Forrester Research, Inc. (Nasdaq: FORR) today announced its second-quarter, ended June 30, 2008, financial results. Total revenues were $63.5 million, compared with $55.2 million for the second quarter of last year. The company also announced its acquisition of JupiterResearch.

"Forrester's second-quarter financial performance met our expectations," said George F. Colony, Forrester's chairman of the board and chief executive officer. "We performed particularly well in revenue growth, deferred revenue growth, and improved margin. The percentage of our syndicated business is moving in the right direction, and our role-based strategy continues to produce positive results. Overall, we are pleased with our performance in the second quarter and the first half of the year."

Second-Quarter Highlights

On a GAAP-reported basis, which reflects an effective tax rate of 37 percent, Forrester reported net income of $8.6 million or $0.37 per diluted share, compared with net income of $4.5 million, or $0.19 per diluted share for the same period last year.

On a pro forma basis, net income was $8.6 million, or $0.37 per diluted share, for the second quarter of 2008, which excludes non-cash stock-based compensation of $1.3 million, amortization of $23,000 of acquisition-related intangible assets, net gains on marketable and non-marketable investments of $1.6 million, and expenses related to the stock option investigation and restatement of the Company's historical financial statements of $666,000, and which reflects a pro forma effective tax rate of 39 percent. This compares with pro forma net income of $7.3 million, or $0.31 per diluted share, for the same period in 2007, which excludes non-cash stock-based compensation of $1.7 million, amortization of $293,000 of acquisition-related intangible assets, net impairments from non-marketable investments of $2.0 million, and expenses related to the stock option investigation and restatement of the Company's historical financial statements of $1.1 million, and which reflects a pro forma effective tax rate of 39 percent.

Six-Month Period Ended June 30, 2008 Financial Performance

• Total revenues were $118.4 million, compared with $102.5 million for the same period last year.
• On a GAAP-reported basis, which reflects an effective tax rate of 40 percent, Forrester reported net income of $13.7 million, or $0.58 per diluted share, for the six months ended June 30, 2008, compared with net income of $6.5 million, or $0.27 per diluted share, for the same period last year.
• On a pro forma basis, net income was $14.8 million, or $0.63 per diluted share, for the six months ended June 30, 2008, which excludes non-cash stock-based compensation of $2.7 million, amortization of acquisition-related intangible assets of $194,000, net gains on marketable and non-marketable investments of $2.1 million, and expenses related to the stock option investigation and restatement of the Company's historical financial statements of $597,000, and which reflects a pro forma effective tax rate of 39 percent. This compares with pro forma net income of $12.1 million, or $0.51 per diluted share, for the same period in 2007, which excludes non-cash stock-based compensation of $4.3 million, amortization of $685,000 of acquisition-related intangible assets, net impairments from non-marketable investments of $1.8 million, and expenses related to the stock option investigation and restatement of the Company's historical financial statements of $2.8 million, and which reflects a pro forma effective tax rate of 39 percent.

A reconciliation of GAAP results to pro forma results and the complete financial release may be found in the complete financial results release at the Forrester web site.

JupiterResearch Acquisition

In a press release issued earlier today, Forrester announced the acquisition of JupiterResearch, LLC., and its parent company, JUPR Holdings, Inc., from MCG Capital Corporation for $23 million in cash, plus assumed liabilities, subject to post-closing adjustments, in a strategic purchase that complements Forrester's syndicated business model. JupiterResearch has 83 employees and 2007 revenues of approximately $14 million. Forrester, with 2007 revenues of $212 million, now has more than 1,000 employees. JupiterResearch joins Forrester's Marketing & Strategy Client Group, which contributed $46.4 million to Forrester's total revenue in 2007.

Like Forrester, JupiterResearch provides business professionals with syndicated research, analysis, and advice backed by proprietary data. JupiterResearch has a substantive and growing library of syndicated research and strong consumer data and excels at market forecasting.

In announcing the acquisition, Colony said, "Forrester's Marketing & Strategy business is a key differentiator in the marketplace. JupiterResearch enhances our existing role-based strategy and offering to make Forrester's Marketing & Strategy clients more successful every day."

Complete Financial Results Release, Conference Call Replay

Visit the Forrester Research web site for the complete financial release and links to the replay of the conference call.

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