Forrester Research(US:FORR)2020-05-09 06:29Financial Data and Key Metrics Changes - Forrester's Q1 2020 revenue increased by 2% year-over-year, slightly below revenue guidance, while earnings per share dramatically exceeded targets due to cost reductions [8][29] - Operating income expanded to $11.3 million, representing 10.6% of revenue, compared to $4.9 million or 4.7% in Q1 2019 [32] - Net income for the quarter was $6.9 million, with earnings per share at $0.37, compared to $1.6 million and $0.08 in Q1 2019 [32] Business Line Data and Key Metrics Changes - Research services grew by 1%, driven mainly by reprints, while advisory services and events grew by 4%, led by strong performance from the content marketing group [31] - Consulting revenue increased by 10% year-over-year in Q1, indicating strong performance in this segment [15] - Events business is expected to face challenges due to the pandemic, but virtual events have been successfully implemented, maintaining brand engagement [17][37] Market Data and Key Metrics Changes - The impact of COVID-19 was first seen in the Asia Pacific region, followed by North America and EMEA, affecting client count, retention, and enrichment metrics [31][33] - Approximately 10% of Forrester's revenue comes from the most vulnerable sectors, including hospitality and travel [49] Company Strategy and Development Direction - Forrester aims to manage through the pandemic and recession, focusing on digital transformation as a key area of growth [7][20] - The company is organized into three groups: research, consulting, and events, with a focus on driving double-digit growth in research products moving forward [12][15] - The shift to virtual events is seen as a strategic pivot to maintain client engagement and brand presence [17][37] Management's Comments on Operating Environment and Future Outlook - Management believes the pandemic will accelerate the need for companies to adopt customer-obsessed digital capabilities, positioning Forrester favorably for future growth [7][20] - The company expects to have positive cash flow for the year and continues to retire debt from the SiriusDecisions acquisition [19][36] - Guidance for Q2 2020 revenue is set between $103 million to $108 million, with full-year guidance revised down by approximately 16% [38][39] Other Important Information - Forrester has maintained a strong cash position with $70 million in cash and generated $22 million in cash during Q1 [19][34] - The company has seen a significant increase in engagement metrics, with a 40% rise in blog traffic and over 100% increase in attendance at analyst-led webinars [24][25] Q&A Session Summary Question: Guidance details regarding the events business - Management indicated that the low end of guidance reflects all events going virtual for the full year, which significantly impacts revenue [41][43] Question: Decline in retention and enrichment metrics - The decline is attributed to small clients moving out of contracts due to financial pressures, particularly in March [45][46] Question: Industry exposure to vulnerable sectors - Approximately 10% of revenue is from sectors like hospitality and travel, which are currently facing challenges [48][49] Question: Sales force headcount changes - The sales force has seen attrition from 2019, but active recruiting is ongoing, and capacity is expected to increase [50][51]