Forrester Research, Inc. (Nasdaq: FORR) today announced
financial results for the first quarter ended March 31, 2024, with
contract value (CV) at $323.1 million, down 4% compared with the
prior year.
“We are in the final year of our migration journey, and we now
have 70% of CV on the Forrester Decisions platform. We saw
stabilization in our key CV retention metrics, an uptick in new
business, and the rollout of Izola, our generative AI tool, to all
Forrester Decisions clients,” said CEO and Chairman George F.
Colony. “However, 2024 continues to be a challenging environment,
with first-quarter revenue down 12%, largely driven by consulting
headwinds. We are maintaining 2024 guidance, and we expect to see
Forrester Decisions momentum gather as we progress through the year
and into 2025.”
First-Quarter Consolidated
Results
Total revenues for the first quarter of 2024 were $100.1
million, compared with $113.7 million for the comparable quarter in
2023. The company also announced that its board of directors
authorized a $25 million increase in the company’s stock repurchase
program, bringing the total available repurchase authorization to
approximately $89 million.
On a GAAP basis, net loss was $6.7 million, or $0.35 per diluted
share, for the first quarter of 2024, compared with a net loss of
$4.1 million, or $0.21 per diluted share, for the same period in
2023.
On an adjusted basis, net income was $2.8 million, or $0.14 per
diluted share, for the first quarter of 2024, reflecting an
adjusted effective tax rate of 29%. Adjusted net income excludes
stock-based compensation of $3.6 million, amortization of
acquisition-related intangible assets of $2.5 million, and
restructuring costs of $6.6 million. This compares with an adjusted
net income of $5.1 million, or $0.27 per diluted share, for the
same period in 2023, which reflects an adjusted tax rate of 29%.
Adjusted net income for the first quarter of 2023 excludes
stock-based compensation of $3.2 million, amortization of
acquisition-related intangible assets of $3.1 million,
restructuring costs of $1.6 million, and a legal settlement of $4.8
million.
Forrester is providing guidance for 2024 as follows:
Full-Year 2024 (GAAP):
- Total revenues of approximately $430 million to $450
million
- Operating margin of approximately 2.2% to 3.4%
- Interest expense of approximately $3.0 million
- An effective tax rate of approximately 50%
- Earnings per share of approximately $0.24 to $0.44
Full-Year 2024 (Adjusted):
Adjusted financial guidance for full-year 2024 excludes
stock-based compensation expense of $14.5 million to $15.0 million,
amortization of acquisition-related intangible assets of
approximately $10.0 million, restructuring costs of approximately
$7.0 million, and any investment gains or losses.
- Adjusted operating margin of approximately 9.5% to 10.5%
- Adjusted effective tax rate of approximately 29%
- Adjusted diluted earnings per share of approximately $1.50 to
$1.70
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; more
than 100 million real-time feedback votes; 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 Securities
and Exchange Commission.
The consolidated statements of operations and the table of key
financial data are attached.
© 2024, Forrester Research, Inc. All rights reserved. Forrester
is a trademark of Forrester Research, Inc.
Forrester Research, Inc. Consolidated Statements of
Income (Unaudited, in thousands, except per share data)
Three Months Ended March 31,
2024
2023
Revenues: Research
$
76,581
$
80,906
Consulting
23,141
31,750
Events
355
1,014
Total revenues
100,077
113,670
Operating expenses: Cost of services and fulfillment
44,690
49,292
Selling and marketing
39,422
41,532
General and administrative
14,059
21,227
Depreciation
2,060
2,104
Amortization of intangible assets
2,514
3,066
Restructuring costs
6,624
1,589
Total operating expenses
109,369
118,810
Loss from operations
(9,292
)
(5,140
)
Interest expense
(762
)
(793
)
Other income, net
1,274
550
Loss before income taxes
(8,780
)
(5,383
)
Income tax benefit
(2,107
)
(1,308
)
Net loss
$
(6,673
)
$
(4,075
)
Basic loss per common share
$
(0.35
)
$
(0.21
)
Diluted loss per common share
$
(0.35
)
$
(0.21
)
Basic weighted average shares outstanding
19,285
19,108
Diluted weighted average shares outstanding
19,285
19,108
Adjusted data (1): Loss from operations - GAAP
$
(9,292
)
$
(5,140
)
Amortization of intangible assets
2,514
3,066
Restructuring costs
6,624
1,589
Legal settlement
—
4,800
Stock-based compensation included in the following expense
categories: Cost of services and fulfillment
2,122
1,847
Selling and marketing
599
497
General and administrative
853
821
Adjusted income from operations
$
3,420
$
7,480
Three Months Ended March 31,
2024
2023
Amount Per Share Amount Per Share
Net loss - GAAP
$
(6,673
)
$
(0.35
)
$
(4,075
)
$
(0.21
)
Amortization of intangible assets
2,514
0.13
3,066
0.16
Restructuring costs
6,624
0.34
1,589
0.08
Legal settlement
—
—
4,800
0.25
Stock-based compensation
3,574
0.19
3,165
0.17
Tax effects of items above (2)
(2,546
)
(0.13
)
(2,978
)
(0.16
)
Adjustment to tax expense for adjusted tax rate (3)
(702
)
(0.04
)
(429
)
(0.02
)
Adjusted net income
$
2,791
0.14
$
5,138
$
0.27
Diluted weighted average shares outstanding
19,339
19,170
(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 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
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 the United States. (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.
Forrester Research, Inc.
Key Financial Data (Unaudited, dollars in thousands)
March 31, December 31,
2024
2023
Balance sheet data: Cash, cash equivalents and marketable
investments
$
118,474
$
124,489
Accounts receivable, net
$
54,717
$
58,999
Deferred revenue
$
193,664
$
156,798
Debt outstanding
$
35,000
$
35,000
March 31,
2024
2023
Cash flow data: Net cash provided by operating activities
$
611
$
12,282
Purchases of property and equipment
$
(1,426
)
$
(1,632
)
Repayments of debt
$
—
$
(15,000
)
Repurchases of common stock
$
(4,097
)
$
—
As of March 31,
2024
2023
Metrics: Contract value
$
323,100
$
337,900
(a) Client retention
72
%
74
%
Wallet retention
88
%
90
%
(a) Number of clients
2,308
2,678
As of March 31,
2024
2023
Headcount: Total headcount
1,690
1,965
Sales force
604
701
(a) March 31, 2023 amounts have been recast based on 2024 foreign
currency rates and updated methodology as described on the investor
relations section of our website.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240430508669/en/
Ed Bryce Morris Vice President, Corporate Development &
Investor Relations Forrester Research, Inc. +1 617-613-6565
ebrycemorris@forrester.com Shweta Agarwal VP, Corporate
Communications Forrester Research, Inc. +1 617-613-6805
sagarwal@forrester.com
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