Executive Summary

Modest return to YoY growth and in-line execution: Q3 revenue was $58.47M (+2% YoY), GAAP net loss was $(1.72)M (−3% margin), and Adjusted EBITDA was $16.48M (28% margin). DSO improved to 64 days and free cash flow was $15.56M .
Results tracked prior guidance: Q3 revenue ($57–59M), net loss ($(1.9)–$(1.2)M) and Adjusted EBITDA ($16–17M) were all achieved within ranges set on Aug 8, 2024 .
Product roadmap advancing into 2025: Account Intent Feeds (Q2), Market Monitor (Q3), and Priority Engine Demand (Q4 launch) support a buying-group-centric GTM and deeper enterprise wallet share .
Combination with Informa Tech’s digital businesses remains a key catalyst; management expects close in Q4 and sees low-to-mid single-digit industry growth in Q4 and early 2025 as macro headwinds ease and AI-related R&D starts to commercialize .

What Went Well and What Went Wrong

What Went Well
- Returned to YoY revenue growth (+2%) with strong cash conversion: cash from operations $19.73M, FCF $15.56M; DSO improved to 64 days (vs 70 a year ago) .
- Product innovation pace high: Account Intent Feeds, Market Monitor, and Priority Engine Demand unify insights and activation across buying groups; early customer feedback and integrations (e.g., 6sense) are positives .
- Strategic combination on track: Special meeting held Nov 26; management reiterated confidence the deal strengthens content scale, data, research and end-to-end offering .
What Went Wrong
- Profitability still pressured: GAAP gross margin 62% (vs 67% in Q3’23), Adjusted EBITDA down 5% YoY to $16.48M; GAAP net loss $(1.72)M (−3% margin) .
- Elevated transaction and related expenses tied to the combination continue to weigh on GAAP results ($2.65M in Q3) .
- Macro demand cautious: management cites suppressed tech cycle, with SMB cohorts remaining challenged; growth expected to be led by large enterprise/strategic accounts near term .

Financial Results

Metric	Q3 2023	Q2 2024	Q3 2024
Revenue ($M)	$57.13	$58.91	$58.47
GAAP Net Income ($M)	$1.74	$1.31	$(1.72)
Diluted EPS ($)	$0.06	$0.05	$(0.06)
Net Income Margin (%)	3%	2%	−3%
Adjusted EBITDA ($M)	$17.37	$16.66	$16.48
Adjusted EBITDA Margin (%)	30%	28%	28%
GAAP Gross Margin (%)	67%	62%	62%
Adjusted Gross Margin (%)	71%	67%	67%
Cash from Operations ($M)	$25.83	$11.92	$19.73
Free Cash Flow ($M)	$22.21	$7.67	$15.56
DSO (days)	70	66	64

Additional balance sheet and liquidity highlights:

Cash, cash equivalents and short-term investments: $355.8M as of 9/30/2024 .
Convertible senior notes: ~$417M principal outstanding (2025: $3M 0.125% coupon; 2026: $414M zero coupon) .

Segment breakdown: Not disclosed in Q3 materials .

KPIs/Operating notes:

Allowance reserve improvement: reserve for doubtful accounts decreased by $2.0M vs year-end 2023 .
Repurchase authorization remaining: up to $92.9M, subject to Informa’s approval .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q3 2024	$57–$59	No update in Q3; actual delivered $58.47	N/A – quarter completed; achieved within range
Net Loss ($M)	Q3 2024	$(1.9)–$(1.2)	No update in Q3; actual $(1.72)	N/A – quarter completed; within range
Adjusted EBITDA ($M)	Q3 2024	$16–$17	No update in Q3; actual $16.48	N/A – quarter completed; within range
Revenue (directional)	Q4 2024 / early 2025	N/A	Expect low-to-mid single-digit growth for broader B2B tech landscape	New directional commentary
FY 2024 Revenue ($M)	FY 2024	$230–$235 (set in May)	No update provided in Q3 materials	No change disclosed

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
AI/Technology investment cycle	Customers keeping R&D spend robust; expectation of future commercialization driving later sales/marketing re-acceleration	Management expects new AI products to spur GTM spend; “worst of downturn behind us”	Improving setup; monetization seen ahead
Product roadmap	IntentMail AI, Account Intent Feeds, Market Monitor pilots	Market Monitor launched; Priority Engine Demand announced to operationalize buying groups	Platform unification accelerating
Macro/interest rates/election	High rates and uncertainty as headwinds	“Two interest rate cuts” and election clarity cited as constructive	Macro headwinds easing
Informa Tech combination	Targeting 2H’24 close; strategic rationale laid out (research/content scale)	Q4 close expected; special meeting Nov 26; confidence reiterated	On track; closing catalyst near term
Customer cohorts	Focus on enterprise/strategic accounts; integrations into martech	Growth to be led by enterprise/strategic; SMBs remain challenged	Mix shift to large enterprise
Collections/DSO	DSO 66 days in Q2; reserve reduced vs YE	DSO 64 days in Q3; continued strong collections; reserve down $2.0M vs YE	Steadily improving AR quality

Management Commentary

“We are encouraged to report modest year-over-year revenue growth for the second quarter in a row. We think it is clear that the worst of the downturn is behind us.” — Executive Chairman Greg Strakosch .
“In October, we announced Priority Engine – Demand… the first step in unifying the customer experience across all TechTarget solutions.” — Shareholder Letter .
“We… expect the broader tech B2B market landscape to show similar low to mid single digit growth in Q4 and through the early part of 2025.” — Shareholder Letter .
“At the account level, our customers… are craving for first-party account-specific intent feeds… [with] a partnership with the 6Sense Revenue AI Platform.” — CEO Mike Cotoia .
“Our focus right now is to close this combination with Informa Tech… and then… execute on the business [and] integration.” — CEO Mike Cotoia .

Q&A Highlights

Product adoption and 2025 pipeline: Management emphasized aggressive platform buildout (Account Intent Feeds, Market Monitor, Priority Engine Demand) to connect content, demand, and analytics, positioning for next-cycle acceleration .
AI monetization timing: Significant AI-related R&D across customers is expected to translate to a renewed GTM spend cycle as products hit market, benefiting TTGT’s first‑party intent‑driven platform .
Macro cycle and visibility: Signs of recovery include interest rate cuts and post‑election clarity; two consecutive quarters of YoY growth support confidence in continued modest growth into early 2025 .
Customer mix: Near‑term growth led by enterprise/strategic accounts; SMBs remain capacity and financing constrained, though TTGT’s breadth still enables selective SMB opportunities .
Informa integration readiness: “Day 1 to Day 365” planning underway with teams “lockstep”; management reiterated strategic fit and integration momentum ahead of expected Q4 closing .

Estimates Context

S&P Global consensus for Q3 2024 EPS/Revenue/EBITDA could not be retrieved at this time due to data access limits; therefore, comparisons vs Wall Street estimates are unavailable in this recap. We will update when S&P Global data access is restored [GetEstimates error].

Key Takeaways for Investors

Execution in Q3 met the plan: revenue within guidance, margins stable QoQ at 28% Adjusted EBITDA, and strong cash conversion (FCF $15.56M). This supports a stabilization narrative heading into year‑end .
Product cycle is a 2025 lever: Priority Engine Demand and Market Monitor advance the buying‑group GTM and analytics story, deepening enterprise use cases and upsell potential .
Mix shift to large accounts should sustain early upturn: management expects enterprise and strategic cohorts to drive growth, with SMB exposure still cautious—a constructive quality tilt for margin durability .
Macro tailwinds building: management cites rate cuts and post‑election clarity while expecting low‑to‑mid single‑digit market growth in Q4/early 2025; AI R&D commercialization could amplify demand in 2025 .
Near‑term catalyst: anticipated Q4 close of the Informa Tech digital combination, expanding content/data/research scale and cross‑sell capacity; integration execution will be the next watch item .
Risk checks: GAAP profitability remains pressured by transaction expenses and lower gross margins vs prior year; continued delivery on cost discipline and integration synergies will matter for multiple support .
Liquidity and balance sheet provide flexibility: $355.8M of cash and investments and repurchase capacity (subject to Informa approval) offer optionality through the integration period .

Sources: Q3 2024 8‑K and Shareholder Letter ; Q3 2024 earnings call transcript ; Q2 2024 8‑K and Shareholder Letter ; Q1 2024 8‑K and Shareholder Letter ; Press releases (Priority Engine Demand; Special Meeting/S‑4; Q3 webcast) .

TechTarget Inc (TTGT)·Q3 2024 Earnings Summary