Forrester Research Reports 2021 Third-Quarter Financial Results
Total revenues were
On a GAAP basis, net income was
On an adjusted basis, net income was
"We continued to see strong momentum in Q3 and achieved our goal of driving double-digit contract value growth faster than we expected," said
"Our solid performance over the past few quarters has allowed us to make investments into sales, marketing, and technology, which will further propel our business forward. Additionally, our newly launched product portfolio, Forrester Decisions, is resonating well with our clients. This next-generation platform will help us drive sustained double-digit contract value growth. Forrester Decisions is already helping us improve our sales velocity, drive wallet retention, and deepen our relationship with clients, resulting in multiyear recurring deals."
As part of the company's pivot to contract value (CV) in 2021,
Fourth-Quarter 2021 (GAAP):
- Total revenues of approximately
$131.0 million to$136.0 million . - Operating margin of approximately 7.5% to 9.5%.
- Interest expense of approximately
$1.0 million . - An effective tax rate of 28%.
- Earnings per share of approximately
$0.33 to$0.39 .
Fourth-Quarter 2021 (Adjusted):
Adjusted financial guidance for the fourth quarter of 2021 excludes stock-based compensation expense of
- Adjusted operating margin of approximately 12.0% to 14.0%.
- Adjusted effective tax rate of 31%.
- Adjusted diluted earnings per share of approximately
$0.53 to$0.59 .
Full-Year 2021 (GAAP):
- Total revenues of approximately
$492.0 million to$497.0 million . - Operating margin of approximately 7.0% to 8.0%.
- Interest expense of approximately
$4.2 million . - An effective tax rate of 27%.
- Earnings per share of approximately
$1.20 to$1.26 .
Full-Year 2021 (Adjusted):
Adjusted financial guidance for full-year 2021 excludes stock-based compensation expense of
- Adjusted operating margin of approximately 12.0% to 13.0%.
- Adjusted effective tax rate of 31%.
- Adjusted diluted earnings per share of approximately
$2.04 to$2.10 .
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 operations and the table of key financial data are attached.
Contact:
Chief Financial Officer
+1 617-613-6129
cfinn@forrester.com
Public Relations
+1 617-613-6805
sagarwal@forrester.com
© 2021,
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Consolidated Statements of Income |
||||||||
(Unaudited, in thousands, except per share data) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
|
|
|||||||
2021 |
2020 |
2021 |
2020 |
|||||
Revenues: |
||||||||
Research |
$ 79,876 |
$ 74,445 |
$ 235,846 |
$ 223,746 |
||||
Consulting |
37,393 |
33,001 |
116,903 |
98,464 |
||||
Events |
867 |
1,131 |
7,838 |
6,253 |
||||
Total revenues |
118,136 |
108,577 |
360,587 |
328,463 |
||||
Operating expenses: |
||||||||
Cost of services and fulfillment |
49,836 |
46,125 |
149,571 |
133,442 |
||||
Selling and marketing |
41,340 |
42,209 |
123,175 |
121,599 |
||||
General and administrative |
14,383 |
12,475 |
41,895 |
35,936 |
||||
Depreciation |
2,342 |
2,544 |
6,887 |
7,398 |
||||
Amortization of intangible assets |
3,696 |
4,722 |
11,567 |
14,147 |
||||
Integration costs |
- |
328 |
334 |
3,815 |
||||
Total operating expenses |
111,597 |
108,403 |
333,429 |
316,337 |
||||
Income from operations |
6,539 |
174 |
27,158 |
12,126 |
||||
Interest expense |
(1,056) |
(1,259) |
(3,251) |
(4,104) |
||||
Other expense, net |
(195) |
(274) |
(866) |
(165) |
||||
Gains on investments |
— |
— |
— |
2,365 |
||||
Income (loss) before income taxes |
5,288 |
(1,359) |
23,041 |
10,222 |
||||
Income tax expense |
766 |
2,401 |
6,220 |
2,658 |
||||
Net income (loss) |
$ 4,522 |
$ (3,760) |
$ 16,821 |
$ 7,564 |
||||
Basic income (loss) per common share |
$ 0.24 |
$ (0.20) |
$ 0.88 |
$ 0.40 |
||||
Diluted income (loss) per common share |
$ 0.23 |
$ (0.20) |
$ 0.87 |
$ 0.40 |
||||
Basic weighted average shares outstanding |
19,134 |
18,872 |
19,107 |
18,779 |
||||
Diluted weighted average shares outstanding |
19,388 |
18,872 |
19,351 |
18,873 |
||||
Adjusted data (1): |
||||||||
Total revenues - GAAP |
$ 118,136 |
$ 108,577 |
$ 360,587 |
$ 328,463 |
||||
Deferred revenue fair value adjustment |
— |
80 |
— |
402 |
||||
Adjusted revenues |
$ 118,136 |
$ 108,657 |
$ 360,587 |
$ 328,865 |
||||
Income from operations - GAAP |
$ 6,539 |
$ 174 |
$ 27,158 |
$ 12,126 |
||||
Deferred revenue fair value adjustment |
— |
80 |
— |
402 |
||||
Amortization of intangible assets |
3,696 |
4,722 |
11,567 |
14,147 |
||||
Integration costs |
— |
328 |
334 |
3,815 |
||||
Lease incentive |
— |
219 |
— |
219 |
||||
Stock-based compensation included in the |
||||||||
following expense categories: |
||||||||
Cost of services and fulfillment |
1,554 |
1,638 |
4,389 |
4,463 |
||||
Selling and marketing |
372 |
446 |
1,220 |
1,231 |
||||
General and administrative |
536 |
614 |
1,742 |
2,270 |
||||
Adjusted income from operations |
$ 12,697 |
$ 8,221 |
$ 46,410 |
$ 38,673 |
Three Months Ended |
Nine Months Ended |
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|
|
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2021 |
2020 |
2021 |
2020 |
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Amount |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
Amount |
Per Share |
|||||||||
Net income (loss) - GAAP |
$ 4,522 |
$ 0.23 |
$ (3,760) |
$ (0.20) |
$ 16,821 |
$ 0.87 |
$ 7,564 |
$ 0.40 |
||||||||
Deferred revenue fair value adjustment |
— |
— |
80 |
— |
— |
— |
402 |
0.02 |
||||||||
Amortization of intangible assets |
3,696 |
0.19 |
4,722 |
0.26 |
11,567 |
0.59 |
14,147 |
0.76 |
||||||||
Integration costs |
— |
— |
328 |
0.02 |
334 |
0.02 |
3,815 |
0.20 |
||||||||
Lease incentive |
— |
— |
219 |
0.01 |
— |
— |
219 |
0.01 |
||||||||
Stock-based compensation |
2,462 |
0.13 |
2,698 |
0.14 |
7,351 |
0.38 |
7,964 |
0.42 |
||||||||
Gains on investments |
— |
— |
— |
— |
— |
— |
(2,365) |
(0.13) |
||||||||
Tax effects of items above (2) |
(1,861) |
(0.09) |
(1,828) |
(0.10) |
(5,276) |
(0.27) |
(6,980) |
(0.37) |
||||||||
Adjustment to tax expense for adjusted tax rate (3) |
(921) |
(0.05) |
2,156 |
0.11 |
(1,615) |
(0.08) |
(1,027) |
(0.05) |
||||||||
Adjusted net income |
$ 7,898 |
0.41 |
$ 4,615 |
$ 0.24 |
$ 29,182 |
1.51 |
$ 23,739 |
$ 1.26 |
||||||||
Diluted weighted average shares outstanding |
19,388 |
18,963 |
19,351 |
18,873 |
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(1) |
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and are also used by |
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acquisition-related deferred revenue fair value adjustments, stock-based compensation, integration costs, lease incentive costs and credits, and net gains from investments, |
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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 |
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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 |
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data does not purport to be prepared in accordance with Accounting 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 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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|
|
|||
2021 |
2020 |
|||
Balance sheet data: |
||||
Cash, cash equivalents, and marketable investments |
$ 146,350 |
$ 90,257 |
||
Accounts receivable, net |
$ 52,317 |
$ 84,695 |
||
Deferred revenue |
$ 194,164 |
$ 179,968 |
||
Debt outstanding |
$ 100,000 |
$ 109,375 |
||
Nine Months Ended |
||||
|
||||
2021 |
2020 |
|||
Cash flow data: |
||||
Net cash provided by operating activities |
$ 84,992 |
$ 29,199 |
||
Purchases of property and equipment |
$ (9,845) |
$ (7,279) |
||
Repayments of debt |
$ (9,375) |
$ (21,031) |
||
Repurchases of common stock |
$ (10,646) |
$ — |
||
As of |
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|
||||
2021 |
2020 |
|||
Metrics: |
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Contract value |
$ 331,030 |
$ 295,646 |
||
Client retention |
78% |
71% |
||
Wallet retention |
99% |
85% |
||
Number of clients |
2,964 |
2,750 |
||
As of |
||||
|
||||
2021 |
2020 |
|||
Headcount: |
||||
Total headcount |
1,763 |
1,823 |
||
Sales force |
648 |
716 |
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