8-K

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): August 5, 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)

Registrant’s 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 August 5, 2014, TechTarget, Inc. (the “Company”) issued a press release announcing its results for the second fiscal quarter ended June 30, 2014. TechTarget is also posting a copy of its supplemental Shareholders Letter with respect to the completed quarter 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 8.01. Other Events.

On August 5, 2014, the Company announced that, on August 4, 2014, its Board of Directors authorized a $20 million stock repurchase program. The Company is authorized to repurchase the Company’s common stock from time to time on the open market or in privately negotiated transactions. The timing and amount of any shares repurchased will be determined based on an evaluation of market conditions and other factors. The Company may elect to implement a Rule 10b5-1 trading plan to make such purchases, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be funded with cash on hand.

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 August 5, 2014 is furnished herewith.

99.2 A copy of the Shareholders Letter posted by TechTarget, Inc. to its website on August 5, 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.
	By:	/s/ Janice Kelliher
Date: August 5, 2014		Janice Kelliher
		Chief Financial Officer and Treasurer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

TechTarget Reports Second Quarter 2014 Financial Results

Company Announces $20 Million Share Buyback

Newton, MA — August 5, 2014 — Technology media company TechTarget, Inc. (NASDAQ: TTGT) today announced financial results for the three months ended June 30, 2014:

• Online revenue grew 16%

• International revenue grew more than 20%

• IT Deal Alert^™ revenue grew 20% sequentially to $4.1 million

• Adjusted EBITDA grew 92% to $5.3 million

• Company generated $9.6 million in cash

• Company announces $20 million share buyback

“The momentum in our business, especially IT Deal Alert and our direct international operations, is continuing as evidenced by our healthy Q2 results and Q3 forecast,” said Greg Strakosch, TechTarget CEO. “Today, we are also announcing a $20 million stock repurchase plan. At current levels, we believe the Company’s stock is attractively valued and believe the repurchase of the Company’s shares represents an excellent long-term investment and that this action demonstrates our commitment to enhancing shareholder value.”

Our revenue for Q2 2014 grew 13%, to $26.1 million, when compared with the same period in 2013. Online revenue for Q2 2014 grew 16% to $23.7 million compared to Q2 2013.

Adjusted EBITDA (earnings before interest, other income and expense, income taxes, depreciation and amortization, as further adjusted to eliminate secondary offering costs and stock-based compensation) for Q2 2014 increased 92% to $5.3 million compared to $2.7 million for Q2 2013.

Total gross profit margin for Q2 2014 was 73%, compared to 69% for Q2 2013. Online gross profit margin increased to 74% for Q2 2014, compared to 70% for Q2 2013. Events gross profit margin increased to 61% for Q2 2014, as compared to 60% for Q2 2013.

Net income was $1.3 million for Q2 2014 compared to a net loss of $0.9 million in Q2 2013. Adjusted net income (net income adjusted to eliminate amortization, stock-based compensation expense, secondary offering costs and the related income tax impact of these charges) for Q2 2014 was $2.5 million compared to $1.0 million in Q2 2013. Net income per basic share for Q2 2014 was $0.04 compared to net loss per basic share of $0.02 for Q2 2013. Adjusted net income per share (adjusted net income divided by adjusted weighted average diluted shares outstanding) for Q2 2014 was $0.07 compared to $0.03 for Q2 2013.

We generated $9.6 million of cash in the quarter. As of June 30, 2014, our cash, cash equivalents and investments totaled $41.9 million, and we had no outstanding bank debt.

Recent Company Highlights

• We had more than 150 IT Deal Alert customers in the quarter. We generated $4.1 million in revenue from IT Deal Alert in the quarter, which is up 20% sequentially from Q1. The renewal rate among our top 100 customers was over 75% and their revenue renewal rate continues to be over 200%.

• International online revenues increased in excess of 20% in the quarter over the second quarter of 2013. International online revenues represented 32% of online revenues.

• We completed a secondary offering of 5,750,000 shares of common stock at a price of $6.25 per share. All of the shares were sold by selling shareholders and we did not receive any proceeds.

• We won 22 Editorial Excellence Awards from the American Society of Business Publication Editors. We won 6 Gold awards, 11 Silver awards and 5 Bronze awards. TechTarget has won over 130 awards for editorial excellence.

Q3 2014 Financial Guidance

In the third quarter of 2014, the Company expects total revenues to be within the range of $24.3 million to $25.5 million, online revenues within the range of $22.0 million to $23.0 million, events revenues within the range of $2.3 million to $2.5 million and adjusted EBITDA to be within the range of $3.2 million to $4.2 million.

Timing Note: Events revenue guidance reflects the movement of an annual event that was held in September of 2013 that will be held this year in October. The event generated approximately $0.9 million of revenue in Q3 2013 and we forecast that it will generate a similar amount of revenue in Q4 2014.

Conference Call and Webcast

TechTarget will discuss these financial results in a conference call at 5:00 p.m. (Eastern Time) today (August 5, 2014). Supplemental financial information and our Chief Executive Officer’s Letter to Shareholders will be posted to the Investor Information section of our website simultaneously with this press release.

NOTE: Our Chief Executive Officer’s 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 TechTarget’s 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 1-888-339-0724 (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 August 5, 2014 one (1) hour after the conference call through September 5, 2014 at 9:00 a.m. ET. To listen to the replay, for US, dial
1-877-344-7529 and use the conference number 10049049. Canadian callers should dial 1-855-669-9658 and also use the conference number 10049049. International callers should dial 1-412-317-0088 and also use the conference number 10049049. 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 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 secondary offering costs, stock-based compensation and restructuring charges, if any. The term “adjusted net income” refers to a financial measure which we define as net income adjusted for amortization, stock-based compensation, secondary offering costs 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 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 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 Company’s 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, including particularly continued increased sales of our IT Deal Alert offering and continued increased international growth; 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 Web’s leading destination for serious technology buyers researching and making enterprise technology decisions. Our extensive global network of online and social media, powered by TechTarget’s Activity Intelligence™ platform, allows technology sales and marketing teams to leverage real-time purchase intent data to more intelligently engage technology buyers and prioritize follow-up based on active projects, technical priorities and

business needs. With more than 120 highly targeted 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 sales and 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 000’s, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(Unaudited)
Revenues:
Online	$	23,652		$	20,371		$	45,732		$	38,846
Events		2,496			2,727			3,393			3,800
Total revenues		26,148			23,098			49,125			42,646
Cost of revenues:
Online(1)		6,149			6,138			12,239			12,066
Events(1)		979			1,087			1,526			1,763
Total cost of revenues		7,128			7,225			13,765			13,829
Gross profit		19,020			15,873			35,360			28,817
Operating expenses:
Selling and marketing(1)		10,007			9,093			19,753			18,213
Product development(1)		1,742			1,676			3,347			3,417
General and administrative(1)		3,774			3,645			7,106			6,952
Depreciation		1,012			985			2,001			1,857
Amortization of intangible assets		454			548			905			1,282
Total operating expenses		16,989			15,947			33,112			31,721
Operating income (loss)		2,031			(74	)		2,248			(2,904	)
Interest expense, net		(11	)		(9	)		(21	)		(6	)
Income (loss) before provision for (benefit from) income taxes		2,020			(83	)		2,227			(2,910	)
Provision for (benefit from) income taxes		717			788			789			(497	)
Net income (loss)	$	1,303		$	(871	)	$	1,438		$	(2,413	)
Net income (loss) per common share:
Basic	$	0.04		$	(0.02	)	$	0.04		$	(0.06	)
Net income (loss) per common share:
Diluted	$	0.04		$	(0.02	)	$	0.04		$	(0.06	)
Weighted average common shares outstanding:
Basic		32,891			39,110			32,788			39,567
Weighted average common shares outstanding:
Diluted		34,022			39,110			33,827			39,567
(1) Amounts include stock-based compensation expense as follows:
Cost of online revenues	$	21		$	38		$	51		$	85
Cost of events revenues		4			4			8			8
Selling and marketing		552			588			1,240			1,291
Product development		27			48			58			101
General and administrative		585			536			1,239			1,160

TECHTARGET, INC.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(in 000’s)

	For the Three Months Ended June 30,					For the Six Months Ended June 30,
	2014		2013			2014		2013
	(Unaudited)
Net income (loss)	$	1,303	$	(871	)	$	1,438	$	(2,413	)
Interest expense, net		11		9			21		6
Provision for (benefit from) income taxes		717		788			789		(497	)
Depreciation		1,012		985			2,001		1,857
Amortization of purchase price adj.		65		65			175		113
Amortization of intangible assets		454		548			905		1,282
EBITDA		3,562		1,524			5,329		348
Secondary offering costs		510		—			510		—
Stock-based compensation expense		1,189		1,214			2,596		2,645
Adjusted EBITDA	$	5,261	$	2,738		$	8,435	$	2,993

TECHTARGET, INC.

Reconciliation of Net Income (Loss) to Adjusted Net Income and Net Income (Loss) per Diluted Share to

Adjusted Net Income per Share

(in 000’s, except per share amounts)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
	(Unaudited)
Net income (loss)	$	1,303		$	(871	)	$	1,438		$	(2,413	)
Amortization of intangible assets		454			548			905			1,282
Stock-based compensation expense		1,189			1,214			2,596			2,645
Secondary offering costs		510			—			510			—
Amortization of purchase price adjustment		65			65			175			113
Impact of income taxes		(1,005	)		52			(1,833	)		(912	)
Adjusted net income	$	2,516		$	1,008		$	3,791		$	715
Net income (loss) per diluted share	$	0.04		$	(0.02	)	$	0.04		$	(0.06	)
Weighted average diluted shares outstanding		34,022			39,110			33,827			39,567
Adjusted net income per share	$	0.07		$	0.03		$	0.11		$	0.02
Adjusted weighted average diluted shares outstanding		34,022			39,517			33,827			40,040
Options, warrants and restricted stock, treasury method included in adjusted weighted average diluted shares above		—			407			—			473
Weighted average diluted shares outstanding		34,022			39,110			33,827			39,567

TECHTARGET, INC.

Financial Guidance for the Three Months Ended September 30, 2014

(in 000’s)

	For the Three Months Ended September 30, 2014
	Range
Revenues	$	24,300	$	25,500
Adjusted EBITDA	$	3,200	$	4,200
Depreciation, amortization and stock-based compensation		2,800		2,800
Interest and other expense, net		10		10
Provision for income taxes		160		570
Net income	$	230	$	820

EX-99.2

Exhibit 99.2

August 5, 2014

Dear Fellow Shareholders:

The momentum in our business continues as evidenced by our healthy Q2 results and Q3 forecast. Online revenue grew 16% in the quarter over the same quarter in 2013. Our international business had another solid quarter with revenues increasing over 20% from the prior year quarter. IT Deal Alert revenue grew 20% sequentially from $3.4 million in Q1 to $4.1 million in Q2. IT Deal Alert continues to make traction in all important areas; revenue growth, new customers, renewals and upsells.

Adjusted EBITDA was up 92% to $5.3 million. Adjusted EBITDA margin was 20% and Gross Margin was 73%. The Company generated $9.6 million of cash in the quarter.

We were pleased to have the opportunity in May to “re-introduce” the TechTarget story to institutional investors. We completed a secondary offering of 5.75 million shares that were sold by our early venture capital investors. The goal of the offering was to improve liquidity, broaden our shareholder base and rebuild independent, sell side analyst coverage. We accomplished all three objectives.

Share buyback

We announced today that our Board has authorized a $20 million stock repurchase plan. At current levels, we believe the Company’s stock is attractively valued and believe the repurchase of the Company’s shares represents an excellent long-term investment and that this action demonstrates our commitment to enhancing shareholder value.

Q2 2014 Results

Our revenue for Q2 2014 grew 13%, to $26.1 million, when compared with the same period in 2013. Online revenue for Q2 2014 grew 16% to $23.7 million compared to Q2 2013.

Adjusted EBITDA (earnings before interest, other income and expense, income taxes, depreciation and amortization, as further adjusted to eliminate secondary offering costs and stock-based compensation) for Q2 2014 increased 92% to $5.3 million compared to $2.7 million for Q2 2013.

Total gross profit margin for Q2 2014 was 73%, compared to 69% for Q2 2013. Online gross profit margin increased to 74% for Q2 2014, compared to 70% for Q2 2013. Events gross profit margin increased to 61% for Q2 2014, as compared to 60% for Q2 2013.

IT Deal Alert Update

IT Deal Alert continues to make traction in all important areas; revenue growth, new customers, renewals and upsells. IT Deal Alert revenues were approximately $4.1 million in the quarter, up from approximately $500,000 in Q2 2013 and approximately $3.4 million in Q1 2014. We had over 150 active customers in the quarter. Our renewal rate among our top 100 customers increased to over 75% and our revenue renewal rate for our top 100 customers continues to be over 200%.

International Update

EMEA and APAC revenues both grew more than 20% in the quarter. International revenue made up approximately 32% of the Company’s online revenues in the quarter.

We continue to have good success with IT Deal Alert internationally. In the second half of this year, we are expanding our European IT Deal Alert offering to include Continental Europe. For the first time, IT Deal Alert will be available in APAC. We expect both of these new offerings to contribute to growth in the second half of 2014 and in 2015.

Traffic Update

Organic traffic from Search is up 31% in the first two quarters of 2014. Organic traffic from Search was up 20% in Q2 with unpaid traffic representing 93% of traffic in the quarter. Our experience with Google Panda 4.0 is consistent with what we’ve seen on previous algorithm changes over the 15 years that we’ve been in business. Our experience over the long run is that high quality content is rewarded by search engines. The foundation of our business is producing fiercely independent, high-quality, in-depth content. This quarter, we are very proud that we won 22 Online Editorial Awards from the American Society of Business Publication Editors.

It is important to note that run-of-site advertising only represents about 10% of our revenues. Historically, our sell-through rate on this inventory is between 65% and 70%, so fluctuations in organic traffic have a minimal impact on TechTarget’ s revenue, positively or negatively.

Balance Sheet

We generated $9.6 million in cash in the quarter, bringing our cash and investments to $42 million as of June 30, 2014.

Q3 2014 Guidance

We expect overall revenues in Q3 2014 to be between $24.3 million $25.5 million. We expect online revenues to be between $22 million and $23 million, which would represent 20% online revenue growth at the midpoint of the range. We expect adjusted EBITDA to be between $3.2 and $4.2 million.

Timing Note: Events revenue guidance reflects the movement of an annual event that was held in September of 2013 that will be held this year in October. The event generated approximately $0.9 million of revenue in Q3 2013 and we forecast that it will generate a similar amount of revenue in Q4 2014.

Summary

We are pleased with the results from the first half of the year. The momentum in our business makes us optimistic about the rest of 2014 and 2015. We look forward to sharing more good news in future quarters.

Sincerely,

Greg Strakosch

CEO

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, including particularly continued increased sales of our IT Deal Alert offering and continued increased international growth; 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.