Forrester Research Reports 2021 Second-Quarter Financial Results

CAMBRIDGE, Mass., July 28, 2021 /PRNewswire/ -- Forrester Research, Inc. (Nasdaq: FORR) today announced its 2021 second-quarter financial results.

Second-Quarter Financial Performance

Total revenues were $128.7 million for the second quarter of 2021, compared with $113.5 million for the second quarter of 2020.

On a GAAP basis, net income was $8.3 million, or $0.43 per diluted share, for the second quarter of 2021, compared with net income of $11.8 million, or $0.63 per diluted share, for the same period in 2020.

On an adjusted basis, net income was $12.7 million, or $0.66 per diluted share, for the second quarter of 2021, which reflects an adjusted effective tax rate of 31%. Adjusted net income excludes stock-based compensation of $2.4 million, amortization of acquisition-related intangible assets of $4.0 million, and integration costs of $0.2 million. This compares with adjusted net income of $12.2 million, or $0.65 per diluted share, for the same period in 2020, which reflects an adjusted tax rate of 31%. Adjusted net income for the second quarter of 2020 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, integration costs of $0.6 million, and gains on investments of $2.4 million.

"Our laser focus on increasing contract value resulted in another strong quarter," said George F. Colony, Forrester's chairman and chief executive officer. "Year over year, contract value grew 9%, and revenue increased across all business units: research, consulting, and events. We generated $70 million of cash in the first half of 2021 — more than the company has produced in any previous full year. Operating margin and earnings per share also exceeded the upper end of guidance. As a result of our continued strong performance in Q2 and the first half of the year, we are raising guidance for the second time this year."

"Our products and engagement model are resonating with clients, and we are confident that our new product portfolio, Forrester Decisions, will further accelerate our ability to deliver sustained double-digit contract value growth. Forrester Decisions brings together the vision and strategy of Forrester with the operational research of SiriusDecisions into one unique offering. Despite pandemic-related headwinds, we believe that the company can achieve its 2021 goals and continue to expand its annually recurring relationships with clients."

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 and $2.9 million of revenue being reclassified from consulting revenues to research revenues in the three and six months ended June 30, 2020, respectively.

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

Third-Quarter 2021 (GAAP):

• Total revenues of approximately $114.0 million to $118.0 million.
• Operating margin of approximately 1.0% to 3.0%.
• Interest expense of approximately $1.0 million.
• An effective tax rate of 31%.
• Earnings per share of approximately $0.01 to $0.07.

Third-Quarter 2021 (Adjusted):

Adjusted financial guidance for the third quarter of 2021 excludes stock-based compensation expense of $2.3 million to $2.5 million, amortization of acquisition-related intangible assets of approximately $3.6 million, and any investment gains or losses.

• Adjusted operating margin of approximately 6.0% to 8.0%.
• Adjusted effective tax rate of 31%.
• Adjusted diluted earnings per share of approximately $0.22 to $0.28.

Full-Year 2021 (GAAP):

• Total revenues of approximately $485.0 million to $495.0 million.
• Operating margin of approximately 6.0% to 7.0%.
• Interest expense of approximately $4.3 million.
• An effective tax rate of 31%.
• Earnings per share of approximately $0.85 to $0.95.

Full-Year 2021 (Adjusted):

Adjusted financial guidance for full-year 2021 excludes stock-based compensation expense of $9.5 million to $10.0 million, amortization of acquisition-related intangible assets of approximately $15.2 million, integration costs of $0.3 million, and any investment gains or losses.

• Adjusted operating margin of approximately 11.0% to 12.0%.
• Adjusted effective tax rate of 31%.
• Adjusted diluted earnings per share of approximately $1.75 to $1.85.

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 third 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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