Forrester Research (FORR) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue declined 10% year-over-year to $89.9 million, with both research and consulting segments experiencing decreases amid ongoing macroeconomic and geopolitical uncertainty.

• Net loss widened to $87.3 million, primarily due to an $83.9 million non-cash goodwill impairment in the Research segment, while adjusted net income was $2.0 million.

• Cash flow from operations improved to $26.7 million, and cash at quarter-end was $134.3 million, with debt at $35 million.

• The transition to the Forrester Decisions platform is complete, with ongoing optimization of go-to-market strategies and increased focus on executive clients.

• Cost reduction initiatives included a 6% workforce reduction in January 2025, following a 3% reduction in 2024.

Financial highlights

• Q1 2025 revenue was $89.9 million, down 10% year-over-year; contract value declined 7% to $290.9 million.

• GAAP net loss was $87.3 million, mainly due to an $83.9 million goodwill impairment; adjusted net income was $2.0 million ($0.11/share).

• Operating income decreased to $2.5 million (2.8% margin); operating expenses decreased across all major categories.

• Free cash flow was $26.1 million; cash, cash equivalents, and marketable investments totaled $134.3 million.

• No share repurchases in Q1; $80 million remains authorized for buybacks.

Outlook and guidance

• 2025 revenue guidance is $400–$415 million, a 4–8% decline versus 2024, with better performance expected in the second half.

• Adjusted operating margin projected at 8–9%; GAAP margin at -18.6% to -17.6%; adjusted EPS guidance is $1.20–$1.35.

• Guidance is conservative, balancing risk and opportunity, and does not assume a recessionary scenario.

• Management anticipates continued pressure on contract value and wallet retention, with full-year effective tax rate expected between -3% and 7%.

• The company expects to remain in compliance with debt covenants and believes liquidity is sufficient for the next twelve months.