TechTarget, Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures about Market Risk Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Informa TechTarget's market risk exposure is primarily a result of fluctuations in foreign exchange rates and interest rates. The Company does not hold or issue financial instruments for trading purposes. Foreign currency exchange risk The Company currently has subsidiaries in the United Kingdom, Hong Kong, China, Australia, Singapore, Germany and France. Approximately 24% and 25% of the Company's revenues for the three and six months ended June 30, 2026, respectively, were derived from customers with billing addresses outside of the United States and our foreign exchange losses were not significant. Additionally, the Company is exposed to foreign exchange risk related to operational expenses incurred, primarily labor costs, most predominantly between the British pound and the United States dollar. Changes in the exchange rate between the British pound and the US dollar can impact the Company's financial results when these foreign currency transactions are converted to US dollars. The Company continues 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. The Company's continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on future results of operations. The Company also maintains receivables and cash accounts denominated In addition, the Company's foreign subsidiaries have certain amounts of Goodwill and Intangibles which expose it to foreign currency exchange rate fluctuations. These exchange rate fluctuations are included as a component of other comprehensive (loss) income. Interest rate risk At June 30, 2026, the Company had cash and cash equivalents totaling $45.8 million. The cash and cash equivalents were held for working capital purposes. Due to the short-term nature of these investments, the Company believes that it does not have any material exposure to changes in the fair value of its investment portfolio as a result of changes in interest rates. Declines in interest rates, however, would reduce future investment income. The Company is exposed to market risk for changes in interest rates related to the Credit Facility, which provides for borrowing up to $250.0 million. Interest on the Credit Facility is calculated by reference to the SOFR, plus 2.5% per annum. Assuming that the amounts available under the Credit Facility were fully drawn, a 1% increase in interest rates would result in an increase in annual interest expense and a decrease in cash flows of $2.5 million per year. Inflation Although the Company cannot accurately anticipate the future effect of inflation on our financial condition or results of operations, inflation historically has not had a material impact on the Company's operations. If the Company's costs were to become subject to significant inflationary pressures, it may not be able to fully offset such higher costs through price increases for services. The Company's inability to do so could harm its business, financial condition or results of operations. 38 Table of Contents