Forrester Research Reports 2023 Second-Quarter Financial Results
CAMBRIDGE, Mass., July 27, 2023 — Forrester Research, Inc. (Nasdaq: FORR) today announced financial results for the second quarter ended June 30, 2023, with flat contract value (CV), at $344.0 million, compared with the prior year.
“While the tech recession and uncertain macroeconomic environment continued to have the most significant impact on our non-CV business, we crossed a meaningful milestone this quarter with 51% of CV now on our Forrester Decisions research platform,” said George F. Colony, Forrester’s chairman and chief executive officer. “Given our laser focus on driving CV growth, we remain on track to migrate two-thirds of total CV to Forrester Decisions by the end of the year. Our ongoing enhancements to Forrester Decisions, combined with continued upskilling of our sales force to drive new business growth and sell higher into organizations, positions us well for long-term success.”
Second-Quarter Consolidated Results
Total revenues for the second quarter of 2023 were $135.6 million, compared with $148.2 million for the comparable quarter in 2022.
On a GAAP basis, net income was $5.3 million, or $0.28 per diluted share, for the second quarter of 2023, compared with net income of $13.9 million, or $0.72 per diluted share, for the same period in 2022.
On an adjusted basis, net income was $18.1 million, or $0.94 per diluted share, for the second quarter of 2023, reflecting an adjusted effective tax rate of 29%. Adjusted net income excludes stock-based compensation of $3.9 million, amortization of acquisition-related intangible assets of $3.1 million, and restructuring costs of $10.5 million. This compares with an adjusted net income of $19.2 million, or $1.00 per diluted share, for the same period in 2022, which reflects an adjusted tax rate of 30%. Adjusted net income for the second quarter of 2022 excludes stock-based compensation of $3.8 million and amortization of acquisition-related intangible assets of $3.4 million.
Forrester is providing updated guidance for 2023 as follows:
Full Year 2023 (GAAP):
- Total revenues of approximately $475 million to $485 million
- Operating margin of approximately 1.2% to 2.2%
- Interest expense of approximately $3.0 million
- An effective tax rate of approximately 43%
- Earnings per share of approximately $0.10 to $0.30
Full Year 2023 (Adjusted):
- Adjusted financial guidance for full-year 2023 excludes stock-based compensation expense of $15.0 million to $16.0 million, amortization of acquisition-related intangible assets of approximately $12.0 million, restructuring costs of approximately $12.5 million, a legal settlement of $4.8 million, and any investment gains or losses.
- Adjusted operating margin of approximately 10.5% to 11.5%
- Adjusted effective tax rate of approximately 29%
- Adjusted diluted earnings per share of approximately $1.80 to $2.00
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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 2023 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 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.
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