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Forrester Research (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We work with business and technology leaders to develop customer-obsessed strategies that drive growth. Forrester’s unique insights are grounded in annual surveys of more than 675,000 consumers and business leaders worldwide, rigorous and objective methodologies, and the shared wisdom of our most innovative clients. Through proprietary research, data and analytics, custom consulting, exclusive executive peer groups, and events, the Forrester experience is about a singular and powerful purpose: to challenge the thinking of our clients to help them lead change in their organizations.

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Forrester Research Reports 2018 Third-Quarter Financial Results

CAMBRIDGE, Mass., Oct. 24, 2018 /PRNewswire/ -- Forrester Research, Inc. (Nasdaq: FORR) today announced its 2018 third-quarter financial results.

Third-Quarter Financial Performance

Total revenues were $84.9 million for the third quarter of 2018, compared with $80.4 million for the third quarter of 2017. Research revenues increased 4%, and advisory services and events revenues increased 9%, compared with the third quarter of 2017.

On a GAAP basis, net income was $4.0 million, or $0.21 per diluted share, for the third quarter of 2018, compared with net income of $4.0 million, or $0.22 per diluted share, for the same period in 2017.

On a pro forma basis, net income was $6.0 million, or $0.33 per diluted share, for the third quarter of 2018, which reflects a pro forma effective tax rate of 31%. Pro forma net income excludes stock-based compensation of $2.1 million, amortization of acquisition-related intangible assets of $0.4 million, and acquisition and integration costs of $1.0 million. This compares with pro forma net income of $5.6 million, or $0.31 per diluted share, for the same period in 2017, which reflects a pro forma tax rate of 40%. Pro forma net income for the third quarter of 2017 excludes stock-based compensation of $2.2 million, amortization of acquisition-related intangible assets of $0.2 million, and net investment losses of $0.8 million.

"Forrester met revenue and operating margin guidance while exceeding EPS guidance for the third quarter of 2018," said George F. Colony, Forrester's chairman and chief executive officer. "Our strategy continues to show results. We remain positive about our momentum and growth as we head into the fourth quarter."

Forrester is providing fourth-quarter 2018 financial guidance as follows:

Fourth-Quarter 2018 (GAAP):

  • Total revenues of approximately $95.0 million to $98.0 million.
  • Operating margin of approximately 9.5% to 11.5%.
  • Other income (expense), net of zero.
  • An effective tax rate of 33%.
  • Diluted earnings per share of approximately $0.36 to $0.39.

Fourth-Quarter 2018 (Pro Forma):

Pro forma financial guidance for the fourth quarter of 2018 excludes stock-based compensation expense of $2.1 million to $2.3 million, acquisition and integration costs of $0.5 million to $0.7 million, amortization of acquisition-related intangible assets of $0.4 million to $0.5 million, and any investment gains or losses.

  • Pro forma operating margin of approximately 13.0% to 15.0%.
  • Pro forma effective tax rate of 31%.
  • Pro forma diluted earnings per share of approximately $0.49 to $0.52.

Our full-year 2018 guidance is as follows:

Full-Year 2018 (GAAP):

  • Total revenues of approximately $354.0 million to $357.0 million.
  • Operating margin of approximately 6.5% to 7.5%.
  • Other income (expense), net of $0.5 million.
  • An effective tax rate of 31%.
  • Diluted earnings per share of approximately $0.91 to $0.94.

Full-Year 2018 (Pro Forma):

Pro forma financial guidance for full-year 2018 excludes stock-based compensation expense of $8.3 million to $8.5 million, acquisition and integration costs of $1.8 million to $2.0 million, amortization of acquisition-related intangible assets of $1.2 million to $1.3 million, and any investment gains or losses.

  • Pro forma operating margin of approximately 9.5% to 10.5%.
  • Pro forma effective tax rate of 31%.
  • Pro forma diluted earnings per share of approximately $1.33 to $1.36.

Quarterly Dividend

Forrester also announced today that its board of directors has approved a quarterly cash dividend of $0.20 per share, payable December 26, 2018, to shareholders of record on December 12, 2018.

About Forrester Research

Forrester Research is one of the most influential research and advisory firms in the world. We work with business and technology leaders to develop customer-obsessed strategies that drive growth. Forrester's unique insights are grounded in annual surveys of more than 675,000 consumers and business leaders worldwide, rigorous and objective methodologies, and the shared wisdom of our most innovative clients. Through proprietary research, data, custom consulting, exclusive executive peer groups, and events, the Forrester experience is about a singular and powerful purpose: to challenge the thinking of our clients to help them lead change in their organizations. For more information, 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 fourth quarter of and full-year 2018, statements about the success of operational improvements, and statements about 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, demand for advisory and consulting services, technology spending, Forrester's ability to respond to business and economic conditions and market trends, Forrester's ability to develop and offer new products and services, the risks and challenges inherent in international business activities, competition and industry consolidation, the ability to attract and retain professional staff, Forrester's dependence on key personnel, Forrester's ability to realize the anticipated benefits from recent internal reorganizations, the possibility of network disruptions and security breaches, Forrester's ability to enforce and protect its intellectual property, and possible variations in Forrester's quarterly operating results. Dividend declarations are at the discretion of Forrester's board of directors, and plans for future dividends may be revised by the board at any time. 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 income and the table of key financial data are attached.

Contact:

Michael Doyle
Chief Financial Officer
Forrester Research, Inc.
+1 617-613-6000
mdoyle@forrester.com

Meaghan Rhyasen
Public Relations
Forrester Research, Inc.
+ 1 617-613-6070
press@forrester.com

 © 2018, 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


Nine Months Ended


September 30,


September 30,


2018


2017


2018


2017









Revenues:








Research services

$    56,332


$    54,235


$  166,332


$  160,553

Advisory services and events

28,558


26,134


92,660


86,743

Total revenues

84,890


80,369


258,992


247,296

Operating expenses:








Cost of services and fulfillment

34,361


32,508


107,537


100,814

Selling and marketing

31,051


29,225


96,771


90,355

General and administrative

11,192


10,083


32,871


30,672

Depreciation

1,965


1,607


6,056


4,775

Amortization of intangible assets

402


197


770


582

Acquisition and integration costs

977



1,306


Total operating expenses

79,948


73,620


245,311


227,198

Income from operations

4,942


6,749


13,681


20,098

Other income, net

319


146


472


248

Losses on investments

(17)


(772)


(62)


(997)

Income before income taxes

5,244


6,123


14,091


19,349

Income tax expense

1,294


2,170


4,086


6,302

Net income

$      3,950


$      3,953


$    10,005


$    13,047









Diluted income per common share

$        0.21


$        0.22


$        0.55


$        0.72









Diluted weighted average shares outstanding

18,433


18,051


18,353


18,212









Basic income per common share

$        0.22


$        0.22


$        0.55


$        0.73









Basic weighted average shares outstanding

18,088


17,747


18,030


17,897









Pro forma data (1):
















Income from operations

$      4,942


$      6,749


$    13,681


$    20,098

Amortization of intangible assets

402


197


770


582

Acquisition and integration costs

977



1,306


Stock-based compensation included in the








following expense categories:








Cost of services and fulfillment

1,001


1,088


3,128


3,387

Selling and marketing

261


170


752


535

General and administrative

858


920


2,311


2,501









Pro forma income from operations

8,441


9,124


21,948


27,103









Other income, net

319


146


472


248

Pro forma income before income taxes

8,760


9,270


22,420


27,351









Income tax expense GAAP

1,294


2,170


4,086


6,302

Tax effects of pro forma items (2)

1,292


1,407


2,423


3,222

Adjustment to tax expense to reflect pro forma tax rate (3)

130


131


441


1,416









Pro forma net income

$      6,044


$       5,562


$    15,470


$    16,411









Pro forma diluted income per share

$        0.33


$         0.31


$        0.84


$        0.90

Pro forma diluted weighted average shares outstanding

18,433


18,051


18,353


18,212










(1) Forrester believes that pro forma 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 pro forma presentation excludes

amortization of acquisition-related intangible assets, stock-based compensation, acquisition and integration costs, net gains or losses from

investments, as well as their related tax effects. We also utilized an assumed tax rate of 31% in 2018 and 40% in 2017, which excludes

items such as  any release of reserves for uncertain tax positions established in prior years and the effect of any adjustments related to the

filing of prior year tax returns. The pro forma 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 pro forma net income, we apply a pro forma effective tax rate of 31% in 2018 and 40% in 2017.



 

 

Forrester Research, Inc.




Key Financial Data




(Unaudited, dollars in thousands)









September 30,


December 31,


2018


2017

Balance sheet data:




Cash, cash equivalents and marketable investments

$                144,452


$                134,123

Accounts receivable, net

$                  38,552


$                  70,023

Deferred revenue

$                128,435


$                145,207






Nine Months Ended


September 30,


2018


2017

Cash flow data:




Net cash provided by operating activities

$                  37,432


$                  36,863

Purchases of property and equipment

$                  (3,161)


$                  (5,806)

Cash paid for acquisitions

$                  (9,250)


$                        —

Repurchases of common stock

$                  (9,946)


$                (39,967)

Dividends paid

$                (10,839)


$                (10,205)






As of


September 30,


2018


2017

Metrics:




Agreement value

$                257,500


$                237,800

Client retention

74%


76%

Dollar retention

88%


88%

Enrichment

100%


94%

Number of clients

2,357


2,393






As of


September 30,


2018


2017

Headcount:




Total headcount

1,418


1,374

Products and advisory services staff

542


510

Sales force

519


530





 

Cision View original content:http://www.prnewswire.com/news-releases/forrester-research-reports-2018-third-quarter-financial-results-300737323.html

SOURCE Forrester