Forrester Research (FORR) Q4 2007 earnings summary

Executive summary

• FY 2007 revenue reached a record $212.1M, up 17% YoY; net income was $18.9M, while the business shifted toward a role-based research strategy.

• Syndicated research represented 62% of revenue; Leadership Boards grew 72% to 1,183 members, supporting the strategy to deepen client engagement and grow renewals.

Financial highlights

• Revenue rose 17% to $212.1M; research services grew 14% to $131.2M and advisory services and other rose 22% to $80.9M.

• Operating income was $22.7M vs. $20.0M in 2006; net income was $18.9M vs. $17.8M.

• Basic EPS was $0.82 and diluted EPS $0.80, compared with $0.80 and $0.77, respectively, in 2006.

• Revenue outside the U.S. increased 17% to $62.3M and remained 29% of revenue; FX translation contributed to growth, with revenue up 15% excluding FX.

Outlook and guidance

• Planned annual sales-force expansion of 15–20% over the next 3 years, alongside faster hiring, training and ramping of sales representatives.

• Management expected current cash, available-for-sale securities and operating cash flows to cover working capital, financing and capital expenditures for at least 2 years.

• The role-based strategy targeted 17 professional roles in more than 25,000 organizations; estimated addressable market was 4M executives and $9B, with penetration below 5%.