Forrester Research, Inc. (Nasdaq: FORR) today announced its 2014 third-quarter financial results.
Third-Quarter Financial Performance
Total revenues were $75.4 million for the third quarter of 2014, compared with $69.8 million for the third quarter of 2013. Research revenues increased 2%, and advisory services and event revenues increased 24%, compared with the third quarter of 2013.
On a GAAP basis, net income was $3.0 million, or $0.16 per diluted share, for the third quarter of 2014, compared with net income of $2.5 million, or $0.12 per diluted share, for the same period in 2013.
On a pro forma basis, net income was $4.7 million, or $0.25 per diluted share, for the third quarter of 2014, which reflects a pro forma effective tax rate of 38%. Pro forma net income excludes stock-based compensation of $2.0 million, amortization of acquisition-related intangible assets of $0.5 million, a credit for reorganization costs of $0.1 million, and net investment losses of $0.1 million. This compares with pro forma net income of $4.1 million, or $0.20 per diluted share, for the same period in 2013, which reflects a pro forma tax rate of 39%. Pro forma net income for the third quarter of 2013 excludes stock-based compensation of $1.9 million and amortization of acquisition-related intangible assets of $0.6 million.
“Forrester met its revenue and EPS guidance for the third quarter,” said George F. Colony, Forrester’s chairman and chief executive officer. “Our unique positioning in the age of the customer is engendering deeper relationships with our clients and opening new doors into new companies. In Q3, we continued to demonstrate the same steady growth since the start of the year. However, we still have work to do to ensure consistent performance across all parts of the business.”
A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.
Forrester is providing fourth-quarter 2014 financial guidance as follows:
Fourth-Quarter 2014 (GAAP):
- Total revenues of approximately $78.5 million to $82.5 million.
- Operating margin of approximately 6.5% to 7.5%.
- Other income, net of zero.
- An effective tax rate of 39%.
- Diluted earnings per share of approximately $0.18 to $0.22.
Fourth-Quarter 2014 (Pro Forma):
Pro forma financial guidance for the fourth quarter of 2014 excludes stock-based compensation expense of $2.1 million to $2.4 million, amortization of acquisition-related intangible assets of approximately $0.5 million, and any investment gains or losses.
- Pro forma operating margin of approximately 10.0% to 11.0%.
- Pro forma effective tax rate of 38%.
- Pro forma diluted earnings per share of approximately $0.27 to $0.31.
Our full-year 2014 guidance is as follows:
Full-Year 2014 (GAAP):
- Total revenues of approximately $310.0 million to $314.0 million.
- Operating margin of approximately 5.5% to 6.5%.
- Other income, net of $0.2 million.
- An effective tax rate of 40%.
- Diluted earnings per share of approximately $0.56 to $0.60.
Full-Year 2014 (Pro Forma):
Pro forma financial guidance for full-year 2014 excludes stock-based compensation expense of $7.2 million to $7.5 million, reorganization costs of approximately $1.8 million, amortization of acquisition-related intangible assets of approximately $2.1 million, and any investment gains or losses.
- Pro forma operating margin of approximately 9.0% to 10.0%.
- Pro forma effective tax rate of 38%.
- Pro forma diluted earnings per share of approximately $0.94 to $0.98.
Forrester also announced today that its board of directors has approved a quarterly dividend of $0.16 per share payable December 17, 2014, to shareholders of record on December 3, 2014.
About Forrester Research
Forrester Research (Nasdaq: FORR) is a global research and advisory firm serving professionals in 13 key roles across three distinct client segments. Our clients face progressively complex business and technology decisions every day. To help them understand, strategize, and act upon opportunities brought by change, Forrester provides proprietary research, consumer and business data, custom consulting, events and online communities, and peer-to-peer executive programs. We guide leaders in business technology, marketing and strategy, and the technology industry through independent fact-based insight, ensuring their business success today and tomorrow. For more information, visit www.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 fourth quarter of and full-year 2014 and statements about 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, technology spending, Forrester’s ability to respond to business and economic conditions and market trends, the risks and challenges inherent in international business activities, competition and industry consolidation, the ability to attract and retain professional staff, Forrester’s dependence on key personnel, the possibility of network disruptions and security breaches, and possible variations in Forrester’s quarterly operating results. Financial guidance regarding shares outstanding and per-share amounts is based on certain assumptions that are subject to change, including as a result of the number of shares repurchased by Forrester under its announced share repurchase program. Dividend declarations are at the discretion of Forrester’s board of directors, and plans for future dividends may be revised by the board at any time. 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.