On July 30, 2024, Forrester Research Inc (FORR, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Forrester Research Inc is a United States-based company that provides independent research, data, and advisory services. It operates through the following segments: The Research segment develops and delivers research, connect, and analytics products; The consulting segment includes the revenues and the related costs of the company's consulting organization, and the Events segment is engaged in developing and hosting in-person and virtual events.
Second-Quarter Financial Performance
Forrester Research Inc reported total revenues of $121.8 million for Q2 2024, a decrease from $135.6 million in the same quarter of 2023. Despite the revenue decline, the company achieved a GAAP net income of $6.3 million, or $0.33 per diluted share, compared to $5.3 million, or $0.28 per diluted share, in Q2 2023. On an adjusted basis, net income was $12.9 million, or $0.68 per diluted share, surpassing the analyst estimate of $0.44 per share.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenues | $121.8 million | $135.6 million |
| GAAP Net Income | $6.3 million | $5.3 million |
| Adjusted Net Income | $12.9 million | $18.1 million |
| Adjusted EPS | $0.68 | $0.94 |
Segment Performance and Challenges
The Research segment generated $83.7 million in revenue, down from $87.7 million in Q2 2023. The Consulting segment saw revenues of $24.8 million, a decline from $30.0 million in the previous year. The Events segment also experienced a drop, with revenues of $13.4 million compared to $17.9 million in Q2 2023.
CEO and Chairman George F. Colony commented,
“We are pleased with the progress we made this quarter with our product migration, and we are on track to hit our target of 80% of CV on the Forrester Decisions platform by year-end. CV metrics continue to stabilize, we have added significant enhancements to the platform, and retention shows improvement from the prior quarter. That said, our non-CV businesses, consulting and events, had a challenging quarter, which caused us to lower 2024 guidance. We are focused on stabilizing those businesses and are increasingly confident of returning to CV growth by the end of the year.”
Income Statement Highlights
Forrester Research Inc reported operating expenses of $110.5 million, down from $127.3 million in Q2 2023. The company achieved an income from operations of $11.3 million, an increase from $8.3 million in the same period last year. Adjusted income from operations was $17.9 million, compared to $25.7 million in Q2 2023.
Balance Sheet and Cash Flow
As of June 30, 2024, Forrester Research Inc had cash, cash equivalents, and marketable investments totaling $110.8 million, down from $124.5 million at the end of 2023. Accounts receivable stood at $47.7 million, and deferred revenue was $164.1 million. The company maintained a debt outstanding of $35.0 million.
Net cash used in operating activities was $2.3 million for the first six months of 2024, compared to net cash provided by operating activities of $15.8 million in the same period last year. The company also repurchased $8.0 million worth of common stock during the first half of 2024.
Analysis and Outlook
Forrester Research Inc's Q2 2024 results reflect a mixed performance, with notable progress in product migration and stabilization of contract value metrics. However, the decline in revenues across the Consulting and Events segments poses challenges that the company aims to address in the coming quarters. The company's ability to achieve its year-end targets and return to CV growth will be critical for its future performance.
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Explore the complete 8-K earnings release (here) from Forrester Research Inc for further details.
