Forrester Research Reports 2023 First-Quarter Financial Results
Commenting on the announcement, CEO and Chairman George Colony stated, “The first quarter was difficult for Forrester. The unsteady economy, along with our ongoing product transformation, constitute ongoing challenges for our business. Consequently, we are taking actions to maintain our margins by reducing our cost structure to align with our expected revenue. Despite these moves, we remain confident in our strategy and in the Forrester Decisions research platform. We remain on track to transition two-thirds of our contract value to Forrester Decisions by year end.”
First-Quarter Consolidated Results
Total revenues for the first quarter of 2023 were
On a GAAP basis, net loss was
On an adjusted basis, net income was
Forrester is providing updated guidance for 2023 as follows:
Full Year 2023 (GAAP):
-
Total revenues of approximately
$475 million $495 million -
Operating margin of approximately
2.0% to3.0% -
Interest expense of approximately
$3.0 million -
An effective tax rate of approximately
38% -
Earnings per share of approximately
$0.24 $0.44
Full Year 2023 (Adjusted):
Adjusted financial guidance for full-year 2023 excludes stock-based compensation expense of
-
Adjusted operating margin of approximately
11.5% to12.5% -
Adjusted effective tax rate of approximately
29% -
Adjusted diluted earnings per share of approximately
$2.00 $2.20
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; over 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 2023 and statements about the performance of Forrester Decisions, Forrester’s ability to manage costs, 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 impact of health epidemics, including COVID-19, on Forrester’s business; 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.
© 2023, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.
| Forrester Research, Inc. | ||||||||
| Consolidated Statements of Operations | ||||||||
| (Unaudited, in thousands, except per share data) | ||||||||
Three Months Ended |
||||||||
March 31, |
||||||||
2023 |
|
2022 |
||||||
| Revenues: | ||||||||
| Research | $ |
80,906 |
|
$ |
85,780 |
|
||
| Consulting |
|
31,750 |
|
|
38,431 |
|
||
| Events |
|
1,014 |
|
|
760 |
|
||
| Total revenues |
|
113,670 |
|
|
124,971 |
|
||
| Operating expenses: | ||||||||
| Cost of services and fulfillment |
|
49,292 |
|
|
53,251 |
|
||
| Selling and marketing |
|
41,532 |
|
|
44,044 |
|
||
| General and administrative |
|
21,227 |
|
|
15,524 |
|
||
| Depreciation |
|
2,104 |
|
|
2,319 |
|
||
| Amortization of intangible assets |
|
3,066 |
|
|
3,362 |
|
||
| Restructuring costs |
|
1,589 |
|
|
— |
|
||
| Total operating expenses |
|
118,810 |
|
|
118,500 |
|
||
| Income (loss) from operations |
|
(5,140 |
) |
|
6,471 |
|
||
| Interest expense |
|
(793 |
) |
|
(613 |
) |
||
| Other income (expense), net |
|
550 |
|
|
(257 |
) |
||
| Gains on investments |
|
— |
|
|
426 |
|
||
| Income (loss) before income taxes |
|
(5,383 |
) |
|
6,027 |
|
||
| Income tax expense (benefit) |
|
(1,308 |
) |
|
1,879 |
|
||
| Net income (loss) | $ |
(4,075 |
) |
$ |
4,148 |
|
||
| Basic income (loss) per common share | $ |
(0.21 |
) |
$ |
0.22 |
|
||
| Diluted income (loss) per common share | $ |
(0.21 |
) |
$ |
0.22 |
|
||
| Basic weighted average shares outstanding |
|
19,108 |
|
|
18,988 |
|
||
| Diluted weighted average shares outstanding |
|
19,108 |
|
|
19,264 |
|
||
| Adjusted data (1): | ||||||||
| Income (loss) from operations - GAAP | $ |
(5,140 |
) |
$ |
6,471 |
|
||
| Amortization of intangible assets |
|
3,066 |
|
|
3,362 |
|
||
| Restructuring costs |
|
1,589 |
|
|
— |
|
||
| Legal settlement |
|
4,800 |
|
|
— |
|
||
| Stock-based compensation included in the | ||||||||
| following expense categories: | ||||||||
| Cost of services and fulfillment |
|
1,847 |
|
|
1,926 |
|
||
| Selling and marketing |
|
497 |
|
|
633 |
|
||
| General and administrative |
|
821 |
|
|
735 |
|
||
| Adjusted income from operations | $ |
7,480 |
|
$ |
13,127 |
|
||
Three Months Ended |
||||||||||||||||
March 31, |
||||||||||||||||
2023 |
|
2022 |
||||||||||||||
| Amount | Per Share | Amount | Per Share | |||||||||||||
| Net income (loss) - GAAP | $ |
(4,075 |
) |
$ |
(0.21 |
) |
$ |
4,148 |
|
$ |
0.22 |
|
||||
| Amortization of intangible assets |
|
3,066 |
|
|
0.16 |
|
|
3,362 |
|
|
0.17 |
|
||||
| Restructuring costs |
|
1,589 |
|
|
0.08 |
|
|
— |
|
|
— |
|
||||
| Legal settlement |
|
4,800 |
|
|
0.25 |
|
|
— |
|
|
— |
|
||||
| Stock-based compensation |
|
3,165 |
|
|
0.17 |
|
|
3,294 |
|
|
0.17 |
|
||||
| Gains on investments |
|
— |
|
|
— |
|
|
(426 |
) |
|
(0.02 |
) |
||||
| Tax effects of items above (2) |
|
(2,978 |
) |
|
(0.16 |
) |
|
(1,572 |
) |
|
(0.08 |
) |
||||
| Adjustment to tax expense for adjusted tax rate (3) |
|
(429 |
) |
|
(0.02 |
) |
|
(226 |
) |
|
(0.01 |
) |
||||
| Adjusted net income | $ |
5,138 |
|
|
0.27 |
|
$ |
8,580 |
|
$ |
0.45 |
|
||||
| Diluted weighted average shares outstanding |
|
19,170 |
|
|
19,264 |
|
||||||||||
| (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 from investments, 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) | |||||||||
March 31, |
|
December 31, |
|||||||
2023 |
|
2022 |
|||||||
| Balance sheet data: | |||||||||
| Cash, cash equivalents and marketable investments | $ |
120,976 |
|
$ |
123,317 |
|
|||
| Accounts receivable, net | $ |
58,915 |
|
$ |
73,345 |
|
|||
| Deferred revenue | $ |
215,093 |
|
$ |
178,021 |
|
|||
| Debt outstanding | $ |
35,000 |
|
$ |
50,000 |
|
|||
March 31, |
|||||||||
2023 |
|
2022 |
|||||||
| Cash flow data: | |||||||||
| Net cash provided by operating activities | $ |
12,282 |
|
$ |
22,666 |
|
|||
| Purchases of property and equipment | $ |
(1,632 |
) |
$ |
(1,262 |
) |
|||
| Repayments of debt | $ |
(15,000 |
) |
$ |
(15,000 |
) |
|||
| Repurchases of common stock | $ |
— |
|
$ |
(9,459 |
) |
|||
As of |
|||||||||
March 31, |
|||||||||
2023 |
|
2022 |
|||||||
| Metrics: | |||||||||
| Contract value | $ |
347,300 |
|
$ |
347,300 |
|
(a) | ||
| Client retention |
|
74 |
% |
|
77 |
% |
|||
| Wallet retention |
|
92 |
% |
|
103 |
% |
|||
| Number of clients |
|
2,678 |
|
|
2,945 |
|
|||
As of |
|||||||||
March 31, |
|||||||||
2023 |
|
2022 |
|||||||
| Headcount: |
|
|
|
||||||
| Total headcount |
|
1,965 |
|
|
1,870 |
|
|||
| Sales force |
|
701 |
|
|
670 |
|
|||
| (a) March 31, 2022 contract value has been recast based on 2023 foreign currency rates. | |||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005884/en/
Tyson Seely
Vice President, Investor Relations
Forrester Research, Inc.
+1 617-613-6805
tseely@forrester.com
Shweta Agarwal
Senior Director, Public Relations
Forrester Research, Inc.
+1 617-613-6805
sagarwal@forrester.com
Source: Forrester Research, Inc.
