First-Quarter Financial Performance
Total revenues were $106.3 million for the first quarter of 2020, compared with $100.6 million for the first quarter of 2019. Research revenues increased 6%, and advisory services and events revenues increased 5%, compared with the first quarter of 2019. Pro forma revenues, which exclude the fair value adjustment to deferred revenue from the acquisition of SiriusDecisions, were $106.5 million for the first quarter of 2020, compared with $104.6 million for the first quarter of 2019.
“Forrester, like many businesses, experienced a slowdown in revenues in Q1,” said George F. Colony, Forester’s chairman and chief executive officer. “Despite growing year on year, we expect the near-term macroeconomic pressures of the global pandemic will reduce revenue and operating profit throughout 2020. As a result, we have implemented cost-reduction measures and adjusted our full-year guidance.”
“Looking ahead to 2021 and beyond, we believe Forrester is well positioned for long-term success,” continued Colony. “Given the unprecedented nature of the pandemic, clients are increasingly relying on Forrester’s fact-based research for guidance; interactions are at an all-time high. We have doubled down on our customer-obsessed research and are pioneering new products, including virtual events, to help our clients navigate uncertainty.”
On a GAAP basis, net loss was $0.5 million, or $0.03 per diluted share, for the first quarter of 2020, compared with a net loss of $13.3 million, or $0.73 per diluted share, for the same period in 2019.
On a pro forma basis, net income was $6.9 million, or $0.37 per diluted share, for the first quarter of 2020, which reflects a pro forma effective tax rate of 31%. Pro forma net income excludes stock-based compensation of $2.8 million, amortization of acquisition-related intangible assets of $4.7 million, acquisition-related deferred revenue fair value adjustment of $0.2 million, and acquisition and integration costs of $2.9 million. This compares with a pro forma net income of $1.6 million, or $0.08 per diluted share, for the same period in 2019, which reflects a pro forma tax rate of 31%. Pro forma net income for the first quarter of 2019 excludes stock-based compensation of $2.7 million, amortization of acquisition-related intangible assets of $6.2 million, acquisition-related deferred revenue fair value adjustment of $3.9 million, and acquisition and integration costs of $3.0 million.
“We ended Q1 with nearly $70 million in cash on the balance sheet after paying down the final $14 million on our line of credit during this quarter,” said Michael Doyle, Forrester’s chief financial officer. “Our strong balance sheet and business model that generates positive cash flow each year position us well to manage through the pandemic.”
