NASDAQ$FORR

Forrester Research Inc · Q4 2023 earnings

Q4 2023 earnings · · Investor relations

Briefing

Forrester's Q4 2023 earnings were released, revealing a challenging year with revenue and contract value declines, yet progress was made in platform improvement and AI tool development.

Forrester Research reported a decrease in revenue to $118.1 million compared to $136.9 million in Q4 2022. The company experienced a net loss of $0.7 million, or $0.03 per diluted share, compared to a net loss of $1.6 million, or $0.09 per diluted share, in the same period last year. Adjusted net income was $4.8 million, or $0.25 per diluted share, compared to $8.5 million, or $0.45 per diluted share, for the same period in 2022. Contract value (CV) decreased by 4%, totaling $332.1 million.

  • Q4 revenue decreased to $118.1 million from $136.9 million year-over-year.
  • Net loss was $0.7 million, or $0.03 per diluted share, improved from a net loss of $1.6 million, or $0.09 per diluted share, in Q4 2022.
  • Adjusted net income was $4.8 million, or $0.25 per diluted share, down from $8.5 million, or $0.45 per diluted share, in the prior year.
  • Contract value decreased by 4% to $332.1 million.

Headline financials

Total Revenue

$118M

Previous: $137M-13.7%
EPS (adj)

$0.25

Previous: $0.45-44.4%
Contract value

$324M

Previous: $3.00+10786666566.7%
Client retention

73.0%

No prior period
Wallet retention

87.0%

No prior period
Number of clients

2.3K

No prior period
Total headcount

1.7K

No prior period
Sales force

601

No prior period
Capital Expenditures

$1.59M

Previous: $1.44M+10.9%
Net Income

-$663K

Previous: -$1.63M+59.3%
Operating Income

-$1.44M

Previous: -$3.08M+53.3%
Gross Profit

$60.8M

Previous: $80.1M-24.1%
Stock-Based Comp

$4.32M

Previous: $3.51M+23.1%

Revenue & EPS history

Forrester · Revenue · Quarterly

$118M

Q4 2023-13.7%vs Q4 2022
Beat estimate in 7 of 15 quarters(47%)
ActualEstimate

Revenue by segment

Forrester · $113M total across 3 segments · Q3 2023

  • Research
    $80.6M-7.4%
  • Consulting
    $28.2M-24.5%
  • Events
    $4.59M+40.8%

Forward guidance

Forrester is providing full-year 2024 financial guidance. Total revenues of approximately $430.0 million to $450.0 million, Diluted earnings per share of approximately $0.33 to $0.53. Adjusted diluted earnings per share of approximately $1.50 to $1.70

Tailwinds

  • Adjusted operating margin of approximately 9.5% to 10.5%
  • Adjusted effective tax rate of 29%
  • Adjusted diluted earnings per share of approximately $1.50 to $1.70
  • Expect pressures throughout the year on CV, key retention metrics, and revenue.
  • Built the product, go-to-market, and organizational foundations to enable the company to return to CV growth in 2025.

Headwinds

  • Total revenues of approximately $430.0 million to $450.0 million, or a decline of 6% to 11% versus the prior year
  • Operating margin of approximately 2.4% to 3.4%
  • Interest expense of approximately $3.0 million
  • An effective tax rate of 35%
  • Diluted earnings per share of approximately $0.33 to $0.53

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 Q4 2023

Historical avgQ4 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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