Year-over-year total contract value up by 15% to $345.8 million 

Cambridge, Mass., February 10, 2022 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its 2021 fourth-quarter and full-year financial results. 

“We delivered historic results in 2021, headlined by record contract value growth of 15%, six straight quarters of sequential contract value growth, and double-digit revenue growth for the year,” said George F. Colony, Forrester’s chairman and chief executive officer. “Our wallet retention, client count, and client retention also increased significantly during the year.” 

“Our new flagship research portfolio, Forrester Decisions, is exceeding expectations, and its value is resonating with our clients. We are well positioned to build on this strong momentum in 2022 and remain laser-focused on increasing contract value at double-digit rates. I thank our employees and clients for helping us achieve these results.” 

Fourth-Quarter Financial Performance 

Total revenues were $133.7 million for the fourth quarter of 2021, compared with $120.5 million for the fourth quarter of 2020. 

On a GAAP basis, net income was $8.0 million, or $0.41 per diluted share, for the fourth quarter of 2021, compared with a net income of $2.4 million, or $0.13 per diluted share, for the same period in 2020. 

On an adjusted basis, net income was $11.3 million, or $0.59 per diluted share, for the fourth quarter of 2021, which reflects an adjusted effective tax rate of 31%. Adjusted net income excludes stock-based compensation of $2.7 million and amortization of acquisition-related intangible assets of $3.6 million. This compares with an adjusted net income of $6.6 million, or $0.35 per diluted share, for the same period in 2020, which reflects an adjusted tax rate of 31%. Adjusted net income for the fourth quarter of 2020 excludes stock-based compensation of $2.9 million, amortization of acquisition-related intangible assets of $5.5 million, integration costs of $2.0 million, lease incentive income of $3.4 million, and investment gains of $0.1 million. 

 

Year Ended December 31, 2021, Financial Performance 

Total revenues were $494.3 million, compared with $449.0 million for the same period in 2020. 

On a GAAP basis, net income was $24.8 million, or $1.28 per diluted share, for 2021, compared with a net income of $10.0 million, or $0.53 per diluted share, for 2020. 

On an adjusted basis, net income was $40.5 million, or $2.09 per diluted share, for 2021, which reflects an adjusted effective tax rate of 31%. Adjusted net income excludes stock-based compensation of $10.1 million, amortization of acquisition-related intangible assets of $15.1 million, and integration costs of $0.3 million. This compares with an adjusted net income of $30.4 million, or $1.60 per diluted share, for 2020, which reflects an adjusted tax rate of 31%. Adjusted net income for 2020 excludes stock-based compensation of $10.9 million, amortization of acquisition-related intangible assets of $19.7 million, acquisition-related deferred revenue fair value adjustment of $0.4 million, integration costs of $5.8 million, lease incentive income of $3.2 million, and investment gains of $2.5 million. 

A reconciliation of GAAP results to adjusted results may be found in the attached financial tables. 

 2022 Guidance 

 Forrester is providing first-quarter 2022 financial guidance as follows: 

 

First-Quarter 2022 (GAAP): 

  • Total revenues of approximately $119.0 million to $123.0 million. 
  • Operating margin of approximately 1.5% to 3.5%. 
  • Interest expense of approximately $0.6 million. 
  • An effective tax rate of 30%. 
  • Diluted earnings per share of approximately $0.04 to $0.10. 

First-Quarter 2022 (Adjusted): 

Adjusted financial guidance for the first quarter of 2022 excludes stock-based compensation expense of $3.2 million to $3.4 million, amortization of acquisition-related intangible assets of approximately $3.4 million, and any investment gains or losses. 

  • Adjusted operating margin of approximately 7.0% to 9.0%. 
  • Adjusted effective tax rate of 30%. 
  • Adjusted diluted earnings per share of approximately $0.28 to $0.34. 

Our full-year 2022 guidance is as follows: 

Full-Year 2022 (GAAP): 

  • Total revenues of approximately $550.0 million to $560.0 million. 
  • Operating margin of approximately 6.5% to 7.5%. 
  • Interest expense of approximately $2.5 million. 
  • An effective tax rate of 30%. 
  • Diluted earnings per share of approximately $1.25  to  $1.35. 

Full-Year 2022 (Adjusted): 

Adjusted financial guidance for full-year 2022 excludes stock-based compensation expense of $14.0 million to $14.5 million, amortization of acquisition-related intangible assets of approximately $13.2 million, and any investment gains or losses. 

  • Adjusted operating margin of approximately 11.5% to 12.5%. 
  • Adjusted effective tax rate of 30%. 
  • Adjusted diluted earnings per share of approximately $2.25 to $2.35. 

About Forrester 

Forrester (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We help leaders across technology, marketing, customer experience, product, and sales functions use customer obsession to accelerate growth. Through Forrester’s proprietary research, consulting, and events, leaders from around the globe are empowered to be bold at work — to navigate change and put their customers at the center of their leadership, strategy, and operations. Our unique insights are grounded in annual surveys of more than 700,000 consumers, business leaders, and technology leaders worldwide; rigorous and objective research methodologies, including Forrester Wave™ evaluations; 70 million real-time feedback votes; and the shared wisdom of our clients. To learn more, 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 first quarter of and full-year 2022 and statements about the performance of Forrester Decisions 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; Forrester’s ability to fulfill existing or generate new consulting engagements and advisory services; technology spending; the impact of health epidemics, including COVID-19, on Forrester’s business; Forrester’s ability to respond to business and economic conditions and market trends; the risks and challenges inherent in international business activities, including the exit of the United Kingdom from the European Union; Forrester’s ability to offer new products and services; Forrester’s dependence on key personnel; Forrester’s ability to attract and retain professional staff; the impact of Forrester’s outstanding debt obligations; competition and industry consolidation; possible variations in Forrester’s quarterly operating results; concentration of ownership of Forrester; the possibility of network disruptions and security breaches; any failure to enforce and protect Forrester’s intellectual property rights; compliance with privacy laws; taxation risks; any weakness in Forrester’s system of internal controls; and the amount and timing of the repurchase of Forrester stock. 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 operations and the table of key financial data are attached.