Forrester Research (FORR) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $102.5M, down 10% year-over-year, with all segments declining and a net loss of $5.8M; contract value was $315.2M, down 5% year-over-year, and 78% of CV is now on the Forrester Decisions platform, expected to exceed 80% by year-end.

• Forrester Decisions migration progressed, with enhancements such as a new AI/data analytics service and the Izola generative AI research portal rollout; Izola became the third most used FD feature with 40% quarter-over-quarter growth in user prompts.

• Large international and government deals contributed positively, including a $2.5M Asia-Pacific tech deal and a $1.6M U.S. government migration.

• Divestiture of FeedbackNow product line completed for $6M cash and a $9M note, resulting in a $1.8M pre-tax loss and a small equity stake retained.

• Multiple restructuring actions and leadership changes occurred, with continued investment in product and sales to drive growth.

Financial highlights

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

• Net loss for Q3 2024 was $5.8M (GAAP), with adjusted net income of $5.6M ($0.29/share), down from $8.6M ($0.44/share) in Q3 2023.

• Operating margin for Q3 2024 was -0.7% (GAAP) and 8.0% (adjusted); adjusted EBITDA margin was 9.9%.

• Cash and investments at quarter-end were $114.9M; net cash used in operations for the nine months was $2M.

• $5M in share repurchases in Q3, $15M year-to-date, with $83M remaining authorization.

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 loss per share expected between $0.24 and $0.04.

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

• CV expected to be flat to slightly down for the full year, with stabilization and potential growth in 2025.

• Full-year 2024 effective tax rate anticipated at 135%–270% (GAAP) and 29% (adjusted).

• Management expects continued macroeconomic pressure and product transition to impact key metrics through 2024.