Forrester Research Reports 2023 Fourth-Quarter And Full-Year Financial Results
Commenting on the results,
“We see 2024 as the final transition year in the Forrester Decisions migration, and this is reflected in our 2024 guidance. We expect pressures throughout the year on CV, key retention metrics, and revenue. However, we have built the product, go-to-market, and organizational foundations to enable the company to return to CV growth in 2025.”
Fourth-Quarter Consolidated Results
Total revenues for the fourth quarter of 2023 were
On a GAAP basis, net loss was
On an adjusted basis, net income was
Year Ended
Total revenues were
On a GAAP basis, net income was
On an adjusted basis, net income was
Additional details regarding key metrics can be found in the investor presentation on the investor relations section of the Company’s website.
A reconciliation of GAAP results to adjusted results may be found in the attached financial tables.
2024 Guidance
Full-Year 2024 (GAAP):
-
Total revenues of approximately
$430.0 million to$450.0 million , or a decline of 6% to 11% versus the prior year - Operating margin of approximately 2.4% to 3.4%
-
Interest expense of approximately
$3.0 million - An effective tax rate of 35%
-
Diluted earnings per share of approximately
$0.33 to$0.53
Full-Year 2024 (Adjusted):
Adjusted financial guidance for full-year 2024 excludes stock-based compensation expense of
- Adjusted operating margin of approximately 9.5% to 10.5%
- Adjusted effective tax rate of 29%
-
Adjusted diluted earnings per share of approximately
$1.50 to$1.70
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, Forrester’s financial guidance for the full-year 2024 and statements about the performance of Forrester Decisions, Forrester’s sales force, 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, including the migration of its existing clients into its Forrester Decisions portfolio of services; Forrester’s ability to fulfill existing or generate new consulting engagements and advisory services; technology spending; the risks and challenges inherent in international business activities; the impact of health epidemics, including COVID-19, on Forrester’s business; Forrester’s ability to offer new products and services; Forrester’s dependence on key personnel; Forrester’s ability to attract and retain professional staff; Forrester’s ability to respond to business and economic conditions and market trends; the impact of Forrester’s outstanding debt obligations; competition and industry consolidation; possible variations in Forrester’s quarterly operating results; concentration of ownership of
The consolidated statements of operations and the table of key financial data are attached.
© 2024,
| Consolidated Statements of Operations | ||||||||||||||||
| (Unaudited, In thousands, except per share data) | ||||||||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||||
|
|
|
|
||||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
||
| Revenues: | ||||||||||||||||
| Research |
$ |
85,185 |
|
$ |
92,188 |
|
$ |
334,396 |
|
$ |
354,453 |
|
||||
| Consulting |
|
28,271 |
|
|
37,512 |
|
|
118,228 |
|
|
152,587 |
|
||||
| Events |
|
4,633 |
|
|
7,191 |
|
|
28,155 |
|
|
30,747 |
|
||||
| Total revenues |
|
118,089 |
|
|
136,891 |
|
|
480,779 |
|
|
537,787 |
|
||||
| Operating expenses: | ||||||||||||||||
| Cost of services and fulfillment |
|
52,600 |
|
|
56,814 |
|
|
204,484 |
|
|
223,773 |
|
||||
| Selling and marketing |
|
44,272 |
|
|
48,691 |
|
|
167,352 |
|
|
181,940 |
|
||||
| General and administrative |
|
16,847 |
|
|
19,758 |
|
|
68,497 |
|
|
67,655 |
|
||||
| Depreciation |
|
1,895 |
|
|
2,277 |
|
|
8,452 |
|
|
9,269 |
|
||||
| Amortization of intangible assets |
|
2,781 |
|
|
3,093 |
|
|
11,956 |
|
|
13,161 |
|
||||
| Restructuring costs |
|
1,132 |
|
|
9,335 |
|
|
13,272 |
|
|
9,335 |
|
||||
| Total operating expenses |
|
119,527 |
|
|
139,968 |
|
|
474,013 |
|
|
505,133 |
|
||||
| Income (loss) from operations |
|
(1,438 |
) |
|
(3,077 |
) |
|
6,766 |
|
|
32,654 |
|
||||
| Interest expense |
|
(774 |
) |
|
(729 |
) |
|
(3,060 |
) |
|
(2,461 |
) |
||||
| Other income, net |
|
739 |
|
|
30 |
|
|
2,371 |
|
|
222 |
|
||||
| Gains (losses) on investments, net |
|
208 |
|
|
(117 |
) |
|
208 |
|
|
309 |
|
||||
| Income (loss) before income taxes |
|
(1,265 |
) |
|
(3,893 |
) |
|
6,285 |
|
|
30,724 |
|
||||
| Income tax expense (benefit) |
|
(602 |
) |
|
(2,263 |
) |
|
3,235 |
|
|
8,918 |
|
||||
| Net income (loss) |
$ |
(663 |
) |
$ |
(1,630 |
) |
$ |
3,050 |
|
$ |
21,806 |
|
||||
| Basic income (loss) per common share |
$ |
(0.03 |
) |
$ |
(0.09 |
) |
$ |
0.16 |
|
$ |
1.15 |
|
||||
| Diluted income (loss) per common share |
$ |
(0.03 |
) |
$ |
(0.09 |
) |
$ |
0.16 |
|
$ |
1.14 |
|
||||
| Basic weighted average common shares outstanding |
|
19,238 |
|
|
19,051 |
|
|
19,183 |
|
|
18,967 |
|
||||
| Diluted weighted average common shares outstanding |
|
19,238 |
|
|
19,051 |
|
|
19,258 |
|
|
19,172 |
|
||||
| Adjusted data (1): | ||||||||||||||||
| Income (loss) from operations - GAAP |
$ |
(1,438 |
) |
$ |
(3,077 |
) |
$ |
6,766 |
|
$ |
32,654 |
|
||||
| Amortization of intangible assets |
|
2,781 |
|
|
3,093 |
|
|
11,956 |
|
|
13,161 |
|
||||
| Restructuring costs |
|
1,132 |
|
|
9,335 |
|
|
13,272 |
|
|
9,335 |
|
||||
| Legal settlement |
|
— |
|
|
— |
|
|
4,800 |
|
|
— |
|
||||
| Stock-based compensation included in the | ||||||||||||||||
| following expense categories: | ||||||||||||||||
| Cost of services and fulfillment |
|
2,563 |
|
|
2,038 |
|
|
9,068 |
|
|
8,435 |
|
||||
| Selling and marketing |
|
849 |
|
|
646 |
|
|
2,943 |
|
|
2,774 |
|
||||
| General and administrative |
|
905 |
|
|
823 |
|
|
3,475 |
|
|
3,334 |
|
||||
| Adjusted income from operations |
$ |
6,792 |
|
$ |
12,858 |
|
$ |
52,280 |
|
$ |
69,693 |
|
||||
|
Three Months Ended |
|
Year Ended |
||||||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||||||||||||||||||
|
Amount |
|
Per Share |
|
Amount |
|
Per Share |
|
Amount |
|
Per Share |
|
Amount |
|
Per Share |
||||||||||||||||||
| Net income (loss) - GAAP |
$ |
(663 |
) |
$ |
(0.03 |
) |
$ |
(1,630 |
) |
$ |
(0.09 |
) |
$ |
3,050 |
|
$ |
0.16 |
|
$ |
21,806 |
|
$ |
1.14 |
|
||||||||
| Amortization of intangible assets |
|
2,781 |
|
|
0.14 |
|
|
3,093 |
|
|
0.16 |
|
|
11,956 |
|
|
0.62 |
|
|
13,161 |
|
|
0.68 |
|
||||||||
| Restructuring costs |
|
1,132 |
|
|
0.06 |
|
|
9,335 |
|
|
0.49 |
|
|
13,272 |
|
|
0.69 |
|
|
9,335 |
|
|
0.49 |
|
||||||||
| Legal settlement |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,800 |
|
|
0.25 |
|
|
— |
|
|
— |
|
||||||||
| Stock-based compensation |
|
4,317 |
|
|
0.22 |
|
|
3,507 |
|
|
0.18 |
|
|
15,486 |
|
|
0.80 |
|
|
14,543 |
|
|
0.76 |
|
||||||||
| (Gains) losses on investments |
|
(208 |
) |
|
(0.01 |
) |
|
117 |
|
|
0.01 |
|
|
(208 |
) |
|
(0.01 |
) |
|
(309 |
) |
|
(0.02 |
) |
||||||||
| Tax effects of items above (2) |
|
(1,994 |
) |
|
(0.10 |
) |
|
(4,261 |
) |
|
(0.22 |
) |
|
(11,111 |
) |
|
(0.58 |
) |
|
(9,748 |
) |
|
(0.51 |
) |
||||||||
| Adjustment to tax expense for adjusted tax rate (3) |
|
(568 |
) |
|
(0.03 |
) |
|
(1,649 |
) |
|
(0.08 |
) |
|
(616 |
) |
|
(0.03 |
) |
|
(1,570 |
) |
|
(0.08 |
) |
||||||||
| Adjusted net income |
$ |
4,797 |
|
|
0.25 |
|
$ |
8,512 |
|
$ |
0.45 |
|
$ |
36,629 |
|
|
1.90 |
|
$ |
47,218 |
|
$ |
2.46 |
|
||||||||
| Diluted weighted average shares outstanding |
|
19,314 |
|
|
19,110 |
|
|
19,258 |
|
|
19,172 |
|
||||||||||||||||||||
| (1) |
| (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 29% in 2023 and 30% in 2022. |
| Key Financial Data | |||||||||
| (Unaudited, dollars in thousands) | |||||||||
|
|
|
|
|||||||
|
|
2023 |
|
|
|
2022 |
|
|||
| Balance sheet data: | |||||||||
| Cash, cash equivalents, and marketable investments |
$ |
124,489 |
|
$ |
123,317 |
|
|||
| Accounts receivable, net |
$ |
58,999 |
|
$ |
73,345 |
|
|||
| Deferred revenue |
$ |
156,798 |
|
$ |
178,021 |
|
|||
| Debt outstanding |
$ |
35,000 |
|
$ |
50,000 |
|
|||
|
Year Ended |
|||||||||
|
|
|||||||||
|
|
2023 |
|
|
|
2022 |
|
|||
| Cash flow data: | |||||||||
| Net cash provided by operating activities |
$ |
21,673 |
|
$ |
39,425 |
|
|||
| Purchases of property and equipment |
$ |
(5,495 |
) |
$ |
(5,663 |
) |
|||
| Repayments of debt |
$ |
(15,000 |
) |
$ |
(25,000 |
) |
|||
| Repurchases of common stock |
$ |
(4,082 |
) |
$ |
(15,112 |
) |
|||
|
As of |
|||||||||
|
|
|||||||||
|
|
2023 |
|
|
|
2022 |
|
|||
| Metrics: | |||||||||
| Contract value |
$ |
332,100 |
|
$ |
345,400 |
|
(a) | ||
| Client retention |
|
73 |
% |
|
74 |
% |
|||
| Wallet retention |
|
87 |
% |
|
94 |
% |
(a) | ||
| Number of clients |
|
2,449 |
|
|
2,778 |
|
|||
|
As of |
|||||||||
|
|
|||||||||
|
|
2023 |
|
|
|
2022 |
|
|||
| Headcount: | |||||||||
| Total headcount |
|
1,744 |
|
|
2,033 |
|
|||
| Sales force |
|
601 |
|
|
709 |
|
|||
|
(a) Effective for the fourth quarter of 2023, we made a slight modification to the calculation of contract value (“CV”) based on the increasing percentage of multi-year contracts we are signing with our clients, and to more closely align CV with the trends in the related bookings and revenue performance. Historically, we have annualized the ratable revenue portion of our CV subscription products, while the entitlements included in the subscriptions (representing approximately 10% of the subscription) have been included in CV at their total value, as all entitlements in the contract are available for use during an annual period. The revised calculation annualizes the entitlements for contracts greater than one year. In addition, we update CV each year for the foreign currency rates used for internal planning purposes. We have updated the CV metric for our 2024 plan rates. For comparative purposes, we have recast historical CV and wallet retention for both the currency rate update and the annualization of entitlements. We have included the recast CV and wallet retention metrics for the period ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240208409175/en/
Vice President, Corporate Development & Investor Relations
+1 617-613-6565
ebrycemorris@forrester.com
Senior Director, Public Relations
+1 617-613-6805
sagarwal@forrester.com
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