FORR - Earnings call transcript Q2 2022 | Forrester Research, Inc.

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Operator

Thank you, and hello, everyone. Thanks for joining today's call. Earlier this afternoon, we issued our press release for the second quarter of 2022.

If you need a copy, you can find one on our website in the Investors section. . by and of Chris Forrester's afternoon CEO, Board Finn. this Colony; George Chief joined our the Chairman and I'm Financial Officer, follow George and call the with will will update. a this financial open Chris afternoon, go then into We'll Q&A. Kelley the Officer, for also Product Johnson, will Sales Hippler, portion join of Officer; Chief Q&A Carrie Chief and the call. us .

such the to call the of our as expressions be those of otherwise. to statements could with a activities and cause within forward-looking and we forward-looking or to I'd cause to like materially contain forward-looking intends, Factors Act expectations anticipates, publicly results statements, in future new begin, believes, and update forth are based plans any forward-looking Reform the remind meaning expects, set and company results that Commission, will These Private of plans, as that and Before XXXX. discussed reports similar on Litigation statements are current Words information, obligation you from actual are identify that statements. this or result statements. future uncertainties Securities and no could the the risks whether the involve in company's estimates these intended Exchange undertakes filings of Securities events differ different to operations and

adjusted on Lastly, excludes consistent with our items previous will be basis, which an comparability. calls, our performance today discussing we affecting

with in our adjusted While for and we reporting appropriate basis comparison on meaningful accordance that GAAP, a an reporting discussion. an not is on provides basis believe numbers this adjusted basis

that, our numbers excluded items over from to press George. list adjusted can You detailed it find release. with And hand a in I'll of these

George Colony

our results, fast and confident continue growth would and call. Forrester's headwinds; the the business. Decisions joining top managing dynamic are strong to environment track. our its at quarter, events we In the impact led changeable double-digit line on our economic revenue like three, QX Number to $X.XX. reached and surpassed three achieved revenue. line. in Two, of dynamics key growth product these we remain for a XX%, growth while XXXX second end by to seen . will our continues guidance. the across We've bottom At nearly operating we was into stay deliver exceeding double-digit you the midyear, of and Thank value Forrester increase one, in investor rates. guidance. I contract results can on we XXXX. we guidance persist of margin our I and high highlight business transition themes end in The grow by research company XXX% per XX% to and business, expect This Earnings a share through exceeding high

and stock. pay contract value debt We strong used part of to cash continue We to generate to fourth which growth. our quarter buy consecutive down back delivered company we flow, of double-digit

margin. CV seat we in headcount optimistic economic client the remain two, factors, full our for our said, attrition CV second ramp in reps; lower and holder one, down driven conditions; EPS and higher-than-normal we that growth, and XX% conversion CV our in growth growth reasons: meet and bookings expect in and Now three, Despite slowed turnover three higher-than-expected that dropped hiring new previous geopolitical quarter. to from quota-carrying QX, sales accounts. slowness by for guidance year our the half a these rates in will XX% sales profit to

approach anniversary we new research the continues growth Forrester product, launch. as its its Decisions, path of X-year our flagship on

a CV increase good company seeing are Forrester enrichment deals. the telecom XX%. quarter, In into upgraded a We large U.S. of Decisions,

agreement. the government Department NMSO first of was and win preferred since contract was this a for gained large Forrester to with vendor our Forrester also the the added We Canadian standing Decisions, offer

the are improving added continuously responsible services, Forrester who In and exceptional Forrester designed primarily adding BXC experiences for In persona building are the digital digital benchmarking Decisions QX, to platform. companies to digital loyalty. service and leaders, we services business We platform. the increasing to strategy XX to plan from August, portfolio. Decisions XX expand the the We for we

competitors, expect to expense. be clients where where they are use to pinpoint Our benchmarks their and they they should future should target lagging trimming where spending

here well Our specific benchmarks Decisions for The rich of include global offers research, metrics few as diverse that platform the a quarter. stood examples Forrester out markets. and averages vertical are portfolio a and in as

of of to labor drop in North U.S. market quality pandemic Index of Valley states. companies. early CX talent Customer benchmark. revealing that change indicator metro history tech heightened revenue America and important in And decelerated, an of companies Our customer released small revealed scoring Silicon improvements with failed forecast The migration largest this and for brands, keep the We induced XXXX in to expectations Experience consumers. centers of a index Southern is changes in Northeastern out the the innovation CX are the experience substantial of been pace because XXX has there the

one auto $X.X in in loss revenue. billion CX [indiscernible] a Index manufacturer a the for an a As point example, score drop mass market

of imbalances, are pressures to of recession. age this make digital We and our research. challenges working diligently relevant research supply to to that our and clients they ensure chain Disruption as inflationary golden manage the is continue threats

to two recovering Now a mentioned Summit XXXX to for the of celebrate North global prices the recorded And clients Pacific. and BXB and the year. I time CX the grew being grew in was is XX% the deals in in normalcy. XXXX, and regions grew America sixth the and sponsor XX% we North It XX%, next our all CX for two Asia high renewals for year's ticket CX in events our America; are Summit and QX America. scores from with returned Grammy see year, format events for quarter. global EMEA nominee our was Experience events our selling concert attendee hybrid all Pumas earlier, business We together events, return and biggest second Customer of and satisfaction XXX% part from to celebrating pandemic. Average Attending events favorite C-level North BXB personal Black my QX in a and events to up wonderful sponsor Austin. as next attendance XX%

Now before like conclude, I I would ESG to quick moment a a Forrester's take on update provide to initiatives.

aims As on Forrester previous noted call, our XX% by emissions cut XXXX. to carbon

call assessing will achieve give our help CFO, will and update. a of Forrester's goal, our to Chris Finn, reduce emissions. anywhere Our us work the further you policies the to who to are platforms and travel migrating I are cloud and now we strategy will also tech more this financial services over turn Chris?

Chris Finn

and us. for Thanks, to thanks again joining George, everyone

and As were of EPS in George the mentioned, high with end revenue, coming strong results guidance. our margins ahead of our second quarter

We EPS the we keep continue . outlook control solid constant bring that to to creating us This given but ability in the expect unfolds. beyond. in year we our FX in a while and our operate our down to headwinds XXXX continue foundation environment as P&L a has confidence guidance can which and margin grow top from the volatile macroeconomic uncertainty to with and led line

reported that have up remarks, many bright we've thus to led far. results George's that on Following are spots year-to-date our there

events. reception Forrester see are Decisions people be in-person excited pleased we platform, We new that market to pricing the with continue and our at are the with we to and achieving

the by focusing highlights Let me the second start on on quarter.

we As and quarter in growth George of events research XX% delivered of mentioned, growth CV by overall XX% and the driven revenue businesses.

includes the million we mentioned. percentage Specifically, revenue in million This $XXX.X compared FX. increase in headwind XX% year-over-year just to company, for X $XXX.X prior as approximate the an generated period, point a from total year I

rates capacity resulted we challenging performance based hiring our and a This realized In of stronger quarter the driven Client constraints, XXXX revenues with XX% compared retention, sales largely double-digit were terms cycle, lower higher QX a in count attrition slow wallet June start improved combination of elongated conversion an prior driven an the on result sales out environment. quarter, were for quarter, a the of and bookings increased down growth segment performance. coming in lower results the as in although ongoing quarter, by a client and to headcount momentum sales second ramp from retention of research CV. by which of to

buying We have are to delays making continuing in macroeconomic experience clients the given headwinds that decisions our also seen facing. are they

continued we we're Decisions the bookings our count As around CV we period, client to expect we base track hitting noise our our confident all year. Forrester retention for rates that for as we migrate Decisions platform. and the noted Forrester remain on plan, last plan and our legacy in With said,

quarter million, revenues compared continuing the our of some events posted with along of compared projects. million, prior focus business an a representing XXXX. business, finally, This were consulting portion by events headcount XXX% which basis. analysts to $XX.X increase posted revenues combination in-person delaying see as CV year X% our of adjusted expenses happy quarter expenses an increased well back people in to Operating return as our we second related for driven by year, P&L this the events Continuing XX% was the and compensation higher in-person the Our $XX.X of their down our second person. to increased to to due the to move growth to of on to business shift And costs. a driven were of on very delivering clients and by scheduled of down to increased our

we or quarter, This up $XX.X compared XX% debt. $XX.X the quarter by XXXX. driven XXXX. was revenue million to Specifically to additional for our of compared as on leading revenue Interest in This in for XX% $X.X million to savings head XXXX. million Operating second same quarter to expense $X.X compared in or lower were second was XX.X% second the in outstanding below period of expectations, in the hiring quarter current the by income the increased count, of quarter the of the to reduction XX.X% was million period.

compared increased quarter of current Finally, income and second XXXX. $XX.X million earnings last the at net XX% increased of $X compared income per of in at the and QX to share million with for XX% income of earnings $X.XX net with EPS and quarter, share $XX.X year, per net

our at capital Looking structure.

and of the XXXX, half were first cash quarter. million activities exited of the and we cash from capital resulting expenditures $XX.X flow as investments operating was million, $XXX.X in million During $X.X

outstanding XX. debt, million of you us of through down also $X.X $XX over we leaving and expecting paid provide authorization second We as walk our approximately of our year and the stock, of remainder repurchased now are million the our we million quarter, $XX leaving repurchase of common revolver us of stock with $XX June commentary. with during what million I'll the additional

which, the headwinds, and potential war Europe macroeconomic new for COVID variant, out remain, upfront, recession, of our in are As such control. with ongoing as the of I a stated currency the many headwinds along the

follows: as top our will forward the going results line pressure put strengthening are to count head results top of on dollar as one, line; our as have line drivers well. mentioned, the see two, challenges we affecting Specifically, continue do we top that

pipeline find said, sales record clients, specifically With of on the longer of We of labor we've tight have themselves top continues this clients are adding have our to talent improved currently but pressure last that market. to a than which we elevated. remains by is highs conversion, while our ramping lower has our are number employees a longer sales strong environment cycles Three, driven period. expected, from hiring seeing largely progress Further, to it new heads European a sales attrition our our our and also the made sales lead finding and resource in, given line. be what hire year, time cycle,

planned. we double-digit our on deliver growth execute As can ramp this CV in the headcount believe second we fully we sales as and increased year half,

QX expect with slow half and of our given start ramps, bookings revenue the bookings recognition be the headcount bookings. delayed the However, we in to in second pacing as commensurately

that also in the the are on on the addition, manage and the we as in to line our margin top our EPS the results pressure and likely deliver to top FX despite guide the we already of year. second issued and our remain ability beginning I In mentioned, our guidance But macroeconomic confident at down P&L half. line, landscape

color some and quarter me the additional for starting provide with the of top Let balance the third line. year

growth be our margin. on the business, year, approximately For will full continue that insignificant In based revenue with the to an the year, high to projected a third single-digit the X% headwind effect full CV we high we to growth. to quarter, single to X% And expect double-digit for our we XXXX. research operating for expect FX for low business mid- on expect bookings

the third low For business, year. full low single our for revenue quarter and mid-single-digit expect digits the growth to for consulting we be to

conditions Finally, across to each the will assumptions hybrid the events guidance where which on local for of continues our events highly business, hold our globe. able dependent to cities the year, is we during revenue we events include be the that hold in

COVID events are But we variant adjust thus very successful. this We far have necessary. the carefully monitoring the will been held new year and as have

we full this, those compared of our by from for XXXX. year increase XXX% all million. together in double expect to for the we the would third of revenues we factors revenue business, Given to expect expect results quarter million Putting $XXX year, and to $XXX to approximately to for prior revenues approximately all event revenue the the we to $XXX year, XXX% million expect total full to now million And total third be full quarter. $XXX

to third margin be the XXXX, in In expect operating quarter to of terms other our X% we XX%. of guidance,

year We focused be investment our continue full margin cost XX.X% XX.X% controls expect and initiatives. to to additional operating to given

to continue should year also million effective in In interest $X.X rate for XXXX, as expect we expect the of to for debt the tax at rates. expected continue and offset XX%. lower of We our increases expense the full an third year quarter balance

in to months third expect the our of guidance $X.XX. ahead. to for cautiously in EPS $X.XX, $X.XX range to remain and a continue we the range We of $X.XX year to we the the optimistic be for Finally, hold about full quarter, our

create today forward. are With still for are back some the we what confident value let and going headwinds, George While we laid have economic, look shareholder Q&A. to macro it concluding me out there that, hand we in geopolitical both before remarks to many and

George Colony

Chris. Thanks,

our . outlook, key points: a and are decisions; to Forrester expect Forrester we provide we continue me navigate Let CV we and go at two, up there grow To quick to headwinds; transition summary continue and year-to-date sum and to before rates. One, will Q&A. X results improve to will our economic three, grow double-digit

the economic a of last about the disruptions on we that of number over I'm whatever company Thank and months. our that operation, At coming recessions encountered conditions our week, meeting has down confident client Forrester doubling focus. over will company manage and talked I clients. side being develop the and Forrester our for call side is This to now will more times. for to to the for and questions. over critical you even the call, teams on turn the challenging Thank our you by in listening of the operator decades

Operator

[Operator Instructions] from question Nicholas comes Blair. Andrew Our with William first

Trevor Romeo

Trevor actually Andrew. is on This for

Just particular on you some bit of wanted clients back it to actually kind of of any of base? Are factors? see of a you And starting I broad-based those kind customer Or Or across seeing piece. signs at rates any extending. subscriptions are actively in concentrated point? conversion pull the those could is just kind cancel of this it dynamics kind sales lower or of customer if is know kind a elaborate more the macro segment? kind fairly to and cycles of uncertainty you mentioned

Kelley Hippler

Kelley you question. for Hippler Thank it's the here. Trevor,

course lot seeing, in the on not in a centralized of will there. in so it during of unusual the that has that conversion as more so other lot little then but we which Europe alluded So bit terms still some -- sales And are business, year. a we're of that are than over the of places, is a war cycles drop seeing confident in Chris going to, is win the that softness rate, longer given been we the

Trevor Romeo

I for growth mentioned still to target you the the year. expect then And Great. Okay. you hit know CV

bit deeper you few there bit to if the of since relative past wondering could a deceleration go there quarters. Just a was

logos, would And expect quarter? from to double-digit the macro a those like or year, get which and this factors expect that growth how rest out the if if you could some pricing new about else, even to would decelerated Just anything here? talk of new of kind of client play kind you seats per of the wondering of the hit bit the does worse

Kelley Hippler

had Sure, just ramp the field. in think And out a challenge that of is I performance I say the was Trevor. our Kelley from biggest would number here. reps we again perspective what

record ramp coming sales So quarter. we have to this in are a reps going be of off that number of

a just lot field folks was were And in what of perspective we out having from driven a anticipating. metrics as by so many the we as not saw

Forrester wallet portfolio We on continue to see and our the good a Decisions retention noise continue to with see still some bit products. of of little legacy

George Colony

the George on on more Decisions. Trevor, in Forrester velocity And we're is much It confidence I'd here. comes well. from is and plan, this track, say performing product seeing

Trevor Romeo

Got hear. it. That to good is

Operator

of Bernstein. the Our line next from question Vincent Colicchio comes with

Vincent Colicchio

CV Yes. I'm with pipeline. your curious

improved pipeline that this now your mentioned versus for the CV had bookings June. what period in last right quarter. like You looks Curious

Kelley Hippler

Kelley sure. will I here. one. Vince, It's take that

we with of sign than QX, QX of multiyear and been So to terms QX, position that deals. as Forrester part better a for well are started in pipeline has we starting from strategy Decisions our

we that sold deals And of deals. you as forward, launched Forrester August. multiyear So product the from we there XX% were about might that Decisions last recall,

walk QX of So the booked that, have is our And good we into news with than previously. ramping got reps. then in we've already QX addition we more business and to

QX. it is our in So going into into going QX shape than pipeline better was

Vincent Colicchio

are I did growth committed currently decline the for goal? that are on And X if in assuming previously hear you so, next track from your attrition quarters? sales you're levels where And they .

Kelley Hippler

to pace the make for on proactively are not XXXX, in our only saw targets of we some XXXX QX. original to the up we've we started to but so hire attrition that help get from for to Yes, actually ground

us goals our for we XXXX. double-digit help the growth head into XXXX as get throughout to course but year to double-digit CV add headcount of the . to keep to So at we us only expect not

Vincent Colicchio

people? was the attrition, more distribution does like? it look the senior with highly And What concentrated

Kelley Hippler

Vince. Sure,

distribution, of some senior reps a hot those of more would But to the understanding by some clients out want into very their decided Forrester with who side. job the to in Forrester, Forrester coupled change and strategy, are who good it say it made we I coming lucrative side our so. terms is in do them of with news change on the was to be with their working to how about joining folks strategy opt for that they So our focus of CV, are and for on our knowing market in

are new we're fully So for hires more clients going and the into that's help forward. add value to our and where how model going bought the moving .

Vincent Colicchio

last improving had about new I think And talked quarter, you for reps. ramp the time

You could that from indicated year -- are you Are X it X you that? you reduce to seeing months. at

Kelley Hippler

it pace for some QX, saw the hiring, back on that, potential put at again, Forrester end are we but much opportunities easier of of We this capacity which, that the to given portfolio are sales that we'll makes seeing disqualify qualify or QX for some we the the delays of either definitely Decisions into in production force.

do we down. -- to come see to it's expect . ramp continue So time

Operator

I'd back concludes question-and-answer turn remarks. management to session. like call closing today's to That for the

Tyson Seely

Tyson. everyone, of is joining I will everyone today. weeks be us any summer. Thank for rest I hope you, if the there great This follow-up a you. around Thank questions. in their has coming are

Operator

participating. Thank concludes for today's This conference call. you

may You disconnect. now

Forrester Research (FORR) 30 Jul 222022 Q2 Earnings call transcript