Forrester Research, Inc. (Nasdaq: FORR), a leading provider of research and analysis on emerging technologies and the Internet, today announced its financial outlook for 2001. This guidance, as stated below, is based on current expectations and industry trends. These statements are forward-looking and actual results may differ materially.
“I am excited about our plans for 2001,” commented George F. Colony, Forrester’s chairman of the board and chief executive officer. “We are well-positioned to advance our strategy of growing both revenue and earnings in the coming year. We plan to achieve year-over-year revenue growth of approximately 50% and an increase in diluted earnings per share of approximately 25% to 30% over 2000 diluted earnings per share. Our 2001 plans reflect and underscore Forrester’s continued commitment to growth and profitability.
“Three factors will drive our business in 2001,” Colony said. “First, every company of scale worldwide will have to become an eBusiness over the next two to five years, and Forrester helps companies take the most efficient and direct course on this voyage. The second factor is technology, which is enabling Forrester to launch our new eTool products that let Forrester clients measure, plan, and execute their eBusiness strategy. The third dynamic driving our growth is globalization. The Internet economy is emerging first in the US, and then it will roll into Europe from 2001 to 2003 and Asia from 2001 to 2005. Forrester will be on the ground in those regions to help large companies transform into eBusinesses.”
“Given the momentum created by these growth drivers, Forrester is working to achieve a number of ambitious financial targets for 2001,” said Susan Whirty Maffei, Esq., Forrester’s chief financial officer. “In addition to year-over-year revenue growth of approximately 50%, we anticipate 2001 core revenue growth of approximately 50% to 55% over 2000, and advisory services and other revenue growth of approximately 45% to 50% over 2000. We expect that core revenue will comprise approximately 74% to 78% of total revenue.
“We also plan to continue to increase profitability, both from an operating income and earnings per share perspective,” Maffei said. “We’ve targeted an operating margin of approximately 17% to 18% for the year, and we expect quarterly margins in line with our historical pattern, starting out lower in the first quarter and increasing throughout the remainder of 2001. Diluted weighted average shares outstanding are expected to be approximately 26 million to 28 million, and we anticipate seeing Forrester’s 2001 diluted earnings per share increase between 25% and 30% over 2000 diluted earnings per share. As we grow earnings, we will also continue to invest in our infrastructure to drive revenue growth. We expect investments to include an aggressive program of recruiting and hiring, geographic expansion, and introduction of new research products and eTools.”
Forrester also reiterated its financial outlook for the fourth quarter of 2000 as outlined in its press release dated October 25, 2000.
- Total revenue growth of approximately 50% to 55% over Q4 1999.
- Core revenue growth of approximately 65% to 70% over Q4 1999.
- Advisory services and other revenue growth of approximately 25% to 30% over Q4 1999. One of the four Forum events that the company plans to hold in Q4 will be a new event. The Company held three events in Q4 1999.
- Operating margin of approximately 19% to 21%. The Company plans to continue to hire aggressively, including, if possible, accelerating 2001 hiring, expanding geographically, and introducing new products. Expenses are dependent in part on the level of revenue.
- The Company expects other income, consisting mainly of interest income, for Q4 2000 to be approximately $2.0 million to $2.2 million, assuming no unanticipated items. The Company expects to pay the purchase price for its acquisition of FORIT GmbH in Q4.
- The tax rate for Q4 2000 is expected to be approximately 37.5%.
- Growth of diluted earnings per share of approximately 40% over Q4 1999 diluted earnings per share of $0.18.