Forrester Research (FORR) Q4 2005 earnings summary

Executive summary

• 2005 revenue grew 11% to $153.2M; pro forma net income rose 16% to $14.3M, client companies increased 8% to 2,007, and cash flow grew 33% to $23.9M.

• Growth returned to double-digit rates after the 2001–2003 technology recession, with expansion across key operating and client metrics.

Financial highlights

• Revenue was $153.229M in 2005, up from $138.479M in 2004; operating income was $14.656M vs. $2.013M.

• Net income was $11.348M in 2005 vs. $4.132M in 2004; diluted EPS was $0.52 vs. $0.18.

• Deferred revenue increased 20% to $86.7M; agreement value rose to $148.6M from $137.1M in 2004.

Outlook and guidance

• 2006 priorities include adding 75 clients with $1B+ revenue, expanding boards business 40% and adding 150 members, and maintaining the syndicated/nonsyndicated mix.

• Plans include expanding research coverage in India, Japan, and Australia, and broadening data offerings, including Hispanic American technology adoption.

• Long-term target is an even split between US and non-US business; actions planned in 2006 after non-US revenue reached 30% vs. a 34% goal in 2005.