Forrester Research Reports 2024 First-Quarter Financial Results
Forrester Research, Inc. reported its 2024 first-quarter financial results, with contract value at $323.1 million, down 4% from the previous year. The company saw stabilization in CV retention metrics, an uptick in new business, and the rollout of Izola, its generative AI tool. However, first-quarter revenue decreased by 12%, mainly due to consulting headwinds. Forrester expects the momentum to pick up in Forrester Decisions as the year progresses. Total revenues for Q1 were $100.1 million, and the company's board authorized a $25 million increase in stock repurchase program.
Forrester Research showcased stability in CV retention metrics and an increase in new business, demonstrating resilience in a challenging environment. The company rolled out Izola, its generative AI tool, to all Forrester Decisions clients, indicating a commitment to innovation.
First-quarter revenue declined by 12%, largely influenced by consulting headwinds. Forrester reported a GAAP net loss of $6.7 million, or $0.35 per diluted share, for Q1 2024. The company is facing challenges in revenue generation despite progress in other areas.
Insights
“We are in the final year of our migration journey, and we now have
First-Quarter Consolidated Results
Total revenues for the first 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
$430 million $450 million -
Operating margin of approximately
2.2% to3.4% -
Interest expense of approximately
$3.0 million -
An effective tax rate of approximately
50% -
Earnings per share of approximately
$0.24 $0.44
Full-Year 2024 (Adjusted):
Adjusted financial guidance for full-year 2024 excludes stock-based compensation expense of
-
Adjusted operating margin of approximately
9.5% to10.5% -
Adjusted effective tax rate of approximately
29% -
Adjusted diluted earnings per share of approximately
$1.50 $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 |
||||||||
| (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, | ||||||||
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
Source: Forrester Research, Inc.
FAQ
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