UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 12, 2014
TechTarget, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 1-33472 | 04-3483216 | ||
(State or Other Jurisdiction of Incorporation |
(Commission File Number) |
(IRS Employer Identification No.) |
275 Grove Street, Newton MA | 02466 | |
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code: (617) 431-9200
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On February 12, 2014, TechTarget, Inc. (the Company) issued a press release announcing its results for the fourth fiscal quarter and year ended December 31, 2013. TechTarget is also posting a copy of its supplemental Shareholders Letter with respect to the completed quarter and fiscal year on the Investor Information section of its website at www.techtarget.com. The full text of the press release issued in connection with the announcement and the related Shareholders Letter are furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K. The information contained in Item 2.02 of this Form 8-K (including Exhibits 99.1 and 99.2) shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation by reference language in such filing, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) | Exhibits. |
The following exhibits relating to Item 2.02 shall be deemed to be furnished, and not filed:
99.1 | A copy of the press release issued by TechTarget, Inc. on February 12, 2014 is furnished herewith. |
99.2 | A copy of the Shareholders Letter posted by TechTarget, Inc. to its website on February 12, 2014 is furnished herewith. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TechTarget, Inc. | ||||||
Date: February 12, 2014 | By: | /s/ Janice Kelliher | ||||
Janice Kelliher Chief Financial Officer and Treasurer |
Exhibit 99.1
FOR IMMEDIATE RELEASE
TechTarget Reports Fourth Quarter and Full Year 2013 Financial Results
Newton, MA February 12, 2014 Technology media company TechTarget, Inc. (NASDAQ: TTGT) today announced financial results for the three months and year ended December 31, 2013.
I am proud that 2013 is TechTargets 10th consecutive year of both positive adjusted EBITDA and cash flow said Greg Strakosch, TechTarget CEO. Despite the continued softness in IT spending, we are forecasting a return to double-digit revenue growth in 2014, based on the positive momentum of our new data analytics suite of products, IT Deal AlertTM and the continued 20% plus online revenue growth of our international operations.
Q4 2013 online revenue decreased by 3% to $22.0 million compared to Q4 2012. Online revenues represented 93% of total Q4 2013 revenues. Q4 2013 events revenue decreased by 37% to $1.7 million compared to Q4 2012 and represented 7% of total Q4 2013 revenues. Total Q4 2013 revenues decreased 6% to $23.7 million compared to Q4 2012. Total 2013 online revenue decreased by 10% to $79.7 million compared to 2012. Online revenues represented 90% of total 2013 revenues. Total 2013 events revenue decreased by 26% to $8.8 million compared to 2012 and represented 10% of total 2013 revenues. Total 2013 revenues decreased 11% to $88.4 million compared to 2012.
Adjusted EBITDA (earnings before interest, other income and expense, income taxes, depreciation and amortization, as further adjusted to eliminate stock-based compensation) for Q4 2013 decreased 37% to $3.6 million compared to $5.8 million for Q4 2012.
Total gross profit margin for Q4 2013 was 72%, compared to 74% for Q4 2012. Online gross profit margin decreased slightly to 74% in Q4 2013, as compared to 75% in Q4 2012. Events gross profit margin decreased to 54% for Q4 2013, as compared to 63% for Q4 2012. Total gross profit margin for full year 2013 was 69%, compared to 72% for full year 2012. Online gross profit margin decreased to 71% in full year 2013 compared to 73% in full year 2012. Events gross profit margin decreased to 57% for full year 2013, as compared to 64% for full year 2012.
Q4 2013 was slightly below break-even compared to net income of $1.0 million in Q4 2012. Adjusted net income (net income adjusted to eliminate amortization, stock-based compensation expense and the related income tax impact of these charges) for Q4 2013 was $1.4 million compared to $3.1 million for Q4 2012. Net loss per basic share was $0.00 for Q4 of 2013 compared with net income per basic share of $0.03 for Q4 of 2012. Adjusted net income per share (adjusted net income divided by adjusted weighted average diluted shares outstanding) for Q4 2013 was $0.04 compared to $0.08 for Q4 2012. Net loss was $1.8 million for full year 2013 compared to net income of $4.0 million for full year 2012. Adjusted net income (net income adjusted to eliminate amortization, stock-based compensation expense and the related income tax impact of these charges) for full year 2013 was $3.4 million compared to $10.1 million for the full year 2012. Net loss per basic share was $0.05 for full year 2013 compared with net income per basic share of $0.10 for the full year 2012. Adjusted net income per share (adjusted net income divided by adjusted weighted average diluted shares outstanding) for the full year 2013 was $0.09 compared to $0.25 for the full year 2012.
The Companys balance sheet and financial position remain strong. As of December 31, 2013, the Companys cash, cash equivalents and investments totaled $33.8 million, and the Company had no outstanding bank debt. In the quarter, the Company used approximately $35.5 million to buy shares of its common stock in a tender offer that was completed on October 25, 2013.
Recent Company Highlights
| 2013 was TechTargets 10th consecutive year of posting both positive adjusted EBITDA and cash flow. In 2013, the Company used its healthy cash flow to re-purchase 9.7 million shares for $48 million. In the past 3 years, the company has re-purchased 15.7 million shares returning $84 million to shareholders. The Company has $34 million in cash and investments and no debt. |
| IT Deal Alert continues to gain traction in the market with over 100 customers using the service in Q4, generating approximately $2.8 million in revenue in the quarter and $4 million in 2013. The Company forecasts that IT Deal Alert revenue will grow at least 20% sequentially in Q1 and at least triple in 2014. |
| International online revenue grew over 20% in 2013, which is the 5th consecutive year of international online revenue growth over 20%, since the company commenced its strategy of migrating from a partnership model to international direct operations. The Company is forecasting international online revenue growth of 20% to 25% in 2014. |
Financial Guidance
In Q1 2014, we are forecasting our return to growth. We expect online revenues will be up between 5% and 10% versus the same period a year ago. For 2014, we expect online revenues will grow in the double-digits. Due to the inherent operating leverage in our business model, we forecast that this revenue growth will translate into at least 50% growth in adjusted EBITDA.
We expect overall revenues in Q1 of 2014 to be between $20.1 and $21.2 million. We expect online revenues to be between $19.3 and $20.3 million. We expect event revenues to be between $0.8 and $0.9 million. We expect adjusted EBITDA to be between break-even and $1.0 million.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference call at 5:00 p.m. (Eastern Time) today (February 12, 2014). Supplemental financial information and our Chief Executive Officers Letter to Shareholders will be posted to the Investor Information section of our website simultaneously with this press release.
NOTE: Our Chief Executive Officers Letter to Shareholders will not be read on the conference call. The conference call will include only brief remarks followed by questions and answers.
The public is invited to listen to a live webcast of TechTargets conference call, which can be accessed on the Investor Information section of our website at http://investor.techtarget.com. The conference call can also be heard via telephone by dialing 1-888-317-6016 (US callers), 1-855-669-9657 (Canadian callers) or 1-412-317-6016 (International callers).
For those investors unable to participate in the live conference call, a replay of the conference call will be available via telephone beginning February 12, 2014 one (1) hour after the conference call through March 12, 2014 at 9:00 a.m. ET. To listen to the replay, for US, dial 1-877-344-7529 and use the conference number 10039337. Canadian callers should dial 1-855-669-9658 and also use the conference number 10039337. International callers should dial 1-412-317-0088 and also use the conference number 10039337. The webcast replay will also be available for replay on http://investor.techtarget.com during the same period.
Non-GAAP Financial Measures
This release and the accompanying tables include a discussion of adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per share, all of which are non-GAAP financial measures which are provided as a complement to results provided in accordance with accounting principles generally accepted in the United States of America (GAAP). The term adjusted EBITDA refers to a financial measure that we define as earnings before net interest, other income and expense, income taxes, depreciation and amortization, as further adjusted to exclude stock-based compensation and restructuring charges, if any. The term adjusted EBITDA margin refers to a financial measure which we define as adjusted EBITDA as a percentage of total revenues. The term adjusted net income refers to a financial measure which we define as net income adjusted for amortization, stock-based compensation and restructuring charges, if any, as further adjusted for the related income tax impact of the adjustments. The term adjusted net income per share refers to a financial measure which we define as adjusted net income divided by adjusted weighted average diluted shares outstanding. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. In addition, our definition of adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per share may not be comparable to the definitions as reported by other companies. We believe adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per share are relevant and useful information because it provides us and investors with additional measurements to compare the Companys operating performance. These measures are part of our internal management reporting and planning process and are primary measures used by our management to evaluate the operating performance of our business, as well as potential acquisitions. The components of adjusted EBITDA include the key revenue and expense items for which our operating managers are responsible and upon which we evaluate their performance. In the case of senior management, adjusted EBITDA is used as one of the principal financial metrics in their annual incentive compensation program. Adjusted EBITDA is also used for planning purposes and in presentations to our board of directors. Adjusted net income is useful to us and investors because it presents an additional measurement of our financial performance, taking into account depreciation, which we believe is an ongoing cost of doing business, but excluding the impact of certain non-cash expenses and items not directly tied to the core operations of our business. Furthermore, we intend to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting. A reconciliation of these non-GAAP measures to GAAP is provided in the accompanying tables.
Forward Looking Statements
Certain matters included in this press release may be considered to be forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team. All statements contained in this press release, other than statements of historical fact, are forward-looking statements, including those regarding: guidance on our future financial results and other projections or measures of our future performance; our expectations concerning market opportunities and our ability to capitalize on them; and the amount and timing of the benefits expected from acquisitions, from new products or services and from other potential sources of additional revenue. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. These statements speak only as of the date of this press release and are based on our current plans and expectations, and they involve risks and uncertainties that could cause actual future events or results to be different than those described in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those relating to: market acceptance of our products and services; relationships with customers, strategic partners and our employees; difficulties in integrating acquired businesses; and changes in economic or regulatory conditions or other trends affecting the Internet, Internet advertising and information technology industries. These and other important risk factors are discussed or referenced in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, under the heading Risk Factors and elsewhere, and any subsequent periodic or current reports filed by us with the SEC. Except as required by applicable law or regulation, we do not undertake any obligation to update our forward-looking statements to reflect future events or circumstances.
About TechTarget
TechTarget (NASDAQ: TTGT) is the online intersection of serious technology buyers, targeted technical content and technology providers worldwide. Our extensive network of online and social media, powered by TechTargets Activity Intelligence platform, redefines how technology marketers view and engage technology buyers based on their active projects, specific technical priorities and business needs. With more than 120 technology-specific websites and a wide selection of custom advertising, branding, lead generation, and sales enablement solutions, TechTarget delivers unparalleled reach and innovative opportunities to drive technology marketing success around the world.
TechTarget has offices in Atlanta, Beijing, Boston, Cincinnati, London, Munich, Paris, San Francisco, Singapore and Sydney.
To learn how you can engage with serious technology buyers worldwide, visit techtarget.com and follow us @TechTarget.
(C) 2014 TechTarget, Inc. All rights reserved. TechTarget and the TechTarget logo are registered trademarks, and IT Deal Alert and Activity Intelligence are trademarks of TechTarget. All other trademarks are the property of their respective owners.
Contacts: | ||||
Investor Inquiries | Media Inquiries | |||
Janice Kelliher | Peter Ross | |||
Chief Financial Officer | Vice President, Corporate Marketing | |||
TechTarget | TechTarget | |||
617-431-9449 | 617-431-9668 | |||
jkelliher@techtarget.com | pross@techtarget.com |
TECHTARGET, INC.
Consolidated Statements of Operations
(in $000s, except per share amounts)
Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(Unaudited) | ||||||||||||||||
Revenues: |
||||||||||||||||
Online |
$ | 22,033 | $ | 22,636 | $ | 79,709 | $ | 88,192 | ||||||||
Events |
1,706 | 2,723 | 8,787 | 11,799 | ||||||||||||
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Total revenues |
23,739 | 25,359 | 88,496 | 99,991 | ||||||||||||
Cost of revenues: |
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Online(1) |
5,782 | 5,695 | 23,362 | 23,513 | ||||||||||||
Events(1) |
787 | 1,012 | 3,771 | 4,301 | ||||||||||||
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Total cost of revenues |
6,569 | 6,707 | 27,133 | 27,814 | ||||||||||||
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Gross profit |
17,170 | 18,652 | 61,363 | 72,177 | ||||||||||||
Operating expenses: |
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Selling and marketing(1) |
9,934 | 9,246 | 36,920 | 36,718 | ||||||||||||
Product development(1) |
1,618 | 1,866 | 6,715 | 7,521 | ||||||||||||
General and administrative(1) |
3,609 | 3,145 | 14,156 | 13,206 | ||||||||||||
Depreciation |
1,005 | 851 | 3,823 | 3,279 | ||||||||||||
Amortization of intangible assets |
467 | 697 | 2,223 | 3,351 | ||||||||||||
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Total operating expenses |
16,633 | 15,805 | 63,837 | 64,075 | ||||||||||||
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Operating income (loss) |
537 | 2,847 | (2,474 | ) | 8,102 | |||||||||||
Interest (expense) income, net |
(35 | ) | 22 | (20 | ) | 107 | ||||||||||
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Income (loss) before provision for (benefit from) income taxes |
502 | 2,869 | (2,494 | ) | 8,209 | |||||||||||
Provision for (benefit from) income taxes |
503 | 1,847 | (657 | ) | 4,185 | |||||||||||
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Net (loss) income |
$ | (1 | ) | $ | 1,022 | $ | (1,837 | ) | $ | 4,024 | ||||||
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Net (loss) income per common share: |
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Basic |
$ | 0.00 | $ | 0.03 | $ | (0.05 | ) | $ | 0.10 | |||||||
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Net (loss) income per common share: |
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Diluted |
$ | 0.00 | $ | 0.02 | $ | (0.05 | ) | $ | 0.10 | |||||||
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Weighted average common shares outstanding: |
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Basic |
33,363 | 40,469 | 37,886 | 40,211 | ||||||||||||
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Weighted average common shares outstanding: |
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Diluted |
33,363 | 40,956 | 37,886 | 40,910 | ||||||||||||
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(1) Amounts include stock-based compensation expense as follows: |
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Cost of online revenues |
$ | 45 | $ | 52 | $ | 173 | $ | 202 | ||||||||
Cost of events revenues |
6 | 6 | 18 | 18 | ||||||||||||
Selling and marketing |
815 | 675 | 2,751 | 2,888 | ||||||||||||
Product development |
58 | 71 | 212 | 265 | ||||||||||||
General and administrative |
633 | 553 | 2,431 | 1,894 |
TECHTARGET, INC.
Reconciliation of Net (Loss) Income to Adjusted EBITDA
(in $000s)
For the Three Months Ended December 31, |
For the Twelve Months Ended December 31, |
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2013 | 2012 | 2013 | 2012 | |||||||||||||
(Unaudited) | ||||||||||||||||
Net (loss) income |
$ | (1 | ) | $ | 1,022 | $ | (1,837 | ) | $ | 4,024 | ||||||
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Interest expense (income), net |
35 | (22 | ) | 20 | (107 | ) | ||||||||||
Provision for (benefit from) income taxes |
503 | 1,847 | (657 | ) | 4,185 | |||||||||||
Depreciation |
1,005 | 851 | 3,823 | 3,279 | ||||||||||||
Amortization of purchase price adj. |
55 | | 201 | | ||||||||||||
Amortization of intangible assets |
467 | 697 | 2,223 | 3,351 | ||||||||||||
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EBITDA |
2,064 | 4,395 | 3,773 | 14,732 | ||||||||||||
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Stock-based compensation expense |
1,557 | 1,357 | 5,585 | 5,267 | ||||||||||||
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Adjusted EBITDA |
$ | 3,621 | $ | 5,752 | $ | 9,358 | $ | 19,999 | ||||||||
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TECHTARGET, INC.
Reconciliation of Net (Loss) Income to Adjusted Net Income and Net (Loss) Income per Diluted Share to
Adjusted Net Income per Share
(in $000s, except per share amounts)
For the Three Months Ended December 31, |
For the Twelve Months Ended December 31, |
|||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(Unaudited) | ||||||||||||||||
Net (loss) income |
$ | (1 | ) | $ | 1,022 | $ | (1,837 | ) | $ | 4,024 | ||||||
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Amortization of intangible assets |
467 | 697 | 2,223 | 3,351 | ||||||||||||
Stock-based compensation expense |
1,557 | 1,357 | 5,585 | 5,267 | ||||||||||||
Amortization of purchase price adjustment |
55 | | 201 | | ||||||||||||
Impact of income taxes |
(646 | ) | 29 | (2,775 | ) | (2,579 | ) | |||||||||
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Adjusted net income |
$ | 1,432 | $ | 3,105 | $ | 3,397 | $ | 10,063 | ||||||||
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Net (loss) income per diluted share |
$ | 0.00 | $ | 0.02 | $ | (0.05 | ) | $ | 0.10 | |||||||
Weighted average diluted shares outstanding |
33,363 | 40,956 | 37,886 | 40,910 | ||||||||||||
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Adjusted net income per share |
$ | 0.04 | $ | 0.08 | $ | 0.09 | $ | 0.25 | ||||||||
Adjusted weighted average diluted shares outstanding |
34,100 | 40,956 | 38,430 | 40,910 | ||||||||||||
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Options, warrants and restricted stock, treasury method included in adjusted weighted average diluted shares above |
737 | | 544 | | ||||||||||||
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Weighted average diluted shares outstanding |
33,363 | 40,956 | 37,886 | 40,910 | ||||||||||||
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TECHTARGET, INC.
Financial Guidance for the Three Months Ended March 31, 2014
(in $000s)
For the Three Months Ended March 31, 2014 |
||||||||
Range | ||||||||
Revenues |
$ | 20,100 | $ | 21,200 | ||||
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Adjusted EBITDA |
$ | (16 | ) | $ | 984 | |||
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|||||
Depreciation, amortization and stock-based compensation |
3,060 | 3,060 | ||||||
Interest and other income, net |
(10 | ) | (10 | ) | ||||
Benefit from income taxes |
(1,415 | ) | (950 | ) | ||||
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Net loss |
$ | (1,651 | ) | $ | (1,116 | ) | ||
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Exhibit 99.2
February 12, 2014
Dear Fellow Shareholders:
We are forecasting double-digit revenue growth and 50% plus adjusted EBITDA growth in 2014. This growth is based on the growing popularity of IT Deal AlertTM, our new data analytics-based family of products, and continued 20% plus growth of international online revenues. It is important to note that we are not counting on a recovery in IT advertising spending. Based on conversations with our customers, we are planning on the assumption that marketing budgets have stabilized at 2013 levels, which is a step-down from the previous years. When IT spending recovers and marketing budgets start to grow again, we believe that the market share gains that we have made during this downturn will provide considerable upside.
2013 was marked by an unexpected slowdown in IT spending that forced our largest customers to reduce their marketing budgets. While this softness adversely affected our topline, we were able to manage our expenses to maintain double-digit adjusted EBITDA margins. Im proud to write that 2013 was our 10th consecutive year of positive adjusted EBITDA and cash flow.
Despite the macro IT challenges, the company stayed the course and continued to invest in new products and expansion of our international operations. Those investments are paying off. Our optimism regarding those efforts is one of the reasons that we were comfortable investing $48 million to repurchase 9.7 million shares in 2013.
Q4 2013 Results
Total Q4 2013 revenues decreased 6% to $23.7 million compared to Q4 2012. Q4 2013 online revenue decreased by 3% to $22.0 million compared to Q4 2012. Online revenues represented 93% of total Q4 2013 revenues. Q4 2013 events revenue decreased by 37% to $1.7 million compared to Q4 2012 and represented 7% of total Q4 2013 revenues.
Adjusted EBITDA (earnings before interest, other income and expense, income taxes, depreciation and amortization, as further adjusted to eliminate stock-based compensation) for Q4 2013 decreased 37% to $3.6 million compared to $5.8 million for Q4 2012.
Total gross profit margin for Q4 2013 was 72%, compared to 74% for Q4 2012. Online gross profit margin decreased slightly to 74% in Q4 2013, compared to 75% for Q4 2012. Events gross profit margin decreased to 54% for Q4 2013, as compared to 63% for Q4 2012.
International Update
International online revenues were up 23% in 2013 and represented approximately 30% of online revenues in 2013. This is the 5th consecutive year that International online revenues grew more than 20%. Our target is to maintain this 20% growth rate for several more years to come.
The migration of IT vendors international marketing budgets from offline vehicles to online is several years behind the US. As these budgets are re-allocated to online, we will benefit from our leadership position and our ability to leverage the strong partnerships we have with the largest IT vendors in the US. In Europe, we have had direct operations in the UK since 2009 and that business continues to develop nicely, posting better than 20% growth in 2013. We are optimistic about our prospects in the rest of Europe because we have only been direct in France since 2012 and in Germany, the largest IT market in Europe, since mid-2013. We also continue to add sales resources in APAC, including appointing our first APAC VP of Sales, a TechTarget veteran who recently relocated from our San Francisco office to Singapore. While our presence in Latin America is still relatively small, it is our fastest growing region.
IT Deal Alert Update
We continue to believe that IT Deal Alert offers us the opportunity to build a meaningful business around our proprietary IT purchase intent data. IT vendors admit that they still make too many of their sales and marketing decisions based on gut instinct. The trend is clear that sales and marketing management prefer using data to drive these decisions. We are uniquely positioned to benefit from this megatrend.
IT Deal Alert continues to gain traction in the market with over 100 customers using the service in Q4 2013, generating approximately $2.8 million in revenue in the quarter for a total of $4 million in 2013. As we scale this business, we are focused on 4 areas: 1. We want to continue to drive adoption among our customers; 2. We want to renew our existing IT Deal Alert customers at a high rate; 3. As most companies are still testing the service within one technology segment, we want them to eventually buy multiple segments; 4. Our long term strategy is to migrate our customers, who are currently buying this service quarterly, to buy the service as an annual subscription. While it is too early to draw firm conclusions from our results against these 4 efforts, we are encouraged by the early progress we have made.
Most of the success in Q4 was driven by our customers adoption of IT Deal Alert: Qualified Sales Opportunities, the full-service offering that we launched in Q3 2013. In the next few weeks, we will be announcing a major refresh of our self-service offering that we originally launched in early 2013. We think this product has the potential to provide meaningful growth in the second half of 2014 and 2015.
In regards to numbers, we expect Q1 2014 IT Deal Alert revenues will grow 20% sequentially from Q4 2013. While it is difficult to forecast the revenue ramp of new products, we are comfortable that IT Deal Alert revenues will at least triple in 2014 as compared to 2013.
Balance Sheet
The Companys balance sheet remains strong. The Company has $34 million in cash and investments and no debt.
Q1 2014 Guidance
In Q1 2014, we are forecasting our return to growth. We expect online revenues will be up between 5% and 10% versus the same period a year ago. For 2014, we expect online revenues will grow in the double-digits. Due to the inherent operating leverage in our business model, we forecast that this revenue growth will translate into at least 50% growth in adjusted EBITDA.
We expect overall revenues in Q1 of 2014 to be between $20.1 and $21.2 million. We expect online revenues to be between $19.3 and $20.3 million. We expect event revenues to be between $.8 and $.9 million. We expect adjusted EBITDA to be between break-even and $1.0 million.
Summary
We look forward to returning to growth in 2014. While we remain cautious about the general health of the IT market, we are very excited about the opportunity that our proprietary purchase intent data provides to build a meaningful business on top of our core online marketing business. In addition, we are confident in our ability to continue to grow our international business. As always, we remain focused on carefully managing expenses, investing appropriately, expanding margins and maintaining healthy cash flow to drive shareholder returns.
Sincerely,
Greg Strakosch
Chairman, CEO and Co-Founder
Forward Looking Statements
Certain matters included in this Letter to Shareholders may be considered to be forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team. All statements contained in this Letter to Shareholders, other than statements of historical fact, are forward-looking statements, including those regarding: guidance on our future financial results and other projections or measures of our future performance; our expectations concerning market opportunities and our ability to capitalize on them; and the amount and timing of the benefits expected from acquisitions, from new products or services and from other potential sources of additional revenue. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. These statements speak only as of the date of this Letter to Shareholders and are based on our current plans and expectations, and they involve risks and uncertainties that could cause actual future events or results to be different than those described in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those relating to: market acceptance of our products and services; relationships with customers, strategic partners and our employees; difficulties in integrating acquired businesses; and changes in economic or regulatory conditions or other trends affecting the Internet, Internet advertising and information technology industries. These and other important risk factors are discussed or referenced in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, under the heading Risk Factors and elsewhere, and any subsequent periodic or current reports filed by us with the SEC. Except as required by applicable law or regulation, we do not undertake any obligation to update our forward-looking statements to reflect future events or circumstances.
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