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

AmountPer ShareAmountPer 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.