Good afternoon. Thank you for attending today's TechTarget Reports Third Quarter 2024 Conference Call and Webcast. My name is Tamia, and I will be your moderator for today's call. All lines will be in mute during the presentation portion of the call. [Operator Instructions] I would now like to pass the conference over to your host, Charlie Rennick, General Counsel. You may proceed.

Thank you, Tamia and good afternoon, everyone. The speakers joining us here today are Greg Strakosch, our Executive Chairman; Mike Cotoia, our Chief Executive Officer; and Dan Noreck, our Chief Financial Officer. Before turning the call over to Greg, 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 have posted our Shareholder Letter on the Investor Relations section of our website and furnished it on an 8-K. You can also find these materials with the SEC free of charge at the SEC's website, www.sec.gov. The corresponding webcast as well as a replay of this conference call will be made available on the Investor Relations section of our website. Following Greg's introductory remarks, the management team will be available to answer your questions. Any statements made today by TechTarget 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 that 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 reports on Forms 10-Q and 10-K. These statements speak only as of the date of this call and TechTarget 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 Shareholder Letter. With that, I will turn the call over to Greg.

Great. Thank you, Charlie. We are encouraged to report modest year-over-year revenue growth for the second quarter in a row. We think it’s clear that the worst of the downturn is behind us. We expect to continue to see similar revenue growth in Q4 and into the early part of 2025. We have several reasons to be optimistic including a better interest rate environment, the certainty that comes with the election behind us, and the expectation that there will be a new technology investment cycle around AI. We used our strong balance sheet to invest during the downturn to strengthen our leadership position. This strength will be increased with the proposed combination with Informa Tech's digital business. We expect this deal to close this quarter. I will now open the call to questions.

We will now begin the Q&A session. [Operator Instructions] Our first question comes from Justin Patterson with KeyBanc. You may proceed.

All right. Thank you. Great. Two if I can. First, you've had a lot of product innovation this year. I'd love to hear just how customers are adopting some of these new products and what could be into the pipeline -- the product pipeline for 2025. So that's the first question. And then secondly, Greg, I just wanted to come back to that point you talked about. There's going to be an AI investment cycle here. I know it is something we are all trying to work through the pace of. When you look at page views on your site, content being consumed, any signs that we are now closer to seeing some of that monetization come in? Thanks so much.

Great. Justin, this is Mike. In terms of the product innovation, we've been very aggressive in terms of the product innovation and what we are trying to build for the overall platform that we are bringing to the market. And at the end of Q2, we introduced one of the products, which is our Account Insights Feed, which is a subscription offering. And it is a module of the Priority Engine, but it's very focused on account-only first-party intent signals. And that was really important for us because if you know us, historically, we are focused on prospect level intelligence for sales activation and for marketing automation to reach individuals. At the account level, our customers have come to us and said they are craving for first-party account-specific intent feeds to help fuel different go-to-market strategies. For example, we look at account-level targeting for customers. We look at creating ABM lists. We look at account prioritization based on first-party insights, programmatic advertising and account insights for sellers. So it is really important that we can provide our intent at the account level into our customers' workflows. We announced as part of that a partnership with 6sense and Revenue AI platform. So think about 6sense in the platform helping customers have access to account insight feeds. But accounts don't get -- vendors don't get access to the TechTarget intelligence unless they subscribe to our insights, so making sure that we have our account insights integrated seamlessly into the 6sense platforms help our customers have a better experience and to really help put that account intent insights into action around those use cases. The other launch that we did was Market Monitor, which is a real-time market dynamics data set to assist our clients in a lot of different areas. Think about…

Thank you.

The next question comes from Joshua Reilly with Needham. You may proceed.

Hi guys. Thanks for taking my questions. Maybe just starting off on the macro. I guess you guys have been running this business for a long time and have seen a lot of cycles. I guess, are you seeing any trends in how this cycle has developed relative to past cycles that can kind of give you confidence that spending will improve in a more material way next year kind of in line with your commentary from the Shareholder Letter?

Yes. That's a good question. So John, I'd say we've been in a two-year depressed technology cycle. And we've seen that. It's not a matter of if, it's a matter of when that will rebound. And I will say, if you take a look at TechTarget throughout 2024, if you look at our Q1 results, which we -- our expectations were we'd be down high single digits, relatively flat year-over-year, but we're up 1% in Q2, and then we saw a 2% growth in Q3. And we are still seeing those -- we expect to see very similar trends, consistent trends in Q3, as we go into Q4 and into the first half of 2025. If you've taken a look at a lot of the other -- some of the companies that have reported actually saw double-digit decline in the first half. They are seeing less of a decline in the second half. We feel like we're navigating a little bit better than a lot of our competition. But what I also look at is some of the things that we've talked about in these downtimes, you're seeing a light at the end of the tunnel. For example, we've seen two interest rate cuts. That always bodes well for the future for the technology market. We saw a presidential election which we didn't know how that was going to go or if it was going to get contested. It seems like it is come and gone and we are moving forward on that. So there were some signs out there that really will benefit, we believe the technology market and what we've seen historically in the long term. So I'd say in the short term, though, we'd like to see the consistent go from decline to growth, two consecutive quarters of growth and being able to say, we have a pattern now of seeing year-over-year growth at modest low to mid-single-digit numbers. That's what gives us confidence in the long term. Our focus right now is to close this combination with Informa Tech. We announced the Informa Tech digital assets. We announced a special meeting date on November 26. We expect it to close shortly thereafter. And then our focus will be executing on the business, making sure that we have the integration done in a timely manner and really navigate through the next couple of quarters and look at capturing the upside when the market does recover and when all these impacts come into play or these changes, and that's what we're really focused on right now.

Got it. That's super helpful. Maybe just following up on that. In the last cycle, a major contributor of your growth was a pretty big increase in the SMB customer count. And then obviously, we know they pulled back quite a bit, particularly when the Silicon Valley Bank crisis hit. In this next cycle coming next year, do you think that these SMB customers will come back? Or do you think that the growth will be driven more by the enterprise and larger customer cohorts? Thanks.

Yes, no problem. I think the first level of growth is going to be with increased product and capability set at the large enterprise and strategic accounts. We now have an ability to go wider and deeper. If you take a look at what we have to offer on our own product road map and what we're launching, that's been really important for us to get ready for 2025. But when you take a look at the assets coming into TechTarget and combining with TechTarget and you talk about industry dive and being able to get into the vertical markets and you talk about the intelligence and advisory arm of Omdia and you look at IT, media markets and brands as well as the net line engine, we have a really good opportunity to land and expand within our existing accounts. And there will be a focus on that on the strategic accounts, in the enterprise accounts, as well as getting into those verticals. I would say that you nailed it. I mean if you take a look at even Gartner's most recent information that came out and talked about some of the smaller tech companies our product offerings to be able to do a good job with those smaller accounts. But I would say the number one place where we're going to be able to love, grow and land and expand is on the enterprise and those strategic accounts.

Got it. Thanks guys. And good luck with closing the deal.

Thank you.

[Operator Instructions] The following comes from Jason Kreyer with Craig-Hallum. You may proceed.

Great. Thank you. This is Cal on for Jason. So first question from us, can you just discuss how the premerger planning has gone so far? And how do you feel like you're positioned should the merger eventually go through here?

Yes. So Cal, we've been working on this since the beginning of the year when we announced it in January 10. We've worked together closely with the Informa Tech digital business units, working closely with Gary, with the business leaders to really understand the operating model, how do we best set the new organization, set it up for success. The teams get along well. The operating model and the organizational structure, I would say, it's been going very, very well across the board. I think everybody sees the opportunity and understand the opportunity that these two organizations coming together can really play in the long term as well as getting off the ground in the short term. We're focused on Day one planning. We've got Day 180 planning all the way to Day 365. I'd say the team has been lockstep on this. And I would say that the planning and the premerger planning has gone well. I didn't catch your second question on that.

I think that was it for that one. But the second question that I just had here, I just kind of wanted to ask on the competitive environment. You kind of talked about leaning on the balance sheet here, keeping your investments progressing. So how do you see those investments really differentiating yourself versus your competitors who may have had to pull back here during the down cycle?

I think companies like -- a lot of our competitors are private companies that we stay in touch with and we also have some public companies. But we've built 25 years of a strong financial profile organization with a strong balance sheet. And we've always had in any downturn, be optimistic -- always be careful on how you invest and understand how you invest, but be opportunistic because, in a downturn we have an opportunity to take market share and really put ourselves in the best position to capture the upside during -- when the recovery comes. And even when -- without a recovery, the investments that we make around our products, around our content and around our audiences, I believe put us in a competitive advantage. There are not a lot of organizations that I would call own and operate the sites and communities that have access to permission based audiences, as well as first-party intent. And to me, that's the most accurate and most effective way to help sales and marketing when they're ready to invest in their growth capabilities for driving revenue and market share. So those investments are really important for us. We take a view of -- we understand we have 90-day quarters, but we take a look at that one to two to three years and if we invest X on this, because we can do it with our balance sheet, this will generate Y and Z in terms of return. So I think we are in an enviable position on that because of the model that we've built over 25 years. We are very disciplined, and we're effective when we make those investments in the right areas.

Perfect. Thank you and I’ll echo good luck here closing the merger.

Thank you.

Thank you. There are currently no other questions in the queue waiting at this time. This concludes today's conference call. Thank you for your participation. You may now disconnect your line.