Flat Quarter for Forrester, Muddied by Accounts Change

Technology research group Forrester has reported first quarter revenues in its Research division down 2 percent on a constant currency basis, with those in the Events division rising 1%. Overall reported revenue was flat at $77.7m, with new accounting standards making comparisons harder.

Research division revenue was $51.7m and Events revenue $26.0m.

Forrester said the primary effect of the adoption of new accounting standards from 1st January 2018 was a reduction in revenue of c.$2.3 million vs previous practice, and a reduction in deferred revenue of $7.8m from the cumulative effect of adopting the standard on January 1st 2018. The new standard's treatment of cancelable contracts also meant accounts receivable and deferred revenue were approximately $5.7m lower as of March 31st this year. For the full year 2018, Forrester expects the change 'not have a significant effect on financial results'.

Net loss was $1.7m on a GAAP basis, vs income of $3.0m in Q1 2017; and $0.2m on a pro forma basis, versus pro forma net income of $3.2m for the same period in 2017.

The company says it expects Q2 GAAP revenues of $92.0 to $95.0m, and full year total revenues of c.$352.0m to $360.0m, with operating margin of approximately 7.5% to 8.5% and diluted EIP of approximately $1.03 to $1.10.

Chairman and CEO George F. Colony (pictured) said: the firm attained revenue guidance for the first quarter of 2018 but missed EPS guidance, explaining: 'Our EPS shortfall was primarily driven by the impact of the new revenue accounting rules, but we do not expect it to affect our full-year earnings. We are seeing meaningful progress in executing our strategy and remain confident in our view for 2018; therefore, we are leaving our full-year 2018 guidance unchanged'.

Web site: www.forrester.com .