Forrester Research(US:FORR)2024-11-08 14:00Contract Value and Client Metrics - Contract value (CV) decreased by 5% to $315.2 million as of September 2024 compared to $331.2 million in the prior year period[69][70] - Client retention remained flat at 73% and wallet retention remained flat at 89% as of September 2024 compared to the prior year period[69][70] - Number of clients decreased by 14% to 2,002 as of September 2024 compared to 2,338 in the prior year period[70] - Approximately 78% of the company's overall CV was in the Forrester Decisions product platform as of September 2024, with an anticipated increase to over 80% by the end of 2024[70] Revenue Breakdown - Research products and services accounted for 75.2% of total revenues for the three months ended September 30, 2024, up from 71.1% in the prior year period[71] - Consulting projects and advisory services accounted for 22.8% of total revenues for the three months ended September 30, 2024, down from 24.9% in the prior year period[71] - Events revenues accounted for 2.0% of total revenues for the three months ended September 30, 2024, down from 4.0% in the prior year period[71] Expense Breakdown - Cost of services and fulfillment accounted for 41.1% of total revenues for the three months ended September 30, 2024, down from 42.3% in the prior year period[71] - Selling and marketing expenses accounted for 37.3% of total revenues for the three months ended September 30, 2024, up from 35.2% in the prior year period[71] - General and administrative expenses accounted for 15.4% of total revenues for the three months ended September 30, 2024, up from 13.3% in the prior year period[71] Revenue Performance - Total revenues decreased by 10% to $102.5 million in Q3 2024 compared to $113.4 million in Q3 2023[72] - Research revenues decreased by 4% to $77.1 million in Q3 2024 compared to $80.6 million in Q3 2023[72] - Consulting revenues decreased by 17% to $23.4 million in Q3 2024 compared to $28.2 million in Q3 2023[72] - Events revenues decreased by 54% to $2.1 million in Q3 2024 compared to $4.6 million in Q3 2023[72] - Revenues from customers outside the U.S. decreased by 9% to $23.6 million in Q3 2024 compared to $25.8 million in Q3 2023[72] Expense Performance - Cost of services and fulfillment decreased by 12% to $42.2 million in Q3 2024 compared to $48.0 million in Q3 2023[74] - Selling and marketing expenses decreased by 4% to $38.3 million in Q3 2024 compared to $40.0 million in Q3 2023[75] - General and administrative expenses increased by 4% to $15.7 million in Q3 2024 compared to $15.1 million in Q3 2023[77] - Depreciation expense decreased by $0.3 million in Q3 2024 compared to the prior year period[78] - Amortization of intangible assets decreased by $0.6 million in Q3 2024 compared to the prior year period[79] Other Income and Taxes - Other income, net decreased by $0.1 million for the three months and increased by $1.1 million for the nine months ended September 30, 2024, primarily due to a $1.9 million increase in interest income, partially offset by a $0.9 million increase in foreign currency exchange losses[84] - Income tax expense increased by $2.3 million (99%) for the three months and $4.1 million (106%) for the nine months ended September 30, 2024, with an effective tax rate of 461% for the nine months, driven by discrete tax items including $3.5 million from the disposition of assets related to the FeedbackNow product line[85] Segment Performance - Research segment revenues decreased by 7% for both the three and nine months ended September 30, 2024, with consulting product revenues within this segment decreasing by 33% and 32%, respectively, due to lower client bookings for advisory services[91] - Consulting segment revenues decreased by 12% and 17% for the three and nine months ended September 30, 2024, respectively, primarily due to lower client bookings for consulting services[91] - Events segment revenues decreased by 54% and 33% for the three and nine months ended September 30, 2024, respectively, primarily due to a decline in sponsorship and event ticket revenues[91] Cash Flow and Financing - The company used $2.0 million of cash in operating activities during the nine months ended September 30, 2024, a decrease of $11.8 million compared to the prior year period, primarily due to a $9.9 million decrease in net income[92] - The company generated $4.8 million from investing activities during the nine months ended September 30, 2024, including $6.0 million from the sale of the FeedbackNow product line[92] - The company used $13.0 million in financing activities during the nine months ended September 30, 2024, primarily for $13.0 million in common stock repurchases[92] - As of September 30, 2024, the company had a remaining stock repurchase authorization of approximately $82.9 million[92] - The company has a $150.0 million revolving credit facility, with $35.0 million drawn as of September 30, 2024, maturing in December 2026[92] Cash and Investments - The company had cash, cash equivalents, and marketable investments totaling $114.9 million as of September 30, 2024, with $81.0 million held outside the U.S.[94] - Non-cancelable lease payments due as of September 30, 2024: $4.0 million in 2024, $26.4 million within 2025 and 2026, $8.8 million within 2027 and 2028, and $6.2 million beyond 2028[94] - The company expects to remain in compliance with its credit facility covenants, including maximum leverage ratio and minimum interest coverage ratio, through the next 12 months[94] - The company intends to permanently reinvest $81.0 million held outside the U.S. and does not plan to repatriate these funds for U.S. operations[94] - The company's current cash balance and cash flows from operations are expected to meet working capital, financing activities, and capital expenditure requirements for the next twelve months[94] Accounting and Risk - No material changes to the company's critical accounting policies and estimates since the last annual report[96] - No material changes in the company's assessment of sensitivity to market risk since the last annual report[98]