Forrester Research Reports 2021 First-Quarter Financial Results

CAMBRIDGE, Mass., May 5, 2021 /PRNewswire/ -- Forrester Research, Inc. (Nasdaq: FORR) today announced its 2021 first-quarter financial results.

First-Quarter Financial Performance

Total revenues were $113.8 million for the first quarter of 2021, compared with $106.3 million for the first quarter of 2020.

On a GAAP basis, net income was $4.0 million, or $0.21 per diluted share, for the first quarter of 2021, compared with a net loss of $0.5 million, or $0.03 per diluted share, for the same period in 2020.

On an adjusted basis, net income was $8.6 million, or $0.45 per diluted share, for the first quarter of 2021, 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 $3.9 million, and integration costs of $0.1 million. This compares with adjusted net income of $6.9 million, or $0.37 per diluted share, for the same period in 2020, which reflects an adjusted tax rate of 31%. Adjusted net income for the first quarter of 2020 excludes stock-based compensation of $2.8 million, amortization of acquisition-related intangible assets of $4.7 million, acquisition-related deferred revenue fair value adjustment of $0.2 million, and integration costs of $2.9 million.

"We significantly beat our Q1 expectations for revenue, operating margin, and earnings per share and generated record quarterly cash flow," said George F. Colony, Forrester's chairman and chief executive officer. "We grew contract value bookings by 4% year over year. We have seen three quarters of sequential CV growth since the second quarter of 2020. As a result of this strong performance, we will be raising guidance for 2021."

"We played offense in 2020, investing and preparing the company for recovery and positioning it to grow contract value bookings by double-digit rates. To that end, I am excited to announce the launch of Forrester Decisions, a premium portfolio of 15 new research services designed to help our clients shorten the distance between a bold vision of the future and superior business impact. The pandemic has driven customer behavior changes, and companies must now be all-in on digital. The Forrester Decisions product portfolio will help businesses navigate these changes. I expect the new product to drive Forrester's contract value growth."

As part of the company's pivot to contract value (CV) in 2021, Forrester is classifying all components of its CV subscription research products as research revenues. In prior periods, advisory sessions included in Forrester's research subscription products were classified as consulting revenues. This has resulted in approximately $1.4 million of revenue being reclassified from consulting revenues to research revenues in the three months ended March 31, 2020.

Forrester is providing second-quarter and full-year 2021 financial guidance as follows:

Second-Quarter 2021 (GAAP):

• Total revenues of approximately $120.0 million to $124.0 million.
• Operating margin of approximately 8.0% to 10.0%.
• Interest expense of approximately $1.1 million.
• An effective tax rate of 32%.
• Earnings per share of approximately $0.28 to $0.34.

Second-Quarter 2021 (Adjusted):

Adjusted financial guidance for the second quarter of 2021 excludes stock-based compensation expense of $2.3 million to $2.5 million, amortization of acquisition-related intangible assets of approximately $4.0 million, integration costs of approximately $0.1 million, and any investment gains or losses.

• Adjusted operating margin of approximately 13.0% to 15.0%.
• Adjusted effective tax rate of 31%.
• Adjusted diluted earnings per share of approximately $0.52 to $0.58.

Full-Year 2021 (GAAP): 

• Total revenues of approximately $473.0 million to $483.0 million.
• Operating margin of approximately 4.5% to 5.5%.
• Interest expense of approximately $4.3 million.
• An effective tax rate of 32%.
• Earnings per share of approximately $0.66 to $0.76.

Full-Year 2021 (Adjusted): 

Adjusted financial guidance for full-year 2021 excludes stock-based compensation expense of $9.8 million to $10.3 million, amortization of acquisition-related intangible assets of approximately $15.2 million, integration costs of $0.3 million to $0.5 million, and any investment gains or losses. 

• Adjusted operating margin of approximately 10.0% to 11.0%.
• Adjusted effective tax rate of 31%.
• Adjusted diluted earnings per share of approximately $1.58 to $1.68.

About Forrester
Forrester (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We help leaders across technology, marketing, customer experience, product, and sales 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 675,000 consumers, business leaders, and technology leaders worldwide; rigorous and objective research methodologies, including Forrester Wave™ evaluations; over 52 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 second quarter of and full-year 2021 and statements about the launch 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; Forrester's ability to fulfill existing or generate new consulting engagements and advisory services; technology spending; the impact of health epidemics, including COVID-19, on Forrester's business; Forrester's ability to respond to business and economic conditions and market trends; the risks and challenges inherent in international business activities, including 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; 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; 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:

Scott Chouinard
Interim Chief Financial Officer and Treasurer
Forrester Research, Inc.
+1 617-613-6060
[email protected]

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

© 2021, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

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