Forrester Q1 2023 Revenue Down 9%

Forrester Research, Inc. (Nasdaq: FORR) has announced financial results for the first quarter ended March 31, 2023. Results were driven by flat contract value (CV) growth and a revenue decline of 9%. On a GAAP basis, loss per share was $0.21, and on an adjusted basis, earnings per share (EPS) was $0.27.

Commenting on the announcement, CEO and Chairman George Colony stated, “The first quarter was difficult for Forrester. The unsteady economy, along with our ongoing product transformation, constitute ongoing challenges for our business. Consequently, we are taking actions to maintain our margins by reducing our cost structure to align with our expected revenue. Despite these moves, we remain confident in our strategy and in the Forrester Decisions research platform. We remain on track to transition two-thirds of our contract value to Forrester Decisions by year end.”

First-Quarter Consolidated Results

Total revenues for the first quarter of 2023 were $113.7 million, compared with $125.0 million for the comparable quarter in 2022.

On a GAAP basis, net loss was $4.1 million, or $0.21 per diluted share, for the first quarter of 2023, compared with net income of $4.1 million, or $0.22 per diluted share, for the same period in 2022.

On an adjusted basis, net income was $5.1 million, or $0.27 per diluted share, for the first quarter of 2023, reflecting an adjusted effective tax rate of 29%. Adjusted net income excludes stock-based compensation of $3.2 million, amortization of acquisition-related intangible assets of $3.1 million, restructuring costs of $1.6 million, and a legal settlement of $4.8 million. This compares with an adjusted net income of $8.6 million, or $0.45 per diluted share, for the same period in 2022, which reflects an adjusted tax rate of 30%. Adjusted net income for the first quarter of 2022 excludes stock-based compensation of $3.3 million, amortization of acquisition-related intangible assets of $3.4 million, and investment gains of $0.4 million.

Forrester is providing updated guidance for 2023 as follows:

Full Year 2023 (GAAP):

 Total revenues of approximately $475 million to $495 million

 Operating margin of approximately 2.0% to 3.0%

 Interest expense of approximately $3.0 million

 An effective tax rate of approximately 38%

 Earnings per share of approximately $0.24 to $0.44

Full Year 2023 (Adjusted):

Adjusted financial guidance for full-year 2023 excludes stock-based compensation expense of $17.5 million to $18.5 million, amortization of acquisition-related intangible assets of approximately $12.0 million, restructuring costs of $11.5 million to $12.5 million, a legal settlement of $4.8 million, and any investment gains or losses.