Forrester Research (FORR) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $102.5M, down 10% year-over-year, with contract value at $315.2M, down 5%, as the company nears completion of its migration to the Forrester Decisions platform, now at 78% of CV and targeting over 80% by year-end.

• Net loss for Q3 2024 was $5.8M ($0.30/share), compared to net income of $2.5M in Q3 2023; adjusted net income was $5.6M ($0.29/share), down from $8.6M ($0.44/share) last year.

• Retention metrics stabilized: wallet retention at 89%, client retention at 73%–81%, and number of clients declined 14% to 2,002.

• Notable events include the divestiture of FeedbackNow for $6M cash and a $9M note, restructuring actions, and the launch of new AI-focused services.

• Macroeconomic headwinds, client budget constraints, and ongoing product transition continue to impact performance.

Financial highlights

• Q3 2024 research revenue: $77.1M (-4% YoY), consulting: $23.4M (-17% YoY), events: $2.1M (-54% YoY); operating loss: $0.7M versus $5.1M income last year.

• Cash and investments at quarter-end: $114.9M; net cash used in operations for nine months: $(2.0)M.

• Deferred revenue stood at $153.2M as of September 30, 2024.

• Share repurchases totaled $13M year-to-date, with $82.9M remaining authorized.

• Debt outstanding was $35M as of September 30, 2024.

Outlook and guidance

• 2024 revenue guidance is $425M–$435M, with adjusted operating margin of 8.5%–9.5% and adjusted EPS of $1.37–$1.57.

• GAAP operating margin guidance: 0.5%–1.5%; GAAP loss per share expected between $0.24 and $0.04.

• Research business expected to decline mid-single digits, consulting down low 20s%, events down low 30s% for the year.

• Management expects continued pressure on key metrics through 2024 due to macroeconomic conditions and product transition.

• Tax rate guidance: adjusted 29%; GAAP effective tax rate expected to be highly variable due to discrete items.