Forrester Research Reports 2016 Second-Quarter Financial Results

7/27/16

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Forrester Research, Inc. (Nasdaq: FORR) today announced its 2016 second-quarter financial results.

Second-Quarter Financial Performance

Total revenues were $87.8 million for the second quarter of 2016, compared with $82.8 million for the second quarter of 2015. Research revenues increased 5%, and advisory services and events revenues increased 9%, compared with the second quarter of 2015.

On a GAAP basis, net income was $7.5 million, or $0.41 per diluted share, for the second quarter of 2016, compared with net income of $5.8 million, or $0.31 per diluted share, for the same period in 2015.

On a pro forma basis, net income was $8.3 million, or $0.46 per diluted share, for the second quarter of 2016, which reflects a pro forma effective tax rate of 40%. Pro forma net income excludes stock-based compensation of $1.6 million, amortization of acquisition-related intangible assets of $0.2 million, and investment losses of $0.1 million. This compares with pro forma net income of $7.3 million, or $0.40 per diluted share, for the same period in 2015, which reflects a pro forma tax rate of 38%. Pro forma net income for the second quarter of 2015 excludes stock-based compensation of $1.5 million, amortization of acquisition-related intangible assets of $0.2 million, and reorganization costs of $0.1 million.

"I am pleased to report that Forrester exceeded revenue, operating income, and EPS guidance for the second quarter,” said George F. Colony, Forrester’s chairman and chief executive officer. “Our strategy is resonating with clients and prospects who must transform to win in the emerging customer-led market.”

Forrester is providing third-quarter 2016 financial guidance as follows:

Third-Quarter 2016 (GAAP):

  • Total revenues of approximately $78.5 million to $81.5 million.
  • Operating margin of approximately 7.0% to 9.0%.
  • Other income (expense), net of zero.
  • An effective tax rate of 40%.
  • Diluted earnings per share of approximately $0.19 to $0.24.

Third-Quarter 2016 (Pro Forma):

Pro forma financial guidance for the third quarter of 2016 excludes stock-based compensation expense of $2.0 million to $2.2 million, amortization of acquisition-related intangible assets of approximately $0.2 million, and any investment gains or losses.

  • Pro forma operating margin of approximately 10.0% to 12.0%.
  • Pro forma effective tax rate of 40%.
  • Pro forma diluted earnings per share of approximately $0.26 to $0.31.

Our full-year 2016 guidance is as follows:

Full-Year 2016 (GAAP):

  • Total revenues of approximately $324.0 million to $330.0 million.
  • Operating margin of approximately 7.5% to 8.5%.
  • Other income (expense), net of zero.
  • An effective tax rate of 40%.
  • Diluted earnings per share of approximately $0.83 to $0.89.

Full-Year 2016 (Pro Forma):

Pro forma financial guidance for full-year 2016 excludes stock-based compensation expense of $8.1 million to $8.6 million, reorganization costs of approximately $1.0 million, amortization of acquisition-related intangible assets of approximately $0.8 million, and any investment gains or losses.

  • Pro forma operating margin of approximately 10.5% to 11.5%.
  • Pro forma effective tax rate of 40%.
  • Pro forma diluted earnings per share of approximately $1.16 to $1.22.

Quarterly Dividend

Forrester also announced today that its board of directors has approved a quarterly cash dividend of $0.18 per share, payable September 21, 2016, to shareholders of record on September 7, 2016.

About Forrester Research

Forrester Research is one of the most influential research and advisory firms in the world. We work with business and technology leaders to develop customer-obsessed strategies that drive growth. Forrester’s unique insights are grounded in annual surveys of more than 500,000 consumers and business leaders worldwide, rigorous and objective methodologies, and the shared wisdom of our most innovative clients. Through proprietary research, data, custom consulting, exclusive executive peer groups, and events, the Forrester experience is about a singular and powerful purpose: to challenge the thinking of our clients to help them lead change in their organizations. For more information, visit forrester.com.