FORR - Earnings call transcript Q2 2018 | Forrester Research, Inc.

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Operator

Good morning. Thank you for joining today’s call. With me today are George Colony, Forrester’s Chairman of the Board and CEO; Kelley Hippler, Forrester’s Chief Sales Officer; and Mike Doyle, Forrester’s Chief Financial Officer. George will open the call, Kelley will follow George to discuss sales, and Mike Doyle will discuss our financials. We’ll then open the call to Q&A. call be available or accessed this XXXX August internationally of can and by replay will until be XX, X-XXX-XXX-XXXX. A dialing X-XXX-XXX-XXXX the reference pass XXXXXXX#. Please code

will remind Before and similar the of company’s expressions estimates forward-looking expects, risks statements. are Litigation XXXX. current statements. materially to be that These that set we believes, plans forward-looking like of Securities statements cause to and are Act such involve the begin, this the intended I’d Private call or in Words those contain Reform forth could results expectations these uncertainties identify meaning of and anticipates, forward-looking based and different within plans, statements you activities from the as on to future intends, operations

actual obligation important differ over as statements, publicly with otherwise. call the whether to Some factors to future events the in reports The cause George I’ll Commission. to of a no Exchange or now result could that company and hand results our the undertakes Colony. update Securities filings new discussed information, are forward-looking of any and

George Colony

progress Good my the an to morning QX our XXXX call. quarter. will the selling Hippler, on and update give of on briefing And our I following sales, Head remarks, a give our investor Kelley welcome in will team.

rates. part the half the Finally, expanding quarter. that Mike every Doyle, business, revenue we the for grew, Bookings company’s our quarter, second In strength guidance double-digit products with a CFO, showed growth exceeded will review. the the and nearly at of portfolio company’s resulting financial for and across all of give EPS in

at years. but highlight quarter, bookings businesses five their will In metrics, rate majority regions take two addition, the through company’s organic second I teams The of rates. of wanted Mike range the financial here. all with in double-digit fastest sales the you a grew at in grew growing to

the XX% quarters. last on high expect standing a good upward at show has to positively the new in five-year continues now to one, to continued year-over-year, is Customer this ramp structure it impacting contributing motion, model, are rolling Number continues retention as in several and dollar Enrichment yield premier engagement Three quarters It experience our engagement growth success customer our renewals. we selling increases improving the accounts over continues Our basis. is in ahead. driving at and managers are improving factors now increased a to results. doing been performance.

uncovering opportunities user successfully are partners new in Solution increasing accounts, enrichment.

the payoff. last is to the hard years X.X work beginning over So

factor finally, ease. second a history to for customer for outcomes opportunities we company. of age opening the clients the more the companies, our to increasing clients multimillion-dollar to forms. in financial business continuing the the is the won insight to And with more our Forrester. our services experience QX, U.S.-based our digital quickly. largest challenges faster, project customer large the of a match and Digital of enabling is large engagement to continues with enables solutions The company, simplifying accelerating of transition product flexible challenge research, In towards value access get This set and

progress we’re remainder we we So growth the and are about for on achieving confident continue XXXX, guidance positive of will feeling that plan. to our our

in direction. frontier move will is critical that our in electric and the clients clients’ believe from cloud. improve clients utilities experience set to We to of next that real-time, to call, capability are our This a increasingly On – real-time customers will demanding. retailers that become to as increasingly insurance this CX, sense our more the companies and of will customer I the products experience QX real-time become described enable ready

company’s updated calls. widening to by have quarters, I’m CX by in events their largest Customer technology San addition a The our FeedbackNow market. for the GlimpzIt. in U.S. GlimpzIt dominant in had growth now CX them strong will is engine from over second to real-time parts Asia-Pacific be Switzerland, The traditional that at attendees XX is experience year-over-year XXX attracted on of experiences drawing this acquired business instant to that has acquired in generation several be recently of history, analytics feedback FeedbackNow revenue. event future would we forum. companies basis. banks every of million of XXX,XXX This about for on devices, company the Cloud, will our to deploys the we’ve sponsors. feedbacks, XX,XXX research a Taps, customer physical Europe of company I recording largest most physical add Cloud, will the keep and Events attendees. and company XX Europe and installed data. led customer and focus and New Germany wide customers Transformation the buttons over countries. important North a quarter. in into talking The City in elements clouds Forums and the of you an user American impact end have CX Experience event to analyzing The the in Francisco capabilities like this side-by-side $X cloud. This digital array American with showed input clients source the AI, We position digital York. unstructured records the Forum, CX clients or to any real-time. past to and two sentiment is real-time just And the over Real-time France in approximately North and the Over machine this those experience and next was growth what market. has of button showed sponsorships, now day. lead New call a the learning and moving direct on going FeedbackNow in the is deployed will the based pipeline will GlimpzIt its a example branch the start-up as York give on company enabling technology sources in real-time and in be introduced Digital franchise growing sales and array analyze analysis X,XXX The generated

we’re many parts with the where stand to double-digit So rates. all at growing, very business conclude, of with midyear pleased we at

thank So the you for being on call.

to Now Kelley? I’d it like to hand Kelley over Hippler.

Kelley Hippler

sales our George. momentum quarter CEM. you, QX Thank model, continue to was or customer a for Forrester the gain solid as organization with we engagement

both to our selling myriad engagement tackle value of Our to based upon the have client as prior pleased to enabled technology organizations. and customer of trying performance am that efforts our the all come trending that of key more I age resources align the they to are their right our challenges the across clients, versus drive us year. need indicators and business direction in for report in thrive with major

rates, of in against In addition pipeline productivity, saw all and year-over-year bookings geographic we aggressive plan. conversion bookings at by sales to strong rep The percentage improvements our an sales was regions in those plan rep attrition. reps mentioned George, net result

good premier our had also We momentum motions, across two and selling core.

process conversion In operational improvement work of a CEM forecasting drive out our complete, premier rates. our to the With our organization pipeline into in we new that QX, rolled management continues. and user excellence the to contributed standup

highest on solutions. our and to strength situations. in bundled seeing our segment, pipeline we into product both focused, in performance, that our extensive what These that insights our of are to the drive teams more be are our and to deliver the new that lead analytics be greater rates fuel selling sellers evolving organization, so can addition marketing retention products a is has In to helping vertically With combination increased our to sign prescriptive sales territories proposed products we we by analysis about help good are collaboration with team done certain our tapping growth. an

sales that turn we As over us would Doyle create the that pleased a better that feel is to we well, But our for are review Mike clients, still we do on. future. more call results. are the to better current With are time We getting ensure with we financial deliver trajectory the our outcomes for I results. consistent outcomes to in work the sell much like to QX that have that, help helping the to organization

Michael Doyle

my of quarter now costs; intangibles; the of of review XX, third acquisition losses look second of the second and quarter our that amortization financial integration I’ll and I’m our income XXXX, for stock-based results, from at statement numbers XXXX. Forrester’s financial begin the quarter Please forma reporting and note including gains expense; the following performance investments. metrics, at outlook compensation June for the and the a Kelley. net Thanks, and items: pro are sheet exclude balance

pro tax rate we XXXX, an For effective of forma for purposes. are XX% utilizing

double-digit our revenue, operating exceeded for the of per revenue advisory second guidance. growth. with and quarter Forrester drove Demand time share XXXX, For margin earnings analysts

well growth in improve, and a Key in reprint retention regions adjustment addition, to and our margin EPS for metrics significantly with and above which line bookings overall enrichment revenue products. up In point Expenses quarter, the expectations, continued first prior had growth was resulted period to guidance. organic revenue and sales our and quarter from added due to X which a across we growth. the all were strong

to me results. second more our of detailed turn Now a let review quarter

on XXXX, revenue $XX.X a $XX.X quarter increased adjusted million and in Forrester’s million as the to from by of second quarter X% X% second basis. currency increased reported,

total by X% increased $XX.X period from and revenue as for increased to and a prior Research reprints. the $XX.X quarter reported, XX% adjusted services of currency services million, Second the revenue on basis X% neutral quarter. research million on represented for revenue adjustment

services the in activity to from X% total European, the currency fueled X regions. point with XX% currency and mix constant XX%, quarter Asia-Pac XX% X represented I’d increased was advisory like by Research. XXXX, X% now in the you by of through The and behind constant growth product and with XXXX, Second point our the and increased million revenue million and to up second Forrester Canadian second take of quarter for in revenue quarter from with starting up revenues, quarter. by of events revenue our $XX.X international $XX.X

enable hosted Research addition and tools in anticipate documents, the for the dynamic second affecting XX we research drive XXXX, market. on of believe frameworks clients library to XXX included We and increased of webinars provides the our decision insights In new and forces to and complex X% for and revenue XXXX. by quarter XX capitalize organizations. growth quarter better businesses a clients. research Forrester public of second the disruptive playbooks, Forrester’s their and Forrester’s Research

and age reprints Excluding premier which we buy the the into customer premium clients also to seeing product Boards Leadership rates products to reader related Under Programs, coach their to services continue access prior single the offerings, memberships. with help gains within Executive referenced, and connect our as organizations. – professionals lead offerings, change just Connect Forrester’s far-reaching are stronger our which our clients strong Forrester to and renew executives periods and peers than that I of revenue adjustments designed Forrester to enrichment our Connect team at encompass are and

X% XX, business. optimized driven down As up year a CMO of total XXXX, and of first compared had as to Connect Forrester for second pricing Executive our members, by to XXXX, in of the compared our quarter last well June boards X%, XXXX. of revenue by leadership X,XXX growth in Connect as CIO X% the Programs, increased quarter and

behalf. data analytics products insights and custom designed clients. to choose leverage analysis services fact-based or on Clients are our to can us products our customer have analytics their provide conduct Our services and to

For the solid in partially growth second primarily offset revenue Technographics our from our X%, by business decline by decreased data quarter, custom business, by driven product. a

As new acquisitions a and GlimpzIt, of business George our FeedbackNow our to efforts accelerate analytics clients. Forrester level the digitally and to our of to value bring transform position mentioned,

Forrester by for driven and organization. was our XX% from and along Consulting, total increase a provided This which quarter includes saw our consulting increase compared analysts, also prior services, in to XX% but our by consulting second advisory the services year. advisory of helped revenue our by growth primarily healthy

year. in including our events Forum, the New seven second XXXX, CX another York of attendance set record held which flagship this quarter Forrester

same-event increased revenue XX% basis quarter, on second by overall. X% the For and a by

XXXX. and quarter of X% Products advisory sequentially. revenue, million, sales year-over-year XXXX. shares a to to merit of the the a in currency, fulfillment increases, and second and in flat and $X.X review the Total constant and expenses staff higher total headcount commissions merit Agreement services General by compared X%, due with of increased by with constant by DC this from up merit a due to the X% year. Overall X% moving also portions and basis statement. and had travel shift was Operating diluted X,XXX, revenue all on regard the on second as income been headcount professional million, and At force force $XX,XXX income was the as total costs to decreased and weighted X% second value X% income higher increased quarter I’ll XXX. $X.XX the drove We and adjusted $XX.X X% that compared and quarter. This quarter $X.XX and weighted driven of and for compared of the expenses and of $XX.X marketing as year. the XXX year-over-year has X%, costs Cost of our earnings per perspective second for and was share forum for of sequentially. recognized. headcount currency services the provide we the XXXX. XX.X% XX% share increased increases quarter $XX.X in compared $XXX,XXX, and a XX.X is XXXX earnings million higher on value. now outstanding to entertainment of to second including by expense income with in increased research $X.X the Net that and by administrative X%, CX and income was first XX.X of and per million, of of compared to highlight by or results of Selling X% or million of were Operating end million the reported second revenue by total into and currency advisory the of the quarter quarter, services quarter prior quarter shares of with and more now increased for on related increases to services quarter operating net quarter reported and place metrics Headcount X% expense. compared will Forrester’s was staff million represents and higher increase. already average the expense X% flat as the services and quarter for of diluted increased average second by contracts up XXXX. the income amount $XX.X well quarter to without forum sales by outstanding Other the constant increased products million, in of second third advisory currency. to

As of and XXXX, $XXX.X was agreement X% the June on XX, value million, constant-currency X% up up from XXXX basis. second quarter a of

our down XXXX, the at unlike XX, per Client is client quarter. metrics, June and enrichment and end was our to retention of a company essentially flat quarter. last for the As compared total X% of X,XXX, year count, metric point-in-time each last

last was XX, companies last Forrester’s June retention as client of to rate for and XXXX, quarter to XX% flat year.

quarter Our and compared to dollar last flat was retention compared up year. last to point rate XX%, X

up appropriate client X next this seen retention close calculate June for rolling up compared points trend was rates selling and improvement XXXX, the attribute methodology the with basis, slip rates We’ve the metric XX-month which We quarters, to XX, X we four can enrichment last early rolling dollar point captures enrichment last which consistent the last occur to on ending quarter and model. a our quarter. Our compared that into in to new year. XX-month between fluctuations due XX% period rate deals quarters over The or the and information. to

to Now balance sheet. I’d review the like

XXXX. the $XXX million, quarter stock from cash compared $XXX.X million as quarter of increase Cash from year-end paid as at an XX, last options million million, was total for $X And of the million, and at operations million XXXX. cash Accounts $X.X June securities the during which was the million XXXX at receivable $XX.X quarter. from $X.X June we compared Our marketable $X.X the XXXX was is June during million million the per million $X.X last than up $X.XX to we to for in in as more of million of was quarter, second XX, in a share, to purchased dividend the the quarter, compared for We of QX second XX, in of that implementation. received exercise we year, shortfall year. $XX system and quarter caused made our $X.X or as $XX.X by

XXXX. XXXX XXXX. X% sales XX compared compared XX, outstanding at our June at million, decrease XX, to XX, was a Our over And to at of Deferred at days was at XX XXXX. revenue days, $XXX June June was days to compared XXXX, June XX June June XX, XX% XX, XXXX accounts XX, receivable days X%

rules, effect the very approximately new increased a quarter of company. for closing, revenue adjusting good revenue In for have the the deferred X%.X However, would

revenue regions in our to were client across growth bookings strong. and see sales products, results metrics. Our We all continued good we improvement and had

our we larger earnings a first were critical we the operating real-time our opportunities. share about excited are pursue blocks discussed. acquisitions and are we expectations two other great per for they Our cash cloud. still healthy margin very and believe acquisitions for and of through XXXX. are very customer experience, these building We exceeded We use sheet target the have George balance half believe quarter a the to Strategically, of on

let full the for take third and our of you guidance year through specifics quarter Now me XXXX. the

to losses. intangible full-year million reminder, any $X.X and full-year million to for full-year to acquisition gains million $X year and for $X.X $XXX,XXX our a and third $X.X million guidance compensation the for and for million $X.X $XXX,XXX of to the investment between As the XXXX; and of the million XXXX; be $XXX,XXX which stock-based costs integration the to to expense third and for quarter $XXX,XXX quarter, the of XXXX; we following: million million $X.X $X.X quarter assets, third excludes the $X.X amortization between and for expect

third follows: financial quarter tax $XX of providing revenues is $X.XX of guidance rate approximately XX%; X.X% margin XX.X%; $XX forma to pro of million forma $X.XX. diluted forma earnings pro to to XXXX approximately share operating effective Forrester of total per pro million; as approximately and

third recent from XX%; XXXX forma to to diluted million; approximately previously effective Our per reflects earnings in million negative I’m impact of of forma And for tax guidance, going much. approximately X.X% follows: of XXXX X-K revenues our quarter guidance acquisitions margin the pro turn of operating total for $XXX the full-year rate very press the portion which today. forma a now $X.XX to pro $X.XX. $XXX full-year filed approximately pro on to $X.XX operator the as release and Thanks XX.X%; call We’ve basis and announced provided to the GAAP over call. of our share our is Q&A

Operator

Thank you.

We session. will the from now ahead. question-and-answer our is And question begin Please Instructions] Colicchio. first go [Operator Vincent

Vincent Colicchio

improving Yes. think about sales sales you’re the growing this terms productivity, as next this the year a of last in Mike, it for you quarter, think, talked year be, seeing? Do I targeting and force. view strong you that is you’re change when of may year will was George bookings maybe is well, you

Michael Doyle

I’ll give I’ll what? you going I’m my to on give it. know and take give some you you – well, color Kelley let

think I are the we start – year. now, right think stay as to described the at it – course, we’ve the that I for going of

got good we’ve lot think, I a things. of

described she that Kelley some things is continuing also to focus think, on. I

want in numbers. Kelley place do And down improve then in as I’ll I the is think by let path look and the her to think, we well. we’re this we’re things year sales encouraged what continue year’s to all give of I that. color seeing and But next accelerate putting already productivity

Kelley Hippler

do even new we last opportunity over Mike. We’ve additional of a productivity, still with I the believe so. under in definitely, plan the in uptick be adding quarters, XXXX. in to start nice that Thanks, that rep sales model, an grow And that. And more would will have seen headcount to Yes. starting but agree the again, couple

Vincent Colicchio

to for take companies those you experience long products? give could Okay. capabilities your for it how may into be two acquisitions a customer the George, – sense on to us you their be integrated made,

George Colony

Yes.

actually, Airport kind and of of So in They this Amsterdam, morning FeedbackNow they is heard revenue that running independently. which cool. won Schiphol have we is, course,

So happen what now. expect is has in we airports have will the to I customer built is that largest five three Vince, would by we currently is – here of experience cloud what of us. the by being Europe digital side But QX,

side So FeedbackNow. become from now in side see coming integrated physical QX, you the with will the digital

So FeedbackNow developing be and I will in QX. analytics included remember, – the for being cloud. they’re the cloud engine FeedbackNow there And itself in it, GlimpzIt, by about, talked the

So I also a good for QX. would timing say, be GlimpzIt that’s would

is think physical becomes today, digital cloud cloud using in the about very the cloud simply, it QX. a FeedbackNow. today It So the

Vincent Colicchio

pick you And that CX may further up piece now then what like product? an build acquisition to out in build would be to missing or your

George Colony

bunch open of whole – A You’re our Vince. for that there’s opportunities talking about bunch a us, acquisitions now? of up them whole

in the You to have opportunities cloud. the inputs

that social There ability would for So those example, around, be cloud, space. scrape in to as point-of-sale be quite a as is taps into the example, at feed the an inputs. the interested terms would scrape, used are that other social to we an inputs

sort of cloud, that’s then there more in more are of one. as so acquisitions the Set fortification, the set well. there So power is engine analytics two

now. portfolio analytics, acquisitions. we building There’s up So a possible you around up tell a right it’s are truthfully, cloud very for whole nice busy I’ll inputs, – very opened but the

Vincent Colicchio

Okay. questions. much Thanks my very for

George Colony

Thanks, Okay. Vince.

Michael Doyle

Vince. Thanks,

Kelley Hippler

Vince. Thanks,

Operator

you. Thank

Tim question next Our ahead. go McHugh. from Please is

Timothy McHugh

thanks. Yes,

Just want to follow-up.

were think, of I those? practices of kind the are or half comment And I lower double And right regions ones guess, the was now? parts guess, I were what digits. what growing

George Colony

sales products say or you Did regions?

Timothy McHugh

but I I said exactly thought territories, time. it recall can’t the was how at you sales

George Colony

it products, was and Tim, we it think, did both. I

Michael Doyle

Yes, we yes. did both,

George Colony

perspective, really of gate bookings Yes. mean, are demand. is the a from I consulting out heavy on product mean, the I what we seeing side, a

a And the building think product a the business healthy excited from biggest was I are that on that about. backlog play pretty are we consulting on side up So we perspective. bookings the

Kelley Hippler

North have in Yes. double-digit well And just did America. as to we Asia-Pac, add perspective, growth as geography from Europe, a

Timothy McHugh

growth side guess, for the bookings we business this point? rate about Okay. the the think at what’s of What research – I so if

Michael Doyle

It’s it’s numbers. It’s of single part bit the up. been Tim. growing From business. a moving been little It’s single our standpoint, it’s biggest of But a percentage digits. digit, a larger

We’re particularly are been in We’ve more. been on we have moving in call research. been user Clearly, to that what side the accelerate of happy that. now. right about But the mid-single digits for looking That’s we even trends encouraging. direction, the

that exit So go see closer that the year. to I not to said, accelerate. are for continue bodes we number, the at want to mean, as our think, because plan I to core we be. year We’d research think rates game into is well like that us we to a next higher single-digit I

Timothy McHugh

did I of here? Right. change acquisition side, how guidance the And the How did kind outlook, think I strip at year change? view change about on the, – of the we the I if guess, least, your out your guess, here, was revenue much of you

George Colony

the expense revenue for it’s impacts the nickel – work. And I – we a really integration that mean, lot a side, revenue of is our things. it’s no. which On function it I just bringing as pure of it’s doing a and costs on, just it’s GlimpzIt. a development of EPS, is. was left example, think combination They’re of But pretty much

are expense for numbers. show investment in to up benefit the and And that that to expect next we FeedbackNow, item, in they line invest year’s business. an So of as we continuing show

We it. about excited very are

accretive But to be that’s part just will we But going into these a have large as things play and think, we net go So profit not year. next we I didn’t this both don’t of year. a any downside. – for it’s year, show – revenue. – But that’s will adding this

revenue on so point guidance from this I adjust didn’t think, nominal it’s we side. at the FeedbackNow,

Timothy McHugh

bigger picture. Okay. And of then kind a lastly,

of quarter like call this guess. a first quarter, I slower Just, feeling It better you’d started little thought. like probably off thought I guess, had we the you are you than walked you’d than feels

So down of we’ve in bit a up progress. sort the volatility of got an just, guess, I little and

comfort this the right? gives most be it guess, that how here, one? trying I’m I that point last that data you do say more more you and look So of the is you contrast that there just sense the at, may with call is sustainable, like that feels the guess, to improvement would on anything recent I

George Colony

we Well, created some call, And created with I think, two period new rules, that really quarter, revenue sort have some a last had there prior this that of the we adjustment noise had quarter. the for last noise were – in things of, for challenges and fallen us shifted the should was revenue us. into

So our been better would little probably bit a have results last quarter.

improvement But and the we what’s every region product a let and we think put and And were we trends place product way. the the work structure let hold I in I’ll talk are give we happy been solutions been is see, that I signaling Kelley about growing, growing. because excited set. you complex complete four model that. leverage I that’s I’ll going a which steady really But in on color around the sales. enrichment set to think very every Kelley the good really And about to very was over think, have a last fundamental put some to have place quarters, is product also to take starting for on a I clients, we starting set in that in really think it’s our fact really

Kelley Hippler

bit there that little self-induced on then And headwind created the us, are QX. a for things Sure. in a couple of of sales mostly side,

very will something North forward. move teams, feel our us So that industry-focused we serve clients realigned the user as premier we we in strongly move teams to into help better more the reorganized America, or

both well also as Asia-Pac frame. user We teams during went through the Europe, in process up standing as that our premier of time

able be little to slower going fast. bit a So again, to go

organization thrilled in So that customer now all engagement the model. we of is premier user are the

to also our a more with it’s results expectation where drained QX we healthier pipeline is than into deliver as move QX manifesting into lot that, a year, finish. think we going the forward. the So start itself did we And consistent having had our I of in at begin going we QX

George Colony

We’ll try and for Tim. lower you, beta

Timothy McHugh

you. Thank color. the appreciate I Hey, right. All Okay.

George Colony

Thanks, Tim.

Kelley Hippler

you. Thank

Operator

call Thank Instructions] questions. will remarks. Doyle over now to [Operator the I for you. showing closing Mike I’m turn no back

Michael Doyle

We joining exciting for and call. out a forward everyone, very Thanks, to to folks much. call post and look forward Great. being we’re this looking and with QX the visiting Thanks very QX.

George Colony

Thank you very much.

Kelley Hippler

Thank you.

Operator

for thank Thank you, ladies and gentlemen. This today’s and conference. Thank you, participating. you concludes

now may You disconnect.

Forrester Research (FORR) 28 Jul 182018 Q2 Earnings call transcript