Forrester Research, Inc. (Nasdaq: FORR) today announced its third-quarter-ended September 30, 2011, financial results.

Third-Quarter Financial Performance

  • Total revenues were $69.8 million, compared with $59.8 million for the third quarter of last year.
  • On a GAAP basis, net income was $5.7 million, or $0.25 per diluted share, for the third quarter of 2011, compared with net income of $3.7 million, or $0.16 per diluted share, for the same period last year.
  • On a pro forma basis, net income was $7.9 million, or $0.34 per diluted share, for the third quarter of 2011, which reflects a pro forma effective tax rate of 40%. Pro forma net income excludes stock-based compensation of $1.4 million, amortization of $0.7 million of acquisition-related intangible assets, $0.9 million of duplicate lease costs, and $0.1 million of acquisition and integration costs. This compares with pro forma net income of $4.4 million, or $0.19 per diluted share, for the same period in 2010, which reflects a pro forma tax rate of 40%. Pro forma net income for the third quarter of 2010 excludes stock-based compensation of $1.2 million, amortization of $0.9 million of acquisition-related intangible assets, $0.4 million of duplicate lease costs, and net investment gains of $1.4 million.

“Forrester met revenue guidance and exceeded operating margin and earnings per share for the third quarter,” said George F. Colony, Forrester’s chairman of the board and chief executive officer. “Our client- and dollar-retention rates continue to perform at the upper end of our historical range. Our good performance notwithstanding, we are taking a more conservative approach and reducing our revenue guidance for the year due to inconsistent performance in some of our markets and the continuing economic turmoil.”

Nine-Month-Period-Ended September 30, 2011, Financial Performance

  • Total revenues were $209.0 million, compared with $183.6 million for the same period last year.
  • On a GAAP basis, net income was $14.1 million, or $0.61 per diluted share, for the nine months ended September 30, 2011, compared with net income of $16.4 million, or $0.71 per diluted share, for the same period last year.
  • On a pro forma basis, net income was $20.2 million, or $0.87 per diluted share, for the nine months ended September 30, 2011, which reflects a pro forma effective tax rate of 40%. Pro forma net income excludes stock-based compensation of $3.1 million, amortization of $1.9 million of acquisition-related intangible assets, $3.9 million of duplicate lease costs, $1.0 million of acquisition and integration costs, and net investment gains of $0.6 million. This compares with pro forma net income of $18.9 million, or $0.82 per diluted share, for the same period in 2010, which reflects a pro forma tax rate of 40%. Pro forma net income for the nine months ended September 30, 2010, excludes stock-based compensation of $3.7 million, amortization of $2.7 million of acquisition-related intangible assets, $0.4 million of duplicate lease costs, $0.3 million of acquisition-related credits, and net investment gains of $1.8 million.

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

Forrester is providing fourth-quarter 2011 financial guidance as follows:

Fourth-Quarter 2011 (GAAP):

  • Total revenues of approximately $74.0 million to $78.0 million.
  • Operating margin of approximately 13.5% to 15.5%.
  • Other income, net of zero.
  • An effective tax rate of 42%.
  • Diluted earnings per share of approximately $0.26 to $0.30.

Fourth-Quarter 2011 (Pro Forma):

Pro forma financial guidance for the fourth quarter of 2011 excludes stock-based compensation expense of $1.3 million to $1.5 million, amortization of acquisition-related intangible assets of approximately $0.7 million, and any investment gains or losses.

  • Pro forma operating margin of approximately 16.5% to 18.5%.
  • Pro forma effective tax rate of 40%.
  • Pro forma diluted earnings per share of approximately $0.33 to $0.37.

Our full-year 2011 guidance is as follows:

Full-Year 2011 (GAAP):

  • Total revenues of approximately $283.0 million to $287.0 million.
  • Operating margin of approximately 12.0% to 13.0%.
  • Other income, net of $0.3 million.
  • An effective tax rate of 42%.
  • Diluted earnings per share of approximately $0.87 to $0.91.

Full-Year 2011 (Pro Forma):

Pro forma financial guidance for full-year 2011 excludes stock-based compensation expense of $4.4 million to $4.6 million, amortization of acquisition-related intangible assets of approximately $2.6 million, duplicate lease costs of $3.9 million, acquisition and integration costs of approximately $1.0 million, and any investment gains or losses.

  • Pro forma operating margin of approximately 16.0% to 17.0%.
  • Pro forma effective tax rate of 40%.
  • Pro forma diluted earnings per share of approximately $1.20 to $1.24.