Forrester Research Inc (NASDAQ:FORR) reported its third-quarter financial results for 2025, presenting a performance that diverged from analyst expectations on the top line while demonstrating strength on the bottom line. The market's initial reaction appears muted, with the stock showing no significant movement in after-hours trading following the announcement.
Earnings and Revenue Versus Estimates
The research and advisory firm posted a mixed quarter, with earnings surpassing forecasts even as revenue fell short of consensus estimates.
- Adjusted Earnings Per Share (EPS): Reported $0.37, beating the analyst estimate of $0.3128.
- Total Revenue: Reported $94.3 million, missing the analyst estimate of $101.1 million.
This performance indicates that while the company faced headwinds in generating sales, it was successful in controlling costs and improving profitability on an adjusted basis. The quarter's results highlight a challenging environment for top-line growth but underscore operational efficiency gains.
Market Reaction and Price Action
The immediate market reaction to the earnings report has been neutral. The stock showed no change in after-hours trading, suggesting that investors are weighing the positive EPS beat against the disappointing revenue figure. This tepid response follows a period of negative momentum for the stock, which has declined approximately 11.5% over the past week and 16% over the past month, indicating that the earnings results may not have been sufficient to reverse the prevailing negative sentiment.
Key Financial and Operational Highlights
The earnings release detailed several important financial metrics and strategic initiatives beyond the headline EPS and revenue numbers.
- Contract Value: A key performance indicator for the company, contract value stood at $288.1 million, a decrease of 7% compared to the prior year.
- GAAP Results: The company reported a net loss of $2.1 million, or $0.11 per diluted share, which is an improvement from a net loss of $5.8 million, or $0.30 per share, in the same quarter last year.
- AI Initiatives: CEO George F. Colony emphasized the company's focus on artificial intelligence, highlighting the recent launch of "Forrester AI Access," a self-service offering built on the company's generative AI tool, Izola. Management expressed optimism that these innovations would unlock new growth opportunities.
Forward-Looking Guidance and Analyst Estimates
Forrester provided financial guidance for the full year 2025, offering a view that contrasts with its GAAP results due to significant one-time charges.
- Full-Year 2025 GAAP Guidance: The company anticipates a substantial net loss, with a diluted loss per share projected between $4.40 and $4.50, primarily driven by an $83.9 million goodwill impairment charge recorded earlier in the year.
- Full-Year 2025 Adjusted Guidance: Excluding one-time items, Forrester expects an adjusted diluted EPS between $1.15 and $1.25 and an adjusted operating margin of 7.5% to 8.5%.
This adjusted EPS guidance appears conservative when compared to the current analyst sales estimate of $412.44 million for the full year, suggesting management is taking a cautious stance on the remainder of the year. For the upcoming fourth quarter, analysts are estimating revenue of $105.78 million and an EPS of $0.357.
For a detailed look at historical earnings and future analyst estimates for Forrester Research, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. The information presented is based on publicly available data and should not be relied upon as the sole basis for an investment decision.
