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DATE

Thursday, July 30, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer and Chairman - George F. Colony
  • Chief Financial Officer - Leo Christian Finn
  • Vice President of Corporate Development, and Investor Relations - Ed Bryce Morris
  • Chief Product Officer - Carrie Johnson Fanlo
  • Chief Sales Officer - Christophe Favre

TAKEAWAYS

  • Total Revenue -- Forrester Research, Inc. (FORR -5.02%) reported $100.2 million in total revenue, representing a 10% decrease compared to $111.7 million in the second quarter of 2025.
  • Contract Value (CV) -- decreased 3% during the quarter, mirroring the performance of the first quarter of 2026.
  • Adjusted Diluted EPS -- $0.40, a 22% decline compared to $0.51 in the prior year period.
  • Consulting Revenue -- $20 million, a 15% decrease primarily attributed to the company's decision to exit the strategy consulting business.
  • Events Revenue -- $8.5 million, down 17% reflecting a shift in strategy toward smaller, more intimate forum formats.
  • Adjusted Operating Income -- $10.4 million, with an adjusted operating margin of 10.4% compared to 12.2% in the second quarter of 2025.
  • Wallet Retention -- 89%, which was flat compared to the previous quarter and up 4 percentage points year over year.
  • Client Retention -- 77%, representing a 3-percentage-point increase year over year but a 1-percentage-point sequential decline.
  • Client Count -- 1,770, an increase of 10 clients during the quarter driven by new business growth.
  • AI Access Product Bookings -- reached approximately $10 million in total bookings since the product's launch nine months ago.
  • Headcount -- decreased 7% year over year following restructuring efforts, though sales quota-carrying headcount saw a slight sequential increase.
  • Forrester AI Adoption -- total users increased 33% sequentially and 69% year over year.
  • Forrester AI Prompts -- grew 58% compared to the first quarter and 105% year over year.
  • Stock Repurchases -- $1 million worth of shares repurchased late in the second quarter, with over $76 million remaining on the authorization.
  • Cash and Debt -- $130 million in cash at quarter end compared to $35 million in total debt.
  • Revenue Guidance -- maintained at $350 million to $360 million for the full year 2026, assuming a decline of 9% to 12% versus 2025.
  • Adjusted EPS Guidance -- reiterated at $0.72 to $0.82 for the full year 2026.
  • B2B Summit North America -- recorded 1,400 attendees, a 9% increase over the previous year, and featured 59 sponsors.
  • B2B Summit Impact -- management estimated the summit influenced approximately $3.5 million in contract value bookings.
  • Research Segment Guidance -- management expects a mid-single-digit revenue decline for the full year 2026.
  • Consulting Segment Guidance -- projected to decline in the low-20s percentage range for the full year.
  • Events Segment Guidance -- anticipated to decline in the mid- to high-teens for the full year.
  • Capital Expenditures -- $18.2 million in the first half of the year, with $16.6 million associated with the Cambridge headquarters buildout.

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RISKS

  • Christophe Favre stated, "Of course, they are areas of challenges and the North American government segment was one of them," noting specific regional sector weakness.
  • George F. Colony stated, "Market uncertainty drove the consulting and events declines, along with our exit of the strategy consulting business earlier in the year," citing external economic pressures.

SUMMARY

Management reported that second-quarter results aligned with internal expectations, featuring stabilization in contract value metrics and growth in AI adoption. The company stated it is exiting its strategy consulting business to concentrate on core research products and new platform integrations. The company reiterated its full-year financial guidance and forecasted a return to contract value growth by the end of 2026. Leadership indicated that artificial intelligence is driving client demand for research and enhancing internal delivery through tools embedded in client workflows.

  • The company launched the Forrester AI agent for Microsoft Copilot, making it the first research firm in its competitive set to establish a presence in that platform.
  • Chief Sales Officer Favre noted, "my focus right now is about improving the productivity of the Salesforce," while assessing potential headcount additions for the second half of the year.
  • Management reported that tech industry research contract value bookings grew by double digits during the quarter.
  • CEO Colony highlighted the "visibility vacuum" caused by declining search engine optimization efficacy, increasing the need for "answer engine optimization."
  • CFO Finn stated, "We remain on a path for CV growth by year-end," supported by a growing pipeline and new products launching in the third quarter.
  • Forrester AI has eclipsed indexed search to become the dominant method for clients to interact with the company's research database.
  • The company updated its Total Experience score to include employee experience as a core component for evaluating the growth potential of 375 global brands.

INDUSTRY GLOSSARY

  • CV (Contract Value): The annual value of subscription-based research and advisory contracts.
  • Wallet Retention: A metric measuring the percentage of contract value retained from the same group of clients over a 12-month period.
  • GTM (Go-to-Market) Singularity: A Forrester term for the convergence of marketing, sales, and product functions driven by AI-centric customer behaviors.
  • Answer Engine Optimization: The process of optimizing content to be accurately retrieved and summarized by AI-driven response systems.
  • TX (Total Experience) Score: A proprietary metric combining customer, brand, and employee experience data to forecast company growth.

Full Conference Call Transcript

Operator: Good afternoon, and thank you for standing by. Welcome to Forrester's Second Quarter 2026 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a Q&A session. Please be advised that today's conference is being recorded. I would now like to turn the conference over to the Vice President of Corporate Development, and Investor Relations, Ed Bryce Morris. Please go ahead.

Ed Bryce Morris: Thank you, and hello, everyone, and thank you for joining today's call. Earlier this afternoon, we issued our press release for the second quarter of 2026. If you need a copy, you can find one on our website in the investors section. Here with us today to discuss our results are George F. Colony, Forrester's Chief Executive Officer and Chairman and Leo Christian Finn, Chief Financial Officer. Carrie Johnson Fanlo, our Chief Product Officer and Christophe Favre, our chief sales officer, are also here with us for the Q&A section of the call.

Before we begin, I would like to remind you that this call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, believes, anticipates, intends, plans, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on the company's current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Factors that could cause actual results to differ are discussed in our reports and filings with the Securities and Exchange Commission.

And the company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events, or otherwise. Lastly, consistent with previous calls, today, we will be discussing our performance on an adjusted basis. Which excludes items affecting comparability. While reporting on an adjusted basis is not in accordance with GAAP, we believe that reporting numbers on this adjusted basis provides a meaningful comparison and an appropriate basis for our discussion. You can find a detailed list of items excluded from these adjusted results in our press release. And with that, I will hand it over to George.

George F. Colony: Thank you for joining Forrester's Q2 2026 Investor Call. I will be covering the following themes before turning the call over to Leo Christian Finn our chief financial officer. 1. Forrester's second quarter performance and our outlook for the second half of the year. 2. recent AI research from Forrester, 3. our flagship B2B and CX events, which were held in the second quarter. and 4. an update on Forrester AI, including adoption and usage. Trends from the first quarter continued into the second quarter as we hit our key metrics. CV decreased 3% and wallet retention was flat. Client retention was down 1%, but client count increased in the quarter.

Total revenue decreased 10% with research revenue down 8% and non CV businesses down 15%. Market uncertainty drove the consulting and events declines, along with our exit of the strategy consulting business earlier in the year. Overall, our Q2 performance was aligned with our expectations, with consensus beats on revenue, margin, and EPS. Despite headwinds in our consulting and events businesses, we have confidence in attaining our plan in the second half of the year. We continue to be laser-focused on achieving CV growth in 2026, and we are maintaining our revenue margin, and EPS guidance for the full-year. AI technology continues to evolve at fast rates, stimulating our clients' need for guidance.

In the quarter, we produced hundreds of new AI research frameworks, models, benchmarks, and technology blueprints I wanted to quickly reference a few here to give investors a window into how we are helping our clients. Forrester is creating a series of reports outlining how high-level corporate roles will be changed in the AI era. In Q2, we released 3: the AI CIO, the AI CMO, the AI chief information security officer. The AI CIO report envisions a world in which the CIO is managing a new way to develop software and a corporate environment where tasks are performed by autonomous agents, overseen by human intelligence, and it will be continually curating and managing outputs.

In this world, the CIO will have 4 new roles. 1. architecting enterprise decision-making. Agents will make decisions, and the CIO must guarantee 24-hour availability to the company. 2. governor of autonomous systems. Agents will fail. The CIO must navigate the risk and contain the damage. 3. economist of AI value. AI will be expensive to operate. The CIO must manage costs and calculate the trade-offs between agentic and human work. And finally, 4. teacher. Boards of directors are accustomed to deterministic reporting. AI yields probabilistic outputs and the CIO must be continually educating the corporation on the risks and opportunities afforded by this approach. A narrative has emerged that companies will not need CIOs in IT in the future.

Our report rejects this view. Asserting that agentic AI will present serious risks and vulnerabilities in large organizations. Firm but opportunistic centralized management of technology will be critical to maintain operations in companies as the Wild West of AI computing unfolds. Another fascinating report from the quarter revealed the state of artificial intelligence within marketing agencies in the US. AI is now pervasive across US marketing agencies, with nine of the top 10 agencies using generative AI and 50% using agentic AI for marketing execution. AI is deployed to ideate creative concepts and prep for pitches, aggregate and assemble strategic insights, and summarize media insights and reporting. Google is the No.

1 AI provider to the agencies with Adobe at No. 2 in the generative AI space, and Anthropic at No. 2 for agentic. These 3 vendors have displaced OpenAI. As is typical in the early days of AI, the agency industry is deploying the technology to increase productivity and drive cost efficiency, not for increased market effectiveness, creativity, and long-term brand growth for their customers. Forrester's research remains ahead of the market impervious to faddish narratives and unafraid to pop bubbles and take iconoclastic stands. Our clients are making multimillion-dollar decisions, They rely on Forrester's objectivity and research-based analysis to ensure that they are making the right decisions. Turning now to events.

At our B2B Summit North America in Phoenix, our largest yearly event, we explored the tectonic shifts underway in how B2B companies sell and promote their products. And Forrester calls this the go-to-market singularity. The event was a clarion call to B2B leaders across marketing, sales, customer success, and product functions. To discard outmoded go-to-market practices and embrace a new augmented resilient, and collaborative GTM approach that will capture AI-centric customers and generate revenue growth. Despite years of volatility driven by changing customer behavior, most B2B firms have failed to change how they engage with buyers. They are clinging to ineffective marketing practices such as mass emailing, marketing-qualified lead obsession, gated content, and siloed teams.

AI is quickly destroying these practices as it transforms buyer journeys and continues to shift power away from sellers, toward buyers. Now as the GTM singularity unfolds, B2B firms must augment sales and marketing efforts with agents. Respond to customer shifts faster, and better align marketing, sales, and product groups to act in unison. The singularity change that is happening right now is what Forrester calls the visibility vacuum. As SEO and search decline, customers are going dark. Making it impossible to gather buying signals from customers and increasing the need to adopt some form of answer engine optimization. The B2B summit saw a 9% year-over-year increase of attendees. We had 1,400 attendees, 59 sponsors, and 110 sessions.

We estimate the summit influenced approximately $3.5 million of contract value bookings. Customer experience forums were held in New York San Francisco, and Amsterdam in the second quarter. At the forums, we unveiled Forrester's updated total experience score. The TX score debuted in 2025, a unique metric that combines the customer experience and brand experience of large companies to accurately forecast the growth potential of those firms. Added this year was a third component, employee experience, yielding a more complete view of where companies are tracking. The TX score places companies in 4 groups based on our data. Leading, plateauing, lagging, and churning.

Our 2026 global total experience score rankings of 375 brands evaluated companies across Asia Pacific, Europe, and North America in 10 vertical markets. Looking at the U.S. automobile market, Honda was dominant in the leader category, Tesla was plateauing. Chrysler lagging, and GM churning. Overall, 41% of the organizations measured improved their scores from 2025, while only 3% declined. The Amsterdam and New York CX forums were sold out. Turning now to developments in Forrester AI. In Q2, we announced the Forrester AI agent for Microsoft Copilot. Enabling clients to access trusted Forrester research and guidance directly from their Microsoft workflows.

This announcement follows Forrester's integration of Forrester AI into Microsoft Teams, continuing our efforts to make research available to our clients where they work. We are revolutionizing how clients engage with research and advisory firms. By the end of Q2, we had activated hundreds of accounts to access Forrester AI from Teams and Copilot. Forrester AI usage increased to new highs in the quarter, with total users up 33% in Q2 versus Q1, and up 69% year-over-year. Forrester AI prompts were up 58% in Q2 compared to Q1, and up 105% year-over-year. In Q2, Forrester AI eclipsed indexed search to become the dominant method used by Forrester Decisions clients to interact with our research database.

We continue to work on integrating Forrester AI with other platforms, including Gemini, Claude, Slack, and others. Watch this space. I will now hand the call over to Leo Christian Finn, our CFO, for more detailed financial analysis of the quarter. Christian?

Leo Christian Finn: Thanks, George, and good afternoon, everyone. In the second quarter, we saw continued momentum in our CV business. This was exhibited in our CV bookings growth for the quarter and the ongoing stabilization of metrics. The CV decline and wallet retention were consistent with the prior quarter, and in line with our expectations. Client retention dipped by one point, but we did see an increase in client count.

Our performance in the second quarter gives us renewed confidence of hitting our CV plan for the year with the target of achieving CV growth as we exit 2026, In addition, we restarted our stock buyback program during the period, and we intend to continue with repurchases throughout the remainder of the year. Q2 saw a 3% CV decline in the quarter This mirrors our first-quarter performance and as stated earlier, was in line with our expectations. We believe this trajectory will improve in the second half of the year, we continue to grow CV bookings. We remain on a path for CV growth by year-end. Despite some market turbulence, we are seeing consistent demand for our products.

Driven by the need for trusted AI advice continued adoption of Forrester AI, ongoing product enhancements, making Forrester more embedded in clients' workflows. For the total company, we generated $100.2 million of revenue compared to $111.7 million in the prior year period which is an overall revenue decrease of 10%. In terms of our revenue breakdown for the quarter, research revenues decreased 8% compared to the second quarter of 2025, with revenue from research products down 7%, reprints down 12%. Client retention of 77% was up three points from the prior year, and down one point from the prior quarter. Client count increased by 10 clients in the quarter, to 1,770 clients supported by new business growth.

While retention of 89% was up four points from the prior year and flat from the prior quarter, Churn, down sell, and new business were all at or above expectations, while upsell was slightly below expectations, and remained flat versus prior period. We continue to see success in our AI access product. This product has delivered approximately $10 million in bookings since its launch nine months ago, and continues to gain traction in the market. We remain focused on retention improvements driven by customer success, sales, ongoing product enhancements, and believe these will continue to pay dividends in the second half of the year.

Our consulting business posted revenues of $20 million, which is down 15% compared to the prior year. The majority of the decline can be ascribed to the strategy consulting business, which we stopped actively selling earlier in the year. We will continue to execute on our existing strategy consulting backlog over the coming quarters and exit this business by year-end. The decision to exit strategy consulting allows our sales force to continue to focus on the expansion of our CV offerings. The content marketing business was down 13%, and this was partially offset by strong performance in the advisory business which grew 21%.

And finally, regarding our events business, we held four events in the second quarter, and posted revenues of $8.5 million, representing a decrease of 17% compared to the second quarter of 2025. Both sponsorship and ticket revenues are impacted by the shift in our event strategy. Which focuses on shorter, more intimate forums. We are receiving very positive feedback about our new event format, which prioritizes deeper in-person connection peer networking. Continuing down our P&L on an adjusted basis, operating expenses for the second quarter decreased by 8% primarily driven by lower compensation costs. Headcount was down 7%, driven by the restructuring earlier in the year.

However, as we look to return to CV growth, we have started to add to our sales capacity and we did see a slight increase in our sales quota-carrying headcount number. Operating income decreased by 24% to $10.4 million, or 10.4% of revenue in the current quarter. Compared to $13.7 million, or 12.2% of revenue in the second quarter of 2025. Interest expense for the quarter was $400,000 down from $700,000 in the second quarter of 2025.

Finally, net income and earnings per share decreased 21% and 22%, respectively, compared to Q2 of last year, with net income at $7.7 million and earnings per share of $0.40 for the current quarter, compared with net income of $9.8 million and earnings per share of $0.51 for the second quarter of 2025. Looking at our capital structure, cash flow from operating activities was $25 million in the first half of the year, and capital expenditures were $18.2 million $16.6 million of the capital expenditures are associated with the ongoing buildout of our Cambridge headquarters. And we have received $2.7 million of reimbursements from the landlord which is reported as a cash inflow from operating activities.

Free cash flow for the first half of the year excluding the net spending on the buildout, was approximately $20.7 million. Remaining CapEx spending for the buildout will be approximately $11 million. However, we expect to receive an additional $14.5 million of reimbursements from the landlord in the second half of the year. Our balance sheet is strong with cash at the end of the quarter of over $130 million and debt of only $35 million. We did not pay down any debt in the quarter, However, we did repurchase approximately $1 million worth of shares this quarter, starting late in the period.

We have over $76 million of our stock repurchase authorization intact, and we plan on accelerating our stock repurchase program in the second half of the year. Moving on to guidance. For 2026, we remain confident in our ability to execute. We are maintaining our guidance at this stage. Let me provide some additional commentary on our outlook for the year. For 2026, we continue to expect revenue to be $350 million to $360 million down 9% to 12% versus 2025. This guidance assumes the outlook for research to be a mid-single-digit decline. Consulting to be a decline in the low-20s, and events to be a decline in the mid- to high-teens for the year.

We still expect our operating margins to be in the range of 6% to 6.5% for 2026, and interest expense is expected to be $2.3 million for the year, and we are guiding to a full-year tax rate of 29%. Taking all of this into account, we still expect EPS to be in the range of $0.72 to $0.82 for the full-year. We continue to execute against our goals for 2026. there has been accelerated adoption of Forrester AI, We continue to focus on retention improvement initiatives, and clients are reacting positively to our new embedded product portfolio. To capitalize on this, we will continue to innovate in the second half of the year to drive CV growth by year-end.

Thank you all for taking the time today. With that, I will hand the call back to George.

George F. Colony: Thank you, Christian. We met our expectations for the quarter, and reiterated our guidance for the full-year. Furthermore, we remain on track to deliver CV growth in the full-year. The era of AI computing is driving demand for Forrester's insights as our clients plan how they will build their private AI models for their customers and begin to replace their enterprise systems with a new generation of AI software. Simultaneously, Forrester's AI capabilities are enabling us to deliver better insights faster, embedded where our clients do their work. This is an extraordinary opportunity for Forrester. We are diligently working to leverage this moment for our clients and our investors.

I will now turn the call over to the operator for the Q&A session.

Operator: Thank you, sir. As a reminder, to ask a question, you would need to press one, one on your telephone. To withdraw your question, please press one, one again. And I show our first question comes from the line of Anja Soderstrom from Sidoti. Please go ahead.

Anja Soderstrom: Hi. Thank you for taking my question. Just curious, what kind of visibility do you have for that expectation of contract value growth by the year-end?

Leo Christian Finn: This is Christian. So it is a good question. Look. We have seen meaningful improvement in our retention metrics this year. We talked about it on the call. We have got a continued laser focus on retention and product innovation, and we expect those improvements to continue into the second half of the year. The pipeline continues to increase. Think the work that Christophe's been doing with the sales organization combined with, obviously, the work we have done from a product innovation standpoint. With AI access and improvements that we know are coming With additional products in the back half here that are launching in Q3. All give us confidence, as we go forward here.

So we continue to look at the models and run the analysis. And we see upside as we move forward here, and that is what gives us confidence.

Christophe Favre: You wanna talk about some of the changes? We had CV bookings growth. In Q2 with really pockets of momentum one of them was tech research that grew by double digits. as well as continued positive CV in the international markets in EMEA as well as in APAC. Of course, they are areas of challenges and the North American government segment was one of them. However, I see a turning point, in Q3 in that segment.

Anja Soderstrom: Okay. And what do you anticipate to drive that turning point? For the government? Yes.

Christophe Favre: We expect a turning point in the government, in the federal area. Where we have built up a very nice pipeline. In the area of AI access. as well as the overall portfolio that we have around our executive leader seats. So we have seen some very interesting opportunities there, and we will know more by the end of Q3.

George F. Colony: I was in Washington two weeks ago with clients, and the overall mood there is getting they are getting back to business. Obviously, these are not typical times. But it is after the doldrums of a year ago. People these agencies have to get their work done. So they are getting back to work.

Anja Soderstrom: Okay. Great. Thank you. And also in terms of the Salesforce, you said you added some headcount there. How do you expect to add more, and how is the current work? Are they up to are they ramped, or are they still building up experience?

Christophe Favre: We had in Q2 a small increase in headcount. However, my focus right now is about improving the productivity of the Salesforce. as well as their performance. I will review at the end of Q3 if we add additional growth headcount for the back half of the year.

Anja Soderstrom: Thank you. That was all for me.

George F. Colony: Anja, thank you.

Operator: Thank you. Thank you. And I show our next question comes from the line of Vincent Colicchio from Barrington Research. Please go ahead.

Vincent Colicchio: Yeah. Christophe, to be clear, so when you say pipeline has expanded for CV, you are talking sequentially. Correct?

Christophe Favre: I am speaking year-over-year.

Vincent Colicchio: Okay.

Christophe Favre: Booking growth year-over-year. For Q2. Here's your question.

Vincent Colicchio: But pipe--you said that pipe-- yeah. Yeah.

Christophe Favre: And the pipeline as well.

Vincent Colicchio: And what sales process changes would you say are having the most impact?

Vincent Colicchio: Yeah.

Christophe Favre: So 1 is the change that we made in our go-to-market strategy. Having organized the North American sales organization around 6 vertical industries. as well as the work we do in preparing our sales organization to take advantage of the new AI era, and, as well, of course, is working closely with our product organizations and we see great uptake. Around our new product portfolio. Especially around AI access. as well as our embedded solutions especially the Microsoft Copilot solutions. Because what we see is customers now want to bring Forrester proprietary expertise where they work. They want to have Forrester embedded in their tools. They really want to make decisions to move faster with higher confidence.

And Forrester is very well positioned to help them do that and help them take action faster.

George F. Colony: You may also wanna mention the balanced scorecard. As a tool here.

Christophe Favre: Yes. We also we implemented what I call the salesforce balanced scorecard. In order to make the salesforce and the sales leaders more accountable for the quality of the work they do and we look much more carefully at areas linked to the pipeline, as well as the pipeline performance.

Vincent Colicchio: And in terms of verticals, I know you said the Fed should improve in Q3. Any change in terms of other verticals that are improving in the Q2 period?

Christophe Favre: We see really an uptick in the tech industry. In Q2. We believe it will continue in Q3. as well as, interestingly, also in the industry manufacturing area. We see those B2B companies willing to transform their go-to-market strategy and taking advantage of this new AI era. These are companies like Siemens or Honeywell.

Vincent Colicchio: that is it for me. And as far as your integration into workflows, is this-- are you ahead of the competition in that regard? What does that look like?

Carrie Johnson Fanlo: Hi, Vincent. it is Carrie. We are the first research company in our competitive set to have a presence in Microsoft Teams, and we are the first to have an agent an AI agent in Copilot. We know from the conversations that we are having that we are on the front line of this, and that is what our customers expect us to be. So we will continue to be that moving forward as well.

Vincent Colicchio: Okay. Thank you.

George F. Colony: Thanks, Vincent.

Operator: Thank you. That concludes our Q&A session. At this time, I would like to turn the conference back to Leo Christian Finn, Chief Financial Officer, for closing remarks.

Leo Christian Finn: Thanks, all, for joining today. Appreciate it. Any questions or follow-up, just reach out to Edward or myself. Thank you.

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.