TechTarget(US:TTGT)2019-05-12 02:39Financial Data and Key Metrics Changes - Q1 2019 revenue grew by 10% compared to the previous year [7] - Adjusted EBITDA increased by 53% year-over-year [7] - Gross margin improved to 77% in Q1 from 75% last year [7] - Adjusted EBITDA margin rose to 27% in Q1 from 19% last year [7] - Adjusted cash flow reached $7.1 million, up 492% year-over-year, representing 89% of adjusted EBITDA [7] - Long-term contracts accounted for 33% of revenue in the quarter [7] - Annual adjusted EBITDA guidance was raised from a range of $36 million to $37 million to a new range of $37 million to $39 million [7] Business Line Data and Key Metrics Changes - Priority Engine, a key product, grew by 37% [15] - Overall business growth was reported at 10% [15] Market Data and Key Metrics Changes - International markets saw strong growth of 15% year-over-year [25] - EMEA region experienced significant growth in Priority Engine and core business [25] - APJ region showed growth exceeding 37% for Priority Engine, although some core components were down slightly [28] - Latin America, having launched Priority Engine last year, showed significant growth despite small numbers [29] Company Strategy and Development Direction - The company is focusing on product development and enhancements, particularly for Priority Engine [18] - Investments are being made in sales enablement and customer success teams to improve client onboarding and success measurement [19][20] - The company aims to maintain strong gross margins between 75% and 80% and incremental EBITDA margins between 50% and 70% while making strategic investments [35] Management's Comments on Operating Environment and Future Outlook - Management noted that the international regions are lagging behind the U.S. in data adoption and new technologies [27] - The company is optimistic about growth opportunities in Latin America and expects the international business to remain about one-third of overall business [31] Other Important Information - A soft launch of Priority Engine Express, a lower-cost version for smaller entities, is underway, targeting companies with fewer than 100 employees [36][38] - The company is optimistic about the potential for this new offering to attract a new customer segment [39] Q&A Session Summary Question: How is IT Deal Alert performing relative to the traditional online business? - Management combined the numbers for IT Deal Alert and reported that Priority Engine grew by 37% while overall business grew by 10% [15] Question: What are the focus areas for the increased investments? - Investments are focused on product development, sales enablement, and customer success teams [18][19] Question: What is driving the different growth rates in international regions? - Growth in international regions is driven by the demand for purchase intent data, with Priority Engine being a catalyst for growth [27] Question: What are the expectations for North America and international revenue growth? - The international business is expected to maintain its proportion of overall business and growth patterns similar to Q1 [31] Question: Where will the uptick in operating expenses be seen? - Increased investments will be reflected in sales and marketing, product development, and customer success initiatives [32] Question: Can you provide details on Priority Engine Express? - Priority Engine Express is aimed at smaller companies, with a soft launch currently in progress, and is expected to generate revenue growth opportunities in 2020 [36][38]