Forrester Research Reports 2020 Second-Quarter Financial Results
Second-Quarter Financial Performance
Total revenues were
"We performed better than we expected during a challenging quarter," said
"The pandemic has disrupted every single business," continued Colony. "With no existing playbook on how to manage this crisis, business leaders are turning to
On a GAAP basis, net income was
On an adjusted basis, net income was
"Despite the continued economic uncertainty due to the pandemic, we are noticing many bright spots in our business," said
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
- 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
- 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
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
The consolidated statements of operations and the table of key financial data are attached.
Contact:
Chief Financial Officer
+1 617-613-6000
mdoyle@forrester.com
Public Relations
+1 617-613-6805
sagarwal@forrester.com
© 2020,
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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 |
Six Months Ended |
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|
|
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2020 |
2019 |
2020 |
2019 |
||||
Revenues: |
|||||||
Research |
$ 73,621 |
$ 76,279 |
$ 146,417 |
$ 144,888 |
|||
Consulting |
34,888 |
34,017 |
68,347 |
65,803 |
|||
Events |
5,032 |
17,887 |
5,122 |
18,141 |
|||
Total revenues |
113,541 |
128,183 |
219,886 |
228,832 |
|||
Operating expenses: |
|||||||
Cost of services and fulfillment |
43,964 |
56,571 |
87,317 |
101,681 |
|||
Selling and marketing |
39,117 |
44,017 |
79,390 |
86,050 |
|||
General and administrative |
11,456 |
13,221 |
23,461 |
26,411 |
|||
Depreciation |
2,448 |
2,166 |
4,854 |
4,189 |
|||
Amortization of intangible assets |
4,713 |
5,099 |
9,425 |
11,309 |
|||
Acquisition and integration costs |
612 |
2,487 |
3,487 |
5,454 |
|||
Total operating expenses |
102,310 |
123,561 |
207,934 |
235,094 |
|||
Income (loss) from operations |
11,231 |
4,622 |
11,952 |
(6,262) |
|||
Interest expense |
(1,307) |
(2,085) |
(2,845) |
(4,437) |
|||
Other income (expense), net |
(201) |
(86) |
109 |
(356) |
|||
Gains (losses) on investments |
2,352 |
(8) |
2,365 |
(44) |
|||
Income (loss) before income taxes |
12,075 |
2,443 |
11,581 |
(11,099) |
|||
Income tax expense |
238 |
888 |
257 |
662 |
|||
Net income (loss) |
$ 11,837 |
$ 1,555 |
$ 11,324 |
$ (11,761) |
|||
Basic income (loss) per common share |
$ 0.63 |
$ 0.08 |
$ 0.60 |
$ (0.64) |
|||
Diluted income (loss) per common share |
$ 0.63 |
$ 0.08 |
$ 0.60 |
$ (0.64) |
|||
Basic weighted average shares outstanding |
18,759 |
18,435 |
18,732 |
18,399 |
|||
Diluted weighted average shares outstanding |
18,831 |
18,780 |
18,828 |
18,399 |
|||
Adjusted data (1): |
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Total revenues - GAAP |
$ 113,541 |
$ 128,183 |
$ 219,886 |
$ 228,832 |
|||
Deferred revenue fair value adjustment |
137 |
4,905 |
322 |
8,810 |
|||
Adjusted revenues |
$ 113,678 |
$ 133,088 |
$ 220,208 |
$ 237,642 |
|||
Income (loss) from operations - GAAP |
$ 11,231 |
$ 4,622 |
$ 11,952 |
$ (6,262) |
|||
Deferred revenue fair value adjustment |
137 |
4,905 |
322 |
8,810 |
|||
Amortization of intangible assets |
4,713 |
5,099 |
9,425 |
11,309 |
|||
Acquisition and integration costs |
612 |
2,487 |
3,487 |
5,454 |
|||
Stock-based compensation included in the |
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following expense categories: |
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Cost of services and fulfillment |
1,232 |
1,567 |
2,825 |
3,030 |
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Selling and marketing |
423 |
485 |
785 |
925 |
|||
General and administrative |
809 |
796 |
1,656 |
1,578 |
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Adjusted income from operations |
$ 19,157 |
$ 19,961 |
$ 30,452 |
$ 24,844 |
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Three Months Ended |
Six Months Ended |
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2020 |
2019 |
2020 |
2019 |
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Amount |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
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Net income (loss) - GAAP |
$ 11,837 |
$ 0.63 |
$ 1,555 |
$ 0.08 |
$ 11,324 |
$ 0.60 |
$ (11,761) |
$ (0.64) |
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Effect on GAAP net loss of diluted shares |
- |
- |
- |
0.01 |
|||||||||||
Deferred revenue fair value adjustment |
137 |
0.01 |
4,905 |
0.26 |
322 |
0.02 |
8,810 |
0.47 |
|||||||
Amortization of intangible assets |
4,713 |
0.25 |
5,099 |
0.28 |
9,425 |
0.50 |
11,309 |
0.61 |
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Acquisition and integration costs |
612 |
0.03 |
2,487 |
0.13 |
3,487 |
0.19 |
5,454 |
0.29 |
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Stock-based compensation |
2,464 |
0.13 |
2,848 |
0.15 |
5,266 |
0.28 |
5,533 |
0.30 |
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(Gains) losses on investments |
(2,352) |
(0.12) |
8 |
- |
(2,365) |
(0.13) |
44 |
- |
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Tax effects of items above (2) |
(2,441) |
(0.13) |
(3,871) |
(0.21) |
(5,153) |
(0.27) |
(7,768) |
(0.42) |
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Adjustment to tax expense for adjusted tax rate (3) |
(2,792) |
(0.15) |
(756) |
(0.04) |
(3,182) |
(0.17) |
2,214 |
0.12 |
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Adjusted net income |
$ 12,178 |
0.65 |
$ 12,275 |
$ 0.65 |
$ 19,124 |
1.02 |
$ 13,835 |
$ 0.74 |
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Diluted weighted average shares outstanding |
18,831 |
18,780 |
18,828 |
18,716 |
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(1) |
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(2) The tax effect of adjusting items is based on the accounting treatment and rate for the jurisdiction of each item. |
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(3) To compute adjusted net income, we apply an adjusted effective tax rate of 31%. |
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Key Financial Data |
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(Unaudited, dollars in thousands) |
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2020 |
2019 |
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Balance sheet data: |
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Cash and cash equivalents |
$ 68,377 |
$ 67,904 |
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Accounts receivable, net |
$ 54,108 |
$ 84,605 |
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Deferred revenue |
$ 170,777 |
$ 179,194 |
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Debt outstanding |
$ 114,063 |
$ 132,750 |
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Six Months Ended |
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2020 |
2019 |
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Cash flow data: |
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Net cash provided by operating activities |
$ 25,002 |
$ 33,529 |
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Purchases of property and equipment |
$ (5,110) |
$ (4,666) |
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Cash paid for acquisitions |
$ — |
$ (238,943) |
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Repayments of debt |
$ (18,688) |
$ (33,125) |
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As of |
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2020 |
2019 |
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Metrics: |
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Agreement value |
$ 339,400 |
$ 348,900 |
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Client retention |
66% |
73% |
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Dollar retention |
88% |
90% |
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Enrichment |
98% |
108% |
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Number of clients |
2,679 |
2,875 |
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As of |
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2020 |
2019 |
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Headcount: |
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Total headcount |
1,843 |
1,777 |
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Products and advisory services staff |
726 |
670 |
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Sales force |
719 |
697 |
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