Business Overview and Basis of Presentation

12 Months Ended

Dec. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Overview and Basis of Presentation

1. Business overview and basis of presentation

Nature of business

TechTarget, Inc. (“Informa TechTarget” or the “Company”, formerly known as Toro CombineCo, Inc. (“CombineCo”) together with its subsidiaries, is a leading business-to-business (“B2B”) growth accelerator, informing and influencing technology buyers and sellers globally. Informa TechTarget has offices in 11 countries as of December 31, 2024.

Liquidity and Capital Resources

During the year ended December 31, 2024, the Company incurred losses of $116.9 million driven mainly by non-cash charges for impairment of goodwill and long-lived assets (offset in part by the remeasurement of contingent consideration) and certain non-recurring cash costs related to the Transactions described below. Additionally, the Company utilized cash in operations of $64.9 million. The Company completed its Transactions (defined below) on December 2, 2024. The Company has a $250 million revolving line of credit (the “Credit Facility”) with Informa PLC (“Informa” or “Parent”), of which $115 million availability remains as of May 28, 2025. The Company’s ability to comply with its covenants will depend on, among other things, financial, business, market, competitive and other conditions, many of which are beyond the Company’s control, See Note 9 Convertible Notes and Credit Facility for further information regarding the Credit Facility. The Company believes it has sufficient cash on hand, working capital, and availability to access additional cash under its Credit Facility to meet its business operating requirements, its capital expenditures and to comply with its debt covenants for at least the next twelve months as of the filing date of this Annual Report on Form 10-K.

The Transactions

On January 10, 2024, Informa entered into a definitive agreement (the “Transaction Agreement”) to combine Informa Intrepid Holdings Inc. (“Informa Tech Digital Business” or “Accounting Predecessor”), a carved-out business wholly-owned by Informa, with former TechTarget, Inc. (“Former TechTarget”) under CombineCo. In accordance with the Transaction Agreement, Informa contributed the Informa Tech Digital Business along with $350 million in cash (the “Contribution”), in exchange for an aggregate of 41,651,366 shares of CombineCo common stock (the “Transaction”). Prior to the Transaction, the Accounting Predecessor had historically operated as part of the Parent and not as a standalone entity and had no separate consolidated legal status of existence. As such, the prior year combined financial statements have been derived from the Parent’s historical accounting records and were presented on a carved-out basis and reflect the assets, liabilities, revenues, expenses and cash flows of the businesses included within the Accounting Predecessor prior to the Transaction. Prior to the closing of the Transaction, Informa undertook certain restructuring transactions to separate the Informa Tech Digital Business. As of the closing date of the Transaction, the Informa Tech Digital Businesses was held directly or indirectly by Informa Intrepid Holdings Inc. (“Informa Intrepid”), a wholly owned subsidiary of Informa. The financial statements for the periods prior to the Transaction have been retrospectively adjusted to reflect the internal restructuring of the Accounting Predecessor as a consolidated group under Informa Intrepid Holdings, Inc. as of the earliest period presented. The Transaction closed on December 2, 2024.

Additionally, CombineCo paid each Former TechTarget shareholder as consideration for one common share of Former TechTarget (i) one share of CombineCo common stock and (ii) cash consideration of approximately $11.70 per share of Former TechTarget common stock (the “Merger” and, together with the Transaction, the “Transactions”). The Merger closed on December 2, 2024 (the “Acquisition Date”), with Informa then holding a 58% interest in CombineCo and former TechTarget shareholders holding the remaining 42% interest in CombineCo. CombineCo changed its name to TechTarget, Inc. upon completion of the Merger.

Basis of presentation

The Merger was accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combination (“ASC 805”). The consolidated financial statements prior to the Acquisition Date reflect the financial statements of the Informa Tech Digital Businesses of Informa, as Accounting Predecessor to Informa TechTarget and the historical consolidated financial statements of Former Tech Target are included only from the Acquisition Date forward.

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and present the historical results of operations, comprehensive income and losses, and cash flows for the years ended December 31, 2024, 2023, and 2022 and the financial position as of December 31, 2024 and 2023. Certain prior-year amounts have been reclassified to conform to the current-year’s presentation. All intercompany balances and transactions within Informa TechTarget have been eliminated in the consolidated financial statements.

The following considerations have been applied to these consolidated financial statements prior to the Transaction:

•

All intercompany transactions and balances between the businesses included within the Accounting Predecessor have been eliminated. Transactions and balances with the Parent, or other non-Informa Tech Digital Business entities controlled by the Parent, are classified as related party transactions.

•

To the extent that an asset, liability, revenue or expense is directly associated with the Accounting Predecessor, it is reflected in these consolidated financial statements. Since the Accounting Predecessor had been part of a wider group of companies controlled by the Parent, the consolidated financial statements may not reflect the same financing costs had the Accounting Predecessor obtained financing on a standalone basis.

•

All costs incurred by Informa that are directly attributable to the Accounting Predecessor have been included in these consolidated financial statements. The costs incurred by the Parent for certain functions and operations that were used by the Accounting Predecessor, including but not limited to executive oversight, finance, treasury, tax, legal, human resources, technology, marketing and other shared services have been allocated using appropriate and consistent allocation methods, including revenue, headcount or other relevant measures. Management of the Parent believes the costs of these services allocated to the Accounting Predecessor have been determined on a reasonable basis but may not reflect the amounts that would have been incurred by the Accounting Predecessor had it been operating on a standalone basis. These cost allocations are discussed further in Note 13. Related Party Transactions.

•

Net Parent Investment, which includes retained earnings, represents the Parent’s historical investment in the Accounting Predecessor, the accumulated net earnings (losses) after taxes and the net effect of settled transactions with and allocations from the Parent. All significant transactions between the Accounting Predecessor and the Parent have been included in the accompanying consolidated financial statements for all years presented. Transactions with the Parent are reflected in the consolidated statements of changes in equity as Net transfers (to) from Parent and in the accompanying consolidated balance sheets as Net Parent investment. All transactions reflected in Net Parent investment by the Accounting Predecessor in the accompanying consolidated balance sheets have been considered as financing activities for purposes of the consolidated statements of cash flows. On the Acquisition Date, Net Parent Investment was converted to Common Stock and Additional Paid-in Capital.

•

The Accounting Predecessor was dependent on the Parent for the majority of its working capital and financing requirements during the financial years presented in these consolidated financial statements. The Parent uses a centralized approach to managing cash and financing its operations. Transactions between the Parent and the Accounting Predecessor under this approach were treated as related party short-term debt. All cash and cash equivalent balances held by the Accounting Predecessor that are not a part of the centralized cash management approach were legally held by the Accounting Predecessor and included in the consolidated financial statements.

•

The Accounting Predecessor had intercompany financing arrangements with the Parent (“related party debt”). These related party financing arrangements between the Accounting Predecessor and the Parent have been included in the accompanying consolidated financial statements for all years presented. These transactions were settled on the Acquisition Date.

•

The Accounting Predecessor's current and deferred taxes are computed on a separate return basis.

The Accounting Predecessor's consolidated financial statements prior to the Transaction may not be indicative of Informa TechTarget’s financial performance and do not necessarily reflect what its results of operations, financial position and cash flows would have been had Informa TechTarget operated as an independent entity during all the periods presented. The amount of actual costs that may have been incurred if Informa TechTarget were a standalone company would depend on a number of factors, including its chosen organizational structure, which functions were performed by its employees or outsourced and strategic decisions made in areas such as information technology and infrastructure.

Restatement of previously issued financial statements

Informa TechTarget restated its previously issued financial statements as of December 31, 2023 and for the years ended

December 31, 2023 and 2022 in this Form 10-K in accordance with ASC Topic 250, Accounting Changes and Error Corrections. The Company has also restated impacted amounts within the notes to the consolidated financial statements, as applicable.

The Company will also restate previously reported quarterly financial information for these errors based on the summary presented herein in its future filings with the Securities and Exchange Commission, as applicable. A summary of the corrections to the impacted financial statement line items to the Company’s previously issued Condensed Consolidated Statements of income and comprehensive income (loss) and Condensed Consolidated Statements of Cash Flow for each quarterly period is presented in Note 16, Quarterly results (unaudited).

In connection with the preparation of its 2024 consolidated financial statements, the following errors related to previously issued financial statements were identified and corrected :

Revenue: The Company applied a monthly convention to recognize certain subscription revenue contracts, rather than recognizing revenue daily. The correction of this error resulted in a cumulative adjustment to decrease Net Parent Investment (“NPI”) as of January 1, 2022 of $2.0 million and an increase to contract liabilities of $2.0 million as of December 31, 2023.

Customer relationship intangible asset amortization: The Company amortized acquired customer relationship intangible assets on a straight-line basis, as opposed to a method that reflect the pattern of consumption. The correction of this error resulted in a cumulative adjustment to decrease net parent investment as of January1, 2022 of $0.7 million, an adjustment to increase amortization expense of $11.3 million and $5.7 million for the years ended December 31, 2023 and 2022, respectively and an adjustment to decrease intangible assets, net of $17.7 million as of December 31, 2023.

Contingent consideration: The Company identified an error in the fair value of the Industry Dive contingent consideration related to the valuation model and the inputs to the valuation model used to determine the fair value of the Industry Dive contingent consideration in purchase accounting related to its acquisition in September 2022 and the related subsequent fair value valuations of contingent consideration through September 2024. The correction of this error resulted in an increase of both the Industry Dive purchase price at the acquisition date and goodwill of $16.5 million at the acquisition date and as of December 31, 2023. The correction of this error also resulted in an increase to the long-term contingent consideration liability of $8.7 million as of December 31, 2023, an increase in the contingent consideration remeasurement gain of $11.3 million for the year ended December 31, 2023 and an increase in the contingent consideration remeasurement loss of $3.5 million recorded for the year ended December 31, 2022.

Goodwill impairment: As a result of adjustments 2 and 3 described above, the Company identified an understatement of its goodwill impairment charge allocated to the Industry Dive reporting unit during the second quarter of 2023. The correction of this error resulted in an increase in the goodwill impairment charge of $9.5 million for the year ended December 31, 2023 and a decrease of goodwill of $9.5 million as of December 31, 2023.

Sales tax: The Company identified an error in the inputs used to determine the measurement of the sales tax liability assumed in its acquisition of Industry Dive in September 2022 and in the sales tax liability subsequent to the acquisition of Industry Dive through the Transaction. This error resulted in a decrease in goodwill of $9.8 million and other liabilities of $9.6 million as of December 31, 2023 and an increase to general and administrative expense of $0.2 million and $0.1 million for the years ended December 31, 2023 and 2022, respectively.

Income tax: The Company identified an error in the amount of deferred tax assets recorded in purchase accounting in its acquisition of Industry Dive in September 2022. This error resulted in an increase of the net deferred tax liability and goodwill of $11.4 million as of December 31, 2023. Additionally, the Company recorded the income tax impact of correcting the above errors and other adjustments (described below) for the years ended December 31, 2023 and 2022, resulting in an increase in the income tax benefit of $3.9 million and $1.7 million, respectively, and a decrease in deferred tax liabilities of $3.6 million as of December 31, 2023.

Other Adjustments

In addition to the errors identified above, the Company has corrected other immaterial errors primarily related to revenue adjustments, acquisition-related adjustments, related party related adjustments, general and administrative expenses, including credit losses, translation related adjustments, cost allocation adjustments, and reclassification adjustments related to income taxes payable, other liabilities and certain expenses. These other errors are quantitatively and qualitatively immaterial,

individually and in the aggregate. However, the Company has corrected these other errors as part of the correction for the material errors described above.

Impact of Restatement

The following tables present the as-restated financial statement line items for the consolidated balance sheet as of December 31, 2023 and as-restated financial statement line items for the consolidated statements of income and comprehensive income (loss) and consolidated statements of cash flows for the years ended December 31, 2023 and 2022. The amounts in the “As Reported” columns below are amounts derived from the Company’s previously filed annual consolidated financial statements included in the Toro CombineCo, Inc. Amendment No. 1 to the Registration Statement on Form S-4, filed with the Securities and Exchange Commission on September 4, 2024. The amounts in the “Adjustment” columns present the impact of the adjustments described above. The amounts in the “As Restated” columns are the updated amounts including the impacts of the adjustments identified.

Consolidated Balance Sheet:


	As of December 31, 2023
	As Reported			Adjustment			As Restated
Assets
Current assets:
Accounts receivable, net of allowance for credit losses of $1,540		38,788			1,048			39,836
Related party trade receivables		4,140			(904	)		3,236
Related party loans receivables		104,249			1,085			105,334
Prepaid expenses and other current assets		6,320			904			7,224
Total current assets		164,286			2,133			166,419
Non-current assets:
Goodwill		467,476			8,338			475,814
Intangible assets, net		293,859			(17,315	)		276,544
Total non-current assets		770,074			(8,977	)		761,097
Total assets	$	934,360		$	(6,844	)	$	927,516
Liabilities and Parent's equity
Current liabilities:
Related party payables		32,390			103			32,493
Contract liabilities		24,489			2,664			27,153
Income taxes payable		3,485			(3,242	)		243
Related party short-term debt		502,872			390			503,262
Total current liabilities		594,659			(85	)		594,574
Non-current liabilities
Other liabilities		12,080			(6,344	)		5,736
Deferred tax liabilities		15,292			7,803			23,095
Contingent consideration		37,500			8,699			46,199
Total non-current liabilities		377,119			10,158			387,277
Total liabilities	$	971,778		$	10,073		$	981,851
Parent's equity:
Net parent investment (deficit)		(59,663	)		(16,917	)		(76,580	)
Total equity (deficit)		(37,418	)		(16,917	)		(54,335	)
Total liabilities and equity	$	934,360		$	(6,844	)	$	927,516

Consolidated statements of income (loss) and comprehensive income (loss):


	For the Years Ended
	December 31, 2023									December 31, 2022
	As Reported			Adjustment			As Restated			As Reported			Adjustment			As Restated
Revenues from external customers		252,049			52			252,101			196,773			321			197,094
Cost of revenues		(99,170	)		344			(98,826	)		(72,608	)		300			(72,308	)
Gross profit		152,879			396			153,275			124,165			621			124,786
Operating expenses																	-
Selling and marketing		55,470			(170	)		55,300			38,963			(135	)		38,828
General and administrative		66,087			801			66,888			47,879			1,103			48,982
Product development		11,143			(83	)		11,060			8,004			(60	)		7,944
Amortization		30,723			11,429			42,152			15,838			5,707			21,545
Impairment of goodwill		130,132			9,513			139,645
Acquisition and integration costs		5,830			239			6,069			9,924			(135	)		9,789
Remeasurement of contingent consideration		(112,653	)		(11,291	)		(123,944	)		4,537			3,463			8,000
Total operating expenses		188,204			10,438			198,642			125,943			9,943			135,886
Operating income (loss)		(35,325	)		(10,042	)		(45,367	)		(1,778	)		(9,322	)		(11,100	)
Interest expense on related party loans		(24,259	)		(390	)		(24,649	)
Interest income		2,402			1,085			3,487
Income (loss) before provision of income taxes		(58,057	)		(9,347	)		(67,404	)		(11,820	)		(9,322	)		(21,142	)
Income tax benefit		5,777			3,850			9,627			15,138			1,719			16,857
Net income (loss)	$	(52,280	)	$	(5,497	)	$	(57,777	)	$	3,318		$	(7,603	)	$	(4,285	)
Total comprehensive income (loss)	$	(72,777	)	$	(5,497	)	$	(78,274	)	$	46,093		$	(7,603	)	$	38,490

Net income (loss) per common share:
Basic		(1.26	)		(0.13	)		(1.39	)		0.08			(0.18	)		(0.10	)
Diluted		(1.26	)		(0.13	)		(1.39	)		0.08			(0.18	)		(0.10	)

Consolidated Statements of Changes in Equity

Opening Net Parent Investment as of January 1, 2022 was adjusted by the cumulative impact of the corrections described in adjustments 1 and 2 above. Net Parent Investment within the consolidated statements of changes in equity for the years ended December 31, 2023 and 2022 was also affected by the restated net income amounts disclosed above. Additionally, accumulated other comprehensive income within the consolidated statements of changes in equity for the years ended December 31, 2023 and 2022 was affected by the other immaterial adjustments described above.

Consolidated statements of cash flows:


	Years Ended December 31,
	2023									2022
	As Reported			Adjustment			As Restated			As Reported			Adjustment			As Restated
Operating activities:
Net income (loss)	$	(52,280	)	$	(5,497	)	$	(57,777	)	$	3,318		$	(7,603	)	$	(4,285	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization		30,774			11,429			42,203			15,838			5,707			21,545
Provision for bad debt											(1,113	)		457			(656	)
Deferred tax provision		(5,777	)		(7,723	)		(13,500	)		(15,138	)		(5,977	)		(21,115	)
Impairment of goodwill		130,132			9,513			139,645
Remeasurement of contingent consideration		(112,653	)		(11,291	)		(123,944	)		4,537			3,463			8,000
Net foreign exchange (gain)/loss		—			1,059			1,059			—			28			28
Change in assets and liabilities:
Accounts receivable		8,211			(678	)		7,533			421			(212	)		209
Prepaid expenses and other current assets											(2,656	)		(904	)		(3,560	)
Related party receivables											(1,052	)		904			(148	)
Income taxes payable		—			3,122			3,122			—			1,767			1,767
Accrued expenses and other liabilities		(1,350	)		135			(1,215	)		(14,415	)		7,687			(6,728	)
Contract liabilities		(8,880	)		514			(8,366	)		4,358			(7,822	)		(3,464	)
Other liabilities		(625	)		844			219			118			2,553			2,671
Related party payables		(104	)		104			—
Net cash (used in) provided by operating activities	$	(14,036	)	$	1,531		$	(12,505	)	$	28,012		$	48		$	28,060
Investing activities:
Contingent consideration settlement											(2,760	)		2,760			—
Net cash used in investing activities										$	(357,457	)	$	2,760		$	(354,697	)
Financing activities:
Contingent consideration settlement											—			(2,760	)		(2,760	)
Cash pool arrangements with Parent		45,333			(1,584	)		43,749			(9,813	)		(136	)		(9,949	)
Net transfers (to) from Parent		29,626			53			29,679			136,026			88			136,114
Net cash provided by financing activities	$	74,959		$	(1,531	)	$	73,428		$	333,123		$	(2,808	)	$	330,315
Supplementation disclosure of cash flow information:
Cash paid by Parent for taxes		3,173			(134	)		3,039			5,989			(1,696	)		4,293

The consolidated statements of cash flows reflect the impact of the adjustments described above. Additionally, there were error corrections during the year ended December 31, 2022 within the reconciliation between net income (loss) and net cash provided by operating activities for a reclass of $7.8 million related to contract liabilities that were previously included in accrued expenses and other liabilities and a reclassification related to the payment of $2.8 million of NetLine contingent consideration from investing activities to financing activities. Certain other prior-year amounts have been reclassified to conform to the current-year’s presentation