Forrester Research Reports 2024 Third-Quarter Financial Results
“We continue to make strong progress with our product migration, and we are on track to exceed our target of 80% of CV on the Forrester Decisions platform by year-end. CV metrics are stable, and we are maintaining our revenue, margin, and EPS guidance for the year,” said CEO and Chairman
Third-Quarter Consolidated Results
Total revenues for the third quarter of 2024 were
On a GAAP basis, net loss was
On an adjusted basis, net income was
Forrester is providing guidance for 2024 as follows:
Full-Year 2024 (GAAP):
-
Total revenues of approximately
$425 million to$435 million - Operating margin of approximately 0.5% to 1.5%
-
Interest expense of approximately
$3.0 million - An effective tax rate of approximately 135% to 270%
-
Loss per share of approximately
$0.24 to$0.04
Full-Year 2024 (Adjusted):
Adjusted financial guidance for full-year 2024 excludes stock-based compensation expense of
- Adjusted operating margin of approximately 8.5% to 9.5%
- Adjusted effective tax rate of approximately 29%
-
Adjusted diluted earnings per share of approximately
$1.37 to$1.57
About Forrester
Forrester (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We help leaders across technology, customer experience, digital, marketing, sales, and product functions use customer obsession to accelerate growth. Through Forrester’s proprietary research, consulting, and events, leaders from around the globe are empowered to be bold at work — to navigate change and put their customers at the center of their leadership, strategy, and operations. Our unique insights are grounded in annual surveys of more than 700,000 consumers, business leaders, and technology leaders worldwide; rigorous and objective research methodologies, including Forrester Wave™ evaluations; and the shared wisdom of our clients. To learn more, visit Forrester.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, Forrester’s financial guidance for the full-year 2024 and statements about the performance of Forrester Decisions and Forrester’s future financial performance and financial condition. These statements are based on Forrester’s current plans and expectations and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual future activities and results to differ include, among others, Forrester’s ability to retain and enrich memberships for its research products and services, including the migration of its existing clients into its Forrester Decisions portfolio of services; Forrester’s ability to fulfill existing or generate new consulting engagements and advisory services; technology spending; the risks and challenges inherent in international business activities; the use of generative AI in Forrester’s business and by Forrester’s clients and competitors; Forrester’s ability to offer new products and services; Forrester’s dependence on key personnel; Forrester’s ability to attract and retain professional staff; Forrester’s ability to respond to business and economic conditions and market trends; the impact of Forrester’s outstanding debt obligations; competition and industry consolidation; possible variations in Forrester’s quarterly operating results; concentration of ownership of Forrester; the possibility of network disruptions and security breaches; any failure to enforce and protect Forrester’s intellectual property rights; compliance with privacy laws; taxation risks; any weakness in Forrester’s system of internal controls; and the amount and timing of the repurchase of Forrester stock. Forrester undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information, please refer to Forrester’s reports and filings with the
The consolidated statements of operations and the table of key financial data are attached.
© 2024,
|
|
||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||
| (Unaudited, in thousands, except per share data) | ||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
|
|
|
|||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||||
| Revenues: | ||||||||||||||||
| Research |
$ |
77,070 |
|
$ |
80,606 |
|
$ |
237,314 |
|
$ |
249,211 |
|
||||
| Consulting |
|
23,369 |
|
|
28,237 |
|
|
71,321 |
|
|
89,957 |
|
||||
| Events |
|
2,088 |
|
|
4,588 |
|
|
15,794 |
|
|
23,522 |
|
||||
| Total revenues |
|
102,527 |
|
|
113,431 |
|
|
324,429 |
|
|
362,690 |
|
||||
| Operating expenses: | ||||||||||||||||
| Cost of services and fulfillment |
|
42,174 |
|
|
47,978 |
|
|
138,028 |
|
|
151,884 |
|
||||
| Selling and marketing |
|
38,273 |
|
|
39,967 |
|
|
117,948 |
|
|
123,080 |
|
||||
| General and administrative |
|
15,738 |
|
|
15,108 |
|
|
44,234 |
|
|
51,650 |
|
||||
| Depreciation |
|
1,957 |
|
|
2,262 |
|
|
6,079 |
|
|
6,557 |
|
||||
| Amortization of intangible assets |
|
2,404 |
|
|
3,041 |
|
|
7,431 |
|
|
9,175 |
|
||||
| Restructuring costs |
|
937 |
|
|
19 |
|
|
7,643 |
|
|
12,140 |
|
||||
| Loss from sale of divested operation |
|
1,775 |
|
|
— |
|
|
1,775 |
|
|
— |
|
||||
| Total operating expenses |
|
103,258 |
|
|
108,375 |
|
|
323,138 |
|
|
354,486 |
|
||||
| Income (loss) from operations |
|
(731 |
) |
|
5,056 |
|
|
1,291 |
|
|
8,204 |
|
||||
| Interest expense |
|
(770 |
) |
|
(763 |
) |
|
(2,295 |
) |
|
(2,286 |
) |
||||
| Other income, net |
|
427 |
|
|
568 |
|
|
2,716 |
|
|
1,632 |
|
||||
| Income (loss) before income taxes |
|
(1,074 |
) |
|
4,861 |
|
|
1,712 |
|
|
7,550 |
|
||||
| Income tax expense |
|
4,724 |
|
|
2,377 |
|
|
7,891 |
|
|
3,837 |
|
||||
| Net income (loss) |
$ |
(5,798 |
) |
$ |
2,484 |
|
$ |
(6,179 |
) |
$ |
3,713 |
|
||||
| Basic income (loss) per common share |
$ |
(0.30 |
) |
$ |
0.13 |
|
$ |
(0.32 |
) |
$ |
0.19 |
|
||||
| Diluted income (loss) per common share |
$ |
(0.30 |
) |
$ |
0.13 |
|
$ |
(0.32 |
) |
$ |
0.19 |
|
||||
| Basic weighted average shares outstanding |
|
19,065 |
|
|
19,191 |
|
|
19,147 |
|
|
19,164 |
|
||||
| Diluted weighted average shares outstanding |
|
19,065 |
|
|
19,289 |
|
|
19,147 |
|
|
19,239 |
|
||||
| Adjusted data (1): | ||||||||||||||||
| Income (loss) from operations - GAAP |
$ |
(731 |
) |
$ |
5,056 |
|
$ |
1,291 |
|
$ |
8,204 |
|
||||
| Amortization of intangible assets |
|
2,404 |
|
|
3,041 |
|
|
7,431 |
|
|
9,175 |
|
||||
| Restructuring costs |
|
937 |
|
|
19 |
|
|
7,643 |
|
|
12,140 |
|
||||
| Loss from sale of divested operation and transaction costs |
|
1,994 |
|
|
— |
|
|
1,994 |
|
|
— |
|
||||
| Legal settlement |
|
— |
|
|
— |
|
|
— |
|
|
4,800 |
|
||||
| Stock-based compensation included in the | ||||||||||||||||
| following expense categories: | ||||||||||||||||
| Cost of services and fulfillment |
|
2,142 |
|
|
2,449 |
|
|
6,777 |
|
|
6,505 |
|
||||
| Selling and marketing |
|
528 |
|
|
790 |
|
|
1,685 |
|
|
2,094 |
|
||||
| General and administrative |
|
933 |
|
|
905 |
|
|
2,740 |
|
|
2,570 |
|
||||
| Adjusted income from operations |
$ |
8,207 |
|
$ |
12,260 |
|
$ |
29,561 |
|
$ |
45,488 |
|
||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||||||||||||||||||
|
Amount |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
|||||||||||||||||||||||||
| Net income (loss) - GAAP |
$ |
(5,798 |
) |
$ |
(0.30 |
) |
$ |
2,484 |
|
$ |
0.13 |
|
$ |
(6,179 |
) |
$ |
(0.32 |
) |
$ |
3,713 |
|
$ |
0.19 |
|
||||||||
| Amortization of intangible assets |
|
2,404 |
|
|
0.13 |
|
|
3,041 |
|
|
0.16 |
|
|
7,431 |
|
|
0.39 |
|
|
9,175 |
|
|
0.47 |
|
||||||||
| Restructuring costs |
|
937 |
|
|
0.05 |
|
|
19 |
|
|
— |
|
|
7,643 |
|
|
0.40 |
|
|
12,140 |
|
|
0.63 |
|
||||||||
| Loss from sale of divested operation and transaction costs |
|
1,994 |
|
|
0.10 |
|
|
— |
|
|
— |
|
|
1,994 |
|
|
0.10 |
|
|
— |
|
|
— |
|
||||||||
| Legal settlement |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,800 |
|
|
0.25 |
|
||||||||
| Stock-based compensation |
|
3,603 |
|
|
0.19 |
|
|
4,144 |
|
|
0.21 |
|
|
11,202 |
|
|
0.58 |
|
|
11,169 |
|
|
0.58 |
|
||||||||
| Tax effects of items above (2) |
|
2,167 |
|
|
0.11 |
|
|
(1,542 |
) |
|
(0.08 |
) |
|
(1,667 |
) |
|
(0.09 |
) |
|
(9,117 |
) |
|
(0.47 |
) |
||||||||
| Adjustment to tax expense for adjusted tax rate (3) |
|
277 |
|
|
0.01 |
|
|
420 |
|
|
0.02 |
|
|
863 |
|
|
0.05 |
|
|
(48 |
) |
|
— |
|
||||||||
| Adjusted net income |
$ |
5,584 |
|
|
0.29 |
|
$ |
8,566 |
|
$ |
0.44 |
|
$ |
21,287 |
|
|
1.11 |
|
$ |
31,832 |
|
$ |
1.65 |
|
||||||||
| Diluted weighted average shares outstanding |
|
19,089 |
|
|
19,289 |
|
|
19,184 |
|
|
19,239 |
|
||||||||||||||||||||
| (1) Forrester believes that adjusted financial results provide investors with consistent and comparable information to aid in the understanding of Forrester’s ongoing business, and they are also used by Forrester in making compensation decisions. Our adjusted presentation excludes amortization of acquisition-related intangible assets, stock-based compensation, restructuring costs, a loss from the sale of a divested operation and related transaction costs, a legal settlement, and net gains or losses from investments, as well as their related tax effects. We also utilized an assumed tax rate of 29% in 2024 and 2023, which excludes items such as the settlement of prior-year tax audits and the effect of any adjustments related to the filing of prior-year tax returns. The adjusted data does not purport to be prepared in accordance with Generally Accepted Accounting Principles in |
| (2) The tax effect of adjusting items is based on the accounting treatment and rate for the jurisdiction of each item. |
| (3) To compute adjusted net income, we apply an adjusted effective tax rate of 29% in 2024 and 2023. |
|
|
|||||||||
| Key Financial Data | |||||||||
| (Unaudited, dollars in thousands) | |||||||||
|
|
|
||||||||
|
|
2024 |
|
|
2023 |
|
||||
| Balance sheet data: | |||||||||
| Cash, cash equivalents and marketable investments |
$ |
114,932 |
|
$ |
124,489 |
|
|||
| Accounts receivable, net |
$ |
39,165 |
|
$ |
58,999 |
|
|||
| Deferred revenue |
$ |
153,155 |
|
$ |
156,798 |
|
|||
| Debt outstanding |
$ |
35,000 |
|
$ |
35,000 |
|
|||
|
|
|||||||||
|
|
2024 |
|
|
2023 |
|
||||
| Cash flow data: | |||||||||
| Net cash provided by (used in) operating activities |
$ |
(2,031 |
) |
$ |
9,791 |
|
|||
| Purchases of property and equipment |
$ |
(2,743 |
) |
$ |
(3,903 |
) |
|||
| Repayments of debt |
$ |
— |
|
$ |
(15,000 |
) |
|||
| Repurchases of common stock |
$ |
(12,984 |
) |
$ |
(4,082 |
) |
|||
| As of | |||||||||
|
|
|||||||||
|
|
2024 |
|
|
2023 |
|
||||
| Metrics: | |||||||||
| Contract value |
$ |
315,200 |
|
$ |
331,200 |
|
(a) | ||
| Client retention |
|
73 |
% |
|
73 |
% |
(a) | ||
| Wallet retention |
|
89 |
% |
|
89 |
% |
(a) | ||
| Number of clients |
|
2,002 |
|
|
2,338 |
|
(a) | ||
| As of | |||||||||
|
|
|||||||||
|
|
2024 |
|
|
2023 |
|
||||
| Headcount: | |||||||||
| Total headcount |
|
1,608 |
|
|
1,750 |
|
|||
| Sales force |
|
597 |
|
|
599 |
|
|||
| (a) |
|||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105791625/en/
Vice President, Corporate Development & Investor Relations
+1 617-613-6565
ebrycemorris@forrester.com
VP, Corporate Communications
+1 617-613-6805
sagarwal@forrester.com
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