TechTarget, Inc. Q4 FY2025 earnings call

Gary highlighted that 2025 laid the groundwork to return the business to top - line revenue growth in 2026 and accelerate growth in years ahead. The combination plan was the key driver of progress, with significant progress in consolidating, integrating, automating, and leveraging AI technology. On products, Omdia brand unified intelligence and advisory operations, launched the Informatech Target Portal, repositioned NetLine. Focused go - to - market strategy on largest customers and highest growth markets. Audience membership grew and members were more active. AI was adopted across four strategic areas: conversational AI interfaces, personalized audience experiences, enhancing efficacy of go - to - market programs, and automating operations. Dan mentioned 2025 results were in line with or ahead of guidance, adjusted EBITDA reached $87.3 million, balance sheet was strong, and 2026 objective was to return to revenue growth with adjusted EBITDA expected to be in the range of $95 million to $100 million.

In 2025, full - year revenue on a combined company basis was $486.8 million, in line with the guidance of being broadly flat year over year. Adjusted EBITDA grew 10% to $87.3 million, exceeding the guidance of $85 million. Fourth quarter revenues were $140.7 million, a 3% year - over - year increase on a combined company basis. Q4 adjusted EBITDA was $41.6 million, a 56% year - over - year increase, with the adjusted EBITDA margin expanding to around 30% compared to approximately 20% in the corresponding quarter of the prior year on a combined company basis.

In 2026, the objective is to return the business to top - line revenue growth for the full year, with adjusted EBITDA expanding to $95 million to $100 million. Q1 2026 will reflect this trend, based on the progress made through strategic initiatives and the strong foundation established for sustainable growth.

Forward - looking statements are subject to risks and uncertainties, including those discussed in the risk factors section of the most recent periodic report filed on Form 10 - K, and the forward - looking statement disclaimer in the earnings release filed earlier today. Actual results may differ materially from the forecast and forward - looking statements.

Q: I wanted to first of all congratulate you on the fourth quarter results and overachieving versus the adjusted EBITDA for the year. But I was particularly impressed with the go - to - market strategy results. Your comment in the press release talks about an approximate 10% growth in revenue from your largest customers. Was that a full - year basis or was that a Q4 metric, Gary?

A: Hi, Eric, and good to hear from you. That's a full - year basis. and on a combined company basis.

Q: And then, you know, there was a time when the different tiers of customers, if I go back to like the end of 2024, you talked about the 7,500 customers that the combined entity had, and that there were 70 customers that were over a million dollars a year. in billing, is that the tier of customers that we're talking about here, or are you stratifying the customer base differently?

A: Oh, no, we are stratifying the customer base differently. It's not the same. We have, if you recall, I'll actually go back to, we have identified that about $10 billion of our $20 billion addressable market sits with about 150 to 200 clients in the marketplace. We've then further prioritized that down to a cohort of 30 portfolio customers and then a further 120 or so customers that are what we would call majors. And the number that I'm quoting for you is for that cohort of 30.

Q: And then is there, you know, you've got so many different products that you're offering customers now. What was resonating with that largest cohort? First of all, did they contract in their use of any of the products? And then what was it that they expanded their use of?

A: Well, you appreciate it's a bit of a mixed picture when you go down to the kind of individual customer level. I would say if there was a trend there, we saw really strong demand for demand. So there was strong demand for our demand products and that was encouraging to see in particular as we consolidated and rationalized the demand portfolio and did a better job of the market positioning of that. And then second, I would say content. Content was generally a strong theme last year as customers were looking to really establish a distinctive voice in the marketplace to stand out from the noise and to leverage the expertise we have our analyst expertise and our editorial expertise to really give them a bit of a a bit of brand association all right.

Q: And then given that the total revenue on the performa combined basis actually declined one percent uh obviously the smaller customers are contracted to sort of offset the success that you had with the The higher tier, as you put it, the 30 portfolio customers. Was there any themes to recognize across the smaller customer base, either smaller enterprise or SMB themes?

A: I suppose the theme I would talk to is much more about international markets. for us. I think what we saw in particular was in the Asia - Pacific region and the triangle between Singapore and China and Korea. Well, it's not a triangle if I had a fourth point, it's a square, isn't it, if I had Tokyo to that. That was definitely a market that was challenged last year. I think in particular some of the macroeconomic situation with Asian technology companies looking to export their their businesses internationally. That was probably the area where I would say the trend really was. I think then we just also saw in that sort of small to medium end of the IT marketplace that that was a market where I don't think that was odd, but there was customer churn in that market in the small to medium end.

Q: All right, and then, Dan, as we're doing our modeling here for 2026, obviously the top line, you didn't want to put too fine a point on it, but as I'm looking at the growth that you had in the back half of 2025 on the pro forma combined, you know, you were up 1% in Q3, you were up 3% in Q4. You know, is it a prudent starting point to kind of take the blend there and say, hey, if we are going to grow, Let's put it in maybe start with a 2% and just use that as a baseline, or is that too aggressive?

A: No, Eric, I think that the way you're laying it out makes sense. I think you could go maybe a little higher than that 2%, but I think the way you're thinking about modeling makes sense to me.

Q: And then last question is around the source of the incremental adjusted EBITDA. Obviously, you know, revenue is not going to be revenue. We're planning on it to be a little bit higher in 2026. But, you know, let's just for discussion, say we're talking about a flat revenue in 26 versus 2025. In 2025, you know, that adjusted EBITDA number was around, what was it, 80, 80, $87.3 million, and yet you're guiding to kind of a midpoint of $97.5. So just to keep it simple, call it $10 million of incremental adjusted EBITDA. What is it that's getting you there? Is this primarily going to be driven by further synergies on the bringing of the two entities together, or what's driving that?

A: Eric, so if you think about where the synergies sort of landed in 2025, they were really back half loaded. So you're really going to start to see the impact of that throughout the full year, as opposed just to being confined or contained to the second half of the year.

Q: OK, thanks for taking my questions.

A: Thank you. Thanks, Eric. Thank you.