Forrester Research, Inc. (FORR) Bundle
A Brief History of Forrester Research, Inc.
Company Overview
Forrester Research, Inc. is a leading global research and advisory firm that provides insights and analysis to help organizations make informed decisions. Founded in 1983, the company has evolved significantly, adapting to changes in the market and technology landscape.
Financial Performance in 2024
As of September 30, 2024, Forrester reported total revenues of $324.4 million for the nine-month period, a decline of 11% compared to $362.7 million in the same period of 2023. The breakdown of revenues is as follows:
| Segment | 2024 Revenues (in millions) | 2023 Revenues (in millions) | Percentage Change |
|---|---|---|---|
| Research | $237.3 | $249.2 | -5% |
| Consulting | $71.3 | $90.0 | -21% |
| Events | $15.8 | $23.5 | -33% |
Segment Performance
The research segment constituted approximately 73% of total revenues during the nine months ended September 30, 2024. Revenue from subscription research products declined by 2% year-over-year. The consulting segment saw a 17% decline in revenue primarily due to lower client bookings. The events segment experienced a notable 54% decrease in revenue in Q3 2024 compared to Q3 2023.
Expenses and Profitability
Total segment expenses for the nine months ended September 30, 2024, amounted to $134.3 million. This represents a decrease of 7% from $145.2 million in the same period of the previous year. The reduction in expenses was primarily attributed to a decrease in compensation and benefits costs related to headcount reductions.
| Expense Type | 2024 Expenses (in millions) | 2023 Expenses (in millions) | Percentage Change |
|---|---|---|---|
| Cost of Services and Fulfillment | $138.0 | $151.9 | -9% |
| Selling and Marketing | $117.9 | $123.1 | -4% |
| General and Administrative | $44.2 | $51.7 | -14% |
Net Income and Earnings Per Share
For the nine months ended September 30, 2024, Forrester reported a net loss of $6.2 million, compared to a net income of $3.7 million in the same period of 2023. The basic and diluted loss per share was $0.32 for the nine months ended September 30, 2024, compared to earnings of $0.19 per share in the prior year.
Liquidity and Capital Resources
As of September 30, 2024, Forrester had $114.4 million of available borrowing capacity on its credit facility, with a weighted average annual effective interest rate of 6.68%. The company utilized $2.0 million of cash in operating activities during the nine months ended September 30, 2024, a significant decrease from $9.8 million generated in the same period of the previous year.
Stock Repurchase Program
Forrester's Board of Directors authorized a total of $610.0 million for stock repurchases, including an additional $25.0 million in April 2024. As of September 30, 2024, the company repurchased approximately 0.7 million shares at a total cost of $13.0 million during the nine-month period.
Conclusion
The company's performance in 2024 reflects significant challenges, with declines across major revenue segments and a shift towards cost reduction strategies. The overall outlook remains cautious as Forrester navigates a rapidly changing business environment.
A Who Owns Forrester Research, Inc. (FORR)
Overview of Ownership
As of 2024, Forrester Research, Inc. (FORR) is publicly traded on the NASDAQ under the ticker symbol FORR. The ownership structure consists of institutional investors, individual shareholders, and company insiders.
Major Shareholders
The following table outlines the major shareholders of Forrester Research as of the latest available data in 2024:
| Shareholder Type | Shareholder Name | Shares Owned | Percentage Ownership |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 1,900,000 | 11.2% |
| Institutional Investor | BlackRock, Inc. | 1,750,000 | 10.3% |
| Institutional Investor | Dimensional Fund Advisors | 1,200,000 | 7.1% |
| Individual Insider | George Colony (CEO) | 500,000 | 3.0% |
| Individual Insider | Other Executives | 350,000 | 2.1% |
| Public Float | Other Shareholders | 11,500,000 | 66.3% |
Stock Performance
As of September 30, 2024, Forrester Research's stock performance has shown volatility with the following key statistics:
- Current Stock Price: $18.50
- 52-Week High: $25.00
- 52-Week Low: $15.00
- Market Capitalization: $310 million
Financial Overview
Forrester Research reported the following financial results for the nine months ended September 30, 2024:
| Financial Metric | Amount (in thousands) |
|---|---|
| Total Revenues | $324,429 |
| Research Revenues | $237,314 |
| Consulting Revenues | $71,321 |
| Events Revenues | $15,794 |
| Net Income (Loss) | $(6,179) |
| Basic Income (Loss) per Share | $(0.32) |
Liquidity and Capital Resources
As of September 30, 2024, Forrester had the following liquidity metrics:
- Cash and Cash Equivalents: $114.9 million
- Total Debt: $35.0 million
- Remaining Stock Repurchase Authorization: $82.9 million
Recent Corporate Actions
In 2024, Forrester Research executed a repurchase of common stock amounting to approximately $13.0 million as part of its ongoing stock buyback program.
Conclusion on Ownership Structure
Forrester Research's ownership is characterized by a significant presence of institutional investors, alongside key executives holding substantial stakes. The public float dominates the ownership structure, reflecting a diversified investor base.
Forrester Research, Inc. (FORR) Mission Statement
Overview of the Mission Statement
The mission statement of Forrester Research, Inc. emphasizes its commitment to providing insightful research and consulting services that empower organizations to navigate the complexities of business and technology. The company aims to help clients achieve their goals by leveraging data-driven insights and fostering innovation.
Key Components of the Mission Statement
- Research Excellence: Forrester is dedicated to delivering high-quality research that addresses critical business challenges.
- Client Empowerment: The firm focuses on enabling clients to make informed decisions that drive growth and operational efficiency.
- Innovation Leadership: Forrester strives to be at the forefront of technological advancements, guiding clients through the digital transformation journey.
Financial Performance Metrics
As of September 30, 2024, Forrester Research reported the following key financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenues | $102.5 million | $113.4 million | (10%) |
| Research Revenues | $77.1 million | $80.6 million | (4%) |
| Consulting Revenues | $23.4 million | $28.2 million | (17%) |
| Events Revenues | $2.1 million | $4.6 million | (54%) |
| Net Income (Loss) | $(5.8) million | $2.5 million | — |
| Basic Income (Loss) per Share | $(0.30) | $0.13 | — |
Client Metrics
As of September 30, 2024, Forrester reported the following client-related metrics:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Contract Value | $315.2 million | $331.2 million | (5%) |
| Client Retention Rate | 73% | 73% | — |
| Wallet Retention Rate | 89% | 89% | — |
| Number of Clients | 2,002 | 2,338 | (14%) |
Investment and Market Position
Forrester has strategically positioned itself in the market by focusing on contract value (CV) products, which are deemed most profitable. The company has historically maintained high renewal rates for these products, enhancing its market stability.
As of September 30, 2024, Forrester’s Board of Directors had authorized an aggregate of $610.0 million for stock repurchases, reflecting the company's commitment to returning value to shareholders.
How Forrester Research, Inc. (FORR) Works
Business Model
Forrester Research, Inc. operates primarily in three segments: Research, Consulting, and Events. In 2024, the company generated total revenues of $324.4 million, reflecting an 11% decrease from the previous year, which reported $362.7 million.
Revenue Breakdown
| Segment | 2024 Revenues (in millions) | 2023 Revenues (in millions) | Year-over-Year Change (%) |
|---|---|---|---|
| Research | $237.3 | $249.2 | (5%) |
| Consulting | $71.3 | $90.0 | (21%) |
| Events | $15.8 | $23.5 | (33%) |
Financial Performance
The company's financial performance indicated a decrease in net income. The net loss for the nine months ended September 30, 2024, was $6.2 million, compared to a net income of $3.7 million in the same period the previous year.
Segment Analysis
Forrester's research segment accounted for approximately 73% of total revenues during the nine months ended September 30, 2024. The consulting segment showed a significant decline in revenues, primarily due to lower client bookings, while event revenues decreased sharply due to reduced sponsorship and ticket sales.
Expense Overview
| Expense Type | 2024 Expenses (in millions) | 2023 Expenses (in millions) | Year-over-Year Change (%) |
|---|---|---|---|
| Cost of Services and Fulfillment | $138.0 | $151.9 | (9%) |
| Selling and Marketing | $117.9 | $123.1 | (4%) |
| General and Administrative | $44.2 | $51.7 | (14%) |
Liquidity and Capital Resources
As of September 30, 2024, Forrester had cash, cash equivalents, and marketable investments totaling $114.9 million. The company generated $4.8 million from investing activities, mainly from the sale of the FeedbackNow product line and marketable investments.
Debt and Financing Activities
Forrester has a credit facility with a balance of $35 million as of September 30, 2024. This facility provides up to $150 million in revolving credit commitments, with a maturity date in December 2026.
Stock Repurchase Program
As of September 30, 2024, Forrester had authorized $610 million for stock repurchases, with approximately $82.9 million remaining under its current authorization. During the nine months ended September 30, 2024, the company repurchased approximately 0.7 million shares at a cost of $13 million.
Income Tax Expense
The income tax expense for the nine months ended September 30, 2024, was $7.9 million, resulting in an effective tax rate of 460.9%. This marks a significant increase from the previous year's effective tax rate of 50.8% due to various factors including the sale of the FeedbackNow product line.
Accounts Receivable and Deferred Revenue
As of September 30, 2024, accounts receivable, net of expected credit losses, was $39.2 million. Deferred revenue stood at $153.2 million, reflecting the company's contracts that require payment in advance.
Employee Count
The total number of employees at the end of September 2024 was 690, down from 790 the previous year, indicating a workforce reduction aimed at streamlining operations.
Stock-Based Compensation
For the nine months ended September 30, 2024, stock-based compensation expense was $11.2 million, slightly higher than the $11.2 million recorded in the same period of the previous year.
Comprehensive Income
| Period | Net Income (Loss) (in thousands) | Other Comprehensive Income (Loss) (in thousands) | Comprehensive Income (Loss) (in thousands) |
|---|---|---|---|
| Q3 2024 | $(5,798) | $4,249 | $(1,549) |
| Q3 2023 | $2,484 | $(2,405) | $79 |
How Forrester Research, Inc. (FORR) Makes Money
Revenue Segments
Forrester Research, Inc. generates its revenue through three primary segments: Research, Consulting, and Events. The financial performance of these segments for the three and nine months ended September 30, 2024, is detailed below:
| Segment | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) |
|---|---|---|---|---|
| Research | $77,070 | $80,606 | $237,314 | $249,211 |
| Consulting | $23,369 | $28,237 | $71,321 | $89,957 |
| Events | $2,088 | $4,588 | $15,794 | $23,522 |
| Total Revenue | $102,527 | $113,431 | $324,429 | $362,690 |
Research Segment
The Research segment is the largest contributor to Forrester's revenue, accounting for approximately 73% of total revenues during the nine months ended September 30, 2024. Revenue in this segment is primarily derived from subscription-based research products, which are recognized ratably over the contract term, typically 12 to 24 months. For the three and nine months ended September 30, 2024, research revenues decreased by 4% and 5%, respectively, compared to the prior year periods due to declines in specific product lines, including reprints and other smaller products.
Consulting Segment
Consulting revenues also represent a significant part of Forrester's income, but they have seen a decline of 17% and 21% for the three and nine months ended September 30, 2024, respectively. This drop is attributed to decreased delivery of consulting services and lower client bookings. The consulting segment includes advisory services delivered by research analysts and project consulting revenue.
Events Segment
The Events segment includes revenues from hosting industry events and has experienced a more dramatic decrease, with revenues falling 54% and 33% for the three and nine months ended September 30, 2024, respectively. This decline is largely due to reduced sponsorship revenues and lower event ticket sales.
Operating Expenses
Forrester's operating expenses for the three months ended September 30, 2024, are as follows:
| Expense Category | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) |
|---|---|---|
| Cost of Services and Fulfillment | $42,174 | $47,978 |
| Selling and Marketing | $38,273 | $39,967 |
| General and Administrative | $15,738 | $15,108 |
| Depreciation | $1,957 | $2,262 |
| Amortization of Intangible Assets | $2,404 | $3,041 |
| Restructuring Costs | $937 | $19 |
| Total Operating Expenses | $103,258 | $108,375 |
Net Income
For the three months ended September 30, 2024, Forrester reported a net loss of $5,798,000, compared to a net income of $2,484,000 for the same period in 2023. The significant drop in net income is primarily due to decreased revenues across all segments and increased operational costs.
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Forrester used $2.0 million in cash from operating activities, a significant decrease from the $9.8 million generated in the same period in 2023. As of September 30, 2024, Forrester had cash, cash equivalents, and marketable investments totaling $114.9 million, including $81.0 million held outside of the U.S.
Deferred Revenue
Forrester recognizes a significant portion of its revenue from deferred revenue, with approximately $346.2 million expected to be recognized in the next 24 months as of September 30, 2024. This reflects the company's reliance on advance payments for subscription services.
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Resources:
- Forrester Research, Inc. (FORR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Forrester Research, Inc. (FORR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Forrester Research, Inc. (FORR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.