Forrester Research (FORR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $121.8 million, down 10% year-over-year, with declines across all segments and underperformance in consulting and events.

• Contract value (CV) was $323.0 million, down 3% year-over-year, but CV bookings beat plan and metrics are stabilizing.

• Forrester Decisions migration progressed, with 73% of CV on the platform and a target of 80% by year-end; multi-year deals increased to 68% of FD CV.

• Product innovation included the rollout of the Izola AI tool to all FD clients, with high satisfaction and usage.

• Workforce reductions, office closures, and new leadership appointments were implemented to align costs and strategy.

Financial highlights

• Q2 2024 revenue was $121.8 million, down from $135.6 million in Q2 2023; six-month revenue was $221.9 million, down 11%.

• GAAP net income for Q2 2024 was $6.3 million ($0.33 per diluted share), up from $5.3 million ($0.28) in Q2 2023; adjusted net income was $12.9 million ($0.68 per share), down from $18.1 million ($0.94).

• Operating income for Q2 2024 was $11.3 million, up from $8.3 million in Q2 2023; adjusted operating income was $17.9 million (14.7% margin), down 30%.

• Cash and investments at quarter-end were $110.8 million; net cash from operations was -$2.3 million, impacted by litigation and restructuring.

• Share repurchases totaled $15 million in H1 2024, with $87.9 million remaining authorized.

Outlook and guidance

• 2024 revenue guidance lowered to $425–$435 million; adjusted operating margin expected at 8.5%–9.5%; adjusted EPS at $1.37–$1.57; tax rate at 29%.

• GAAP operating margin expected at 1.2%–2.2%; GAAP EPS at $0.06–$0.19.

• Research business expected to decline mid-single digits, consulting to decline low 20s percent, and events to decline high 20s percent for the year.

• CV expected to be flat to slightly up by year-end as FD migration completes.

• Management expects continued macroeconomic pressure and no assumed improvement in forecasts.