8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 27, 2005

FORRESTER RESEARCH, INC.

(Exact Name of Registrant Specified in Charter)

Delaware	000-21433	04-2797789
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

400 Technology Square, Cambridge, Massachusetts	02139
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 613-6000

N/A

(Former Name or Former Address, if Changed Since Last Report)

Page 1 of 5
Exhibit Index appears on Page 4

TABLE OF CONTENTS

	ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
	ITEM 9.01. Financial Statements and Exhibits.
SIGNATURE
Exhibit Index
Press Release dated July 27, 2005

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

     The information contained in this current report on Form 8-K is furnished pursuant to Item 12 of Form 8-K “Results of Operations and Financial Condition”. This information and the exhibits hereto are being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of, or otherwise regarded as filed under, the Securities Exchange Act of 1934, as amended. The information contained in this report shall not be incorporated by reference into any filing of Forrester Research, Inc. with the SEC, whether made before or after the date hereof, regardless of any general incorporation language in such filings.

     On July 27, 2005, Forrester Research, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2005, the full text of which is attached hereto as Exhibit 99.1.

     Forrester believes that pro forma financial results provide investors with consistent and comparable information to aid in the understanding of Forrester’s ongoing business. Our pro forma presentation excludes the following:

     Amortization of acquisition-related intangibles — we exclude the non-cash effect of the amortization of acquisition-related intangibles from our pro forma results in order to more consistently present our ongoing results of operations.

     Impairments of non-marketable securities — we have consistently excluded both one-time gains and one-time write-offs related to our investments in non-marketable securities from our pro forma results in order to keep quarter over quarter comparisons consistent.

     Reorganization costs — we exclude reorganization costs in order to present a consistent basis for quarterly comparisons and to more consistently present our results of operations.

     However, these measures should be considered in addition to, not as a substitute for, or superior to, operating income or other measures of financial performance prepared in accordance with generally accepted accounting principles as more fully discussed in the Forrester’s financial statements and filings with the Securities and Exchange Commission.

ITEM 9.01. Financial Statements and Exhibits.

(c)	Exhibits
	99.1          Press Release dated July 27, 2005.

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FORRESTER RESEARCH, INC.
By:	/s/ WARREN HADLEY
	Name:	Warren Hadley
	Title:	Treasurer and Chief Financial Officer

Dated: July 27, 2005

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Exhibit Index

Exhibit	Description	Page
99.1	Press Release dated July 27, 2005.		5

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EX-99.1

Exhibit 99.1

Forrester Research Reports Second-Quarter 2005 Financial Results

Company Raises Full-Year 2005 Guidance

CAMBRIDGE, Mass., July 27, 2005 . . . Forrester Research, Inc. (Nasdaq: FORR) today announced its second-quarter ended June 30, 2005 financial results.

Second-Quarter Financial Performance

• Total revenues were $39.2 million, compared with $34.9 million for the second quarter of last year.

• On a GAAP-reported basis, which reflects an effective tax rate of 39 percent, Forrester reported net income of $2.7 million or $0.12 per diluted share, compared with a net loss of $2.3 million, or $0.11 per diluted share, for the same period last year.

• On a pro forma basis, net income was $3.4 million or $0.15 per diluted share, for the second quarter of 2005, which excludes amortization of $833,000 of acquisition-related intangible assets, and non-marketable investment gains of $112,000 and which reflects a pro forma effective tax rate of 35 percent. This compares with pro forma net income of $3.0 million, or $0.13 per diluted share, for the same period in 2004, which excludes amortization of $1.4 million of acquisition-related intangible assets, reorganization costs of $6.8 million primarily due to office space consolidations, and non-marketable investment gains of $57,000, and reflects a pro forma effective tax rate of 35 percent.

Six-Month Period Ended June 30, 2005, Financial Performance

• Total revenues were $73.0 million, compared with $66.7 million for the same period last year.

• On a GAAP-reported basis, which reflects an effective tax rate of 39 percent, Forrester reported net income of $5.5 million, or $0.25 per diluted share for the six months ended 2005, compared to a net loss of $2.6 million or $0.12 per diluted share for the same period last year.

• On a pro forma basis, net income was $5.9 million or $0.27 per diluted share, for the six months ended June 30, 2005, which excludes amortization of $2.0 million of acquisition-related intangible assets, non-marketable investment gains of $1.8 million and which reflects a pro forma effective tax rate of 35 percent. This compares with pro forma net income of $5.5 million, or $0.24 per diluted share for the same period last year, which excludes amortization of $3.7 million of acquisition-related intangible assets, reorganization costs of $8.8 million primarily due to office space consolidations, and non-marketable investment gains of $57,000, and reflects a pro forma effective tax rate of 35 percent.

A reconciliation of GAAP results to pro forma results may be found in the attached financial tables.

“Forrester reported a solid quarter of double-digit revenues and earnings per share growth,” said George F. Colony, chairman of the board and chief executive officer. “During the second quarter, we made progress on our key 2005 objective to regenerate our syndicated research business, as sales of WholeView 2 improved. Demand for consulting services and the Oval Program remained strong while year-over-year attendance at our three events increased. Forrester had a healthy first-half of 2005 and as a result is raising full-year guidance.”

Forrester is providing third-quarter 2005 financial guidance as follows:

Third-Quarter 2005 (GAAP):

• Total revenues of approximately $37.0 million to $39.0 million.

• Operating margin of approximately 10 percent to 12 percent.

• Other income of approximately $750,000.

• An effective tax rate of 39 percent.

• Diluted earnings per share of approximately $0.12 to $0.16.

Third-Quarter 2005 (Pro Forma):

Pro forma financial guidance for the second quarter of 2005 excludes amortization of acquisition-related intangible assets of approximately $800,000 and any gains or impairment charges related to non-marketable investments.

• Pro forma operating margin of approximately 12 percent to 14 percent.

• Pro forma effective tax rate of 35 percent.

• Pro forma diluted earnings per share of approximately $0.16 to $0.18.

Forrester is revising full-year 2005 guidance as follows:

Full-Year 2005 (GAAP):

• Total revenues of approximately $152.0 million to $156.0 million.

• Operating margin of approximately 10 percent to 12 percent.

• Other income of approximately $3.0 million.

• An effective tax rate of 39 percent.

• Diluted earnings per share of approximately $0.55 to $0.63.

Full-Year 2005 (Pro Forma):

Pro forma financial guidance for full-year 2005 excludes amortization of acquisition-related intangible assets of approximately $3.5 million, as well as all gains and impairment charges related to marketable and non-marketable securities.

• Pro forma operating margin of approximately 13 percent.

• Pro forma diluted earnings per share of approximately $0.65 to $0.69.

• An effective tax rate of 35 percent.

Forrester Research (Nasdaq: FORR) is an independent technology and market research company that provides pragmatic and forward-thinking advice about technology’s impact on business and consumers. For 22 years, Forrester has been a thought leader and trusted advisor, helping global clients lead in their markets through its research, consulting, events, and peer-to-peer executive programs. For more information, visit www.forrester.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, Forrester’s financial and operating targets for the third quarter of and full-year 2005, statements about the potential success of product offerings, and the ability of Forrester to achieve success in the current economy. These statements are based on Forrester’s current plans and expectations and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual future activities and results to differ include, among others, Forrester’s ability to anticipate business and economic conditions, technology spending, market trends, competition, industry consolidation, the ability to attract

and retain professional staff, possible variations in Forrester’s quarterly operating results, risks associated with Forrester’s ability to offer new products and services, and Forrester’s dependence on renewals of its membership-based research services and on key personnel. Forrester undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information, please refer to Forrester’s reports and filings with the Securities and Exchange Commission.

The consolidated statements of income, consolidated balance sheets, and consolidated statements of cash flows are attached.

Kimberly Maxwell	Karyl Levinson
Director, Investor Relations	Director, Corporate Communications
Forrester Research, Inc.	Forrester Research, Inc.
+1 617/613-6234	+1 617/613-6262
kmaxwell@forrester.com	press@forrester.com

© 2005, Forrester Research, Inc. All rights reserved. Forrester and Forrester Oval Program are trademarks of Forrester Research, Inc.

Forrester Second-Quarter Fiscal 2005 Results / Page 4

Forrester Research, Inc.
Consolidated Statements of Income

(In thousands, except per share data)

	Three months ended June 30,					Six months ended June 30,
	2005		2004			2005		2004
	(Unaudited)					(Unaudited)
Revenues
Research services	$	23,847	$	23,046		$	47,216	$	46,035
Advisory services and other		15,399		11,875			25,812		20,615
Total revenues		39,246		34,921			73,028		66,650
Operating expenses
Cost of services and fulfillment		16,514		14,377			30,291		27,516
Selling and marketing		13,002		11,605			24,904		22,665
General and administrative		4,416		3,985			8,450		7,396
Depreciation		882		1,026			1,756		2,057
Amortization of intangible assets		833		1,384			1,956		3,728
Reorganization costs		—		6,794			—		8,751
Total operating expenses		35,647		39,171			67,357		72,113
Income (loss) from operations		3,599		(4,250	)		5,671		(5,463	)
Other income, net		754		662			1,504		1,488
Realized gains on sales of securities and non-marketable investments		112		57			1,780		57
Income (loss) before income taxes		4,465		(3,531	)		8,955		(3,918	)
Income tax provision (benefit)		1,741		(1,183	)		3,492		(1,313	)
Net income (loss)	$	2,724	$	(2,348	)	$	5,463	$	(2,605	)
Diluted income (loss) per share	$	0.12	$	(0.11	)	$	0.25	$	(0.12	)
Diluted weighted average shares outstanding		21,847		22,074			21,843		22,165
Basic income (loss) per share	$	0.13	$	(0.11	)	$	0.25	$	(0.12	)
Basic weighted average shares outstanding		21,511		22,074			21,561		22,165
Pro forma data (1):
Income (loss) from operations	$	3,599	$	(4,250	)	$	5,671	$	(5,463	)
Amortization of intangible assets		833		1,384			1,956		3,728
Reorganization costs		—		6,794			—		8,751
Pro forma income from operations		4,432		3,928			7,627		7,016
Other income, net		754		662			1,504		1,488
Pro forma income before income taxes		5,186		4,590			9,131		8,504
Pro forma income tax provision		1,815		1,607			3,196		2,977
Pro forma net income	$	3,371	$	2,984		$	5,935	$	5,527
Pro forma diluted earnings per share	$	0.15	$	0.13		$	0.27	$	0.24
Diluted weighted average shares outstanding		21,847		22,614			21,843		22,693

Forrester believes that pro forma financial results provide investors with consistent and comparable information to aid in the understanding of Forrester’s ongoing business. Our pro forma presentation excludes amortization of intangibles, reorganization costs and impairments of non-marketable securities and gains from sales of marketable securities as well as their related tax effects. This does not purport to be prepared in accordance with Generally Accepted Accounting Principles.

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Forrester Second-Quarter Fiscal 2005 Results / Page 5

Forrester Research, Inc.
Consolidated Balance Sheets

(In thousands)

	June 30,			December 31,
	2005			2004
	(Unaudited)
Assets:
Cash and cash equivalents	$	55,217		$	37,328
Marketable securities		76,603			90,112
Accounts receivable, net		28,056			39,210
Deferred commissions		6,661			6,834
Prepaid expenses and other current assets		5,816			5,509
Total current assets		172,353			178,993
Property and equipment, net		6,558			6,410
Goodwill, net		52,921			52,875
Intangible assets, net		5,105			6,992
Deferred income taxes		43,118			42,860
Non-marketable investments and other assets		14,260			14,742
Total assets	$	294,315		$	302,872
Liabilities and stockholders’ equity:
Accounts payable	$	2,455		$	3,741
Accrued expenses		25,933			26,928
Deferred revenue		69,961			72,357
Total liabilities		98,349			103,026
Preferred stock		—			—
Common stock		249			247
Additional paid-in capital		182,908			180,310
Retained earnings		76,540			71,077
Treasury stock, at cost		(61,243	)		(50,056	)
Accumulated other comprehensive loss		(2,488	)		(1,732	)
Total stockholders’ equity		195,966			199,846
Total liabilities and stockholders’ equity	$	294,315		$	302,872

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Forrester Second-Quarter Fiscal 2005 Results / Page 6

Forrester Research, Inc.
Consolidated Statements Cash Flows

(In thousands)

	Six months ended June 30,
	2005			2004
	(Unaudited)
Cash flows from operations:
Net income (loss)	$	5,463		$	(2,605	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities –
Depreciation		1,754			2,057
Amortization of intangible assets		1,961			3,728
Non-marketable investments gains		(112	)		(57	)
Realized gain on sale of securities		(1,668	)		—
Tax benefit from stock options		400			238
Deferred income taxes		198			(2	)
Non-cash reorganization costs		—			1,844
Accretion of premiums on marketable securities		577			404
Changes in assets and liabilities, net of acquisition –
Accounts receivable		10,114			14,785
Deferred commissions		173			548
Prepaid expenses and other current assets		(533	)		(717	)
Accounts payable		(1,276	)		279
Accrued expenses		(109	)		(5,359	)
Deferred revenue		(415	)		(5,481	)
Net cash provided by operating activities		16,527			9,662
Cash flows from investing activities:
Purchases of property and equipment		(1,983	)		(1,279	)
Purchase of non-marketable investments		—			(2,163	)
Decrease in other assets		538			529
Purchase of marketable securities		(103,222	)		(67,735	)
Proceeds from sales and maturities of marketable securities		115,567			91,549
Net cash provided by investing activities		10,900			20,901
Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock option plans and employee stock purchase plan		2,202			2,350
Acquisition of treasury shares		(11,189	)		(9,178	)
Structured stock repurchase		—			54
Net cash used in financing activities		(8,987	)		(6,774	)
Effect of exchange rate changes on cash and cash equivalents		(551	)		(106	)
Net increase in cash and cash equivalents		17,889			23,683
Cash and cash equivalents, beginning of period		37,328			22,385
Cash and cash equivalents, end of period	$	55,217		$	46,068

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