Cambridge, Mass., February 11, 2021 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its 2020 fourth-quarter and full-year financial results.

Fourth-Quarter Financial Performance

Total revenues were $120.5 million for the fourth quarter of 2020, compared with $124.3 million for the fourth quarter of 2019. Adjusted revenues, which exclude the fair value adjustment to deferred revenue from the acquisition of SiriusDecisions, were $120.6 million for the fourth quarter of 2020, compared with $125.1 million for the fourth quarter of 2019.

On a GAAP basis, net income was $2.4 million, or $0.13 per diluted share, for the fourth quarter of 2020, compared with net income of $4.9 million, or $0.26 per diluted share, for the same period in 2019.

On an adjusted basis, net income was $6.6 million, or $0.35 per diluted share, for the fourth quarter of 2020, which reflects an adjusted effective tax rate of 31%. Adjusted net income excludes stock-based compensation of $2.9 million, amortization of acquisition-related intangible assets of $5.5 million, acquisition and integration costs of $2.0 million, lease incentive income of $3.4 million, and investment gains of $0.1 million. This compares with adjusted net income of $10.7 million, or $0.57 per diluted share, for the same period in 2019, which reflects an adjusted tax rate of 31%. Adjusted net income for the fourth quarter of 2019 excludes stock-based compensation of $3.1 million, amortization of acquisition-related intangible assets of $5.7 million, acquisition-related deferred revenue fair value adjustment of $0.8 million, acquisition and integration costs of $1.1 million, and investment gains of $0.1 million.

 “Forrester had a strong finish to the year despite challenging macroeconomic conditions. We helped our clients find new ways to win and retain customers during the pandemic, shift their workforces to virtual, and prepare themselves for a post-pandemic digital world,” said George F. Colony, Forrester’s chairman and chief executive officer. “After the uncertainty of Q2, company momentum built in Q3 and Q4, with rising engagement across our research, consulting, and events businesses. We exceeded revenue and EPS guidance for the quarter and head into 2021 with healthy cash flow and a solid balance sheet.

“In 2021, the company is laser-focused on increasing research contract value bookings at double-digit rates — that is job number one.”

 Year Ended December 31, 2020, Financial Performance

Total revenues were $449.0 million, compared with $461.7 million for the same period in 2019. Adjusted revenues, which exclude the fair value adjustment to deferred revenue from the acquisition of SiriusDecisions, were $449.4 million, compared with $473.0 million for the same period in 2019.

On a GAAP basis, net income was $10.0 million, or $0.53 per diluted share, for 2020, compared with a net loss of $9.6 million, or $0.52 per diluted share, for 2019.

On an adjusted basis, net income was $30.4 million, or $1.60 per diluted share, for 2020, which reflects an adjusted effective tax rate of 31%. Adjusted net income 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, acquisition and integration costs of $5.8 million, lease incentive income of $3.2 million, and investment gains of $2.5 million. This compares with adjusted net income of $31.0 million, or $1.65 per diluted share, for 2019, which reflects an adjusted tax rate of 31%. Adjusted net income for 2019 excludes stock-based compensation of $11.7 million, amortization of acquisition-related intangible assets of $22.6 million, acquisition-related deferred revenue fair value adjustment of $11.3 million, and acquisition and integration costs of $8.9 million.

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

2021 Guidance

Forrester is providing first-quarter 2021 financial guidance as follows:

First-Quarter 2021 (GAAP):

  • Total revenues of approximately $104.0 million to $108.0 million.
  • Operating margin of approximately (1.0)% to 1.0%.
  • Interest expense of approximately $1.2 million.
  • An effective tax rate of 32%.
  • Loss per share of approximately $0.02 to $0.08.

First-Quarter 2021 (Adjusted):

Adjusted financial guidance for the first quarter of 2021 excludes stock-based compensation expense of $2.4 million to $2.6 million, amortization of acquisition-related intangible assets of approximately $3.8 million, integration costs of approximately $0.1 million, and any investment gains or losses.

  • Adjusted operating margin of approximately 5.0% to 7.0%.
  • Adjusted effective tax rate of 31%.
  • Adjusted diluted earnings per share of approximately $0.15 to $0.21.

Our full-year 2021 guidance is as follows:

Full-Year 2021 (GAAP):

  • Total revenues of approximately $466.0 million to $476.0 million.
  • Operating margin of approximately 4.5% to 5.5%.
  • Interest expense of approximately $4.5 million.
  • An effective tax rate of 32%.
  • Diluted earnings per share of approximately $0.57 to $0.67.

Full-Year 2021 (Adjusted):

Adjusted financial guidance for full-year 2021 excludes stock-based compensation expense of $10.2 million to $10.7 million, amortization of acquisition-related intangible assets of approximately $15.2 million, integration costs of $0.3 million to $0.5 million, and any investment gains or losses.

  • Adjusted operating margin of approximately 10.0% to 11.0%.
  • Adjusted effective tax rate of 31%.
  • Adjusted diluted earnings per share of approximately $1.50 to $1.60.

About Forrester Research

 Forrester (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We help business and technology leaders 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 675,000 consumers, business leaders, and technology leaders worldwide; rigorous and objective methodologies, including Forrester Wave™ evaluations; and the shared wisdom of our most innovative 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 2021 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, the impact of health epidemics, including COVID-19, on Forrester’s business; 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; 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; Forrester’s ability to anticipate and respond to market trends; Forrester’s ability to successfully integrate businesses that it acquires; the impact of Forrester’s outstanding debt obligations; the possibility of network disruptions and security breaches; competition and industry consolidation; any failure to enforce and protect Forrester’s intellectual property rights; privacy laws; possible variations in Forrester’s quarterly operating results; taxation risks; concentration of ownership of Forrester; and any weakness in Forrester’s system of internal controls. 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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