TechTarget, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a mixed performance compared to the previous fiscal period. For the three months ended September 30, 2024, the company generated revenue of $58.5 million, a 2% increase from $57.1 million in the same period of 2023. However, for the nine months ended September 30, 2024, total revenue decreased by 2% to $169.0 million from $172.7 million in the prior year.

The gross profit for the third quarter was $36.5 million, down 5% from $38.2 million in Q3 2023, while the gross profit margin fell to 62% from 67%. The decline in gross profit was attributed to a $3.6 million decrease in revenue and a $7.9 million increase in the cost of revenue, which rose to $61.9 million for the nine months ended September 30, 2024, compared to $54.0 million in the same period of 2023.

Operating expenses for the third quarter increased to $38.3 million from $37.7 million year-over-year, leading to an operating loss of $1.8 million, a significant decline from an operating income of $469,000 in Q3 2023. The net loss for the third quarter was $1.7 million, compared to a net income of $1.7 million in the same quarter of the previous year. For the nine months ended September 30, 2024, the net loss totaled $10.5 million, a stark contrast to the net income of $6.1 million reported in the same period of 2023.

The company’s cash and cash equivalents increased to $278.5 million as of September 30, 2024, up from $226.7 million at the end of 2023. This increase was primarily driven by cash generated from operating activities, which amounted to $40.9 million for the nine months ended September 30, 2024, although this was lower than the $53.8 million generated in the same period of 2023.

Strategically, TechTarget is in the process of merging with Informa PLC, with a merger agreement signed on January 10, 2024. The merger is expected to close in the last quarter of 2024, pending customary conditions. Under the agreement, Informa will own 57% of the new entity, with former TechTarget stockholders receiving approximately $11.71 per share in cash. The company is also facing potential litigation related to this merger, with claims alleging that the Definitive Proxy Statement is materially incomplete and misleading.

Overall, while TechTarget experienced a slight revenue increase in Q3 2024, the overall financial performance for the nine-month period reflects challenges, including increased costs and a significant net loss.