Business Overview and Basis of Presentation

3 Months Ended

Mar. 31, 2025

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”, the “Company”, “we”, “us” or “our”, 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.

The Transactions

On January 10, 2024, Informa, PLC (“Informa” or “Parent”) entered into a definitive agreement (the “Transaction Agreement”) to combine Informa Intrepid Holdings Inc. (“Informa Tech Digital Business” or “Informa Intrepid” 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, in exchange for CombineCo common stock (the “Transaction”). 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”, with the Transaction, collectively 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 condensed consolidated financial statements prior to the Acquisition Date reflect the financial statements of the Informa Tech Digital Business, as Accounting Predecessor to Informa TechTarget and the historical consolidated financial statements of Former Tech Target are consolidated only from the Acquisition Date forward.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all normal and recurring adjustments have been included such that the unaudited condensed consolidated financial statements are fairly stated. The results of operations for the periods presented are not necessarily indicative of results to be expected for any other interim periods or for the full year. The information included in these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (“SEC”) on May 28, 2025.

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 prior to the Transaction. As such, Informa TechTarget 's condensed consolidated financial statements have been derived from the Parent’s historical accounting records and were presented on a carved-out basis prior to the Transaction.

The consolidated financial statements prior to the Transaction reflect the assets, liabilities, revenues, expenses and cash flows of the businesses included within the Accounting Predecessor. The following considerations have been applied to these unaudited condensed consolidated financial statements prior to the Transaction:

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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.

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To the extent that an asset, liability, revenue or expense is directly associated with the Accounting Predecessor, it is reflected in these unaudited condensed consolidated financial statements. Since the Accounting Predecessor had been part of a wider group of companies controlled by the Parent, the unaudited condensed consolidated

financial statements may not reflect the same financing costs had the Accounting Predecessor obtained financing on a standalone basis.

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All costs incurred by Informa that are directly attributable to the Accounting Predecessor have been included in these unaudited condensed 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 11. Related Party Transactions.

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Net Parent deficit, which includes retained earnings, represents the Parent’s historical investment in the Accounting Predecessor, the accumulated net earnings or 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 unaudited condensed consolidated financial statements for all reporting periods presented. Transactions with the Parent are reflected in the unaudited condensed consolidated statements of stockholders’ equity (deficit) as net transfers to Parent and in the accompanying unaudited condensed consolidated balance sheets as net Parent deficit. All transactions reflected in net Parent deficit by the Accounting Predecessor in the accompanying unaudited condensed consolidated balance sheets have been considered as financing activities for purposes of the unaudited condensed consolidated statements of cash flows. Effective as of the Acquisition Date, net Parent deficit was converted to Common Stock and Additional Paid-in Capital.

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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 unaudited condensed 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 unaudited condensed consolidated financial statements.

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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 unaudited condensed consolidated financial statements for all reporting periods presented. These transactions were settled on the Acquisition Date.

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

The Accounting Predecessor's condensed 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 its Form 10-K filed with the SEC on May 28, 2025. The restatement included the impact on the previously issued unaudited interim financial information through September 2024. Informa TechTarget has restated its previously issued financial statements for the three months ended March 31, 2024 in this Form 10-Q in accordance with ASC Topic 250, Accounting Changes and Error Corrections. The Company has also restated impacted amounts within the notes to the unaudited condensed consolidated financial statements, as applicable.

In connection with the preparation of its fiscal 2024 condensed consolidated financial statements, the following errors related to previously issued unaudited interim financial statements for the three months ended March 31, 2024 were identified and corrected:

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 an adjustment to increase amortization expense of $2.9 million for the three months ended March 31, 2024.

Contingent consideration: The Company identified an error in the fair value of the Industry Dive contingent consideration principally related to 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 in the contingent consideration remeasurement loss of $0.8 million recorded for the three months ended March 31, 2024.

Income tax: The Company recorded the income tax impact of correcting the above errors and other adjustments (described below) for the three months ended March 31, 2024, resulting in an increase in the income tax benefit of $4.7 million.

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 and general and administrative expenses for credit losses. 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 unaudited condensed consolidated statement of income (loss) and comprehensive income (loss) and unaudited condensed consolidated statement of cash flows for the three months ended March 31, 2024. The amounts in the “As Reported” columns below are amounts derived from the Company’s previously filed unaudited condensed combined financial statements included in the Company's Form 8-K, filed with the SEC on December 3, 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.

Unaudited condensed consolidated statement of income (loss) and comprehensive income (loss):


	Three months ended March 31, 2024
	As Reported			Adjustment			As Restated
Revenue	$	59,293		$	(634	)	$	58,659
Gross profit		35,324			(634	)		34,690
General and administrative		18,635			(457	)		18,178
Amortization		7,962			2,874			10,836
Acquisition and integration costs		7,753			(776	)		6,977
Remeasurement of contingent consideration		1,263			801			2,064
Total operating expenses		54,706			2,442			57,148
Operating loss		(19,382	)		(3,076	)		(22,458	)
Related party interest expense		(6,591	)		390			(6,201	)
Interest income		2,319			(1,085	)		1,234
Loss before provision of income taxes		(23,436	)		(3,771	)		(27,207	)
Benefit for income taxes		2,955			4,743			7,698
Net loss		(20,481	)		972			(19,509	)
Total comprehensive loss		(17,930	)		972			(16,958	)
Net loss per common share:
Basic	$	(0.49	)	$	0.02		$	(0.47	)
Diluted	$	(0.49	)	$	0.02		$	(0.47	)

Unaudited condensed consolidated statement of stockholders’ deficit

Net Parent deficit within the unaudited condensed consolidated statement of stockholders’ equity (deficit) for the three months ended March 31, 2024 was affected by the restated net loss amounts disclosed above as well as the impact of the acquisition and integration costs and other immaterial adjustments to net transfers to Parent.

Unaudited condensed consolidated statement of cash flows:


	Three months ended March 31, 2024
	As Reported			Adjustment			As Restated
Operating activities:
Net loss	$	(20,481	)	$	972		$	(19,509	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization		8,064			2,874			10,938
Provision for bad debt		814			(457	)		357
Deferred tax provision		(2,955	)		(5,283	)		(8,238	)
Remeasurement of contingent consideration		1,263			801			2,064
Net foreign exchange loss		-			(54	)		(54	)
Changes in operating assets and liabilities:
Accounts receivable		(4,791	)		1,147			(3,644	)
Prepaid expenses and other current assets (liabilities)		191			(806	)		(615	)
Accrued expenses and other liabilities		(3,385	)		430			(2,955	)
Income tax payable		-			361			361
Contract liabilities		10,498			(548	)		9,950
Other assets (liabilities)		(241	)		363			122
Net cash used in operating activities	$	(1,553	)	$	(200	)	$	(1,753	)
Financing activities:
Cash pool arrangements with Parent		5,741			715			6,456
Net transfer to Parent		(3,540	)		(515	)		(4,055	)
Net cash provided by financing activities	$	2,201		$	200		$	2,401