Forrester Research (FORR) Q4 2002 earnings summary

Executive summary

• 2002 results reflected recession-driven cuts in technology spending, fewer client companies, lower contract values, and substantial workforce restructuring.

• WholeView Research improved client satisfaction from 73% to 81% and supported renewal improvements; 2003 priorities include push-and-pull research, further WholeView enhancements, and Giga integration.

Financial highlights

• FY2002 revenue fell 39% YoY to $96.936M; operating loss was $1.143M versus $20.617M operating income in 2001.

• Net income was $589K versus $18.117M in 2001; basic EPS was $0.03 and diluted EPS was $0.02, down from $0.80 and $0.76.

• Core research revenue fell 46% to $67.380M; advisory services and other revenue declined 17% to $29.556M.

• Operating expenses included $12.170M of reorganization costs; non-marketable investment impairments were $4.118M, while 2001 included a $1.664M Internet AdWatch sale gain.

Outlook and guidance

• Lower agreement value and renewal rates were expected to reduce 2003 revenue; agreement value was $78.1M at year-end 2002, down 33% YoY.

• 2003 initiatives: combine syndicated push research with client-directed pull offerings, expand WholeView, and develop The CIO Group and TSDP advisory products.

• Cash, marketable securities, and operating cash flows were expected to cover working capital, financing, capital expenditures, Giga, and repurchase needs for at least two years.

• Integration of Giga was expected to broaden practitioner research, add cross-selling opportunities, and increase shareholder value across financial metrics.