Forrester Research (FORR) 8-K Forrester Research Reports Fourth-Quarter and Full-Year 2007 Financial Results

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

Forrester Research Reports Fourth-Quarter and Full-Year 2007 Financial Results

CAMBRIDGE, Mass., February 6, 2008 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its fourth quarter and year ended December 31, 2007 financial results.

Fourth-Quarter Financial Performance

• Total revenues were $58.4 million, compared with $48.9 million for the fourth quarter of last year.

• On a GAAP-reported basis, Forrester reported net income of $5.6 million or $0.24 per diluted share, compared with net income of $6.2 million, or $0.26 per diluted share, for the same period last year.

• On a pro forma basis, net income was $8.7 million, or $0.37 per diluted share, for the fourth quarter of 2007, which excludes non-cash stock-based compensation expense of $2.6 million, amortization of $254,000 of acquisition-related intangible assets, net marketable and non-marketable investment gains of $671,000 and expenses related to the previously reported stock option investigation and restatement of the Company’s historical financial statements of $954,000 and which reflects a pro forma effective tax rate of 39 percent. This compares with pro forma net income of $7.5 million, or $0.31 per diluted share, for the same period in 2006, which excludes non-cash stock-based compensation expense of $2.0 million, amortization of $462,000 of acquisition-related intangible assets, net non-marketable investment gains of $43,000 and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $668,000 and which reflects a pro forma effective tax rate of 37 percent.

Year Ended December 31, 2007 Financial Performance

• Total revenues were $212.1 million, compared with $181.5 million for the same period last year. Revenues related to the Ultimate Consumer Panel business, which was sold during the third quarter of 2006, are not included in revenues but are included as a component of income from discontinued operations for 2006.

• On a GAAP-reported basis, Forrester reported net income of $18.9 million, or $0.80 per diluted share, for the year ended December 31, 2007, compared with net income of $17.8 million, or $0.77 per diluted share, for the same period last year.

• On a pro forma basis, net income was $27.6 million, or $1.16 per diluted share, for the year ended December 31, 2007, which excludes non-cash stock-based compensation expense of $8.3 million, amortization of $1.2 million of acquisition-related intangible assets, net marketable and non-marketable investment impairments of $1.0 million and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $4.6 million and which reflects a pro forma effective tax rate of 39 percent. This compares with pro forma net income of $22.5 million, or $0.98 per diluted

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Forrester Fourth-Quarter And Full-Year Fiscal 2007 Information / Page 2

share, for the same period last year, which excludes non-cash stock-based compensation expense of $7.2 million, amortization of $2.1 million of acquisition-related intangible assets, a net gain from the sale of discontinued operations of $1.4 million, $300,000 of net income from discontinued operations, net non-marketable investment gains of $348,000 and expenses related to the stock option investigation and restatement of the Company’s historical financial statements of $668,000 and which reflects a pro forma effective tax rate of 37 percent.

A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.

“We are pleased with our 2007 financial performance,” said George F. Colony, Forrester’s chairman of the board and chief executive officer. “Along with the introduction of our new role-based strategy, we achieved the top end of our revenue growth target and exceeded our EPS guidance. In 2008, we will complete the transition to roles, an offering which has made us more relevant to our clients. We’ll also continue to drive our syndicated business this year, a key priority for Forrester.”

Forrester is providing first-quarter 2008 financial guidance as follows:

First-Quarter 2008 (GAAP):

• Total revenues of approximately $53.5 million to $56.5 million.

• Operating margin of approximately 11 percent to 14 percent.

• Other income of approximately $2.3 million.

• An effective tax rate of 39 percent.

• Diluted earnings per share of approximately $0.21 to $0.27

First-Quarter 2008 (Pro Forma):

Pro forma financial guidance for the first quarter of 2008 excludes amortization of acquisition-related intangible assets of approximately $200,000, non-cash stock-based compensation expense of $1.3 million to $1.7 million, costs related to the stock option investigation and restatement of the Company’s historical financial statements of approximately $200,000 and any gains or impairment charges related to marketable and non-marketable investments.

• Pro forma operating margin of approximately 13 percent to 15 percent.

• Pro forma effective tax rate of 39 percent.

• Pro forma diluted earnings per share of approximately $0.24 to $0.28.

Forrester is providing full-year 2008 guidance as follows:

Full-Year 2008 (GAAP):

• Total revenues of approximately $240 million to $248 million.

• Operating margin of approximately 14 percent to 16 percent.

• Other income of approximately $ 9.5 million.

Forrester Fourth-Quarter And Full-Year Fiscal 2007 Information / Page 3

• An effective tax rate of 39 percent.

• Diluted earnings per share of approximately $1.14 to $ 1.24.

Full-Year 2008 (Pro Forma):

Pro forma financial guidance for full-year 2008 excludes non-cash stock-based compensation expense of $5.0 million to $ 6.0 million, amortization of acquisition-related intangible assets of approximately $250,000, costs related to the stock option investigation and restatement of the Company’s historical financial statements of $200,000 to $500,000, as well as any gains or impairment charges related to marketable and non-marketable investments.

• Pro forma operating margin of approximately 17 to 18 percent.

• Pro forma diluted earnings per share of approximately $ 1.28 to $ 1.36.

• An effective tax rate of 39 percent.

Forrester Research, Inc. (Nasdaq: FORR) is an independent technology and market research company that provides pragmatic and forward-thinking advice about technology’s impact on business and consumers. For 24 years, Forrester has been a thought leader and trusted advisor, helping global clients lead in their markets through its research, consulting, events, and peer-to-peer executive programs. For more information, visit www.forrester.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, Forrester’s financial and operating targets for the fourth quarter of and full-year 2007. These statements are based on Forrester’s current plans and expectations and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual future activities and results to differ include, among others, Forrester’s ability to anticipate business and economic conditions, technology spending, market trends, competition, industry consolidation, the ability to attract and retain professional staff, possible variations in Forrester’s quarterly operating results, risks associated with Forrester’s ability to offer new products and services, and Forrester’s dependence on renewals of its membership-based research services and on key personnel. Forrester undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information, please refer to Forrester’s reports and filings with the Securities and Exchange Commission.

The consolidated statements of income, consolidated balance sheets, and consolidated statements of cash flows are attached.

Michael Doyle	Karyl Levinson
Chief Financial Officer	Vice President, Corporate Communications
Forrester Research, Inc.	Forrester Research, Inc.
+1 617.613.6000	+1 617.613.6262
mdoyle@forrester.com	press@forrester.com

Forrester Fourth-Quarter And Full-Year Fiscal 2007 Information / Page 4

© 2008, Forrester Research, Inc. All rights reserved. Forrester is a trademark of Forrester Research, Inc.

Forrester Fourth-Quarter and Full Year Fiscal 2007 Results/Page 5

Forrester Research, Inc.
Consolidated Statements of Income
(In thousands, except per share data)

	Three months ended				Year ended
	Dec 31,		Dec 31,		Dec 31,			Dec 31,
	2007		2006		2007			2006
	(Unaudited)				(Unaudited)
Revenues
Research services	$	34,851	$	30,596	$	131,163		$	114,876
Advisory services and other		23,568		18,352		80,893			66,597
Total revenues		58,419		48,948		212,056			181,473
Operating expenses
Cost of services and fulfillment		21,501		18,967		81,608			73,268
Selling and marketing		19,017		15,595		71,830			59,626
General and administrative		8,216		6,099		30,749			22,859
Depreciation		1,105		871		3,986			3,618
Amortization of intangible assets		254		462		1,232			2,060
Total operating expenses		50,093		41,994		189,405			161,431
Income from continuing operations		8,326		6,954		22,651			20,042
Other income, net		2,219		1,768		8,372			5,704
Gains (impairments) from securities and non-marketable investments, net		671		43		(1,019	)		348
Income from continuing operations before income taxes		11,216		8,765		30,004			26,094
Income tax provision		5,601		2,526		11,061			10,037
Income from continuing operations	$	5,615	$	6,239	$	18,943		$	16,057
Discontinued operations
Income from discontinued operations, net of taxes		—		—		—			300
Gain on sale of discontinued operations, net of taxes		—		—		—			1,399
Net Income	$	5,615	$	6,239	$	18,943		$	17,756
Diluted income per share from continuing operations	$	0.24	$	0.26	$	0.80		$	0.70
Diluted income per share from discontinued operations	$	—	$	—	$	—		$	0.07
Diluted income per share from net income	$	0.24	$	0.26	$	0.80		$	0.77
Diluted weighted average shares outstanding		23,670		23,815		23,729			22,973
Basic income per share from continuing operations	$	0.24	$	0.27	$	0.82		$	0.72
Basic income per share from discontinued operations	$	—	$	—	$	—		$	0.08
Basic income per share from net income	$	0.24	$	0.27	$	0.82		$	0.80
Basic weighted average shares outstanding		23,096		22,970		23,074			22,195
Pro forma data (1):
Income from continuing operations	$	8,326	$	6,954	$	22,651		$	20,042
Amortization of intangible assets		254		462		1,232			2,060
Investigation related expenses		954		668		4,583			668
Non-cash stock-based compensation included in the following expense categories:
Cost of services and fulfillment		1,127		931		4,245			3,185
Selling and marketing		206		492		1,730			1,885
General and administrative		1,231		578		2,351			2,140
Pro forma income from continuing operations		12,098		10,085		36,792			29,980
Other income, net		2,219		1,768		8,372			5,704
Pro forma income before income taxes		14,317		11,853		45,164			35,684
Pro forma income tax provision		5,584		4,386		17,614			13,203
Pro forma net income	$	8,733	$	7,467	$	27,550		$	22,481
Pro forma diluted earnings per share	$	0.37	$	0.31	$	1.16		$	0.98
Diluted weighted average shares outstanding		23,670		23,815		23,729			22,973

(1) Forrester believes that pro forma financial results provide investors with consistent and comparable information to aid in the understanding of Forrester believes that pro forma financial results provide investors with consistent and comparable information to aid in the understanding of Forrester’s ongoing business. Our pro forma presentation excludes amortization of intangibles, non-cash stock-based compensation expense Forrester’s ongoing business. Our pro forma presentation excludes amortization of intangibles, non-cash stock-based compensation expense, net gains or impairments from marketable and non-marketable investments, discontinued operations, costs associated with the stock option investigation This does not purport to be prepared in accordance with Accounting Principles Generally Accepted in the United States. and restatement of our historical financial statements, as well as their related tax effects. The pro forma data does not purport to be prepared in accordance with Accounting Principles Generally Accepted in the United States.

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Forrester Fourth-Quarter and Full Year Fiscal 2007 Results/Page 6

Forrester Research, Inc.
Condensed Consolidated Balance Sheets
(In thousands)

	December 31,			December 31,
	2007			2006
	(Unaudited)
Assets:
Cash and cash equivalents	$	53,163		$	39,157
Available-for-sales securities		195,811			168,676
Accounts receivable, net		69,865			59,727
Deferred commissions		10,631			10,117
Deferred income taxes		13,236			13,592
Prepaid expenses and other current assets		11,304			7,610
Total current assets		354,010			298,879
Property and equipment, net		6,834			5,611
Deferred income taxes		2,274			11,335
Goodwill and intangible assets, net		53,986			54,688
Non-marketable investments and other long term assets		9,253			13,630
Total assets	$	426,357		$	384,143
Liabilities and stockholders’ equity:
Accounts payable	$	4,174		$	2,878
Accrued expenses		28,891			29,852
Deferred revenue		111,418			99,875
Total current liabilities		144,483			132,605
Deferred income tax liability and other non-current accrued income tax liability		6,858			6,633
Total liabilities		151,341			139,238
Preferred stock		—			—
Common stock		282			279
Additional paid-in capital		284,431			270,306
Retained earnings		81,478			62,766
Treasury stock, at cost		(90,428	)		(85,834	)
Accumulated other comprehensive loss		(747	)		(2,612	)
Total stockholders’ equity		275,016			244,905
Total liabilities and stockholders’ equity	$	426,357		$	384,143

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Forrester Fourth-Quarter and Full Year Fiscal 2007 Results/Page 7

Forrester Research, Inc.
Consolidated Statements Cash Flows
(In thousands)

	Year ended
	December 31,			December 31,
	2007			2006
	(Unaudited)
Cash flows from operations:
Net income	$	18,943		$	17,756
Net income and gain from sale of discontinued operations		—			(1,699	)
Income from continuing operations	$	18,943		$	16,057
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation		3,986			3,618
Amortization of intangible assets		1,232			2,060
Non-cash stock-based compensation		8,326			7,210
Impairments (gains) from non-marketable investments, net		1,622			(348	)
Realized gains on sales of available-for-sale securities		(603	)		—
Increase in provision for doubtful accounts		480			358
Tax benefit from exercises of employee stock options		101			75
Deferred income taxes		6,165			9,636
Accretion of premiums on available-for-sale securities		607			852
Changes in assets and liabilities -					—
Accounts receivable		(9,966	)		(7,765	)
Deferred commissions		(514	)		(1,267	)
Prepaid expenses and other current assets		(3,552	)		(1,906	)
Accounts payable		1,171			1,171
Accrued expenses		(409	)		2,935
Deferred revenue		9,841			12,751
Net cash provided by operating activities		37,430			45,437
Net cash provided by discontinued operations		—			325
Net cash provided by operating activities		37,430			45,762
Cash flows from investing activities:
Purchases of property and equipment		(5,106	)		(3,334	)
Purchase of non-marketable investments		—			(300	)
Proceeds from non-marketable investments		2,640			555
Proceeds from sale of discontinued operations		250			1,642
Decrease in other assets		146			391
Purchases of available-for-sale securities		(1,240,584	)		(565,495	)
Proceeds from sales and maturities of available-for-sale securities		1,217,367			480,166
Net cash used in investing activities		(25,287	)		(86,375	)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock option plans and employee stock purchase plan		4,896			42,526
Tax benefits related to stock options		807			308
Acquisition of treasury shares		(4,594	)		(12,304	)
Net cash provided by financing activities		1,109			30,530
Effect of exchange rate changes on cash and cash equivalents		754			702
Net increase (decrease) in cash and cash equivalents		14,006			(9,381	)
Cash and cash equivalents, beginning of period		39,157			48,538
Cash and cash equivalents, end of period	$	53,163		$	39,157