NASDAQ$FORR

Forrester Research Inc · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

Forrester's first quarter results for 2023 were announced, revealing challenges due to a difficult economic climate and ongoing product transformation, resulting in a revenue decline and flat contract value growth.

Forrester Research reported a challenging first quarter with a 9% decrease in revenue, totaling $113.7 million compared to $125.0 million in the same period last year. The company experienced a net loss of $4.1 million, or $0.21 per share, on a GAAP basis, while adjusted EPS was $0.27. Flat contract value growth also contributed to the difficult quarter.

  • Total revenues decreased to $113.7 million from $125.0 million year-over-year.
  • GAAP net loss was $4.1 million, or $0.21 per diluted share, compared to a net income of $4.1 million, or $0.22 per diluted share, in the prior year.
  • Adjusted net income was $5.1 million, or $0.27 per diluted share, compared to $8.6 million, or $0.45 per diluted share, in the same period last year.
  • Contract value remained flat at $347.3 million.

Headline financials

Total Revenue

$114M

Previous: $125M-9.0%
EPS (adj)

$0.27

Previous: $0.45-40.0%
Contract value

$347M

Previous: $351M-1.2%
Client retention

74.0%

Previous: 77.0%-3.9%
Wallet retention

92.0%

Previous: 103.0%-10.7%
Number of clients

2.7K

Previous: 2.9K-9.1%
Capital Expenditures

-$1.63M

Previous: -$1.26M-29.3%
Free Cash Flow

-$5.71M

Previous: $2.89M-297.7%
Net Income

-$4.08M

Previous: $4.15M-198.2%
Operating Income

-$5.14M

Previous: $6.47M-179.4%
Gross Profit

$64.2M

Previous: $74.7M-14.1%
Cash & Equivalents

$104M

Previous: $112M-7.4%
Total Assets

$594M

Previous: $652M-8.9%
Stock-Based Comp

$3.17M

Previous: $3.29M-3.9%

Revenue & EPS history

Forrester · Revenue · Quarterly

$114M

Q1 2023-9%vs Q1 2022
Beat estimate in 7 of 15 quarters(47%)
ActualEstimate

Revenue by segment

Forrester · $114M total across 3 segments · Q1 2023

  • Research
    $80.9M-5.7%
  • Consulting
    $31.8M-17.4%
  • Events
    $1.01M+33.4%

Forward guidance

Forrester provided updated guidance for full year 2023. Total revenues are expected to be approximately $475 million to $495 million with earnings per share of approximately $0.24 to $0.44. Adjusted diluted earnings per share are expected to be approximately $2.00 to $2.20.

Tailwinds

  • Total revenues of approximately $475 million to $495 million
  • Operating margin of approximately 2.0% to 3.0%
  • Earnings per share of approximately $0.24 to $0.44
  • Adjusted operating margin of approximately 11.5% to 12.5%
  • Adjusted diluted earnings per share of approximately $2.00 to $2.20

Headwinds

  • Interest expense of approximately $3.0 million
  • An effective tax rate of approximately 38%
  • Excludes stock-based compensation expense of $17.5 million to $18.5 million
  • Excludes amortization of acquisition-related intangible assets of approximately $12.0 million
  • Excludes restructuring costs of $11.5 million to $12.5 million, and a legal settlement of $4.8 million

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2023

Historical avgQ1 2023

-2.0%

Avg return

Earnings day

-3.2%

Avg return

5 days after

-1.7%

Avg return

30 days after

38%

25 / 65 earnings

Positive

+8.9%

Q3 2024

Best reaction

-16.0%

Q4 2022

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-1.9%+4.3%+14.9%
Q4 2025-9.7%-7.1%-3.9%
Q3 2025+2.9%+0.1%-12.5%
Q1 2025+3.7%+7.6%+9.9%
Q4 2024-12.1%-12.5%-33.0%
Q3 2024+8.9%+10.6%+15.0%
Q2 2024+6.6%+0.5%+1.5%
Q1 2024-6.8%-3.7%-2.5%
Q4 2023-8.1%-14.2%-12.4%
Q3 2023-4.2%-11.6%-3.0%
Q2 2023+1.0%+3.2%-1.1%
Q1 2023-15.8%-14.7%-0.3%
Q4 2022-16.0%-13.5%-15.9%
Q3 2022-15.8%-20.4%-14.2%
Q2 2022-7.3%-7.1%-16.7%
Q1 2022-2.9%-8.5%-7.5%
Q4 2021-3.8%-2.2%-6.3%
Q3 2021+5.4%+9.1%+5.4%
Q2 2021+5.4%-1.3%+3.9%
Q1 2021+4.3%+3.5%-4.1%
Q4 2020-3.8%-4.4%+0.7%
Q3 2020+3.0%+9.0%+20.6%
Q2 2020+7.6%+9.2%+10.5%
Q1 2020+3.5%-10.8%+13.1%
Q4 2019-2.4%-4.9%-31.6%
Q3 2019-1.0%-1.2%+9.8%
Q2 2019-13.9%-21.7%-29.2%
Q1 2019-1.0%+1.6%-9.9%
Q4 2018+1.4%+4.2%+6.5%
Q3 2018-7.3%-4.3%+7.3%
Q2 2018-0.9%+2.8%+14.2%
Q1 2018-10.0%-10.2%-7.6%
Q4 2017-3.7%-5.8%+0.2%
Q3 2017+0.5%-0.8%+6.3%
Q2 2017-1.4%-1.6%-2.1%
Q1 2017-1.0%-2.0%-3.2%
Q4 2016-12.3%-10.8%-8.2%
Q3 2016-3.6%+0.4%+10.5%
Q2 2016+8.1%+5.8%+8.2%
Q1 2016-4.3%
Q4 2015+2.3%
Q3 2015+3.3%
Q2 2015-5.3%
Q1 2015-4.2%
Q4 2014+0.3%
Q3 2014-3.1%
Q2 2014+0.4%
Q1 2014+5.9%
Q4 2013-2.0%
Q3 2013-1.3%
Q2 2013-6.4%
Q1 2013+1.1%
Q4 2012-4.6%
Q3 2012+1.0%
Q2 2012-12.1%
Q1 2011-1.9%
Q1 2012+5.3%
Q4 2009+0.1%
Q4 2011+0.1%
Q3 2011-1.0%
Q3 2010-1.0%
Q2 2010-1.0%
Q2 2011-1.0%
Q4 2010-1.0%
Q1 2010+5.0%

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