Forrester Research (FORR) Q4 2004 earnings summary

Executive summary

• FY04 revenue rose 10% YoY to $138.5M; operating income was $2.0M and net income was $4.1M. Advisory and other revenue grew faster than research revenue.

• Agreement value reached $137.1M, up 8.6% YoY, supported by higher average contract values, more clients, and improved retention metrics.

• WholeView 2 unified Forrester and Giga research; 2004 offerings spanned Research, Data, Consulting, and Community.

Financial highlights

• Revenue was $138.479M, up from $125.999M in 2003; research services revenue rose 2% to $94.347M, while advisory services and other revenue rose 31% to $44.132M.

• Operating income was $2.013M versus $1.578M in 2003; net income was $4.132M versus $2.191M, and diluted EPS was $0.18 versus $0.10.

• FY04 operating expenses included $8.396M of reorganization costs and $6.461M of intangible amortization; Greenfield-related gains were $1.072M.

• Cash from operations was $18.006M, compared with $4.115M in 2003; cash and marketable securities totaled $127.440M at year-end.

Outlook and guidance

• Current cash, marketable securities, and operating cash flows were expected to cover working capital, financing, and capital expenditures for at least two years; planned investment included new offerings and infrastructure.

• A February 2005 authorization added $50M for common-stock repurchases; future earnings were expected to be retained, with no cash dividends anticipated in the foreseeable future.