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

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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ 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.

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 ~~October~~July 31, ~~2017,~~2020, the registrant had ~~27,597,437~~ 27,536,786 shares of common ~~stock,~~stock, $0.001 par value per share, outstanding.

	September 30, 2017			December 31, 2016
	(Unaudited)						June 30, 2020			December 31, 2019
Assets							(Unaudited)			(Unaudited)
Current assets:
Cash and cash equivalents	$	19,253		$	18,485
Cash							$	50,390		$	52,487
Short-term investments		8,764			10,988			5,023			5,012
Accounts receivable, net of allowance for doubtful accounts of $1,676 and $1,961 as of September 30, 2017 and December 31, 2016, respectively		29,393			22,551
Accounts receivable, net of allowance for doubtful accounts of $2,028 and $1,899 respectively								25,568			27,102
Prepaid taxes		2,133			3,961			—			1,017
Prepaid expenses and other current assets		2,670			1,952			1,830			1,813
Total current assets		62,213			57,937			82,811			87,431
Property and equipment, net		8,757			9,232			12,951			12,371
Long-term investments		3,042			7,801
Goodwill		93,717			93,469			97,023			93,639
Intangible assets, net		542			601			3,471			710
Operating lease assets with right-of-use								25,485			26,385
Deferred tax assets		543			139			616			136
Other assets		880			898			903			936
Total assets	$	169,694		$	170,077		$	223,260		$	221,608
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	1,486		$	2,100		$	1,847		$	2,036
Current operating lease liability								2,769			2,571
Current portion of term loan		9,888			6,157			1,554			1,241
Accrued expenses and other current liabilities		2,747			2,792			3,737			2,476
Accrued compensation expenses		1,240			698			1,164			3,679
Income taxes payable		-			122			3,217			65
Deferred revenue		9,238			6,079
Contract liabilities								5,051			4,335
Total current liabilities		24,599			17,948			19,339			16,403
Long-term liabilities:
Long-term portion of term loan		24,811			32,286			21,540			22,473
Deferred rent		1,763			2,080
Non-current operating lease liability								26,845			28,170
Deferred tax liabilities		198			200			850			1,611
Other liabilities								1,140			—
Total liabilities		51,371			52,514			69,714			68,657
Commitments and contingencies (Note 8)
Leases and contingencies (see Note 9)
Stockholders’ equity:
Preferred stock, 5,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock, $0.001 par value per share, 100,000,000 shares authorized, 53,246,110 shares issued and 27,597,037 shares outstanding at September 30, 2017 and 52,601,284 shares issued and 27,495,539 shares outstanding at December 31, 2016		53			52
Treasury stock, 25,649,073 shares at September 30, 2017 and 25,105,745 shares at December 31, 2016, at cost		(167,953	)		(162,731	)
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued or outstanding								—			—
Common stock, $0.001 par value; 100,000,000 shares authorized; 55,035,081 and 54,903,824 shares issued, respectively; 27,536,786 and 28,142,519 shares outstanding, respectively								55			55
Treasury stock, at cost; 27,498,295 and 26,761,305 shares, respectively								(199,796	)		(184,972	)
Additional paid-in capital		298,933			296,853			326,194			317,675
Accumulated other comprehensive gain (loss)		5			(248	)
Accumulated deficit		(12,715	)		(16,363	)
Accumulated other comprehensive loss								(399	)		(319	)
Retained earnings								27,492			20,512
Total stockholders’ equity		118,323			117,563			153,546			152,951
Total liabilities and stockholders’ equity	$	169,694		$	170,077		$	223,260		$	221,608

Consolidated Statements of ~~Operations~~Income and Comprehensive Income ~~(Loss)~~

	For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended						For the Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2017			2016			2017			2016			2020			2019			2020			2019
	(Unaudited)						(Unaudited)						(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues:
Online	$	28,012		$	24,247		$	78,085		$	76,242
Events		—			1,503			168			3,713
Total revenues		28,012			25,750			78,253			79,955
Cost of revenues:
Online(1)		6,951			6,889			20,931			20,360
Events		—			723			41			2,049
Total cost of revenues		6,951			7,612			20,972			22,409
Revenues													$	34,796		$	34,286		$	66,212		$	64,258
Cost of revenues⁽¹⁾														8,785			7,952			16,936			14,964
Gross profit		21,061			18,138			57,281			57,546			26,011			26,334			49,276			49,294
Operating expenses:
Selling and marketing(1)		11,568			11,243			33,006			33,331
Product development(1)		2,209			2,074			6,168			6,027
General and administrative(1)		3,288			3,138			9,542			9,392
Depreciation		1,065			951			3,249			2,987
Amortization of intangible assets		44			183			126			718
Selling and marketing⁽¹⁾														12,570			13,976			25,519			26,422
Product development⁽¹⁾														1,846			2,001			3,878			3,988
General and administrative⁽¹⁾														3,267			3,123			6,622			6,145
Depreciation and amortization, excluding depreciation of $221, $56, $392, and $69, respectively, included in cost of revenues														1,453			1,146			2,798			2,276
Total operating expenses		18,174			17,589			52,091			52,455			19,136			20,246			38,817			38,831
Operating income		2,887			549			5,190			5,091			6,875			6,088			10,459			10,463
Interest and other expense, net		(190	)		(471	)		(447	)		(1,037	)		(10	)		(253	)		(479	)		(390	)
Income before provision for income taxes		2,697			78			4,743			4,054			6,865			5,835			9,980			10,073
Provision for income taxes		623			100			1,337			1,725			2,092			1,684			3,000			2,632
Net income (loss)	$	2,074		$	(22	)	$	3,406		$	2,329
Other comprehensive income, net of tax:
Unrealized gain (loss) on investments (net of tax provision of $3, $(13), $11, and $3, respectively)	$	6		$	(22	)	$	20		$	5
Foreign currency translation gain		71			11			233			110
Net income													$	4,773		$	4,151		$	6,980		$	7,441
Other comprehensive income (loss), net of tax:
Unrealized loss on investments (net of tax provision of $(24), $0, $13, and $0, respectively)													$	84		$	—		$	(48	)	$	—
Foreign currency translation gain (loss)														21			(58	)		(32	)		(17	)
Other comprehensive income (loss)		77			(11	)		253			115			105			(58	)		(80	)		(17	)
Comprehensive income (loss)	$	2,151		$	(33	)	$	3,659		$	2,444
Net income (loss) per common share:
Comprehensive income													$	4,878		$	4,093		$	6,900		$	7,424
Net income per common share:
Basic	$	0.08		$	(0.00	)	$	0.12		$	0.08		$	0.17		$	0.15		$	0.25		$	0.27
Diluted	$	0.07		$	(0.00	)	$	0.12		$	0.07		$	0.17		$	0.15		$	0.25		$	0.26
Weighted average common shares outstanding:
Basic		27,555			27,540			27,521			30,650			27,533			27,640			27,768			27,723
Diluted		28,320			27,540			28,275			31,608			28,163			28,232			28,304			28,226

	Common Stock				Treasury Stock
	Number of Shares		$0.001 Par Value		Number of Shares		Cost			Additional Paid-In Capital			Accumulated Other Comprehensive (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

	Common Stock				Treasury Stock
	Number of Shares		$0.001 Par Value		Number of Shares		Cost			Additional Paid-In Capital			Accumulated Other Comprehensive (Loss)			Retained Earnings		Total Stockholders’ Equity
Balance, December 31, 2018		54,117,325	$	54		26,326,280	$	(177,905	)	$	307,014		$	(215	)	$	3,637	$	132,585
Issuance of common stock from exercise of options		10,000		—		—		—			23			—			—		23
Issuance of common stock from restricted stock awards		112,545		—		—		—			—			—			—		—
Purchase of common stock through stock buyback		—		—		220,297		(3,125	)		—			—			—		(3,125	)
Impact of net settlements		6,391		—		6,391		—			(868	)		—			—		(868	)
Stock-based compensation expense		—		—		—		—			3,179			—			—		3,179
Comprehensive income:
Unrealized gain on foreign currency exchange		—		—		—		—			—			41			—		41
Net income		—		—		—		—			—			—			3,290		3,290
Balance, March 31, 2019		54,246,261	$	54		26,552,968	$	(181,030	)	$	309,348		$	(174	)	$	6,927	$	135,125
Issuance of common stock from exercise of options		56,207		—		—		—			—			—			—		—
Issuance of common stock from restricted stock awards		—		—		97,427		(1,600	)		—			—			—		(1,600	)
Purchase of common stock through stock buyback		—		—		—		—			3,762			—			—		3,762
Stock-based compensation expense		—		—		—		—			—			—			—		—
Comprehensive income:
Unrealized gain on foreign currency exchange		—		—		—		—			—			(58	)		—		(58	)
Net income		—		—		—		—			—			—			4,151		4,151
Balance, June 30, 2019		54,302,468	$	54		26,650,395	$	(182,630	)	$	313,110		$	(232	)	$	11,078	$	141,380

	Six Months Ended
	June 30,
	2020			2019
	(Unaudited)
Operating activities:
Net income	$	6,980		$	7,441
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		3,190			2,345
Provision for bad debt		317			367
Stock-based compensation		6,721			6,224
Amortization of debt issuance costs		4			4
Deferred tax provision		(1,236	)		(80	)
Changes in operating assets and liabilities:
Accounts receivable		1,217			2,600
Prepaid expenses and other current assets		(17	)		(112	)
Other assets		15			(94	)
Accounts payable		(187	)		(843	)
Income taxes payable		4,162			1,153
Accrued expenses and other current liabilities		(346	)		(175	)
Operating lease right-of-use assets and liabilities, net		(182	)		(161	)
Accrued compensation expenses		(637	)		(763	)
Contract liabilities		700			913
Other liabilities		1,140			—
Net cash provided by operating activities		21,841			18,819
Investing activities:
Purchases of property and equipment, and other capitalized assets		(3,338	)		(3,379	)
Purchases of investments and maturities of investments		(71	)		500
Acquisitions of businesses, net		(5,015	)		—
Net cash used in investing activities		(8,424	)		(2,879	)
Financing activities:
Tax withholdings related to net share settlements		(68	)		(868	)
Purchase of treasury shares and related costs		(14,824	)		(4,725	)
Proceeds from exercise of stock options		—			23
Term loan principal payment		(625	)		(625	)
Net cash used in financing activities		(15,517	)		(6,195	)
Effect of exchange rate changes on cash		3			(13	)
Net (decrease) increase in cash		(2,097	)		9,732
Cash at beginning of period		52,487			34,673
Cash at end of period	$	50,390		$	44,405
Supplemental disclosure of cash flow information:
Cash paid for taxes, net	$	92		$	1,407

For the Nine Months Ended

September 30,

2017

2016

(Unaudited)

Operating Activities:

Net income

$
3,406

$
2,329

Adjustments to reconcile net income to net cash provided by operating
activities:

Depreciation and amortization

3,373

3,705

Provision for bad debt

606

289

Amortization of investment premiums

214

217

Stock-based compensation

5,309

5,070

Amortization of debt issuance costs

81

128

Changes in operating assets and liabilities:

Accounts receivable

(7,447
)

452

Prepaid taxes, prepaid expenses and other current assets

(759
)

(436
)
Other assets

44

54

Accounts payable

(618
)

19

Income taxes payable

1,581

1,094

Accrued expenses and other current liabilities

(130
)

(786
)
Accrued compensation expenses

519

(88
)
Deferred revenue

3,159

1,331

Other liabilities

(321
)

(29
)
Net cash provided by operating activities

9,017

13,349

Investing activities:

Purchases of property and equipment, and other capitalized assets

(2,761
)

(3,435
)
Purchases of investments

(500
)

(3,210
)
Proceeds from sales and maturities of investments

7,300

4,600

Net cash provided by (used in) investing activities

4,039

(2,045
)
Financing activities:

Tax withholdings related to net share settlements

(3,789
)

(4,380
)
Purchase of treasury shares and related costs

(5,222
)

(45,056
)
Payment of earnout liabilities

—

(459
)
Proceeds from exercise of stock options

561

3,963

Debt issuance costs

(50
)

(367
)
Term loan proceeds

—

50,000

Term loan principal payment

(3,750
)

—

Net cash (used in) provided by financing activities

(12,250
)

3,701

Effect of exchange rate changes on cash and cash equivalents

(38
)

29

Net increase in cash and cash equivalents

768

15,034

Cash and cash equivalents at beginning of period

18,485

14,783

Cash and cash equivalents at end of period

$
19,253

$
29,817

Supplemental disclosure of cash flow information:

Cash (refunded from) paid for taxes, net

$
(166
)

$
685

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

TechTarget, Inc. and its subsidiaries (the “Company”) is a leading provider of specialized online content for buyers of enterprise ~~information~~ technology ~~(“IT”)~~ products and services, and a leading provider of purchase-intent marketing and sales services for ~~enterprise~~business-to-business “B2B” technology ~~vendors.~~companies. The Company’s service offerings enable enterprise B2B technology ~~vendors~~companies to better identify, reach, and influence corporate ITenterprise technology decision makers actively researching specific ITenterprise technology purchases. The Company improves ~~vendors’~~B2B technology companies’ ability to impact these audiences for business growth using advanced targeting, analytics, and data services complemented with customized marketing programs that integrate demand generation and brand advertising techniques. The Company operates a network of over 140 websites, each of which focuses on a ~~specific IT~~major enterprise technology sector such as storage, security, or networking. ITEnterprise technology and business professionals have become increasingly specialized, and they have come to rely on the Company’s sector-specific websites for purchasing decision support. The Company’s content platform enables ITenterprise technology and business professionals to navigate the complex and rapidly changing ITenterprise technology 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 ITenterprise technology and business professionals’ needs for expert, peer, and IT vendor information and provide a platform on which IT vendors can launch targeted marketing campaigns which generate measurable return on investment. Based upon the logical clustering of ~~users’~~members’ 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 ~~media groups: Security; Networking; Storage;~~market categories including: Security, Networking, Storage, Data Center and Virtualization ~~Technologies;~~Technologies, CIO/IT ~~Strategy;~~Strategy, Business Applications and ~~Analytics;~~Analytics, Application Architecture and ~~Development; Channel;~~Development, and ~~TechnologyGuide.com.~~ANCL Channel.

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, ~~2016. Other than those noted~~2019, and in ~~the “Accounting Guidance Adopted in 2017” section below, there were no material changes~~this note to the ~~Company’s critical accounting policies and use of estimates during the first nine months of 2017.~~consolidated financial statements.

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 (Beijing) Information Technology Consulting Co. Ltd. (“TTGT Consulting”~~), TechTarget (Australia) Pty Ltd., TechTarget (Singapore) Pte Ltd., E-Magine Médias SAS (“LeMagIT”) and TechTarget Germany GmbH. 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. Additionally, through its wholly-owned subsidiaries, TTGT HK and TTGT Consulting, the Company effectively controls a variable interest entity (“VIE”), Keji Wangtuo Information Technology Co., Ltd., (“KWIT”), which was incorporated under the laws of the People’s Republic of China (“PRC”). 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.

PRC laws and regulations prohibit or restrict foreign ownership of internet-related services and advertising businesses. To comply with these foreign ownership restrictions, the Company operates its websites and provides online advertising services in the PRC through KWIT. The Company entered into certain exclusive agreements with KWIT and its shareholders through TTGT HK, which obligated TTGT HK to absorb all of the risk of loss from KWIT’s activities and entitled TTGT HK to receive all of its residual returns. In addition, the Company entered into certain agreements with the authorized parties through TTGT HK, including Management and Consulting Services, Voting Proxy, Equity Pledge and Option Agreements. TTGT HK assigned all of its rights and obligations to the newly formed wholly foreign-owned enterprise, TTGT Consulting. TTGT Consulting is established and existing under the laws of the PRC, and is wholly-owned by TTGT HK.

Based on these contractual arrangements, the Company consolidates the financial results of KWIT as required by Accounting Standards Codification (“ASC”) 810-10, Consolidation: Overall, because the Company holds all the variable interests of KWIT through TTGT Consulting, which is the primary beneficiary of KWIT. Despite the lack of technical majority ownership, there exists a parent-subsidiary relationship between the Company and the VIE through the aforementioned agreements, whereby the equity holders.

of KWIT assigned all of their voting rights underlying their equity interest in KWIT to TTGT Consulting. In addition, through the other aforementioned agreements, the Company demonstrates its ability and intention to continue to exercise the ability to obtain substantially all of the profits and absorb all of the expected losses of KWIT. All significant intercompany accounts and transactions between the Company, its subsidiaries, and KWIT have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted (Generally Accepted Accounting Principles or “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 accounting principles generally accepted in the U.S. 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, ~~2016.~~

The adoption of a recent accounting pronouncement, described in more detail in the Accounting Guidance Adopted in 2017 section below, resulted in an in immaterial adjustment to the Accumulated Deficit in the Consolidated Balance Sheet as of December 31, 2016 and in an immaterial reclassification between Operating Activities and Financing Activities in the Consolidated Statement of Cash Flows for the nine months ended September 30, 2016. There was no effect on the Consolidated Statements of Operations and Comprehensive Income.

~~There were no reclassifications out of accumulated other comprehensive income in the periods ended September 30, 2017 or 2016.~~2019.

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 revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to revenues, long-lived assets, goodwill, the allowance for doubtful accounts, stock-based compensation, ~~earnouts,~~ 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.

In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the Consolidated Statement of Cash Flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company ~~adopted~~generates its revenues from the ~~provisions~~sale of ~~the new standard on January 1, 2017. Implementing the new pronouncement resulted in the Company recognizing tax benefits~~targeted marketing and ~~tax deficiencies related to stock compensation deductions as a component~~advertising campaigns, which it delivers via its network of the provision for income tax expense in the reporting period in which they occur. Additionally, the Company has applied the modified retrospective adoption approach, which resulted in the Company recording deferred tax assets of approximately $0.2 million with an offsetting entry to retained earnings. ASU 2016-09 also requires the presentation of excess tax benefit from stock options as an operating activity on the Consolidated Statement of Cash Flows instead of as a financing activity, which resulted in an immaterial reclassification in the Consolidated Statement of Cash Flows for the first nine months of 2016.

~~In May 2014, the FASB issued ASU No. 2014-09,~~websites and data analytics solutions. Revenue ~~from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU 2014-09 is based on the principle that revenue~~ is recognized ~~to depict the transfer of~~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.

We maintain an ~~amount that reflects the consideration~~allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgmentsaccounts receivable and changes in ~~judgments~~such are classified as general and ~~assets recognized from costs incurred~~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 ~~obtain or fulfill a contract.~~inform adjustments to historical loss data. In ~~July 2015,~~determining the ~~FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral~~amount of the ~~Effective Date (“ASU 2015-14”).~~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, 2020, the Company’s assessment considered business and market disruptions caused by COVID-19 and estimates of expected emerging credit and collectability trends. The ~~amendments~~continued volatility in ~~ASU 2015-14~~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.

Other liabilities consist of the long-term portions of amounts payable related to our acquisition of substantially all of the assets of Data Science Central LLC (see Notes 4 and 14) and the amounts deferred under the Coronavirus, Aid, Relief and Economic

Security Act (CARES Act) which allows employers to defer the ~~effective date~~payment of ASU 2014-09 for all entities by one year. As a result, this guidance is now effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017 (January 1, 2018the 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 ~~Company)~~period beginning on March 27, 2020, and ~~early adoption is permitted only as of annual reporting periods (including interim reporting periods within those reporting periods) beginning after~~ending December ~~15, 2016.~~ ~~In March 2016, the FASB issued ASU 2016-08,~~ ~~Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which further clarifies the implementation guidance on principal versus agent considerations contained~~31, 2020, can be deferred. The deferred amounts will then be payable in ~~ASU 2014-09. In April~~equal installments at December 31, 2021 and ~~May 2016, the FASB issued ASU 2016-10,~~ ~~Identifying Performance Obligations and Licensing, and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, respectively, each of which provide further implementation guidance for ASU 2014-09.~~December 31, 2022.

The standard may be applied retrospectively to each prior period presented, or using the modified retrospective approach, with the cumulative effect recognized as of the date of initial application. The Company anticipates adopting the standard effective January 1, 2018, using the modified retrospective approach. The Company is continuing to identify any necessary changes to its systems, processes, and internal controls to meet the standard’s reporting and disclosure requirements. Based upon evaluations to date, the Company does not anticipate any significant system, process, or internal control changes. The Company continues to progress in its evaluation of the impact of the adoption of the standard on other areas of its consolidated financial statements and disclosures, and anticipates additional required disclosures but does not anticipate a material effect on its reported revenue, its net income, or its accounting for deferred commissions balances.Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statements of ~~Operations~~Income and Comprehensive Income. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees, ~~for~~ capital and operating leases, existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company ~~is currently evaluating~~adopted ASU 2016-02 in the ~~impact~~first quarter of 2019 using the modified retrospective approach, and elected the package of practical expedients permitted under the transition guidance. Results and disclosure requirements for reporting periods beginning after January 1, 2019 are presented under Topic 842.

The Company elected the package of practical expedients permitted under the transition guidance, which allowed us to carryforward our historical lease classification, our assessment on whether a contract was or contains a lease, and our initial direct costs for any leases that ~~this guidance will have~~existed prior to January 1, 2019. We also elected to combine our lease and non-lease components and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the Consolidated Statements of Income and Comprehensive Income on ~~its consolidated financial statements and disclosures.~~ ~~However,~~a straight-line basis over the lease term. The Company ~~anticipates that this standard will have a material impact on its financial position, primarily due to office space~~recorded operating ~~leases, for which the Company will be required to recognize~~ lease assets with right-of-use of $27.5 million and $2.9 million current operating lease ~~liabilities on its Consolidated Balance Sheets. The Company will continue to assess the potential impacts~~liability and $29.2 million non-current operating lease liability as of ~~this standard, including the impact the adoption~~January 1, 2019, of ~~this guidance will have on its results of operations or cash flows, if any.~~which $4.9 million and $0.3 million were reclassified from deferred rent and prepaid rent, respectively (see Note 9).

In January 2017, the FASB issued 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. The Company adopted the new standard effective January 1, 2020. The adoption of this 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, 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. The Company adopted the new standard effective January 1, 2020. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” (ASU 2016-13) 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. The Company adopted the new standard effective January 1, 2020. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In August 2018, the FASB issued Accounting Standard Update 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. The Company adopted the new standard effective January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued Accounting Standard Update No. 2019-12, Income Taxes (Topic 740): “Simplifying the Accounting for Income Taxes” (ASU 2019-12), which simplifies the accounting for income taxes. This guidance will be effective for us in the first quarter of 2021 on a prospective basis, and early adoption is permitted. The Company is currently evaluating the impact ~~that this~~of the new guidance ~~will have~~ on ~~its~~our consolidated financial ~~statements~~statements.

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

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 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 $2.6 million and $2.4 million at June 30, 2020, and December 31, 2019, respectively.

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including ~~cash equivalents,~~ 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 for was determined based on three levels of input as follows:

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

Fair Value Measurements at
Reporting Date Using

September 30,
2017

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Assets:

Money market funds (1)

$
3,452

$
3,452

$
—

$
—

Short-term investments(2)

8,764

—

8,764

—

Long-term investments(2)

3,042

—

3,042

—

Total assets

$
15,258

$
3,452

$
11,806

$
—

			Fair Value Measurements at June 30, 2020
	June 30, 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)	$	5,023	$	—	$	5,023	$	—
Total assets	$	5,023	$	—	$	5,023	$	—
Liabilities:
Contingent consideration - current (2)	$	711	$	—	$	—	$	711
Contingent consideration - non-current (2)		426		—		—		426
Total liabilities	$	1,137	$	—	$	—	$	1,137

Cash ~~and cash equivalents consist of highly liquid investments with maturities of three months or less at date of purchase. Cash equivalents are~~is carried at cost, which approximates ~~their~~ fair market value. Cash ~~and cash equivalents~~ consisted of the following:

~~The Company’s short-term and long-term investments are accounted for as available for sale securities. These investments~~Investments are recorded at fair value with the related unrealized gains and losses included in accumulated other comprehensive ~~loss,~~income, a component of stockholders’ equity, net of tax. ~~The cumulative unrealized loss, net of taxes, was $10 and $30 as of September 30, 2017 and December 31, 2016, respectively.~~ Realized gains and losses on the sale of these investments are determined using the specific identification method. The cumulative unrealized loss, net of taxes, was $47 thousand as of June 30, 2020. There were no0 realized gains or losses ~~during the three or nine months ended September 30, 2017 or 2016.~~as of December 31, 2019.

~~The Company had~~ ~~nineteen~~ ~~debt securities in an unrealized loss position at September 30, 2017. All of these securities have been in such a position for no more than~~ ~~fourteen~~ ~~months. The unrealized loss on those securities was approximately $16 and the fair value was $11.3 million. At December 31, 2016, the Company had~~ ~~twenty one~~ ~~debt securities in an unrealized loss position, and the unrealized loss on those securities was approximately $48 and the fair value was $13.8 million~~ at that date. The Company uses specific identification when reviewing these investments for impairment. Because the Company does not intend to sell the investments that are in an unrealized loss position and it is not likely that the Company will be required to sell any investments before recovery of their cost basis, the Company does not consider those investments with an unrealized loss to be other-than-temporarily impaired at September 30, 2017.

~~The Company’s investments have contractual maturity dates that range from~~ ~~November~~ ~~2017 to January 2019. All income generated from these investments is recorded as interest income.~~

Intangible assets are amortized over their estimated useful lives, which range from ~~five~~approximately 3 to ~~ten~~17 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 ~~3.08 years.~~5.01 years. Amortization expense was $0.1 million ~~and $0.7 million~~ for each of the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016, respectively.~~2019. Amortization expense is recorded within operating expenses as the 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~~0t write off any fully amortized intangible assets in the first ~~nine~~six months of ~~2017. The change in the gross carrying amount of intangible assets during the nine months ended September 30, 2017 was due to foreign currency translation gains and losses.~~2020.

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~~0t have any intangible assets other than goodwill with indefinite lives as of ~~September~~June 30, ~~2017~~2020 or December 31, ~~2016.~~2019. There were no indications of impairment as of ~~September~~June 30, ~~2017,~~2020, and the Company believes that, as of the balance sheet dates presented, none of the Company’s goodwill or intangible assets was ~~impaired.~~impaired

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

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Numerator:

Net income (loss)

$
2,074

$
(22
)

$
3,406

$
2,329

Denominator:

Basic:

Weighted average shares of common stock and vested,
     undelivered restricted stock units outstanding

27,554,586

27,539,655

27,521,244

30,650,164

Diluted:

Weighted average shares of common stock and vested,
     undelivered restricted stock units outstanding

27,554,586

27,539,655

27,521,244

30,650,164

     Effect of potentially dilutive shares (1)

765,799

—

754,043

958,059

Total weighted average shares of common stock and vested,
     undelivered restricted stock units outstanding and potentially
     dilutive shares

28,320,385

27,539,655

28,275,287

31,608,223

Net Income (Loss) Per Share:

Basic net income (loss) per share

$
0.08

$
(0.00
)

$
0.12

$
0.08

Diluted net income (loss) per share

$
0.07

$
(0.00
)

$
0.12

$
0.07

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerator:
Net income	$	4,773	$	4,151	$	6,980	$	7,441
Denominator:
Basic:
Weighted average shares of common stock and vested, undelivered restricted stock units outstanding		27,532,786		27,640,207		27,768,224		27,722,521
Diluted:
Weighted average shares of common stock and vested, undelivered restricted stock units outstanding		27,532,786		27,640,207		27,768,224		27,722,521
Effect of potentially dilutive shares ⁽¹⁾		630,127		591,538		535,844		503,469
Total weighted average shares of common stock and vested, undelivered restricted stock units outstanding and potentially dilutive shares		28,162,913		28,231,745		28,304,068		28,225,990
Net Income Per Share:
Basic net income per share	$	0.17	$	0.15	$	0.25	$	0.27
Diluted net income per share	$	0.17	$	0.15	$	0.25	$	0.26

On ~~May 9, 2016,~~December 24, 2018, the Company entered into a ~~Senior Secured Credit Facilities Credit~~Loan and Security Agreement (the “Loan Agreement”) with Western Alliance Bank (the “Bank”) as the lender. The Loan Agreement provides for a $25 million term loan ~~(the “Term Loan Agreement”). Under the Term Loan Agreement, the Company borrowed and received $50 million in aggregate principal amount pursuant to~~facility with a ~~five-year term loan~~maturity date of December 10, 2023 (the “Term Loan”).

The ~~borrowings under the~~ Term Loan ~~Agreement are~~is secured by a lien on substantially all of the assets of the Company, including a pledge of the stock of certain of its wholly-owned ~~subsidiaries. As of September 30, 2017,~~subsidiaries (limited, in the ~~carrying amount~~case of the ~~Term Loan was $34.7 million.~~

~~At the Company’s option, the Term Loan Agreement bears interest at either an annual rate~~stock of ~~1.50% plus the higher~~certain foreign subsidiaries of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 0.50%, or the London Interbank Offered Rate (“LIBOR”) plus 2.50%. The applicable interest rate was 3.74% at September 30, 2017, representing LIBOR plus the applicable margin of 2.50%. Interest expense under the Term Loan Agreement was $1.0 million and $0.6 million during the nine months ended September 30, 2017 and 2016, respectively. This includes non-cash interest expense of $81 and $36 for the nine months ended September 30, 2017 and 2016, respectively, related to the amortization of deferred issuance costs. During the nine months ended September 30, 2017, the Company, ~~made principal payments totaling $3.8 million.~~to no more than 65% of the capital stock of such subsidiaries).

The Term Loan must be repaid quarterly, with applicable interest paid monthly, in the following manner: 1.25% of the initial aggregate borrowings are due and payable each quarter for the first two loan years, 1.88% of the initial aggregate borrowings are due and payable each quarter for the third loan year, and 2.50% of the initial aggregate borrowings are due and payable each quarter for the fourth and fifth loan years. At maturity, all outstanding amounts, including unpaid principal and accrued and unpaid interest, under the Loan Agreement ~~requires~~will be due and payable.

The Term Loan bears interest at a floating per annum rate equal to one and three-eighths percent (1.375%) above the greater of (a) the one-month U.S. LIBOR rate reported in The Wall Street Journal or (b) two percent (2.00%).

On July 2, 2020, the Company entered into a Loan and Security Modification Agreement (“Modification Agreement”) with the Bank pursuant to which the Company and the Bank agreed to amend the Loan Agreement. The Modification Agreement, among other things, added or amended certain definitions in the Loan Agreement, added a financial covenant requiring the Company to maintain ~~compliance with certain covenants, including leverage~~an Asset Coverage Ratio (as defined in the Loan Agreement) of no less than 1.0 to 1.0 tested as of the end of each quarter, and ~~fixed charge coverage ratio covenants. At September 30, 2017, the Company was in compliance with all covenants under the Term Loan Agreement.~~provided

~~The Company conducts its operations in leased office facilities under various noncancelable operating lease agreements that, as amended in October 2017, expire through December 2029.~~

On October 26, 2017, the Company and Hines Global REIT Riverside Center, LLC (“Hines”) entered into a Third Amendment (the “Third Amendment”) to the lease agreement for office space in Newton, Massachusetts, dated as of August 4, 2009, by and between the Company and MA-Riverside Project, L.L.C. (predecessor-in-interest to Hines) as amended (the “Newton Lease”). The Third Amendment extends the lease term to December 31, 2029 and preserves the Company’s option to extend the term for an additional five (5) year period subject to certain terms and conditions set forth in the Newton Lease. The Third Amendment reduces the rentable space from approximately 110,000 square feet to approximately 74,000 square feet effective January 1, 2018 and provides the Company with a ~~one-time cash allowance~~new revolving line of upcredit facility of $20,000,000 (“Line of Credit”). The Line of Credit allows the Company to ~~$3.3 million,~~request non-formula advances in an aggregate principal amount not to exceed the Line of Credit and to use the proceeds of such advances until the facility matures on July 2, 2022. Advances under the Line of Credit bear interest at a floating rate equal to one-quarter percent (0.25%) above the Prime Rate (as published in the Money Rates section of the Western Edition of The Wall Street Journal, or such other rate of interest publicly announced from time to time by Western Alliance as its Prime Rate); provided that at no time shall the interest rate on such advances be less than three and one half percent (3.50%). The Modification Agreement also establishes a process by which ~~may~~the Company and the Bank will determine an alternative interest rate for the Company’s existing Term Loan under the Loan Agreement in the event that the Bank determines that LIBOR ceases to exist or is no longer available. In addition, the Company will be ~~used~~required to pay customary fees and expenses, including an annual facility fee with respect to the Line of Credit. Together, the Loan Agreement and Line of Credit are guaranteed by the Company ~~for any purpose. Beginning on~~and secured by substantially all assets of the Company and its subsidiaries.

On January 1, ~~2018, base monthly rent under~~2019, the ~~Third Amendment will be $0.3 million. The base rent will increase biennially at a rate averaging approximately 1% per year, beginning on January 1, 2020.~~Company adopted Topic 842 Leases using the modified retrospective approach. The Company ~~remains responsible~~recorded operating lease assets (right-of-use assets) of $27.5 million and operating lease liabilities of $32.1 million. There was no impact to retained earnings upon adoption of Topic 842.

The Company has various non-cancelable lease agreements for certain ~~other costs under~~of its offices with original lease periods expiring between 2019 and 2029. Lease terms may include options to extend or terminate the ~~Third Amendment, including operating expenses and taxes.~~

~~The Newton Lease contains rent concessions, which~~lease when it is reasonably certain the Company will exercise that option. Leases with a renewal option 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 ~~receiving over~~reasonably certain of being exercised, the ~~life~~Company considers several economic factors, including but not limited to, the significance of leasehold improvements incurred on the ~~Newton Lease.~~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 ~~Company’s operating leases include lease incentives and~~arrangements have discounted rent periods or escalating rent payment ~~amounts and~~provisions. Leases with an initial term of twelve months or less are ~~renewable for varying periods.~~not recorded on the Consolidated Balance Sheets. The Company ~~is recognizing the related~~recognizes rent expense on a straight-line basis over the ~~term~~lease term. The Company’s lease agreements do not contain any material residual value guarantee or material restrictive covenants.

As of ~~each~~June 30, 2020, operating lease ~~taking into account the~~assets were $25.5 million and operating lease ~~incentives and escalating lease payments. Total rent expense under~~liabilities were $29.6 million. The maturity of the Company’s ~~leases was approximately $3.4 million and approximately $3.3 million for the nine months ended September 30, 2017 and 2016, respectively.~~

~~Future minimum~~operating lease ~~payments under the Company’s noncancelable operating leases, as amended,~~liabilities as of ~~October 26, 2017~~June 30, 2020 are as follows:

For the three and six months ended June 30, 2020 and 2019, the total lease cost is comprised of the following amounts:

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.

From time to time and in the ordinary course of business, the Company may be subject to various claims, charges, and litigation. At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the Company did ~~not~~0t 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.

In September 1999, the Company approved a stock option plan (the “1999 Plan”) that provided for the issuance of shares of common stock incentives. The 1999 Plan provided for the granting of incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), and stock grants. These incentives were offered to the Company’s employees, officers, directors, consultants, and advisors. Each option is exercisable at such times and subject to such terms as determined by the Company’s Board of Directors (the “Board”); grants generally vest over a four year period, and expire no later than ten years after the grant date.

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. Effective upon the consummation of the IPO, no further awards were made pursuant to the 1999 Plan, but any outstanding awards under the 1999 Plan remain in effect and continue to be subject to the terms of the 1999 Plan. The 2007 Plan allowed the Company to grant ISOs, 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~~three- to ~~four year~~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.

~~At the inception of the plan, the Company reserved for issuance an aggregate of 2,911,667 shares of common stock under the~~ The 2007 Plan ~~which~~ expired in May 2017. The 2007 Plan was subject to an automatic annual increase of shares on January 1 of each year, beginning on January 1, 2008, equal to the lesser of (a) 2% of the outstanding number of shares of common stock (on a fully-diluted basis) on the immediately preceding December 31 and (b) such lower number of shares as may be determined by the compensation committee of the Board. The number of shares available for issuance under the 2007 Plan was subject to adjustment in the event of a stock split, stock dividend or other change in capitalization. Additionally, shares that were subject to stock options returned to the 1999 Plan as a result of their expiration, cancellation, or termination were automatically made available for issuance under the 2007 Plan. Approximately 8,224,334 shares were added to the 2007 Plan in accordance with the automatic annual increase and 1999 Plan return provisions. No

NaN 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 ~~1,527,870~~77,500 shares of common stock ~~including 25,000 vested restricted stock units,~~ that remain subject to outstanding stock grants under the 2007 Plan as of ~~September~~June 30, ~~2017.~~2020.

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, ~~approximately~~ 3,000,000 shares of 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. 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. 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 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”), they would be subject to the same vesting and forfeiture provisions as the underlying award. There ~~are~~is a total of ~~635,000~~1,368,630 shares of common stock that remain subject to outstanding stock grants under the 2017 Plan as of ~~September~~June 30, ~~2017.~~2020.

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 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.~~0. 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 ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 is presented below:

Year-to-Date Activity	Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value		Options Outstanding		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
Options outstanding at December 31, 2016		861,380		$	9.42
Options outstanding at December 31, 2019											140,000	$	13.14
Granted		20,000			10.33						25,000	$	29.64
Exercised		(103,673	)		5.44			$	437		—		—
Forfeited		—			—						—		—
Cancelled		(104,087	)		13.47						—		—
Options outstanding at September 30, 2017		673,620		$	9.43		1.98	$	2,310
Options exercisable at September 30, 2017		653,620		$	9.41		1.74	$	2,277
Options vested or expected to vest at September 30, 2017		671,652		$	9.43		1.96	$	2,306
Options outstanding at June 30, 2020											165,000	$	15.64		6.11	$	2,375
Options exercisable at June 30, 2020											137,500	$	12.96		5.36	$	2,347
Options vested or expected to vest at June 30, 2020											162,880	$	15.46		6.06	$	2,374

There were 0 options exercised during the ~~nine~~six months ended ~~September~~June 30, ~~2017, the~~2020. 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 ~~$0.4 million. During~~$20 thousand during the ~~nine~~six months ended ~~September~~June 30, ~~2016, the total intrinsic value of options exercised was $1.8 million.~~2019. The total amount of cash received from exercise of these options was approximately ~~$0.6 million and $4.0 million~~$23 thousand during the ~~nine~~six months ended, ~~September~~June 30, ~~2017 and 2016, respectively.~~2019.

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 ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 is presented below:

There were 103,688 restricted stock units with a total ~~grant date~~grant-date fair value of $2.2 million that vested during the six months ended June 30, 2020. There were 12,000 shares forfeited with a total value of $303 thousand for the six months ended June 30, 2020. There were 98,811 restricted stock units with a total grant-date fair value of $1.9 million that vested during ~~each of~~ the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016 was $6.2 million.~~ 2019.

As of, ~~September~~June 30, ~~2017,~~2020 there was ~~$12.0~~$17.2 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 ~~2.1~~ ~~years.~~1.5 years.

As of, ~~September~~June 30, ~~2017,~~2020 the Company has reserved ~~8,676,876~~2,376,015 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 ~~Plan.~~

On May 10, 2016, the Company commenced a tender offer (the “Tender Offer”) to purchase up to 8.0 million shares of its common stock, representing approximately 24.8% of the shares of TechTarget’s common stock issued and outstanding at that time, at a price of $7.75 per share.

The Tender Offer expired on June 8, 2016. In accordance with the terms of the Tender Offer, the Company accepted for purchase 5,237,843 shares of its common stock for a purchase price of $7.75 per share, or a total of $40.6 million. Repurchased shares were recorded under the cost method and are reflected as treasury stock in the accompanying Consolidated Balance Sheets. The total cost of the Tender Offer was $40.8 million, which included approximately $0.2 million in costs directly attributable to the purchase of shares pursuant to the Tender Offer. In connection with the Tender Offer, TCV V, L.P., TCV Member Fund, L.P. (along with TCV V, L.P., referred to as the “TCV Funds”) and TCV Management 2004, L.L.C. (“TCM 2004”), each a related party, collectively tendered 3,379,249 shares of the Company’s common stock in the aggregate. Jay Hoag, a member of the Board at the time of the Tender Offer, was also a member of the general partner of the TCV Funds and a member of TCM 2004, which at the time was estimated to hold more than 5% of the voting securities of the Company. Additionally, Rogram LLC, a related party, tendered 308,713 shares in connection with the Tender Offer. Roger Marino, a member of the Board, indirectly controls shares in Rogram LLC.Plans.

In ~~June 2016,~~November 2018, the Company announced that the Board had authorized a ~~$20~~$25.0 million stock repurchase program (the ~~“June 2016~~“November 2018 Repurchase Program”)~~, whereby~~ 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 ~~the~~a manner that may be determined by ~~the Board. During the nine months ended September 30, 2017, the~~management. The Company repurchased ~~543,328~~736,760 shares ~~of common stock for~~at an aggregate purchase price of ~~$5.2~~approximately $14.8 million during the first quarter of 2020 under the November 2018 Stock Repurchase Program. NaN amounts were repurchased under this plan during the second quarter of 2020 and the November 2018 Repurchase Program was terminated in May 2020.

On May 1, 2020, the Company’s Board of Directors approved a new two-year $25.0 million stock repurchase program (the “May 2020 Repurchase Program”). Repurchases of the Company's stock under the May 2020 Repurchase Program may be made in the open market, in privately negotiated transactions, or pursuant to one or more trading plans. The timing and amount of repurchases, if any, will be determined by the ~~June 2016~~Company's management at its discretion and be based on a variety of factors such as the market price of the Company's common stock, corporate and contractual requirements, prevailing market and economic conditions and legal requirements. The May 2020 Repurchase ~~Program.~~Program may be modified, suspended or discontinued at any time. NaN amounts were repurchased under May 2020 Repurchase Program during the second quarter of 2020.

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

On May 5, 2017, the Company’s Board reauthorized the common stock repurchase program to allow the Company to use the remaining balance of the unused authorization under the June 2016 Repurchase Program after its original expiration in June 2017. The reauthorized program allows the Company to repurchase its 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. The reauthorized program has no time limit and may be suspended at any time. Additionally, the Company may establish, from time to time, 10b5-1 trading plans that will provide flexibility as it buys back its shares. As of September 30, 2017, the Company had $6.8 million remaining for purchases under the stock repurchase program.

The Company’s effective income tax rate before discrete items was 44.7% and 42.0% for the nine months ended September 30, 2017 and 2016, respectively. The Company recognized income tax benefits for discrete items of ~~$0.8 million and of an immaterial amount during the nine months ended September 30, 2017 and 2016, respectively.~~ 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 orof 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’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense.~~

~~In the first quarter of 2017,~~ ~~the~~ Company ~~adopted ASU 2016-09, which requires that all excess tax benefits and tax deficiencies related to stock compensation be recognized as~~recorded income tax expense ~~or benefit in~~of $3.0 million and $2.6 million the ~~Consolidated Statement of Operations and Comprehensive Income in the period incurred.~~ ~~The Company recognized $0.5 million of income tax benefits from excess deductions net of shortfalls during the nine~~six months ended ~~September~~June 30, ~~2017.~~ ~~As part of adopting ASU 2016-09, the Company recorded deferred tax assets for the federal~~2020 and ~~state excess tax benefit net operating losses in the amount of $0.2 million, with an offsetting entry to retained earnings.~~June 30, 2019 respectively.

The Company views its operations and manages its business as ~~one~~1 operating segment based on factors such as how the Company manages its operations and how its executive management team reviews results and makes decisions on how to allocate resources and assess performance.

~~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 are comprised of property and equipment, net; goodwill; and intangible assets, net.No single country outside of the U.S. accounted for 10% or more of the Company’s long-lived assets during either of these periods.

On February 18, 2020, the Company acquired substantially all of the operating assets of Data Science Central LLC, which is a niche digital publishing and media company focused on data science and business analytics for $5.5 million, plus a potential future earnout valued at $0.9 million at the time of acquisition, which is currently valued at $1.1 million (Note 4). A $5.0 million cash payment was made at closing, with the remainder due in fiscal year 2021. The earnout is subject to certain revenue growth targets and the payment is adjusted based on actual results. If all targets are met, the total purchase price, including the earnout, shall not exceed $7.5 million which will become payable upon the achievement of certain revenue objectives during the next two years.

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

The following discussion and analysis of our financial condition andresults of operations should be read in conjunction with the consolidatedfinancial statements and accompanying notes included elsewhere in this QuarterlyReport on Form 10-Q. This discussion and analysis contains forward-lookingstatements that involve risks, uncertainties and assumptions. Our actualresults could differ materially from those anticipated in these forward-lookingstatements 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, ~~2016~~2019 under Part I, Item 1A, “Risk Factors,” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 under Part II, Item 1A, “Risk Factors” 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 ~~34.~~35.

~~We are~~TechTarget, Inc. (“we” or “the Company”) is a Delaware corporation incorporated on September 14, 1999. Through continued innovation around our specialized online content for buyers of enterprise ~~information~~ technology ~~(“IT”),~~solutions we have become a global leader in purchase intent-driven marketing and sales services that deliver business impact for enterprise business-to-business “B2B” technology ~~vendors.~~companies. Our offerings enable B2B technology ~~vendors~~companies to better identify, reach and influence corporate ITenterprise technology decision makers actively researching specific ITenterprise technology purchases. We improve ~~vendors’~~a vendor’s ability to impact these audiences for business growth using advanced targeting, analytics and data services complemented with customized marketing programs that integrate demand generation, ~~and~~ brand marketing and advertising techniques.

~~IT professionals have~~Enterprise technology has become increasingly specialized, and ~~because each of~~ the websites within our network of over 140 websites ~~focuses on a specific IT sector~~address every major enterprise technology segment such as storage, security, or networking, ITand business applications. Enterprise technology and business professionals rely on us for key decision support information tailored to their specific areas of responsibility.

We enable ITenterprise technology and business professionals to navigate the complex and rapidly-changing ITenterprise technology landscape where purchasing decisions can have significant financial and operational consequences. Our content strategy includes three primary sources ~~which IT~~that 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 ~~user-generated,~~member-generated, or peer-to-peer, content. In addition to utilizing our independent editorial content, registered members appreciate the ability to deepen their pre-purchase research by accessing the extensive vendor supplied content available across our website network. Likewise, these members derive significant additional value from the ability our network provides to seamlessly interact with and contribute to information exchanges in a given field.

We had approximately ~~20.0~~20.5 million and ~~17.7~~19.8 million registered members – our “audiences” – as of ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019 respectively. During the second quarter of 2020, the Company ended a partnership with a company covering the Belgium, Netherlands, and Luxembourg (“Benelux”) region. This reduced our member number by 0.5 million. Additionally, we restated our 2019 membership to remove the Benelux member number as of June 30, 2019 (0.5 million). We believe that we have sufficient members within our remaining database to support our business needs within the Benelux region. While the size of our registered ~~user~~member base does not provide direct insight into our customer numbers or our revenues, 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~~customers 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 ~~user~~member base enables ~~IT vendors~~B2B technology companies to reach a specialized audience efficiently because our content is highly segmented and aligned with the ~~IT vendors’~~B2B technology companies’ specific products. With it, we have developed a broad customer base and, ~~now~~in 2020 expect to deliver marketing and sales services programs to approximately ~~1,300~~1,400 customers.

We finished the second quarter of 2020 in a strong financial position. As of June 30, 2020, our balance sheet included:

Our remaining debt obligation for 2020, including required interest payments, is approximately $1.0 million. We generated $21.8 million in cash from operations during the six months ended June 30, 2020. In July 2020, we obtained a $20 million line of credit with Western Alliance Bank. While we do not have any current plans to utilize the line of credit, we feel that the line of credit provides us with additional flexibility in the current economic environment. We expect to be able to maintain adequate liquidity to satisfy our cash needs as we navigate through the current environment, although we could experience significant fluctuations in our cash flows from period to period. If necessary, we may take additional steps to preserve adequate liquidity, including through accessing capital markets and other sources of external financing.

During the second quarter we saw similar trends that we saw at the end of the first quarter. We saw a general shift in customer behavior moving away from longer term contracts in favor of shorter term contracts, which allow our customers ~~annually.~~greater flexibility. Additionally, our ability to attract new customer to longer term contracts was impacted as a result of the general cautiousness related to the COVID-19 environment. These factors resulted in Priority Engine revenue growth of only 1% over last year. We saw weakness from the Global 10 accounts, in particular their investments in their branding.

Our revenue growth in quarter was driven in large part due to increases in our international revenue. We believe the increase in international revenue was driven by three items:

We continue to prepare for a new release of Priority Engine (expected after Labor Day). This release will include further enhancements for field sales use cases.

Even after the easing of governmental restrictions and the severity of the COVID-19 crisis lessens, we could experience further fluctuations in our results of operations and cash flows resulting from the ongoing global impacts of the crisis and our customers’ realignment of their marketing and sales budgets.

Our priorities remain to 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.

At the beginning of 2020, we expected the strong demand we saw in 2019 to continue. However, beginning in March, we saw certain customers extend their normal sales cycles and shift their budgets away from long-term commitments to shorter-term marketing campaigns as they began to navigate through the pandemic. This trend continued throughout the second quarter of 2020 and through the date of this report. We expect these adverse impacts to result in lower revenue for the duration of the pandemic. The impact COVID-19 will have on our 2020 results remains uncertain, and we continue to evaluate the impacts the pandemic will have on our business operations and strategy going forward. We believe we will return to normal growth rates when the macro environment improves.

Our revenues for the ~~nine~~six months ended ~~September~~June 30, ~~2017 declined approximately 2%~~2020 increased by $2.0 million, or 3%, to ~~$78.3~~$66.2 million, compared with $64.3 million, during the same period in ~~2016. IT Deal Alert~~^TM2019. Priority Engine™ revenues ~~were up 58%~~increased 6% to more than $25.0 million, in the first ~~nine~~six months of ~~2017,~~2020 compared ~~to the first nine months of 2016, and quarterly IT Deal Alert revenues topped $10~~with $23.6 million ~~for the second consecutive quarter. Revenues from our Priority Engine~~^TM ~~and Deal Data~~^TM ~~products were up 130%~~ in the first ~~nine~~six months of ~~2017, compared~~2019. This increase was offset, in part, by our legacy Global customers, who decreased their spend, particularly as it related to the first nine months of 2016, and the number of IT Deal Alert customers in the first nine months of 2017 was up approximately 60% from the first nine months of 2016. We had 62 new Priority Engine customers in the third quarter of 2017 and we had a successful launch of Priority Engine outside North America in the first quarter of 2017, with 91 international customers utilizing the service in the third quarter of 2017. our brand offerings.

~~We continue to have success selling longer term deals and, in the third quarter of 2017, 23% of our online revenue was derived from longer term contracts.~~ The amount of revenue that we derived from ~~longer term~~longer-term contracts in the ~~third~~second quarter of ~~2017~~2020 increased ~~more than 70%~~6%, compared to the ~~amount that we recognized in the third~~second quarter of ~~2016.~~ 2019. As we noted above, we saw some of our customers shift from long-term commitments to shorter-term commitments.

~~The news on IT Deal Alert has been consistently positive,~~We continue to benefit from our customers’ increasing demand for purchase intent data to fuel their sales and ~~we are also seeing stabilization~~marketing outreach. Another important factor in our ~~core online revenues. While core online~~ revenue ~~was down 21% in the first nine months of 2017, compared~~trajectory relates to the ~~first nine months~~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 ~~2016, the rate of decline has been moderating over the course of~~customers purchase “always on” programs from us that combine offerings to identify and influence active buyers throughout the year. ~~Our core revenues declined $1.4 million~~The growth in ~~the nine-month period from ten~~

~~major global~~our longer-term revenue component is evidence of our continued traction for these types of integrated programs. Additionally, customers ~~a number of which have been involved in large-scale corporate transactions that have negatively affected their~~use our offerings to support quarterly sales and marketing ~~spend. Core revenues from the four accounts that~~campaigns. These purchases are transitioning through complex post-merger consolidation and integration transactions were down approximately 40% in the first nine months. While this situation is beyond our control and our visibility here is limited, our experience has shown that after the corporate consolidation and integration process completed, marketing budgets tend to recover. If history holds true, those four accounts may perform better in the remaining quartermore fluid – customers of this ~~year. The declines~~type may focus more on offerings in ~~revenues from these major customers also contributed~~a particular campaign, and shift objectives as opposed to the results of our online international geo-targeted revenues, where our target audience is outside North America (“International”), which nevertheless increased 5% compared to the first nine months of the prior year.an “always on” program.

~~As indicated, online~~Our international geo-targeted revenues, where our target audience is outside North America (“International”), increased 5%25% for the ~~first nine~~three months ~~of 2017,~~ended June 30, 2020, compared with the prior year period driven by International IT Deal Alert growth, partially offset by a decrease in core online sales, primarily to our largest customers, which was offset in part by International IT Deal Alert growth. The weakness in core online continues to be distributed across Europe, the ~~Middle East, and Africa (“EMEA”), Asia Pacific (“APAC”) and Latin America.~~items noted above.

Gross profit percentage was 75% and ~~70%~~77% for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively. ~~Online gross~~Gross profit ~~increased~~decreased by ~~$3.7~~$0.3 million, ~~primarily attributable~~mainly due to ~~the increase in online revenues as~~product mix compared to the same period a year ago. Events gross profit decreased by $0.8 million as a result of the decreased events revenues as compared to the same period in the prior year. As we announced on February 14, 2017, we have phased out our events products.

~~Macro-economic Conditions and Industry Trends.~~ ~~Because most of our customers are IT vendors, the success of our~~ business ~~is intrinsically linked~~not including items relating to the ~~health, and subject to the market conditions, of the IT industry. In the three months ended September 30, 2017, we did not see any meaningful improvement~~global pandemic, which is discussed in the IT market and many of our customers continue to be revenue-challenged. This fact, coupled with some of our largest clients’ corporate post-merger consolidation and integration efforts, as well as caution because of foreign currency concerns, has continued to put ~~pressure~~ on marketing budgets. 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.further detail above.

•

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 which will allow time for a free trade agreement to be negotiated. If no agreement can be reached at the end of this transition period, it could mean that the United Kingdom will face tariffs on goods traveling to the EU. Brexit could subject us to new regulatory costs and compliance obligations (including regarding the treatment and transfer of personal data). The full effect of Brexit remains uncertain and depends on any agreements the United Kingdom may make to retain access to the EU market. Moreover, the overall impact of Brexit may create further global economic uncertainty, which may cause a subset of our customers to more closely monitor their costs in the affected region. Our revenue generated from customers who have billing addresses within the United Kingdom was approximately 10% of our total revenues for both periods ended June 30, 2020 and 2019, respectively.

~~Brexit.~~ The announcement of the results of the United Kingdom’s referendum in which voters approved an exit of the United Kingdom from the European Union, commonly referred to as “Brexit,” has resulted in significant general economic uncertainty as well as volatility in global stock markets and currency exchange rate fluctuations. On March 29, 2017, the United Kingdom formally notified the European Union of its intention to withdraw pursuant to Article 50 of the Lisbon Treaty. Secretary of State for Exiting the European Union David Davis and European Union Chief Negotiator Michel Barnier commenced exit negotiations on June 19, 2017 and continue to meet to negotiate the terms of the United Kingdom’s withdrawal from, and outline its future relationship with, the European Union While both parties have reported constructive progress with respect to the negotiations to date, continued uncertainty remains regarding the terms of the United Kingdom’s new partnership with the European Union and its member states. The overall impact of Brexit may create further global economic uncertainty, which may cause a subset of our customers to more closely monitor their costs in the affected region. Our revenues generated from customers who have billing addresses within the United Kingdom were approximately 10% of our total revenues for each of the three months ended September 30, 2017 and 2016.

•

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.

•

Product. Purchase intent data continues to drive our product strategy. During 2020, we intend to make our purchase intent data more readily available for salespersons at our customers, focusing on connectivity, ROI metrics and attribution. (expected release after Labor Day). Additionally, we will be focusing on extending the market reach of our purchase intent data, with a Priority Engine offering (Priority Engine Express) tailored for the SMB market. We continue to anticipate Priority Engine Express will ramp up the back half of 2020.

~~Customer Demographics.~~ ~~In the three months ended September 30, 2017~~, online revenues from ten major global customers, which generally have the most international exposure, increased approximately 7% compared to the same period a year ago. Although we have historically reported a group of 12 major global customers, due to mergers and consolidations, this group has been reduced to ten. Online revenues from our mid-sized customers (our largest 100 customers, excluding those companies we consider our ten major global customers, who generally have less exposure internationally) increased by approximately 14% compared to the same period a year ago. Online revenues attributable to our smaller customers, which tend to be venture capital-backed start-ups that primarily operate in North America, increased by approximately 37% over the prior year period. All three customer segments continued to report a challenging environment, and this translated into our customers remaining cautious with their marketing expenditures.
•
Customer Demographics. In the three months ended June 30, 2020, revenues from our legacy global customers decreased approximately 26% compared to the same period a year ago. Revenues from our largest 100 customers, excluding the legacy global customers described above increased by approximately 16% compared to the same period a year ago. Revenues attributable to remaining customers, which tend to be venture capital-backed start-ups that primarily operate in North America, increased by approximately 5% over the prior year period.

•

Geographic. During the three months ended, June 30, 2020 approximately 39% of our revenues were derived from International campaigns.

~~Our key strategic initiatives include:~~

~~Geographic~~ – During the three months ended September 30, 2017, approximately 31% of our online revenues were derived from International campaigns. International marketing budgets continue to be challenged by the effects of the strong dollar and the uncertainty caused by Brexit. International results were also impacted by the large corporate post-merger consolidation and integration efforts noted above. We rolled out Priority Engine™ in Europe in the third quarter of 2016, and we launched Priority Engine in APAC during the fourth quarter of 2016.

~~Product~~ – IT Deal Alert revenues were approximately $13.4 million in the three months ended September 30, 2017, up from approximately $7.3 million in the same period in 2016. This includes International IT Deal Alert revenues of $3.5 million, which is also included in International revenues as discussed above. In the third quarter of 2017, we had over 600 active customers utilizing our IT Deal Alert products and services, up from 370 customers in the third quarter of 2016. We expect IT Deal Alert to continue to be a meaningful growth driver through 2017.

~~Our core online revenues were down 14% in the third quarter of 2017 compared to the third quarter of 2016, which was disproportionately driven by our largest customers.~~

~~Sources of~~ Revenues

Revenue changes for the three and ~~nine~~six month ~~periods~~period ended, ~~September~~June 30, ~~2017,~~2020 as compared to the same ~~periods~~period in ~~2016, were as follows:~~2019, are shown in the table below. See the discussion above and Note 3 and Note 13 to our consolidated financial statements for additional information on our revenues.

Three Months Ended September 30,

2017 vs. 2016

Nine Months Ended
September 30,

2017 vs. 2016

2017

2016

change

2017

2016

change

($ in thousands)

($ in thousands)

Total Online

$
28,012

$
24,247

16
%

$
78,085

$
76,242

2
%
Total Online by Geographic Area:

North America:

North America IT Deal Alert

9,953

5,895

69
%

26,563

18,629

43
%
North America Core Online

9,374

10,644

(12
)%

26,444

33,683

(21
)%
Total North America Online

19,327

16,539

17
%

53,007

52,312

1
%
International:

International IT Deal Alert

3,451

1,381

150
%

8,869

3,850

130
%
International Core Online

5,234

6,327

(17
)%

16,209

20,080

(19
)%
Total International Online

8,685

7,708

13
%

25,078

23,930

5
%
Total Online by Product:

IT Deal Alert:

North America IT Deal Alert

9,953

5,895

69
%

26,563

18,629

43
%
International IT Deal Alert

3,451

1,381

150
%

8,869

3,850

130
%
Total IT Deal Alert

13,404

7,276

84
%

35,432

22,479

58
%
Core Online:

North America Core Online

9,374

10,644

(12
)%

26,444

33,683

(21
)%
International Core Online

5,234

6,327

(17
)%

16,209

20,080

(19
)%
Total Core Online

14,608

16,971

(14
)%

42,653

53,763

(21
)%
Total Events

$
—

$
1,503

(100
)%

$
168

$
3,713

(95
)%
Total Revenues

$
28,012

$
25,750

9
%

$
78,253

$
79,955

(2
)%

	For the Three Months Ended June 30,				Percent Change	For the Six Months Ended June 30,				Percent Change
	2020		2019			2020		2019
North America	$	21,106	$	23,353	-10%	$	40,855	$	43,631	-6%
International		13,690		10,933	25%		25,357		20,627	23%
Total	$	34,796	$	34,286	1%	$	66,212	$	64,258	3%

We sell customized marketing programs to ~~IT vendors~~B2B technology companies targeting a specific audience within a particular ITenterprise 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’ ITenterprise technology sales cycles. As a result, our customers often run multiple advertising programs with us in order to target their desired audience of ITenterprise 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, ITenterprise technology 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 ~~six~~nine months. ~~In 2016, we began~~We continue to enter into ~~longer term~~longer-term contracts with certain customers, and in the quarter ended, ~~September~~June 30, ~~2017,~~2020 approximately ~~23%~~34% of our ~~online~~ revenues were from ~~longer term~~longer-term contracts of approximately 12twelve months. ~~In the three months ended September 30, 2017, demand generation and brand advertising remained our~~

primary sources of revenues, while data analytics-driven intelligence solutions, driven by growth in our IT Deal Alert products and services, contributed approximately 48% of online revenues as compared with approximately 30% for the same period in 2016.

Online revenues represented 100% of total revenues for each of the three and nine months ended September 30, 2017 and 94% and 95% of the total revenues for the three and nine months ended September 30, 2016, respectively. As previously disclosed, we have phased out our events product line.

Product and Service Offerings

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

~~Online~~

IT Deal Alert. IT Deal Alert is a suite of products and services for ~~IT vendors~~B2B technology companies that leverages the detailed purchase intent data that we collect about end-user ITenterprise technology organizations. Through proprietary scoring methodologies, we use this insight to help our customers identify and prioritize accounts whose content consumption around specific ITenterprise technology topics indicates that they are “in-market” for a particular product or service. We also use the data directly to identify and further profile accounts’ upcoming purchase plans.

~~IT Deal Alert: Qualified Sales Opportunities~~™. Qualified Sales Opportunities is a product that profiles specific in-progress purchase projects, including information on scope and purchase considerations, in approximately 150 technology-specific segments.

•

Priority Engine™. 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 information that enables marketers and sales personnel to identify and understand accounts and individuals actively researching new technology purchases and then to engage those active prospects within the organizations that are relevant to the purchase. We sell this service in approximately 200 technology-specific segments which our customers use for demand generation, account-based marketing and other marketing and sales activities. Priority Engine is also available with specific geographic focus, bringing the total available segments to over 300.

~~IT Deal Alert: Priority Engine~~. Priority Engine is a subscription service powered by our Activity Intelligence™ platform, which integrates with leading customer relationship management and marketing automation platforms from salesforce.com, Marketo, Inc., Eloqua, Pardot, Hubspot, and Integrate. The service delivers information that enables marketers and sales personnel to identify and understand accounts and individuals actively researching new technology purchases and then to engage those active prospects within the organizations that are relevant to the purchase. We sell this service in approximately 200 technology-specific segments which our customers use for demand generation, account-based marketing and other marketing and sales activities.

~~IT Deal Alert: Deal Data~~™. Deal Data is a customized solution aimed at sales intelligence and data scientist functions within our customer organizations. It renders our Activity Intelligence data directly consumable by the customer's internal applications.

•

Sales Quality Leads. Are a suite of products which accelerate inside sales efforts by enabling our customers to prioritize their resources. Qualified Sales Opportunities™ is a product that profiles specific in-progress purchase projects, including information on scope and purchase considerations, in approximately 80 technology-specific segments. Building on the success of our Qualified Sales Opportunities product, Sales-Ready Leads and High-Quality Leads, which were launched in 2020, round out our qualified sales solutions with levels of pre-qualification tailored to the specific needs of our clients and their varied use cases.

~~IT Deal Alert: TechTarget Research~~™. TechTarget Research is a subscription product that sources proprietary information about purchase transactions from IT professionals who are making or have recently completed these purchases. The offering provides data on market trends, pricing dynamics and vendor win/loss and displacement trends.

•

Deal Data™. 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.

~~Core Online.~~Demand Solutions. Our ~~core online~~ offerings enable our customers to reach and influence prospective buyers through content marketing programs designed to generate demand for their solutions, and through display advertising and other brand programs that influence consideration by prospective buyers.

~~Demand Solutions.~~ ~~Our suite of demand solutions offerings~~ This allows ~~IT vendors~~B2B technology companies to maximize return on investment by capturing sales leads from the distribution and promotion of content to our audience of ITenterprise technology and business professionals. All of our demand solutions campaigns offer the Activity Intelligence Dashboard, a tool that gives our customers’ marketers and sales representatives a near real-time view of their prospects including insights on the research activities of technology buying teams at the individual, team and account levels. Demand solutions offerings may also include an additional service, TechTarget Re-Engage™, which helps both technology marketers and their sales teams to identify highly active prospects, detect emerging projects, retarget interested buying teams, and accelerate engagement with specific accounts.

Our demand solutions offerings may ~~also~~ include the following program components:

~~White Papers.~~ White papers are technical documents created by IT vendors to describe business or technical problems which are addressed by the vendors’ products or services. In a program that includes demand solutions, we post white papers on our relevant websites and our users receive targeted promotions about these content assets. Prior to viewing white papers, our registered members and visitors supply their corporate contact information and agree to receive further information from the vendor. The corporate contact and other qualification information for these leads are supplied to the vendor in real time through our proprietary lead management software.

•

White Papers. White papers are technical documents created by B2B technology companies to describe business or technical problems which are addressed by the vendors’ products or services. In a program that includes demand solutions, we post white papers on our relevant websites and our members receive targeted promotions about these content assets. Prior to viewing white papers, our registered members and visitors supply their corporate contact information and agree to receive further information from the vendor. The corporate contact and other qualification information for these leads are supplied to the vendor in near real time through our proprietary lead management software.

•

Webcasts, Podcasts, Videocasts and Virtual Trade ~~Shows~~.Shows. Webcasts, podcasts, videocasts, virtual trade shows and similar content bring informational sessions directly to attendees’ desktops and mobile devices. As is the case with white papers, our ~~users~~members supply their corporate contact and qualification information to the webcast, podcast, videocast or virtual trade show sponsor when they view or download the content. Sponsorship includes access to the registrant information and visibility before, during and after the event.

~~Content Sponsorships~~. IT vendors, or groups of vendors, pay us to sponsor independent editorially created content vehicles on specific technology topics where the registrant information is then provided to all participating sponsors. In some cases, these vehicles are supported by multiple sponsors in a single segment, with the registrant information provided to all participating sponsors. Because these offerings are editorially driven, our customers get the benefit of association with independently created content as well as access to sales leads that are researching the topic.

•

Content Sponsorships. B2B technology companies, or groups of vendors, pay us to sponsor independent editorially created content vehicles on specific technology topics where the registrant information is then provided to all participating sponsors. In some cases, these vehicles are supported by multiple sponsors in a single segment, with the registrant information provided to all participating sponsors. Because these offerings are editorially driven, our customers get the benefit of association with independently created content as well as access to sales leads that are researching the topic.

Brand ~~Solutions.~~Solutions. Our suite of brand solutions offerings provides ~~IT vendors~~B2B technology companies exposure to targeted audiences of ITenterprise technology and business professionals actively researching information related to their products and services. We leverage our Activity Intelligence ~~product framework~~ 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.~~ These offerings enable our customers to influence prospective buyers through display advertising purchased on the websites we operate. Programs may include specific sites, or audience segments across our sites.

•

On-Network Branding. These offerings enable our customers to influence prospective buyers through display advertising purchased on the websites we operate. Programs may include specific sites or audience segments across our sites.

~~Off-Network Branding.~~ Our Off-Network offerings allow our customers to influence prospective buyers through display advertising when they are visiting other websites on the internet. We identify audience segments that can be targeted based on their activity and demonstrated interests against our content and websites, and offer an array of audience extension and retargeting solutions that leverage Activity Intelligence.

•

Off-Network Branding. Our Off-Network offerings allow our customers to influence prospective buyers through display advertising when they are visiting other websites on the internet. We identify audience segments that can be targeted based on their activity and demonstrated interests against our content and websites, and offer an array of audience extension and retargeting solutions that leverage Activity Intelligence.

•

Microsites and Related Formats. We have a range of solutions that create stand-alone websites for B2B Technology Companies, or “embedded” websites that exist within the context of our existing websites, to enable a more immersive experience for enterprise technology and business professionals with the content and brand messaging of the vendor.

~~Microsites and Related Formats.~~ We have a range of solutions that create stand-alone websites for IT vendors, or “embedded” websites that exist within the context of our existing websites, to enable a more immersive experience for IT professionals with the content and brand messaging of the vendor.

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

~~Historically, we have operated a select number~~Our suite of ~~face-to-face events,~~demand solutions offerings allows B2B technology companies to maximize return on investment by capturing sales leads from the ~~majority~~distribution and promotion of which were free to IT professionals and were sponsored by IT vendors. Events revenues represented 6% and 5% of total revenues for the three and nine months ended September 30, 2016, respectively. In 2017, we ceased to offer these servicescontent to our ~~customers~~audience of enterprise technology and ~~instead focus~~business professionals. Our demand solutions campaigns typically offer the Activity Intelligence Dashboard, a tool that gives our ~~efforts~~customers’ marketers and sales representatives a near real-time view of their prospects including insights on ~~enhancing our data driven product offerings and working with our customers to gain~~ the ~~fullest advantage that our data-driven products can offer.~~research activities

Expenses consist of cost of ~~online and event~~ revenues, selling and marketing, product development, general and administrative, depreciation and amortization, ~~of intangible assets,~~ 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 ~~Online~~ Revenues. Cost of ~~online~~ revenues ~~consist~~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.

~~Cost of Events Revenues~~. Cost of events revenues consist primarily of: direct expenses, including site, food and beverages for the event attendees and event speaker expenses; salaries and related personnel costs; travel-related 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 revenues.

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 ~~two~~three to ~~ten~~twelve years.

~~Amortization of Intangible Assets~~. 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 ~~five~~2 to ~~ten~~17 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 ~~Senior Secured Credit Facilities Credit~~Loan and Security Agreement ~~for a term loan (“Term Loan~~(the “Loan Agreement”) with Western Alliance Bank and amortization of premiums on our investments, less any interest income earned on cash, ~~cash equivalents,~~ and short-term and long-term investments. We historically have invested our cash in money market accounts, municipal bonds, government agency bonds, ~~U.S~~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.

The discussion of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.”). The preparation of these financial statements requires us to make estimates, judgments and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenues, 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, ~~2016.~~2019. Other than those noted ~~in the “Accounting Guidance Adopted in 2017” section~~ in Note 2 to our consolidated financial statements, there were no material changes to our critical accounting policies and estimates during the first ~~nine~~six months of ~~2017.~~2020.

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 are comprised primarily of book to tax differences on stock-based compensation and timing of deductions for ~~deferred~~ rent expense, accrued expenses, depreciation, and amortization. As of ~~September~~June 30, ~~2017,~~2020, we had ~~state~~foreign net operating loss (“NOL”) carryforwards of ~~approximately $1.3 million which expire at various dates through 2033. We also had foreign NOL carryforwards of $1.0~~$0.2 million, which may be used to offset future taxable income in foreign jurisdictions ~~until they expire at various dates through 2021. The deferred tax assets related to the foreign NOL carryforwards have been fully offset by a valuation allowance.~~ indefinitely.

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

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

($ in thousands)

($ in thousands)

Revenues:

Online

$
28,012

100
%

$
24,247

94
%

$
78,085

100
%

$
76,242

95
%
Events

—

0
%

1,503

6
%

168

0
%

3,713

5
%
Total revenues

28,012

100
%

25,750

100
%

78,253

100
%

79,955

100
%
Cost of revenues:

Online

6,951

25
%

6,889

27
%

20,931

27
%

20,360

25
%
Events

—

0
%

723

3
%

41

0
%

2,049

3
%
Total cost of revenues

6,951

25
%

7,612

30
%

20,972

27
%

22,409

28
%
Gross profit

21,061

75
%

18,138

70
%

57,281

73
%

57,546

72
%
Operating expenses:

Selling and marketing

11,568

41
%

11,243

44
%

33,006

42
%

33,331

42
%
Product development

2,209

8
%

2,074

8
%

6,168

8
%

6,027

8
%
General and administrative

3,288

12
%

3,138

12
%

9,542

12
%

9,392

12
%
Depreciation

1,065

4
%

951

4
%

3,249

4
%

2,987

4
%
Amortization of intangible assets

44

0
%

183

1
%

126

0
%

718

1
%
Total operating expenses

18,174

65
%

17,589

68
%

52,091

67
%

52,455

66
%
Operating income

2,887

10
%

549

2
%

5,190

7
%

5,091

6
%
Interest and other expense, net

(190
)

(1
)%

(471
)

(2
)%

(447
)

(1
)%

(1,037
)

(1
)%
Income before provision for income
taxes

2,697

10
%

78

0
%

4,743

6
%

4,054

5
%
Provision for income taxes

623

2
%

100

0
%

1,337

2
%

1,725

2
%
Net income (loss)

$
2,074

7
%

$
(22
)

(0
)%

$
3,406

4
%

$
2,329

3
%

	Three Months Ended June 30,										Six Months Ended June 30,
	2020					2019					2020					2019
Revenues	$	34,796		100	%	$	34,286		100	%	$	66,212		100	%	$	64,258		100	%
Cost of revenues		8,785		25	%		7,952		23	%	$	16,936		26	%		14,964		23	%
Gross profit		26,011		75	%		26,334		77	%		49,276		74	%		49,294		77	%
Operating expenses:
Selling and marketing		12,570		36	%		13,976		41	%		25,519		39	%		26,422		41	%
Product development		1,846		5	%		2,001		6	%		3,878		6	%		3,988		6	%
General and administrative		3,267		9	%		3,123		9	%		6,622		10	%		6,145		10	%
Depreciation and amortization		1,453		4	%		1,146		3	%		2,798		4	%		2,276		4	%
Total operating expenses		19,136		55	%		20,246		59	%		38,817		59	%		38,831		60	%
Operating income		6,875		20	%		6,088		18	%		10,459		16	%		10,463		16	%
Interest and other expense, net		(10	)	0	%		(253	)	-1	%		(479	)	-1	%		(390	)	-1	%
Income before provision for income taxes		6,865		20	%		5,835		17	%		9,980		15	%		10,073		16	%
Provision for income taxes		2,092		6	%		1,684		5	%		3,000		5	%		2,632		4	%
Net income	$	4,773		14	%	$	4,151		12	%	$	6,980		11	%	$	7,441		12	%

Comparison of Three Months Ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~June 30, 2019

~~Online.~~ The increase in ~~online~~ revenues ~~is primarily attributable~~was due to ~~an increase of $6.1 million~~customers increasing their spend for data driven marketing products. Priority Engine revenue grew 1% versus last year to $12.5 million. Increases in ~~revenues from our IT Deal Alert product offerings, partially~~lead generation, driven by the customers movement to shorter term contracts, were offset by ~~a decrease~~decreases in ~~core online revenues.~~

~~Events.~~ ~~The decrease in events revenues is due to our decision to cease offering these services to our customers during 2017.~~brand.

~~Cost of Online Revenues~~. Cost of online revenues remained relatively flat in the third quarter of 2017 compared with the same period the prior year, with a slight increase in employee-related costs offset by decreases to certain marketing and product-related costs.

~~Cost of Events Revenues.~~ The decrease in cost of events revenues was due to both decreases in variable direct and employee-related costs and the decrease in the number of events that we conducted as a result of phasing out our events products.

Gross Profit. Our gross profit is equal to the difference between our revenues and our cost of revenues for the period. Gross profit percentage was 75% for the ~~third quarter of 2017~~three months ended 2020 and ~~70%~~77% for the ~~third quarter~~three months of ~~2016. Online gross~~June 30, 2019. Gross profit ~~increased~~decreased by ~~$3.7~~$0.3 million in the ~~third quarter of 2017, as~~three months ended June 30, 2020 compared to the same period in ~~2016,~~2019, primarily attributable to the ~~increase in online revenues~~product mix as compared to the same period a year ago. ~~Online gross profit percentage increased to 75% in the third quarter of 2017 from 72% in the third quarter of 2016.~~ Because the majority of our costs are labor-related, we expect our gross profit to fluctuate from period to period depending on the total revenues for the period. ~~We expect the phase out of our events products to have a positive impact on our gross profit and gross profit percentage going forward.~~

	Three Months Ended September 30,
	2017			2016			Increase (Decrease)			Percent Change			Three Months Ended June 30,
	($ in thousands)												2020			2019			Increase (Decrease)			Percent Change
Operating expenses:
Selling and marketing	$	11,568		$	11,243		$	325			3	%	$	12,570		$	13,976		$	(1,406	)		-10	%
Product development		2,209			2,074			135			7			1,846			2,001			(155	)		-8	%
General and administrative		3,288			3,138			150			5			3,267			3,123			144			5	%
Depreciation		1,065			951			114			12
Amortization of intangible assets		44			183			(139	)		(76	)
Depreciation and amortization														1,453			1,146			307			27	%
Total operating expenses	$	18,174		$	17,589		$	585			3	%	$	19,136		$	20,246		$	(1,110	)		-5	%
Interest and other expense, net	$	(190	)	$	(471	)	$	281			(60	)%	$	(10	)	$	(253	)	$	243			96	%
Provision for income taxes	$	623		$	100		$	523			523	%	$	2,092		$	1,684		$	408			24	%

Selling and Marketing. Selling and marketing expenses ~~increased for~~ ~~the three months ended September 30, 2017, as compared to the three months ended September 30, 2016, primarily due to an increase in variable compensation-related expenses.~~

~~Product Development.~~ ~~Product development expense increased slightly~~decreased for the three months ended ~~September~~June 30, ~~2017, compared with the same period the prior year, due to a reduction in the amount of development costs that were capitalized year over year~~2020, as ~~some resources were allocated to non-capitalized projects.~~

~~General and Administrative. General and administrative expense increased slightly for the three months ended September 30, 2017,~~ compared to the same period in ~~2016~~2019, primarily due to decreases in stock-based compensation expense (accounting for 60% of the overall decrease) and contracted services as well as a reduction of travel and entertainment expenses related to COVID-19 circumstances.

Product Development. Product development expense decreased for the three months ended June 30, 2020, as compared to the same period in 2019, mainly due to an increase in ~~stock-based compensation expense~~labor and ~~corporate taxes, partially~~related costs capitalized offset, in part, by ~~a decrease~~increases in ~~bad debt expense.~~contracted services.

~~Depreciation~~General and ~~Amortization~~Administrative. ~~Depreciation~~General and administrative expense increased for the three months ended ~~September~~June 30, ~~2017 when~~2020, compared to the same period in ~~2016,~~2019, due to ~~additions~~an increase in stock compensation expenses offset in part by decreases in other labor costs.

Depreciation and Amortization. Depreciation and amortization expense increased due to ~~property and equipment. The decrease in amortization of~~newly acquired intangible assets ~~expense was attributable to~~with high value, which were placed in service during 2020 and amortized during the ~~timing with which amortization expense for certain~~three months ended June 30, 2020 Those intangible assets ~~is recorded.~~

~~Interest and Other Expense, Net. Interest and other expense, net~~were not in service during the ~~third quarter of 2017 was $0.2 million, compared to $0.5 million in the third quarter of 2016, primarily due to fluctuations in currency exchange rates.~~

~~Provision for Income Taxes.~~ ~~Our effective tax rate was 23.1% and 128.2% for the~~ ~~three months~~ ended September 30, 2017 and 2016, respectively. We have permanent differences that increase our tax expense on income or reduce our tax benefit on loss. The lower rate in the third quarter of 2017, as compared to same period in 2016, was primarily due to the impact of excess deductions from stock-based compensation in the third quarter of 2017, as well as to a high rate in the third quarter of 2016 due to discrete items recognized in a quarter with relatively low net income. The effective tax rate differs from the statutory rate primarily due to these permanent differences in non-deductible expenses, state income taxes, and foreign income taxes.2019.

Comparison of ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~June 30, 2019

~~Online.~~ The increase in ~~online~~ revenues ~~is primarily attributable~~was due to ~~an increase of $13.0 million~~customers increasing their spending for data driven marketing products. Priority Engine™ revenues were up 6% in ~~revenues from our IT Deal Alert product offerings, partially~~the six months ended June 30, 2020. Increases in lead generation, driven by the customers movement to shorter term contracts, were offset by ~~a decrease~~decreases in ~~core online revenues.~~

~~Events.~~ The decrease in events revenues is due to our decision to cease offering these services to our customers during 2017. The events revenue in the nine months ended September 30, 2017 was from residual events which could not be canceled.brand.

~~Cost of Online Revenues~~. The increase in cost of online revenues was primarily attributable to the slightly higher relative costs associated with servicing our new product offerings as well as contracted services costs related to fulfilling certain demand generation campaigns and certain international partner campaigns, partially offset by a decrease in editorial-related costs.

Gross Profit. Our gross profit is equal to the difference between our revenues and our cost of revenues for the period. Gross profit percentage was ~~73%~~74% for the first ~~nine~~six months of ~~2017~~2020 and ~~72%~~77% for the ~~first nine~~six months ~~of 2016. Online gross~~ended June 30, 2019. Gross profit ~~increased by $1.3 million~~remained relatively flat in the ~~first nine~~six months ~~of 2017, as~~ended June 30, 2020 compared to the same period in ~~2016,~~2019, primarily attributable to a shift in the ~~increase in online revenues as~~product mix compared to the same period a year ago. ~~Online gross profit percentage was 73% for each of the first nine months~~

~~of 2017 and 2016.~~ Because the majority of our costs are labor-related, we expect our gross profit to fluctuate from period to period depending on the total revenues for the period. ~~We expect the phase out of our events products to have a positive impact on our gross profit and gross profit percentage going forward.~~

	Nine Months Ended September 30,
	2017			2016			Increase (Decrease)			Percent Change			Six Months Ended June 30,
	($ in thousands)												2020			2019			Increase (Decrease)			Percent Change
Operating expenses:
Selling and marketing	$	33,006		$	33,331		$	(325	)		(1	)%	$	25,519		$	26,422		$	(903	)		-3	%
Product development		6,168			6,027			141			2	%		3,878			3,988			(110	)		-3	%
General and administrative		9,542			9,392			150			2			6,622			6,145			477			8	%
Depreciation		3,249			2,987			262			9
Amortization of intangible assets		126			718			(592	)		(82	)
Depreciation and amortization														2,798			2,276			522			23	%
Total operating expenses	$	52,091		$	52,455		$	(364	)		(1	)%	$	38,817		$	38,831		$	(14	)		0	%
Interest and other expense, net	$	(447	)	$	(1,037	)	$	590			(57	)%	$	(479	)	$	(390	)	$	(89	)		23	%
Provision for income taxes	$	1,337		$	1,725		$	(388	)		(22	)%	$	3,000		$	2,632		$	368			14	%

Selling and Marketing. Selling and marketing expenses decreased for the ~~nine~~six months ended ~~September~~June 30, ~~2017, as compared to the nine months ended September 30, 2016, primarily due to declines in employee-related expenses because of lower headcount.~~

~~Product Development.~~ Product development expense remained relatively flat for the nine months ended September 30, 2017, compared with the same period the prior year. Costs that were capitalized associated with internal-use software and website development remained flat year over year.

~~General and Administrative. General and administrative expense remained relatively flat for the nine months ended September 30, 2017,~~2020, as compared to the same period in ~~2016.~~2019, primarily due to decreases in stock-based compensation expenses (accounting for 39% of the overall decrease) and contracted services as well as a reduction of travel and entertainment expenses related to COVID-19.

Product Development. Product development expense decreased for the six months ended June 30, 2020, as compared to the same period in 2019, primarily due to additional amounts that were capitalized over the six months ended June 30, 2019 offset in part by increases in contracted services.

General and Administrative. General and administrative expense increased for the six months ended June 30, 2020, compared to the same period in 2019, primarily due to increases in stock compensation expense.

Depreciation and Amortization. Depreciation and amortization expense increased for the six months ended June 30, 2020 when compared to the same period in ~~2016 primarily because of additions~~2019, due to ~~property and equipment and the timing with which the depreciation expense is recorded. The decrease in amortization of intangible assets expense was attributable the timing with which the~~increased amortization expense ~~for certain intangible assets is recorded.~~

~~Interest and Other Expense, Net~~. Interest and other expense, net in the first nine months of 2017 was $0.4 million, compared to $1.0 million in the first nine months of 2016, due to fluctuations in currency exchange rates, partially offset by increased interest expense associated with the Term Loan Agreement that we entered into during the second quarter of 2016.

~~Provision for Income Taxes.~~ Our effective tax rate was 28.2% and 42.6% for the nine months ended September 30, 2017 and 2016, respectively. We have permanent differences that increase our tax expense on income or reduce our tax benefit on loss; the lower rate in the first nine months of 2017, as comparedrelated to the ~~same period in 2016, was primarily due to the impact~~Company’s acquisition during February of ~~$1.2 million of excess deductions net of shortfalls from stock-based compensation in 2017.~~2020.

The timing of our revenues is affected by seasonal factors. Our revenues are 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 revenues in relation to our expenses, many of which do not vary directly with revenues, has an impact on the cost of online revenues, selling and marketing, product development, and general and administrative expenses as a percentage of revenues in each calendar quarter during the year.

The majority of our expenses are personnel-related and ~~include~~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.

~~At September 30, 2017, our~~Our cash ~~cash equivalents,~~ and investments at June 30, 2020 totaled ~~$31.1~~$55.4 million, a ~~$6.2~~$2.1 million decrease from December 31, ~~2016.~~2019, primarily driven by the repurchase of shares of our common stock under our November 2018 Repurchase Program, the acquisition of substantially all the operating assets of Data Science Central in February 2020, investments in property and equipment, and principal payments on our term loan partially offset by cash generated from operations. We believe that our existing cash ~~cash equivalents,~~ and investments and our cash flow from operating activities will be sufficient to meet our anticipated cash needs for at least the next 12twelve months. Additionally, we have $20 million available under a new line of credit agreement entered into in July 2020. 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 ~~the~~any expansion into complementary businesses. To the extent that our cash and ~~cash equivalents,~~ investments, ~~and~~ cash flow from operating activities, and amounts available under our line of credit are insufficient to fund our future activities, we may need to raise additional funds through bank credit arrangements or public or private equity or debt financings. We also may need to raise additional funds in the event we determine in the future to effect one or more additional acquisitions of businesses.

Our cash ~~cash equivalents,~~ and investments, at ~~September~~June 30, ~~2017~~2020 were held for working capital ~~purposes and were invested primarily in money market accounts, U.S. Treasury securities, municipal bonds and government agency bonds and, to a lesser extent, corporate bonds.~~purposes. We do not enter into investments for trading or speculative purposes.

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 ~~service delivery and billing activity,~~ cash collections, ~~and~~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 revenues for the applicable period, multiplied by the number of days in the applicable period. DSO was 9767 days and 69 days at ~~September~~June 30, ~~2017~~2020 and ~~78 days at~~ December 31, ~~2016. The increase in DSO was primarily due to the timing of payments from all classes of customers. We typically see an increase in DSO from December 31 to September 30 due to the reduction of revenues and historically strong collections in the fourth quarter.~~2019, respectively.

Cash provided by operating activities primarily consists of net income adjusted for certain non-cash items including depreciation and amortization, ~~the provision~~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 ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 was ~~$9.0~~$21.8 million compared to cash provided by operating activities of ~~$13.3~~$18.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2020.

The ~~decrease~~increase in cash provided by operating activities was primarily athe result of changes in ~~operating assets~~working capital (driven mainly by a increases in amounts payable for income and ~~liabilities of $(4.0) million~~payroll taxes as compared to ~~$1.6 million~~2019) offset by decreases in ~~the first nine months of 2017 and 2016, respectively. Significant components of the changes in assets and liabilities in the first nine months of 2017 included~~ ~~a $7.4 million increase in~~amounts collected from accounts ~~receivable and a $3.2 million increase in deferred revenue.~~receivable.

Cash ~~provided by~~used in investing activities in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 was ~~$4.0~~$8.4 million and was primarily a result of ~~proceeds from sales~~the acquisition of substantially all of the operating assets of Data Science Central in February 2020 ($5.0 million) and ~~maturities of investments, partially offset by the~~ purchase of property and equipment, ~~which was made up~~ primarily offor internal-use software, and ~~website development costs and~~to a lesser extent, computer ~~equipment. Cash used in investing activities in the nine months ended September 30, 2016 was $2.0 million and was related to the purchase of property and~~ equipment ~~made up primarily of internal-use software and website development costs, computer equipment and related software, partially offset by the conversion of long-term investments into cash equivalents.~~. We capitalized internal-use software and website development costs of ~~$0.6~~$3.0 million and ~~$0.7~~$2.6 million for the ~~three~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016, respectively, and $2.2 million for each of the nine months ended September 30, 2017 and 2016.~~2019, respectively.

In the first ~~nine~~six months of ~~2017,~~June 30, 2020, we used ~~$12.3~~$15.5 million for financing activities, consisting primarily of ~~$5.2~~$14.8 million, for the purchase of treasury shares, $0.6 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. In the first six months of 2019 we used $6.2 million for financing activities, consisting primarily of $4.7 million for the purchase of treasury shares and related costs, ~~$3.8~~$0.6 million for the repayment of principal ~~under~~on the ~~Term~~ Loan Agreement, and ~~$3.8~~$0.9 million for tax withholdings related to net share settlements, partially offset by a net $0.5 million received from other financing activities. In the first nine months of 2016, we received $3.7 million from financing activities, including $50.0 million in proceeds related to a term loan entered into during the second quarter of 2016, partially offset by $45.1 million used for the purchase of treasury shares and related costs.settlements.

In ~~June 2016, we~~November 2018 the Company announced that ~~our~~the Board ~~of Directors (our “Board”)~~ had authorized a ~~$20~~$25.0 million stock repurchase program (the ~~“June 2016~~“November 2018 Repurchase Program”)~~, whereby we are~~ under which the Company is authorized to repurchase ~~our~~the Company’s common stock from time to time on the open market or in privately negotiated transactions at prices and in ~~the~~a manner that may be determined by ~~our Board.~~management. The Company repurchased 736,760 shares at an aggregate purchase price of approximately $14.8 million during the first quarter of 2020 under the November 2018 Stock Repurchase Program. No amounts were repurchased under this plan during the second quarter of 2020 and the November 2018 Repurchase Program was terminated in May 2020. During the ~~three and nine~~six months ended ~~September~~June 30, ~~2017,~~2019 we repurchased ~~300,114 and 543,328~~317,724 shares of common stock ~~respectively,~~ for an aggregate purchase price of ~~$3.1~~approximately $4.7 million ~~and $5.2 million, respectively,~~ pursuant to the ~~June 2016~~(“November 2018 Repurchase ~~Program.~~Program”). The November 2018 Repurchase Program was terminated on May 1, 2020.

On May 1, 2020, the Company’s Board of Directors approved a new two-year $25.0 million stock repurchase program (the “May 2020 Repurchase Program”). Repurchases of the Company's stock under the May 2020 Repurchase Program may be made in the open market, in privately negotiated transactions, or pursuant to one or more trading plans. The timing and amount of repurchases, if any, will be determined by the Company's management at its discretion and be based on a variety of factors such as the market price of the Company's common stock, corporate and contractual requirements, prevailing market and economic conditions and legal requirements. The May 2020 Repurchase Program may be modified, suspended or discontinued at any time. No amounts were repurchased under this program during the second quarter of 2020.

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

On May 5, 2017, our Board reauthorized the common stock repurchase program to allow us to use the remaining balance of the unused authorization under the 2016 Repurchase Program after its original expiration in June 2017. The reauthorized program allows us 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 our management. The reauthorized program has no time limit and may be suspended at any time. Additionally, we may establish, from time to time, 10b5-1 trading plans that will provide flexibility as we buy back our shares. As of September 30, 2017, we had $6.8 million remaining for purchases under the stock repurchase program.

~~On May 10, 2016, we commenced a Tender Offer to purchase up to 8.0 million shares of our common stock at a price of $7.75 per share.~~

The Tender Offer expired on June 8, 2016. In accordance with the terms of the Tender Offer, we accepted for purchase 5,237,843 shares of our common stock for a total of $40.8 million, which included approximately $0.2 million in costs directly attributable to the Tender Offer. In connection with the Tender Offer, TCV V, L.P., TCV Member Fund, L.P. (along with TCV V, L.P., referred to as the “TCV Funds”) and TCV Management 2004, L.L.C. (“TCM 2004”), each a related party, collectively tendered 3,379,249 shares of our common stock in the aggregate. Jay Hoag, a member of our Board at the time of the Tender Offer, was also a member of the general partner of the TCV Funds and a member of TCM 2004, which at the time was estimated to hold more than 5% of our voting securities. Additionally, Rogram LLC, a related party, tendered 308,713 shares in connection with the Tender Offer. Roger Marino, a member of our Board, indirectly controls shares in Rogram LLC.

On ~~May 9, 2016,~~December 24, 2018, we entered into a Loan and Security Agreement (the “Loan Agreement”) with Western Alliance Bank as the ~~Term~~lender. The Loan Agreement ~~under which we borrowed $50~~provides for a $25 million ~~in aggregate principal amount pursuant to~~term loan facility with a ~~five-year term loan~~maturity date of December 10, 2023 (the “Term Loan”).

The borrowings under the ~~Term~~ Loan Agreement are secured by a lien on substantially all of our assets, including a pledge of the stock of certain wholly-owned subsidiaries (limited, in the case of ~~our wholly-owned subsidiaries.~~

~~Borrowings under~~ the stock of certain foreign subsidiaries, to no more than 65% of the capital stock of such subsidiaries). The Term Loan ~~Agreement~~ must be repaid quarterly, with applicable interest paid monthly, in the following manner: ~~2.5%~~1.25% of the initial aggregate borrowings are due and payable each quarter for the first two loan ~~year and 5.0%~~years, 1.88% of the initial aggregate borrowings are due and payable each quarter ~~during~~for the third loan year, and 2.50% of the initial aggregate borrowings are due and payable each ~~subsequent~~quarter for the fourth and fifth loan ~~year.~~years. At maturity, all outstanding amounts, including unpaid principal and accrued and unpaid interest, under the ~~Term~~ Loan Agreement will be due and payable.

The ~~Term~~borrowings are subject to a leverage ratio, measured quarterly. The Loan Agreement also requires us to ~~maintain compliance~~make representations and warranties and to comply with certain other covenants ~~including leverage~~ and ~~fixed charge coverage ratio covenants.~~agreements that are customary in loan agreements of this type. At ~~September~~June 30, ~~2017,~~2020, we were in compliance with all covenants under the ~~Term~~ Loan Agreement.

~~At our option, the Term~~The Loan Agreement bears interest at ~~either an annual~~a floating per annum rate ~~of 1.50% plus~~equal to one and three-eighths percent (1.375%) above the ~~higher~~greater of (a) the ~~Prime Rate~~one (1) month U.S. LIBOR rate reported in ~~effect on such day~~The Wall Street Journal and (b) ~~the Federal Funds Effective Rate in effect on such day plus 0.50%, or the London Interbank Offered Rate (“LIBOR”~~two percent (2.00%) ~~plus 2.50%~~. As of September 30, 2017, the applicable interest rate was 3.74%, representing LIBOR plus the applicable margin of 2.50%. Interest expense under the Term Loan Agreement was $0.4 million and $1.0 million for the three and nine months ended September 30, 2017, respectively, which includes non-cash interest expense related to the amortization of deferred issuance costs of $28,000 and $81,000 for the three and nine months ended September 30, 2017, respectively.

~~Borrowings under the Term~~The Loan Agreement may be prepaid at our option without penalty, ~~and must be repaid upon~~provided we comply with the ~~occurrence~~notice provision of ~~certain events, including certain~~the document. The Loan Agreement also contains customary events of ~~default.~~

~~We were required~~default, subject to ~~pay a one-time upfront administration and arrangement fee on the closing date. Thereafter, a non-refundable fee will be due and payable on each anniversary of the effective date~~grace periods in certain cases, which may cause repayment of the Term Loan ~~Agreement. Total debt issuance costs paid~~to be accelerated.

On July 2, 2020, the Company and the Bank entered in ~~relation to~~a Loan and Security Modification Agreement (the “Modification Agreement”) amending the ~~Term~~ Loan Agreement ~~were approximately $0.4 million. The costs were recorded~~between the Company and the Bank. Among other things, the Modification Agreement added or amended certain definitions in the Loan Agreement, added a new asset coverage ratio financial covenant of no less than 1.0 to 1.0 tested as ~~a direct deduction from the carrying amount~~ of the ~~Term Loan~~end of each quarter, and ~~amortized as~~provided the Company with a new revolving line of credit facility of $20,000,000 (“Line of Credit”). The Line of Credit allows the Company to request non-formula advances in an aggregate principal amount not to exceed the Line of Credit and to use the proceeds of such advances until the facility matures on July 2, 2022. Advances under the Line of Credit bear interest ~~expense over~~at a floating rate equal to one-quarter percent (0.25%) above the ~~life~~Prime Rate (as published in the Money Rates section of the ~~Term Loan Agreement.~~Western Edition of The Wall Street Journal, or such other rate of interest publicly announced from time to time by Western Alliance as its Prime Rate); provided that at no time shall the interest rate on such advances be less than three and one half percent (3.50%). Additionally, the Modification Agreement includes language providing for the Company and the Bank to mutually agree upon a LIBOR replacement if LIBOR ceases to exist or is no longer available.

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 ~~$2.8~~$3.3 million and $3.4 million for the ~~nine~~six month periods ended ~~September~~June 30, ~~2017~~ 2020 and, ~~2016,~~2019 respectively. A majority of our capital expenditures in the first ~~nine~~six months of ~~2017~~2020 were for internal-use software and website development costs and, to a lesser extent, computer equipment and related software. A majority of our capital expenditures in the first six months of 2019 were for leasehold improvements and 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 ~~$2.2~~$3.0 million and $2.6 million for ~~each of~~ the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively. We are not currently party to any purchase contracts related to future capital expenditures.

On October 26, 2017, we and Hines Global REIT Riverside Center, LLC (“Hines”) entered into a Third Amendment (the “Third Amendment”) to the lease agreement for office space in Newton, Massachusetts, dated as of August 4, 2009, by and between us and MA-Riverside Project, L.L.C. (predecessor-in-interest to Hines) as amended (the “Newton Lease”). The Third Amendment extends the lease term to December 31, 2029 and preserves our option to extend the term for an additional five (5) year period subject to certain terms and conditions set forth in the Newton Lease. The Third Amendment reduces the rentable space from approximately 110,000 square feet to approximately 74,000 square feet effective January 1, 2018 and provides us with a one-time cash allowance of up to $3.3 million, which may be used by us for any purpose. Beginning on January 1, 2018, base monthly rent under the Third Amendment will be $0.3 million. The base rent will increase biennially at a rate averaging approximately 1% per year, beginning January 1, 2020. We remain responsible for certain other costs under the Third Amendment, including operating expenses and taxes.

There were no ~~further~~ 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, ~~2016.~~2019.

~~See Note 2 to our consolidated financial statements for recent accounting pronouncements that could have an effect on us.~~

~~Certain information included in this~~This Quarterly Report on Form 10-Q ~~may contain~~contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange ~~Act.~~Act of 1934. All statements, other than statements of historical facts, included or referenced in this Quarterly Report ~~on Form 10-Q~~ that address activities, events or developments which we expect will or may occur in the future are forward-looking statements, including statements regarding ~~the~~our intent, ~~belief~~beliefs or current expectations ~~of the Company~~ and ~~members~~those of our management team. ~~The words “will,” “believe,” “intend,” “expect,” “anticipate,” “project,” “estimate,” “predict” and similar expressions are also intended to~~In some cases, you can identify forward-looking ~~statements.~~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 ~~guidance on~~ our future financial results and other projections or measures of our future ~~performance; our~~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; ~~and~~ the amount and timing of the benefits expected from acquisitions, new strategies, products or services and other potential sources of additional ~~revenues. Such forward-looking statements are not guarantees~~revenue; and the behavior of ~~future performance~~our members, partners, and ~~involve risks and uncertainties.~~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,~~expectations. Such forward-looking statements are not guarantees of future performance and ~~they~~ 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 ~~marketing and~~ advertising and ITinformation technology industries; data privacy laws, rules, and regulations; and other matters included in our SEC filings, ~~with the Securities and Exchange Commission,~~ including ~~those detailed under Part I, Item 1A, “Risk Factors” of~~in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and ~~under~~ Part II, Item 1A1A. “Risk Factors” of this Quarterly Report on ~~From~~Form 10-Q. 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 ~~Qualitati~~veQualitative Disclosures ~~About~~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.

We currently have subsidiaries in the United Kingdom, Hong Kong, Australia, Singapore, Germany and France. ~~Additionally, we have a wholly foreign-owned enterprise formed under the laws of the People's Republic of China (“PRC”), and a variable interest entity in Beijing, PRC.~~ Approximately ~~25%~~30% of our revenues for the ~~three~~six months ended ~~September~~June 30, ~~2017~~2020 were 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, ~~including any impact of the United Kingdom’s decision to withdraw from the European Union,~~ 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.

At ~~September~~June 30, ~~2017,~~2020, we had cash ~~cash equivalents,~~ and investments ~~totaling $31.1~~of, $55.4 million. ~~These amounts~~The investments were ~~invested primarily~~ in ~~money market accounts and municipal bonds and, to~~ a ~~lesser extent, government agency bonds, U.S. Treasury securities, and corporate bonds.~~bond fund. The cash ~~cash equivalents,~~ and investments were held for working capital purposes. We do not enter 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 ~~of our investment portfolio~~ as a result of changes in interest rates. Declines in interest rates, however, would reduce future investment income.

Our exposure to market risk also relates to interest expense on borrowings under the ~~Term~~ Loan Agreement. ~~At our option, the~~The borrowings under the ~~Term~~ Loan Agreement bear interest at ~~either~~ an annual rate of ~~1.50%~~1.375% plus the higher of ~~(a)~~ the ~~Prime Rate~~one-month U.S. LIBOR rate reported in ~~effect on such day and (b)~~ the ~~Federal Funds Effective Rate in effect for such day plus 0.50%,~~Wall Street Journal or ~~the London Interbank Offered Rate (“LIBOR”~~two percent (2.00%) ~~plus 2.50%~~ (see Note 78 to the consolidated financial statements). At ~~September~~June 30, ~~2017,~~2020, there was ~~$35.0~~$23.1 million of aggregate principal outstanding under the ~~Term~~ Loan Agreement.

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 ~~the~~this Quarterly Report on Form 10-Q for the period ended ~~September~~June 30, ~~2017,~~2020, management, under the supervision of the Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), conducted an evaluation of our disclosure controls and procedures as of ~~September~~June 30, ~~2017.~~2020. 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.

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 ~~third~~second quarter of ~~2017~~2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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.

Our business is subject to a number of risks, including those identified in Item 1A – “Risk Factors” of our ~~2016~~ 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. As of, ~~September 30, 2017,~~ there have been no material changes to the risk factors disclosed in our ~~2016~~ Annual Report on Form 10-K except to the risks relating to ~~international privacy law changes,~~COVID-19 and EU-US Privacy Shield Framework, as amended ~~below~~.below. 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.

We were adversely impacted by the recent outbreak of the new coronavirus disease (COVID-19) and could experience additional adverse impacts that could be material to the Company’s business, operating results, financial condition and liquidity.

Our business was adversely impacted by the effects of the spread of the new coronavirus disease (COVID-19). We are witnessing the far-reaching impact that COVID-19 is having on our employees, customers, vendors, members, stockholders, and other stakeholders as well as the global economy and society at large. While we have responded proactively to address the effects of COVID-19 and to mitigate its potential impacts to our business, including through the elimination of all non-essential travel, transitioning our entire workforce to a remote work environment, and enhancing access to certain health and safety resources for our employees, beginning in March, 2020 we saw certain customers extend their normal sales cycles and budget shifts as some customers moved from long-term commitments to shorter term marketing campaigns as they began to navigate through the pandemic. To date, we have only experienced a handful of cancellations but we continue to stay close to our customers to ensure they are continuing to see ROI. New customer acquisition became harder as some potential customers were less apt to spend on new products or services.

We believe our strong financial position provides us with the flexibility to weather this period of economic uncertainty and the opportunity to respond quickly to our customers with the content and services they expect. However, the restrictive measures local, state, and federal governments (including in the other countries in which we operate) have implemented to prevent the spread of COVID-19, including restrictions on the operation of non-essential businesses, shelter in place orders, travel restrictions, quarantines, school closures, and other community response and social distancing policies and guidelines, will continue to affect the way we and our customers conduct and operate our respective businesses. We remain open and continue to provide the content and services that are important to our customers. Moreover, our dedicated employees continue to collaborate with each other and our customers and their sales and marketing teams, to deliver high quality, impactful campaigns. While we will continue to actively monitor government restrictions impacting our business and remain focused on business continuity, including reducing expenses and managing liquidity, given the fluid nature of COVID-19, the uncertainty of its duration, the potential for resurgence, and the unknown effects of potential future government actions in response to COVID-19, we cannot estimate the duration or magnitude of its impact on the global economy, our business or our financial results.

Changes in laws and standards relating to marketing, data collection and use, and the privacy of internet users could impact our ability to conduct our business and thereby decrease our marketing and advertising service ~~revenues.~~revenues while imposing significant compliance costs on the Company.

We use e-mail as a significant means of communicating with our ~~users.~~members. The laws and regulations governing the use of e-mail for marketing purposes continues to evolve, and the growth and development of the market for commerce over the internet may lead to the adoption of additional legislation and/or changes to existing laws. If new laws or regulations are adopted, or existing laws and regulations are interpreted and/or amended or modified to impose additional restrictions on our ability to send e-mail to our ~~users~~members or potential ~~users,~~members, we may not be able to communicate with them in a cost-effective manner. In addition to legal restrictions on the use of e-mail, internet service providers and others typically attempt to block the transmission of unsolicited e-mail, commonly known as “spam.” If an internet service provider or software program identifies e-mail from us as “spam,” we could be placed on a restricted list that would block our e-mail to ~~users~~members or potential ~~users~~members who maintain e-mail accounts with these

internet service providers or who use these software programs. If we are unable to communicate by e-mail with our ~~users~~members and potential ~~users~~members as a result of legislation, blockage or otherwise, our business, operating results and financial condition could be harmed.

We collect information from ~~our users~~those who visit or register as members on our websites, co-branded sites, or for services, respond to surveys or, in some cases, view our content. Subject to each ~~user’s~~member’s permission (or right to decline, which we refer to as an “opt-out”, a practice that may differ across our various websites, depending on the applicable needs and requirements of different countries’ laws), we may use this information to inform our ~~users~~members of services that they have indicated may be of interest to them. We may also share this information with our customers for ~~users~~members who have elected to receive additional promotional materials and have expressly or implicitly granted us permission to share their information with third parties. We also collect information on our ~~users~~members based on their activity on our sites. The U.S. federal government and certain states have adopted or proposed limitations on the collection, distribution and use of personal information of internet users.

Although, to date, our efforts to comply with applicable federal and state laws and regulations have not hurt our business, additional, more burdensome laws or regulations, including more restrictive consumer privacy and data security laws, could be enacted or applied to us or our customers. Such laws or regulations could impair our ability to collect ~~user~~member information that helps us to provide more targeted content to our ~~users~~website visitors and members and detailed lead data to our customers, thereby impairing our ability to maintain and grow our audience and maximize revenue from our customers. Additionally, the ~~Federal Trade Commission~~FTC and many state attorneys general are applying federal and state consumer protection laws to require that the online collection, use and dissemination of data, and the presentation of website content, comply with certain standards for notice, choice, security and access. Courts may also adopt these developing standards. In many cases, the specific limitations imposed by these standards are subject to interpretation by courts and other governmental authorities. A few states have also introduced legislation that, if enacted, would restrict or prohibit behavioral marketing and advertising within the state. In the absence of a federal law pre-empting their enforcement, such state legislation would likely have the practical effect of regulating behavioral marketing and advertising nationwide because of the difficulties behind implementing state-specific policies or ~~identifying the location of a particular user.~~sending targeted advertising to individuals based on their perceived commercial interests. In the event of additional legislation in this area, our ability to effectively target our ~~users~~website visitors and members may be limited. We believe that we are in compliance with applicable consumer protection laws, but a determination by a state or federal agency or court that any of our practices do not meet these laws and regulations could create liability to us, result in adverse publicity and affect negatively our businesses. New interpretations of these standards could also require us to incur additional costs and restrict our business operations.

~~In addition, the European Union (“E.U.”)~~The EU and its member states, California and Canada have regulations dealing with the collection and use of personal information obtained from their citizens. Regulations in these jurisdictions have focused on the collection, processing, transfer, use, disclosure and security of information that may be used to identify or that actually identifies an individual, such as ana name, e-mail address

or online identifier (such as an IP address in certain cases). These laws also provide consumers the right to access the information a ~~name. Further, within~~company has collected on them, correct it, request that it be deleted, or to stop the ~~E.U., certain member state data protection authorities regard IP addresses as personal~~sale of such information ~~and legislation in the E.U. requires informed consent for the placement of a cookie on a user device.~~to third parties.

The General Data Protection Regulation (“GDPR”) ~~was approved by the E.U. Parliament on April 14, 2016 and will become~~became effective onin May ~~25, 2018. The GDPR replaces the Data Protection Directive 95/46/EC~~2018 and was designed to, among other things, harmonize disparate data privacy laws found across Europe. GDPR implemented more rigorous principles relating to the data privacy and data protection, including, among other things, enhanced disclosure requirements regarding how personal information is obtained, used, and shared, limitations on the purpose and storage of personal information, mandatory data breach notification requirements and enhanced standards for data controllers to demonstrate that they have obtained valid consent for certain data processing activities. Its application and scope are extensive and penalties for non-compliance are significant, including fines of up to 20 million Euros or 4% of total worldwide revenue. ~~Additionally, on January 10, 2017,~~In the ~~E.U. Commission~~event the Company is deemed not in compliance with GDPR, or fails to maintain compliance, then the Company would be exposed to material damages, costs and/or fines if an EU regulator or EU resident commenced an action. Failure to comply or maintain compliance could cause considerable harm to us and our reputation (including requiring notification to customers, regulators, and/or members), cause a loss of confidence in our services, and deter current and potential customers from using our services.

Further, the presidency of the council of the EU released a revised draft of the pending Proposal for Regulation on Privacy and Electronic Communications (“ePrivacy Regulation”) which will replace the ePrivacy Directive and is intended to align with the overall ~~E.U.~~EU data privacy and protection framework, including GDPR. The ePrivacy Regulation was defeated by the ~~GDPR. Compliance with~~council of the ~~GDPR and the final~~EU, but it is expected to be proposed again. The ePrivacy Regulation could disrupt the Company’s ability to use or transfer data or to market and sell its products and services, which could have a material adverse effect on our business, financial condition, and operating results.

Our customers may implement compliance measures that do not align with our services, which could limit the scope and delivery of services we are able to provide. Our customers may also require us to ~~add new resources~~take on additional privacy and security obligations,

causing us to incur potential disruption and expense related to our business processes. If our policies and practices, or ~~change~~those of our ~~current~~customers, are, or ~~future services which may adversely affect~~are perceived to be, insufficient or if our ~~revenues. Law makers~~members, website visitors or customers have concerns regarding our data privacy and data protection practices, particularly with respect to GDPR or the pending ePrivacy Regulation, then we could be subject to enforcement actions or investigations by regulators ~~are expected to release additional guidance on~~or lawsuits by private parties, member engagement could decline and our business could be negatively impacted.

For certain data transfers and processing activities between the ~~implementation of~~EU and the ~~GDPR over the months leading up to and following its effective date, which may further impact our compliance efforts.~~

U.S., many companies ~~have, since 2000,~~previously relied on the Department of Commerce Safe Harbor Principles (“Safe Harbor”) and self-certification process in order to lawfully transfer and process the personal data of people in the ~~E.U.~~EU to the U.S. in a manner that the ~~E.U., until recently,~~EU deemed adequate to protect the security of such information. On October 6, 2015, the ~~European~~ Court of Justice of the European Union (“CJEU”) declared that Safe Harbor was no longer valid. U.S. and ~~E.U.~~EU lawmakers in February 2016 announced a replacement for Safe Harbor, called the ~~E.U.-U.S.~~EU-U.S. Privacy Shield Framework ~~Principles~~ (“the EU Privacy Shield”). On July 12, 2016, the European Commission deemed the EU-US Privacy Shield adequate to enable data transfers of personal data from the ~~E.U.~~EU to the U.S. ~~On September 23, 2016, we completed~~Similarly, a Swiss-U.S. Privacy Shield (the “Swiss Privacy Shield”) was announced in January 2017, replacing the ~~initial documentation and process requirements and~~former Swiss-U.S. Safe Harbor, enabling data transfers of personal data from Switzerland to the U.S. The Company self-certified to the EU Privacy Shield and Swiss Privacy Shield most recently on March 6, 2020. On July 16, 2020, the CJEU invalidated the EU Privacy Shield. ~~We received final confirmation from~~The CJEU upheld the ~~FTC regarding certification and compliance with the Privacy Shield requirements on February 10, 2017. On January 25, 2017, President Trump~~adequacy of EU Standard Contractual Clauses (“SCCs”) issued an executive order directing U.S. government agencies to ensure that their privacy policies exclude persons who are not U.S. citizens or lawful permanent residents from the protections of the U.S. Privacy Act of 1974 regarding personally identifiable information. Despite initial concerns regarding impacts to the Privacy Shield,by the European Commission ~~subsequently reported that~~for the ~~executive order did not threaten the viability~~transfer of personal data to data processors established outside of the EU, however, the court made clear that reliance on SCCs alone may not necessarily be sufficient in all circumstances and that their use must be assessed on a case-by-case basis taking into account the surveillance laws and right of individuals in the destination country. The CJEU’s decision takes effect immediately. The CJEU decision does not impact the Swiss Privacy Shield. The Company uses several mechanisms to transfer personal data from the EU to the U.S. (including having previously relied on the EU Privacy Shield) and are evaluating what additional mechanisms may be required to establish adequate safeguards for the further transfer of personal data. If supervisory authorities issue guidance on transfer mechanisms, including circumstances where the SCCs cannot be used and/or start taking enforcement action, we could suffer additional costs, complaints, and/or regulatory investigations or fines. Moreover, if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services and could adversely affect our financial results.

In order to continue receiving personal data from the United Kingdom in reliance on the EU Privacy Shield following Brexit, the Company may be required to meet standards for cross-border transfer imposed by the UK itself.

Our digital properties collect and use data about our website visitors’ and members’ online behavior, and the revenue associated with this activity could be impacted by government regulation and enforcement, industry trends, self-regulation, technology changes, consumer behavior and attitude, and private action. We ~~will continue~~also use such information to ~~monitor potential~~call website visitors and members who have provided their telephone numbers to be enrolled as a member (for free). Our partners may then follow-up to try to sell products or services to such individuals.

We also work with our partners to deliver targeted advertisements based on members and website visitors’ perceived commercial interests. Many of our users voluntarily provide us with contact and other information when they visit our websites. We may utlize data from third-party sources to augment our user profiles and marketing databases so we are better able to personalize content, enhance our analytical capabilities, better target our marketing programs, and better qualify leads for our partners. If changes in ~~legal~~user sentiment regarding the sharing of information results in a significant number of visitors to our websites refusing to provide us with contact and other information, our ability to personalize content for our users and provide targeted marketing solutions for our partners would be impaired. If our users choose to opt-out of having their data used for behavioral targeting, it would be more difficult for us to offer targeted marketing programs for our partners. If we are unable to acquire data from third-party sources for whatever reason, or if there is a marked increase in the cost of obtaining such data, our ability to personalize content and provide marketing solutions could be negatively impacted.

The use of such consumer data by online service providers and advertising networks is a topic of active interest among federal, state, and international regulatory bodies, as well as self-regulatory organizations, and the regulatory environment is unsettled. Federal, state, and international laws and regulations govern the collection, use, retention, disclosure, sharing and security of data that we receive from and about our website visitors and members through cookies and other similar technologies. Our privacy policies and practices concerning the collection, use, and disclosure of user data are posted on our websites.

There are new and expanding proposals for laws and regulations regarding “Do Not Track” requirements ~~of privacy laws, particularly with respect~~that protect users’ right to ~~impacts~~choose whether or not to ~~the Privacy Shield.~~

~~U.S. and European lawmakers and regulators~~be tracked online. These proposals seek, among other things, to allow consumers to have ~~recently expressed concern~~greater control over the use of ~~third-party cookies~~private information collected online, to forbid the collection or ~~web beacons for the purpose~~use of online ~~behavioral marketing and advertising, and efforts~~information, to address these uses may result in broader requirements that would apply to our research activities, including our efforts to understand our users’ internet usage. Such actions may have a chilling effect on businesses like ours that collect or use online usage information generally, or may substantially increase the cost of maintainingdemand a business ~~that collects or uses online usage information, increase regulatory scrutiny and increase the potential of class action lawsuits. In response~~ to marketplace concerns about the usage of third-party cookies and web beacons to track user behaviors, the major browser applications have enabled features that allow the user to limit the collection of certain data. These developments could impair our ability to collect user information that helps us provide more targeted marketing content to our users. In addition, several browser applications, including Microsoft Internet Explorer, Mozilla Firefox, Google Chrome and Apple Safari, contain tracking protection features and options that allow userscomply with their choice to opt out of ~~ad-tracking cookies~~such collection or use, and to place limits upon the disclosure of information to third party websites. Any such laws and regulations could have a significant impact on the operation of our advertising and data businesses. U.S. regulatory agencies have also placed an increased focus on online privacy matters and, in particular, on online advertising activities

that utilize cookies or other tracking tools. Consumer and industry groups have expressed concerns about online data collection and use by companies, which has resulted in the release of various industry self-regulatory codes of conduct and best practice guidelines that are binding for member companies engaged in online behavioral advertising (“OBA”) and similar activities. These codes of conduct and best practice guidelines govern, among other things, the ways in which companies can collect, use and disclose user information for OBA purposes, how companies must give notice of these practices, and what choices companies must provide to consumers regarding these practices.

We may be required or otherwise choose to adopt Do Not Track mechanisms, and we may be required to abide by certain ~~cases block~~self-regulatory principles promulgated by the Digital Advertising Alliance and others for OBA and similar activities, in which case our ability to use our existing tracking technologies, to collect and sell user behavioral ~~tracking from specified websites. In the event users implement these tracking protection features~~data, and ~~options, they have the potential~~permit their use by other third parties could be impaired. This could cause our net revenues to decline and adversely affect our ~~business negatively.~~operating results.

We believe that we are in material compliance with all laws, regulations and ~~regulations~~self-regulatory regimes that are applicable to us. AsHowever, as referenced above, these laws, regulations, and ~~laws~~self-regulatory regimes may be modified, and new laws may be enacted in the future that may apply to us and affect our business. Further, data protection authorities may interpret existing laws in new ways. We may deploy new products and services from time to time, which may also require us to change our compliance practices. Any such developments (or developments stemming from enactment or modification of other laws) or the failure to anticipate accurately the application or interpretation of these laws could create liability tofor us, result in adverse publicity, increase our future compliance costs, make our products and services less attractive to our members and customers, or cause us to change or limit our business practices, and materially affect our business and ~~results of operations.~~operating results. Further, any failure on our part to comply with any relevant laws or regulations may subject us to significant civil, criminal or contractual liabilities.

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

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.

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)~~Zip Code)

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

Item		Page

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	3
	Consolidated BalanceSheets as of ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019	3
	Consolidated Statements of ~~Operations~~Income and Comprehensive Income for the ~~Three~~three and six months ended June 30, 2020 and ~~Nine Months Ended September 30, 2017 and 2016~~ 2019	4
	Consolidated Statements of ~~Cash Flows~~Stockholders’ Equity for the ~~Nine Months Ended September~~three and six months ended June 30, ~~2017~~2020 and ~~2016~~ 2019	5
	Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019	7
	Notes to Consolidated Financial Statements	68
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1822
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3236
Item 4.	Controls and Procedures	3236

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	3337
Item 1A.	Risk Factors	3337
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3441
Item 6.	Exhibits	3542
	Signatures	3643

	Contract Liabilities
Year-to-Date Activity
Balance at December 31, 2019	$	4,335
Deferral of revenue		2,178
Recognition of previously unearned revenue		(1,965	)
Balance at March 31, 2020	$	4,548
Deferral of revenue		1,822
Recognition of previously unearned revenue		(1,319	)
Balance at June 30, 2020	$	5,051

Cost of online revenues	$	13	$	36	$	38	$	90
Cost of revenues									$	71	$	41	$	140	$	80
Selling and marketing		1,284		1,260		3,161		3,103		2,118		2,964		4,307		4,655
Product development		18		45		92		124		125		93		321		186
General and administrative		811		703		2,018		1,753		979		664		1,953		1,303

			Fair Value Measurements at Reporting Date Using
	December 31, 2016		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds(1)	$	4,301	$	4,301	$	—	$	—
Short-term investments(2)		10,988		—		10,988		—
Long-term investments(2)		7,801		—		7,801		—
Total assets	$	23,090	$	4,301	$	18,789	$	—

			Fair Value Measurements at December 31, 2019
	December 31, 2019		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)	$	5,012	$	—	$	5,012	$	—
Total assets	$	5,012	$	—	$	5,012	$	—

	September 30, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Short-term and long-term investments:
U.S. Treasury securities	$	1,998	$	—	$	(3	)	$	1,995
Government agency bonds		2,005		—		(2	)		2,003
Municipal bonds		5,815		—		(8	)		5,807
Corporate bonds		2,003		—		(2	)		2,001
Total short-term and long-term investments	$	11,821	$	—	$	(15	)	$	11,806

			September 30, 2017									June 30, 2020
	Estimated Useful Lives (Years)		Gross Carrying Amount		Accumulated Amortization			Net		Estimated Useful Lives (Years)		Gross Carrying Amount		Accumulated Amortization		Net
Customer, affiliate and advertiser relationships	5		$	6,918	$	(6,909	)	$	9	5-17		$	8,684	$	6,326	$	2,358
Developed websites, technology and patents		10		1,323		(878	)		445		10		2,005		1,079		926
Trademark, trade name and domain name	8			1,797		(1,718	)		79	5-8			1,798		1,753		45
Proprietary user information database and internet traffic		5		1,195		(1,186	)		9		5		1,094		1,094		—
Non-Compete agreement											3		170		28		142
Total intangible assets			$	11,233	$	(10,691	)	$	542			$	13,751	$	10,280	$	3,471

Years Ending December 31:	Amortization Expense		Amortization Expense
2017 (October 1 – December 31)	$	43
2018		109
2019		92
2020		78
2020 (July 1 – December 31)			$	223
2021		94		463
2022				492
2023				329
2024				319
Thereafter		126		1,645
Total	$	542	$	3,471

Years Ending December 31:	Minimum Lease Payments
2017 (October 1 – December 31)	$	1,203
2018		4,218
2019		4,107
2020		3,630
2021		3,734
Thereafter		28,004
Total	$	44,896

	Minimum Lease
Years Ending December 31:	Payments
2020 (June 30 – December 31)	$	2,063
2021		4,132
2022		3,778
2023		3,696
2024		3,725
Thereafter		17,760
Total future minimum lease payments	$	35,154
Less imputed interest		5,540
Total operating lease liabilities	$	29,614

Included in the Consolidated Balance Sheet:
Current operating lease liabilities	$	2,769
Non-current operating lease liabilities		26,845
Total operating lease liabilities	$	29,614

	Three Months Ended				Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Operating lease expense	$	946	$	975	$	1,893	$	1,950
Short-term lease expense		26		21		54		42
Total lease expense	$	972	$	996	$	1,947	$	1,992

	As of
	June 30, 2020
Weighted-average remaining lease term — operating leases		5.1
Weighted-average discount rate — operating leases		4	%

Year-to-Date Activity	Shares			Weighted- Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value		Shares			Weighted- Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value
Nonvested outstanding at December 31, 2016		1,640,790		$	8.54
Nonvested outstanding at December 31, 2019									1,301,130		$	21.82
Granted		618,826			9.57				95,688		$	21.10
Vested		(759,866	)		8.20				(103,688	)	$	21.12
Forfeited		(35,500	)		9.93				(12,000	)	$	25.21
Nonvested outstanding at September 30, 2017		1,464,250		$	9.12	$	17,483
Nonvested outstanding at June 30, 2020									1,281,130		$	21.79	$	38,472

	Three Months Ended September 30,				Nine Months Ended September 30,				For the Three Months Ended 2020				For the Six Months Ended June 30,
	2017		2016		2017		2016		2020		2019		2020		2019
United States	$	20,971	$	19,298	$	56,955	$	59,715	$	24,197	$	25,813	$	46,634	$	48,063
United Kingdom	$	2,922	$	2,116	$	8,563	$	7,515		4,531		3,324		8,323		6,433
Other international		4,119		4,336		12,735		12,725		6,068		5,149		11,255		9,762
Total	$	28,012	$	25,750	$	78,253	$	79,955	$	34,796	$	34,286	$	66,212	$	64,258


Cash and investments:	$55.4 million
Current portion debt:	$1.6 million
Long-term portion debt:	$21.5 million

	Three Months Ended September 30,				2017 vs. 2016			Nine Months Ended September 30,				2017 vs. 2016
	2017		2016		change			2017		2016		change
	($ in thousands)							($ in thousands)
Total Online	$	28,012	$	24,247		16	%	$	78,085	$	76,242		2	%
Total Online by Geographic Area:
North America:
North America IT Deal Alert		9,953		5,895		69	%		26,563		18,629		43	%
North America Core Online		9,374		10,644		(12	)%		26,444		33,683		(21	)%
Total North America Online		19,327		16,539		17	%		53,007		52,312		1	%
International:
International IT Deal Alert		3,451		1,381		150	%		8,869		3,850		130	%
International Core Online		5,234		6,327		(17	)%		16,209		20,080		(19	)%
Total International Online		8,685		7,708		13	%		25,078		23,930		5	%
Total Online by Product:
IT Deal Alert:
North America IT Deal Alert		9,953		5,895		69	%		26,563		18,629		43	%
International IT Deal Alert		3,451		1,381		150	%		8,869		3,850		130	%
Total IT Deal Alert		13,404		7,276		84	%		35,432		22,479		58	%
Core Online:
North America Core Online		9,374		10,644		(12	)%		26,444		33,683		(21	)%
International Core Online		5,234		6,327		(17	)%		16,209		20,080		(19	)%
Total Core Online		14,608		16,971		(14	)%		42,653		53,763		(21	)%
Total Events	$	—	$	1,503		(100	)%	$	168	$	3,713		(95	)%
Total Revenues	$	28,012	$	25,750		9	%	$	78,253	$	79,955		(2	)%

Period	Total Number of Shares Purchased(1)		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2017 – July 31, 2017		6,541	$	9.72		6,541	$	9,827,895
August 1, 2017 – August 31, 2017		118,035	$	9.69		118,035	$	8,684,703
September 1, 2017 – September 30, 2017		175,538	$	10.62		175,538	$	6,820,071
Total		300,114	$	10.23		300,114	$	6,820,071

Exhibit No.		Description of Exhibit

~~31.1~~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~~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~~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)

	TECHTARGET, INC.
	(Registrant)

Date: ~~November 8, 2017~~August 5, 2020	By:	/s/ MICHAEL COTOIA
		Michael Cotoia, Chief Executive Officer and Director (Principal Executive Officer)

Date: ~~November 8, 2017~~August 5, 2020	By:	/s/ DANIEL NORECK
		Daniel Noreck, Chief Financial Officer and Treasurer (Principal Accounting and Financial Officer)

Large accelerated filer

Accelerated filer

Non-accelerated filer

☐ ~~(Do not check if a small reporting company)~~

Smaller reporting company

Emerging growth company