Forrester Research Reports 2019 First-Quarter Financial Results
First-Quarter Financial Performance
Total revenues were
On a GAAP basis, net loss was
On a pro forma basis, net income was
"
Second-Quarter 2019 (GAAP):
- Total revenues of approximately
$124.5 million to $128.5 million . - Operating margin of approximately 1.5% to 3.5%.
- Interest expense of approximately
$2.2 million . - An effective tax rate of 5% to 10%.
- Diluted earnings per share of approximately
$0.02 to $0.06 .
Second-Quarter 2019 (Pro Forma):
Pro forma financial guidance for the second quarter of 2019 excludes the reduction in revenue from the fair value adjustment of pre-acquisition deferred revenue of
- Pro forma revenue of approximately
$130.0 million to $134.0 million . - Pro forma operating margin of approximately 13.5% to 15.5%.
- Pro forma effective tax rate of 31%.
- Pro forma diluted earnings per share of approximately
$0.57 to $0.61 .
Our full-year 2019 guidance is as follows:
Full-Year 2019 (GAAP):
- Total revenues of approximately
$464.0 million to $476.0 million . - Operating margin of approximately (1.5)% to 0.5%.
- Interest expense of approximately
$8.7 million to $9.0 million . - An effective tax rate of 5% to 10%.
- Diluted loss per share of approximately
$0.45 to $0.57 .
Full-Year 2019 (Pro Forma):
Pro forma financial guidance for full-year 2019 excludes the reduction in revenue from the fair value adjustment of pre-acquisition deferred revenue of
- Pro forma revenues of approximately
$475.0 million to $487.0 million . - Pro forma operating margin of approximately 10.0% to 12.0%.
- Pro forma effective tax rate of 31%.
- Pro forma diluted earnings per share of approximately
$1.55 to $1.67 .
About
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 consolidated statements of income and the table of key financial data are attached.
Contact:
Michael Doyle
Chief Financial Officer
+1 617-613-6000
mdoyle@forrester.com
Meaghan Rhyasen
Public Relations
+1 617-613-6070
press@forrester.com
© 2019,
Forrester Research, Inc. |
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Consolidated Statements of Income |
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(Unaudited, In thousands, except per share data) |
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Three Months Ended |
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March 31, |
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2019 |
2018 |
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Revenues: |
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Research services |
$ 68,609 |
$ 51,700 |
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Advisory services and events |
32,040 |
26,049 |
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Total revenues |
100,649 |
77,749 |
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Operating expenses: |
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Cost of services and fulfillment |
45,110 |
34,105 |
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Selling and marketing |
42,033 |
33,011 |
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General and administrative |
13,190 |
10,739 |
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Depreciation |
2,023 |
1,996 |
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Amortization of intangible assets |
6,210 |
186 |
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Acquisition and integration costs |
2,967 |
— |
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Total operating expenses |
111,533 |
80,037 |
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Loss from operations |
(10,884) |
(2,288) |
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Interest expense |
(2,352) |
— |
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Other expense, net |
(270) |
(118) |
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Losses on investments |
(36) |
(25) |
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Loss before income taxes |
(13,542) |
(2,431) |
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Income tax benefit |
(226) |
(698) |
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Net loss |
$ (13,316) |
$ (1,733) |
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Basic loss per common share |
$ (0.73) |
$ (0.10) |
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Diluted loss per common share |
$ (0.73) |
$ (0.10) |
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Basic weighted average shares outstanding |
18,363 |
18,036 |
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Diluted weighted average shares outstanding |
18,363 |
18,036 |
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Pro forma data (1): |
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GAAP total revenues |
$ 100,649 |
$ 77,749 |
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Deferred revenue fair value adjustment |
3,905 |
— |
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Pro forma revenues |
$ 104,554 |
$ 77,749 |
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Loss from operations |
$ (10,884) |
$ (2,288) |
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Amortization of intangible assets |
6,210 |
186 |
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Deferred revenue fair value adjustment |
3,905 |
— |
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Acquisition and integration costs |
2,967 |
— |
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Stock-based compensation included in the |
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following expense categories: |
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Cost of services and fulfillment |
1,463 |
1,020 |
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Selling and marketing |
440 |
244 |
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General and administrative |
782 |
699 |
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Pro forma income (loss) from operations |
4,883 |
(139) |
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Interest expense |
(2,352) |
— |
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Other expense, net |
(270) |
(118) |
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Pro forma income (loss) before income taxes |
2,261 |
(257) |
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Income tax benefit GAAP |
(226) |
(698) |
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Tax effects of pro forma items (2) |
3,897 |
528 |
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Adjustment to tax expense to reflect pro forma tax rate (3) |
(2,970) |
90 |
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Pro forma net income (loss) |
$ 1,560 |
$ (177) |
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Pro forma diluted income (loss) per share |
$ 0.08 |
$ (0.01) |
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Pro forma diluted weighted average shares outstanding |
18,651 |
18,036 |
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(1) Forrester believes that pro forma financial results provide investors with consistent and |
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comparable information to aid in the understanding of Forrester's ongoing business, and are also |
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used by Forrester in making compensation decisions. Our pro forma presentation excludes |
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amortization of acquisition-related intangible assets, acquisition-related deferred revenue fair value |
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adjustments, stock-based compensation, acquisition and integration costs, net gains or losses |
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from investments, as well as their related tax effects. We also utilized an assumed tax rate of 31% |
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in both 2019 and 2018, which excludes items such as any release of reserves for uncertain tax |
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positions established in prior years and the effect of any adjustments related to the filing of prior |
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year tax returns. The pro forma data does not purport to be prepared in accordance with Accounting |
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Principles Generally Accepted in the United States. |
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(2) The tax effect of adjusting items is based on the accounting treatment and rate for the |
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jurisdiction of each item. |
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(3) To compute pro forma net income, we apply a pro forma effective tax rate of 31%. |
Forrester Research, Inc. |
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Key Financial Data |
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(Unaudited, dollars in thousands) |
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March 31, |
December 31, |
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2019 |
2018 |
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Balance sheet data: |
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Cash and cash equivalents |
$ 75,012 |
$ 140,296 |
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Accounts receivable, net |
$ 69,122 |
$ 67,318 |
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Deferred revenue |
$ 191,612 |
$ 135,332 |
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Debt outstanding |
$ 153,438 |
$ — |
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March 31, |
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2019 |
2018 |
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Cash flow data: |
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Net cash provided by operating activities |
$ 26,483 |
$ 7,805 |
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Purchases of property and equipment |
$ (2,772) |
$ (1,324) |
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Cash paid for acquisitions |
$ (239,438) |
$ — |
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Repayments of debt |
$ (21,563) |
$ — |
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Repurchases of common stock |
$ — |
$ (4,367) |
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Dividends paid |
$ — |
$ (3,611) |
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As of |
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March 31, |
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2019 |
2018 |
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Metrics: (a) (b) |
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Agreement value |
$ 345,300 |
$ 246,400 |
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Client retention |
72% |
71% |
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Dollar retention |
90% |
90% |
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Enrichment |
106% |
110% |
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Number of clients |
2,850 |
2,349 |
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(a) Client retention, dollar retention and enrichment as of March 31, 2018 have been adjusted to conform to the current period calculation methodology. |
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(b) Agreement value and number of clients include the effect of SiriusDecisions, but retention and enrichment metrics will not be similarly affected until Q1 2020. |
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As of |
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March 31, |
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2019 |
2018 |
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Headcount: |
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Total headcount |
1,779 |
1,379 |
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Products and advisory services staff |
664 |
524 |
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Sales force |
694 |
519 |
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