TechTarget Inc (Form: 10-Q, Received: 08/04/2021 16:15:37)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-33472

TECHTARGET, INC.

(Exact name of registrant as specified in its charter)

Delaware	04-3483216
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

275 Grove Street Newton, Massachusetts	02466
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 431-9200

Former name, former address and formal fiscal year, if changed since last report: Not applicable

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 Par Value	TTGT	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 30, 2021, the registrant had 28,159,043 shares of common stock, $0.001 par value per share, outstanding.

TABLE OF CONTENTS

Item		Page

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
	Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	3
	Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2021 and 2020	4
	Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 6.	Exhibits	40
	Signatures	41

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

TechTarget, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

	June 30, 2021			December 31, 2020
Assets	(Unaudited)			(Unaudited)
Current assets:
Cash	$	109,038		$	82,616
Short-term investments		84			84
Accounts receivable, net of allowance for doubtful accounts of $1,646 and $1,754 respectively		39,718			40,183
Prepaid taxes		—			796
Prepaid expenses and other current assets		4,562			4,084
Total current assets		153,402			127,763
Property and equipment, net		16,453			13,661
Goodwill		182,222			179,118
Intangible assets, net		105,441			108,872
Operating lease assets with right-of-use		22,291			26,031
Deferred tax assets		1,500			216
Other assets		909			907
Total assets	$	482,218		$	456,568
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,718		$	4,303
Current operating lease liability		3,657			3,611
Accrued expenses and other current liabilities		13,430			16,539
Accrued compensation expenses		3,438			5,789
Income taxes payable		197			487
Contract liabilities		27,854			15,689
Total current liabilities		52,294			46,418
Non-current lease liability		23,482			26,943
Convertible debt		195,303			153,882
Other liabilities		1,221			2,971
Deferred tax liabilities		16,086			23,848
Total liabilities		288,386			254,062
Leases and contingencies (see Note 9)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock, $0.001 par value; 100,000,000 shares authorized; 55,669,885 and 55,633,155 shares issued, respectively; 28,159,043 and 28,122,603 shares outstanding, respectively		56			56
Treasury stock, at cost; 27,510,842 and 27,510,552 shares, respectively		(199,796	)		(199,796	)
Additional paid-in capital		345,609			363,055
Accumulated other comprehensive income		3,220			1,611
Retained earnings		44,743			37,580
Total stockholders’ equity		193,832			202,506
Total liabilities and stockholders’ equity	$	482,218		$	456,568

See accompanying Notes to Consolidated Financial Statements.

TechTarget, Inc.

Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share data)

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue	$	63,711		$	34,796		$	116,680		$	66,212
Cost of revenue⁽¹⁾		17,114			8,785			32,282			16,936
Amortization of acquired technology		776			—			1,541			—
Gross profit		45,821			26,011			82,857			49,276
Operating expenses:
Selling and marketing⁽¹⁾		22,099			12,570			43,705			25,519
Product development⁽¹⁾		2,534			1,846			5,457			3,878
General and administrative⁽¹⁾		6,208			3,267			12,643			6,622
Depreciation, excluding depreciation of $446, $221, $827 and $392, respectively, included in cost of revenue		1,388			1,171			2,609			2,357
Amortization		1,658			282			3,288			441
Total operating expenses		33,887			19,136			67,702			38,817
Operating income		11,934			6,875			15,155			10,459
Interest and other income (expense), net		(486	)		(10	)		(1,182	)		(479	)
Income before provision for income taxes		11,448			6,865			13,973			9,980
Provision for income taxes		6,328			2,092			7,043			3,000
Net income	$	5,120		$	4,773		$	6,930		$	6,980
Other comprehensive income (loss), net of tax:
Unrealized income (loss) on investments (net of tax provision of $0, $(24), $0 and $13, respectively)	$	—		$	84		$	—		$	(48	)
Foreign currency translation gain (loss)		575			21			1,609			(32	)
Other comprehensive income (loss)		575			105			1,609			(80	)
Comprehensive income	$	5,695		$	4,878		$	8,539		$	6,900
Net income per common share:
Basic	$	0.18		$	0.17		$	0.25		$	0.25
Diluted	$	0.17		$	0.17		$	0.24		$	0.25
Weighted average common shares outstanding:
Basic		28,152			27,533			28,146			27,768
Diluted		32,144			28,163			32,121			28,304

(1)	Amounts include stock-based compensation expense as follows:

Cost of revenue	$	384	$	71	$	896	$	140
Selling and marketing		3,535		2,118		7,058		4,307
Product development		121		125		776		321
General and administrative		1,972		979		3,882		1,953

See accompanying Notes to Consolidated Financial Statements.

TechTarget, Inc.

Consolidated Statements of Stockholders’ Equity

(in thousands, except share and per share data)

(Unaudited)

	Common Stock				Treasury Stock
	Number of Shares		$0.001 Par Value		Number of Shares		Cost			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders’ Equity
Balance, December 31, 2020		55,633,155	$	56		27,510,552	$	(199,796	)	$	363,055		$	1,611	$	37,580	$	202,506
Reclassification due to the adoption of ASU 2020-06		—		—		—		—			(30,500	)		—		233		(30,267	)
Issuance of common stock from restricted stock awards		24,815		—		—		—			—			—		—		—
Impact of net settlements		290		—		290		—			(370	)		—		—		(370	)
Stock-based compensation expense(1)		—		—		—		—			7,425			—		—		7,425
Comprehensive income:
Unrealized gain on foreign currency exchange		—		—		—		—			—			1,034		—		1,034
Net income		—		—		—		—			—			—		1,810		1,810
Balance, March 31, 2021		55,658,260	$	56		27,510,842	$	(199,796	)	$	339,610		$	2,645	$	39,623	$	182,138
Issuance of common stock from exercise of options		2,500		—		—		—			16			—		—		16
Issuance of common stock from restricted stock awards		9,125		—		—		—			—			—		—		—
Registration fees		—		—		—		—			(29	)		—		—		(29	)
Stock-based compensation expense(1)		—		—		—		—			6,012			—		—		6,012
Comprehensive income:
Unrealized gain on foreign currency exchange		—		—		—		—			—			575		—		575
Net income		—		—		—		—			—			—		5,120		5,120
Balance, June 30, 2021		55,669,885	$	56		27,510,842	$	(199,796	)	$	345,609		$	3,220	$	44,743	$	193,832

See accompanying Notes to Consolidated Financial Statements.

	Common Stock				Treasury Stock
	Number of Shares		$0.001 Par Value		Number of Shares		Cost			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings		Total Stockholders’ Equity
Balance, December 31, 2019		54,903,824	$	55		26,761,305	$	(184,972	)	$	317,675		$	(319	)	$	20,512	$	152,951
Issuance of common stock from restricted stock awards		123,027		—		—		—			—			—			—		—
Purchase of common stock through stock buyback		—		—		736,760		(14,824	)		—			—			—		(14,824	)
Impact of net settlements		230		—		230		—			(68	)		—			—		(68	)
Stock-based compensation expense(1)		—		—		—		—			5,294			—			—		5,294
Comprehensive income:
Unrealized loss on investments		—		—		—		—			—			(132	)		—		(132	)
Unrealized loss on foreign currency exchange		—		—		—		—			—			(53	)		—		(53	)
Net income		—		—		—		—			—			—			2,207		2,207
Balance, March 31, 2020		55,027,081	$	55		27,498,295	$	(199,796	)	$	322,901		$	(504	)	$	22,719	$	145,375
Issuance of common stock from restricted stock awards		8,000		—		—		—			—			—			—		—
Stock-based compensation expense		—		—		—		—			3,293			—			—		3,293
Comprehensive income:
Unrealized gain on investments		—		—		—		—			—			84			—		84
Unrealized gain on foreign currency exchange		—		—		—		—			—			21			—		21
Net income		—		—		—		—			—			—			4,773		4,773
Balance, June 30, 2020		55,035,081	$	55		27,498,295	$	(199,796	)	$	326,194		$	(399	)	$	27,492	$	153,546

(1)

Includes $0.8 and $1.8 million of accrued compensation expense for the six months ended June 30, 2021 and 2020, respectively.

See accompanying Notes to Consolidated Financial Statements.

TechTarget, Inc.

Consolidated Statements of Cash Flows

(in thousands)

	For the Six Months Ended
	June 30,
	2021			2020
	(Unaudited)
Operating activities:
Net income	$	6,930		$	6,980
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		3,436			2,749
Amortization		4,829			441
Provision for bad debt		6			317
Stock-based compensation		12,612			6,721
Amortization of debt issuance costs		654			4
Deferred tax provision		1,228			(1,236	)
Changes in operating assets and liabilities:
Accounts receivable		460			1,217
Prepaid expenses and other current assets		(867	)		(17	)
Other assets		388			15
Accounts payable		(552	)		(187	)
Income taxes payable		502			4,162
Accrued expenses and other current liabilities		(3,197	)		(346	)
Operating lease right-of-use assets and liabilities, net		(2,239	)		(182	)
Accrued compensation expenses		(728	)		(637	)
Contract liabilities		12,165			700
Other liabilities		(1,746	)		1,140
Net cash provided by operating activities		33,881			21,841
Investing activities:
Purchases of property and equipment, and other capitalized assets, net		(6,225	)		(3,338	)
Purchases of investments and maturities of investments		—			(71	)
Acquisitions of businesses, net		—			(5,015	)
Net cash used in investing activities		(6,225	)		(8,424	)
Financing activities:
Tax withholdings related to net share settlements		(370	)		(68	)
Purchase of treasury shares and related costs		—			(14,824	)
Registration fees		(29	)		—
Proceeds from stock option exercises		16			—
Payment of earnout liabilities		(1,032	)		—
Term loan principal payment		—			(625	)
Net cash used in financing activities		(1,415	)		(15,517	)
Effect of exchange rate changes on cash		181			3
Net increase (decrease) in cash		26,422			(2,097	)
Cash at beginning of period		82,616			52,487
Cash at end of period	$	109,038		$	50,390
Supplemental disclosure of cash flow information:
Cash paid for taxes, net	$	5,306		$	92

See accompanying Notes to Consolidated Financial Statements.

TechTarget, Inc.

Notes to Consolidated Financial Statements

(In thousands, except share and per share data, where otherwise noted, or instances where expressed in millions)

1. Organization and Operations

TechTarget, Inc. and its subsidiaries (collectively, the “Company”) is a global data and analytics leader and software provider for buyers of purchase intent-driven marketing and sales data for enterprise technology vendors. The Company’s service offerings enable technology vendors to better identify, reach and influence corporate information technology (“IT”) decision-makers actively researching specific IT purchases. The Company improves vendors’ ability to impact these audiences for business growth using advanced targeting, analytics and data services complemented by customized marketing programs that integrate demand generation, brand advertising techniques, and content curation and creation. The Company operates a network of approximately 140 websites and 1,151 webinars and virtual event channels, which each focus on a specific IT sector such as storage, security or networking. IT and business professionals have become increasingly specialized, and they have come to rely on the Company’s sector-specific websites and webinars and virtual event channels for purchasing decision support. The Company’s content platforms enable IT and business professionals to navigate the complex and rapidly changing IT landscape where purchasing decisions can have significant financial and operational consequences. At critical stages of the purchase decision process, these content offerings through different channels meet IT and business professionals’ needs for expert, peer and IT vendor information and provide platforms on which B2B technology companies can launch targeted marketing campaigns which generate measurable return on investment. Based upon the logical clustering of members and users’ respective job responsibilities and the marketing focus of the products being promoted by the Company’s customers, the Company categorizes its content offerings to address the key market opportunities and audience extensions across a portfolio of distinct market categories: Security; Networking; Storage; Data Center and Virtualization Technologies; CIO/IT Strategy; Business Applications and Analytics; Application Architecture and Development; and ANCL Channel.

2. Summary of Significant Accounting Policies

The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these Notes to Consolidated Financial Statements. The Company’s critical accounting policies are those that affect its more significant judgments used in the preparation of its consolidated financial statements. A description of the Company’s critical accounting policies and estimates is contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and in this note to the consolidated financial statements.

Principles of Consolidation

The accompanying Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, TechTarget Securities Corporation (“TSC”), TechTarget Limited, TechTarget (HK) Limited (“TTGT HK”), TechTarget (Australia) Pty Ltd., TechTarget (Singapore) Pte Ltd., E-Magine Médias SAS (“LeMagIT”), TechTarget Germany GmbH and as of December 23, 2020, BrightTALK Limited and its wholly owned subsidiary, BrightTALK, Inc. (collectively, the “BrightTALK subsidiaries”). TSC is a Massachusetts corporation. TechTarget Limited is a subsidiary doing business principally in the United Kingdom. TTGT HK is a subsidiary incorporated in Hong Kong in order to facilitate the Company’s activities in the Asia-Pacific region. TechTarget (Australia) Pty Ltd. and TechTarget (Singapore) Pte Ltd. are the entities through which the Company does business in Australia and Singapore, respectively; LeMagIT and TechTarget Germany GmbH, both wholly-owned subsidiaries of TechTarget Limited, are entities through which the Company does business in France and Germany, respectively. The BrightTALK subsidiaries are entities through which the Company does business for the BrightTALK webinar and virtual event and audience delivery platform.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted (Generally Accepted Accounting Principles or “U.S. GAAP”) in the United States (“U.S.”) 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. All adjustments, which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown, are of a normal, recurring nature and have been reflected in the consolidated financial statements. 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 consolidated financial statements should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in this report and the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Reclassifications

The Company historically presented depreciation and amortization expense as one combined line item on the Consolidated Statements of Income and Comprehensive Income. Due to the Company’s recent acquisitions, the materiality of amortization expense has increased and the Company has elected to present these expenses in two separate line items for all periods presented. This reclassification had no effect on total operating expenses or net income.

Foreign Currency Translation

The functional currency of the Company’s major foreign subsidiaries is generally the local currency. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the Consolidated Statement of Comprehensive Income. Foreign currency transaction gains and losses are included in interest and other income (expense), net in the Consolidated Statement of Income. All assets and liabilities denominated in foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the average exchange rate during the period.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to revenue, long-lived assets, goodwill, the allowance for doubtful accounts, stock-based compensation, self-insurance accruals, and income taxes. The Company reduces its accounts receivable for an allowance for doubtful accounts based on its best estimate of the amount of probable credit losses. Estimates of the carrying value of certain assets and liabilities are based on historical experience and on various other assumptions that the Company believes to be reasonable. Actual results could differ from those estimates.

Revenue Recognition

The Company generates its revenue from the sale of purchase intent data and marketing and sales services, which it delivers via its network of websites, webinar and virtual event channels, and data analytics solutions. Revenue is recognized when performance obligations are satisfied by transferring promised goods or services to customers, as determined by applying a five-step process consisting of: a) identifying the contract, or contracts, with a customer, b) identifying the performance obligations in the contract, c) determining the transaction price, d) allocating the transaction price to the performance obligations in the contract, and e) recognizing revenue when, or as, performance obligations are satisfied.

Accounts Receivable

We maintain an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense in the Consolidated Statements of Income and Comprehensive Income. We assess collectability by reviewing accounts receivable on an individual basis when we

identify specific customers with known disputes, overdue amounts or collectability issues and also reserve for losses on all accounts based on historical information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. In determining the amount of the allowance for credit losses, we consider historical collectability based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations.

At June 30, 2021, the Company’s collectability assessment continues to include the business and market disruptions caused by COVID-19 and estimates of expected emerging credit and collectability trends. The continued volatility in market conditions and evolving shifts in credit trends are difficult to predict, causing variability and volatility that may have a material impact on our allowance for credit losses in future periods.

Fair Value of Financial Instruments

Financial instruments consist of cash and cash equivalents, short-term investments, accounts receivable, accounts payable, and contingent consideration. Due to their short-term nature and liquidity, the carrying value of these instruments, with the exception of contingent consideration, approximates their estimated fair values. The Company classifies all of its short-term investments as available-for-sale. The fair value of contingent consideration was estimated using a discounted cash flow method.

Business Combinations

The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement.

During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s Consolidated Statement of Income and Comprehensive Income.

Other Liabilities

Other liabilities consist of the long-term portions of amounts payable related to the amounts deferred under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) which allows employers to defer the payment of the Company’s employer share of FICA payroll taxes. The amount of the employer share of FICA payroll taxes (6.2% of the first $137,700 of employee pay) due for the period beginning on March 27, 2020, and ending December 31, 2020, can be deferred. The deferred amounts will then be payable in equal installments at December 31, 2021 and December 31, 2022. Amounts relating to payment due December 31, 2021 of $1.2 million are included in accrued expenses as of June 30, 2021.

Recent Accounting Pronouncements

Recently Adopted Accounting Guidance

In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-04, Intangibles-Goodwill and Other (Topic 350), simplifying the Test for Goodwill Impairment (ASU 2017-04). ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (step 2 of the goodwill impairment test) and instead requires only a one-step quantitative impairment test, performed by comparing the fair value of goodwill with its carrying amount. ASU 2017-04 is effective on a prospective basis effective for goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. We adopted the new standard effective January 1, 2020 and the guidance did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (ASU 2018-15), which requires implementation costs incurred by customers in cloud computing arrangements (i.e., hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the non-cancellable term of the cloud computing arrangements plus any optional renewal periods that are reasonably certain to be exercised by the customer or for

which the exercise is controlled by the service provider. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. We adopted the new standard effective January 1, 2020 and the guidance did not have a material impact on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-03, “Measurement of Credit Losses on Financial Instruments,” (ASU 2016-03) which amends ASC 326 “Financial Instruments—Credit Losses” which introduces a new methodology for accounting for credit losses on financial instruments. The guidance establishes a new forward-looking "expected loss model" that requires entities to estimate current expected credit losses on accounts receivable and financial instruments by using all practical and relevant information. We adopted the new standard effective January 1, 2020 and the guidance did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, “Changes to Disclosure Requirements for Fair Value Measurements” (Topic 820) (ASU 2018-13), which improved the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements. We adopted the new standard effective January 1, 2020 and the guidance did not have a material impact on our consolidated financial statements.

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). ASU 2019-12 removes certain exceptions for performing intraperiod tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods. The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and the effect of enacted changes in tax laws or rates in interim periods. The Company adopted ASU 2019-12 in the first quarter of 2021 and the guidance did not have a material impact on our consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s own Equity (Subtopic 815-40), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible debt instruments and contracts on an entity’s own equity. Among other things, the standard removes certain accounting models which require bifurcation from the host contract of certain features of convertible debt instruments, unless the feature qualifies as a derivative under ASC 815. Additionally, companies are required to use the if-converted method for convertible instruments in their calculations of diluted earnings per share. Early adoption is permitted but no earlier than the fiscal year beginning after December 15, 2020.

The Company elected to early adopt ASU 2020-06 effective January 1, 2021. The Company has elected the modified retrospective method to transition to the guidance. The modified retrospective method requires the Company to:

Recombine our convertible notes into a single instrument by reclassifying the amount initially recorded to the equity component against the outstanding debt on the convertible notes.

Reclassify an amount from retained earnings equal to the difference between the sum of the carrying values of the debt and the conversion feature immediately before transition and the revised amortized cost of the combined convertible instrument under the traditional debt model as of the transition date.

Post-transition, account for the convertible notes as a single instrument recognizing interest expense based on the applicable and recalculated effective interest rate and continue to apply the if-converted method in the Company’s calculation of diluted earnings per share.

The following table summarizes the impact of the Company’s adoption of ASU 2020-06:

	December 31, 2020		January 1, 2021		Change
Convertible Debt	$	153,882	$	194,649	$	40,767
Additional Paid-in Capital		363,055		332,555		(30,500	)
Retained Earnings		37,580		37,813		233
Deferred Tax Liabilities		23,848		13,348		(10,500	)
Total					$	—

3. Revenue

Disaggregation of Revenue

The following table depicts the disaggregation of revenue according to categories consistent with how the Company evaluates its financial performance and economic risk. International revenue consists of international geo-targeted campaigns, which are campaigns targeted at an audience of members outside of North America.

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
North America	$	39,416	$	21,106	$	72,454	$	40,855
International		24,295		13,690		44,226		25,357
Total	$	63,711	$	34,796	$	116,680	$	66,212

Contract Liabilities

Timing may differ between the satisfaction of performance obligations and the invoicing and collections of amounts related to the Company’s contracts with customers. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. Additionally, certain customers may receive credits, which are accounted for as a material right. The Company estimates these amounts based on the expected amount of future services to be provided to the customer and allocates a portion of the transaction price to these material rights. The Company recognizes these material rights as the material rights are exercised. The resulting amounts included in the contract liabilities on the accompanying Consolidated Balance Sheets were $2.7 million and $2.2 million at June 30, 2021, and December 31, 2020, respectively. Revenue recognized for the three and six months ended June 30, 2021, respectively that had been recorded in deferred revenue at the beginning of the respective quarter, was $13.0 million and $28.1 million.

	Contract Liabilities
Year-to-Date Activity
Balance at December 31, 2020	$	15,689
Billings		62,341
Revenue Recognized		(52,969	)
Balance at March 31, 2021	$	25,061
Billings		66,504
Revenue Recognized		(63,711	)
Balance at June 30, 2021	$	27,854

The Company elected to apply the following practical expedients:

•

Existence of a Significant Financing Component in a Contract. As a practical expedient, the Company has not assessed whether a contract has a significant financing component because the Company expects at contract inception that the period between payment by the customer and the transfer of promised goods or services by the Company to the customer will be one year or less. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 90 days. In addition, the Company has determined that the payment terms that the Company provides to its customers are structured primarily for reasons other than the provision of financing to the customer.

•

Costs to Fulfill a Contract. The Company’s revenue is primarily generated from customer contracts that are for one year or less. Costs primarily consist of incentive compensation paid based on the achievements of sales targets. As a practical expedient, for amortization periods that are determined to be one year or less, the Company expenses any incremental costs of obtaining the contract with a customer when incurred. For those customer contracts greater than one year, the Company capitalizes and amortizes the expenses over the period of benefit.

•

Revenue Invoiced. The Company has applied the practical expedient for certain revenue streams to exclude the value of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed.

4. Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including short-term and long-term investments and contingent consideration. The Company’s bank and money market accounts are in bank deposits and are not quoted instruments. As such they are all considered cash. The fair value of these financial assets and liabilities was determined based on three levels of input as follows:

•

Level 1. Quoted prices in active markets for identical assets and liabilities;

•

Level 2. Observable inputs other than quoted prices in active markets; and

•

Level 3. Unobservable inputs.

The fair value hierarchy of the Company’s financial assets carried at fair value and measured on a recurring basis is as follows:

			Fair Value Measurements at June 30, 2021
	June 30, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Short-term investments (1)	$	84	$ —		$	84	$	—
Total assets	$	84	$	—	$	84	$	—
Liabilities:
Contingent consideration - current (2)	$	2,237	$ —		$ —		$	2,237
Total liabilities	$	2,237	$	—	$	—	$	2,237

			Fair Value Measurements at December 31, 2020
	December 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Short-term investments (1)	$	84	$	—	$	84	$	—
Total assets	$	84	$	—	$	84	$	—
Liabilities:
Contingent consideration - current (2)	$	1,027	$	—	$	—	$	1,027
Contingent consideration - non-current (2)		1,751		—		—		1,751
Total liabilities	$	2,778	$	—	$	—	$	2,778

(1)	Short-term investments consist of municipal bonds, corporate bonds, bond funds, U.S. Treasury securities, and government agency bonds; their fair value is calculated using an interest rate yield curve for similar instruments.

(2)

Contingent consideration liabilities are measured using the income approach and discounted to present value based on an assessment of the probability that the Company would be required to make such future payments. The contingent consideration liabilities are measured at fair value using significant Level 3 (unobservable) inputs such as discount rates and probability measures. Remeasurement of the contingent consideration to fair value is reported in the income statement as amortization expense in the period remeasured.

	Fair Value
Year-to-Date Activity
Balance at December 31, 2020	$	2,778
Payments on Contingent Liabilities		(1,032	)
Amortization of discount on contingent liabilities		53
Remeasurement of contingent liabilities		185
Balance at March 31, 2021	$	1,984
Amortization of discount on contingent liabilities		44
Remeasurement of contingent liabilities		209
Balance at June 30, 2021	$	2,237

5. Cash and Investments

Cash is carried at cost, which approximates fair market value. As of June 30, 2021 and December 31, 2020, cash consisted of $109.0 million and $82.6 million respectively.

Investments are recorded at fair value with the related unrealized gains and losses included in accumulated other comprehensive income, a component of stockholders’ equity, net of tax. Realized gains and losses on the sale of these investments are determined using the specific identification method. There were no realized gains or losses as of June 30, 2021 or December 31, 2020.

Short-term investments consisted of the following:

	June 30, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Short-term investments:
Bond funds	$	84	$	—	$	—	$	84
Total short-term investments	$	84	$	—	$	—	$	84

	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Short-term investments:
Bond funds	$	84	$	—	$	—	$	84
Total short-term investments	$	84	$	—	$	—	$	84

6. Goodwill and Intangible Assets

The following table summarizes the Company’s intangible assets, net:

			June 30, 2021
	Estimated Useful Lives (Years)		Gross Carrying Amount		Accumulated Amortization			Net
Customer, affiliate and advertiser relationships	5-19		$	78,716	$	(9,019	)	$	69,697
Developed websites, technology and patents		10		32,911		(2,885	)		30,026
Trademark, trade name and domain name	5-16			7,682		(2,103	)		5,579
Proprietary user information database and internet traffic		5		1,150		(1,150	)		—
Non-compete agreements	1.5-3			230		(91	)		139
Total intangible assets			$	120,689	$	(15,248	)	$	105,441

			December 31, 2020
	Estimated Useful Lives (Years)		Gross Carrying Amount		Accumulated Amortization			Net
Customer, affiliate and advertiser relationships	5-19		$	78,283	$	(6,595	)	$	71,688
Developed websites, technology and patents		10		32,535		(1,315	)		31,220
Trademark, trade name and domain name	5-16			7,619		(1,831	)		5,788
Proprietary user information database and internet traffic		5		1,149		(1,149	)	—
Non-compete agreements	1.5-3			230		(54	)		176
Total intangible assets			$	119,816	$	(10,944	)	$	108,872

Intangible assets are amortized over their estimated useful lives, which range from eighteen months to nineteen years, using methods of amortization that are expected to reflect the estimated pattern of economic use. The remaining amortization expense will be recognized over a weighted-average period of approximately 7.3 years. Amortization expense was $4.3 million and $0.1 million for the six months ended June 30, 2021 and 2020, respectively. Amortization expense relating to developed websites, technology and patents is recorded within costs of revenues. All other amortization is recorded within operating expenses as the remaining intangible assets consist of customer-related assets which generate website traffic that the Company considers to be in support of selling and marketing activities. The Company did not write off any fully amortized intangible assets in the first six months of 2021.

The Company expects amortization expense of intangible assets to be as follows:

Years Ending December 31:	Amortization Expense
2021 (July 1 – December 31)	$	4,368
2022		8,271
2023		8,100
2024		8,069
2025		8,070
Thereafter		68,563
Total	$	105,441

Goodwill and indefinite-lived intangible assets are not amortized but are reviewed annually for impairment or more frequently if impairment indicators arise. The Company did not have any intangible assets with indefinite lives other than goodwill as of June 30, 2021 or December 31, 2020. There were no indications of impairment as of June 30, 2021, and the Company believes that, as of the balance sheet dates presented, none of the Company’s goodwill or intangible assets was impaired. Goodwill increased $0.2 million and $0.5 million for the three and six months ended June 30, 2021 respectively from translation adjustments booked to other comprehensive income.

7. Net Income Per Common Share

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income per common share is as follows:

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Numerator:
Net income	$	5,120	$	4,773	$	6,930	$	6,980
Denominator:
Basic:
Weighted average shares of common stock and vested, undelivered restricted stock units outstanding		28,152,210		27,532,786		28,146,414		27,768,224
Diluted:
Weighted average shares of common stock and vested, undelivered restricted stock units outstanding		28,152,210		27,532,786		28,146,414		27,768,224
Effect of potentially dilutive shares ⁽¹⁾		3,992,029		630,127		3,975,049		535,844
Total weighted average shares of common stock and vested, undelivered restricted stock units outstanding and potentially dilutive shares		32,144,239		28,162,913		32,121,463		28,304,068
Net Income Per Common Share:
Basic:
Net income applicable to common stockholders	$	5,120	$	4,773	$	6,930	$	6,980
Weighted average shares of stock outstanding		28,152,210		27,532,786		28,146,414		27,768,224
Basic net income per common share	$	0.18	$	0.17	$	0.25	$	0.25
Diluted:
Net income applicable to common stockholders	$	5,510	$	4,773	$	7,710	$	6,980
Weighted average shares of stock outstanding		32,144,239		28,162,913		32,121,463		28,304,068
Diluted net income per common shares ⁽¹⁾	$	0.17	$	0.17	$	0.24	$	0.25

(1)

In calculating diluted net income per share, 45 thousand shares and 35 thousand shares related to outstanding stock options and unvested, undelivered restricted stock units were excluded for the three and six months ended June 30, 2021, respectively. Additionally, in calculating diluted net income per shares, weighted average shares includes 2.9 million shares related to the if converted basis of our convertible bond for the three and sixth months ended June 30, 2021, respectively 29 thousand shares and 26 thousand shares related to outstanding stock options and unvested, undelivered restricted stock units were excluded for the three and six months ended June 30, 2020, respectively.

8. Convertible Debt and Loan Agreement

Convertible Debt

In December 2020, the Company issued $201.3 million in aggregate principal amount of 0.125% convertible senior notes (the “Notes”) due December 15, 2025, unless earlier repurchased by the Company or converted by the holder pursuant to their terms. Interest is payable semiannually in arrears on June 15 and December 15 of each year, which commenced on June 15, 2021.

The Notes are governed by an Indenture between the Company, as issuer, and U.S. Bank, National Association, as trustee. The Notes are unsecured and rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated in right of payment to the Notes and equal in right of payment to the Company’s unsecured indebtedness that is not so subordinated.

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s election.

Holders of the Notes will not receive any cash payment representing accrued and unpaid interest, if any, upon conversion of a Note, except in limited circumstances. Accrued but unpaid interest will be deemed to be paid by cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock paid or delivered, as the case may be, to the holder upon conversion of the Notes.

Prior to the close of business on September 15, 2025, the Notes will be convertible at the option of holders during certain periods, only upon satisfaction of certain conditions set forth below. On or after September 15, 2025, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes at the conversion price at any time regardless of whether the conditions set forth below have been met.

Holders may convert all or a portion of their Notes prior to the close of business on September 14, 2025, in multiples of the $1,000 principal amount, only under the following circumstances:

•

during any calendar quarter commencing after the calendar quarter ending on March 31, 2021 (and only during such calendar quarter), if the last reported sales price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•

during the five business day period after any five consecutive trading day period, or the Notes measurement period, in which the “trading price” (as defined in the Indenture) per $1,000 principal amount of the Notes for each trading day of the Notes measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;

•

if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on September 14, 2025; or

•

upon the occurrence of specified corporate events as set forth in the Indenture.

Prior to the adoption of ASU 2020-06, based on market data available for publicly traded, senior, unsecured corporate bonds issued by companies in the same industry and with similar maturities, the Company estimated the implied market interest rate of its Notes to be approximately 5%, assuming no conversion option. Assumptions used in the estimate represent what market participants would use in pricing the liability component of the Notes, including market interest rates, credit standing, and yield curves, all of which are defined as Level 2 observable inputs. The estimated implied interest rate was applied to the Notes, which resulted in a fair value of the liability component of $158.8 million upon issuance, calculated as the present value of future contractual payments based on the $201.3 million of aggregate principal amount. The excess of the principal amount of the liability component over its carrying amount, or the debt discount, is amortized to interest expense over the term of the Notes. The $42.5 million difference between the gross proceeds received from issuance of the Notes of $201.3 million and the estimated fair value of the liability component represents the equity component of the Notes and was recorded in additional paid-in capital. The equity component is not remeasured as long as it continues to meet the conditions for equity classification.

In accounting for the transaction costs related to the issuance of the Notes, the Company allocated the total amount incurred to the liability and equity components in proportion to the allocation of proceeds. Transaction costs attributable to the liability component, totaling $5.25 million, are being amortized to expense over the term of the Notes, and transaction costs attributable to the equity component, totaling $1.4 million, were included with the equity component in shareholders’ equity.

Effective January 1, 2021, upon the adoption of ASU 2020-06, the Company reclassified the equity component into the debt component as more fully described above.

The Notes consist of the following:

	June 30, 2021		December 31, 2020
Liability Component:
Principal	$	201,250	$	201,250
Less: debt discount, net of amortization		5,947		47,368
Net carrying amount	$	195,303	$	153,882
Equity component^(a)	$	—	$	41,059

(a)	Recorded in the consolidated balance sheet within additional paid-in capital, net of $1,404 transaction costs.

The following table sets forth total interest expense recognized related to the Notes:

	June 30, 2021		December 31, 2020
0.125% coupon	$	126	$	10
Amortization of debt discount and transaction costs		654		346
	$	780	$	356

As of June 30, 2021, the fair value of the Notes, which was determined based on inputs that are observable in the market or that could be derived from, or corroborated with, observable market data, quoted prices of the Notes in an over-the-counter market (Level 2), and carrying value of debt instruments (carrying value excludes the equity component of the Company’s convertible notes classified in equity) were as follows:

	June 30, 2021				December 31, 2020
	Fair Value		Carrying Value		Fair Value		Carrying Value
Convertible senior notes	$	254,259	$	195,303	$	218,940	$	153,882

Based on the closing price of our common stock of $77.49 on June 30, 2021, the if-converted value of the Notes was greater by $20.2 million than their aggregate principal amount. The effective interest rate of the Notes is 0.8%.

Loan Agreement

On December 24, 2018, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Western Alliance Bank (the “Bank”) as the lender. The Loan Agreement provided for a $25 million term loan facility with a maturity date of December 10, 2023. The Loan Agreement was paid in full in December 2020 and all liens related to the Loan Agreement released.

Borrowings under the Loan Agreement bore interest, on the outstanding daily balance thereof, at a floating per annum rate equal to one and three-eighths percent (1.375%) above the greater of (a) the one (1) month U.S. LIBOR rate reported in The Wall Street Journal as of such date or (b) two percent (2.00%).

9. Leases and Contingencies

The Company conducts its operations in leased office facilities under various noncancelable operating lease agreements that expire through December 2029.

On October 26, 2017, the Company entered into a Third Amendment (the “Third Amendment”) to the lease agreement for office space in Newton, Massachusetts, dated as of August 4, 2009 (the “Newton Lease”). The Third Amendment extended the lease term to December 31, 2029 and preserves the Company’s option to extend the term for an additional five-year period subject to certain terms and conditions set forth in the Newton Lease. The Third Amendment reduced the rentable space from approximately 110,000 square feet to approximately 74,000 square feet effective January 1, 2018. As of January 1, 2018, base monthly rent under the Third Amendment is $0.3 million. The base rent increases biennially at a rate averaging approximately 1% per year, as of January 1, 2020. The Company remains responsible for certain other costs under the Third Amendment, including operating expense and taxes.

In April 2021, the Company entered into a Fourth Amendment (the “Fourth Amendment”). The Fourth Amendment became effective during May 2021. The Fourth Amendment reduced the rentable space from approximately 74,000 square feet to approximately 68,000 square feet and provided the Company with a one-time payment of approximately $0.6 million. As of May 1, 2021, base monthly rent is approximately $0.3 million per month. All other terms and conditions are substantially similar to those terms in the Third Amendment.

Certain of the Company’s operating leases, including the Newton Lease, include lease incentives and escalating payment amounts and are renewable for varying periods. The Company recognizes the related rent expense on a straight-line basis over the term of each lease, taking into account the lease incentives and escalating lease payments.

The Company has various non-cancelable lease agreements for certain of its offices with original lease periods expiring between 2021 and 2029. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain it will exercise that option. Leases with renewal options allow the Company to extend the lease term typically between 1 and 5 years. When determining the lease term, renewal options reasonably certain of being exercised are included in the lease term. When determining if a renewal option is reasonably certain of being exercised, the Company considers several economic factors, including but not limited to, the significance of leasehold improvements incurred on the property, whether the asset is difficult to replace, underlying contractual obligations, or specific characteristics unique to that particular lease that would make it reasonably certain that the Company would exercise such option. Renewal and termination options were generally not included in the lease term for the Company's existing operating leases. Certain of the arrangements have discounted rent periods or escalating rent payment provisions. Leases with an initial term of twelve months or less are not recorded on the consolidated balance sheets. The Company recognizes rent expense on a straight-line basis over the lease term.

As of June 30, 2021, operating lease assets were $22.3 million and operating lease liabilities were $27.1 million. The maturities of the Company’s operating lease liabilities as of June 30, 2021 were as follows:

	Minimum Lease
Years Ending December 31:	Payments
2021 (July 1 – December 31)	$	2,085
2022		4,342
2023		3,996
2024		3,986
2025		3,197
Thereafter		13,195
Total future minimum lease payments		30,801
Less imputed interest		3,662
Total operating lease liabilities	$	27,139

Included in the Consolidated Balance Sheet:
Current operating lease liabilities	$	3,657
Non-current operating lease liabilities		23,482
Total operating lease liabilities	$	27,139

For the three and six months ended June 30, 2021 and 2020, the total lease cost was comprised of the following amounts:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Operating lease expense	$	1,111	$	946	$	2,253	$	1,893
Short-term lease expense		66		26		142		54
Total lease expense	$	1,177	$	972	$	2,395	$	1,947

The following summarizes additional information related to operating leases:

	As of
	June 30, 2021
Weighted-average remaining lease term — operating leases		4.5
Weighted-average discount rate — operating leases		4	%

If the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate as the discount rate. The Company uses its best judgment when determining the incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term to the lease payments in a similar currency.

Litigation

From time to time and in the ordinary course of business, the Company may be subject to various claims, charges, and litigation. At June 30, 2021 and December 31, 2020, the Company did not have any pending claims, charges, or litigation that it expects would have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

10. Stock-Based Compensation

Stock Option and Incentive Plans

In April 2007, the Board approved the 2007 Stock Option and Incentive Plan (the “2007 Plan”), which was approved by the stockholders of the Company and became effective upon the consummation of the Company’s IPO in May 2007. The 2007 Plan allowed the Company to grant incentive stock options (“ISOs”), non-qualified stock options (“NSOs”), stock appreciation rights, deferred stock awards, restricted stock units and other awards. Under the 2007 Plan, stock options could not be granted at less than fair market value on the date of grant and grants generally vested over a three- to four-year period. Stock options granted under the 2007 Plan expire no later than ten years after the grant date. Additionally, beginning with awards made in August 2015, the Company had the option to direct a net issuance of shares for satisfaction of tax liability with respect to vesting of awards and delivery of shares. Prior to August 2015, this choice of settlement method was solely at the discretion of the award recipient. The 2007 Plan expired in May 2017.

No new awards may be granted under the 2007 Plan; however, the shares of common stock remaining in the 2007 Plan are available for issuance in connection with previously awarded grants under the 2007 Plan. There are 37,500 shares of common stock that remain subject to outstanding stock grants under the 2007 Plan as of June 30, 2021.

In March 2017, the Board approved the 2017 Stock Option and Incentive Plan (the “2017 Plan”), which was approved by the stockholders of the Company at the 2017 Annual Meeting and became effective June 16, 2017. The 2017 Plan replaces the Company’s 2007 Plan. On that date, 3,000,000 shares of the Company’s common stock were reserved for issuance under the 2017 Plan and, generally, shares that are forfeited or canceled from awards under the 2017 Plan also will be available for future awards. In April 2021, the stockholders’ authorized an additional 3,800,000 shares of the Company’s common stock for issuance under the 2017 Plan. Under the 2017 Plan, the Company may grant restricted stock and restricted stock units, non-qualified stock options, stock appreciation rights, performance awards, and other stock-based and cash-based awards. Grants generally vest in equal tranches over a three-year period. Stock options granted under the 2017 Plan expire no later than ten years after the grant date. Shares of stock issued pursuant to restricted stock awards are restricted in that they are not transferable until they vest. Shares of stock underlying awards of restricted stock units are not issued until the units vest. Non-qualified stock options cannot be exercised until they vest. Under the 2017 Plan, all stock options and stock appreciation rights must be granted with an exercise price that is at least equal to the fair market value of the common stock on the date of grant. The 2017 Plan broadly prohibits the repricing of options and stock appreciation rights without stockholder approval and requires that no dividends or dividend equivalents be paid with respect to options or stock appreciation rights. The 2017 Plan further provides that, in the event any dividends or dividend equivalents are declared with respect to restricted stock, restricted stock units, other stock-based awards and performance awards (referred to as “full-value awards”), such dividends or dividend equivalents would be subject to the same vesting and forfeiture provisions as the underlying award. There are a total of 1,595,225 shares of common stock that remain subject to outstanding stock-based grants under the 2017 Plan as of June 30, 2021. There are a total of 3,905,986 shares of common stock that are available for issuance under the 2017 Plan as of June 30, 2021.

Accounting for Stock-Based Compensation

The Company uses the Black-Scholes option pricing model to calculate the grant date fair value of an award.

The expected volatility of options granted has been determined using a weighted average of the historical volatility of the Company’s common stock for a period equal to the expected life of the option. The expected life of options has been determined utilizing the “simplified” method. The risk-free interest rate is based on a zero coupon U.S. treasury instrument whose term is

consistent with the expected life of the stock options. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock; therefore, the expected dividend yield is assumed to be zero. The Company applied an estimated annual forfeiture rate based on historical averages in determining the expense recorded in each period.

A summary of the stock option activity under the Company’s plans for the six months ended June 30, 2021 is presented below:

Six Month Activity	Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Options outstanding at December 31, 2020		107,500		$	17.34		—		—
Granted		20,000			66.93		—		—
Exercised		(2,500	)		6.47		—		—
Forfeited		—			—		—		—
Cancelled		—			—		—		—
Options outstanding at June 30, 2021		125,000		$	25.49		6.85	$	6,500
Options exercisable at June 30, 2021		105,000		$	17.60		6.26	$	6,289
Options vested or expected to vest at June 30, 2021		123,398		$	24.95		6.81	$	6,483

The total intrinsic value of options exercised (i.e. the difference between the market price at exercise and the price paid by the employee to exercise the options) was $154 thousand during the six months ended June 30, 2021. The total amount of cash received from exercise of these options was approximately $16 thousand during the six months ended, June 30, 2021. There were no options exercised during the six months ended, June 30, 2020.

Restricted Stock Units

Restricted stock units are valued at the market price of a share of the Company’s common stock on the date of the grant. A summary of the restricted stock unit activity under the Company’s plans for the six months ended June 30, 2021 is presented below:

Year-to-Date Activity	Shares			Weighted- Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value
Nonvested outstanding at December 31, 2020		1,478,000		$	31.33		—
Granted		64,152			77.93		—
Vested		(34,802	)		60.90		—
Forfeited		—			—		—
Nonvested outstanding at June 30, 2021		1,507,350		$	32.65	$	116,805

There were 34,802 restricted stock units with a total grant-date fair value of $2.1 million that vested during the six months ended June 30, 2021. There were 103,688 restricted stock units with a total grant-date fair value of $2.2 million that vested during the six months ended June 30, 2020.

As of June 30, 2021, there was $30.9 million of total unrecognized compensation expense related to stock options and restricted stock units, which is expected to be recognized over a weighted average period of 1.5 years.

11. Stockholders’ Equity

Common Stock Repurchase Programs

On November 7, 2018, the Company announced a program (the “November 2018 Stock Repurchase Program”) to repurchase shares up to an aggregate amount of $25.0 million whereby the Company was authorized to repurchase the Company’s common stock from time to time on the open market or in privately negotiated transactions at prices and in a manner that may be determined by management. The Company repurchased 736,760, 411,849 and 243,425 shares at an aggregate purchase price of $14.8 million, $7.1 million and $3.1 million and an average share price of $20.10, $17.14 and $12.82 during the years ended December 31, 2020, 2019, and 2018, respectively, under the November 2018 Stock Repurchase Program. We terminated the November 2018 Stock Repurchase Program in May 2020.

In May 2020, we announced that our Board had authorized a $25.0 million stock repurchase program (the “May 2020 Repurchase Program”) whereby we are authorized to repurchase our common stock from time to time on the open market or in privately negotiated transactions at prices and in the manner that may be determined by management. No amounts were repurchased under this plan during the six month period ended June 30, 2021.

Repurchased shares are recorded under the cost method and are reflected as treasury stock in the accompanying Consolidated Balance Sheets.

Reserved Common Stock

As of June 30, 2021, the Company has reserved 5,538,711 shares of common stock for use in settling outstanding options and unvested restricted stock units that have not been issued, as well as future awards available for grant under the 2007 and 2017 Plans and 4,000,186 shares issuable upon conversion of the Notes.

12. Income Taxes

The Company measures its interim period tax expense using an estimated annual effective tax rate and adjustments for discrete taxable events that occur during the interim period. The estimated annual effective income tax rate is based upon the Company’s estimations of annual pre-tax income, the geographic mix of pre-tax income, and its interpretations of tax laws. The Company updates the estimate of its annual effective tax rate at the end of each quarterly period. The Company recorded income tax expense of $6.3 million and $7.0 million for the three and six months ended June 30, 2021 respectively. The tax expense for the three and six months ended June 30, 2021 increased by approximately $3.2 million due to an increase in the corporate tax rate in the United Kingdom from 19% to 25% which became law in June of 2021 with an effective date of April 1, 2023. This change impacted the value of the Company’s deferred tax assets and liabilities in the United Kingdom. The Company recorded income tax expense of $2.1 million and $3.0 million for the three and six months ended June 30, 2020 respectively.

13. Segment Information

The Company views its operations and manages its business as one operating segment which is the business of providing purchase intent marketing and sales services. The Company aggregated its operating segment based upon the similar economic and operating characteristics of its operations.

Geographic Data

Net sales by campaign target area were as follows (1):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
North America	$	39,416	$	21,106	$	72,454	$	40,855
International		24,295		13,690		44,226		25,357
Total	$	63,711	$	34,796	$	116,680	$	66,212

(1)

Net sales to customers by campaign target area is based on the geo-targeted (target audience) location of the campaign.

Net sales to unaffiliated customers by geographic area were as follows (2):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2021		2020		2021		2020
United States	$	45,769	$	24,197	$	83,269	$	46,634
United Kingdom		8,825		4,531		16,973		8,323
Other international		9,117		6,068		16,438		11,255
Total	$	63,711	$	34,796	$	116,680	$	66,212

(2)

Net sales to unaffiliated customers by geographic area is based on the customers’ current billing addresses and does not consider the geo-targeted (target audience) location of the campaign.

Long-lived assets by geographic area were as follows:

	June 30, 2021		December 31, 2020
United States	$	197,778	$	195,424
International		106,338		106,227
Total	$	304,116	$	301,651

Long-lived assets are comprised of property and equipment, net; goodwill; and intangible assets, net. The United Kingdom accounted for 34% of the Company’s long-lived assets for the six months ended June 30, 2021 and no single country outside of the U.S. or United Kingdom accounted for 10% or more of the Company’s long-lived assets during either of these periods.

14. Acquisitions and Subsequent Events

2020 Acquisitions

BrightTALK Limited

On December 23, 2020, the Company acquired all outstanding stock of BrightTALK Limited and its wholly owned subsidiary BrightTALK, Inc., which is a leading marketing platform for webinars and virtual events that enables marketers to create original webinar and video content. The Company has included the financial results of BrightTALK in the consolidated financial statements from the date of acquisition. The transaction costs associated with the acquisition were approximately $5.0 million and were recorded in general and administrative expense. The acquisition date fair value of the consideration transferred for BrightTALK was approximately $151.0 million in cash.

Our consolidated financial statements have not been retroactively restated to include BrightTALK’s historical financial position or results of operations. The acquisition was accounted for as a business combination. In accordance with the purchase method of accounting, the purchase price paid has been allocated to the assets and liabilities acquired based upon their estimated fair values as of the acquisition date, with the excess of the purchase price over the net assets acquired recorded as goodwill. We have substantially completed our valuation processes of all of the assets and liabilities acquired in the acquisition, however, until we have completed our valuation process, there may be adjustments to our estimates of fair value and resulting preliminary purchase price allocation, specifically those that require significant accounting estimates and assumptions.

The following table shows the preliminary purchase price allocation as of the date acquired, and adjustments to June 30, 2021 (in thousands). Table excludes translation adjustments since the purchase date related to assets and liabilities of BrightTALK Limited:

	December 23, 2020			Adjustments			June 30, 2021
Cash	$	1,997		$	—		$	1,997
Accounts receivable		11,810			—			11,810
Operating lease right-of-use assets		1,986			—			1,986
Other assets		2,948			(332	)		2,616
Goodwill		71,846			2,560			74,406
Intangible assets		90,370			—			90,370
Accounts payable, accrued expenses and other liabilities		(9,194	)		(2,091	)		(11,285	)
Unearned revenue		(6,980	)		—			(6,980	)
Operating lease liabilities		(2,446	)		—			(2,446	)
Deferred tax liabilities and income tax payable		(11,490	)		(137	)		(11,627	)
Net Assets acquired	$	150,847		$	—		$	150,847

The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities, for which there is no basis for U.S. income tax purposes. The fair values assigned to tangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The provisional measurements of fair value for income taxes payable and deferred taxes set forth above may be subject to change as additional information is received and certain tax returns are finalized. Certain tax attributes that will benefit the Company, for which the calculations are not yet complete, are payable to the seller upon the Company’s realization of those benefits. Estimated fair value measurements relating to the acquisition are made using Level 3 inputs including discounted cash flow techniques. Fair value is estimated using inputs primarily from the income approach, which include the use of both the multiple period excess earnings method and the relief from royalties method. The significant assumptions used in estimating fair value include (i) the estimated life the asset will contribute to cash flows, such as attrition rate of customers or remaining contractual terms, (ii) profitability and (iii) the estimated discount rate that reflect the level of risk associated with receiving future cash flows. The Company valued the customer relationship asset using an income approach; specifically, the multi-period excess earnings method. The significant assumptions used to value customer relationships included, among others, attrition rates, revenue growth rate, and discount rate. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.

Other Acquisitions

During 2020, the Company acquired substantially all the assets of two other companies for an aggregate of $25.0 million in cash and $2.2 million of contingent consideration and has included the financial results of these companies in its consolidated financial statements from the dates of acquisition. The earnouts are subject to certain revenue growth targets and the payment is adjusted based on actual results. The transactions were not material to the Company and the costs associated with the acquisitions were not material. The Company accounted for the transactions as business combinations. In allocating the purchase consideration based on estimated fair values, the Company recorded $17.1 million of intangible assets (offset by the value of assumed liabilities under of the agreements of $3.5 million), and $12.7 million of goodwill. The majority of the goodwill balance associated with these business combinations is deductible for U.S. income tax purposes.

2021 Acquisition

During July 2021, the Company acquired substantially all the assets of a leading healthcare business to business media company focusing on healthcare-related technology for consideration of $25.0 million in cash and contingent consideration of $5.0 million. The contingent consideration is subject to certain revenue growth targets. The transaction will not be considered to be material to the Company and the costs associated with the acquisition will not be material.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and accompanying notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors including those discussed below in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended December 31, 2020 under Part I, Item 1A, “Risk Factors,” and in the other documents we file with the Securities and Exchange Commission. Please refer to our “Forward-Looking Statements” section on page 37 of this Quarterly Report on Form 10-Q.

Overview

TechTarget, Inc. (“we” or the “Company”) is a global data and analytics leader and software provider for purchase intent-driven marketing and sales data and content curation and creation services which delivers business impact for business-to-business (“B2B”) companies. Our solutions enable B2B technology companies to identify, reach, and influence key enterprise technology decision makers faster and with higher efficacy. We improve information technology (“IT”) vendors’ abilities to impact highly targeted audiences for business growth using advanced targeting, first-party analytics and data services complemented with customized marketing programs that integrate demand generation, brand marketing, and advertising techniques.

We enable enterprise technology and business professionals to navigate the complex and rapidly-changing enterprise technology landscape where purchasing decisions can have significant financial and operational consequences. Our content strategy includes three primary sources which enterprise technology and business professionals use to assist them in their pre-purchase research: independent content provided by our professionals, vendor-generated content provided by our customers and member-generated, or peer-to-peer, content. In addition to utilizing our independent editorial content, registered members and users appreciate the ability to deepen their pre-purchase research by accessing the extensive vendor-supplied content available across our website and webinar and virtual event channels network. Likewise, these members and users derive significant additional value from the ability of our network to provide seamless interaction and contribute to information exchanges in a given field. To advance our ability to provide purchase intent-driven marketing and sales data, we have been acquisitive. During 2020, we acquired BrightTALK Limited, a technology media company that provides customers with a platform to create, host and promote virtual events, webinars and video content, The Enterprise Strategy Group, Inc., a leading provider of decision support content based on user research and market analysis for enterprise technology companies, and Data Science Central, LLC, a digital publishing and media company focused on data science and business analytics.

We had approximately 27.6 million and 20.5 million registered members and users – our “audiences” – as of June 30, 2021 and 2020, respectively. As a result of the BrightTALK acquisition in December 2020, we added approximately 6.1 million unique users of the BrightTALK platform to our audiences. While the size of our registered member and user base does not provide direct insight into our customer numbers or our revenue, the value of our services sold to our customers is a direct result of the breadth and reach of this content footprint. This footprint creates the opportunity for our clients to gain business leverage by targeting our audiences through customized marketing programs. Likewise, the behavior exhibited by these audiences enables us to provide our customers with data products to improve their marketing and sales efforts. The targeted nature of our member and user base enables B2B technology companies to reach a specialized audience efficiently because our content is highly segmented and aligned with the B2B technology companies’ specific products.

Through our ability to identify, reach and influence key decision makers, we have developed a broad customer base and, in 2021, we anticipate delivering purchase intent-driven marketing and sales data programs to more than 2,000 customers.

COVID-19 Business Update

In the first quarter of 2020, we began to see the impacts of the COVID-19 pandemic on our business. As local and national actions, such as stay at home mandates, took effect, we began to see the macro-economic uncertainty that the COVID-19 pandemic created, which impacted our customers’ purchasing decisions. We observed our customers navigate this economic uncertainty through a combination of strategies, including focusing their buying decisions on shorter duration contracts. Additionally, our ability to attract new customers to longer-term contracts (which we define as contracts in excess of 270 days) was impacted as a result of the general cautiousness related to the COVID-19 pandemic.

While the COVID-19 pandemic has not had a material adverse impact on our operations, the future course of the pandemic and any potential financial impact remain highly uncertain and continue to evolve. Even after the easing of governmental restrictions, as the severity of the COVID-19 pandemic lessens, we could experience further fluctuations in our results of operations and cash flows resulting from the ongoing global impacts of the pandemic and our customers’ realignment of their marketing and sales budgets.

Our priorities remain ensuring the health and safety of our employees, customers, vendors, members, stockholders, and other stakeholders, while delivering our content and services to our customers around the world and continuing to drive long-term growth.

Executive Summary

Financial Results For the Six Months Ended June 30, 2021

Our revenue for the six months ended June 30, 2021 increased by $50.5 million, or 76%, to $116.7 million, compared with $66.2 million, during the same period in 2020. Priority Engine™ revenue increased 14% to $28.4 million, in the first six months of 2021 compared with $25.0 million in the first six months of 2020. Increased customer spend for additional data driven marketing products, including Priority Engine™, lead generation and brand contributed to our growth, as well as our acquisitions which significantly contributed to our growth. As required under accounting principles generally accepted in the United States (“U.S. GAAP”), we recorded unearned revenue related to acquired contracts from acquired entities at fair value on the date of acquisition. As a result, we did not recognize certain revenue related to these acquired contracts that the acquired entities would have otherwise recorded as an independent entity. The amount of revenue that we derived from longer-term contracts in the second quarter of 2021 increased 121%, compared to the second quarter of 2020, which was significantly impacted by our acquisitions.

We continue to benefit from our customers’ increasing demand for purchase intent data to fuel their sales and marketing outreach. Another important factor in our revenue trajectory relates to the evolving way our customers use our purchase intent data relative to our offerings. Our offerings help customers identify “in-market” prospects for their products and services – our offerings help them reach, influence, and activate these prospects. A growing number of customers purchase “always on” programs from us that combine offerings to identify and influence active buyers throughout the year. Additionally, customers use our offerings to support quarterly sales and marketing campaigns. These purchases are more fluid – customers of this type may focus more on offerings in a particular campaign, and shift objectives as opposed to an “always on” program.

Our international geo-targeted revenue, where our target audience is outside North America (“International”), increased more than 77% for the three months ended June 30, 2021, compared with the prior year period driven by the items noted above.

Gross profit percentage was 72% and 75% for the three months ended June 30, 2021 and 2020, respectively. Gross profit increased by $19.8 million, mainly due to the increase in revenue compared to the same period a year ago.

Business Trends

The following discussion highlights key trends affecting our business not including items relating to the global pandemic, which is discussed in further detail above.

•

Macro-economic Conditions and Industry Trends. Because most of our customers are B2B technology companies, the success of our business is intrinsically linked to the health, and subject to the market conditions, of the IT industry. Despite the current uncertainty in the economy, there are several factors indicating positive IT spending over the next few years is likely. There are several IT catalysts such as AI, security, data analytics, and cloud migrations, to name a few. Our growth continues to be driven in large part by the return on the investments we made in our data analytics suite of products, IT Deal Alert™, which continues to drive market share gains for us. While we will continue to invest in this growth area, management will also continue to carefully control discretionary spending such as travel and entertainment, and the filling of new and replacement positions, in an effort to maintain profit margins and cash flows.

•

COVID-19. Throughout 2020 and 2021, we have been impacted by COVID-19 in multiple ways: we noted an acceleration of our international revenue as customers in those regions moved from face-to-face events to online platforms; we noted our ability to expand our new logo acquisition with our Priority Engine™ Express offering was negatively impacted. We anticipate certain of these trends to continue through the remainder of 2021.

•

Brexit. The United Kingdom’s June 2016 referendum, in which voters approved an exit of the United Kingdom from the European Union, commonly referred to as “Brexit,” resulted in significant general economic uncertainty as well as volatility in global stock markets and currency exchange rate fluctuations. In March 2017, the United Kingdom served notice to the European Council under Article 50 of the Lisbon Treaty of its intention to withdraw from the European Union. As of January 30, 2020, the United Kingdom’s membership in the European Union was terminated and an eleven-month transition period began. In December 2020, the United Kingdom and the European Union agreed on a trade and cooperation agreement, under which the United Kingdom and the European Union will now form two separate markets governed by two distinct regulatory and legal regimes. The trade and cooperation agreement covers the general objectives and framework of the relationship between the United Kingdom and the European Union, including as it relates to trade, transport and visas. Notably, under the trade and cooperation agreement, United Kingdom service suppliers no longer benefit from automatic access to the entire European Union single market, United Kingdom goods no longer benefit from the free movement of goods and there is no longer the free movement of people between the United Kingdom and the European Union. Depending on the application of the terms of the trade and cooperation agreement, we could face new regulatory costs and challenges. The full effect of Brexit remains uncertain and depends on the application of the terms of the trade and cooperation agreement. Our revenue generated from customers who have billing addresses within the United Kingdom was approximately 14% and 10% of our total revenue for the three months ended June 30, 2021 and 2020, respectively.

•

Privacy. On July 16, 2020, the Court of Justice of the European Union invalidated the EU-US Privacy Shield Framework and upheld the adequacy of the use of EU Standard Contractual Clauses. We, along with thousands of other companies, relied on this EU-US Privacy Shield Framework, among other mechanisms, for the transfer of personal data to data processors established outside of the EU. The U.S. Department of Commerce, European Commission and the European Data Protection Board remain in close contact regarding the impact of the CJEU decision and supervisory authorities are expected to issue further guidance to business. We are evaluating what additional mechanisms or actions may be required to establish adequate safeguards for the further transfer of personal data.

•

Customer Demographics. In the three months ended June 30, 2021, revenue from our legacy global customers (a static cohort comprised of our 10 historically largest on premises hardware technology companies), increased by approximately 61% compared to the prior year. Revenue from our other customers, excluding the legacy global customers described above, increased by approximately 101% compared to the prior year.

Our key strategic initiatives include:

•

Geographic. During the three months ended, June 30, 2021, approximately 40% of our revenue was derived from internationally targeted campaigns.

•

Product. Purchase intent data continues to drive our product strategy. During 2021, we intend to make the purchase intent data acquired through our recent acquisition of BrightTALK more readily available through our Priority Engine™ offering. We are additionally focused on improving connectivity, ROI metrics and attribution. Through our Priority Engine™ Express offering, we will focus on extending the market reach of our purchase intent data to companies in the SMB market.

•

Our revenue was up 83% in the second quarter of 2021 compared to the second quarter of 2020, which was primarily driven by the factors noted above. We have looked extensively at the dynamics between IT Deal Alert™ and other offerings and have evaluated whether our growth in IT Deal Alert™ customers is taking away from other products for those same accounts. However, our data indicates that this is not the case, and while our sales team is leading with IT Deal Alert™, our sales team continues to emphasize the benefits of integration across our product offerings.

Revenue

Revenue changes for the three and six month periods ended June 30, 2021, as compared to the same periods in 2020, are shown in the table below. See the discussion above and Notes 3 and 13 to our consolidated financial statements for additional information on our revenues.

	For the Three Months Ended June 30,				Percent Change	For the Six Months Ended June 30,				Percent Change
	2021		2020			2021		2020
North America	$	39,416	$	21,106	87%	$	72,454	$	40,855	77%
International		24,295		13,690	77%		44,226		25,357	74%
Total	$	63,711	$	34,796	83%	$	116,680	$	66,212	76%

We sell customized marketing programs to B2B technology companies targeting a specific audience within a particular enterprise technology or business sector or sub-sector. We maintain multiple points of contact with our customers to provide support throughout their organizations and their customers’ IT sales cycles. As a result, our customers often run multiple advertising programs with us in order to target their desired audience of enterprise technology and business professionals more effectively. There are multiple factors that can impact our customers’ marketing and advertising objectives and spending with us, including but not limited to, IT product launches, increases or decreases to their advertising budgets, the timing of key industry marketing events, responses to competitor activities and efforts to address specific marketing objectives such as creating brand awareness or generating sales leads. Our products and services are generally delivered under short-term contracts that run for the length of a given program, typically less than nine months. In 2016, we began to enter into longer-term contracts with certain customers, and in the quarter ended June 30, 2021 approximately 40% of our revenue was from longer-term contracts.

Product and Service Offerings

We use our offerings to provide B2B technology companies with numerous touch points to identify, reach and influence key enterprise technology decision makers. The following is a description of the products and services we offer:

•

IT Deal AlertTM. A suite of data and services for B2B technology companies that leverages the detailed purchase intent data that we collect on enterprise technology organizations and professionals researching IT purchases on our network of websites. Through proprietary scoring methodologies, we use this insight to help our customers identify and prioritize accounts and contacts whose content consumption around specific enterprise technology topics indicates that they are “in-market” for a particular product or service. The suite of products and services includes Priority Engine™, Qualified Sales Opportunities™, and Deal Data™. Priority Engine™ is a subscription service powered by our Activity Intelligence™ platform, which integrates with customer relationship management and marketing automation platforms from salesforce.com, Marketo, Eloqua, Pardot, and Integrate. The service delivers lead generation workflow solutions that enable marketers and sales forces to identify and understand accounts and individuals actively researching new technology purchases and then to engage those active prospects. Qualified Sales Opportunities™ is a product that profiles specific in-progress purchase projects, including information on scope and purchase considerations. Deal Data™ is a customized solution aimed at sales intelligence and data scientist functions within our customer organizations. It renders our Activity Intelligence™ data into one-time offerings directly consumable by the customer’s internal applications.

•

Channel Offerings. Our offering allows our customers to deliver unlimited live webinars and videos to an unlimited audience.

•

Demand Solutions. Our offerings enable our customers to reach and influence prospective buyers through content marketing programs, such as white papers, webcasts, podcasts, webinars, videocasts, virtual trade shows, and content sponsorships, designed to generate demand for their solutions, and through display advertising and other brand programs that influence consideration by prospective buyers. We believe this allows B2B technology companies to maximize ROI on marketing and sales expenditures by capturing sales leads from the distribution and promotion of content to our audience of enterprise technology and business professionals.

•

Brand Solutions. Our suite of brand solutions offerings provides B2B technology companies with direct exposure to targeted audiences of enterprise technology and business professionals actively researching information related to their products and services. We leverage our Activity Intelligence™ platform to enable significant segmentation and targeting of specific audiences that can be accessed through these programs. Components of brand programs may include on-network branding, off-network branding, and microsites and related formats.

•

Custom Content Creation. We also at times create white papers, case studies, webcasts or videos to our customers’ specifications. These customized content assets are then promoted to our audience within both demand solutions and brand solutions programs.

Cost of Revenue, Operating Expenses, and Other

Expenses consist of cost of revenue, selling and marketing, product development, general and administrative, depreciation and amortization, and interest and other expense, net. Personnel-related costs are a significant component of each of these expense categories except for depreciation and amortization and interest and other expense, net.

Cost of Revenue. Cost of revenue consists primarily of: salaries and related personnel costs; member acquisition expenses (primarily keyword purchases from leading internet search sites); freelance writer expenses; website hosting costs; vendor expenses associated with the delivery of webcast, podcast, videocast and similar content, and other offerings; stock-based compensation expenses; facility expenses, and other related overhead.

Selling and Marketing. Selling and marketing expenses consist primarily of: salaries and related personnel costs; sales commissions; travel-related expenses; stock-based compensation expenses; facility expenses and other related overhead. Sales commissions are recorded as expense when earned by the employee, based on recorded revenue.

Product Development. Product development includes the creation and maintenance of our network of websites, advertiser offerings and technical infrastructure. Product development expense consists primarily of salaries and related personnel costs; stock-based compensation expenses; facility expenses, and other related overhead.

General and Administrative. General and administrative expenses consist primarily of salaries and related personnel costs; facility expenses and related overhead; accounting, legal and other professional fees; and stock-based compensation expenses.

Depreciation and Amortization. Depreciation expense consists of the depreciation of our property and equipment and other capitalized assets. Depreciation is calculated using the straight-line method over their estimated useful lives, ranging from three to twelve years. Amortization of intangible assets expense consists of the amortization of intangible assets recorded in connection with our acquisitions. Separable intangible assets that are not deemed to have an indefinite life are amortized over their estimated useful lives, which range from eighteen months to nineteen years, using methods that are expected to reflect the estimated pattern of economic use.

Interest and Other Income (Expense), Net. Interest and other expense, net consists primarily of interest costs and the related amortization of deferred issuance costs on amounts borrowed under our Convertible Senior Notes and our Loan and Security Agreement (the “Loan Agreement”) with Western Alliance Bank and amortization of premiums on our investments, less any interest income earned on cash, and short-term and long-term investments. We historically have invested our cash in money market accounts, municipal bonds, government agency bonds, U.S. Treasury securities and corporate bonds. Other expense, net consists of non-operating gains or losses, primarily related to realized and unrealized foreign currency gains and losses on trade assets and liabilities.

Non-GAAP Financial Measure

We use Adjusted Revenue, a non-GAAP financial measure to assist us in evaluating our operating performance to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate our financial performance. We believe that non-GAAP Adjusted Revenue reflects our ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in our business. We also believe that this non-GAAP measure provides useful information to investors and others in understanding and evaluating our operating results and prospects in the same manner as management and in comparing financial results across accounting periods. Regulation S-K Item 10(e), “Use of non-GAAP financial measures in Commission filings,” defines and prescribes the conditions for use of non-GAAP financial information.

A limitation of our non-GAAP financial measure of Adjusted Revenue is that it does not have a uniform definition. Our definition will likely differ from the definitions used by other companies, and therefore comparability may be limited.

We compensate for these limitations by reconciling the non-GAAP financial measure to GAAP revenue, the most comparable GAAP financial measure. Adjusted Revenue should be considered in addition to, not as a substitute for or in isolation from, GAAP revenue. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure, and to view our non-GAAP financial measure in conjunction with the most comparable GAAP financial measure.

Adjusted Revenue

We define Adjusted Revenue as the sum of revenue and the impact of fair value adjustments to acquired unearned revenue related to services billed by an acquired company prior to its acquisition. Management uses this measure to evaluate growth of the business period over period, excluding the impact of adjustments due to purchase accounting. We believe that it is important to evaluate growth on this basis. We expect our Adjusted Revenue to converge over time with our GAAP revenue.

The following table presents a reconciliation of Adjusted Revenue:

	Three Months Ended June 30,					Six Months Ended June 30,
	2021			2020		2021			2020
Revenue	$	63,711		$	34,796	$	116,680		$	66,212
Impact of fair value adjustment on acquired unearned revenue		3,271			—		8,296			—
Adjusted Revenue	$	66,982		$	34,796	$	124,976		$	66,212
Adjusted revenue percentage change		92	%				89	%
Revenue percentage change		83	%				76	%

Application of Critical Accounting Policies and Use of Estimates

The discussion of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue, long-lived assets, goodwill, allowance for doubtful accounts, stock-based compensation, contingent liabilities, self-insurance accruals and income taxes. We based our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that we believe to be reasonable. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Our actual results may differ from these estimates under different assumptions or conditions.

Our critical accounting policies are those that affect our more significant judgments used in the preparation of our consolidated financial statements. A description of our critical accounting policies and estimates is contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Other than those noted in Note 2 to our consolidated financial statements, there were no material changes to our critical accounting policies and estimates during the first six months of 2021.

Income Taxes

We are subject to income taxes in both the U.S. and foreign jurisdictions, and we use estimates in determining our provision for income taxes. We recognize deferred tax assets and liabilities based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates.

Our deferred tax assets and liabilities are comprised primarily of book to tax differences on stock-based compensation and timing of deductions for rent expense, accrued expenses, depreciation and amortization. For the three months ended June 30, 2021, the Company reflected the impact of the change in the corporate tax rate in the United Kingdom from 19% to 25%, which becomes effective April 1, 2023. The change was enacted into law during June 2021.

Results of Operations

The following table sets forth our results of operations for the periods indicated, including percentage of total revenue:

	Three Months Ended June 30,										Six Months Ended June 30,
	2021					2020					2021					2020
Revenue	$	63,711		100	%	$	34,796		100	%	$	116,680		100	%	$	66,212		100	%
Cost of revenue		17,114		27	%		8,785		25	%		32,282		28	%		16,936		26	%
Amortization of acquired technology		776		1	%		—		0	%		1,541		1	%		—		0	%
Gross profit		45,821		72	%		26,011		75	%		82,857		71	%		49,276		74	%
Operating expenses:
Selling and marketing		22,099		35	%		12,570		36	%		43,705		37	%		25,519		39	%
Product development		2,534		4	%		1,846		5	%		5,457		5	%		3,878		6	%
General and administrative		6,208		10	%		3,267		9	%		12,643		11	%		6,622		10	%
Depreciation		1,388		2	%		1,171		3	%		2,609		2	%		2,357		4	%
Amortization		1,658		3	%		282		1	%		3,288		3	%		441		1	%
Total operating expenses		33,887		53	%		19,136		55	%		67,702		58	%		38,817		59	%
Operating income		11,934		19	%		6,875		20	%		15,155		13	%		10,459		16	%
Interest and other expense, net		(486	)	-1	%		(10	)	0	%		(1,182	)	-1	%		(479	)	-1	%
Income before provision for income taxes		11,448		18	%		6,865		20	%		13,973		12	%		9,980		15	%
Provision for income taxes		6,328		10	%		2,092		6	%		7,043		6	%		3,000		5	%
Net income	$	5,120		8	%	$	4,773		14	%	$	6,930		6	%	$	6,980		11	%

Impact of Acquisitions

The comparability of our operating results in the three and six months ended June 30, 2021 to the three and six months ended June 30, 2020 was impacted by our recent acquisitions, including the acquisition of BrightTALK Limited in December 2020.

Comparison of Three Months Ended June 30, 2021 and June 30, 2020

Revenue

Three Months Ended June 30,

2021

2020

Increase

Percent

Change

Revenue

63,711

34,796

28,915

Revenue increased for the three months ended June 30, 2021, as compared to the same period in 2020, primarily due to customers increasing their spend for additional data driven marketing products. Priority Engine™, lead generation and brand revenue each increased over prior quarter and contributed to our growth, as well as revenue attributed to our acquisitions, which significantly contributed to our growth. As required under U.S. GAAP, we recorded unearned revenue related to acquired contracts from acquired entities at fair value on the date of acquisition. As a result, we did not recognize certain revenue related to these acquired contracts that the acquired entities would have otherwise recorded as an independent entity.

Cost of Revenue and Gross Profit

	Three Months Ended June 30,
	2021			2020			Increase		Percent Change
Cost of revenue	$	17,114		$	8,785		$	8,329		95	%
Gross profit	$	45,821		$	26,011		$	19,810		76	%
Gross profit percentage		72	%		75	%

Gross Profit. Our gross profit is equal to the difference between our revenue and our cost of revenues for the period. Gross profit percentage was 72% and 75% for the three months ended June 30, 2021 and 2020, respectively. Gross profit increased by $19.8 million in the three months ended June 30, 2021 compared to the same period in 2020, primarily due to increased revenue compared to the same period a year ago. Gross profit was negatively impacted by $0.8 million during the quarter due to amortization of intangibles

related to the acquisition of BrightTALK technology, which lowered gross profit by approximately 1%. Because the majority of our costs are labor-related, we expect our gross profit to fluctuate from period to period depending on the total revenue for the period.

Operating Expenses and Other

	Three Months Ended June 30,
	2021			2020			Increase (Decrease)		Percent Change
Operating expenses:
Selling and marketing	$	22,099		$	12,570		$	9,529		76	%
Product development		2,534			1,846			688		37	%
General and administrative		6,208			3,267			2,941		90	%
Depreciation		1,388			1,171			217		19	%
Amortization		1,658			282			1,376		488	%
Total operating expenses	$	33,887		$	19,136		$	14,751		77	%
Interest and other expense, net	$	(486	)	$	(10	)	$	476		4760	%
Provision for income taxes	$	6,328		$	2,092		$	4,236		202	%

Selling and Marketing. Selling and marketing expenses increased for the three months ended June 30, 2021, as compared to the same period in 2020, primarily due to increases in pay related expenses related to our December 2020 acquisitions and a $1.4 million increase in stock-based compensation expense, primarily due to increased stock prices from the prior year.

Product Development. Product development expense increased for the three months ended June 30, 2021, as compared to the same period in 2020, primarily due to BrightTALK.

General and Administrative. General and administrative expense increased for the three months ended June 30, 2021, as compared to the same period in 2020, primarily due to an increase in pay costs, $1.0 million increase in stock-based compensation costs and an increase in professional fees related to the December acquisitions.

Depreciation. Depreciation expense increased for the three months ended June 30, 2021, as compared to the same period in 2020, due to increased capital expenditures, primarily from the BrightTALK acquisition.

Amortization. Amortization expense increased for the three months ended June 30, 2021, as compared to the same period in 2020, primarily due to intangible assets acquired in 2020.

Interest and other expense, net. Interest and other expense increased for the three months ended June 30, 2021, as compared to the same period in 2020, primarily due to amortization of debt issuance costs and currency fluctuations from trade receivables.

Provision for income taxes. Our effective income tax rate was 55% and 30% for the three months ended June 30, 2021 and 2020, respectively. The tax expense for the three months ended June 30, 2021 increased by approximately $3.2 million primarily due to an increase in the corporate tax rate in the United Kingdom from 19% to 25% which became law in June of 2021 with an effective date of April 1, 2023. This change impacted the value of our deferred tax assets and liabilities in the United Kingdom. As required by generally accepted accounting principles, changes in tax rates should be reflected once they become law. Absent the change in tax rate in the United Kingdom, our income tax expense and effective tax rate for 2021 would have been $3.1 million and 27%, respectively.

Comparison of Six Months Ended June 30, 2021 and June 30, 2020

Revenue

Six Months Ended June 30,

2021

2020

Increase

Percent

Change

Revenues

116,680

66,212

50,468

Revenue increased for the six months ended June 30, 2021, as compared to the same period in 2020, primarily due to customers increasing their spend for additional data driven marketing products. Priority Engine™, lead generation and brand revenue each increased over prior quarter and contributed to our growth, as well as revenue attributed to our acquisitions, which significantly contributed to our growth. As required under U.S. GAAP, we recorded unearned revenue related to acquired contracts from acquired entities at fair value on the date of acquisition. As a result, we did not recognize certain revenue related to these acquired contracts that the acquired entities would have otherwise recorded as an independent entity.

Cost of Revenue and Gross Profit

	Six Months Ended June 30,
	2021			2020			Increase		Percent Change
Cost of revenue	$	32,282		$	16,936		$	15,346		91	%
Gross profit	$	82,857		$	49,276		$	33,581		68	%
Gross profit percentage		71	%		74	%

Gross Profit. Our gross profit is equal to the difference between our revenue and our cost of revenues for the period. Gross profit percentage was 71% and 74% for the six months ended June 30, 2021 and 2020, respectively. Gross profit increased by $33.6 million in the six months ended June 30, 2021 compared to the same period in 2020, primarily attributable to increased revenue compared to the same period a year ago. Gross profit was negatively impacted by $1.5 million during the quarter due to amortization of intangibles related to the acquisition of BrightTALK technology, which lowered gross profit by approximately 1%. Because the majority of our costs are labor-related, we expect our gross profit to fluctuate from period to period depending on the total revenue for the period.

Operating Expenses and Other

	Six Months Ended June 30,
	2021			2020			Increase (Decrease)		Percent Change
Operating expenses:
Selling and marketing	$	43,705		$	25,519		$	18,186		71	%
Product development		5,457			3,878			1,579		41	%
General and administrative		12,643			6,622			6,021		91	%
Depreciation		2,609			2,357			252		11	%
Amortization		3,288			441			2,847		646	%
Total operating expenses	$	67,702		$	38,817		$	28,885		74	%
Interest and other expense, net	$	(1,182	)	$	(479	)	$	703		147	%
Provision for income taxes	$	7,043		$	3,000		$	4,043		135	%

Selling and Marketing. Selling and marketing expenses increased for the six months ended June 30, 2021, as compared to the same period in 2020, primarily due to increases in pay related expenses related to our December 2020 acquisitions and a $2.8 million increase in stock-based compensation expense, primarily due to increased stock prices from prior year.

Product Development. Product development expense increased for the six months ended June 30, 2021, as compared to the same period in 2020, primarily due to BrightTALK expenses of $1.2 million.

General and Administrative. General and administrative expense increased for the six months ended June 30, 2021, as compared to the same period in 2020, primarily due to an increase in pay costs, a $1.9 million increase in stock-based compensation costs, and professional fees related to the December acquisitions.

Depreciation. Depreciation expense increased for the six months ended June 30, 2021, as compared to the same period in 2020, due to increased capital expenditures, primarily from BrightTALK acquisition.

Amortization. Amortization expense increased for the six months ended June 30, 2021, as compared to the same period in 2020, primarily due to intangible assets acquired in 2020.

Interest and other expense, net. Interest and other expense increased for the six months ended June 30, 2021, as compared to the same period in 2020, primarily due to amortization of debt issuance costs and currency fluctuations from trade receivables.

Provision for income taxes. Our effective income tax rate was 50% and 30% for the six months ended June 30, 2021 and 2020, respectively. The increase in tax expense was primarily due to the impact of the increase in the corporate tax rate in the United Kingdom from 19% to 25%. This increase becomes effective April 1, 2023 and became law in June 2021. As required by generally accepted accounting principles, changes in tax rates should be reflected once they become law. Absent the change in tax rate in the United Kingdom, our income tax expense and effective tax rate for 2021 would have been $3.8 million and 27%, respectively.

Seasonality

The timing of our revenue is affected by seasonal factors. Our revenue is seasonal primarily as a result of the annual budget approval process of many of our customers, the normal timing at which our customers introduce new products and the historical decrease in advertising in summer months. The timing of revenue in relation to our expenses, many of which do not vary directly with revenue, has an impact on the cost of online revenue, selling and marketing, product development, and general and administrative expenses as a percentage of revenue in each calendar quarter during the year.

The majority of our expenses are personnel-related and includes salaries, stock-based compensation, benefits and incentive-based compensation plan expenses. As a result, we have not experienced significant seasonal fluctuations in the timing of our expenses period to period.

Liquidity and Capital Resources

Resources

Our cash and investments at June 30, 2021 totaled $109.1 million, a $26.4 million increase from December 31, 2020, primarily driven by our cash generated from operations offset in part by investments in property and equipment. We believe that our existing cash and investments and our cash flow from operating activities will be sufficient to meet our anticipated cash needs for at least the next twelve months. Our future working capital requirements will depend on many factors, including the operations of our existing business, our potential strategic expansion internationally, future acquisitions we might undertake and any expansion into complementary businesses. To the extent that our cash and investments and cash flow from operating activities are insufficient to fund our future activities, we may raise additional funds through bank credit arrangements or public or private equity or debt financings. We may also raise additional funds in the event we determine in the future to effect one or more additional acquisitions of businesses.

June 30,

2021

December 31,

2020

Cash and investments

109,122

82,700

Accounts receivable, net

39,718

40,183

Cash and Investments

Our cash and investments at June 30, 2021 were held for working capital purposes. We do not enter into investments for trading or speculative purposes.

Accounts Receivable, Net

Our accounts receivable balance fluctuates from period to period, which affects our cash flow from operating activities. The fluctuations vary depending on the timing with which we meet our performance obligations and on the timing of our cash collections, as well as on changes to our allowance for doubtful accounts. We use days sales outstanding (“DSO”) as a measurement of the quality and status of our receivables. We define DSO as net accounts receivable at quarter end divided by total revenue for the applicable period, multiplied by the number of days in the applicable period. DSO was 54 days and 57 days at June 30, 2021 and December 31, 2020, respectively.

Cash Flows

	Six Months Ended June 30,
	2021			2020
Net cash provided by operating activities	$	33,881		$	21,841
Net cash used in investing activities	$	(6,225	)	$	(8,424	)
Net cash used in financing activities	$	(1,415	)	$	(15,517	)

Operating Activities

Cash provided by operating activities primarily consists of net income adjusted for certain non-cash items including depreciation and amortization, provisions for bad debt, stock-based compensation, deferred income taxes, and the effect of changes in working capital and other activities. Cash provided by operating activities for the six months ended June 30, 2021 was $33.9 million compared to cash provided by operating activities of $21.8 million for the six months ended June 30, 2020.

The increase in cash provided by operating activities was primarily the result of changes in working capital (driven mainly by increases in contract liabilities as compared to 2020) and stock-based compensation charged to earnings.

Investing Activities

Cash used in investing activities in the six months ended June 30, 2021 was $6.2 million and was for the purchase of property and equipment, primarily for internal-use software, and to a lesser extent, computer equipment. In the first six months of 2020 we used $8.4 million in investing activities primarily a result of the acquisition of substantially all of the operating assets of Data Science Central in February 2020 ($5.0 million) and purchase of property and equipment, primarily for internal-use software, and to a lesser extent, computer equipment. We capitalized internal-use software and website development costs of $5.7 million and $3.0 million for the six months ended June 30, 2021 and 2020, respectively.

Financing Activities

In the first six months of June 30, 2021, we used $1.4 million for financing activities, consisting primarily of $1.0 million for the payment of contingent consideration related to the 2020 acquisitions and $0.4 million for tax withholdings related to net share settlements. In the first six months of 2020 we used $15.5 million for financing activities, consisting primarily of $14.8 million for the purchase of treasury shares, $0.3 million for the repayment of principal under the Loan Agreement and related costs and $0.1 million for tax withholdings related to net share settlements.

Common Stock Repurchase Program

In November 2018, the Company announced that the Board had authorized a $25.0 million stock repurchase program (the “November 2018 Repurchase Program”) under which the Company is authorized to repurchase the Company’s common stock from time to time on the open market or in privately negotiated transactions at prices and in a manner that may be determined by management. The Company repurchased 736,760, 411,849 and 243,425 shares at an aggregate purchase price of $14.8 million, $7.1 million and $3.1 million and an average share price of $20.10, $17.14 and $12.82 during the years ended December 31, 2020, 2019, and 2018, respectively, under the November 2018 Stock Repurchase Program. We terminated the November 2018 Repurchase Program in May 2020.

On May 1, 2020, we announced that our Board had authorized a $25.0 million stock repurchase program (the “May 2020 Repurchase Program”) whereby we are authorized to repurchase our common stock from time to time on the open market or in privately negotiated transactions at prices and in the manner that may be determined by management. No amounts have been repurchased under this plan.

Repurchased shares were recorded under the cost method and are reflected as treasury stock in the accompanying Consolidated Balance Sheets. All shares were repurchased with cash on hand.

Convertible Debt and Term Loan and Credit Facility Borrowings

Convertible Debt

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s election.

The Notes have an initial conversion rate of 14.1977 shares of common stock per $1,000 principal amount of the Notes. This represents an initial effective conversion price of approximately $70.43 per share of common stock and 2,857,447 shares issuable upon conversion. Throughout the term of the Notes, the conversion rate may be adjusted upon the occurrence of certain events. Holders of the Notes will not receive any cash payment representing accrued and unpaid interest, if any, upon conversion of a Note, except in limited circumstances. Accrued but unpaid interest will be deemed to be paid by cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock paid or delivered, as the case may be, to the holder upon conversion of the Notes.

Loan Agreement

On December 24, 2018, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Western Alliance Bank as the lender. The Loan Agreement provided for a $25 million term loan facility with a maturity date of December 10, 2023. The Loan Agreement was paid in full in December 2020 and all liens related to the Loan Agreement released.

Capital Expenditures

We have made capital expenditures primarily for computer equipment and related software needed to host our websites, internal-use software development costs, as well as for leasehold improvements and other general purposes to support our growth. Our capital expenditures totaled $6.2 million and $3.3 million for the six-month periods ended June 30, 2021 and, 2020 respectively. A majority of our capital expenditures in the first six months of 2021 were for internal-use software and website development costs and, to a lesser extent, computer equipment and related software. We capitalized internal-use software and website development costs of $5.7 million and $3.0 million for the six months ended June 30, 2021 and 2020, respectively. We are not currently party to any purchase contracts related to future capital expenditures.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Contractual Obligations

There were no material changes to our contractual obligations and commitments described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included or referenced in this Quarterly Report that address activities, events or developments which we expect will or may occur in the future are forward-looking statements, including statements regarding our intent, beliefs or current expectations and those of our management team. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “going to,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, priorities, plans, or intentions. Such statements may include those regarding our future financial results and other projections or measures of our future operating performance, including the drivers of such growth, profitability, and performance (including, in each case, any potential impact of product and service development efforts, GDPR, potential changes to customer relationships, and other operational decisions); expectations concerning market opportunities and our ability to capitalize on them; the amount and timing of the benefits expected from acquisitions, new strategies, products or services and other potential sources of additional revenue; and the behavior of our members, partners, and customers. These statements speak only as of the date of this Quarterly Report on Form 10-Q and are based on our current plans and expectations. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual future events or results to be different than those described in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those relating to: market acceptance of our products and services, including continued increased sales of our IT Deal Alert offerings and continued increased international growth; relationships with customers, strategic partners and employees; the duration and extent of the COVID-19 pandemic; difficulties in integrating acquired businesses; changes in economic or regulatory conditions or other trends affecting the internet, internet advertising and information technology industries; data privacy laws, rules, and regulations; and other matters included in our SEC filings, including in our Annual Report on Form 10-K for the year ended December 31, 2020. Actual results may differ materially from those contemplated by the forward-looking statements. We undertake no obligation to update our forward-looking statements to reflect future events or circumstances.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in foreign exchange rates and interest rates. We do not hold or issue financial instruments for trading purposes.

Foreign Currency Exchange Risk

We currently have subsidiaries in the United Kingdom, Hong Kong, Australia, Singapore, Germany and France. Approximately 29% of our revenue for the six months ended June 30, 2021 was derived from customers with billing addresses outside of the United States and our foreign exchange gains/losses were not significant. We currently believe our exposure to foreign currency exchange rate fluctuations is financially immaterial and therefore have not entered into foreign currency hedging transactions. We continue to review this issue and may consider hedging certain foreign exchange risks through the use of currency futures or options in the future. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. Our continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations.

Interest Rate Risk

At June 30, 2021, we had cash and investments of $109.1 million. The investments were held in a bond fund. The cash and investments were held for working capital purposes. We have not entered into investments for trading or speculative purposes. Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value as a result of increases in interest rates. Declines in interest rates, however, would reduce future investment income.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We are required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) as appropriate, to allow timely decisions regarding required disclosure.

In connection with the preparation of this Quarterly Report on Form 10-Q for the period ended June 30, 2021, management, under the supervision of the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures as of June 30, 2021. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

As previously discussed, we completed our acquisition of BrightTALK Limited during the fourth quarter of 2020. We are in the process of integrating certain controls and related procedures for BrightTALK with those of TechTarget. Other than integrating such controls, there were no changes in our internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during the second quarter of 2021 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently a party to any material legal proceedings and we are not aware of any pending or threatened litigation against us that could have a material adverse effect on our business, operating results or financial condition.

Item 1A. Risk Factors

Our business is subject to a number of risks, including those identified in Item 1A, “Risk Factors” of our 2020 Annual Report on Form 10-K, that could have a material effect on our business, results of operations, financial condition and/or liquidity and that could cause our operating results to vary significantly from period to period. We may disclose changes to any risk factors presented or disclose additional factors from time to time in our future filings with the Securities and Exchange Commission.

Item 6. Exhibits

The exhibits listed below are filed as part of this Quarterly Report on Form 10-Q.

			Incorporated by Reference to
Exhibit No.	Description of Exhibit	Form or Schedule	Exhibit No.	Filing Date with SEC	SEC File Number

3.1	Fourth Amended and Restated Certificate of Incorporation of the Registrant.	10-Q	3.1	11/13/2007	001-33472

3.2*	Amended and Restated Bylaws of TechTarget, Inc.
10.1*	Fourth Amendment to Lease Agreement, by and between the Registrant and ARE-MA REGION NO. 76, LLC for the premises located at One Riverside Center, 275 Grove Street, Newton, Massachusetts, dated April 30, 2021.

31.1*	Certification of Michael Cotoia, Chief Executive Officer of TechTarget, Inc., pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Daniel Noreck, Chief Financial Officer and Treasurer of TechTarget, Inc., pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*	Certifications of Michael Cotoia, Chief Executive Officer of TechTarget, Inc. and Daniel Noreck, Chief Financial Officer and Treasurer of TechTarget, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document* The instance document does not appear in the Interactive Data File because its XBRL tags are
	Embedded within the Inline XBRL document.
101.SCH	XBRL Inline Taxonomy Extension Schema Document*

101.CAL	XBRL Inline Taxonomy Extension Calculation Linkbase Document*

101.DEF	XBRL Inline Taxonomy Extension Definition Linkbase Document*

101.LAB	XBRL Inline Taxonomy Extension Label Linkbase Document*

101.PRE	XBRL Inline Taxonomy Extension Presentation Linkbase Document*

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exbibit 101)

*	Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TECHTARGET, INC.
	(Registrant)

Date: August 4, 2021	By:	/s/ MICHAEL COTOIA
		Michael Cotoia, Chief Executive Officer and Director (Principal Executive Officer)

Date: August 4, 2021	By:	/s/ DANIEL NORECK
		Daniel Noreck, Chief Financial Officer and Treasurer (Principal Accounting and Financial Officer)

Exhibit 3.2

AMENDED AND RESTATED BY-LAWS

OF TECHTARGET, INC.

(the "Corporation")

ARTICLE I

Stockholders

SECTION 1.Annual Meeting.The annual meeting of stockholders (any such meeting being referred to in these By-laws as an "Annual Meeting") shall be held at the hour, date and place within or without the United States which is fixed by the Board of Directors, which time, date and place may subsequently be changed at any time by vote of the Board of Directors. If no Annual Meeting has been held for a period of thirteen months after the Corporation's last Annual Meeting, a special meeting in lieu thereof may be held, and such special meeting shall have, for the purposes of these By-laws or otherwise, all the force and effect of an Annual Meeting. Any and all references hereafter in these By-laws to an Annual Meeting or Annual Meetings also shall be deemed to refer to any special meeting(s) in lieu thereof.

SECTION 2.Notice of Stockholder Business and Nominations.

(a)

Annual Meetings of Stockholders.

(1)Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders may be made at an Annual Meeting (a) pursuant to the Corporation's notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this By-law, who is entitled to vote at the meeting, who is present (in person or by proxy) at the meeting and who complies with the notice procedures set forth in this By-law. In addition to the other requirements set forth in this By-law, for any proposal of business to be considered at an Annual Meeting, it must be a proper subject for action by stockholders of the Corporation under Delaware law.

(2)For nominations or other business to be properly brought before an Annual Meeting by a stockholder pursuant to clause (c) of paragraph (a)(1) of this By-law, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year's Annual Meeting; provided, however, that in the event that the date of the Annual Meeting is advanced by more than 30 days before or delayed by more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such Annual Meeting and not later than the close of business on the later of the 90th day prior to such Annual Meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. Notwithstanding anything to the contrary provided herein, for the first Annual Meeting following the initial public offering of common stock of the Corporation, a stockholder's notice shall be timely if delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the later of the 90th day prior to the scheduled date of such Annual Meeting or the 10th day following the day on which public announcement of the date of such Annual Meeting is first made or sent by the Corporation. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a

director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to

Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made, and the names and addresses of other stockholders known by the stockholder proposing such business to support such proposal, and the class and number of shares of the Corporation's capital stock beneficially owned by such other stockholders; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made

(i) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner, and (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner.

(3)Notwithstanding anything in the second sentence of paragraph (a)(2) of this By-law to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least 85 days prior to the first anniversary of the preceding year's Annual Meeting, a stockholder's notice required by this By-law shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.

(b)

General.

(1)Only such persons who are nominated in accordance with the provisions of this By-law shall be eligible for election and to serve as directors and only such business shall be conducted at an Annual Meeting as shall have been brought before the meeting in accordance with the provisions of this By-law. The Board of Directors or a designated committee thereof shall have the power to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the provisions of this By-law. If neither the Board of Directors nor such designated committee makes a determination as to whether any stockholder proposal or nomination was made in accordance with the provisions of this By-law, the presiding officer of the Annual Meeting shall have the power and duty to determine whether the stockholder proposal or nomination was made in accordance with the provisions of this By-law. If the Board of Directors or a designated committee thereof or the presiding officer, as applicable, determines that any stockholder proposal or nomination was not made in accordance with the provisions of this By-law, such proposal or nomination shall be disregarded and shall not be presented for action at the Annual Meeting.

(2)For purposes of this By-law, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

(3)Notwithstanding the foregoing provisions of this By-law, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this By-law. Nothing in this By-law shall be deemed to affect any rights of

(i) stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to

Rule 14a-8 under the Exchange Act or (ii) the holders of any series of Undesignated Preferred Stock to elect directors under specified circumstances.

SECTION 3.Special Meetings.Except as otherwise required by statute and subject to the rights, if any, of the holders of any series of Undesignated Preferred Stock, special meetings of the stockholders of the Corporation

may be called only by the Board of Directors acting pursuant to a resolution approved by the affirmative vote of a majority of the Directors then in office. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders of the Corporation.

SECTION 4.Notice of Meetings; Adjournments.A notice of each Annual Meeting stating the hour, date and place, if any, of such Annual Meeting shall be given not less than ten (10) days nor more than sixty (60) days before the Annual Meeting, to each stockholder entitled to vote thereat by delivering such notice to such stockholder or by mailing it, postage prepaid, addressed to such stockholder at the address of such stockholder as it appears on the Corporation's stock transfer books.

Notice of all special meetings of stockholders shall be given in the same manner as provided for Annual Meetings, except that the notice of all special meetings shall state the purpose or purposes for which the meeting has been called.

Notice of an Annual Meeting or special meeting of stockholders need not be given to a stockholder if a waiver of notice is executed before or after such meeting by such stockholder or if such stockholder attends such meeting, unless such attendance was for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened.

The Board of Directors may postpone and reschedule any previously scheduled Annual Meeting or special meeting of stockholders and any record date with respect thereto, regardless of whether any notice or public disclosure with respect to any such meeting has been sent or made pursuant to Section 2 of this Article I of these By- laws or otherwise. In no event shall the public announcement of an adjournment, postponement or rescheduling of any previously scheduled meeting of stockholders commence a new time period for the giving of a stockholder's notice under Section 2 of this Article I of these By-laws.

When any meeting is convened, the presiding officer may adjourn the meeting if (a) no quorum is present for the transaction of business, (b) the Board of Directors determines that adjournment is necessary or appropriate to enable the stockholders to consider fully information which the Board of Directors determines has not been made sufficiently or timely available to stockholders, or (c) the Board of Directors determines that adjournment is otherwise in the best interests of the Corporation. When any Annual Meeting or special meeting of stockholders is adjourned to another hour, date or place, notice need not be given of the adjourned meeting other than an announcement at the meeting at which the adjournment is taken of the hour, date and place, if any, to which the meeting is adjourned and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting; provided, however, that if the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting shall be given to each stockholder of record entitled to vote thereat and each stockholder who, by law or under the Certificate of Incorporation of the Corporation (as the same may hereafter be amended and/or restated, the "Certificate") or these By-laws, is entitled to such notice.

SECTION 5.Quorum.A majority of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at any meeting of stockholders. If less than a quorum is present at a meeting, the holders of voting stock representing a majority of the voting power present at the meeting or the presiding officer may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice, except as provided in Section 5 of this Article I. At such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally noticed. The stockholders present at a duly constituted meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

SECTION 6. Voting and Proxies. Stockholders shall have one vote for each share of stock entitled to vote owned by them of record according to the stock ledger of the Corporation, unless otherwise provided by law or by the Certificate. Stockholders may vote either (i) in person, (ii) by written proxy or (iii) by a transmission permitted

by §212(c) of the Delaware General Corporation Law ("DGCL"). Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission permitted by §212(c) of the DGCL may be substituted for or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. Proxies shall be filed in accordance with the procedures established for the meeting of stockholders. Except as otherwise limited therein or as otherwise provided by law, proxies authorizing a person to vote at a specific meeting shall entitle the persons authorized thereby to vote at any adjournment of such meeting, but they shall not be valid after final adjournment of such meeting. A proxy with respect to stock held in the name of two or more persons shall be valid if executed by or on behalf of any one of them unless at or prior to the exercise of the proxy the Corporation receives a specific written notice to the contrary from any one of them.

SECTION 7.Action at Meeting.When a quorum is present at any meeting of stockholders, any matter before such meeting (other than an election of a director or directors) shall be decided by a majority of the votes properly cast for and against such matter, except where a different vote is required by law, by the Certificate or by these By-laws. In the event of a contested election, when a quorum is present, directors shall be elected by a plurality of the votes cast by the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. If directors are to be elected by a plurality vote, stockholders shall not be permitted to vote against a nominee. An election shall be a “contested election” if the number of nominees exceeds the number of directors to be elected at the meeting as of the tenth (10th) day preceding the date of the corporation’s first notice to stockholders of such meeting sent pursuant to Section 4 of Article I of these By-laws (the “Determination Date”); provided, however, that if, in accordance with Section 4 of Article I of these By-laws, stockholders are entitled to nominate persons for election as a director after the otherwise applicable Determination Date, the Determination Date shall instead be the last day on which stockholders are entitled to nominate persons for election as a director. Any election that is not a contested election shall be an uncontested election. In the event of an uncontested election, when a quorum is present a director nominee shall be elected if the number of votes cast “for” such director’s election exceeds the number of votes cast “against” that director’s election by the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors (with “abstentions” and “broker non-votes” not counted as a vote cast either “for” or “against” that director’s election). The Corporation shall not directly or indirectly vote any shares of its own stock; provided, however, that the Corporation may vote shares which it holds in a fiduciary capacity to the extent permitted by law.

SECTION 8.Stockholder Lists.The Secretary or an Assistant Secretary (or the Corporation's transfer agent or other person authorized by these By-laws or by law) shall prepare and make, at least 10 days before every Annual Meeting or special meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for a period of at least ten (10) days prior to the meeting in the manner provided by law. The list shall also be open to the examination of any stockholder during the whole time of the meeting as provided by law.

SECTION 9.Presiding Officer.The Chairman of the Board, if one is elected, or if not elected or in his or her absence, the President, shall preside at all Annual Meetings or special meetings of stockholders and shall have the power, among other things, to adjourn such meeting at any time and from time to time, subject to Sections 5 and 6 of this Article I. The order of business and all other matters of procedure at any meeting of the stockholders shall be determined by the presiding officer.

SECTION 10.Inspectors of Elections.The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the presiding officer shall appoint one or more inspectors to act at the meeting. Any inspector may, but need not, be an officer, employee or agent of the Corporation. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall perform such duties as are required by the DGCL, including the counting of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors. The presiding officer may review all determinations made by the inspectors, and in so doing the presiding officer shall be entitled to exercise his or her sole judgment and discretion and he or she shall not be

bound by any determinations made by the inspectors. All determinations by the inspectors and, if applicable, the presiding officer, shall be subject to further review by any court of competent jurisdiction.

ARTICLE II

Directors

SECTION 1.Powers.The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors except as otherwise provided by the Certificate or required by law.

SECTION 2.Number and Terms.The number of directors of the Corporation shall be fixed solely and exclusively by resolution duly adopted from time to time by the Board of Directors. The directors shall hold office in the manner provided in the Certificate.

SECTION 3.Qualification.No director need be a stockholder of the Corporation.

SECTION 4.Vacancies.Vacancies in the Board of Directors shall be filled in the manner provided in the Certificate.

SECTION 5.Removal. Directors may be removed from office in the manner provided in the Certificate. SECTION 6.Resignation.A director may resign at any time by giving written notice to the Chairman of the

Board, if one is elected, the President or the Secretary. A resignation shall be effective upon receipt, unless the resignation otherwise provides.

SECTION 7.Regular Meetings.The regular annual meeting of the Board of Directors shall be held, without notice other than this Section 7, on the same date and at the same place as the Annual Meeting following the close of such meeting of stockholders. Other regular meetings of the Board of Directors may be held at such hour, date and place as the Board of Directors may by resolution from time to time determine and publicize by means of reasonable notice given to any director who is not present at the meeting at which such resolution is adopted.

SECTION 8.Special Meetings.Special meetings of the Board of Directors may be called, orally or in writing, by or at the request of a majority of the directors, the Chairman of the Board, if one is elected, or the President. The person calling any such special meeting of the Board of Directors may fix the hour, date and place thereof.

SECTION 9.Notice of Meetings.Notice of the hour, date and place of all special meetings of the Board of Directors shall be given to each director by the Secretary or an Assistant Secretary, or in case of the death, absence, incapacity or refusal of such persons, by the Chairman of the Board, if one is elected, or the President or such other officer designated by the Chairman of the Board, if one is elected, or the President. Notice of any special meeting of the Board of Directors shall be given to each director in person, by telephone, or by facsimile, electronic mail or other form of electronic communication, sent to his or her business or home address, at least 24 hours in advance of the meeting, or by written notice mailed to his or her business or home address, at least 48 hours in advance of the meeting. Such notice shall be deemed to be delivered when hand delivered to such address, read to such director by telephone, deposited in the mail so addressed, with postage thereon prepaid if mailed, dispatched or transmitted if faxed, telexed or telecopied, or sent by electronic mail or other form of electronic communication, or when delivered to the telegraph company if sent by telegram.

A written waiver of notice signed before or after a meeting by a director and filed with the records of the meeting shall be deemed to be equivalent to notice of the meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because such meeting is not lawfully called or convened. Except as otherwise required by law, by the Certificate or by these By-laws, neither the

business to be transacted at, nor the purpose of, any meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

SECTION 10.Quorum.At any meeting of the Board of Directors, a majority of the total number of directors shall constitute a quorum for the transaction of business, but if less than a quorum is present at a meeting, a majority of the directors present may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice, except as provided in Section 9 of this Article II. Any business which might have been transacted at the meeting as originally noticed may be transacted at such adjourned meeting at which a quorum is present. For purposes of this section, the total number of directors includes any unfilled vacancies on the Board of Directors.

SECTION 11.Action at Meeting.At any meeting of the Board of Directors at which a quorum is present, the vote of a majority of the directors present shall constitute action by the Board of Directors, unless otherwise required by law, by the Certificate or by these By-laws.

SECTION 12.Action by Consent.Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the records of the meetings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form. Such consent shall be treated as a resolution of the Board of Directors for all purposes.

SECTION 13.Manner of Participation.Directors may participate in meetings of the Board of Directors by means of conference telephone or other communications equipment by means of which all directors participating in the meeting can hear each other, and participation in a meeting in accordance herewith shall constitute presence in person at such meeting for purposes of these By-laws.

SECTION 14.Committees.The Board of Directors, by vote of a majority of the directors then in office, may elect from its number one or more committees, including, without limitation, an Executive Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and an Audit Committee, and may delegate thereto some or all of its powers except those which by law, by the Certificate or by these By-laws may not be delegated. Except as the Board of Directors may otherwise determine, any such committee may make rules for the conduct of its business, but unless otherwise provided by the Board of Directors or in such rules, its business shall be conducted so far as possible in the same manner as is provided by these By-laws for the Board of Directors. All members of such committees shall hold such offices at the pleasure of the Board of Directors. The Board of Directors may abolish any such committee at any time. Any committee to which the Board of Directors delegates any of its powers or duties shall keep records of its meetings and shall report its action to the Board of Directors.

SECTION 15.Compensation of Directors.Directors shall receive such compensation for their services as shall be determined by a majority of the Board of Directors, or a designated committee thereof, provided that directors who are serving the Corporation as employees and who receive compensation for their services as such, shall not receive any salary or other compensation for their services as directors of the Corporation.

ARTICLE III

Officers

SECTION 1.Enumeration.The officers of the Corporation shall consist of a President, a Treasurer, a Secretary and such other officers, including, without limitation, a Chairman of the Board of Directors, a Chief Executive Officer and one or more Vice Presidents (including Executive Vice Presidents or Senior Vice Presidents), Assistant Vice Presidents, Assistant Treasurers and Assistant Secretaries, as the Board of Directors may determine.

SECTION 2.Election.At the regular annual meeting of the Board of Directors following the Annual Meeting, the Board of Directors shall elect the [Chief Executive Officer,] President, the Treasurer and the Secretary. Other officers may be elected by the Board of Directors at such regular annual meeting of the Board of Directors or at any other regular or special meeting.

SECTION 3.Qualification.No officer need be a stockholder or a director. Any person may occupy more than one office of the Corporation at any time. Any officer may be required by the Board of Directors to give bond for the faithful performance of his or her duties in such amount and with such sureties as the Board of Directors may determine.

SECTION 4.Tenure.Except as otherwise provided by the Certificate or by these By-laws, each of the officers of the Corporation shall hold office until the regular annual meeting of the Board of Directors following the

next Annual Meeting and until his or her successor is elected and qualified or until his or her earlier resignation or removal.

SECTION 5.Resignation.Any officer may resign by delivering his or her written resignation to the Corporation addressed to the President or the Secretary, and such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.

SECTION 6.Removal. Except as otherwise provided by law, the Board of Directors may remove any officer with or without cause by the affirmative vote of a majority of the directors then in office.

SECTION 7.Absence or Disability.In the event of the absence or disability of any officer, the Board of Directors may designate another officer to act temporarily in place of such absent or disabled officer.

SECTION 8.Vacancies.Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors.

SECTION 9.Chief Executive Officer.The Chief Executive Officer shall, subject to the direction of the Board of Directors, have general supervision and control of the Corporation's business. If there is no Chairman of the Board or if he or she is absent, the Chief Executive Officer shall preside, when present, at all meetings of stockholders and of the Board of Directors. The Chief Executive Officer shall have such other powers and perform such other duties as the Board of Directors may from time to time designate.

SECTION 10.Chairman of the Board. The Chairman of the Board, if one is elected, shall preside, when present, at all meetings of the stockholders and of the Board of Directors. The Chairman of the Board shall have such other powers and shall perform such other duties as the Board of Directors may from time to time designate.

SECTION 11.President and Chief Financial Officer.The President and Chief Financial Officer, if one is elected, shall have such powers and shall perform such duties as the Board of Directors may from time to time designate.

SECTION 12. Vice Presidents and Assistant Vice Presidents. Any Vice President (including any Executive Vice President or Senior Vice President) and any Assistant Vice President shall have such powers and shall perform such duties as the Board of Directors or the Chief Executive Officer may from time to time designate.

SECTION 13.Treasurer and Assistant Treasurers.The Treasurer shall, subject to the direction of the Board of Directors and except as the Board of Directors or the Chief Executive Officer may otherwise provide, have general charge of the financial affairs of the Corporation and shall cause to be kept accurate books of account. The Treasurer shall have custody of all funds, securities, and valuable documents of the Corporation. He or she shall have such other duties and powers as may be designated from time to time by the Board of Directors or the Chief Executive Officer.

Any Assistant Treasurer shall have such powers and perform such duties as the Board of Directors or the Chief Executive Officer may from time to time designate.

SECTION 14.Secretary and Assistant Secretaries.The Secretary shall record all the proceedings of the meetings of the stockholders and the Board of Directors (including committees of the Board) in books kept for that purpose. In his or her absence from any such meeting, a temporary secretary chosen at the meeting shall record the proceedings thereof. The Secretary shall have charge of the stock ledger (which may, however, be kept by any transfer or other agent of the Corporation). The Secretary shall have custody of the seal of the Corporation, and the Secretary, or an Assistant Secretary, shall have authority to affix it to any instrument requiring it, and, when so affixed, the seal may be attested by his or her signature or that of an Assistant Secretary. The Secretary shall have such other duties and powers as may be designated from time to time by the Board of Directors or the Chief

Executive Officer. In the absence of the Secretary, any Assistant Secretary may perform his or her duties and responsibilities.

Any Assistant Secretary shall have such powers and perform such duties as the Board of Directors or the Chief Executive Officer may from time to time designate.

SECTION 15.Other Powers and Duties.Subject to these By-laws and to such limitations as the Board of Directors may from time to time prescribe, the officers of the Corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Board of Directors or the Chief Executive Officer.

ARTICLE IV

Capital Stock

SECTION 1.Certificates of Stock.Each stockholder shall be entitled to a certificate of the capital stock of the Corporation in such form as may from time to time be prescribed by the Board of Directors; provided that the Board may provide that some or all of any or all classes or series of its stock shall be uncertificated shares, in which case the holders of such stock will not be entitled to certificates with respect to such stock. Such certificate shall be signed by the Chairman of the Board of Directors, the Chief Executive Officer or a Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary. The Corporation seal and the signatures by the Corporation's officers, the transfer agent or the registrar may be facsimiles. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the time of its issue. Every certificate for shares of stock which are subject to any restriction on transfer and every certificate issued when the Corporation is authorized to issue more than one class or series of stock shall contain such legend with respect thereto as is required by law.

SECTION 2.Transfers.Subject to any restrictions on transfer and unless otherwise provided by the Board of Directors, shares of stock may be transferred only on the books of the Corporation by the surrender to the Corporation or its transfer agent of the certificate theretofore properly endorsed or accompanied by a written assignment or power of attorney properly executed, with transfer stamps (if necessary) affixed, and with such proof of the authenticity of signature as the Corporation or its transfer agent may reasonably require.

SECTION 3.Record Holders.Except as may otherwise be required by law, by the Certificate or by these By-laws, the Corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer, pledge or other disposition of such stock, until the shares have been transferred on the books of the Corporation in accordance with the requirements of these By-laws.

SECTION 4.Record Date.In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date: (a) in the case of determination of stockholders entitled to vote at any meeting of stockholders, shall, unless otherwise required by law, not be more than sixty nor less than ten days before the date of such meeting and (b) in the case of any other action, shall not be more than sixty days prior to such other action. If no record date is fixed: (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held and (ii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

SECTION 5.Replacement of Certificates.In case of the alleged loss, destruction or mutilation of a certificate of stock, a duplicate certificate may be issued in place thereof, upon such terms as the Board of Directors may prescribe.

ARTICLE V

Indemnification

SECTION 1.Definitions.For purposes of this Article:

(a)"Corporate Status" describes the status of a person who is serving or has served (i) as a Director of the Corporation, (ii) as an Officer of the Corporation, or (iii) as a director, partner, trustee, officer, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan, foundation, association, organization or other legal entity which such person is or was serving at the request of the Corporation. For purposes of this Section 1(a), an Officer or Director of the Corporation who is serving or has served as a director, partner, trustee, officer, employee or agent of a Subsidiary shall be deemed to be serving at the request of the Corporation. Notwithstanding the foregoing, "Corporate Status" shall not include the status of a person who is serving or has served as a director, officer, employee or agent of a constituent corporation absorbed in a merger or consolidation transaction with the Corporation with respect to such person's activities prior to said transaction, unless specifically authorized by the Board of Directors or the stockholders of the Corporation;

(b)"Director" means any person who serves or has served the Corporation as a director on the Board of Directors of the Corporation;

(c)"Disinterested Director" means, with respect to each Proceeding in respect of which indemnification is sought hereunder, a Director of the Corporation who is not and was not a party to such Proceeding;

(d)"Expenses" means all reasonable attorneys' fees, retainers, court costs, transcript costs, fees of expert witnesses, private investigators and professional advisors (including, without limitation, accountants and investment bankers), travel expenses, duplicating costs, printing and binding costs, costs of preparation of demonstrative evidence and other courtroom presentation aids and devices, costs incurred in connection with document review, organization, imaging and computerization, telephone charges, postage, delivery service fees, and all other disbursements, costs or expenses of the type customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, settling or otherwise participating in, a Proceeding;

(e)"Non-Officer Employee" means any person who serves or has served as an employee or agent of the Corporation, but who is not or was not a Director or Officer;

(f)"Officer" means any person who serves or has served the Corporation as an officer appointed by the Board of Directors of the Corporation;

(g)"Proceeding" means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, inquiry, investigation, administrative hearing or other proceeding, whether civil, criminal, administrative, arbitrative or investigative; and

(h)"Subsidiary" shall mean any corporation, partnership, limited liability company, joint venture, trust or other entity of which the Corporation owns (either directly or through or together with another Subsidiary of the Corporation) either (i) a general partner, managing member or other similar interest or (ii) (A) 50% or more of the voting power of the voting capital equity interests of such corporation, partnership, limited liability company, joint venture or other entity, or (B) 50% or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other entity.

SECTION 2.Indemnification of Directors and Officers.Subject to the operation of Section 4 of this Article V of these By-laws, each Director and Officer shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader

indemnification rights than such law permitted the Corporation to provide prior to such amendment) against any and all Expenses, judgments, penalties, fines and amounts reasonably paid in settlement that are incurred by such Director or Officer or on such Director's or Officer's behalf in connection with any threatened, pending or completed Proceeding or any claim, issue or matter therein, which such Director or Officer is, or is threatened to be made, a party to or participant in by reason of such Director's or Officer's Corporate Status, if such Director or Officer acted in good faith and in a manner such Director or Officer reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The rights of indemnification provided by this Section 2 shall continue as to a Director or Officer after he or she has ceased to be a Director or Officer and shall inure to the benefit of his or her heirs, executors, administrators and personal representatives. Notwithstanding the foregoing, the Corporation shall indemnify any Director or Officer seeking indemnification in connection with a Proceeding initiated by such Director or Officer only if such Proceeding was authorized in advance by the Board of Directors of the Corporation, unless such Proceeding was brought to enforce an Officer or Director's rights to indemnification or, in the case of Directors, advancement of Expenses under these By-laws in accordance with the provisions set forth herein.

SECTION 3.Indemnification of Non-Officer Employees.Subject to the operation of Section 4 of this Article V of these By-laws, each Non-Officer Employee may, in the discretion of the Board of Directors of the Corporation, be indemnified by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended, against any or all Expenses, judgments, penalties, fines and amounts reasonably paid in settlement that are incurred by such Non-Officer Employee or on such Non-Officer Employee's behalf in connection with any threatened, pending or completed Proceeding, or any claim, issue or matter therein, which such Non- Officer Employee is, or is threatened to be made, a party to or participant in by reason of such Non-Officer Employee's Corporate Status, if such Non-Officer Employee acted in good faith and in a manner such Non-Officer Employee reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The rights of indemnification provided by this Section 3 shall exist as to a Non-Officer Employee after he or she has ceased to be a Non-Officer Employee and shall inure to the benefit of his or her heirs, personal representatives, executors and administrators. Notwithstanding the foregoing, the Corporation may indemnify any Non-Officer Employee seeking indemnification in connection with a Proceeding initiated by such Non-Officer Employee only if such Proceeding was authorized in advance by the Board of Directors of the Corporation.

SECTION 4.Good Faith.Unless ordered by a court, no indemnification shall be provided pursuant to this Article V to a Director, to an Officer or to a Non-Officer Employee unless a determination shall have been made that such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal Proceeding, such person had no reasonable cause to believe his or her conduct was unlawful. Such determination shall be made by (a) a majority vote of the Disinterested Directors, even though less than a quorum of the Board of Directors, (b) a committee comprised of Disinterested Directors, such committee having been designated by a majority vote of the Disinterested Directors (even though less than a quorum), (c) if there are no such Disinterested Directors, or if a majority of Disinterested Directors so directs, by independent legal counsel in a written opinion, or (d) by the stockholders of the Corporation.

SECTION 5.Advancement of Expenses to Directors Prior to Final Disposition.

(a)The Corporation shall advance all Expenses incurred by or on behalf of any Director in connection with any Proceeding in which such Director is involved by reason of such Director's Corporate Status within ten

(10) days after the receipt by the Corporation of a written statement from such Director requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by such Director and shall be preceded or accompanied by an undertaking by or on behalf of such Director to repay any Expenses so advanced if it shall ultimately be determined that such Director is not entitled to be indemnified against such Expenses. Notwithstanding the foregoing, the Corporation shall advance all Expenses incurred by or on behalf of any Director seeking advancement

of expenses hereunder in connection with a Proceeding initiated by such Director only if such Proceeding was

(i) authorized by the Board of Directors of the Corporation, or (ii) brought to enforce Director's rights to indemnification or advancement of Expenses under these By-laws.

(b)If a claim for advancement of Expenses hereunder by a Director is not paid in full by the Corporation within 10 days after receipt by the Corporation of documentation of Expenses and the required undertaking, such Director may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and if successful in whole or in part, such Director shall also be entitled to be paid the expenses of prosecuting such claim. The failure of the Corporation (including its Board of Directors or any committee thereof, independent legal counsel, or stockholders) to make a determination concerning the permissibility of such advancement of Expenses under this Article V shall not be a defense to the action and shall not create a presumption that such advancement is not permissible. The burden of proving that a Director is not entitled to an advancement of expenses shall be on the Corporation.

(c)In any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that the Director has not met any applicable standard for indemnification set forth in the DGCL.

SECTION 6.Advancement of Expenses to Officers and Non-Officer Employees Prior to Final Disposition.

(a)The Corporation may, at the discretion of the Board of Directors of the Corporation, advance any or all Expenses incurred by or on behalf of any Officer or any Non-Officer Employee in connection with any Proceeding in which such is involved by reason of the Corporate Status of such Officer or Non-Officer Employee upon the receipt by the Corporation of a statement or statements from such Officer or Non-Officer Employee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by such Officer and Non-Officer Employee and shall be preceded or accompanied by an undertaking by or on behalf of such to repay any Expenses so advanced if it shall ultimately be determined that such Officer or Non-Officer Employee is not entitled to be indemnified against such Expenses.

(b)In any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that the Officer or Non-Officer Employee has not met any applicable standard for indemnification set forth in the DGCL.

SECTION 7.Contractual Nature of Rights.

(a)The foregoing provisions of this Article V shall be deemed to be a contract between the Corporation and each Director and Officer entitled to the benefits hereof at any time while this Article V is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or theretofore existing or any Proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts.

(b)If a claim for indemnification hereunder by a Director or Officer is not paid in full by the Corporation within 60 days after receipt by the Corporation of a written claim for indemnification, such Director or Officer may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim, and if successful in whole or in part, such Director or Officer shall also be entitled to be paid the expenses of prosecuting such claim. The failure of the Corporation (including its Board of Directors or any committee thereof, independent legal counsel, or stockholders) to make a determination concerning the permissibility of such indemnification under this Article V shall not be a defense to the action and shall not create a presumption that such indemnification is not permissible. The burden of proving that a Director or Officer is not entitled to indemnification shall be on the Corporation.

(c)In any suit brought by a Director or Officer to enforce a right to indemnification hereunder, it shall be a defense that such Director or Officer has not met any applicable standard for indemnification set forth in the DGCL.

SECTION 8.Non-Exclusivity of Rights.The rights to indemnification and advancement of Expenses set forth in this Article V shall not be exclusive of any other right which any Director, Officer, or Non-Officer Employee may have or hereafter acquire under any statute, provision of the Certificate or these By-laws, agreement, vote of stockholders or Disinterested Directors or otherwise.

SECTION 9.Insurance.The Corporation may maintain insurance, at its expense, to protect itself and any Director, Officer or Non-Officer Employee against any liability of any character asserted against or incurred by the Corporation or any such Director, Officer or Non-Officer Employee, or arising out of any such person's Corporate Status, whether or not the Corporation would have the power to indemnify such person against such liability under the DGCL or the provisions of this Article V.

SECTION 10.Other Indemnification. The Corporation's obligation, if any, to indemnify any person under this Article V as a result of such person serving, at the request of the Corporation, as a director, partner, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, employee benefit plan or enterprise.

ARTICLE VI

Miscellaneous Provisions

SECTION 1.Fiscal Year.The fiscal year of the Corporation shall be determined by the Board of Directors. SECTION 2.Seal. The Board of Directors shall have power to adopt and alter the seal of the Corporation.

SECTION 3.Execution of Instruments.All deeds, leases, transfers, contracts, bonds, notes and other obligations to be entered into by the Corporation in the ordinary course of its business without director action may be executed on behalf of the Corporation by the Chairman of the Board, if one is elected, the Chief Executive Officer, the President or the Treasurer or any other officer, employee or agent of the Corporation as the Board of Directors or Executive Committee may authorize.

SECTION 4.Voting of Securities.Unless the Board of Directors otherwise provides, the Chairman of the Board, if one is elected, the President or the Treasurer may waive notice of and act on behalf of this Corporation, or appoint another person or persons to act as proxy or attorney in fact for this Corporation with or without discretionary power and/or power of substitution, at any meeting of stockholders or shareholders of any other corporation or organization, any of whose securities are held by this Corporation.

SECTION 5.Resident Agent.The Board of Directors may appoint a resident agent upon whom legal process may be served in any action or proceeding against the Corporation.

SECTION 6.Corporate Records.The original or attested copies of the Certificate, By-laws and records of all meetings of the incorporators, stockholders and the Board of Directors and the stock transfer books, which shall contain the names of all stockholders, their record addresses and the amount of stock held by each, may be kept outside the State of Delaware and shall be kept at the principal office of the Corporation, at the office of its counsel or at an office of its transfer agent or at such other place or places as may be designated from time to time by the Board of Directors.

SECTION 7.Certificate.All references in these By-laws to the Certificate shall be deemed to refer to the Amended and Restated Certificate of Incorporation of the Corporation, as amended and in effect from time to time.

SECTION 8.Amendment of By-laws.

(a)Amendment by Directors.Except as provided otherwise by law, these By-laws may be amended or repealed by the Board of Directors by the affirmative vote of a majority of the directors then in office.

(b)Amendment by Stockholders.These By-laws may be amended or repealed at any Annual Meeting, or special meeting of stockholders called for such purpose, by the affirmative vote of at least 75% of the outstanding shares entitled to vote on such amendment or repeal, voting together as a single class; provided, however, that if the Board of Directors recommends that stockholders approve such amendment or repeal at such meeting of stockholders, such amendment or repeal shall only require the affirmative vote of the majority of the outstanding shares entitled to vote on such amendment or repeal, voting together as a single class. Notwithstanding the foregoing, stockholder approval shall not be required unless mandated by the Certificate, these By-laws, or other applicable law.

SECTION 9.Notices.If mailed, notice to stockholders shall be deemed given when deposited in the mail, postage prepaid, directed to the stockholder at such stockholder's address as it appears on the records of the Corporation. Without limiting the manner by which notice otherwise may be given to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the DGCL.

SECTION 10.Waivers.A written waiver of any notice, signed by a stockholder or director, or waiver by electronic transmission by such person, whether given before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such person. Neither the business nor the purpose of any meeting need be specified in such a waiver.

Adopted,and effective as of,.

Exhibit 10.1

FOURTH AMENDMENT TO LEASE

THIS FOURTH AMENDMENT TO LEASE (this “Fourth Amendment”) is made as of April 30, 2021 (the “Effective Date”), by and between ARE-MA REGION NO. 76, LLC, a Delaware limited liability company (“Landlord”), and TECH TARGET, INC., a Delaware corporation (“Tenant”).

RECITALS

Landlord (as successor-in-interest to Hines Global REIT Riverside Center, LLC) and Tenant are now parties to that certain Lease Agreement dated as of August 4, 2009 (the “Original Lease”), as amended by that certain First Amendment dated as of November 18, 2010, as further amended by that certain Second Amendment dated as of July 23, 2015, and as further amended by that certain Third Amendment dated as of October 26, 2017 (the “Third Amendment”) (as amended, the “Lease”). Pursuant to the Lease, Tenant leases certain “Premises” consisting of approximately 73,692 rentable square feet on the first and second floors of that certain building located at 275 Grove Street, Newtown, Massachusetts (the “Building”). The Premises are more particularly described in the Lease. Capitalized terms used herein without definition shall have the meanings defined for such terms in the Lease.

Landlord and Tenant desire, subject to the terms and conditions set forth below, to amend the Lease to, among other things, reflect the termination of the Lease with respect to that certain portion of the Premises containing approximately 5,678 rentable square feet on the first floor of the Building located in a portion of Suite 1-150, as more particularly shown on Exhibit A attached hereto (the “Fourth Amendment Reduction Premises”).

NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, the mutual promises and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

Return of Fourth Amendment Reduction Premises. The Lease with respect to the Fourth Amendment Reduction Premises shall terminate on the later of June 30, 2021 or the date that the Relocation Improvements (as hereinafter defined) have been substantially completed except for punchlist items which do not materially impact Tenant’s ability to conduct business in the Premises (“Substantial Completion”); provided, however, Landlord shall be permitted to accelerate such termination of the Lease with respect to the Fourth Amendment Reduction Premises to a date prior to June 30, 2021, upon (i) Substantial Completion of the Relocation Improvements and (ii) written notice delivered by Landlord to Tenant (such termination date, as may be accelerated, is referred to herein as the “Fourth Amendment Reduction Date”). Tenant shall voluntarily surrender the Fourth Amendment Reduction Premises on such date in accordance with all surrender requirements contained in the Lease and in the condition in which Tenant is required to surrender the Premises as of the expiration of the Lease. From and after the Fourth Amendment Reduction Date, Tenant shall have no further rights of any kind with respect to the Fourth Amendment Reduction Premises. Notwithstanding the foregoing, those provisions of the Lease which, by their terms, survive the termination of the Lease shall survive the surrender of the Fourth Amendment Reduction Premises and termination of the Lease with respect to the Fourth Amendment Reduction Premises as provided for herein. Nothing herein shall excuse Tenant from its obligations under the Lease with respect to the Fourth Amendment Reduction Premises prior to the Fourth Amendment Reduction Date.

Lease Termination Payment. The parties are entering into this Fourth Amendment as a result of Landlord’s desire to lease the Fourth Amendment Reduction Premises (along with other space in the Building) to a new tenant (the “New Tenant”). As consideration for Tenant entering into this Fourth Amendment, Landlord hereby agrees to pay Tenant a lease termination payment in the amount of $577,987.50 within 45 days after the Effective Date.

740329028.10

Defined Terms. Commencing on the calendar day immediately following the Fourth Amendment Reduction Date (the “Fourth Amendment Adjustment Date”), the defined terms “Building,” “Premises Rentable Area,” and “Tenant’s Pro Rata Share,” which are defined in the Lease, shall be deleted in their entirety and replaced with the following:

“Building: The building located at 275 Grove Street, Newton, Massachusetts 02466, and commonly known as Riverside Center, consisting of approximately 509,702 rentable square feet.”

“Premises Rentable Area: Approximately 68,014 rentable square feet located in One Riverside Center, of which approximately (i) 8,849 rentable square feet are located in Suite 1-150 on the first floor, (ii) 44,962 rentable square feet are located in Suite 1-200 on the second floor, and (iii) 14,203 rentable square feet are located in Suite 1-205 on the second floor.”

“Tenant’s Pro Rata Share: 13.34%”

4.	Premises. As of the Fourth Amendment Adjustment Date, the depiction of the Premises as shown on Exhibit A, Third Amendment attached to the Third Amendment shall be deleted in its entirety and replaced with the depiction of the Premises as shown on Exhibit B attached to this Fourth Amendment.

Basic Rent. Commencing on the Effective Date, notwithstanding anything to the contrary contained in the Lease, Tenant’s obligation to pay Basic Rent shall only apply with respect to the remaining Premises, and Tenant shall no longer be required to pay Basic Rent with respect to the Fourth Amendment Reduction Premises. Therefore, commencing on the Effective Date, Tenant’s obligation to pay Basic Rent is hereby modified as set forth below. If there is an overpayment due to Tenant’s pre-payment of rent then Landlord shall either (i) refund to Tenant the amount thereof within thirty (30) days or (ii) instruct Tenant to deduct the amount thereof from the next monthly rental payments.


Period	Annual Basic Rent	Monthly Basic Rent	Basic Rent Per Rentable Square Foot
1/1/21 – 12/31/21	$3,060,630.00	$255,052.50	$45.00
1/1/22 – 12/31/22	$3,128,644.00	$260,720.33	$46.00
1/1/23 – 12/31/23	$3,128,644.00	$260,720.33	$46.00
1/1/24 – 12/31/24	$3,196,658.00	$266,388.17	$47.00
1/1/25 – 12/31/25	$3,196,658.00	$266,388.17	$47.00
1/1/26 – 12/31/26	$3,264,672.00	$272,056.00	$48.00
1/1/27 – 12/31/27	$3,264,672.00	$272,056.00	$48.00
1/1/28 – 12/31/28	$3,332,686.00	$277,723.83	$49.00
1/1/29 – 12/31/29	$3,332,686.00	$277,723.83	$49.00

6.	Expense Excess and Tax Excess. Commencing on the Effective Date, notwithstanding anything to the contrary contained in the Lease, Tenant shall no longer be required to pay Tenant’s Pro Rata

740329028.102

Share of the Expense Excess or the Tax Excess attributable to the Fourth Amendment Reduction Premises.

7.	Parking. Commencing on the Fourth Amendment Adjustment Date, Section IV of the Third Amendment shall be deleted in its entirety and replaced with the following:

“Parking. Commencing on the Fourth Amendment Adjustment Date, the definition of “Parking Space” under Section 1.2 of the Lease shall be 204 parking spaces, subject to the terms of Section 2.2 of the Lease. Parking Spaces shall be allocated as follows: 204 parking spaces of which (i) 25 parking spaces shall be within the executive parking area under Building One, (ii) 137 parking spaces shall be in the exterior parking garage, and (iii) 42 parking spaces shall be located on the surface lot, all on a non-exclusive, first-come, first-served basis, and in accordance with the provisions of Exhibit G-1 to the Original Lease. Landlord shall have the right to reduce Tenant’s number of parking spaces in the executive parking area to 19 spaces with 30 days’ notice to Tenant, in which case, Tenant shall be allotted 141 parking spaces in the exterior garage and 44 parking spaces on the surface lot.”

Relocation Improvements. Landlord shall be responsible, at Landlord’s sole cost and expense, for constructing approximately 6 new offices within the Premises, relocating offices and desks to the second floor of the Premises, and performing such other work, relocations, and improvements in accordance with detailed plans and specifications and pursuant to the scope of work set forth on Exhibit C attached hereto (the “Relocation Improvements”), and for moving and relocating all of Tenant’s belongings as may be required pursuant to this Fourth Amendment, including Tenant’s belongings from the Fourth Amendment Reduction Premises to the remaining Premises. Any changes made by Landlord to the Relocation Improvement plans and specifications set forth on Exhibit C attached hereto will be subject to Tenant’s review and approval, which shall not be unreasonably withheld, conditioned, delayed, or denied. For avoidance of doubt, any necessary work to facilitate the Relocation Improvements, such as with respect to HVAC, electricity, wiring and cabling, shall be at Landlord’s sole cost and expense. Furthermore, Landlord shall use materials and finishes to match the existing improvements within the Premises. Tenant acknowledges and agrees that following the Effective Date, Landlord will require access to portions of the Premises in order to perform the Relocation Improvements. Landlord and its contractors and agents shall have the right to enter the Premises to perform the Relocation Improvements, and Tenant shall cooperate with Landlord in connection with same. Landlord shall schedule all access in advance with the Tenant and have a representative of Landlord accompany any contractors or other visitors when they are in the Premises during the period commencing on the Effective Date through the Fourth Amendment Reduction Date. Landlord shall use reasonable efforts to coordinate the Relocation Improvement’s with Tenant’s schedule to minimize disruption to Tenant’s business operations; provided, however, Tenant acknowledges that Landlord’s performance of the Relocation Improvements may adversely affect Tenant’s use and occupancy of the Premises. Tenant waives all claims against Landlord for rent abatement in connection with the Relocation Improvements. Landlord agrees to cause the contractor performing the Relocation Improvements to name Tenant as an additional insured on such contractor’s liability insurance policy maintained in connection with the Relocation Improvements.

Relocation of Storage Spaces. Commencing on the Fourth Amendment Adjustment Date, Landlord shall relocate the storage area and Tenant’s belongings from the “Dock Storage Space” referenced in Section 7.4(a) of the Original Lease, to approximately 228 rentable square feet in the garage, known as Suite P-005, as more particularly shown on Exhibit D attached hereto (the “Garage Storage Space”). Commencing on the Fourth Amendment Adjustment Date, Tenant shall discontinue paying monthly rent for the Dock Storage Space and shall begin paying monthly rent for the Garage Storage Space at the rate of $10.00 per rentable square foot per year. Tenant shall lease the Garage Storage Space on a month-to-month basis, terminable upon 90 days’ prior written notice to Landlord.

740329028.103

10.

Special Permit. In accordance with the requirements of the Special Permit/Site Plan Approval affecting the Building, Tenant shall use best reasonable efforts to recycle all materials used in Tenant’s operations and in any event comply with any recycling program implemented by Landlord at the Building.

11.

OFAC. Tenant and, to Tenant’s knowledge, all beneficial owners of Tenant are currently (a) in compliance with and shall at all times during the Term of the Lease remain in compliance with the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury and any statute, executive order, or regulation relating thereto (collectively, the “OFAC Rules”), (b) not listed on, and shall not during the Term of the Lease be listed on, the Specially Designated Nationals and Blocked Persons List maintained by OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuant to any authorizing statute, executive order, or regulation, and (c) not a person or entity with whom a U.S. person is prohibited from conducting business under the OFAC Rules.

12.

Brokers. Landlord and Tenant each represents and warrants that it has not dealt with any broker, agent or other person (collectively, “Broker”) in connection with the transaction reflected in this Fourth Amendment and that no Broker brought about this Fourth Amendment, other than Colliers International (representing Tenant). Notwithstanding anything to the contrary contained herein, Landlord shall not be responsible for any commission or other form of compensation to Colliers International in connection with this Fourth Amendment. Landlord and Tenant each hereby agree to indemnify and hold the other harmless from and against any claims by any Broker claiming a commission or other form of compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard to this Fourth Amendment.

13.	Miscellaneous.

a.This Fourth Amendment is the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions. This Fourth Amendment may be amended only by an agreement in writing, signed by the parties hereto.

b.This Fourth Amendment is binding upon and shall inure to the benefit of the parties hereto, their respective agents, employees, representatives, officers, directors, divisions, subsidiaries, affiliates, assigns, heirs, successors in interest and shareholders.

c.This Fourth Amendment may be executed in 2 or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature process complying with the U.S. federal ESIGN Act of 2000) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. Electronic signatures shall be deemed original signatures for purposes of this Fourth Amendment and all matters related thereto, with such electronic signatures having the same legal effect as original signatures.

d.Except as amended and/or modified by this Fourth Amendment, the Lease is hereby ratified and confirmed and all other terms of the Lease shall remain in full force and effect, unaltered and unchanged by this Fourth Amendment. In the event of any conflict between the provisions of this Fourth Amendment and the provisions of the Lease, the provisions of this Fourth Amendment shall prevail. Whether or not specifically amended by this Fourth Amendment, all of the terms and provisions of the Lease are hereby amended to the extent necessary to give effect to the purpose and intent of this Fourth Amendment.

[Signatures on following page]

740329028.104

IN WITNESS WHEREOF, Landlord and Tenant have executed this Fourth Amendment as of the day and year first above written.

TENANT:

TECH TARGET, INC.,

a Delaware corporation

By: /s/ Daniel T. Noreck

Its: CFO

LANDLORD:

ARE-MA REGION NO. 76, LLC,

a Delaware limited liability company

By:ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

a Delaware limited partnership,

managing member

By:ARE-QRS CORP.,

a Maryland corporation,

general partner

By:/s/ Allison Grochola .

Its: Senior Vice President RE Legal Affairs

740329028.105

Exhibit A

Fourth Amendment Reduction Premises

740329028.10

Exhibit B

Depiction of the Premises as of the

Fourth Amendment Adjustment Date

740329028.10

Exhibit C

Scope of Work

740329028.10

Exhibit D

Garage Storage Space

(Highlighted area is Garage Storage Space)

740329028.10

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael Cotoia, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of TechTarget, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2021

/s/ Michael Cotoia

Michael Cotoia

Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Daniel Noreck, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of TechTarget, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2021

/s/ Daniel Noreck

Daniel Noreck

Chief Financial Officer and Treasurer

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND

PRINCIPAL FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of Michael Cotoia and Daniel Noreck hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his/her capacity as Chief Executive Officer and Chief Financial Officer and Treasurer, respectively of TechTarget, Inc. (the Company), that, to his/her knowledge, the Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2021 as filed with the Securities and Exchange Commission (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 4, 2021	By:	/s/ Michael Cotoia
		Michael Cotoia
		Chief Executive Officer

Date: August 4, 2021	By:	/s/ Daniel Noreck
		Daniel Noreck
		Chief Financial Officer and Treasurer