TechTarget(TTGT) - 2019 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents TechTarget's unaudited consolidated financial statements and management's discussion and analysis for the company Item 1. Financial Statements (unaudited) This section presents TechTarget's unaudited consolidated financial statements, including balance sheets, income statements, equity statements, and cash flows, with detailed accounting notes Consolidated Balance Sheets The Consolidated Balance Sheets present the company's financial position, detailing assets, liabilities, and equity as of March 31, 2019, and December 31, 2018 | Metric | March 31, 2019 (in thousands) | December 31, 2018 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total assets | $202,612 | $176,463 | | Total liabilities | $67,487 | $43,878 | | Total stockholders' equity | $135,125 | $132,585 | Consolidated Statements of Income and Comprehensive Income This statement outlines the company's financial performance for the three months ended March 31, 2019 and 2018, detailing revenues, expenses, and net income | Metric | Three Months Ended March 31, 2019 (in thousands) | Three Months Ended March 31, 2018 (in thousands) | YoY Change (in thousands) | YoY Change (%) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------ | :------------- | | Revenues | $29,972 | $27,299 | $2,673 | 9.8% | | Gross profit | $22,960 | $20,574 | $2,386 | 11.6% | | Operating income | $4,375 | $2,594 | $1,781 | 68.7% | | Net income | $3,290 | $2,094 | $1,196 | 57.1% | | Basic Net income per common share | $0.12 | $0.08 | $0.04 | 50.0% | | Diluted Net income per common share | $0.12 | $0.07 | $0.05 | 71.4% | Consolidated Statements of Stockholders' Equity This statement details changes in stockholders' equity for the three months ended March 31, 2019 and 2018, including common stock, treasury stock, and retained earnings | Metric | Balance, December 31, 2018 (in thousands) | Balance, March 31, 2019 (in thousands) | | :-------------------------------- | :---------------------------------------- | :--------------------------------------- | | Total Stockholders' Equity | $132,585 | $135,125 | | Treasury Stock Cost | $(177,905) | $(181,030) | | Additional Paid-In Capital | $307,014 | $309,348 | | Retained Earnings | $3,637 | $6,927 | - The company purchased 220,297 shares of common stock through stock buyback for $3,125 thousand during the three months ended March 31, 2019[15] - Stock-based compensation expense contributed $3,179 thousand to additional paid-in capital for the three months ended March 31, 2019[15] Consolidated Statements of Cash Flows This statement presents cash flows from operating, investing, and financing activities for the three months ended March 31, 2019 and 2018 | Metric | Three Months Ended March 31, 2019 (in thousands) | Three Months Ended March 31, 2018 (in thousands) | YoY Change (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------ | | Net cash provided by operating activities | $9,804 | $3,795 | $6,009 | | Net cash used in investing activities | $(1,333) | $(98) | $(1,235) | | Net cash used in financing activities | $(4,283) | $(4,229) | $(54) | | Net increase (decrease) in cash and cash equivalents | $4,178 | $(544) | $4,722 | | Cash and cash equivalents at end of period | $38,851 | $25,422 | $13,429 | Notes to Consolidated Financial Statements These notes provide detailed information on accounting policies, financial statement components, and disclosures, covering revenue, fair value, goodwill, leases, and stock compensation Note 1. Organization and Operations TechTarget, Inc. provides specialized online content and purchase-intent marketing services for IT buyers and enterprise technology vendors - TechTarget, Inc. is a leading provider of specialized online content for enterprise IT product and service buyers, and purchase-intent marketing and sales services for enterprise technology vendors[20] - The company operates a network of over 140 websites, each focusing on a specific IT sector (e.g., storage, security, networking) to support IT and business professionals' purchasing decisions[20] Note 2. Summary of Significant Accounting Policies This note details significant accounting policies, including consolidation, estimates, revenue recognition, and the Q1 2019 adoption of new lease accounting guidance - The company adopted ASU No. 2016-02, Leases (Topic 842), in the first quarter of 2019 using a modified retrospective approach, resulting in the recording of operating lease assets (right-of-use) of $27.5 million and operating lease liabilities of $32.1 million as of January 1, 2019[27][28][49] - Revenue is recognized when performance obligations are satisfied by transferring promised goods or services to customers, following a five-step process[26] - No material changes to critical accounting policies and estimates occurred during the first three months of 2019, other than those related to leases[21] Note 3. Revenues This note disaggregates revenue by geographic area and details contract liabilities, including deferral and recognition of unearned revenue | Geographic Area | Three Months Ended March 31, 2019 (in thousands) | Three Months Ended March 31, 2018 (in thousands) | | :---------------- | :--------------------------------------------- | :--------------------------------------------- | | North America | $20,278 | $18,850 | | International | $9,694 | $8,449 | | Total Revenues | $29,972 | $27,299 | | Contract Liabilities Activity | Amount (in thousands) | | :---------------------------- | :-------------------- | | Balance at December 31, 2018 | $5,573 | | Deferral of revenue | $1,946 | | Recognition of previously unearned revenue | $(1,925) | | Balance at March 31, 2019 | $5,594 | Note 4. Fair Value Measurements This note describes fair value measurements of financial assets, categorizing them into Level 1, Level 2, and Level 3 inputs | Asset (December 31, 2018) | Fair Value (in thousands) | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | | :------------------------ | :------------------------ | :--------------------- | :--------------------- | :--------------------- | | Money market funds | $15,070 | $15,070 | - | - | | Short-term investments | $500 | - | $500 | - | | Total assets | $15,570 | $15,070 | $500 | - | - As of March 31, 2019, there are no investments measured at fair value as remaining short-term investments matured in Q1 2019, and money market accounts are now considered cash[36] [Note 5. Cash, Cash Equivalents, and Investments](index=10&type=section&id=Note%205.%20Cash%2C%20Cash%