Forrester Research 2025 Q1 Earnings Misses Targets as Net Income Plummets 1207.8%

Forrester Research (FORR) reported its fiscal 2025 Q1 earnings on May 12th, 2025. The company fell short of market expectations, with total revenue decreasing by 10.2% compared to the previous year. Despite a volatile market, Forrester maintained its full-year guidance. The projected revenues range from $400.0 million to $415.0 million, indicating a decline of 4.0% to 7.5% compared to the prior year. Diluted loss per share is expected to be approximately $4.23 to $4.08.

Revenue
Forrester Research's total revenue for the first quarter of 2025 was $89.88 million, a 10.2% decrease from the $100.08 million reported in the same quarter of the previous year. The Research segment led with $68.41 million, while Consulting brought in $21.44 million. Events contributed a modest $26,000 to the overall revenue.

Earnings/Net Income
Losses for Forrester Research widened significantly, with the company reporting a net loss of $87.27 million in 2025 Q1, compared to a net loss of $6.67 million in 2024 Q1. The loss per share jumped to $4.62 from $0.35, marking a 1220.0% increase. The EPS results were unfavorable, reflecting deeper financial challenges.

Price Action
The stock price of Forrester Research edged down 0.48% during the latest trading day, climbed 7.50% during the most recent full trading week, and jumped 11.51% month-to-date.

Post-Earnings Price Action Review
The approach of buying FORR during revenue misses and holding for 30 days is speculative but potentially rewarding. This strategy banks on the real estate sector's defensive nature during economic downturns, relying on factors like interest rates, economic growth, and rental income to drive recovery. Historically resilient, the real estate sector might rebound within the 30-day period, but caution is advised as macroeconomic influences could alter outcomes. The strategy also involves market psychology, testing reactions to negative news and adapting investments accordingly. Economic cycles offer contrarian opportunities, where buying during market weakness may exploit oversold conditions. The 30-day period provides a risk management strategy, allowing for portfolio reassessment if the fund's value doesn't improve. Although promising, this strategy bears risks tied to broader market issues and may not suit all investors.

CEO Commentary
“We expect 2025 to be marked by volatility, and this is reflected in our first-quarter metrics and the decline in revenue,” said George F. Colony, CEO and Chairman. He emphasized that despite a challenging environment, Forrester is focused on managing costs while generating solid cash flow. Colony highlighted the company’s unique research and continuous guidance model as a strategic priority during uncertain times, aiming to assist clients with cost optimization, efficient risk management, and adaptive strategies.

Guidance
For the full year 2025, Forrester projects total revenues of approximately $400.0 million to $415.0 million, indicating a decline of 4.0% to 7.5% compared to the prior year. The company anticipates a diluted loss per share of approximately $4.23 to $4.08, while the adjusted operating margin is expected to be between 8.0% and 9.0%.

Additional News
Recently, Forrester announced the unveiling of its top 10 emerging technologies for 2025, with a focus on AI innovation shifting from experimentation to business imperative. The list includes Agentic AI, GenAI for visual content, and synthetic data, emphasizing their potential impact on industries such as financial services, insurance, healthcare, and the public sector. Additionally, Forrester has introduced Izola, a generative AI tool, becoming the third highest destination for clients on its website. This innovation aims to enhance client engagement and streamline research processes, aligning with Forrester's continuous guidance model.