News Release Details

Forrester Research Reports 2021 Fourth-Quarter And Full-Year Financial Results

February 10, 2022
Year-over-year total contract value up by 15% to $345.8 million

CAMBRIDGE, Mass., Feb. 10, 2022 /PRNewswire/ -- Forrester Research, Inc. (Nasdaq: FORR) today announced its 2021 fourth-quarter and full-year financial results.

"We delivered historic results in 2021, headlined by record contract value growth of 15%, six straight quarters of sequential contract value growth, and double-digit revenue growth for the year," said George F. Colony, Forrester's chairman and chief executive officer. "Our wallet retention, client count, and client retention also increased significantly during the year."

"Our new flagship research portfolio, Forrester Decisions, is exceeding expectations, and its value is resonating with our clients. We are well positioned to build on this strong momentum in 2022 and remain laser-focused on increasing contract value at double-digit rates. I thank our employees and clients for helping us achieve these results."

Fourth-Quarter Financial Performance

Total revenues were $133.7 million for the fourth quarter of 2021, compared with $120.5 million for the fourth quarter of 2020.

On a GAAP basis, net income was $8.0 million, or $0.41 per diluted share, for the fourth quarter of 2021, compared with a net income of $2.4 million, or $0.13 per diluted share, for the same period in 2020.

On an adjusted basis, net income was $11.3 million, or $0.59 per diluted share, for the fourth quarter of 2021, which reflects an adjusted effective tax rate of 31%. Adjusted net income excludes stock-based compensation of $2.7 million and amortization of acquisition-related intangible assets of $3.6 million. This compares with an adjusted net income of $6.6 million, or $0.35 per diluted share, for the same period in 2020, which reflects an adjusted tax rate of 31%. Adjusted net income for the fourth quarter of 2020 excludes stock-based compensation of $2.9 million, amortization of acquisition-related intangible assets of $5.5 million, integration costs of $2.0 million, lease incentive income of $3.4 million, and investment gains of $0.1 million.

Year Ended December 31, 2021, Financial Performance

Total revenues were $494.3 million, compared with $449.0 million for the same period in 2020.

On a GAAP basis, net income was $24.8 million, or $1.28 per diluted share, for 2021, compared with a net income of $10.0 million, or $0.53 per diluted share, for 2020.

On an adjusted basis, net income was $40.5 million, or $2.09 per diluted share, for 2021, which reflects an adjusted effective tax rate of 31%. Adjusted net income excludes stock-based compensation of $10.1 million, amortization of acquisition-related intangible assets of $15.1 million, and integration costs of $0.3 million. This compares with an adjusted net income of $30.4 million, or $1.60 per diluted share, for 2020, which reflects an adjusted tax rate of 31%. Adjusted net income for 2020 excludes stock-based compensation of $10.9 million, amortization of acquisition-related intangible assets of $19.7 million, acquisition-related deferred revenue fair value adjustment of $0.4 million, integration costs of $5.8 million, lease incentive income of $3.2 million, and investment gains of $2.5 million.

A reconciliation of GAAP results to adjusted results may be found in the attached financial tables.

2022 Guidance

Forrester is providing first-quarter 2022 financial guidance as follows:

First-Quarter 2022 (GAAP):

  • Total revenues of approximately $119.0 million to $123.0 million.
  • Operating margin of approximately 1.5% to 3.5%.
  • Interest expense of approximately $0.6 million.
  • An effective tax rate of 30%.
  • Diluted earnings per share of approximately $0.04 to $0.10.

First-Quarter 2022 (Adjusted):

Adjusted financial guidance for the first quarter of 2022 excludes stock-based compensation expense of $3.2 million to $3.4 million, amortization of acquisition-related intangible assets of approximately $3.4 million, and any investment gains or losses.

  • Adjusted operating margin of approximately 7.0% to 9.0%.
  • Adjusted effective tax rate of 30%.
  • Adjusted diluted earnings per share of approximately $0.28 to $0.34.

Our full-year 2022 guidance is as follows:

Full-Year 2022 (GAAP):

  • Total revenues of approximately $550.0 million to $560.0 million.
  • Operating margin of approximately 6.5% to 7.5%.
  • Interest expense of approximately $2.5 million.
  • An effective tax rate of 30%.
  • Diluted earnings per share of approximately $1.25 to $1.35.

Full-Year 2022 (Adjusted):

Adjusted financial guidance for full-year 2022 excludes stock-based compensation expense of $14.0 million to $14.5 million, amortization of acquisition-related intangible assets of approximately $13.2 million, and any investment gains or losses.

  • Adjusted operating margin of approximately 11.5% to 12.5%.
  • Adjusted effective tax rate of 30%.
  • Adjusted diluted earnings per share of approximately $2.25 to $2.35.

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 700,000 consumers, business leaders, and technology leaders worldwide; rigorous and objective research methodologies, including Forrester Wave™ evaluations; 70 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 first quarter of and full-year 2022 and statements about the performance 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; any weakness in Forrester's system of internal controls; and the amount and timing of the repurchase of Forrester stock. 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:

Chris Finn
Chief Financial Officer
Forrester Research, Inc.
cfinn@forrester.com

Shweta Agarwal
Public Relations
Forrester Research, Inc.
+1 617-613-6805
sagarwal@forrester.com

© 2022, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

 

Forrester Research, Inc.









Consolidated Statements of Income









(Unaudited, in thousands, except per share data)











Three Months Ended


Year Ended



December 31,


December 31,



2021


2020


2021


2020










Revenues:









Research


$                 89,494


$                 77,798


$              325,340


$              301,544

Consulting


39,211


38,839


156,114


137,303

Events


5,023


3,884


12,861


10,137

Total revenues


133,728


120,521


494,315


448,984

Operating expenses:









Cost of services and fulfillment


52,244


47,457


201,815


180,899

Selling and marketing


47,774


44,601


170,949


166,200

General and administrative


16,161


14,433


58,056


50,369

Depreciation


2,503


2,481


9,390


9,879

Amortization of intangible assets


3,562


5,536


15,129


19,683

Integration costs



1,964


334


5,779

Total operating expenses


122,244


116,472


455,673


432,809

Income from operations


11,484


4,049


38,642


16,175

Interest expense


(971)


(1,236)


(4,222)


(5,340)

Other expense, net


(363)


(209)


(1,229)


(374)

Gains on investments, net



107



2,472

Income before income taxes


10,150


2,711


33,191


12,933

Income tax expense


2,127


285


8,347


2,943

Net income


$                   8,023


$                   2,426


$                 24,844


$                   9,990










Basic income per common share


$                     0.42


$                     0.13


$                     1.30


$                     0.53

Diluted income per common share


$                     0.41


$                     0.13


$                     1.28


$                     0.53

Basic weighted average common shares outstanding


19,118


18,971


19,110


18,827

Diluted weighted average common shares outstanding


19,376


19,119


19,357


18,935










Adjusted data (1):









Total revenues - GAAP


$              133,728


$              120,521


$              494,315


$              448,984

Deferred revenue fair value adjustment



42



444

Adjusted revenues


$              133,728


$              120,563


$              494,315


$              449,428










Income from operations - GAAP


$                11,484


$                  4,049


$                38,642


$                 16,175

Deferred revenue fair value adjustment



42



444

Amortization of intangible assets


3,562


5,536


15,129


19,683

Integration costs



1,964


334


5,779

Lease incentive



(3,445)



(3,226)

Stock-based compensation included in the 









following expense categories:









Cost of services and fulfillment


1,668


1,693


6,057


6,156

Selling and marketing


478


520


1,698


1,751

General and administrative


573


700


2,315


2,970

Adjusted income from operations


$                 17,765


$                 11,059


$                 64,175


$                 49,732

 



Three Months Ended


Year Ended



December 31,


December 31,



2021


2020


2021


2020



 Amount 


 Per Share 


 Amount 


 Per Share 


 Amount 


 Per Share 


 Amount 


 Per Share 

Net income - GAAP


$              8,023


$     0.41


$              2,426


$     0.13


$            24,844


$     1.28


$              9,990


$     0.53

Deferred revenue fair value adjustment




42





444


0.02

Amortization of intangible assets


3,562


0.19


5,536


0.29


15,129


0.78


19,683


1.04

Integration costs




1,964


0.10


334


0.02


5,779


0.30

Lease incentive




(3,445)


(0.18)




(3,226)


(0.17)

Stock-based compensation


2,719


0.14


2,913


0.15


10,070


0.52


10,877


0.57

Gains on investments




(107)





(2,472)


(0.13)

Tax effects of items above (2)


(1,831)


(0.09)


(1,632)


(0.08)


(7,107)


(0.37)


(8,612)


(0.45)

Adjustment to tax expense for adjusted tax rate (3)


(1,135)


(0.06)


(1,063)


(0.06)


(2,750)


(0.14)


(2,091)


(0.11)

Adjusted net income


$            11,338


0.59


$              6,634


$     0.35


$            40,520


2.09


$            30,372


$     1.60

Diluted weighted average shares outstanding


19,376




19,119




19,357




18,935




















(1) Forrester believes that adjusted financial results provide investors with consistent and comparable information to aid in the understanding of Forrester's ongoing



business and are also used by Forrester in making compensation decisions. Our adjusted presentation excludes amortization of acquisition-related intangible assets,



acquisition-related deferred revenue fair value adjustments, stock-based compensation, integration costs, net gains or losses from investments, and lease



incentive cost and credits, as well as their related tax effects. We also utilized an assumed tax rate of 31% in both 2021 and 2020, which excludes items such as any release

of reserves for uncertain tax positions established in prior years, the settlement of prior-year tax audits, and the effect of any adjustments related to the filing of prior-year tax

returns. The adjusted data does not purport to be prepared in accordance with Accounting Principles Generally Accepted in the United States. 






















(2) The tax effect of adjusting items is based on the accounting treatment and rate for the jurisdiction of each item.


























(3) To compute adjusted net income, we apply an adjusted effective tax rate of 31%.













 

Forrester Research, Inc.





Key Financial Data





(Unaudited, dollars in thousands)







December 31,


December 31,



2021


2020

Balance sheet data:





Cash, cash equivalents, and marketable investments


$             134,278


$               90,257

Accounts receivable, net


$               86,965


$               84,695

Deferred revenue


$             213,696


$             179,968

Debt outstanding


$               75,000


$             109,375








Year Ended



December 31,



2021


2020

Cash flow data:





Net cash provided by operating activities


$            107,067


$               47,754

Purchases of property and equipment


$             (10,745)


$                (8,905)

Repayments of debt


$             (34,375)


$              (23,375)

Repurchases of common stock


$             (20,066)


$                       —








As of



December 31,



2021


2020

Metrics:





Contract value


$             345,800


$             301,300

Client retention


78%


72%

Wallet retention


102%


86%

Number of clients


3,005


2,808








As of



December 31,



2021


2020

Headcount:





Total headcount


1,781


1,798

Sales force


637


701

 

 

Cision View original content:https://www.prnewswire.com/news-releases/forrester-research-reports-2021-fourth-quarter-and-full-year-financial-results-301480096.html

SOURCE Forrester