Forrester Research Reports 2020 Fourth-Quarter And Full-Year Financial Results
Forrester Research announced its Q4 and full-year 2020 results, showing a revenue decline to $120.5 million from $124.3 million YoY. The company posted net income of $2.4 million ($0.13/share), down from $4.9 million ($0.26/share) in Q4 2019. Full-year revenues were $449.0 million, a drop from $461.7 million in 2019, but net income improved from a loss of $9.6 million in 2019 to $10.0 million in 2020. For Q1 2021, Forrester expects revenues between $104.0 million and $108.0 million. Full-year 2021 revenue guidance is set at $466.0 million to $476.0 million.
- Improved full-year net income of $10.0 million compared to a net loss in 2019.
- Adjusted earnings per share forecast for full-year 2021 ranges from $1.50 to $1.60.
- Q4 2020 revenue decreased to $120.5 million, down from $124.3 million YoY.
- Full-year 2020 revenues declined to $449.0 million, down from $461.7 million in 2019.
- Q4 adjusted net income fell to $6.6 million from $10.7 million in Q4 2019.
CAMBRIDGE, Mass., Feb. 11, 2021 /PRNewswire/ -- Forrester Research, Inc. (Nasdaq: FORR) today announced its 2020 fourth-quarter and full-year financial results.
Fourth-Quarter Financial Performance
Total revenues were
On a GAAP basis, net income was
On an adjusted basis, net income was
"Forrester had a strong finish to the year despite challenging macroeconomic conditions. We helped our clients find new ways to win and retain customers during the pandemic, shift their workforces to virtual, and prepare themselves for a post-pandemic digital world," said George F. Colony, Forrester's chairman and chief executive officer. "After the uncertainty of Q2, company momentum built in Q3 and Q4, with rising engagement across our research, consulting, and events businesses. We exceeded revenue and EPS guidance for the quarter and head into 2021 with healthy cash flow and a solid balance sheet.
"In 2021, the company is laser-focused on increasing research contract value bookings at double-digit rates — that is job number one."
Year Ended December 31, 2020, Financial Performance
Total revenues were
On a GAAP basis, net income was
On an adjusted basis, net income was
A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.
2021 Guidance
Forrester is providing first-quarter 2021 financial guidance as follows:
First-Quarter 2021 (GAAP):
- Total revenues of approximately
$104.0 million to$108.0 million . - Operating margin of approximately (1.0)% to
1.0% . - Interest expense of approximately
$1.2 million . - An effective tax rate of
32% . - Loss per share of approximately
$0.02 to$0.08 .
First-Quarter 2021 (Adjusted):
Adjusted financial guidance for the first quarter of 2021 excludes stock-based compensation expense of
- Adjusted operating margin of approximately
5.0% to7.0% . - Adjusted effective tax rate of
31% . - Adjusted diluted earnings per share of approximately
$0.15 to$0.21 .
Our full-year 2021 guidance is as follows:
Full-Year 2021 (GAAP):
- Total revenues of approximately
$466.0 million to$476.0 million . - Operating margin of approximately
4.5% to5.5% . - Interest expense of approximately
$4.5 million . - An effective tax rate of
32% . - Diluted earnings per share of approximately
$0.57 to$0.67 .
Full-Year 2021 (Adjusted):
Adjusted financial guidance for full-year 2021 excludes stock-based compensation expense of
- Adjusted operating margin of approximately
10.0% to11.0% . - Adjusted effective tax rate of
31% . - Adjusted diluted earnings per share of approximately
$1.50 to$1.60 .
About Forrester Research
Forrester (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We help business and technology leaders 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 675,000 consumers, business leaders, and technology leaders worldwide; rigorous and objective methodologies, including Forrester Wave™ evaluations; and the shared wisdom of our most innovative 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 first quarter of and full-year 2021 and statements about 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, the impact of health epidemics, including COVID-19, on Forrester's business; Forrester's ability to retain and enrich memberships for its research products and services; technology spending; Forrester's ability to respond to business and economic conditions and market trends; the risks and challenges inherent in international business activities; the exit of the United Kingdom from the European Union; 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 anticipate and respond to market trends; Forrester's ability to successfully integrate businesses that it acquires; the impact of Forrester's outstanding debt obligations; the possibility of network disruptions and security breaches; competition and industry consolidation; any failure to enforce and protect Forrester's intellectual property rights; privacy laws; possible variations in Forrester's quarterly operating results; taxation risks; concentration of ownership of Forrester; and any weakness in Forrester's system of internal controls. 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.
Contact:
Michael Doyle
Chief Financial Officer
Forrester Research, Inc.
+1 617-613-6000
mdoyle@forrester.com
Shweta Agarwal
Public Relations
Forrester Research, Inc.
+1 617-613-6805
sagarwal@forrester.com
© 2021, 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 | Year Ended | |||||||
December 31, | December 31, | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Revenues: | ||||||||
Research | $ 75,255 | $ 79,299 | $ 294,485 | $ 298,735 | ||||
Consulting | 41,382 | 37,530 | 144,362 | 135,952 | ||||
Events | 3,884 | 7,440 | 10,137 | 27,010 | ||||
Total revenues | 120,521 | 124,269 | 448,984 | 461,697 | ||||
Operating expenses: | ||||||||
Cost of services and fulfillment | 47,457 | 50,116 | 180,899 | 196,726 | ||||
Selling and marketing | 44,601 | 45,210 | 166,200 | 172,865 | ||||
General and administrative | 14,433 | 13,098 | 50,369 | 53,042 | ||||
Depreciation | 2,481 | 2,262 | 9,879 | 8,572 | ||||
Amortization of intangible assets | 5,536 | 5,656 | 19,683 | 22,619 | ||||
Acquisition and integration costs | 1,964 | 1,100 | 5,779 | 8,948 | ||||
Total operating expenses | 116,472 | 117,442 | 432,809 | 462,772 | ||||
Income (loss) from operations | 4,049 | 6,827 | 16,175 | (1,075) | ||||
Interest expense | (1,236) | (1,713) | (5,340) | (8,054) | ||||
Other expense, net | (209) | (286) | (374) | (515) | ||||
Gains on investments, net | 107 | 106 | 2,472 | 45 | ||||
Income (loss) before income taxes | 2,711 | 4,934 | 12,933 | (9,599) | ||||
Income tax expense (benefit) | 285 | 44 | 2,943 | (29) | ||||
Net income (loss) | $ 2,426 | $ 4,890 | $ 9,990 | $ (9,570) | ||||
Basic income (loss) per common share | $ 0.13 | $ 0.26 | $ 0.53 | $ (0.52) | ||||
Diluted income (loss) per common share | $ 0.13 | $ 0.26 | $ 0.53 | $ (0.52) | ||||
Basic weighted average common shares outstanding | 18,971 | 18,624 | 18,827 | 18,492 | ||||
Diluted weighted average common shares outstanding | 19,119 | 18,720 | 18,935 | 18,492 | ||||
Adjusted data (1): | ||||||||
Total revenues - GAAP | $ 120,521 | $ 124,269 | $ 448,984 | $ 461,697 | ||||
Deferred revenue fair value adjustment | 42 | 790 | 444 | 11,257 | ||||
Adjusted revenues | $ 120,563 | $ 125,059 | $ 449,428 | $ 472,954 | ||||
Income (loss) from operations - GAAP | $ 4,049 | $ 6,827 | $ 16,175 | $ (1,075) | ||||
Deferred revenue fair value adjustment | 42 | 790 | 444 | 11,257 | ||||
Amortization of intangible assets | 5,536 | 5,656 | 19,683 | 22,619 | ||||
Acquisition and integration costs | 1,964 | 1,100 | 5,779 | 8,948 | ||||
Lease incentive | (3,445) | — | (3,226) | — | ||||
Stock-based compensation included in the | ||||||||
following expense categories: | ||||||||
Cost of services and fulfillment | 1,693 | 1,815 | 6,156 | 6,627 | ||||
Selling and marketing | 520 | 402 | 1,751 | 1,768 | ||||
General and administrative | 700 | 862 | 2,970 | 3,289 | ||||
Adjusted income from operations | $ 11,059 | $ 17,452 | $ 49,732 | $ 53,433 | ||||
Three Months Ended | Year Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Amount | Per Share | Amount | Per Share | Amount | Per Share | Amount | Per Share | ||||||||
Net income (loss) - GAAP | $ 2,426 | $ 0.13 | $ 4,890 | $ 0.26 | $ 9,990 | $ 0.53 | $ (9,570) | $ (0.52) | |||||||
Effect on GAAP net loss of diluted shares | — | — | — | 0.01 | |||||||||||
Deferred revenue fair value adjustment | 42 | — | 790 | 0.04 | 444 | 0.02 | 11,257 | 0.60 | |||||||
Amortization of intangible assets | 5,536 | 0.29 | 5,656 | 0.30 | 19,683 | 1.04 | 22,619 | 1.20 | |||||||
Acquisition and integration costs | 1,964 | 0.10 | 1,100 | 0.06 | 5,779 | 0.30 | 8,948 | 0.48 | |||||||
Lease incentive | (3,445) | (0.18) | — | — | (3,226) | (0.17) | — | — | |||||||
Stock-based compensation | 2,913 | 0.15 | 3,079 | 0.16 | 10,877 | 0.57 | 11,684 | 0.62 | |||||||
Gains on investments | (107) | — | (106) | — | (2,472) | (0.13) | (45) | — | |||||||
Tax effects of items above (2) | (1,632) | (0.08) | (4,166) | (0.22) | (8,612) | (0.45) | (15,062) | (0.80) | |||||||
Adjustment to tax expense for adjusted tax rate (3) | (1,063) | (0.06) | (580) | (0.03) | (2,091) | (0.11) | 1,125 | 0.06 | |||||||
Adjusted net income | $ 6,634 | $ 0.35 | $ 0.57 | $ 1.60 | $ 1.65 | ||||||||||
Diluted weighted average shares outstanding | 19,119 | 18,720 | 18,935 | 18,720 | |||||||||||
(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, acquisition-related deferred revenue fair value adjustments, stock-based compensation, acquisition and integration costs, net gains or losses from investments, lease incentive cost and credits, as well as their related tax effects. We also utilized an assumed tax rate of | ||||||||||||||
(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 | ||||||||||||||
Forrester Research, Inc. | ||||
Key Financial Data | ||||
(Unaudited, dollars in thousands) | ||||
December 31, | December 31, | |||
2020 | 2019 | |||
Balance sheet data: | ||||
Cash and cash equivalents | $ 90,257 | $ 67,904 | ||
Accounts receivable, net | $ 84,695 | $ 84,605 | ||
Deferred revenue | $ 179,968 | $ 179,194 | ||
Debt outstanding | $ 109,375 | $ 132,750 | ||
Year Ended | ||||
December 31, | ||||
2020 | 2019 | |||
Cash flow data: | ||||
Net cash provided by operating activities | $ 47,754 | $ 48,406 | ||
Purchases of property and equipment | $ (8,905) | $ (11,890) | ||
Cash paid for acquisitions | $ — | $ (237,684) | ||
Repayments of debt | $ (23,375) | $ (42,250) | ||
As of | ||||
December 31, | ||||
2020 | 2019 | |||
Metrics: | ||||
Agreement value | $ 345,300 | $ 358,000 | ||
Client retention | ||||
Dollar retention | ||||
Enrichment | ||||
Number of clients | 2,697 | 2,880 | ||
As of | ||||
December 31, | ||||
2020 | 2019 | |||
Headcount: | ||||
Total headcount | 1,798 | 1,795 | ||
Products and advisory services staff | 704 | 688 | ||
Sales force | 701 | 698 | ||
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SOURCE Forrester Research
