Forrester Research Reports 2020 Second-Quarter Financial Results

CAMBRIDGE, Mass., July 30, 2020 /PRNewswire/ -- Forrester Research, Inc. (Nasdaq: FORR) today announced its 2020 second-quarter financial results.

Second-Quarter Financial Performance

Total revenues were $113.5 million for the second quarter of 2020, compared with $128.2 million for the second quarter of 2019. Adjusted revenues, which exclude the fair value adjustment to deferred revenue from the acquisition of SiriusDecisions, were $113.7 million for the second quarter of 2020, compared with $133.1 million for the second quarter of 2019.

"We performed better than we expected during a challenging quarter," said George F. Colony, Forrester's chairman and chief executive officer. "We exceeded our revenue guidance by more than $5 million and exceeded EPS by 31 cents."

"The pandemic has disrupted every single business," continued Colony. "With no existing playbook on how to manage this crisis, business leaders are turning to Forrester for advice and research on how to navigate these challenging times. We are continually innovating our own business and sharing best practices with our clients — our quick pivot to digital events is an example. As a result, our client interactions are at an all-time high. As we look ahead to 2021 and beyond, we are well positioned to come out of the pandemic stronger."

On a GAAP basis, net income was $11.8 million, or $0.63 per diluted share, for the second quarter of 2020, compared with a net income of $1.6 million, or $0.08 per diluted share, for the same period in 2019.

On an adjusted basis, net income was $12.2 million, or $0.65 per diluted share, for the second quarter of 2020, which reflects an adjusted effective tax rate of 31%. Adjusted net income excludes stock-based compensation of $2.5 million, amortization of acquisition-related intangible assets of $4.7 million, acquisition-related deferred revenue fair value adjustment of $0.1 million, acquisition and integration costs of $0.6 million, and gains on investments of $2.4 million. This compares with an adjusted net income of $12.3 million, or $0.65 per diluted share, for the same period in 2019, which reflects an adjusted tax rate of 31%. Adjusted net income for the second quarter of 2019 excludes stock-based compensation of $2.8 million, amortization of acquisition-related intangible assets of $5.1 million, acquisition-related deferred revenue fair value adjustment of $4.9 million, and acquisition and integration costs of $2.5 million.

"Despite the continued economic uncertainty due to the pandemic, we are noticing many bright spots in our business," said Michael Doyle, Forrester's chief financial officer. "As a result of a stronger than expected performance in the second quarter in our research, consulting, and events businesses, combined with successful implementation of cost-reduction measures, we are raising our 2020 year-end guidance."

Forrester is providing third-quarter 2020 financial guidance as follows:

Third-Quarter 2020 (GAAP):

• Total revenues of approximately $99.0 million to $104.0 million.
• Operating margin of approximately (5.0)% to (3.0)%.
• Interest expense of approximately $1.3 million.
• An effective tax rate of approximately 1.0%.
• Loss per share of approximately $0.25 to $0.31.

Third-Quarter 2020 (Adjusted):

Adjusted financial guidance for the third quarter of 2020 excludes the reduction in revenue from the fair value adjustment of pre-acquisition deferred revenue of approximately $0.1 million, stock-based compensation expense of $2.4 million to $2.6 million, amortization of acquisition-related intangible assets of approximately $4.7 million, integration costs of $0.4 million to $0.6 million, and any investment gains or losses.

• Adjusted operating margin of approximately 3.0% to 5.0%.
• Adjusted effective tax rate of 31%.
• Adjusted diluted earnings per share of approximately $0.06 to $0.12.

Our full-year 2020 guidance is as follows:

Full-Year 2020 (GAAP):

• Total revenues of approximately $420.0 million to $430.0 million.
• Operating margin of approximately 0.5% to 2.5%.
• Interest expense of approximately $5.4 million.
• An effective tax rate of approximately 1%.
• Income per share of approximately breakeven to $0.25.

Full-Year 2020 (Adjusted):

Adjusted financial guidance for full-year 2020 excludes the reduction in revenue from the fair value adjustment of pre-acquisition deferred revenue of approximately $0.4 million, stock-based compensation expense of $10.2 million to $10.7 million, amortization of acquisition-related intangible assets of approximately $18.8 million, integration costs of $4.3 million to $4.7 million, and any investment gains or losses.

• Adjusted operating margin of approximately 8.5% to 10.5%.
• Adjusted effective tax rate of 31%.
• Adjusted diluted earnings per share of approximately $1.15 to $1.40.

About Forrester Research

Forrester is one of the most influential research and advisory firms in the world. We work with business and technology leaders to drive customer-obsessed vision, strategy, and execution that accelerate growth. Forrester's unique insights are grounded in annual surveys of more than 690,000 consumers and business leaders worldwide, rigorous and objective methodologies, and the shared wisdom of our most innovative clients. Through proprietary research, data and analytics, custom consulting, exclusive peer groups, certifications, and events, we are revolutionizing how businesses grow in the age of the customer. Learn more at www.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, the anticipated impact of COVID-19 on Forrester's operating results, Forrester's financial guidance for the third quarter of and full-year 2020, 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
[email protected]

Shweta Agarwal
Public Relations
Forrester Research, Inc.
+1 617-613-6805
[email protected]

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SOURCE Forrester