Forrester Research Posts 73% Increase In Fourth-Quarter Revenues And 58% Increase In Net Income
Forrester Research, Inc. (Nasdaq: FORR), a leading provider of research and analysis on emerging technologies, today announced its financial results for the three months and year ended December 31, 2000.
For the fourth quarter of 2000, revenues increased 73% to $47.9 million from $27.7 million in the fourth quarter of 1999. Net income for the fourth quarter of 2000 rose 58% to $7.3 million, compared with pro forma net income of $4.6 million for the same period last year. Diluted earnings per share for the fourth quarter of 2000 increased to $0.30, compared with pro forma earnings of $0.18 per share for the fourth quarter of 1999. The agreement value of the company’s core research and advisory services at December 31, 2000, increased 62% to $187.8 million from $115.8 million at December 31, 1999. Deferred revenue grew 55% to $102.5 million at December 31, 2000, from $66.2 million at December 31, 1999.
“We are pleased with our fourth-quarter performance,” said George F. Colony, chairman of the board and chief executive officer. “Our focus on emerging technologies and helping Global 3,500 companies transform to eBusinesses continues to set us apart as a leading research force. Our ability to scale — by creating innovative research products and opening new markets across the globe — played a significant role in our profitability and growth. Forrester’s deep business and technology focus delivered relevant and valuable insight to the company’s widening customer base.”
For the year ended December 31, 2000, Forrester reported revenues of $157.1 million, an 80% increase from the $87.3 million posted for 1999. Net income for 2000 rose 86% to $21.6 million, compared with pro forma net income of $11.6 million in 1999. Diluted earnings per share grew to $0.88 in 2000, compared with pro forma earnings per share of $0.58 in 1999.
“In the fourth quarter, Forrester launched four new eBusiness TechRankings™ categories. These fully customizable rankings are designed to help companies select the best emerging technologies and services to drive their eBusiness strategy,” stated Colony. “By combining our technology expertise with the most objective and thorough product testing and evaluation available, we are delivering a continuously updated research tool to large companies to help them make critical technology direction and selection decisions.”
Forrester continued to expand its international reach during the fourth quarter of 2000. Forrester’s Research Center Deutschland introduced two new German-language Market Focuses: Financial Services and B2C. Colony added, “Now that FORIT GmbH has successfully transitioned into Forrester’s Research Center Deutschland, we can focus on perfecting our German-language research and create a model for native-language research as we build our presence and strategy research in international markets.
“During the quarter, we announced two new North American Research Centers in Toronto and San Francisco,” said Colony. “Recognizing that Toronto is the epicenter for Canadian technology change, the first Canadian Report, ‘Canada’s B2B Future,’ premiered to much media and industry anticipation. The demand for eBusiness research in Canada affirms our North American expansion strategy. In fact, Canada was second only to Europe as a source of international revenue during the fourth quarter of 2000.
“Likewise, clients are enthusiastic about our new San Francisco Research Center,” commented Colony. “We are on track to staff this office with 30 employees by the end of 2001, and we have already hired four research analysts from the Bay area.
Forrester hosted four Forums in the fourth quarter of 2000 in Europe and in the US. “We covered fresh ground in our first US Healthcare Forum and in our UK Media Forum,” stated Colony. “Feedback from attendees of the Retail & Marketing Forum Europe and our annual Executive Strategy Forum in Boston validated our unique approach to Event format and content.
“Looking forward to 2001, we see new opportunities emerging even as the economic outlook changes,” said Colony. “The last few years have been an Internet ‘phony war’ — lots of talk but not much substantive change. We are now entering the real war, a time when winners and losers will emerge, and the risks to large companies that fail to take the eBusiness initiative will rise. Forrester is the best-positioned technology research company for the times. We help Global 3,500 companies synchronize their sales channels, make sound technology decisions, take real costs out of their business models, and eliminate inefficient processes. Our ‘Whole View’ approach makes Forrester unique in the research business.
“In 2001, we’re recruiting the top talent and expanding globally,” continued Colony. “We’re equipping our clients with the right business and technology analysis for the times. New products like Business Technographics® will help vendors target the right customers; TechRankings will help users choose the right technology. We look forward to continued growth in 2001 and are reiterating our guidance for the year.”
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Forrester is reiterating its financial outlook for its fiscal year 2001 as discussed in its press release dated November 29, 2000.
Fiscal Year 2001
- Total revenue growth of approximately 50% over 2000.
- Core revenue growth of approximately 50% to 55% over 2000.
- Advisory services and other revenue growth of approximately 45% to 50% over 2000.
- Operating margin of approximately 17% to 18%.
- Diluted weighted average shares outstanding are expected to be approximately 26 million to 28 million.
- Growth of diluted earnings per share of approximately 25% to 30% over 2000 diluted earnings per share.
First Quarter 2001
For the first quarter of 2001, the company aims to achieve the following financial targets:
- Total revenue growth of approximately 45% to 50% over Q1 2000.
- Core revenue growth of approximately 50% to 55% over Q1 2000.
- Advisory services and other revenue growth of approximately 25% to 30% over Q1 2000.
- Operating margin of approximately 13% to 14%.
- The company expects other income, consisting mainly of interest income, for Q1 2001 to be approximately $2.0 million, assuming no unanticipated items.
- Diluted weighted average shares outstanding are expected to be approximately 25.0 million to 26.0 million.
- Growth of diluted earnings per share of approximately 25% to 30% over Q1 2000 diluted earnings per share.