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Thank you for joining the Informa TechTarget reports 2024 full year financial results. My name is Sami, and I'll be coordinating your call today. During the presentation, you can register a question I'll now hand over to your host, Charles Renick, General Counsel at Informa TechTarget to begin. Please go ahead, Charles. Thank you, Sammy, and good morning, everyone.
10m 28s
The speakers joining us here today are Gary Nugent, our Chief Executive Officer and Dan Norick, our financial officer. Before turning the call over to Gary, 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 a press release to the Investor Relations section of our website and furnished it on an eight ks. Can also find these materials with the SEC 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 Informa TechTarget that are not factual, including during the Q and 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 ks.
11m 32s
These statements speak only as of the date of this call, Informant TechTarget undertakes no obligation to revise or update any forward looking statements order to reflect 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 the extent available without unreasonable effort accompanies our press release. And with that, I'll turn the call over to Gary.
12m 3s
Thank you, Charlie.
12m 4s
Good morning from Boston, Massachusetts.
12m 7s
And thank you for investing the time to join us today and for your patience while we walk through the Informa TechTarget. 2024 audit and preparations for the 10 ks filing. We filed our full set of 2024 financial statements and the annual report on Form 10 ks last week on May 28. Which is available at www.informatechtarget.com. Reported results for 2024 reflect the structure of the combination. Comprising twelve months contribution from the Informa Tech digital businesses and around one month contribution from the legacy TechTarget business. Being the period from completion of the transaction on 12/02/2024 through to the year end. On this basis, reported revenues were $285,000,000 with a GAAP net loss of $117,000,000 The latter reflecting the contribution period of TechTarget acquisition and integration costs and non cash impairments at the point of combination. Adjusted EBITDA was $31,000,000 On a combined company basis, assuming the combination was in effect from 01/01/2024 we delivered full year revenues of $490,000,000 in line with the previous guidance. This equates to broadly flat underlying performance for the year reflecting the subdued market backdrop with a activity levels impacted by geopolitical tensions and macroeconomic uncertainties. The combined company net loss was $166,000,000 and combined company adjusted EBITDA was $82,000,000 The latter included certain non recurring operating costs relating to the combination, including an allocation of the Informa Group's central costs to the Informa Tech digital businesses in 2024.
14m 12s
A portion of which are included in the transitional service agreements entered into on the closing date. Our financial position at the year end was strong with cash cash equivalents and short term investments of around $354,000,000 and around $416,000,000 of outstanding convertible senior notes. Given the subdued market backdrop, I would describe our performance in 2024 as robust. Holding revenues while improving margins. And if you let me turn to the future, our combined business sits at the intersection of two attractive and dynamic markets. Technology and B2B marketing. Representing a $20,000,000,000 addressable market. Through this combination, are creating the scale talent and operating platform to nurture and build specialist audiences and deliver increasing value for clients. And I am excited and optimistic about the opportunity that we have ahead of us and how that can translate into value for our other stakeholders too. Including our shareholders and our 2,000 or so colleagues at Informa Tech. Target. In 2025, the foundation year for Informa TechTarget our focus is on combining our strengths across brands, [indiscernible] go to market and talent. To position the business for long term growth. The combination program to successfully integrate the legacy companies is well underway.
15m 46s
With all executive and senior leadership appointments completed 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. Product strategy work is advancing well, including a repositioning of the net line product to address the volume end of the demand market. And reshaping the intelligence and advisory portfolio to better meet the needs. Of our evolving customer requirements.
16m 23s
We are tracking well ahead of year one operating cost synergy target of $5,000,000 with a high degree of confidence in our ability to meet or beat the $45,000,000 overall run rate synergies targeted by year three. The business environment remains subdued. But our guidance remains in line with previous commentary with a target for broadly flat like for like revenues and an increase in adjusted EBITDA for the year.
16m 51s
Supported by the over delivery of combination synergies and non recurrence of one off combination costs that were included within the 2024 results. Beyond the near near term market dynamics, and the foundation year, we remain confident in the medium term growth opportunities for Informa TechTarget underpinned by innovation and growth in technology and the increasing demand for more efficient data driven B2B digital services. A final note we will be we will update our investor presentation following today's call which again you will find on www.informatectarget.com. Thank you. I will now pass the call back to our moderator, Sami. And open the call for any questions.
17m 44s
You very much.
17m 58s
Our first question comes from Joshua Riley from Needham. Your line is open.
18m 3s
Please go ahead.
18m 7s
All right. Great. Thanks for taking my questions.
18m 10s
Maybe to start off with now, you know, we haven't had a call in a while. So I think it would be helpful to get an update on how AI is impacting your business, 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 b to b tech purchase today versus a year or a go or more when, there was less proliferation of GenAI tools.
18m 42s
Hi, Josh. Thanks for the question. Let me maybe think about this or break this down into sort of three component parts. The first thing of course is that your AI as a technology is a market in and of itself for our company, for our business. So in other words, we are in the position to inform and educate and connect the market, the buy side of the market about AI technologies and how they can be applied to business. And of course, within the business, end up also the AI companies who providing products and services and technologies 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 and with enthusiasm. You then got the second thing I think which is how do we apply AI to our business First and foremost to improve upon our effectiveness and our efficiency. And again, have a number of initiatives across the business to do so. We can see this in many areas of our business and our research and intelligence and advisory capabilities and our editorial and audience development capabilities and indeed in our marketing and sales capabilities in our go to market.
19m 55s
And we are applying that to our business to improve our and to improve our effectiveness and indeed to improve quality. And we then have matter of applying AI to actually improve the products and bring new products and services to market. And of course, you will have, you know, in the last half of last year, you will have heard TechTarget and make talk about the application of AI. To the Priority Engine product to actually help the sales use cases engage with their customers is a good example of that. And then maybe finally to your point about how AI is impacting the way in which the market marketplace discovers content and consumes content and is informed and educated. I would say that but obviously there will be, I think, I mean, application [indiscernible] particular is changing that landscape. Certainly what we are seeing is that when customers are open buyers to be precise, when buyers are in the market and are looking to make large capital decisions, significant investments in their business, They are needing deep research into the subject and are looking for content which comes from a 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 research.
21m 28s
Got it. That's very helpful. Appreciate that. Do you mention in the release that the cost synergies are on plan or ahead of in terms of timing. You've now had some time to review the combined company, can you just comment on how you feel about the total $45,000,000 in cost and revenue synergies in both terms of timing? And then is that still a total number that you're comfortable with going forward?
21m 55s
I can 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. And I think we will try certainly on the if you recall synergies of $45,000,000 are broken down into both cost synergies and revenue synergies. In particular, we feel confident in our ability to accelerate the cost synergy side of that equation. And on the revenue synergy side of that equation, we're confident that we will be on track.
22m 28s
Got it. And then maybe I'll just throw one more out there. You talked about some short term disrupts into the business. In January and February. Maybe you can just discuss know, what what happened there. How you remedy that, pretty quickly within a quarter to be executing moving forward. Thanks, guys.
22m 45s
Thank you. Largely, that's about us approaching implementing a combination plan, Josh. Obviously, when we bring two companies together, there's lots of work to be done on processes, on systems, on the operating model and organization design. I talked earlier on about us go to market strategy and the adjustments in the sales [indiscernible] Etcetera. There's obviously an element of disruption associated with that. But we felt that it was important that we get ahead of the curve and that we execute with pace and get ourselves into a position to anticipate the market opportunity.
23m 31s
Thank you.
23m 37s
Our next question comes from Jason Kreyer from Craig Hallum. Your line is open. Please go ahead.
23m 44s
Wonderful. Thank you. Thank you for taking my questions. So Gary, you talked about kind of a subdued market that you're seeing right now. So I'm wondering if could just give more details on what that means, maybe more external. You talked about kind of the internal disruption, but, know, more details on the macro would be great. And then just as a follow-up, your guidance kinda called for, you know, more of a decline in the near term with you know, more momentum as we get into the back half of the year. Can you talk about what gives you the confidence in that and what you're hearing from customers that that gets you to that conclusion? Thank you.
24m 23s
Yes, of course, Jason. Thank you for the question. I think we used the term subdued market and I think that is reflective of what we experienced in 2024. As well. So I suppose what we're really seeing is that we're seeing a continuation of the pattern in 2024 and that's why it reflects all that. So neither is yet a significant improvement or for that much of a deterioration would be made description of that. In terms of what gives me confidence in improving in the back half of the year is largely around the investments that we're making. So The Us pressing ahead with our combination and putting and getting ourselves in a position to anticipate the market more effectively in the half of the year. Through our new go to market model, through the product strategy and the product roadmap that we've created and generally leveraging if you like, the thesis that was the combination in the first place. Which is that in bringing these two companies together, we create a company that has breadth and scale and in doing so that breadth and scale will play out in the marketplace and win out in the marketplace, particularly with the larger customers in the market who have scale requirements and then we have the ability to meet those scale requirements.
25m 43s
Gary, can you call out any opportunities in the near term where you say you know, the the the early stages of this integration, you can see more success with the cross sell? Or areas where you're already seeing success with cross sell? [indiscernible] I would see we'd just save that in two ways. We've certainly seen what I would describe as tactically success with the cross sell. As we've taken the customer relationships that we had from both sides of the combination and leveraging them to drive incremental revenues. Incremental sales and incremental revenues. And we've already seen some success of that throughout the first quarter. I think separate and distinct from that, there was what I would describe as maybe more of the strategic cross sell, which is actually our ability to put much larger proposals in front of our customers. And therefore we are seeing and we could have one or two really interesting examples of us putting large larger sized proposals in front of our customers our customers buying into that and of course their ability to increase our average deal size with our customer base over time is an important part of our strategy.
26m 56s
Alright. Thank you. Appreciate it.
27m 8s
Our next question comes from Merrick Eric Martinuzzi from Lake Street. Your line is open. Please go ahead.
27m 18s
About a third of your business is subscription or at least that's the the number I have. From might have been 2023. I'm not sure if that still applies for the 2024 numbers, but just wondering if you could comment on how renewals went over the past quarter or so in comparison to a year ago and whether you know, kind of a net revenue retention or a gross renewals Just curious to know how the subscription business has gone.
27m 51s
Thank you, and the the largest element of our subscription business is in the intelligence and the advisory space. And I would say if I sort of recall really year on year, the value based renewal rates are holding holding flat as I would say year on year, it was my observation. Similarly then I think we have other subscriptions in the brand to demand [indiscernible] And I would say a little bit flat year on year to a little bit down from a value perspective in some areas. But generally speaking, I'm comfortable in the quality of the product and our ability [indiscernible] drive growth in those products over the long term of of the year.
28m 41s
Okay. And that also, I assume, is the better you're expecting better in the second half of '25 than in the first half? I I think I think I would expect so, yes. But I would say that in terms of growing the subscription businesses and holding revenue holding the renewal rate is obviously a strong part of that. Strategy and improving them modestly. But really I think the acquisition of new customers and growing the base within our existing customers, what I would describe is new upsell to the subscription or new subscription. Customers as a core part of the strategy.
29m 22s
Okay.
29m 23s
And then you talked about on the product side repositioning Netline to the volume end of the market How has that process been going?
29m 36s
Certainly, we're very encouraged with the q one experience of taking that product to that end of the market in the market except Alright. And then what exactly do you mean by the reshaping of the intelligence and advisory portfolio to better meet evolving customer demand? Could you give an example?
30m 1s
This this was largely about a taking the portfolio of services, in particular the intelligence services within the intelligence and advisory portfolio and and what are the maybe what you might describe is packaging them into a fewer number of larger packages. And then also aligning those packages with the segments in the market place. That we see, the segments being enterprise IT, consumer industrial, and telecommunications and service providers. So it's really about product packaging. And taking packages, which I think were more suited the needs and the requirements of the market marketplace. In addition to that, then in bringing the enterprise strategy group business and joining that with the Omnia and the wards and the Canalys business. [indiscernible] We've now created two consulting capabilities, one which is the strategy consulting capability and the other which is the go to market strategy consulting capability. And I think that creates so much cleaner offering in the marketplace to those corporate strategists and analyst relations product business unit leaders, product managers and product marketers.
31m 21s
Got it.
31m 22s
And then lastly, Dan, what can you tell us about the latest for the cash and debt balances, either a March 31 update of the or maybe even the May update on cash and debt.
31m 39s
Sure, Eric. I mean, from a net debt position, we are fundamentally in the same place. Right? Because we use the cash that was on hand plus we drew down $135,000,000 on the revolver line of credit. To fund the repayment of the convertible notes. But fundamentally, the net debt position is the same.
32m 3s
Got it. Thank you.
32m 5s
Yep.
32m 12s
We currently have no further questions. And with that, would like to thank you all for joining us today. This concludes today's call. You may now disconnect your lines.
Key Insights
Reported 2024 revenues of $285M and a GAAP net loss of $117M, reflecting one month of legacy TechTarget contribution and acquisition/integration costs; adjusted EBITDA was $31M. On a combined company basis (assuming full-year combination), revenues were $490M, net loss $166M, and adjusted EBITDA $82M, in line with previous guidance.
The company describes 2024 performance as robust given a subdued market backdrop, with flat underlying performance and improved margins; cash, cash equivalents, and short-term investments at year-end were ~$354M, with ~$416M in outstanding convertible senior notes.
Integration of Informa Tech and TechTarget is progressing well: all executive and senior leadership appointments are complete, sales organization restructuring is accelerated, and product strategy work is advancing (including repositioning Netline and reshaping the intelligence/advisory portfolio).
Cost synergy targets are ahead of plan: tracking well above the year one $5M target and confident in meeting or exceeding the $45M run-rate synergy target by year three; guidance for 2025 is for flat like-for-like revenues and increased adjusted EBITDA, supported by synergy delivery and non-recurrence of one-off costs.
Subscription business renewal rates are holding flat year-on-year; cross-sell opportunities are already yielding incremental revenues, with larger proposals being put in front of customers. Management remains optimistic about medium-term growth opportunities driven by innovation, technology market growth, and demand for data-driven B2B digital services.
