Year-over-year total contract value up by 12% to $331 million
Total revenues were $118.1 million for the third quarter of 2021, compared with $108.6 million for the third quarter of 2020. The company also announced that its board of directors authorized a $50 million increase in the company’s stock repurchase program, bringing the total available repurchase authorization to approximately $100 million.
On a GAAP basis, net income was $4.5 million, or $0.23 per diluted share, for the third quarter of 2021, compared with a net loss of $3.8 million, or $0.20 per diluted share, for the same period in 2020.
On an adjusted basis, net income was $7.9 million, or $0.41 per diluted share, for the third quarter of 2021, which reflects an adjusted effective tax rate of 31%. Adjusted net income excludes stock-based compensation of $2.5 million and amortization of acquisition-related intangible assets of $3.7 million. This compares with an adjusted net income of $4.6 million, or $0.24 per diluted share, for the same period in 2020, which reflects an adjusted tax rate of 31%. Adjusted net income for the third quarter of 2020 excludes stock-based compensation of $2.7 million, amortization of acquisition-related intangible assets of $4.7 million, acquisition-related deferred revenue fair value adjustment of $0.1 million, integration costs of $0.3 million, and lease incentive costs of $0.2 million.
“We continued to see strong momentum in Q3 and achieved our goal of driving double-digit contract value growth faster than we expected,” said George F. Colony, Forrester’s chairman and chief executive officer. “Year-over-year contract value increased by 12%. We also delivered strong overall revenue growth and cash flow, with a significant expansion of our operating margin and EPS growth of 71%. As a result of our continued strong performance in Q3, we are raising full-year guidance for the third time this year.”
“Our solid performance over the past few quarters has allowed us to make investments into sales, marketing, and technology, which will further propel our business forward. Additionally, our newly launched product portfolio, Forrester Decisions, is resonating well with our clients. This next-generation platform will help us drive sustained double-digit contract value growth. Forrester Decisions is already helping us improve our sales velocity, drive wallet retention, and deepen our relationship with clients, resulting in multiyear recurring deals.”
As part of the company’s pivot to contract value (CV) in 2021, Forrester is classifying all components of its CV subscription research products as research revenues. In prior periods, advisory sessions included in Forrester’s research subscription products were classified as consulting revenues. This has resulted in approximately $1.6 million and $4.5 million of revenue being reclassified from consulting revenues to research revenues in the three and nine months ended September 30, 2020, respectively.
Source: Forrester Earnings Release
