in terms of the headlines of the release is really about our ongoing, our confidence in the long term. We still believe that this is an incredibly attractive end market. The intersection of the technology sector and B2B marketing is a large $20 billion addressable market with many dynamics that we believe are favorable to our company and in our ability to compete and win in that market. through the breadth and the scale and the diversity that the combination affords us as we bring the companies together. And that has been no more so. I think that confidence has only been reinforced in the recent customer conversations that we've been having. In particular, over the last couple of weeks, we had the opportunity to host a number of our most valuable customers at Cannes in Nice. And similarly, we also hosted our ROI Summit with over 130 customers in London. And in all of those conversations, I was continued to be encouraged that what we are proposing is really leaning into the needs and the wants of our largest customers. We talk therefore about where we see the growth coming from, where we see that long-term growth coming from, first and foremost in increasing our penetration of the enterprise IT market. And then beyond that, We talk about the lever that is international expansion and the fact that 40% of our addressable markets is outside of the United States. We talk about the industry vertical technology market, which is actually demonstrating robust health at the moment. These are technology markets that are specific to given industry verticals, whether that be automotive industry or the telecommunications industry or the financial services industry, et cetera. And then we talk about our ability to create new products and bring those to market. And then finally, the fifth growth lever, which is as cash builds and our strength builds, our ability to supply capital to grow inorganically. We also talk about in the release, AI as an opportunity. We believe that the phenomenon that is artificial intelligence is a huge opportunity for our business. First and foremost, it is a market. Our own OMDIA analysts predict that the market for artificial intelligence products, services, tools, systems, however you would describe it, will be about a $190 billion market in and of itself by the end of 2028. And of course, as a business, it's our role to inform, to educate the buy side of the industry as they seek to make buying decisions, procurement decisions. And of course, it's our role to then connect the sales side of the industry to those buyers. And that is the heart of our business and therefore having a new robust technology market is a fabulous opportunity for this. We also see a huge opportunity in terms of the nature of our business and what we do and the use cases that exist for AI both generative and agentic and other forms of it lend themselves to our ability to improve our effectiveness and increase our efficiency and to be able to then turn that into competitive advantage in the marketplace. and we are working diligently to do that. And we also believe that we can see ways in which actually through the application of AI to our existing products and to new products that we have in our roadmap, that we can make those products more competitive, more functional, more feature rich, and more competitive. The last thing we talk about in the release is really something which is discussed regularly with our customers, with investors, And actually within the company as a whole is the way in which AI is changing how the world discovers and consumes information with a shift from the traditional search to AI-enabled platforms. And we are strengthening our capabilities in artificial intelligence engine optimization. And actually, we're learning that much of the skills and the knowledge and the experience we have in search engine optimization are highly applicable there. We will of course continue to invest in those search engine optimization skills because we believe that they are still very relevant moving forward. But also a key point that we wanted to make clear is that we also continue to invest in the many other audience development and engagement strategies that we have at our disposal as a business. For example, the industry dive outbound newsletter model, the BrightTalk and NetLine partnership models that exist, and of course, the access to the rich first-party data from Informa PLC and the events businesses, which we believe underlines the strength and diversity in our approach to building and nurturing audiences and then creating that permissioned first-party data, which underpins all of our products and services. I think I'll pause there and see if there are any questions or comments.

Of course, we will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you need to remove your question, please press star followed by two. Again, as a reminder, it is star one to ask a question. As a reminder, please pick up your speakerphone if you're using one today. Our first question comes from the line of Joshua Riley with Needham and Company. Your line is now open.